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
0-18504
PARTICIPATING INCOME PROPERTIES II, L.P.
and
FFCA INVESTOR SERVICES CORPORATION 88-C
- --------------------------------------------------------------------------------
(Exact Name of Co-Registrants as Specified in Their
Organizational Documents)
Delaware 86-0588505
- --------------------------------------------------------------------------------
(Partnership State of Organization) (Partnership I.R.S. Employer
Identification Number)
Delaware 86-0588507
- --------------------------------------------------------------------------------
(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 II, L.P.
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 $ 3,865,853 $ 3,790,885
RECEIVABLES FROM LESSEES 174,218 173,000
PROPERTY SUBJECT TO OPERATING LEASES, at cost
Land 11,709,570 11,709,570
Buildings 54,004,577 54,004,577
Equipment 4,926,921 5,268,921
------------ ------------
Total 70,641,068 70,983,068
Less-Accumulated depreciation 19,584,183 19,119,173
------------ ------------
51,056,885 51,863,895
------------ ------------
Total assets $ 55,096,956 $ 55,827,780
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 2,093,274 $ 2,075,158
PAYABLE TO GENERAL PARTNERS 25,244 18,239
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES 81,101 72,787
DEFERRED INCOME 799,916 868,470
------------ ------------
Total liabilities 2,999,535 3,034,654
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partners (197,605) (190,647)
Limited partners 52,295,026 52,983,773
------------ ------------
Total partners' capital 52,097,421 52,793,126
------------ ------------
Total liabilities and partners' capital $ 55,096,956 $ 55,827,780
============ ============
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES II, L.P.
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
1997 1996
---------- ----------
REVENUES:
Rental $1,865,905 $1,865,905
Participating rentals 531,517 565,585
Interest and other 55,697 38,793
Gain on sale of equipment 2,138 --
---------- ----------
2,455,257 2,470,283
---------- ----------
EXPENSES:
General partner and affiliate fees 209,102 213,394
Depreciation 766,397 723,820
Operating 61,212 54,159
---------- ----------
1,036,711 991,373
---------- ----------
NET INCOME $1,418,546 $1,478,910
========== ==========
NET INCOME ALLOCATED TO:
General partners $ 14,185 $ 14,789
Limited partners 1,404,361 1,464,121
---------- ----------
$1,418,546 $1,478,910
========== ==========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(based on 82,834 units held by limited partners) $ 16.95 $ 17.68
========== ==========
<PAGE>
PARTICIPATING INCOME PROPERTIES II, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
General ---------------------------
Partners Number Total
Amount of Units Amount Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 $ (190,647) 82,834 $ 52,983,773 $ 52,793,126
Net income 14,185 -- 1,404,361 1,418,546
Distribution to partners (21,143) -- (2,093,108) (2,114,251)
------------ ------------ ------------ ------------
BALANCE, March 31, 1997 $ (197,605) 82,834 $ 52,295,026 $ 52,097,421
============ ============ ============ ============
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES II, L.P.
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 $ 1,418,546 $ 1,478,910
Adjustments to net income:
Depreciation 766,397 723,820
Gain on sale of equipment (2,138) --
Change in assets and liabilities:
Increase in receivables from lessees (1,218) (6,471)
Increase in payable to general partner 7,005 --
Increase in accounts payable and accrued liabilities 8,314 1,732
Decrease in deferred income (68,554) (186,923)
----------- -----------
Net cash provided by operating activities 2,128,352 2,011,068
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property 42,751 --
----------- -----------
CASH FLOWS FOR FINANCING ACTIVITIES:
Partner distributions declared (2,114,251) (2,134,175)
Increase in distribution payable to limited partners 18,116 12,164
----------- -----------
Net cash used in financing activities (2,096,135) (2,122,011)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 74,968 (110,943)
CASH AND CASH EQUIVALENTS, beginning of period 3,790,885 3,818,927
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 3,865,853 $ 3,707,984
=========== ===========
</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 II, L.P., a Delaware
limited partnership, (the Registrant), had received $82,834,000 in gross
proceeds from its offering of Units. Net funds available for investment,
after payment of sales commissions, organizational costs and acquisition
costs, amounted to $71,956,541. The offering of Units is the Registrant's
sole source of capital, and since the final closing of limited partnership
units was held on December 11, 1989, the Registrant will not receive
additional funds from the offering. The Registrant was fully invested in
thirteen travel plaza properties by June 1991 and does not anticipate any
further capital expenditures.
The Registrant declared a cash distribution to the limited partners of
$2,093,108 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, the Registrant received base rental revenue pursuant to
its lease arrangements in the amount of $1,865,905, unchanged from the
same period of the prior year. Base rental revenue for the period includes
the recognition of approximately $69,000 of income previously deferred. In
addition, the Registrant received or accrued participating rentals of
$531,517 for the period which is lower than the comparable quarter in 1996
by $34,068 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 all eleven 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 increased 4.6%
between quarters primarily due to an increase in depreciation expense and
an increase in operating expenses.
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 88-C
---------------------------------------
BALANCE SHEET - MARCH 31, 1997
------------------------------
ASSETS
Cash $100
Investment in Participating Income Properties II, 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 88-C (88-C) was organized on August 11,
1987 to act as the assignor limited partner in Participating Income Properties
II, L.P. (PIP-II).
The assignor limited partner is the owner of record of the limited
partnership units of PIP-II. All rights and powers of 88-C have been assigned to
the holders, who are the registered and beneficial owners of the units. Other
than to serve as assignor limited partner, 88-C 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 II, L.P.
By FRANCHISE FINANCE CORPORATION OF AMERICA II
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 88-C
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> 0000820806
<NAME> PARTICIPATING INCOME PROPERTIES II, 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> 3,865,853
<SECURITIES> 0
<RECEIVABLES> 174,218
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 70,641,068
<DEPRECIATION> 19,584,183
<TOTAL-ASSETS> 55,096,956
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 52,097,421
<TOTAL-LIABILITY-AND-EQUITY> 55,096,956
<SALES> 0
<TOTAL-REVENUES> 2,455,257
<CGS> 0
<TOTAL-COSTS> 1,036,711
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,418,546
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,418,546
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,418,546
<EPS-PRIMARY> 16.95
<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> 0000820807
<NAME> FFCA INVESTOR SERVICES CORPORATION 88-C
<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>
