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, 2000
[ ] 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
MARCH 31, 2000 AND DECEMBER 31, 1999
(Unaudited)
March 31, December 31,
2000 1999
------------ ------------
ASSETS
LAND:
Held for sale $ 1,744,556 $ 5,109,126
Subject to sale agreements 2,740,607 3,118,364
Subject to sale agreements with affiliate 1,412,250 788,287
------------ ------------
Total land 5,897,413 9,015,777
LOAN RECEIVABLE FROM AFFILIATE 7,598,415 7,598,415
CASH AND CASH EQUIVALENTS 8,992,569 16,667,333
PREPAID EXPENSES AND OTHER 89,718 159,228
------------ ------------
Total assets $ 22,578,115 $ 33,440,753
============ ============
LIABILITIES AND PARTNERS' CAPITAL
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 6,268,628 $ 14,314,676
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 233,703 163,786
------------ ------------
Total liabilities 6,502,331 14,478,462
------------ ------------
PARTNERS' CAPITAL (DEFICIT):
General partner (1,481) (3,844)
Limited partners 16,077,265 18,966,135
------------ ------------
Total partners' capital 16,075,784 18,962,291
------------ ------------
Total liabilities and partners' capital $ 22,578,115 $ 33,440,753
============ ============
1
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
2000 1999
---------- ----------
REVENUES:
Land sales $6,603,799 $ --
Interest on loan to affiliate 212,500 212,500
Interest on investments and other 188,712 25,013
---------- ----------
7,005,011 237,513
---------- ----------
EXPENSES:
Cost of land sales 3,458,143 --
General partner fees 44,880 61,850
Property management fees 9,000 9,000
Marketing -- 5,713
Property taxes 20,509 50,795
Other operating 90,534 55,415
---------- ----------
3,623,066 182,773
---------- ----------
NET INCOME $3,381,945 $ 54,740
========== ==========
NET INCOME ALLOCATED TO:
General partner $ 2,363 $ 547
Limited partners 3,379,582 54,193
---------- ----------
$3,381,945 $ 54,740
========== ==========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(based on 50,000 units held by limited partners) $ 67.59 $ 1.08
========== ==========
2
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
General ---------------------------
Partner Number Total
Amount of Units Amount Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1999 $ (3,844) 50,000 $ 18,966,135 $ 18,962,291
Net Income 2,363 -- 3,379,582 3,381,945
Distribution to Limited Partners -- -- (6,268,452) (6,268,452)
------------ ------------ ------------ ------------
BALANCE, March 31, 2000 $ (1,481) 50,000 $ 16,077,265 $ 16,075,784
============ ============ ============ ============
</TABLE>
3
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
2000 1999
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,381,945 $ 54,740
Adjustments to net income:
Change in assets and liabilities:
Decrease in land held for sale 3,364,570 --
Increase in land subject to sales agreements (246,206) --
Decrease in prepaid expenses and other 69,510 140,428
Increase (decrease) in accounts payable
and accrued liabilities 69,917 (25,205)
------------ -----------
Net cash provided by operating activities 6,639,736 169,963
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Limited partner distribution declared (6,268,452) --
Decrease in distribution payable (8,046,048) (441,000)
------------ -----------
Net cash used in financing activities (14,314,500) (441,000)
------------ -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (7,674,764) (271,037)
CASH AND CASH EQUIVALENTS, beginning of period 16,667,333 2,292,149
------------ -----------
CASH AND CASH EQUIVALENTS, end of period $ 8,992,569 $ 2,021,112
============ ===========
4
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(1) SUBSEQUENT EVENT:
As provided in the Partnership agreement, the Partnership entered into an
agreement on December 29, 1988 to sell approximately five acres of the Property
(the Parcel) to FFCA at a purchase price determined by independent appraisal to
be the fair market value of the unimproved Parcel and related improvements. In
connection with the sale agreement, the Partnership also funded the construction
of an office building on the Parcel that is the corporate headquarters of FFCA.
This loan to FFCA for the acquisition of the Parcel, the office building and the
parcel improvements totaled $8.5 million. On May 1, 2000, this loan matured and
the principal, together with accrued interest, was paid. In addition, FFCA paid
Additional Interest in the amount of $1.13 million, as provided in the loan
agreement.
The sale of the Parcel to FFCA was recognized in the Partnership's
financial statements on May 1, 2000 when the amounts loaned to FFCA were repaid
to the Partnership.
5
<PAGE>
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 has made monthly payments to the Registrant
of interest only, through maturity of the loan on May 1, 2000, at which time the
principal balance of the loan was paid off, together with accrued interest, and
Additional Interest in the amount of $1.13 million. Reserves remaining in the
Registrant are 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 have
been land sales, interest payments received from FFCA under the loan agreement
(interest payments were made through May 1, 2000 at which time the loan was paid
in full) 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. As of May 3, 2000,
all land parcels were sold or are under contract for sale. A proxy statement was
filed with the Securities and Exchange Commission in April 2000, requesting an
investor vote on the sale of a parcel of property to a related party and on the
dissolution of the partnership upon sale of the remaining parcels under
contract.
During the quarter ended March 31, 2000 (the period), the Registrant closed
two land sale transactions comprising three parcels aggregating approximately 13
acres to unaffiliated third parties. The land sale transactions during the
period provided cash sale proceeds of approximately $6.6 million. The parcels
had a total original cost of $3.1 million and closing and other costs of
approximately $328,000. These parcel sales resulted in gains totaling $3.2
million. Distributions declared from the parcel sale net proceeds amounted to
approximately $6.3 million for the period.
At May 3, 2000, the four remaining land parcels (approximately 34 acres)
were all under contract for sale at prices aggregating approximately $17.8
million. The original cost of these four parcels totaled approximately $5.1
million. Three of the parcels are under contract to unaffiliated third parties
and one parcel is under contract with a related party. The related party
contract was entered into on February 7, 2000 with Franchise Finance Corporation
of America, an affiliate of the General Partner, to purchase a parcel
(approximately 3.6 acres) adjacent to its corporate headquarters. This sale is
subject to the approval, by vote, of the majority of the limited partner
interest of the Partnership. Additionally, all of these contracts are subject to
a due diligence process and, therefore, the Registrant cannot predict which, if
any of these contracts will result in the sale of a land parcel or the timing or
the amount of any future cash distributions. Once the remaining parcels are
sold, the Partnership will liquidate and distribute its assets in accordance
with the Partnership agreement.
Total revenues were approximately $7 million for the quarter ended March
31, 2000 as compared to approximately $238,000 for the comparable quarter in
1999. Revenues in 2000 were higher because land sales comprised the majority of
the revenues in 2000 and there were no land sales during the first quarter of
1999. Interest on investments and other income for the period increased by
approximately $164,000 from the comparable quarter of the prior year due to the
increase in temporary investment securities held during the period. The higher
cash balance in 2000 resulted from net land sale proceeds held during that
quarter prior to distribution of the cash to the limited partners. Total
expenses (excluding the cost of land sales) decreased by approximately $18,000
for the period over the comparable period of the prior year due primarily to
lower property taxes and lower general partner fees due to the sale of land
parcels. These reductions were offset by costs related to the Proxy Statement
filed in April 2000.
6
<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 March 31, 2000 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 - MARCH 31, 2000
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 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: May 12, 2000 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 duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FFCA INVESTOR SERVICES CORPORATION 88-B
Date: May 12, 2000 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 MARCH 31, 2000 AND THE STATEMENT OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 2000 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 8,992,569
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 5,897,413
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 22,578,115
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 16,075,784
<TOTAL-LIABILITY-AND-EQUITY> 22,578,115
<SALES> 0
<TOTAL-REVENUES> 7,005,011
<CGS> 0
<TOTAL-COSTS> 3,458,143
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,381,945
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,381,945
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,381,945
<EPS-BASIC> 67.59
<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, 2000 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<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>
