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, 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
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(Unaudited)
September 30, December 31,
2000 1999
----------- ------------
ASSETS
LAND:
Held for sale $ 1,105,172 $ 5,109,126
Subject to sale agreements -- 3,118,364
Subject to sale agreement with affiliate -- 788,287
----------- ------------
Total land 1,105,172 9,015,777
LOAN RECEIVABLE FROM AFFILIATE -- 7,598,415
CASH AND CASH EQUIVALENTS 9,845,165 16,667,333
PREPAID EXPENSES AND OTHER 227,624 159,228
----------- ------------
Total assets $11,177,961 $ 33,440,753
=========== ============
LIABILITIES AND PARTNERS' CAPITAL
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 7,042,057 $ 14,314,676
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 185,425 163,786
----------- ------------
Total liabilities 7,227,482 14,478,462
----------- ------------
PARTNERS' CAPITAL (DEFICIT):
General partner 12,320 (3,844)
Limited partners 3,938,159 18,966,135
----------- ------------
Total partners' capital 3,950,479 18,962,291
----------- ------------
Total liabilities and partners' capital $11,177,961 $ 33,440,753
=========== ============
1
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------- -------------------------
9/30/00 9/30/99 9/30/00 9/30/99
---------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Land sales $6,248,402 $ 2,058,710 $22,485,614 $2,058,710
Interest on loan to affiliate -- 212,500 283,458 637,500
Additional interest from affiliate -- -- 1,130,058 --
Interest on investments and other 206,883 42,905 630,445 89,241
---------- ------------ ----------- ----------
6,455,285 2,314,115 24,529,575 2,785,451
---------- ------------ ----------- ----------
EXPENSES:
Cost of land sales 2,694,260 1,025,906 9,123,926 1,025,906
General partner fees 23,074 61,831 98,987 186,217
Property management fees 9,000 9,000 27,000 27,000
Marketing -- 1,950 -- 10,499
Property taxes 16,076 (22,412) 47,943 67,017
Other operating 94,022 63,584 253,650 196,202
---------- ------------ ----------- ----------
2,836,432 1,139,859 9,551,506 1,512,841
---------- ------------ ----------- ----------
NET INCOME $3,618,853 $ 1,174,256 $14,978,069 $1,272,610
========== ============ =========== ==========
NET INCOME ALLOCATED TO:
General partner $ 647 $ 1,415 $ 16,164 $ 2,398
Limited partners 3,618,206 1,172,841 14,961,905 1,270,212
---------- ------------ ----------- ----------
$3,618,853 $ 1,174,256 $14,978,069 $1,272,610
========== ============ =========== ==========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(based on 50,000 units held by limited partners) $ 72.36 $ 23.46 $ 299.24 $ 25.40
========== ============ =========== ==========
</TABLE>
2
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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 16,164 -- 14,961,905 14,978,069
Distribution to Limited Partners -- -- (29,989,881) (29,989,881)
-------- ------ ------------ ------------
BALANCE, September 30, 2000 $ 12,320 50,000 $ 3,938,159 $ 3,950,479
======== ====== ============ ============
</TABLE>
3
<PAGE>
SCOTTSDALE LAND TRUST LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 14,978,069 $ 1,272,610
Adjustments to net income:
Gain on sale of property (113,298) --
Change in assets and liabilities:
Decrease in land held for sale 4,003,954 5,393,550
Decrease (increase) in land subject to sales agreements 3,118,364 (4,502,174)
Decrease (increase) in prepaid expenses and other (68,396) 147,960
Increase (decrease) in accounts payable and accrued expenses 21,639 (51,966)
------------ -----------
Net cash provided by operating activities 21,940,332 2,259,980
------------ -----------
CASH FLOW FROM INVESTING ACTIVITY:
Receipt of loan payoff from affiliate and sale of
related parcel 8,500,000 --
------------ -----------
Net cash provided by investing activity 8,500,000 --
------------ -----------
CASH FLOWS FOR FINANCING ACTIVITIES:
Limited partner distributions declared (29,989,881) (1,923,680)
Increase (decrease) in distribution payable (7,272,619) 1,482,680
------------ -----------
Net cash used in financing activities (37,262,500) (441,000)
------------ -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (6,822,168) 1,818,980
CASH AND CASH EQUIVALENTS, beginning of period 16,667,333 2,292,149
------------ -----------
CASH AND CASH EQUIVALENTS, end of period $ 9,845,165 $ 4,111,129
============ ===========
</TABLE>
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
In the second quarter of 2000 a proposal was passed by a majority vote of
the investors of Scottsdale Land Trust Limited Partnership (the Registrant) to
dissolve the partnership upon the sale of the remaining land parcels. As of
October 31, 2000, one land parcel remains available for sale. Once all of The
Perimeter Center parcels are sold, the Registrant will liquidate and distribute
its assets in accordance with the partnership agreement. The general partner of
the Registrant intends to deposit funds in a liquidating trust until the general
partner determines that all contingent liabilities have been paid or that there
are no outstanding or contingent liabilities. After payment of all outstanding
or contingent liabilities, the remaining trust funds, if any, will be returned
to the investors in the same manner as required for liquidating distributions
under the partnership agreement. The net amount ultimately available for
distribution to the investors depends on various factors, such as the actual
cost of the liquidation and the amount of interest income from temporary
investments received by the Registrant until completely liquidated. Cash
reserves remaining in the Registrant total approximately $2.6 million.
During the quarter ended September 30, 2000 (the "period"), the Registrant
closed two land sale transactions comprising two parcels aggregating
approximately 11 acres. One of the land sales was to an unaffiliated third
party, and the other was a land sale to the Registrant's affiliate, Franchise
Finance Corporation of America (FFCA). This related party sale was approved
earlier this year by a vote of the investors of the Registrant. The land sale
transactions during the period provided cash sale proceeds of approximately $6.2
million. The parcels had a total original cost of $2.4 million and closing and
other costs of approximately $325,000. These parcel sales resulted in gains
totaling approximately $3.5 million. Distributions declared during the period
amounted to approximately $7 million, representing the net proceeds from the
parcel sales during the quarter and the limited partners' portion of the
additional interest received from FFCA upon payoff of its note in May.
At October 31, 2000, one remaining land parcel (approximately 6 acres)
remains available for sale and the Registrant is in preliminary negotiations for
the sale of this parcel. Once this remaining parcel is sold, the Registrant will
liquidate and distribute its assets in accordance with the partnership agreement
and deposit the remaining funds in the liquidating trust. The liquidating trust
would be available to satisfy claims made directly or indirectly with respect to
the liquidation of the Registrant for a period of up to 24 months following the
effective date of the trust agreement, at which time, as long as there are no
unresolved claims, the remaining balance of the liquidating trust will be
disbursed to the investors.
Revenues totaled approximately $6.5 million for the quarter ended September
30, 2000, as compared to approximately $2.3 million for the comparable quarter
in 1999. Total revenues for the nine months ended September 30, 2000 were
approximately $24.5 million as compared to approximately $2.8 million for the
same period in 1999. Revenues in 2000 were higher because more land sale
transactions closed during that period as compared to 1999. There was no
interest income on the loan to an affiliate during the quarter ended September
30, 2000, due to the maturity and payment in full of the loan on May 1, 2000.
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 the
quarter prior to distribution of the cash to the investors. Total expenses
(excluding the cost of land sales) increased by approximately $28,000 for the
quarter ended September 30, 2000 over the comparable quarter of the prior year.
Year-to-date expenses (excluding the cost of land sales) decreased by $59,000
for the nine-month period from the comparable period of the prior year. The
increase during the quarter resulted from payment of professional services. The
decrease during the nine-month period is primarily 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 nine months. The general partner fee decreased from the
5
<PAGE>
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, 2000
consist of cash equivalents. 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.
6
<PAGE>
FFCA INVESTOR SERVICES CORPORATION 88-B
BALANCE SHEET - SEPTEMBER 30, 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.
7
<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 6, 2000 By /s/ John Barravecchia
---------------------------------------
John Barravecchia, Executive Vice
President, Treasurer and Chief
Financial Officer
8
<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 6, 2000 By /s/ John Barravecchia
------------------------------------
John Barravecchia, President,
Secretary and Treasurer, Chief
Financial Officer
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