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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, 1996
-------------------------------------------------
[ ] 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
0-20151
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
and
FFCA/PIP III INVESTOR SERVICES CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Co-Registrants as Specified in Their
Organizational Documents)
Delaware 86-0665681
- --------------------------------------------------------------------------------
(Partnership State of Organization) (Partnership I.R.S. Employer
Identification Number)
Delaware 86-0555605
- --------------------------------------------------------------------------------
(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.
------- ---------------------
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
------
CASH AND CASH EQUIVALENTS $ 665,534 $ 638,406
RECEIVABLES FROM LESSEES 46,416 39,257
MORTGAGE LOAN INTEREST RECEIVABLE 45,208 45,208
MORTGAGE LOAN RECEIVABLE 7,750,000 7,750,000
PROPERTY SUBJECT TO OPERATING LEASES, at cost
Land 2,684,138 2,684,138
Buildings 11,010,862 11,010,862
Equipment 947,838 947,838
----------- -----------
Total 14,642,838 14,642,838
Less-Accumulated depreciation 1,824,973 1,599,633
----------- -----------
12,817,865 13,043,205
----------- -----------
Total assets $21,325,023 $21,516,076
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 579,506 $ 579,556
PAYABLE TO GENERAL PARTNER 34,007 -
RENTAL DEPOSITS AND OTHER 251,851 251,520
----------- -----------
Total liabilities 865,364 831,076
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General partner (14,972) (12,718)
Limited partners 20,474,631 20,697,718
----------- -----------
Total partners' capital 20,459,659 20,685,000
----------- -----------
Total liabilities and partners' capital $21,325,023 $21,516,076
=========== ===========
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
6/30/96 6/30/95 6/30/96 6/30/95
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Rental $394,870 $394,870 $ 789,740 $ 789,740
Participating rentals 136,489 136,378 256,213 248,305
Mortgage loan interest 135,625 135,625 271,250 271,250
Investment interest and other 5,825 5,938 11,337 13,097
-------- -------- ----------- -----------
672,809 672,811 1,328,540 1,322,392
-------- -------- ----------- -----------
EXPENSES:
General partner fees 68,154 67,424 115,168 106,296
Depreciation 112,522 112,818 225,340 225,635
Operating 19,371 20,066 42,813 45,466
-------- -------- ----------- -----------
200,047 200,308 383,321 377,397
-------- -------- ----------- -----------
NET INCOME $472,762 $472,503 $ 945,219 $ 944,995
======== ======== =========== ===========
NET INCOME ALLOCATED TO:
General partner $ 4,728 $ 4,725 $ 9,452 $ 9,450
Limited partners 468,034 467,778 935,767 935,545
-------- -------- ----------- -----------
$472,762 $472,503 $ 945,219 $ 944,995
======== ======== =========== ===========
NET INCOME PER LIMITED
PARTNERSHIP UNIT (based on
26,709 units outstanding) $17.52 $17.51 $35.04 $35.03
====== ====== ====== ======
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Limited Partners
General ----------------
Partner Number Total
Amount of Units Amount Amount
-------- -------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1995 $(12,718) 26,709 $20,697,718 $20,685,000
Net income 9,452 - 935,767 945,219
Distributions to partners (11,706) - (1,158,854) (1,170,560)
-------- ------ ----------- -----------
BALANCE, June 30, 1996 $(14,972) 26,709 $20,474,631 $20,459,659
======== ====== =========== ===========
</TABLE>
<PAGE>
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 945,219 $ 944,995
Adjustments to net income:
Depreciation 225,340 225,635
Change in assets and liabilities:
Increase in receivables from lessees (7,159) -
Increase in payable to general partner 34,007 -
Increase (decrease) in rental deposits and other 331 (18,462)
------------ ------------
Net cash provided by operating
activities 1,197,738 1,152,168
CASH FLOWS FOR FINANCING ACTIVITIES:
Distributions to partners (1,170,610) (1,170,610)
------------ ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 27,128 (18,442)
CASH AND CASH EQUIVALENTS, beginning of period 638,406 654,948
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 665,534 $ 636,506
============ ============
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
- --------------------------------
Item 2. Management's Discussion and Analysis of
- ------- Financial Condition and Results of Operations
---------------------------------------------
As of June 30, 1996, Participating Income Properties III Limited
Partnership, a Delaware limited partnership, (the Registrant), had
received $26,709,000 in gross proceeds from its offering of Units. Net
funds available for investment, after payment of sales commissions,
organization costs and acquisition fees, amounted to $23,012,902. The
offering of Units is the Registrant's sole source of capital, and since
the final closing of limited partnership units was held on February 28,
1992, the Registrant will not receive additional funds from the offering.
The Registrant was fully invested in travel plaza properties and mortgages
by June 30, 1993 and does not anticipate any further capital expenditures.
The Registrant declared a cash distribution to the limited partners of
$579,432 for the quarter ended June 30, 1996 (the period), which, combined
with the first quarter distribution of $579,422 amounts to $1,158,854 year
to date. During the period, all net proceeds not invested in travel plaza
property and the mortgage loan were invested in Government Agency discount
notes and bank repurchase agreements (which are secured by United States
Treasury and Government obligations).
During the period, the Registrant received base rental revenue and
mortgage loan interest income pursuant to its travel plaza lease and loan
arrangements in the amount of $530,495, which remains unchanged from the
prior year. In addition, the Registrant received or accrued participating
rentals of $136,489 for the period, which is comparable to the same period
in 1995. Total expenses remained constant at $200,047 for the period as
compared to the same period in the prior year. Net income for the three
months ended June 30, 1996 remained unchanged from the same period in
1995.
The decrease in total assets reflected in the Registrant's financial
statements filed with this report is mainly attributable to the
depreciation allowance, which is deducted for accounting purposes from the
cost of the assets on the Registrant's books.
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.
<PAGE>
FFCA/PIP III INVESTOR SERVICES CORPORATION
------------------------------------------
BALANCE SHEET - JUNE 30, 1996
-----------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Cash $100
Investment in Participating Income Properties III 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
====
</TABLE>
Note: FFCA/PIP III Investor Services Corporation (the Corporation) was
incorporated on December 5, 1988, and amended on July 9, 1990 to act as the
assignor limited partner in Participating Income Properties III Limited
Partnership (PIP III).
The assignor limited partner is the owner of record of the limited
partnership units of PIP III. All rights and powers of the Corporation have been
assigned to the holders, who are the registered and beneficial owners of the
units. Other than to serve as assignor limited partner, the Corporation 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
registrants have duly caused this report to be signed on their behalf by
the undersigned thereunto duly authorized.
PARTICIPATING INCOME PROPERTIES III LIMITED
PARTNERSHIP
By FFCA PARTICIPATING MANAGEMENT COMPANY
LIMITED PARTNERSHIP
Managing General Partner
By FRANCHISE FINANCE CORPORATION OF AMERICA III
Corporate General Partner
Date: July 8, 1996 By /s/ John R. Barravecchia
---------------------------------------------
John R. Barravecchia, 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/PIP III INVESTOR SERVICES CORPORATION
Date: July 8, 1996 By /s/ John R. Barravecchia
----------------------------------------------
John R. Barravecchia, President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE BALANCE SHEET AS OF JUNE 30, 1996 AND
THE STATEMENT OF INCOME FOR THE SIX MONTHS ENDED
JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000865828
<NAME> PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 665,534
<SECURITIES> 0
<RECEIVABLES> 46,416
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,642,838
<DEPRECIATION> 1,824,973
<TOTAL-ASSETS> 21,325,023
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20,459,659
<TOTAL-LIABILITY-AND-EQUITY> 21,325,023
<SALES> 0
<TOTAL-REVENUES> 1,328,540
<CGS> 0
<TOTAL-COSTS> 383,321
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 945,219
<INCOME-TAX> 0
<INCOME-CONTINUING> 945,219
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 945,219
<EPS-PRIMARY> 35.04
<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, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
BALANCE SHEET.
</LEGEND>
<CIK> 0000865829
<NAME> FFCA/PIP III INVESTOR SERVICES CORPORATION
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<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>
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