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, 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
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(Unaudited)
September 30, December 31,
1999 1998
------------ ------------
ASSETS
LAND:
Held for sale $ 7,092,894 $ 12,486,444
Subject to sale agreements 7,564,545 3,062,371
Subject to sale agreement with affiliate 788,287 788,287
------------ ------------
Total land 15,445,726 16,337,102
LOAN RECEIVABLE FROM AFFILIATE 7,598,415 7,598,415
CASH AND CASH EQUIVALENTS 4,111,129 2,292,149
PREPAID EXPENSES AND OTHER 106,742 254,702
------------ ------------
Total assets $ 27,262,012 $ 26,482,368
============ ============
LIABILITIES AND PARTNERS' CAPITAL
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 1,923,987 $ 441,307
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 146,227 198,193
------------ ------------
Total liabilities 2,070,214 639,500
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partner (5,129) (7,527)
Limited partners 25,196,927 25,850,395
------------ ------------
Total partners' capital 25,191,798 25,842,868
------------ ------------
Total liabilities and partners' capital $ 27,262,012 $ 26,482,368
============ ============
2
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
9/30/99 9/30/98 9/30/99 9/30/98
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Land sales $ 2,058,710 $ 2,520,642 $ 2,058,710 $ 5,391,715
Interest on loan to affiliate 212,500 212,500 637,500 637,500
Interest on investments and other 42,905 45,768 89,241 128,113
----------- ----------- ----------- -----------
2,314,115 2,778,910 2,785,451 6,157,328
----------- ----------- ----------- -----------
EXPENSES:
Cost of land sales 1,025,906 867,176 1,025,906 2,625,610
General partner fees 61,831 64,428 186,217 196,499
Property management fees 9,000 9,000 27,000 27,000
Marketing 1,950 -- 10,499 10,071
Property taxes (22,412) 53,572 67,017 122,470
Other operating 63,584 72,888 196,202 205,899
----------- ----------- ----------- -----------
1,139,859 1,067,064 1,512,841 3,187,549
----------- ----------- ----------- -----------
NET INCOME $ 1,174,256 $ 1,711,846 $ 1,272,610 $ 2,969,779
=========== =========== =========== ===========
NET INCOME ALLOCATED TO:
General partner $ 1,415 $ 584 $ 2,398 $ 2,037
Limited partners 1,172,841 1,711,262 1,270,212 2,967,742
----------- ----------- ----------- -----------
$ 1,174,256 $ 1,711,846 $ 1,272,610 $ 2,969,779
=========== =========== =========== ===========
NET INCOME PER LIMITED
PARTNERSHIP UNIT (based on 50,000
units held by limited partners) $ 23.46 $ 34.22 $ 25.40 $ 59.35
=========== =========== =========== ===========
</TABLE>
3
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
General ---------------------
Partner Number Total
Amount of Units Amount Amount
------ -------- ------ ------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1998 $(7,527) 50,000 $ 25,850,395 $ 25,842,868
Net Income 2,398 -- 1,270,212 1,272,610
Distribution to Limited Partners -- -- (1,923,680) (1,923,680)
------- ------ ------------ ------------
BALANCE, September 30, 1999 $(5,129) 50,000 $ 25,196,927 $ 25,191,798
======= ====== ============ ============
</TABLE>
4
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,272,610 $ 2,969,779
Adjustments to net income:
Change in assets and liabilities:
Decrease in land held for sale 5,393,550 3,359,074
Increase in land subject to sales agreements (4,502,174) (1,078,367)
Decrease (increase) in prepaid expenses
and other 147,960 (4,323)
Increase (decrease) in accounts payable and
accrued expenses (51,966) 55,659
----------- -----------
Net cash provided by operating activities 2,259,980 5,301,822
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Limited partner distributions declared (1,923,680) (5,046,812)
Increase (decrease) in distribution payable 1,482,680 (1,785,688)
----------- -----------
Net cash used in financing activities (441,000) (6,832,500)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,818,980 (1,530,678)
CASH AND CASH EQUIVALENTS, beginning of period 2,292,149 5,844,446
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 4,111,129 $ 4,313,768
=========== ===========
5
<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 September 30, 1999 total approximately $2 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 September 30, 1999 (the period), the
Registrant sold one 4.5 acre land parcel to an unaffiliated third party. This
land sale provided cash sale proceeds of approximately $2,060,000. 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 of approximately
$1,030,000. Cash distributions declared from the parcel sale proceeds amounted
to $1,923,680 for the period.
At September 30, 1999, the Registrant had seven parcels of land
(approximately 46 acres) under contract for sale, at prices aggregating
approximately $21.3 million, to five unaffiliated third parties. The original
cost of these seven parcels totaled approximately $7.6 million. One of these
parcels, representing 4.8 acres, was sold subsequent to September 30, 1999 for
approximately $1.9 million. The parcel had a total original cost of
approximately $856,000 and closing and other costs of approximately $64,000.
This parcel sale resulted in a gain in October 1999 totaling approximately $1
million.
Approximately 34 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 $2.3 million for the quarter ended September 30,
1999 as compared to $2.8 million for the comparable quarter in 1998. Total
revenues for the nine months ended September 30, 1999 were $2.8 million as
compared to $6.2 million for the same period in 1998. Revenues were higher in
the nine month period of 1998 because more land sales closed during that period
as compared to 1999. Interest on investments and other income for the nine month
period decreased by $38,872 from the comparable period of the prior year due to
the decrease in temporary investment securities held during the nine months
ended September 30, 1999. The higher cash balance in 1998 resulted from net land
sale proceeds held during that period prior to distribution of the cash to the
limited partners. The quarterly decrease was not significant.
6
<PAGE>
Total expenses (excluding the cost of land sales) decreased by $85,935
for the quarter ended September 30, 1999 from the comparable quarter the prior
year. Year-to-date expenses (excluding the cost of land sales) decreased by
approximately $75,000 for the nine month period over the comparable period of
the prior year. These decreases were due to decreases in property taxes, repairs
and maintenance, and general partner fees. Property taxes and repairs and
maintenance expenses decreased due to the sale of land parcels during the past
twelve months. In addition, the current year's property tax assessment was lower
than anticipated, so the property tax accrual was adjusted accordingly. The
general partner fee decreased from 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.
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 September 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.
7
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 88-B
BALANCE SHEET - SEPTEMBER 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.
8
<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: November 4, 1999 By /s/ John Barravecchia
--------------------------------------------
John Barravecchia, Executive Vice President,
Treasurer and Chief Financial Officer
9
<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 4, 1999 By /s/ John Barravecchia
---------------------------------------
John Barravecchia, President, Secretary
and Treasurer
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF SEPTEMBER 30, 1999 AND THE STATEMENT OF OPERATIONS FOR THE NINE
MONTHS ENDED SEPTEMBER 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 4,111,129
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 15,445,726
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 27,262,012
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,191,798
<TOTAL-LIABILITY-AND-EQUITY> 27,262,012
<SALES> 0
<TOTAL-REVENUES> 2,785,451
<CGS> 0
<TOTAL-COSTS> 1,025,906
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,272,610
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,272,610
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,272,610
<EPS-BASIC> 25.40
<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, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-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>
