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, 1999
[ ] 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 (480) 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 1. FINANCIAL STATEMENTS.
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998
(Unaudited)
June 30, December 31,
1999 1998
------------ ------------
ASSETS
LAND:
Held for sale $ 10,286,157 $ 12,486,444
Subject to sale agreements 5,262,658 3,062,371
Subject to sale agreement with affiliate 788,287 788,287
------------ ------------
Total land 16,337,102 16,337,102
LOAN RECEIVABLE FROM AFFILIATE 7,598,415 7,598,415
CASH AND CASH EQUIVALENTS 2,023,080 2,292,149
PREPAID EXPENSES AND OTHER 187,102 254,702
------------ ------------
Total assets $ 26,145,699 $ 26,482,368
============ ============
LIABILITIES AND PARTNERS' CAPITAL
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 307 $ 441,307
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 204,170 198,193
------------ ------------
Total liabilities 204,477 639,500
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partner (6,543) (7,527)
Limited partners 25,947,765 25,850,395
------------ ------------
Total partners' capital 25,941,222 25,842,868
------------ ------------
Total liabilities and partners' capital $ 26,145,699 $ 26,482,368
============ ============
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
6/30/99 6/30/98 6/30/99 6/30/98
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Land sales $ -- $1,093,825 $ -- $2,871,073
Interest on loan to affiliate 212,500 212,500 425,000 425,000
Interest on investments and other 21,323 33,467 46,336 82,345
--------- ---------- --------- ----------
233,823 1,339,792 471,336 3,378,418
--------- ---------- --------- ----------
EXPENSES:
Cost of land sales -- 675,929 -- 1,758,434
General partner fees 62,536 65,585 124,386 132,071
Property management fees 9,000 9,000 18,000 18,000
Marketing 2,836 6,917 8,549 10,071
Property taxes 38,634 35,803 89,429 68,898
Other operating 77,203 72,535 132,618 133,011
--------- ---------- --------- ----------
190,209 865,769 372,982 2,120,485
--------- ---------- --------- ----------
NET INCOME $ 43,614 $ 474,023 $ 98,354 $1,257,933
========= ========== ========= ==========
NET INCOME ALLOCATED TO:
General partner $ 436 $ 561 $ 984 $ 1,453
Limited partners 43,178 473,462 97,370 1,256,480
--------- ---------- --------- ----------
$ 43,614 $ 474,023 $ 98,354 $1,257,933
========= ========== ========= ==========
NET INCOME PER LIMITED
PARTNERSHIP UNIT (based on 50,000
units held by limited partners) $ .86 $ 9.47 $ 1.95 $ 25.13
========= ========== ========= ==========
</TABLE>
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(Unaudited)
Limited Partners
General -----------------------
Partner Number Total
Amount of Units Amount Amount
--------- -------- ----------- -----------
BALANCE, December 31, 1998 $ (7,527) 50,000 $25,850,395 $25,842,868
Net Income 984 -- 97,370 98,354
-------- ------ ----------- -----------
BALANCE, June 30, 1999 $ (6,543) 50,000 $25,947,765 $25,941,222
======== ====== =========== ===========
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 98,354 $ 1,257,933
Adjustments to net income:
Change in assets and liabilities:
Decrease in land held for sale 2,200,287 913,036
Decrease (increase) in land subject
to sales agreements (2,200,287) 578,404
Decrease in prepaid expenses and other 67,600 16,961
Increase in accounts payable and accrued
expenses 5,977 5,070
----------- -----------
Net cash provided by operating activities 171,931 2,771,404
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Limited partner distributions declared -- (2,604,079)
Decrease in distribution payable (441,000) (3,229,921)
----------- -----------
Net cash used in financing activities (441,000) (5,834,000)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (269,069) (3,062,596)
CASH AND CASH EQUIVALENTS, beginning of period 2,292,149 5,844,446
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 2,023,080 $ 2,781,850
=========== ===========
<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. When the Registrant receives full payment
on the loan, the cash proceeds will be distributed to the limited partners in
accordance with the partnership agreement, net of cash reserves, if any, needed
for future operations of the Registrant. Cash reserves remaining in the
Registrant at June 30, 1999 total approximately $1.9 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. 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 and distribute its assets in
accordance with the partnership agreement.
During the quarter ended June 30, 1999 (the period), the Registrant closed
no land sale transactions; therefore, there were no cash distributions declared.
At June 30, 1999, the Registrant had five parcels of land (approximately 25
acres) under contract for sale, at a price aggregating approximately $11.7
million, to four unaffiliated third parties. The original cost of these five
parcels totaled approximately $5.3 million. One of these parcels, representing
4.5 acres, was sold subsequent to June 30, 1999 for approximately $2 million.
The parcel had a total original cost of approximately $890,000 and closing and
other costs of approximately $135,000. This parcel sale resulted in a gain in
July 1999 totaling approximately $1 million.
Approximately 60 acres (excluding the parcels in escrow) remain available
for sale and the Registrant has entered into preliminary negotiations for the
sale of several of the remaining land parcels. 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
distributions.
Total revenues were approximately $234,000 for the quarter ended June 30,
1999 as compared to approximately $1.3 million for the comparable quarter in
1998. Total revenues for the six months ended June 30, 1999 were approximately
$471,000 as compared to approximately $3.4 million for the same period in 1998.
Revenues in 1998 were higher because land sales comprised the majority of the
revenues in 1998. Interest on investments and other income for the period
decreased by approximately $12,000 from the comparable period of the prior year
due to the decrease in temporary investment securities held during the quarter
ended June 30, 1999. The higher cash balance in 1998 resulted from net land sale
proceeds held during that quarter prior to distribution of the cash to the
limited partners. Year-to-date amounts were similarly affected.
Total expenses (excluding the cost of land sales) for the quarter ended
June 30, 1999 were comparable to the prior year. Year to date expenses
(excluding the cost of land sales) increased by approximately $11,000 for the
six month period over the comparable period of the prior year due primarily to
an increase in property taxes which was offset somewhat by a decrease in general
partner fees. Property taxes increased, despite the sale of land parcels during
the past twelve months, due to higher assessed land values. The general partner
fee decreased during the six month period over the comparable period of the
prior year because the fee is based on Assets Under Management, as defined in
the partnership agreement, and as parcels are sold the general partner fee is
reduced accordingly.
<PAGE>
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The financial instruments held by the Registrant at June 30, 1999 consist
of cash equivalents and a loan receivable from an affiliate. The Registrant
intends to hold the investments to maturity; therefore, these financial
instruments do not subject the Registrant to a material exposure to changes in
interest rates.
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 88-B
BALANCE SHEET - JUNE 30, 1999
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 LIMITED
PARTNERSHIP
General Partner
By PERIMETER CENTER MANAGEMENT COMPANY
Corporate General Partner
Date: August 4, 1999 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 caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FFCA INVESTOR SERVICES CORPORATION 88-B
Date: August 4, 1999 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, 1999 AND THE STATEMENT OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1999 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 2,023,080
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 16,337,102
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 26,145,699
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,941,222
<TOTAL-LIABILITY-AND-EQUITY> 26,145,699
<SALES> 0
<TOTAL-REVENUES> 471,336
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 98,354
<INCOME-TAX> 0
<INCOME-CONTINUING> 98,354
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 98,354
<EPS-BASIC> 1.95
<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, 1999 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<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-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
