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 September 30, 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 0-17626
Commission file number 0-17853
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
and
FFCA INVESTOR SERVICES CORPORATION 88-B
- --------------------------------------------------------------------------------
(Exact Name of Co-Registrants as Specified in Their
Organizational Documents)
Delaware 86-0588512
- --------------------------------------------------------------------------------
(Partnership State of Organization) (Partnership I.R.S. Employer
Identification Number)
Delaware 86-0588514
- --------------------------------------------------------------------------------
(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.
------- ---------------------
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------ ------------
<S> <C> <C>
ASSETS
------
LAND:
Held for Sale $ 15,928,713 $ 26,326,289
Subject to Sale Agreements 4,511,312 2,980,166
Subject to Sale Agreement With Affiliate 788,287 788,287
------------ ------------
Total land 21,228,312 30,094,742
LOAN RECEIVABLE FROM AFFILIATE 7,598,415 7,598,415
CASH AND CASH EQUIVALENTS 11,523,120 2,418,201
PREPAID EXPENSES AND OTHER 140,522 148,293
------------ ------------
Total assets $ 40,490,369 $ 40,259,651
============ ============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 10,028,208 $ 939,956
PAYABLE TO GENERAL PARTNER 54,427 58,481
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 76,211 160,927
------------ ------------
Total liabilities 10,158,846 1,159,364
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partner (11,552) (12,529)
Limited partners 30,343,075 39,112,816
------------ ------------
Total partners' capital 30,331,523 39,100,287
------------ ------------
Total liabilities and partners' capital $ 40,490,369 $ 40,259,651
============ ============
</TABLE>
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
9/30/97 9/30/96 9/30/97 9/30/96
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Land sales $ 10,582,692 $ -- $ 16,507,620 $ 4,010,638
Interest on loan to affiliate 212,500 212,500 637,500 637,500
Interest on investments and other 81,305 19,951 172,369 109,776
------------ ------------ ------------ ------------
10,876,497 232,451 17,317,489 4,757,914
------------ ------------ ------------ ------------
EXPENSES:
Cost of land sales 6,143,843 -- 9,910,299 2,380,847
General partner fee 79,427 90,123 250,297 271,021
Property management fee 9,000 9,000 27,000 27,000
Marketing 6,691 16,675 16,725 77,342
Property taxes 31,520 45,882 115,984 132,126
Other operating 102,918 90,336 302,196 258,761
------------ ------------ ------------ ------------
6,373,399 252,016 10,622,501 3,147,097
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 4,503,098 $ (19,565) $ 6,694,988 $ 1,610,817
============ ============ ============ ============
NET INCOME (LOSS) ALLOCATED TO:
General partner $ 642 $ (196) $ 977 $ (190)
Limited partners 4,502,456 (19,369) 6,694,011 1,611,007
------------ ------------ ------------ ------------
$ 4,503,098 $ (19,565) $ 6,694,988 $ 1,610,817
============ ============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT (based on
50,000 units held by limited partners) $ 90.05 $ (.39) $ 133.88 $ 32.22
============ ============ ============ ============
</TABLE>
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
General ---------------------------
Partner Number Total
Amount of Units Amount Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 $ (12,529) 50,000 $ 39,112,816 $ 39,100,287
Net Income 977 -- 6,694,011 6,694,988
Distributions to Limited Partners -- -- (15,463,752) (15,463,752)
------------ ------------ ------------ ------------
BALANCE, September 30, 1997 $ (11,552) 50,000 $ 30,343,075 $ 30,331,523
============ ============ ============ ============
</TABLE>
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 6,694,988 $ 1,610,817
Change in assets and liabilities:
Decrease in land held for sale 10,397,576 179,117
Decrease (increase) in land subject to sales agreements (1,531,146) 2,016,693
Decrease in prepaid expenses and other 7,771 66,451
Decrease in payable to general partner (4,054) (27,097)
Increase (decrease) in accounts
payable and accrued expenses (84,716) 87,441
------------ ------------
Net cash provided by operating activities 15,480,419 3,933,422
------------ ------------
CASH FLOWS FOR FINANCING ACTIVITIES:
Distributions to limited partners (6,375,500) (3,825,501)
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 9,104,919 107,921
CASH AND CASH EQUIVALENTS, beginning of period 2,418,201 1,362,963
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 11,523,120 $ 1,470,884
============ ============
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 2. Management's Discussion and Analysis of
- ------- Financial Condition and Results of Operations
---------------------------------------------
Scottsdale Land Trust Limited Partnership (the Registrant) received
$50,000,000 in gross proceeds from its public offering of the Units on November
23, 1988. After deducting organizational and offering expenses, the Registrant
had $43,250,000 in net proceeds available for investment. The net proceeds were
used to purchase the property (The Perimeter Center), fund the construction of
the infrastructure and fund the $8.5 million loan to Franchise Finance
Corporation of America (FFCA), in accordance with the partnership agreement.
Pursuant to the loan agreement, FFCA makes monthly payments of interest only to
the Registrant and is current on such payments. The entire principal balance of
the loan is due in May 2000, or earlier if all of The Perimeter Center land
parcels are sold prior to that date. The Registrant's primary sources of revenue
are land sales, interest payments received from FFCA under the loan agreement
and interest earned on the Registrant's temporary investments. As land parcels
are sold, distributions of the net cash sale proceeds are made in accordance
with the partnership agreement. Once all of The Perimeter Center parcels are
sold, the Registrant will liquidate all of its other assets and distribute them
in accordance with the partnership agreement.
Funds pending distribution to the limited partners are temporarily
invested in U.S. Government Agency discount notes and bank repurchase agreements
(which are secured by United States Treasury and Government obligations).
Reserves remaining in the Registrant approximate $1.4 million. These reserves
may be used from time to time to pay amounts assessed by the city or county
taxing authorities for developmental or other costs.
During the quarter ended September 30, 1997 (the period), the Registrant
sold 12 land parcels aggregating 35.3 acres to unaffiliated third parties. Land
sale transactions during the quarter provided aggregate cash sales proceeds of
$10,582,692 and closing and other costs of $554,862, resulting in net cash
proceeds of $10,027,830. Sales for the nine months ended September 30, 1997
totaled 19 land parcels aggregating 55.7 acres and resulted in net cash proceeds
of $15,463,752. The Registrant declared a cash distribution to the limited
partners of $10,027,830 for the quarter ended September 30, 1997 (to be paid in
November 1997) which, combined with the first and second quarterly distributions
totaling $5,435,922, amounts to $15,463,752 year to date.
Land sales comprise the majority of total revenues for the quarter ended
September 30, 1997 (there were no land sales during the comparable quarter ended
September 30, 1996). The average sales price per acre of land sold during the
period increased 32% to approximately $299,800 per acre from approximately
$227,500 per acre for land sold during the year ended December 31, 1996. It also
represents an increase over the average sales price per acre for land sold in
the first two quarters of 1997 ($291,000 per acre). Gain as a percentage of land
sale revenues remained constant at 42% and 40% for the quarter and nine months
ended September 30, 1997, respectively, compared to 41% for the nine months
ended September 30, 1996.
The Registrant sold two parcels of land in October 1997 representing 17.2
acres and has an additional 23.6 acres in escrow under contract to sell. These
October sales and parcels in escrow have a combined weighted average sales price
of $340,000 per acre. Including the October 1997 parcel sales, 61% of the
original land held for sale at The Perimeter Center is either sold or in escrow.
The timing of land sales varies from quarter to quarter and the Registrant
cannot determine which, if any, of its negotiations will result in the sale of a
land parcel and; therefore, cannot predict the timing or amount of any future
cash distribution from such sale proceeds.
Interest and other income for the period increased by $61,354 over the
comparable period of the prior year due to the increase in temporary investment
securities resulting from a higher average cash balance invested in the
September 1997 quarter. This high cash balance results from net sale proceeds
held during the quarter prior to distribution of the cash to the limited
partners. Total expenses (excluding the cost of land sales) for the period
decreased by $22,460 from the comparable period of the prior year due to
decreases in the general partner fee
<PAGE>
($10,696), marketing expenses ($9,984) and property taxes ($14,362) and are
partially offset by an increase in other operating expenses. The general partner
fee decreased during the period because the fee is based on Assets Under
Management, as defined in the partnership agreement, and as parcels are sold the
general partner fee will be reduced accordingly. Marketing expenses vary from
quarter to quarter based primarily on the timing of various marketing and
promotional events planned for the period.
In January 1997, the Perimeter Center Owners' Association (the
Association) began paying for all common area maintenance required at the
Perimeter Center and is assessing common area maintenance fees to all of the
land owners within the Perimeter Center (including the Registrant). The
Registrant is charged a common area maintenance fee (based on square footage
owned) by the Association. Other operating costs during the period increased
$12,582 over the comparable quarter of 1996 due to higher water usage.
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.
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- ------- ----------------------------------------------------------
The Co-Registrants do not use derivative financial instruments.
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 88-B
---------------------------------------
BALANCE SHEET - SEPTEMBER 30, 1997
----------------------------------
ASSETS
Cash $100
Investment in Scottsdale Land Trust Limited Partnership, 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-B (88-B) was organized on August 11,
1987 to act as the assignor limited partner in Scottsdale Land Trust Limited
Partnership (SLT). The assignor limited partner is the owner of record of the
limited partnership units of SLT. All rights and powers of 88-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, 88-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
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
By FFCA MANAGEMENT COMPANY, L.P.
General Partner
By PERIMETER CENTER MANAGEMENT COMPANY
Corporate General Partner
Date: November 7, 1997 By /s/ John Barravecchia
------------------------------------------
John Barravecchia, Chief Financial Officer
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
co-registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FFCA INVESTOR SERVICES CORPORATION 88-B
Date: November 7, 1997 By /s/ John Barravecchia
------------------------------------------
John Barravecchia, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF SEPTEMBER 30, 1997 AND
THE STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 824098
<NAME> SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 11,523,120
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 21,228,312
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40,490,369
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 30,331,523
<TOTAL-LIABILITY-AND-EQUITY> 40,490,369
<SALES> 16,507,620
<TOTAL-REVENUES> 17,317,489
<CGS> 9,910,299
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 6,694,988
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,694,988
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,694,988
<EPS-PRIMARY> 133.88
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF SEPTEMBER 30, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
BALANCE SHEET.
</LEGEND>
<CIK> 824134
<NAME> FFCA INVESTOR SERVICES CORPORATION 88-B
<MULTIPLIER> 1
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<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>
