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, 1997
-------------------------------------------------
[ ] 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 1. Financial Statements.
------- ---------------------
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
(Unaudited)
March 31, December 31,
1997 1996
----------- -----------
ASSETS
------
CASH AND CASH EQUIVALENTS $ 644,720 $ 651,261
RECEIVABLES FROM LESSEES 38,094 38,000
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 2,160,775 2,048,841
----------- -----------
12,482,063 12,593,997
----------- -----------
Total assets $20,960,085 $21,078,466
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
DISTRIBUTION PAYABLE TO LIMITED PARTNERS $ 579,559 $ 579,450
PAYABLE TO GENERAL PARTNER 7,012 7,720
RENTAL DEPOSITS AND OTHER 249,656 255,504
----------- -----------
Total liabilities 836,227 842,674
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General partner (18,330) (17,210)
Limited partners 20,142,188 20,253,002
----------- -----------
Total partners' capital 20,123,858 20,235,792
----------- -----------
Total liabilities and partners' capital $20,960,085 $21,078,466
=========== ===========
<PAGE>
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
1997 1996
-------- --------
REVENUES:
Rental $394,870 $394,870
Participating rentals 111,733 119,724
Mortgage loan interest 135,625 135,625
Interest and other 5,341 5,512
-------- --------
647,569 655,731
-------- --------
EXPENSES:
General partner fees 35,799 47,014
Depreciation 111,934 112,818
Operating 26,490 23,442
-------- --------
174,223 183,274
-------- --------
NET INCOME $473,346 $472,457
======== ========
NET INCOME ALLOCATED TO:
General partner $ 4,733 $ 4,725
Limited partners 468,613 467,732
-------- --------
$473,346 $472,457
======== ========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(based on 26,709 units held by limited partners) $ 17.55 $ 17.51
======== ========
<PAGE>
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(Unaudited)
Limited Partners
General ----------------------
Partner Number Total
Amount of Units Amount Amount
--------- ---------- ----------- -----------
BALANCE, December 31, 1996 $(17,210) 26,709 $20,253,002 $20,235,792
Net income 4,733 - 468,613 473,346
Distribution to partners (5,853) - (579,427) (585,280)
-------- ------ ----------- -----------
BALANCE, March 31, 1997 $(18,330) 26,709 $20,142,188 $20,123,858
======== ====== =========== ===========
<PAGE>
PARTICIPATING INCOME PROPERTIES III LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 473,346 $ 472,457
Adjustments to net income:
Depreciation 111,934 112,818
Change in assets and liabilities:
Increase in receivables from lessees (94) (160)
Decrease in payable to general partner (708) --
Increase (decrease) in rental deposits and other (5,848) 910
--------- ---------
Net cash provided by operating activities 578,630 586,025
--------- ---------
CASH FLOWS FOR FINANCING ACTIVITIES:
Partner distributions declared (585,280) (585,172)
Increase in distribution payable 109 --
--------- ---------
Net cash used in financing activities (585,171) (585,172)
--------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (6,541) 853
CASH AND CASH EQUIVALENTS, beginning of period 651,261 638,406
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 644,720 $ 639,259
========= =========
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
- --------------------------------
Item 2. Management's Discussion and Analysis of
- ------- Financial Condition and Results of Operations
---------------------------------------------
As of March 31, 1997, 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
$579,427 for the quarter ended March 31, 1997 (the period). 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 $111,733 for the period which is lower than the comparable
quarter in 1996 and is attributable to decreased overall travel plaza
sales. In June 1996, a credit card issuer to Flying J Travel Plaza
customers terminated its relationship with the travel plazas. As a result,
volumes and margins at many Flying J Travel Plaza locations decreased. CFJ
Properties, the lessee of one of the Registrant's travel plazas, has
advised the general partner of the Registrant that it expects sales will
stabilize and be restored by mid-1997. Total expenses of $174,223 for the
period were lower than expenses for the quarter ended March 31, 1996 due
to lower general partner fees; such fees are calculated based on revenues
net of operating expenses. Net income for the period is comparable to the
same period in 1996.
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 - MARCH 31, 1997
------------------------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
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: April 4, 1997 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: April 4, 1997 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 MARCH 31, 1997 AND
THE STATEMENT OF INCOME FOR THE THREE MONTHS ENDED
MARCH 31, 1997 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 644,720
<SECURITIES> 0
<RECEIVABLES> 38,094
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,642,838
<DEPRECIATION> 2,160,775
<TOTAL-ASSETS> 20,960,085
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20,123,858
<TOTAL-LIABILITY-AND-EQUITY> 20,960,085
<SALES> 0
<TOTAL-REVENUES> 647,569
<CGS> 0
<TOTAL-COSTS> 174,223
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 473,346
<INCOME-TAX> 0
<INCOME-CONTINUING> 473,346
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 473,346
<EPS-PRIMARY> 17.55
<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, 1997
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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<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>
