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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
---------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------------- ---------------------
Commission file number
0-16720
PARTICIPATING INCOME PROPERTIES 1986, L.P.
and
FFCA INVESTOR SERVICES CORPORATION 86-B
- --------------------------------------------------------------------------------
(Exact Name of Co-Registrants as Specified in Their
Organizational Documents)
Delaware 86-0570015
- --------------------------------------------------------------------------------
(Partnership State of Organization) (Partnership I.R.S. Employer
Identification Number)
Delaware 86-0557949
- --------------------------------------------------------------------------------
(Corporation State of Incorporation) (Corporation I.R.S. Employer
Identification Number)
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona 85255
- --------------------------------------------------------------------------------
(Address of principal executive offices) (zip code)
Co-Registrants' telephone number including area code (602) 585-4500
-------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item l. Financial Statements.
------- ---------------------
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------ ------------
ASSETS
------
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 2,356,736 $ 2,346,371
RECEIVABLES FROM LESSEES 144,697 149,803
SECURED NOTES RECEIVABLE 123,920 131,323
PROPERTY SUBJECT TO OPERATING LEASES, at cost
Land 6,773,272 6,773,272
Buildings 29,669,322 29,669,322
Equipment 626,781 626,781
------------ ------------
Total 37,069,375 37,069,375
Less-Accumulated depreciation 11,266,994 10,937,860
------------ ------------
25,802,381 26,131,515
------------ ------------
Total assets $ 28,427,734 $ 28,759,012
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 1,316,851 $ 1,321,426
PAYABLE TO GENERAL PARTNER 14,821 10,304
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 47,618 49,704
RENTAL DEPOSITS 114,400 114,400
------------ ------------
Total liabilities 1,493,690 1,495,834
------------ ------------
MINORITY INTEREST (Note 1) (15,252) (14,923)
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partner (161,347) (158,058)
Limited partners 27,110,643 27,436,159
------------ ------------
Total partners' capital 26,949,296 27,278,101
------------ ------------
Total liabilities and partners' capital $ 28,427,734 $ 28,759,012
============ ============
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
1997 1996
---------- ----------
REVENUES:
Rental $1,072,247 $1,078,631
Participating rentals 413,241 468,335
Interest and other 26,152 24,777
Gain on sale of property -- 16,410
---------- ----------
1,511,640 1,588,153
---------- ----------
EXPENSES:
General partner fees 131,523 136,780
Depreciation 329,134 414,632
Operating 48,777 50,400
---------- ----------
509,434 601,812
---------- ----------
MINORITY INTEREST IN INCOME 1,168 1,164
---------- ----------
NET INCOME $1,001,038 $ 985,177
========== ==========
NET INCOME ALLOCATED TO:
General partner $ 10,010 $ 9,852
Limited partners 991,028 975,325
---------- ----------
$1,001,038 $ 985,177
========== ==========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(based on 51,687 units held by limited partners) $ 19.17 $ 18.87
========== ==========
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
General ----------------------------
Partner Number Total
Amount of Units Amount Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 $ (158,058) 51,687 $ 27,436,159 $ 27,278,101
Net income 10,010 -- 991,028 1,001,038
Distribution to partners (13,299) -- (1,316,544) (1,329,843)
------------ ------------ ------------ ------------
BALANCE, March 3l, 1997 $ (161,347) 51,687 $ 27,110,643 $ 26,949,296
============ ============ ============ ============
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES 1986, L.P. AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,001,038 $ 985,177
Adjustments to net income:
Depreciation 329,134 414,632
Gain on sale of property -- (16,410)
Minority interest in income 1,168 1,164
Change in assets and liabilities:
Decrease (increase) in receivables from lessees 5,106 (20,023)
Increase (decrease) in payable to general partner 4,517 (17,705)
Decrease in accounts payable and
accrued liabilities (2,086) (4,990)
----------- -----------
Net cash provided by operating activities 1,338,877 1,341,845
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property -- 430,192
Principal collections on secured notes receivable 7,403 6,702
----------- -----------
Net cash provided by investing activities 7,403 436,894
----------- -----------
CASH FLOWS FOR FINANCING ACTIVITIES:
Partner distributions declared (1,329,843) (3,452,049)
Decrease in distribution payable (4,575) --
Distribution to minority interest (1,497) (1,564)
----------- -----------
Net cash used in financing activities (1,335,915) (3,453,613)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 10,365 (1,674,874)
CASH AND CASH EQUIVALENTS, beginning of period 2,346,371 3,649,977
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 2,356,736 $ 1,975,103
=========== ===========
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of
- ------- Financial Condition and Results of Operations
---------------------------------------------
As of March 31, 1997, Participating Income Properties 1986, L.P., a
Delaware limited partnership, (the Registrant), had received $51,687,000
in gross proceeds from its offering of Units. Net funds available for
investment, after payment of sales commissions, organization costs and
acquisition fees, amounted to $45,232,790. The offering of Units is the
Registrant's sole source of capital, and since the final closing of
limited partnership units was held on April 16, 1987, the Registrant will
not receive additional funds from the offering. The Registrant was fully
invested in eleven travel plaza properties by September 1988 and does not
anticipate any further capital expenditures.
The Registrant declared a cash distribution to the limited partners of
$1,316,544 for the quarter ended March 31, 1997 (the period). During the
period, all net proceeds not invested in real estate were invested in
Government Agency discount notes and bank repurchase agreements (which are
secured by United States Treasury and Government obligations).
During the period, base rental revenue from the travel plaza leases
amounted to $1,072,247 as compared to $1,078,631 for the same period of
the prior year. In the first quarter of 1996, the Registrant sold a
portion of the land comprising the Boise, Idaho travel plaza property,
resulting in a monthly reduction of $2,128 in rental revenue. The
Registrant received or accrued participating rentals of $413,241 for the
period which is lower than the comparable quarter in 1996 by $55,094 and
is attributable to decreased overall travel plaza sales. In June 1996, a
credit card issuer to Flying J Travel Plaza customers terminated its
relationship with the travel plazas. As a result, volumes and margins at
many Flying J Travel Plaza locations decreased. CFJ Properties, the lessee
of eight of the Registrant's travel plazas, has advised the general
partner of the Registrant that it expects sales will stabilize and be
restored by mid-1997. Total expenses decreased by $92,378 to $509,434 for
the period primarily due to a decrease in depreciation expense related to
the sale of travel plaza equipment in the last twelve months.
The decrease in total assets reflected in the Registrant's financial
statements filed with this Report is mainly attributable to the
depreciation allowance, which is deducted for accounting purposes from the
cost of the assets on the Registrant's books.
In the opinion of management, the financial information included in this
report reflects all adjustments necessary for fair presentation. All such
adjustments are of a normal recurring nature.
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 86-B
---------------------------------------
BALANCE SHEET - MARCH 31, 1997
------------------------------
ASSETS
Cash $100
Investment in Participating Income Properties 1986, L.P., at cost 100
----
Total Assets $200
====
LIABILITY
Payable to Parent $100
----
STOCKHOLDER'S EQUITY
Common Stock; $l par value; 100 shares authorized,
issued and outstanding 100
---
Liability and Stockholder's Equity $200
====
Note: FFCA Investor Services Corporation 86-B (86-B) was organized on June 23,
1986 to act as the assignor limited partner in Participating Income Properties
1986, L.P. (PIP-86).
The assignor limited partner is the owner of record of the limited
partnership units of PIP-86. All rights and powers of 86-B have been assigned to
the holders, who are the registered and beneficial owners of the units. Other
than to serve as assignor limited partner, 86-B has no other business purpose
and will not engage in any other activity or incur any debt.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
PARTICIPATING INCOME PROPERTIES 1986, L.P.
By FFCA MANAGEMENT COMPANY, L.P.
General Partner
By PERIMETER CENTER MANAGEMENT COMPANY
Corporate General Partner
Date: April 4, 1997 By /s/ John R. Barravecchia
-------------------------------------------
John R. Barravecchia, Chief Financial Officer
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
co-registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FFCA INVESTOR SERVICES CORPORATION 86-B
Date: April 4, 1997 By /s/ John R. Barravecchia
------------------------------------------
John R. Barravecchia, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF MARCH 31, 1997 AND
THE STATEMENT OF INCOME FOR THE THREE MONTHS ENDED
MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000797977
<NAME> PARTICIPATING INCOME PROPERTIES 1986, L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 2,356,736
<SECURITIES> 0
<RECEIVABLES> 268,617
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 37,069,375
<DEPRECIATION> 11,266,994
<TOTAL-ASSETS> 28,427,734
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 26,949,296
<TOTAL-LIABILITY-AND-EQUITY> 28,427,734
<SALES> 0
<TOTAL-REVENUES> 1,511,640
<CGS> 0
<TOTAL-COSTS> 509,434
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,001,038
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,001,038
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,001,038
<EPS-PRIMARY> 19.17
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF MARCH 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
BALANCE SHEET.
</LEGEND>
<CIK> 0000797978
<NAME> FFCA INVESTOR SERVICES CORPORATION 86-B
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 200
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 200
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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