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 June 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
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
JUNE 30, 1997 AND DECEMBER 31, 1996
(Unaudited)
June 30, December 31,
1997 1996
-------- ------------
ASSETS
------
CASH AND CASH EQUIVALENTS $ 4,178,575 $ 2,418,201
----------- -----------
LAND:
Held for Sale 17,519,283 26,326,289
Subject to Sale Agreements 8,509,722 2,980,166
Subject to Sale Agreement With Affiliate 788,287 788,287
----------- -----------
Total land 26,817,292 30,094,742
----------- -----------
LOAN RECEIVABLE FROM AFFILIATE 7,598,415 7,598,415
PREPAID EXPENSES AND OTHER 144,820 148,293
----------- -----------
Total assets $38,739,102 $40,259,651
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 2,768,878 $ 939,956
PAYABLE TO GENERAL PARTNER - 58,481
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 113,969 160,927
----------- -----------
Total liabilities 2,882,847 1,159,364
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General partner (12,195) (12,529)
Limited partners 35,868,450 39,112,816
----------- -----------
Total partners' capital 35,856,255 39,100,287
----------- -----------
Total liabilities and partners' capital $38,739,102 $40,259,651
=========== ===========
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
6/30/97 6/30/96 6/30/97 6/30/96
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Land sales $3,030,548 $440,938 $5,924,928 $4,010,638
Interest on loan to affiliate 212,500 212,500 425,000 425,000
Interest on investments and other 53,856 31,334 91,064 89,825
--------- -------- ---------- ----------
3,296,904 684,772 6,440,992 4,525,463
--------- -------- ---------- ----------
EXPENSES:
Cost of land sales 1,775,414 313,336 3,766,456 2,380,847
General partner fees 81,612 87,148 170,870 180,898
Property management fees 9,000 9,000 18,000 18,000
Marketing 6,315 32,295 10,034 60,667
Property taxes 39,999 42,618 84,464 86,244
Other operating 79,745 90,680 199,278 168,425
---------- -------- ----------- -----------
1,992,085 575,077 4,249,102 2,895,081
---------- -------- ----------- -----------
NET INCOME $1,304,819 $109,695 $2,191,890 $1,630,382
========== ======== ========== ==========
NET INCOME (LOSS) ALLOCATED TO:
General partner $ 497 $ (179) $ 334 $ 6
Limited partners 1,304,322 109,874 2,191,556 1,630,376
---------- ---------- ---------- ----------
$1,304,819 $109,695 $2,191,890 $1,630,382
========== ======== ========== ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT (based on
50,000 units held by limited partners) $26.09 $2.20 $43.83 $32.61
====== ===== ====== ======
</TABLE>
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 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 334 -- 2,191,556 2,191,890
Distribution to Limited Partners -- -- (5,435,922) (5,435,922)
-------- ------ ----------- -----------
BALANCE, June 30, 1997 $(12,195) 50,000 $35,868,450 $35,856,255
======== ====== =========== ===========
</TABLE>
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,191,890 $ 1,630,382
Change in assets and liabilities:
Decrease in land held for sale 8,807,006 179,117
Decrease (increase) in land subject to sales agreements (5,529,556) 2,016,693
Decrease in prepaid expenses and other 3,473 57,771
Decrease in payable to general partner (58,481) (11,199)
Increase (decrease) in accounts
payable and accrued expenses (46,958) 74,235
----------- -----------
Net cash provided by operating activities 5,367,374 3,946,999
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Limited partner distributions declared (5,435,922) (3,518,501)
Increase in distribution payable 1,828,922 --
----------- -----------
Net cash used in financing activities (3,607,000) (3,518,501)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,760,374 428,498
CASH AND CASH EQUIVALENTS, beginning of period 2,418,201 1,362,963
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 4,178,575 $ 1,791,461
=========== ===========
</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, including
selling expenses, the financial advisory fee, property acquisition fee and due
diligence expense reimbursement, 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. All unexpended funds are 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 $1.3 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. Aside from the sale of land parcels, the Registrant's primary
sources of revenue are interest payments received from FFCA under the loan
agreement and interest earned on the Registrant's temporary investments.
During the quarter ended June 30, 1997 (the period), the Registrant sold
three land parcels aggregating 10.3 acres to unaffiliated third parties. These
transactions provided for an aggregate cash sales price of $3,030,548, an
aggregate original cost of $1,513,516 and closing and other costs of $261,898,
resulting in a gain of $1,255,134 for the period.
The Registrant declared a cash distribution to the limited partners of
$2,768,650 for the quarter ended June 30, 1997 (to be paid in August 1997) which
represents the net cash proceeds from the above-mentioned parcel sales.
Year-to-date distributions declared totaled $5,435,922. During the period, cash
proceeds from the land parcel sales were invested in temporary investment
securities pending distribution to the limited partners.
Land sales revenues comprise the majority of total revenues for the
quarters ended June 30, 1997 and 1996. The average sales price per acre of land
sold during the period increased 10% to approximately $295,500 per acre from
approximately $268,200 per acre for the comparable period of 1996. Land sales
revenues were higher in 1997 than in 1996 primarily because the Registrant sold
10.3 acres of land during the quarter ended June 30, 1997 as compared to 1.6
acres sold during the quarter ended June 30, 1996. The Registrant is currently
in negotiations with unaffiliated third parties for the sale of approximately 60
acres of land (representing one-third of the land originally held for sale) with
prices ranging from $6.00 to $10.00 per square foot. The timing of land sales
varies from quarter to quarter and the Registrant cannot determine which, if
any, of these 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 increased by $22,522 due to
the increase in temporary investment securities held during the period,
resulting from a higher average cash balance invested in the June 1997 quarter,
prior to distribution of cash to the limited partners.
Total expenses for the period increased by $1,417,008 from the comparable
period of the prior year due to increases in the cost of land sales
($1,462,078), offset partially by decreases in general partner fees ($5,536),
marketing expenses ($25,980) and other operating expenses ($10,935). General
partner fees decreased during the period because the fees are based on Assets
Under Management, as defined in the partnership agreement, and as parcels are
sold the general partner fees 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. The decrease in other operating
expenses resulted primarily from a decrease in repairs and maintenance costs. In
January 1997, the Perimeter Center Owners' Association (the Association) began
paying for all repairs and maintenance required at the Perimeter Center and is
assessing common area maintenance fees to all of the land
<PAGE>
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 and this has resulted in a decrease in repairs and maintenance costs
of approximately $8,200 during the period over the same period of the prior
year.
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 - JUNE 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 duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
By FFCA MANAGEMENT COMPANY LIMITED
PARTNERSHIP
General Partner
By PERIMETER CENTER MANAGEMENT COMPANY
Corporate General Partner
Date: August 12, 1997 By /s/ John Barravecchia
--------------------------------------------
John Barravecchia, Executive Vice President,
Treasurer and 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-B
Date: August 12, 1997 By /s/ John Barravecchia
-------------------------------------------
John Barravecchia, President, Secretary and
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AS OF JUNE 30, 1997 AND THE STATEMENT OF OPERATIONS FOR THE SIX
MONTHS ENDED JUNE 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> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 4,178,575
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 26,817,292
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 38,739,102
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 35,856,255
<TOTAL-LIABILITY-AND-EQUITY> 38,739,102
<SALES> 5,924,928
<TOTAL-REVENUES> 6,440,992
<CGS> 3,766,456
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,191,890
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,191,890
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,191,890
<EPS-PRIMARY> 43.83
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AS OF JUNE 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> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-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>
