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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
----- THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
----- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
---- ----
Commission File Number 0-5556
CONSOLIDATED-TOMOKA LAND CO.
(Exact name of registrant as specified in its charter)
FLORIDA 59-0483700
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
149 South Ridgewood Avenue
Daytona Beach, Florida 32114
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(Address of principal executive offices) (Zip Code)
Registrant's telephone Number, including area code
(904) 255-7558
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
SECURITIES EXCHANGE ACT OF 1934:
Name of each exchange on
Title of each class which registered
-------------------------- ------------------------
COMMON STOCK, $1 PAR VALUE AMERICAN STOCK EXCHANGE
SECURITIES REGISTERED UNDER SECTION 12(g) OF THE ACT:
NONE
(Title of Class)
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
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
-----
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at March 15, 1995 was approximately $15,608,241.
The number of shares of the Registrant's Common Stock outstanding on March 15,
1995 was 6,261,272.
Portions of the 1994 Annual Report to Stockholders of Registrant are
incorporated by reference in Part II of this report. Portions of the Proxy
Statement of Registrant dated March 31, 1995 are incorporated by reference in
Part III of this report.
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PART I
Item 1. Business
The Company is primarily engaged in the citrus industry and, through
its wholly owned subsidiaries, Indigo Group Inc., Indigo Development Inc., and
Indigo Group Ltd., the real estate industry. Real estate operations include
property leasing, commercial real estate, real estate development, leasing
properties for oil and mineral exploration and the sale of forest products.
See "Business - Real Estate Operations" for further comments regarding
formation of Indigo Group Ltd. The Company also operated in the Resort
industry until July 14, 1994 when the Resort complex at Indigo Lakes was sold.
From time to time, the Company sells unimproved real estate considered surplus
to its operating needs. This latter function is not considered as part of the
Company's ordinary operations and is included in general corporate and other
operations, along with earnings from temporary investments, in the information
below which separate the business segments.
Revenues of each segment are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1994 1993 1992
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(In Thousands)
<S> <C> <C> <C>
$ $ $
Citrus Operations 8,175 10,719 10,714
Real Estate Operations 16,528 15,780 20,185
General Corporate and
Other Operations 4,023 967 1,911
------ ------ ------
Combined 28,726 27,466 32,810
====== ====== ======
</TABLE>
Operating Income (Loss) for each segment is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
1994 1993 1992
------- ------ -------
(In Thousands)
<S> <C> <C> <C>
$ $ $
Citrus Operations 86 2,286 2,721
Real Estate Operations 9,637 2,184 3,344
General Corporate and
Other Operations 508 ( 2,657) ( 1,298)
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Combined 10,231 1,813 4,767
====== ====== ======
</TABLE>
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Item 1. Business (continued)
Identifiable assets of each segment are as follows:
<TABLE>
<CAPTION>
At December 31,
--------------------------------------------------------
1994 1993 1992
------ ---- -------
(In Thousands)
<S> <C> <C> <C>
$ $ $
Citrus Operations 17,349 17,313 16,433
Real Estate Operations 40,813 35,728 38,276
General Corporate and
Other Operations 3,373 5,967 3,055
Net Assets of Discontinued Resort
Operations -- 6,807 7,294
------ ------ ------
Combined 61,535 65,815 65,058
====== ====== ======
</TABLE>
Identifiable assets by segment are those assets that are used in each
segment. General corporate assets and those used in the Company's other
operations consist primarily of cash, temporary investments, notes receivable,
and property, plant, and equipment.
CITRUS
Citrus groves. The Company, under the name Lake Placid Groves, owns
and operates approximately 4,200 acres of orange and grapefruit groves located
primarily in three large parcels in Highlands County, Florida. The average age
of grove trees is 19 years, well within the average 45-year productive life.
At December 31, 1994, about 3,000 acres were classified as fruit bearing. The
balance of the acreage has been planted substantially with young trees as part
of the grove renovation discussed below. These groves will become fruit
bearing at the approximate rate of 400 acres per year, over four years,
beginning with 1994-95 crop year. All groves require expenditures chargeable
to production expenses, such as fertilizer, irrigation, and cultivation.
In late 1988, the Company began a grove development project on 1,600
acres east of U. S. Highway 27, fronting on State Road 70, south of Lake
Placid. This project, which included the installation of deep wells and low
pressure micro-jet irrigation systems, was completed in mid-1992. Initial
development work was started on approximately 400 acres of grove in 1989 with
400 additional acres developed in each of the three following years. The land,
which is about one mile from the Company's fresh fruit packing plant, is high
and dry and well suited for growing citrus. The 1992-93 crop year was the
first year any significant fruit was harvested from these groves.
Citrus operations. The Company harvests and sells both fresh and
to-be-processed citrus from its bearing groves. In connection with the groves,
the Company owns and operates an efficient fresh fruit citrus packing plant,
placed in service during the fall of 1969, in which the portion of the crop
which is sold as fresh fruit is packed. Fresh fruit sales are made by the
Company to wholesale produce distributors and retail grocery chains primarily
in the Eastern and Midwestern regions of the United States and Canada. In an
effort to achieve optimum utilization of the packing facility, the Company also
handles the fruit of other growers in the area.
The Company has an agreement in place with Turner Foods, Inc. whereby
the Company processes the portion of Turner's crop being sold on the fresh
market through the Company's packing house. Turner also pays the Company for
delivery of the fruit
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Item 1. Business (continued)
and until August of 1990, was under contract with the Company for the
harvesting of their fruit. The obligations under the agreements can be
terminated by either party on August 31 of each year upon thirty days written
notice. The amounts received by the Company for such services for the years
ended 1994, 1993 and 1992, amounted to $699,423, $329,294, and $798,829,
respectively.
That portion of the Company's citrus crop which is not sold as fresh
fruit is processed by Citrus World Incorporated, an agricultural cooperative
under a participating marketing pool agreement. The agreement is a two year
arrangement which the Company may terminate on October 1 of the second year by
giving written notice sixty days prior to such date. Citrus World, one of the
larger processors of citrus products in the United States, pools its own fruit
with the fruit purchased from the Company and other citrus growers, processes
the pooled fruit, and sells the products produced therefrom. Each participant
in the pool, including Citrus World, shares ratably in the proceeds from the
sales of these products, net of Citrus World's actual processing and marketing
costs, plus a per-unit handling fee. Citrus World makes periodic payments to
all participants on their pro rata share of net sales proceeds and makes final
payment after all the products in the pool have been sold. During the years
1994, 1993, and 1992, the Company's sales under the above pooling agreement
amounted to $2,993,457, $4,086,996, and $2,856,123, respectively.
The percentages of the Company's citrus which are sold as fresh fruit
and which are diverted to the processing plant can vary considerably from year
to year, depending upon fruit size, exterior appearance, and the relative
profitability of the markets. During the crop year ended August 31, 1994,
approximately 43% of the Company's citrus crop was sold as fresh fruit and the
balance was diverted to the cannery, as compared with 45% in the crop year
ended August 31, 1993 and 54% the crop year ended August 31, 1992.
The citrus industry, which is seasonal in nature as are other
agricultural pursuits, is subject to wide fluctuations in income because of
changes in demand, weather conditions, and other economic factors. Also
affecting income are the continuing large amounts of frozen concentrate orange
juice from Brazil which maintains high supply levels and tend to lower selling
prices. The Company's sales of fresh citrus fruit can be affected adversely by
marketing orders issued by the United States Department of Agriculture under
the Agricultural Marketing Agreement Act, which can result in periodic
proration, controlled by grade and size, of interstate shipment of Florida
oranges and grapefruit. Also, tariffs established by the International Tariff
Commission and approved by Congress can impact the cost of importing citrus
products and thus affect the supply and selling prices of processed citrus.
The North American Free Trade Agreement, which was passed in 1994, may also
have an effect on future fruit prices as it is phased in.
RESORT OPERATIONS
During 1994, the Company sold its resort operation known as the Indigo
Lakes Holiday Inn Crowne Plaza Resort located on U. S. Highway 92 in Daytona
Beach, Florida. The Resort had been under a management contract with
Sandcastle Resorts since August 17, 1990. A group associated with Sandcastle
Resorts formed a partnership named Indigo Lakes Resort, Ltd. and purchased the
145-unit inn, 8 separate buildings housing 64 condominium-style units, tennis
courts and pro shop, a conference center, several small meeting rooms, two
swimming pools, and other properties related to those facilities. The 18-hole
championship golf course, fully equipped golf pro shop, restaurant and cocktail
lounge, and a 500-seat banquet and meeting room facility, were sold to The
Fairways Group, L.P.
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Item 1. Business (continued)
On January 4, 1992, the Company had assumed a leasehold interest in a
21,000-square-foot restaurant located adjacent to the Indigo Lakes Holiday Inn
Crowne Plaza Resort. The Resort's food and beverage division operated the
building as a restaurant and lounge for portion of the period from time of
lease until April of 1993, after which it stood empty until the lease with the
Company was terminated in 1994.
The Company owned and operated a 143-unit motel at the intersection of
Interstate Highway 95 and U. S. Highway 92 in Daytona Beach, Florida, under a
License Agreement with Howard Johnson Motor Lodge Inc. until it was sold August
of 1991.
REAL ESTATE OPERATIONS
On April 30, 1987, the Company and The Charles Wayne Group formed The
Charles Wayne Group Ltd. ("CWG LTD."), a Florida limited partnership, to engage
in the development, construction, management, and sale of residential and
commercial real estate properties. The residential real estate assets of the
Company's real estate subsidiaries, along with certain other assets including
near-term developable acreage, comprised the Company's contribution. The
Charles Wayne Group contributed its residential real estate assets, home
building business, commercial real estate properties, and a beneficial interest
in certain real estate brokerage activities.
Until October 1990, the Company, as a limited partner, and its
subsidiary, Charles Wayne Group Inc. as corporate managing general partner,
owned the majority interest (68.43%) in the partnership, while The Charles
Wayne Partners, as the non-managing general partner, owned the remaining
minority interest. The partners of The Charles Wayne Group were the managers
of the partnership's daily operations. On October 19, 1990, the Company
acquired the 31.57% minority interest of CWG LTD. and assumed management of the
major business activities of CWG LTD. In August of 1991 the names of The
Charles Wayne Group Ltd. and The Charles Wayne Group Inc. were changed to
Indigo Group Ltd.("IG LTD") and Indigo Group Inc. ("IG INC"), respectively.
From October of 1990 until December 1993, IG LTD centered its
operations on residential community development, construction, and sales,
operating primarily in four communities. In September of 1993, IG LTD reached
an agreement, effective December 31, 1993, to dispose of its interest in the
following two communities under a lot marketing and sales arrangement:
- Riverwood Plantation, a community of 180 acres in Port Orange,
Florida. Approximately 80% of the lots are sold.
- Woodlake, a community of 62 acres also in Port Orange, Florida,
which was 94% complete when sold.
Six lots remain at the 200-acre Indigo Lakes development in Daytona
Beach, which IG LTD continues to offer for sale. Indigo Lakes also included a
304-unit apartment complex constructed in 1989 by a joint venture between IG
LTD and the Trammel Crow Company. The complex was sold to the mortgage holder
in 1994.
In Highlands County, Florida, IG LTD is developing Tomoka Heights on
180 acres adjacent to Lake Henry. The community is approved for a total of 587
single-family and duplex units now selling in the $89,000 to $135,000 price
range. The development features controlled access and has appeal for active
retired couples. The sales and construction operations are performed by third
parties as of January 1994. At December 31, 1994, there were approximating 175
developable lots remaining to be sold.
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Item 1. Business (continued)
IG LTD. was the developer and builder of two additional communities,
Dunlawton Hills, a 320-dwelling-unit community comprised of sixty acres in Port
Orange, Florida and St. Andrews Highlands at Pelican Bay, a 166-unit golf
course community on 34 acres in Daytona Beach, Florida, until sold out in 1991.
IG LTD. also provided shelter housing contract services to homesite
owners at Palm Coast in Flagler County, approximately twenty-five miles north
of Daytona Beach, Florida. The sales and administrative offices at Palm Coast
were consolidated with Daytona Beach facilities in 1991 due to the weak economy
and extremely competitive market, effectively eliminating the construction
services in Palm Coast. IG LTD. had an inventory of fifty-three fully
developed non-contiguous lots in Palm Coast at December 31, 1994.
In addition to its residential communities, IG LTD. operates and
manages several income properties. The Mariner Village Shopping Center is a
63,000-square-foot neighborhood center located in Spring Hill, Florida.
Mariner's anchor tenants are a Winn Dixie grocery store and an Eckerd drug
store. This property was operated at 91% occupancy during 1994. Mariner Towne
Square is an adjacent 18,000-square-foot facility which was completed in 1989
and as of December 31, 1994 was 93% occupied. Forest Center is a
72,000-square-foot neighborhood shopping center located east of Ocala, Florida.
This facility was 92% leased at December 31, 1994 and has Winn Dixie, Eckerd
drug store and Family Dollar department store as its anchor tenants. During
1993 Winn Dixie expanded its leased space by 10,500 square feet at the Forest
Center location. Another developed commercial property is a
24,000-square-foot office building at Palm Coast. This property was 91% leased
at December 31, 1994. During 1989, IG LTD. also completed construction of a
10,800-square-foot building in Daytona Beach which was leased entirely to a
major insurance company, until sold in December 1992.
Indigo Commercial Realty, a commercial real estate brokerage company
formed in 1991, is the Company's agent in the marketing and management of
commercial properties. Approximately 123 acres of fully developed sites, owned
by Indigo Group Inc. and IG LTD were available for sale at December 31, 1994.
All development and improvement costs have been completed at these sites. All
of these commercial sites are located in the Daytona Beach area. A forty-four
acre commercial office and multi-family development acquired in 1988, in which
IG LTD had a 50% joint venture interest, was sold in 1991. IG LTD. has
discontinued shopping center and office building development, thus these
remaining sites as well as other commercial properties will be sold in an
orderly fashion.
In August of 1989, the Company and IG LTD. reached an agreement in
principle with the Ladies Professional Golf Association ("LPGA") and the City
of Daytona Beach, which calls for planning and development of the site for the
national headquarters of the LPGA along with two championship golf courses to
be developed, owned, and operated by the City of Daytona Beach. A mixed-use
development complimentary to these sports-oriented land uses has been planned
for the adjoining acreage. This development is on approximately 3,900 acres of
Company-owned land in Daytona Beach, plus 500 acres owned by the City of
Daytona Beach immediately west of Interstate 95. The official opening of the
LPGA International golf course occurred in July 1994. In the first quarter of
1994, construction began on the Interstate 95 interchange at LPGA Boulevard,
formerly 11th Street, which is the north and main entrance to the project. The
LPGA has successfully relocated its world headquarters to Daytona Beach and
occupies rental offices owned by Indigo Development Inc. In December of 1994,
the first sale within the development was completed with the closing of 60
acres of residential land located in the northern section of the property.
Sales of homes are anticipated in the Spring of 1995. The second golf course
is in the design and permitting stage and is expected to be under construction
in early 1996.
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Item 1. Business (continued)
Subsurface Interests. The Company owns full or fractional subsurface
oil, gas, and mineral interests in approximately 562,000 "surface" acres of
land owned by others in various parts of Florida, equivalent to approximately
305,000 acres in terms of full interest. The Company leases its interests to
mineral exploration firms whenever possible.
At December 31, 1994, mineral leases were in effect covering a total
of 13,870 surface acres. Although the leases are for five- to ten-year terms,
they are terminable annually by the lessees; and the lessees have no obligation
to conduct drilling operations. Leases on 4,614 acres have reached maturity
but are held by the oil companies without annual rental payments because of
producing oil wells, on which the Company receives royalties.
The purchasers of 82,543 surface acres in which the Company has a
one-half reserved mineral interest (of which 2,694 acres are now under oil
exploration leases) are entitled to releases of the Company's rights if such
releases are required for residential or business development. Consideration
for such releases on 73,117 of those acres would be at the rate of $2.50 per
surface acre. On other acres the Company's current policy is to grant no
releases of its reserved mineral rights. In rare instances, a release of
surface entry rights might be granted upon request of a surface owner who
requires such a release for special financing or development purposes.
At December 31, 1994, there were four producing oil wells on the
Company's interests. During 1994 no new wells were brought into production.
Volume in 1994 was 141,488 barrels and volume in 1993 was 111,739 barrels.
Production for prior recent years was: 1992 - 130,693 barrels, 1991 - 125,995
barrels, and 1990 - 189,625 barrels.
Income Properties. The Company owns several commercial rental
properties in Volusia and Highlands Counties. See "Business - Real Estate
Operations" for a discussion of commercial properties developed by IG LTD.
In March 1984, the Company acquired a 24,000-square-foot office
building of masonry construction in Daytona Beach. As of December 31, 1994,
all space was fully leased, with the LPGA as the principal tenant. The
remaining space is occupied by a physician specializing in rehabilitative
practices.
On December 31, 1986, the Company acquired a two-building office
complex in downtown Daytona Beach. The larger building, known as Consolidated
Center, is a modern steel and glass, seven-story, 47,000-square-foot office
building constructed in 1985. The Company moved its corporate headquarters to
the building in January 1988 and made space available for the headquarters of
IG LTD. The remaining space is under lease to other tenants. The smaller
building at 17,000 square feet is subject to an existing lease/purchase
agreement and is considered a direct financing lease by the Company.
Volusia County, Florida. A restaurant and lounge building located
adjacent to the Howard Johnson motel facility described under "Business -
Resort Operations" was formerly leased. This property was sold with the Howard
Johnson Motor Lodge in 1991.
Two service stations located near the interchange of Interstate
Highway 95 and U. S. Highway 92, which pass through the Daytona Beach area
lands owned by the Company, were leased to major oil companies until sold in
December of 1992. A third service station, located at the interchange of
Interstate 95 and State Road 40, was leased to a major oil company through
December 31, 1991, at which time it was sold.
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Item 1. Business (continued)
The 11,000-square-foot office building previously used as the
Company's administrative offices in Daytona Beach and subsequently leased to
3rd parties was sold in December 1992.
During 1978 and early 1979, the Company constructed a commercial
building at the intersection of Interstate 95 and State Road 40. Previously
this facility was operated as a gift and fruit shop. This building was sold in
December 1993.
Highlands County, Florida. The Company leased a 50,000-square-foot
building, located in Sebring, Florida, to Scotty's Home Builder's Supply, Inc
until sold in early 1993. Two other buildings formerly vacant were leased up
with occupancy in early 1992: A 12,000-square-foot facility was leased for a
ten-year term with an option to purchase, and sold in 1993. A second
10,500-square-foot building, formerly the Company's administrative office, was
leased for a three-year term. This 10,500 square foot building was sold in
December of 1992.
The regional administrative offices were relocated to a site on U. S.
27 near Lake Placid, Florida, at the entrance to Tomoka Heights (see "Business
- Real Estate Operations") in August 1987. On this site the Company
constructed a 7,000-square-foot office building. In May 1990, the Company sold
this facility to a regional health care services corporation and moved its
administrative function to the Company's citrus production office.
Sunshine Newspaper, Inc. leased from the Company a 7,000-square-foot
building located near Lake Placid, in which it operated a printing plant until
the building was sold to them in 1993.
Forest product sales. Income from sales of forest products varies
considerably from year to year depending on economic conditions and rainfall,
which sometimes limits access to portions of the woodlands. In addition,
drought conditions such as experienced in early 1985 and throughout 1990
sharply increase the potential of forest fires.
The timber lands encompass approximately 24,000 acres west of Daytona
Beach. Forest product sales during the next few years are projected to
moderately exceed expenses which are primarily real estate taxes. Additional
expenses include the costs of installing roads and drainage systems,
reforestation, and wild fire suppression.
GENERAL, CORPORATE AND OTHER OPERATIONS
Real estate held and land transactions. More than 90% of the
Company's lands have been owned by the Company or its affiliates for more than
fifty years. A few tracts have been acquired in recent years to provide better
access to lands already owned. To date the Company has not been in the
business of acquiring and holding real estate for sale. Instead, portions of
the Company's lands are put to their best economic use. Unsolicited sales are
made of parcels which do not appear to offer opportunities for use in the
foreseeable future.
Land development beyond that discussed at "Business - Real Estate
Operations" will necessarily depend upon the long-range economic and population
growth of Florida and may be significantly affected by fluctuations in economic
conditions, prices of Florida real estate, and the amount of resources
available to the Company for development.
No major sales of undeveloped lands are under consideration at this
time.
Employees. The Company has approximately 157 employees, including
approximately 77 seasonal employees in citrus operations. During the citrus
harvesting season, these seasonal employees are hired to pack and handle the
citrus crop. No employees are represented by unions. The Company considers
its employee relations to be satisfactory.
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Item 2. Properties
Information concerning the Company's properties is included on pages
2-4 of the Company's 1994 Annual Report to Shareholders (the "Annual Report")
under the captions "Land Holdings", "Citrus", "Conference Center and Resort"
and "Real Estate Operations" and is incorporated herein by reference. Except
for parts of the Annual Report expressly incorporated herein by reference, the
annual report is not to be deemed filed with the Securities and Exchange
Commission.
Item 3. Legal Proceedings
There are no material pending legal proceedings to which the Company
or its subsidiaries are a party.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
fourth quarter of the year ended December 31, 1994.
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PART II
Item 5. Market for the Registrant's Common Stock and Related Shareholder
Matters
Information concerning the Company's common stock and dividends is
included on page 29 of the Annual Report under the caption "Common Stock Prices
and Dividends" and page 4 under the caption "Five-Year Financial Highlights"
and such discussion is incorporated herein by reference.
Item 6. Selected Financial Data
Five-year financial statement data is included on page 4 of the Annual
Report under the caption "Five-Year Financial Highlights" and such information
is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Management's Discussion and Analysis of Financial Condition and
Results of Operations is included on pages 26 through 28 of the Annual Report,
under the captions "Management's Discussion and Analysis," and "Financial
Position" and such discussion is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
Financial Statements
Financial statements incorporated by reference in this report are
listed at Part IV, Item 14 (a), "Financial Statements."
Item 9. Disagreements on Accounting and Financial Disclosures
There were no disagreements with accountants on accounting and
financial disclosures during the two years ended December 31, 1994.
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PART III
The information required by Items 10, 11, 12, and 13 is incorporated
herein by reference to the registrant's 1994 annual meeting proxy statement
pursuant to Instruction G to Form 10-K. On March 31, 1995, the registrant
anticipates filing with the Commission, pursuant to Regulation 14A under the
Securities Exchange Act of 1934, its definitive proxy statement to be used in
connection with its 1994 annual meeting of shareholders at which directors will
be elected for the ensuing year.
Executive Officers of the Registrant
The executive officers of the registrant, their ages at January 31, 1995, their
business experience during the past five years, and the year first elected as
an executive officer of the Company are as follows:
Bob D. Allen, 60, president and chief executive officer, March 1990 to
present; vice chairman of First Union Corporation (a publicly owned
bank holding company) from July 1986 until March 1990.
Bruce W. Teeters, 49, senior vice president-finance and treasurer,
January 1988 to present.
Both of the above are elected annually as provided in the By-Laws.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a.) 1. Financial Statements
The Company's 1992, 1993, and 1994 financial statements,
together with the reports of Arthur Andersen LLP, dated February 10, 1995, and
Rex Meighen & Company, dated February 10, 1994, appearing on pages 5 to 24 of
the accompanying 1994 Annual Report to Shareholders are incorporated by
reference in this Form 10-K Annual Report. The following is a list of such
financial statements with references to the pages of the 1994 Annual Report to
Shareholders on which they may be found:
<TABLE>
<CAPTION>
Annual Report
Page No.
-------------
<S> <C>
Report of Independent Certified Public Accountants 5
Consolidated Statements of Operations and Retained Earnings
for the three years ended December 31, 1994 6
Consolidated Balance Sheets as of December 31, 1993 and 1994 7
Consolidated Statements of Cash Flows for the three
years ended December 31, 1994 8-9
Notes to Consolidated Financial Statements 10-24
</TABLE>
With the exception of (i) the aforementioned financial
statements and (ii) the information incorporated under Items 2, 5, 6, and 7,
the 1994 Annual Report to Shareholders is not to be deemed filed as part of
this report.
Other Schedules are omitted because of the absence
of conditions under which they are required or because the required information
is given in the financial statements or notes thereto.
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Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K
(continued)
(a) 3. Exhibits
(2.1) Agreement of Merger and Plan of Merger and
Reorganization dated April 28, 1993 between
Consolidated-Tomoka Land Co. and CTLC, Inc. filed with
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1993 and incorporated by this
reference.
(2.2) Certificate of Merger dated April 28, 1993 filed with
the registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1993 and incorporated by this
reference.
(3.1) Articles of Incorporation of CTLC, Inc. dated February
26, 1993 and Amended Articles of Incorporation dated
March 30, 1993 filed with the registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31,
1993 and incorporated by this reference
(3.2) By-Laws of CTLC, Inc. filed with the registrant's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1993 and incorporated by this reference
(10) Material Contracts:
(10.1) Marketing Agreement executed on September 1, 1994
between Citrus World, Inc. and Consolidated-Tomoka
Land Co.
(10.2) Packing House Agreement executed on November 1, 1994
between Turner Foods Corporation and Consolidated-
Tomoka Land Co.
(10.3) The Consolidated-Tomoka Land Co. Unfunded Deferred
Compensation Plan filed with the registrant's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1981 and incorporated by this reference.
(10.4) The Consolidated-Tomoka Land Co. Unfunded Deferred
Compensation Plan executed on October 25, 1982 filed
with the registrant's annual report on Form 10-K for
the year ended December 31, 1982 and incorporated by
this reference.
(10.5) The Consolidated-Tomoka Land Co. Stock Option Plan
effective April 26, 1990 filed with the registrant's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1990 and incorporated by this reference.
(11) Statement regarding Computation of Per Share Earnings.
(13) 1994 Annual Report to Shareholders. (With the
exception of the information incorporated under Items
2, 4, 5, 6, and 7 the 1994 Annual Report to
Shareholders is not deemed to be filed as part of this
report.)
(21) Subsidiaries of the Registrant
(23.1) Consent of Rex Meighen & Company
(23.2) Consent of Arthur Andersen LLP
(b) Reports on Form 8-K
No reports were filed on Form 8-K during the fourth quarter of
the year ended December 31, 1994.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
CONSOLIDATED-TOMOKA LAND CO.
(Registrant)
March 30, 1995 By /s/ Bob D. Allen
---------------------------
Bob D. Allen, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report
is signed below by the following persons on behalf of the Registrant in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
March 30, 1995 Chairman of the Board and Director /s/ David D. Peterson
--------------------------
David D. Peterson
March 30, 1995 President, Chief Executive
Officer (Principal Executive
Officer), and Director /s/ Bob D. Allen
--------------------------
Bob D. Allen
March 30, 1995 Senior Vice President-Finance
Treasurer (Principal Financial
and Accounting Officer), Director /s/ Bruce W. Teeters
--------------------------
Bruce W. Teeters
March 30, 1995 Director /s/ John C. Adams, Jr.
--------------------------
John C. Adams, Jr.
March 30, 1995 Director /s/ Robert F. Lloyd
--------------------------
Robert F. Lloyd
</TABLE>
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
(2.1) Agreement of Merger and Plan of Merger and Reorganization
dated April 28, 1993 between Consolidated-Tomoka Land Co.
and CTLC, Inc. filed with the registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1993 and
incorporated by this reference. *
(2.2) Certificate of Merger dated April 28, 1993 filed with the
registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993 and incorporated by this reference. *
(3.1) Articles of Incorporation of CTLC, Inc. dated February 26,
1993 and Amended Articles of Incorporation dated March 30,
1993 filed with the registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1993 and incorporated
by this reference. *
(3.2) By-laws of CTLC, Inc. filed with the registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1993 and
incorporated by this reference. *
10 Material Contracts:
(10.1) Marketing Agreement executed on September 1, 1994 between
Citrus World, Inc. and Consolidated-Tomoka Land Co. 16
(10.2) Packing House Agreement executed November 1, 1994 between
Turner Food Corporation and Consolidated-Tomoka Land Co. 28
(10.3) The Consolidated-Tomoka Land Co. Unfunded Deferred Compensation
Plan filed with the registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1981 and incorporated
by this reference. *
(10.4) The Consolidated-Tomoka Land Co. Unfunded Deferred Compensation
Plan executed on October 25, 1982 filed with the registrant's
annual report on Form 10-K for the year ended December 31, 1982
and incorporated by this reference. *
(10.5) The Consolidated-Tomoka Land Co. Stock Option Plan effective
April 26, 1990 filed with the registrant's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1990 and incorporated
by this reference. *
(11) Statement regarding Computation of Per Share Earnings. 33
(13) 1994 Annual Report to Shareholders 34
(21) Subsidiaries of the Registrant
(23.1) Consent of Rex Meighen & Company
(23.2) Consent of Arthur Andersen LLP
* - Incorporated by Reference
</TABLE>
<PAGE> 1
EXHIBIT 10.1
MARKETING AGREEMENT
CITRUS WORLD, INC.
THIS AGREEMENT, made as of the 1st day of September, 1994, between
CITRUS WORLD, INC., a cooperative association organized under the laws of the
State of Florida with its principal place of business at Lake Wales, Florida
(hereinafter referred to as "Citrus World") and CONSOLIDATED-TOMOKA LAND CO. of
LAKE PLACID, Florida (hereinafter referred to as "Member").
W I T N E S S E T H:
WHEREAS, Citrus World owns and operates a citrus fruit canning,
packaging, and processing plant at Lake Wales, Florida, as well as other
facilities both within and without the State of Florida for the extraction,
canning, and/or processing, warehousing, and marketing of processed citrus
fruit products; and
WHEREAS, Member is a member-stockholder of Citrus World and desires to
arrange for the sale and delivery of citrus fruit to Citrus World for
processing and marketing of the products derived therefrom.
NOW, THEREFORE, in consideration of the premises and other valuable
considerations, it is mutually agreed as follows:
1. Definitions. For the purposes of this Agreement:
(a) "Grower-Members" shall mean citrus fruit growers who
are members of Member where Member is a cooperative
association.
1
<PAGE> 2
(b) "Non-Member Patrons" shall mean citrus fruit growers
who are not Grower-Members but who have agreed as of
or prior to October 1, 1992, to sell fruit to Member
(if a cooperative) for marketing; to allow pooling of
such fruit on a cooperative basis; and to accept the
pool proceeds (after deduction of all costs and
expenses) as the total amount due for such fruit.
(c) "Growers" shall include both Grower-Members and
Non-Member Patrons.
(d) "Committed Fruit" shall mean all citrus fruit from
Member which is not packed as fresh fruit and which
is either produced by Member itself or which, where
Member is a cooperative association, is committed to
Member by means of valid Grower Marketing Agreements.
(e) "Grower Marketing Agreements" shall mean valid
agreements between Member if a cooperative and
Member's Growers whereby each Grower will have agreed
(i) to sell and deliver citrus fruit to Member for
marketing; (ii) that such fruit will be grown on
specific groves the description of which has been
furnished to Member; and (iii) that such agreements
shall not be terminable except upon two years notice
(subject, however, to the provisions of paragraph 17
hereof).
(f) "Limited Fruit" shall mean all citrus fruit from
Member the quantity of which has been set, in terms
of a specified number of boxes, by Citrus World's
Board of Directors less an allowance, not to exceed
five percent (5%) of such set quantity, to
accommodate Member's fresh fruit packing house
operations.
(g) "Grove Property" shall mean all planted grove
properties owned or leased as of October 1, 1992 by
Member, or by a Grower, the fruit from which will be
Committed Fruit. Such properties may be comprised of
actual producing groves or young groves not producing
fruit as of October 1, 1992. Former groves destroyed
by blight, disease or freeze that are to be replanted
but which may not have been replanted as of October
1, 1992, may be included provided they are, in fact,
replanted by September 1, 1995. But such acreage that
is not planted shall not be eligible for replacement
as provided in Paragraph 11 hereof.
2
<PAGE> 3
(h) "Fruit Owned or Controlled by Member" shall include
all Committed Fruit and Limited Fruit, either or both.
(i) "Florida Citrus Season" means the period each year
commencing on September 1 and ending on the following
August 31.
2. Delivery and Transfer of Title. Subject to the terms of this
Agreement, Member agrees to deliver to Citrus World all Fruit Owned or
Controlled by Member, and Member hereby assigns and transfers to Citrus World
upon such delivery absolute title and ownership to all such fruit that is
accepted by Citrus World. Member agrees to deliver the same to such place as
Citrus World may direct and Member hereby warrants that Member will have good
and lawful authority to sell and transfer said fruit at the time of such
delivery and warrants title to said fruit against the lawful claims of all
persons whomsoever.
3. Estimate and Identity of Fruit. On or before October 1st of
each year this Agreement is in effect, Member agrees to furnish to Citrus World
the estimated quantity by varieties of Fruit Owned or Controlled by Member. In
addition, Member shall at the same time clearly identify all Committed Fruit by
delivering to Citrus World a list specifying the Grove Property (including the
information specified in paragraph 4 below) from whence the same is to be
harvested. And, except as provided in paragraph 10 hereof, Grove Property
included in such list may not be removed therefrom except upon 2 years written
notice to Citrus World. If applicable, Member will furnish at such time the
varieties and quantities of Limited Fruit to be delivered to Citrus World
pursuant to this Agreement, provided that any changes in the varieties of fruit
and quantities thereof from that delivered during the previous Florida Citrus
Season must be approved by Citrus World's Board of Directors, unless management
determines a varietal change is beneficial to Citrus World.
3
<PAGE> 4
4. Records. So long as this agreement remains in effect, Member
will maintain adequate records, and will furnish copies thereof to Citrus
World, so as to be able to describe fully all Grove Properties listed by Member
pursuant to paragraph 3 above, including acreage, block by variety, and the
number and age of the trees in each block.
5. Certificate of Compliance. Each year, within 30 days following
the close of Member's fiscal year, Member will deliver to Citrus World a
certificate of compliance in the form of Exhibit "A" attached hereto and made a
part hereof signed by Member, and accompanied by an opinion of Member's
independent auditor to be based on Member's records and in the form of Exhibit
"B" also attached hereto and made a part hereof, attesting to the fact (a) that
all fruit delivered by Member to Citrus World during the preceding Florida
citrus season was in fact Fruit Owned or Controlled by Member as herein
defined; and (b) that the total quantity of all such Fruit Owned or Controlled
by member was in fact delivered to Citrus World by Member.
6. Acceptance of Fruit by Citrus World. Subject to the provisions
of paragraph 13 hereof, Citrus World shall accept for processing and marketing
all Fruit Owned or Controlled by Member which is (a) included in the estimate
made pursuant to paragraph 3 above and derived from the Grove Property
designated pursuant to said paragraph; or (b) consists of Limited Fruit.
However, Citrus World shall not accept any fruit which does not comprise fruit
from the Grove Property specified or is in excess of the number of boxes of
Limited Fruit, and no waiver of the provisions of this paragraph shall be valid
unless approved by Citrus World's Board of Directors, Executive Committee or
Marketing Committee.
7. Purchase Price. Citrus World agrees to sell the product
manufactured from fruit delivered by member hereunder, pooled with products
manufactured from fruit delivered by other members or any other source, and to
pay over ratably as the agreed purchase price
4
<PAGE> 5
due Member hereunder the net amount received from such sale, as final
settlement in full to Member, less any and all advances to Member and less
Citrus World's usual uniform and regular charges and expenses for handling and
processing the fruit and from marketing the products therefrom including all
commonly accepted business expenses and conventional reserves. Member further
agrees to accept capital equity certificates or credits of the type and in the
form authorized by the By-Laws of Citrus World as payment of that part of such
purchase price which is equal to the retained amounts for capital purchases
fixed by the Board of Directors of Citrus World.
8. Advances. Citrus World agrees to make advances to Member upon
the delivery of fruit to it as may from time to time be established by Citrus
World's Board of Directors; however, Citrus World shall not be obligated to
make any final settlement on account of such deliveries until the end of its
fiscal year, or later at the discretion of its Board of Directors.
9. Excess Fruit. Any and all fruit acquired by Member but which
Member could not include in the estimate made pursuant to paragraph 3 above,
shall first be offered to Citrus World for purchase on a cash or participation
basis and Member agrees not to sell such fruit to others at a price lower than
that offered by Citrus World, or on a participation basis upon terms less
favorable than those offered by Citrus World.
10. Diversion of Fruit. Member agrees it will not permit any
citrus fruit now or hereafter comprising Fruit Owned or Controlled by Member to
be delivered to any canning or processing plant other than those of Citrus
World or designated by Citrus World during the period covered by this
Agreement, except:
5
<PAGE> 6
(a) Where a Grower or Member has made a bona fide sale or
transfer of ownership of all or part of a grove such
that the fruit therefrom is no longer available to
Member; or
(b) Where a Grower dies and such deceased Grower's heirs,
administrators, or executors desire to withdraw the
deceased Grower's groves such that the fruit
therefrom is no longer available to Member; or
(c) Where the Board of Directors of Citrus World has
permitted Member to make specified deliveries to
others.
11. Replacement of Grove Property. Whenever Member should occasion
a reduction in Member's designated Grove Property pursuant to the provisions of
paragraph 10(a) or (b) above, or due to the withdrawal of a Grower or for any
other reason, then Member may replace such property, provided, however, that:
(a) Member has actually suffered a reduction in the
amount of Member's Grove Property;
(b) the property to be replaced consists only of planted
acreage;
(c) the replacement shall be completed within two (2)
years from the date of the loss;
(d) Member will immediately notify Citrus World upon the
making of any such replacement; and
(e) the varieties of citrus fruit grown on the
replacement acreage shall be substantially the same
as that grown on the lost property unless otherwise
approved by Citrus World's Board of Directors.
All grove property added as replacement property pursuant to this paragraph
shall be deemed to be Grove Property as herein defined and included in the
properties identified pursuant to paragraph 3 hereof, but nothing herein shall
be deemed or construed as modifying the two year notice requirement for the
addition or removal of the replacement property or any other properties as set
forth in said paragraph 3, nor the obligation of Member to deliver to Citrus
6
<PAGE> 7
World the quantities of fruit specified by Member in the then current estimate
delivered by Member to Citrus World pursuant to said paragraph 3.
12. Fruit Exchange. If for pooling considerations, or in the
interest of Citrus World's plant efficiency, Fruit Owned or Controlled by
Member is, with the knowledge and consent of Citrus World, exchanged for other
fruit of like type and quality, then such exchange fruit shall nevertheless be
deemed to be Fruit Owned or Controlled by Member for the purposes of this
Agreement. Any such exchanges will be noted in the Certificate and opinion to
be submitted by Member pursuant to paragraph 5 hereof.
13. Origin and Rejection of Fruit. All fruit to be delivered by
Member under this agreement shall consist only of fruit grown upon groves
located within the State of Florida and such fruit, together with the
horticultural practices used in growing and harvesting the same, shall conform
in all respects to all applicable laws and regulations of the United States and
the State of Florida. Citrus World may, at its option, reject any and all fruit
that fails to pass State and/or Federal inspection or to conform with this
Agreement, and any loss or additional cost Citrus World may suffer thereby
shall be charged against Member.
14. Increase in Grove Property Acreage or Amount of Fruit. The
quantity of Member's Grove Property and/or the amount of fruit may be increased
but only in the following manner:
(a) On or before June 1 of each year, Citrus World will
consider an increase in the amount of Grove Property
acreage and/or total quantity of fruit to be handled
by it for the next ensuing Florida Citrus Season.
Beginning September 1, 1994, should Citrus World
determine to increase such acreage or fruit quantity
then such increase will be allocated to the then
current members of Citrus World in proportion to the
total number of shares of A, B
7
<PAGE> 8
and C stock held by each such member as of the
preceding August 31.
(b) The quantity of Grove Property listed by Member
pursuant to paragraph 3 may be increased or decreased
whenever such change is to consist solely of grove
properties that have been acquired by Citrus World
Employee option holders exercise of their options.
15. Liquidated Damages. Inasmuch as the remedy at law would be
inadequate and inasmuch as it would be impracticable and extremely difficult to
determine the actual damage resulting to Citrus World should Member fail to
deliver fruit hereunder, regardless of the cause of such failure (except as
provided in paragraph 18 hereof) Member hereby agrees to pay to Citrus World as
liquidated damages for breach of this agreement for all fruit which Member has
agreed to deliver hereunder but which Member has failed to deliver, the sum of
Seven Hundred and Fifty Dollars ($750.00) per acre for each acre the fruit from
which was not delivered in its entirety or Two Dollars ($2.00) per standard
field box for all diverted fruit. Both parties agree that this Agreement is one
of a series dependent for its true value upon the adherence by each and all of
the contracting parties to each and all of the said agreements, but the
cancellation of any other similar agreement or the failure of any of the
parties thereto to comply with the same, shall not affect the validity of this
Agreement.
16. Attorney's Fees. If any action whatsoever by reason of breach
or threatened breach of this Agreement is brought, the party that does not
prevail shall pay all costs thereof, including reasonable attorneys fees
expended or incurred in such proceedings.
17. Term and Termination. This Agreement shall commence upon its
execution by both parties and shall remain in effect until terminated by Member
which may be accomplished only as of September 1st of any year and only by
notifying Citrus World in writing at least two (2) years prior to the September
1st upon which such termination is to be
8
<PAGE> 9
effective. Provided, however, that Citrus World shall not be obligated to
release Member from this Agreement as long as Member is indebted to Citrus
World in any sum.
18. Force Majeure. Neither party to this Agreement shall be liable
for damages for failure to perform hereunder to the extent that performance by
either of them is made impossible or delayed by Act of God, war, fire,
equipment breakdown, strike, embargo, lockout, inability to obtain materials,
supplies or transportation or any other cause beyond the control of either of
said parties.
19. Bylaws and Rules. The By-Laws of Citrus World now in existence
and as hereafter amended, and all rules, regulations and orders promulgated by
Citrus World from time to time shall be parts of this Agreement and binding
upon the parties thereto.
20. Right of Offset. Citrus World shall have the right to offset
and deduct any sums that may become due to it from Member from amounts accruing
to Member under this Agreement whether such indebtedness to Citrus World arises
under this Agreement or otherwise.
21. No Oral Agreement. The parties agree that there are no oral or
other conditions, promises, covenants, representations or inducements in
addition to or at variance with any of the terms hereof, and that this contract
represents the voluntary and clear understanding of both parties fully and
completely.
22. Successors and Assigns. This Agreement shall inure to and be
binding upon the successors, assigns and/or legal representatives of both of
the parties hereto.
9
<PAGE> 10
IN WITNESS WHEREOF, both parties have executed this agreement as of
the day and year first above written by their duly authorized representatives.
Attest or Witness:
Patricia Lagoni CONSOLIDATED-TOMOKA LAND CO.
---------------
Secretary
SEAL By: Hugh J. Veley
-------------
V.P. Citrus
Attest or Witness:
David C. Ratha CITRUS WORLD, INC.
-------------------
Corporate Secretary
SEAL By: F.M. Hunt
---------
10
<PAGE> 11
CITRUS WORLD
1994-95 UNIFORM MARKETING AGREEMENT
EXHIBIT "A"
CERTIFICATE OF COMPLIANCE
To the best of our knowledge and belief, the undersigned member of
Citrus World hereby certifies (a) that all fruit delivered to Citrus World by
the undersigned during the 1994-1995 Florida Citrus Season consisted of Fruit
Owned or Controlled by the undersigned as such terms are defined in Paragraph 1
of the Citrus World Uniform Marketing Agreement; and (b) that the total
quantity of such fruit has been delivered to Citrus World in accordance with
Paragraph 2 of said Agreement.
CONSOLIDATED-TOMOKA LAND CO.
By:
-------------------------
Date
-------------------------
11
<PAGE> 12
CITRUS WORLD
1994-95 UNIFORM MARKETING AGREEMENT
EXHIBIT "B"
CERTIFICATE OF MEMBER'S INDEPENDENT AUDITOR
We have examined the accompanying Certificate of Compliance with the
Citrus World Marketing Agreement, Paragraphs 1 and 2, for the 1994-1995 Florida
Citrus Season as executed by Consolidated-Tomoka Land Co. (hereinafter referred
to as "Member.") Our examination was made in accordance with standards
established by the American Institute of Certified Public Accounts and,
accordingly, included such procedures as we considered necessary in the
circumstances.
In our opinion, based upon the books and records of Member, the
Certificate of Compliance referred to above correctly reflects compliance by
Member with the criteria established in the Citrus World Marketing Agreement,
Paragraphs 1 and 2.
---------------------------------
Auditor
By:
-----------------------------
Date
-----------------------------
12
<PAGE> 1
EXHIBIT 10.2
PACKING HOUSE AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of November, 1994, by
and between TURNER FOODS CORPORATION, a Florida corporation, 25450 Airport
Road, Punta Gorda, Florida 33950 (hereinafter referred to as "TFC") and
CONSOLIDATED-TOMOKA LAND COMPANY, Post Office Box 1005, Lake Placid, Florida
33852 (hereinafter referred to as "CONSOLIDATED").
WITNESSETH
WHEREAS, CONSOLIDATED is the owner and operator of a fresh citrus fruit packing
house located near Lake Placid, Florida (hereinafter referred to as the
"packing house"), and
WHEREAS, TFC is the owner of citrus groves located in Highlands, Collier,
Hendry and DeSoto Counties, Florida, known as the "HICKORY, HIGHLAND, GATOR
SLOUGH, and DESOTO CITRUS GROVES", and
WHEREAS, the parties desire that a portion of the citrus fruit raised on said
TFC CITRUS GROVES which is suitable for packing as fresh fruit shall be run
through CONSOLIDATED's packing house, pursuant to the terms and conditions
hereinafter set forth:
1.0 COMMITTED FRUIT: TFC agrees to deliver and CONSOLIDATED agrees to receive
at its packing house the following estimated quantities providing that
previous commitments can be met:
<TABLE>
<CAPTION>
Variety Estimated Quantity
------- ------------------
<S> <C>
Robinson Tangerine 11,500
Hamlin Orange As mutually agreed upon
Pineapple Orange As mutually agreed upon
Orlando Tangelo 55,000
Temple 50,000
Murcott Tangerine 25,000
Valencia As mutually agreed upon
</TABLE>
The above volumes are subject to market conditions, TFC and CONSOLIDATED
have the right to add varieties or volumes, or to delete varieties or
volumes, if acceptable to both parties.
2.0 POOLS: All fruit from TFC run through CONSOLIDATED's packing house will
be pooled with other fruit of like grade and quality from CONSOLIDATED or
from other growers.
2.1 POOL PERIODS: All fruit harvested will be accounted for in a
seasonal pool period by variety. The seasonal pool period is further
defined as August through June or upon completion of final harvest of
fruit covered by this Agreement.
1
<PAGE> 2
2.2 PACK-OUT: CONSOLIDATED shall account for all fruit received by its
packing house from HICKORY, HIGHLAND, GATOR SLOUGH, or DESOTO CITRUS
GROVES separately and on a daily basis by standard box (hereinafter
defined) and shall transmit DAILY to TFC (c/o Chet Townsend; FAX No.
(813)657-6418) a report of all pack-out data for such fruit.
"Pack-Out Data" shall be deemed to mean listing by variety and by
grade of (i) all fruit that meets fresh fruit standards and (ii) all
fruit that is eliminated.
3.0 PACKING AND SELLING COSTS: Packing and selling costs are based on a
packed 1-3/5 bu. carton:
3.1 PACKING COSTS: Packing and costs based on a packed 1-3/5 bu. box:
<TABLE>
<CAPTION>
PACKED IN: 4/5 BU. 2/5 BU. 4# 5# BULK
CARTON CARTON BAGMASTERS BAGMASTERS BINS
WOOD
---------- ------- ------- ---------- ---------- ----
<S> <C> <C> <C> <C> <C>
Oranges $5.10 $6.60 $6.30 $6.18 $1.25
Temples $5.10 $6.60 $6.30 $6.18 $1.25
Tangelos $5.10 $6.60 $6.30 $6.18 $1.25
Tangerines $6.50 N/A N/A N/A $1.25
</TABLE>
3.2 SELLING COSTS: $0.30 per packed or bulk standard box.
3.3 HANDLING COSTS: $0.20 per packed or bulk standard box.
3.4 ELIMINATION HAUL: Hauling: Per weight box (90 lbs. for Oranges,
Temples and Tangelos; 95 lbs. for Tangerines).
ELIMINATION HAUL RATES:
<TABLE>
<CAPTION>
Temple
Tangelo
Destination Oranges Tangerine
----------- ------- ---------
<S> <C> <C>
Silver Springs, Winter Garden $0.50/box $0.60/box
SunPac, Winter Haven $0.42/box $0.52/box
Coke, Auburndale $0.45/box $0.55/box
Tropicana, Bradenton $0.45/box $0.55/box
Tropicana, Fort Pierce $0.45/box $0.55/box
Cargill, Frostproof $0.35/box $0.45/box
LaBelle $0.35/box $0.45/box
OrangeCo, Bartow $0.42/box $0.52/box
</TABLE>
2
<PAGE> 3
3.5 ELIMINATION CHARGES: $0.25 for Oranges, Temples, Tangelos: $0.40 for
Tangerines.
3.6 INDUSTRY ASSESSMENTS: As set by the industry groups and is to be
deducted from Fruit Proceeds of TFC and paid by CONSOLIDATED:
<TABLE>
<CAPTION>
1994-95 SEASON
1 - 3/5 BU. BOX
---------------
<S> <C> <C>
Florida Citrus Packers .0040
Dept. of Citrus Oranges .2900
Grapefruit .3500
Reticulata .3500
Citrus Canker None
Department of Agriculture .1332
Citrus Marketing Order .0050
Citrus Admin. Committee .006
Total Assessments Oranges .4382
Grapefruit .4982
Reticulata .4982
</TABLE>
4.0 HAUL CHARGES FROM GROVE TO PACKING HOUSE: CONSOLIDATED agrees to haul all
fruit from HICKORY CITRUS GROVE for $0.16 per box, from HIGHLAND and GATOR
SLOUGH CITRUS GROVES for $0.40 per box, and from DESOTO CITRUS GROVE for
$0.20 per box, to be deducted from Fruit Proceeds of the participation
plan.
5.0 PICK AND ROADSIDE CHARGES: Pick and roadside charges will be negotiated
with an independent contractor approved by TFC. TFC will pay for all
pick and roadside charges direct to harvester. CONSOLIDATED agrees to
advance TFC $1.25 per box weekly for fruit delivered to packing house.
6.0 ELIMINATION FRUIT: Packing house eliminations will be sold directly to a
processing plant of TFC's choice under separate contract agreement.
Proceeds from sale of elimination fruit will go directly to TFC. TFC will
furnish TFC Trip Ticket books, one for each grove, for a CONSOLIDATED
representative to write for each load of eliminations delivered for TFC's
account. CONSOLIDATED will mail, daily, copies of TFC Trip Tickets to the
Punta Gorda address above. All TFC Trip ticket books used or unused
should be returned to the grove location by the end of the current season.
3
<PAGE> 4
7.0 TERMS OF PAYMENT: Within 30 days following the close of each month
during each Florida Citrus season, CONSOLIDATED will pay to TFC 75% of
the anticipated pool returns, less the harvesting advance and other
charges listed in paragraphs 3.0, 4.0 and 5.0, due TFC arising from all
fruit picked and sold during each month.
The remaining balance due from such pool returns will be paid by
CONSOLIDATED to TFC within 75 days after the final close of each pool.
Each TFC Grove should be accounted for separately, with separate
statements. Each statement should tie to TFC Trip Ticket numbers, which
can be sorted by ticket prefix numbers (grove identification number).
All payment checks and statements should be sent to Turner Foods
Corporation, 25450 Airport Road, Punta Gorda, FL 33950.
8.0 ESTIMATED RETURNS: CONSOLIDATED will provide estimated returns and
payment dates as requested throughout the season. TFC understands the
estimates may vary considerably from actual final returns depending upon
many variables. CONSOLIDATED will report the average FOB selling price
for each carton size on a weekly basis (to be faxed to Chet Townsend at
(813)657-6418).
9.0 STANDARD BOX: For the purposes of this Agreement, "standard box" means
Florida standard weight boxes as follows: oranges - 90 pounds;
Grapefruit - 85 pounds; Tangerines - 95 pounds.
10.0 DELIVERY SCHEDULE: Delivery schedules shall enable TFC to harvest in a
timely fashion so as to enhance marketability and to avoid loss from
premature harvest or excess loss due to over-maturity. Delivery
schedules shall be coordinated with CONSOLIDATED and TFC site
representatives.
11.0 RIGHT OF ENTRY: TFC reserves the right for its agents or designees to
enter CONSOLIDATED's packing house as it may elect for the purpose of
inspecting the work. CONSOLIDATED reserves the right for its agents or
designees to enter TFC's groves for inspection and harvest of the fruit
under contract.
12.0 RECORDS AND ACCOUNTS: CONSOLIDATED shall keep and maintain such records
and accounts in connection with the performance of the Contract, as shall
permit CONSOLIDATED to furnish TFC an accurate written allocation of the
total amount paid for performance of the Contract to the various
elements of the Contract. CONSOLIDATED shall retain such records and
accounts for a period not less than five (5) years and shall make
records available to TFC for inspection and copying, where records are
kept, during reasonable business hours and upon seven (7) days' written
request.
13. TERM OF CONTRACT: This contract shall commence upon full execution of
this Contract and shall remain in force through the 1994-1995 season.
4
<PAGE> 5
14.0 Complete Agreement and Non-Waiver: This Contract is intended to be
final and complete, and exclusive statements of the terms of the
Agreement between the parties. The parties agree that parol or
extrinsic evidence may not be used to vary or contradict the express
terms of this Contract. Except as specifically provided herein, this
contract shall not be amended or modified, and no waiver of any
provision hereof shall be effective, unless set forth in a written
instrument authorized and executed with the same formality as this
contract.
15.0 Binding Effect: This Agreement shall be binding upon and inure to the
benefit of the parties respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement this 1st day of
November, 1994.
TURNER FOODS CORPORATION
Dagmar Gewlas By: John C. Merritt
--------------------------------- -------------------------------
Witness John C. Merritt
Vice-President
Deborah Valenta
---------------------------------
Witness
CONSOLIDATED-TOMOKA LAND CO.
Linda Doyle By: Hugh J. Veley
--------------------------------- -------------------------------
Witness V.P. Citrus
Betty Caudill
---------------------------------
Witness
5
<PAGE> 1
EXHIBIT 11
CONSOLIDATED-TOMOKA LAND CO. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
PRIMARY EARNINGS (IN THOUSANDS)
INCOME FROM CONTINUING OPERATIONS 6,490,401 1,215,984 3,026,834
LOSS FROM DISCONT. RESORT OPERATIONS (NET OF TAX) (135,611) (759,284) (516,530)
EXTRAORDINARY ITEM -- -- 1,491,909
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES -- 329,442 --
--------- --------- ---------
NET INCOME APPLICABLE TO COMMON STOCK 6,354,790 786,142 4,002,213
========= ========= =========
PRIMARY SHARES USED IN COMPUTATION
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,261,272 6,261,272 6,261,272
SHARES APPLICABLE TO STOCK OPTIONS USING THE TREASURY STOCK
METHOD AT AVERAGE MARKET PRICE FOR THE PERIOD 25,376 31,928 21,820
--------- --------- ---------
TOTAL PRIMARY SHARES 6,286,648 6,293,200 6,283,092
========= ========= =========
PRIMARY EARNINGS PER COMMON SHARE:
INCOME FROM CONTINUING OPERATIONS $1.04 $0.20 $0.48
LOSS FROM DISCONT. RESORT OPERATIONS (NET OF TAX) ($0.03) ($0.12) ($0.08)
EXTRAORDINARY ITEM $0.00 $0.00 $0.24
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES $0.00 $0.05 $0.00
--------- --------- ---------
NET INCOME APPLICABLE TO COMMON STOCK $1.01 $0.13 $0.64
========= ========= =========
FULLY DILUTED SHARES USED IN COMPUTATION
TOTAL PRIMARY SHARES 6,286,648 6,293,200 6,283,092
SHARES APPLICABLE TO STOCK OPTIONS IN ADDITION TO THOSE
USED IN PRIMARY COMPUTATION DUE TO USE OF THE HIGHER OF
AVERAGE MARKET PRICE OR PERIOD END MARKET PRICE -- 1,356 --
--------- --------- ---------
6,286,648 6,294,556 6,283,092
========= ========= =========
FULLY DILUTED EARNINGS PER SHARE
INCOME FROM CONTINUING OPERATIONS $1.04 $0.20 $0.48
LOSS FROM DISCONT. RESORT OPERATIONS (NET OF TAX) ($0.03) ($0.12) ($0.08)
EXTRAORDINARY ITEM $0.00 $0.00 $0.24
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES $0.00 $0.05 $0.00
--------- --------- ---------
NET INCOME APPLICABLE TO COMMON STOCK $1.01 $0.13 $0.64
========= ========= =========
</TABLE>
<PAGE> 1
EXHIBIT 13
ANNUAL REPORT
<PAGE> 2
<TABLE>
<CAPTION>
CONSOLIDATED - TOMOKA LAND CO.
------------------------------------------------------------------------------------------------------------------------------
<S> <C>
BOARD OF DIRECTORS OFFICERS
JOHN C. ADAMS, JR. (2) DAVID D. PETERSON
Chairman of the Board of Hilb, Rogal and Chairman of the Board
Hamilton Company of Daytona Beach, Inc.
(an insurance agency); Executive Vice BOB D. ALLEN
President and Chief Operating Officer President and Chief
of Hilb, Rogal and Hamilton Company Executive Officer
BOB D. ALLEN (1) BRUCE W. TEETERS
President and Chief Executive Senior Vice President - Finance
Officer of the Company and Treasurer
JACK H. CHAMBERS (3) ROBERT F. APGAR
Of Counsel to law firm of Vice President - General Counsel
Foley & Lardner
JOSEPH BENEDICT III
JAMES P. GORTER Vice President - Government
Chairman of the Board of Relations
Baker Fentress & Company;
limited partner of Goldman, PATRICIA LAGONI
Sachs & Co. Vice President - Administration
and Corporate Secretary
WILLIAM O. E. HENRY (3)
Practicing attorney and partner HUGH J. VELEY
in law firm of Holland & Knight, Vice President - Citrus
counsel for the Company
EMILY J. SOTTILE
ROBERT F. LLOYD (2) Assistant Secretary and
Chariman of the Board and Assistant Treasurer
Chief Executive Officer of
Lloyd Buck - Cadillac Inc. LINDA CRISP
Assistant Secretary
JOHN H. PACE, JR (3)
Chairman of Cardinal Investment GARY MOOTHART
Company (investor in securities Controller
and real estate)
INDIGO DEVELOPMENT INC.
DAVID D. PETERSON (1) WILLIAM H. MCMUNN
Chairman of the Board of the Company; President
President and Chief Executive Officer
of Baker, Fentress & Company (1) Member of the Executive Committee
(2) Member of the Compensation and
BRUCE W. TEETERS Stock Option Committee
Senior Vice President - Finance (3) Member of the Audit Committee
and Treasurer of the Company
---------------------------------------------------------- -------------------------------------------------------
COUNSEL AUDITORS
Holland & Knight Arthur Andersen LLP
Post Office Box 1526 101 East Kennedy Boulevard
Orlando, Florida 32802-1526 Tampa, Florida 33602
REGISTRAR AND STOCK TRANSFER AGENT MAILING ADDRESS
Mellon Securities Trust Company Consolidated-Tomoka Land Co.
Four Station Square, Third Floor Post Office Box 10809
Pittsburgh, PA 15219-1173 Daytona Beach, Florida 32120-0809
</TABLE>
<PAGE> 3
TO OUR SHAREHOLDERS
It is a pleasure to report that the Company achieved its highest level of
operating earnings in recent history. Net income of $6.4 million or $1.01 per
share was earned in 1994 compared to net income of $0.8 million or $.13 per
share in the prior year.
In addition to record earnings in 1994, the year was highlighted by the
July sale of Indigo Lakes Resort in a cash transaction for its approximate book
value. This event represented a major step toward the Company's goal of exiting
all business segments except its citrus and land development operations and
provided funds for a significant reduction in outstanding debt. Thus the
resort's annual operating losses, ranging from $0.4 million to $1.7 million
over the past five years, have been eliminated.
Citrus operating results were well short of internal plans and normal
expectations. The crop harvested January April produced less volume than
expected. More recently, the unusually warm and wet September to December
growing conditions caused fruit to mature early and with shorter than normal
shelf life. Growers, therefore, expedited harvesting and overwhelmed the
markets, which collapsed normal pricing. Little better than break-even results
were disappointing although variable results should be expected from any
commodity- based business. The Company's groves are in excellent condition and
there are many reasons to be optimistic about the long-term profitability of
the citrus fresh fruit business.
Progress on the 4,500-acre Ladies Professional Golf Association ("LPGA")
multi-use project included the official opening of the LPGA International golf
course in July and the December sale of 60 acres for residential development
around the golf course. The transaction includes options to purchase the
remaining 246 residential acres surrounding this first of two championship
courses. The I-95 highway interchange, which will provide greatly improved
access to the project, will be partially usable in late April, when the course
is host to the LPGA Sprint tournament, and fully operational by late summer.
Three real estate transactions which generated $8.1 million in total
revenue also were noteworthy: January sale of a 26-acre shopping center site in
Ormond Beach to Wal-Mart; sale of a 273-acre manufactured housing site, also in
Ormond Beach; and sale of undeveloped lake frontage in Highlands County. During
1994, approximately 600 total acres of vacant lands were sold at an average
realized price of $21,000 per acre.
During the year, dividends paid to shareholders increased to $.35 per
share from $.30 per share in 1993, a 17% increase. Continuing the current
dividend rate ($.20 per share) paid twice a year would produce a $.40 per share
dividend in 1995, a 100% increase over the 1992 level.
While much was accomplished in 1994, there are many remaining
opportunities for improvement. Management is optimistic that its business
strategy emphasis on citrus and land activities will lead to continuing
operating improvement in 1995 and beyond.
/s/ Bob D. Allen
----------------
Bob D. Allen
President
1
<PAGE> 4
SHAREHOLDERS' REPORT
LAND HOLDINGS
Land holdings of the Company and its affiliates, all of which are located
in Florida, include: approximately 27,100 acres in the Daytona Beach area of
Volusia County; approximately 5,900 acres in Highlands County, near Lake
Placid; shopping centers in Hernando and Marion Counties; commercial/retail
sites in Volusia County; office buildings and rental properties in Volusia and
Flagler Counties; and full or fractional subsurface oil, gas, and mineral
interests in approximately 551,000 "surface acres" in 19 Florida counties. The
conversion and subsequent utilization of these assets provides the base of the
Company's operations.
The holdings of approximately 27,100 acres in Volusia County include
approximately 19,900 acres within the city limits of Daytona Beach,
approximately 6,700 acres within the unincorporated area of Volusia County, and
small acreages in the cities of Ormond Beach and Port Orange. Of the 19,900
acres inside the city limits of Daytona Beach, approximately 3,900 acres have
received development approval by governmental agencies. The 3,900 acres plus
approximately 500 acres owned by the City of Daytona Beach and 90 acres sold
for development by others will be the site of a long-term, mixed-use
development which will include the national headquarters of the Ladies
Professional Golf Association along with two championship golf courses. The
first golf course, a maintenance facility, and the first phase of a road to
serve the LPGA community were completed in 1993. Construction of the final
phase of the entrance road and the interim clubhouse were completed in 1994.
Construction of the entrance signage and landscaping are underway, and
construction of the second golf course is expected to begin in late 1995 or
early 1996. A 60-acre parcel of land was sold to a residential developer in
1994, and construction of homes around the first golf course should begin in
the spring of 1995. The acreage not currently being developed, including lands
on which development approvals have been received, are involved in an active
forestry operation. Except for a 22-acre parcel at the Interstate 95 and Taylor
Road interchange in the Port Orange area south of Daytona Beach, the tract
straddles Interstate 95 for 6 1/2 miles between U.S. 92 and State Road 40, with
approximately 23,800 acres west and 3,300 east of the interstate.
Subsidiaries of the Company are holders of the developed Volusia County
properties and are involved in the development of additional lands zoned for
residential, commercial, or industrial purposes.
Previous holdings of the Company and its affiliates which were developed
and sold include the Indigo Lakes Resort, lands in 7 residential communities,
and approximately 260 acres of commercial and industrial sites.
In Highlands County, located in south central Florida along U.S. Highway
27, the Company grows citrus on approximately 4,200 acres. These groves and
most of the other Highlands County lands are near Lake Placid, Florida, which
is about 75 miles east of Sarasota and 150 miles northwest of Miami. Rental
properties in Highlands County have been disposed of; and the remaining lands,
approximately 1,700 acres, are either in a subsidiary's inventory for sale or
leased for grazing or other agricultural purposes. A large portion of these
lands and much of the citrus acreage is located on or near lakes, suggesting
potential future residential development. One lakefront parcel of 225 acres,
including approximately 170 acres of citrus, was sold in 1994.
The Company's oil, gas, and mineral interests, which are equivalent to
full rights to 305,000 acres, were acquired by retaining subsurface rights when
acreage was sold many years ago.
CITRUS
Under the name "Lake Placid Groves," the Citrus Division of
Consolidated-Tomoka Land Co. grows and packs fresh whole citrus fruit,
primarily oranges, tangelos, and temples. The brand names "Lake Placid" and
"Winding Waters" are used in marketing directly to wholesalers and retailers in
the eastern half of the United States and Canada. Because fresh fruit usually
commands higher prices, the operation emphasizes sales of fresh fruit packed in
the Company's modern fresh fruit packing plant; however, the division also
ships part of the harvest (not suitable for packing because of size,
appearance, content deficiencies, or demand) to a cooperative, partially owned
by the Company, in Lake Wales, Florida, where it is processed into juice and
juice concentrate.
All groves are situated in prime citrus-growing areas on the southern
ridge of Highlands County, Florida; and much of the land is adjacent to the
southeastern shore line of two large lakes, whose water temperatures provide
some protection against freezing weather. The trees are in excellent condition.
During 1994, a grove of approximately 170 acres on the east shore of Lake
Placid was sold, primarily to recognize the value of lake frontage which is
suitable for future residential development. The 1992-93 crop set a Company
record of over 1,200,000 boxes of fruit. The Company crop for the 1993-94
season showed production of 905,000 boxes harvested; and the 1994-95 crop is
expected to be approximately the same as 1993-94. Future production is expected
to increase when the 1,600-acre grove planted during years 1989 through 1993
reaches full maturity.
The average age of grove trees is about 19 years, well within the average
45-year productive life. The groves are well maintained and irrigated by a
modern low-volume
2
<PAGE> 5
system. The citrus groves are mortgaged as collateral for a bank line of
credit and term loan.
The fresh fruit packing plant near Lake Placid, Florida, packs and sells
both Company fruit and that of other growers. This process involves washing,
grading, waxing, and packing into cartons or bags for direct shipment to
customers who buy in truckload quantities. For each of the last ten seasons,
the plant has been among the top ten largest Florida packers of fresh oranges.
The facility is within a seven-mile radius of all its grove sources, providing
a significant transportation cost advantage.
The cooperative to which a portion of the crop is sent is owned by the
Company and eleven other growers. It markets and processes under several brand
names, including Donald Duck, Blue Bird, and Florida's Natural. The division
shares in the net proceeds from the processed products (juice, juice
concentrate, and by-products) according to the amount and content of fruit
delivered to the plant.
CONFERENCE CENTER AND RESORT
During 1994, the Company sold its resort operation known as the Indigo
Lakes Holiday Inn Crowne Plaza Resort. The Resort had been under a management
contract with Sandcastle Resorts since August 17, 1990. A group associated with
Sandcastle Resorts formed a partnership named Indigo Lakes Resort, Ltd. and
purchased the 145-unit inn, 8 separate buildings housing 64 condominium-style
units, tennis courts and pro shop, a conference center, several small meeting
rooms, two swimming pools, and other properties related to those facilities.
The 18-hole championship golf course, fully equipped golf pro shop, restaurant
and cocktail lounge, and a 500-seat banquet and meeting room facility were sold
to The Fairways Group, L.P.
On January 4, 1992, the Company had assumed a leasehold interest in a
21,000-square-foot restaurant located adjacent to the Indigo Lakes Holiday Inn
Crowne Plaza Resort. The Resort's food and beverage division operated the
building as a restaurant and lounge for portions of the period from time of
lease until April of 1993, after which it stood empty until the lease with the
Company was terminated in 1994.
REAL ESTATE OPERATIONS
One of the Company's major achievements in recent years was the relocation
of the Ladies Professional Golf Association ("LPGA") to Daytona Beach in 1989
with planned construction of its national headquarters on Company lands. The
LPGA signed a four-party agreement with the Company, Indigo Group Ltd., a
wholly owned subsidiary, ("IG LTD"), and the City of Daytona Beach which
includes development of a new mixed-use community on approximately 3,900 acres
of Company land. Development plans were approved by the governmental agencies
in 1993. The City of Daytona Beach has completed construction of a Rees Jones
designed "signature" golf course which was opened to the public July 11, 1994.
The course is ranked by Golf Magazine as one of the ten best new municipal golf
courses in the Country. A second golf course is being designed by architect
Arthur Hills for construction on lands to be donated by the Company to the
City. The City will either operate both courses or contract with others to do
so. The LPGA's prestigious Sprint Championship Tournament, held last year at
Indigo Lakes, will be held at the LPGA International course in April 1995.
From October of 1990 until December of 1993, IG LTD. centered its
operations on residential community development, construction and sales,
operating primarily in four communities. In September of 1993, IG LTD reached
an agreement, effective December 31, 1993, to dispose of its interest in two
communities under a lot marketing and sales arrangement:
- Riverwood Plantation, a community of 180 acres in Port Orange, Florida.
More than 80% of the lots are sold with the Company owning 84 lots at December
31, 1994.
- Woodlake, a community of 62 acres also in Port Orange, Florida, in which
all lots have been sold.
- Six lots remain at the 200-acre Indigo Lakes development in Daytona
Beach.
- In Highlands County, Florida, IG LTD is developing Tomoka Heights
on 180 acres adjacent to Lake Henry. The community is approved for a total
of 587 single-family and duplex units now selling in the $89,000 to $135,000
price range. The development features controlled access and has appeal for
active retired couples. The sales and construction operations have been
performed by third parties since January 1994. Eight units were sold in 1994.
Rental properties consist of a two-building office complex in downtown
Daytona Beach, a 24,000-square-foot office building near the interchange of
Interstate 95 and U.S. 92 in Daytona Beach, and a 24,000-square-foot office
building in Palm Coast, which is approximately 30 miles north of Daytona Beach.
The larger building of the downtown Daytona Beach complex is a
47,000-square-foot, seven-story office building leased to several tenants and
partially occupied by the Company; the smaller, containing 17,000 square feet,
is under a lease/purchase agreement and considered a financing lease. The other
two buildings are leased to multiple tenants. The downtown Daytona Beach and
Palm Coast buildings are covered by debt in the form of industrial revenue
bonds.
IG LTD owns Mariner Village and Mariner Towne Square Shopping Centers in
Spring Hill and a 50%
3
<PAGE> 6
interest in The Forest Center Shopping Center east of Ocala. All three
properties are encumbered by mortgages.
Other leasing activities of Consolidated-Tomoka include ground leases for
billboards, grazing leases covering 930 acres, leases of communication tower
sites, and a hunting lease covering approximately 20,000 acres.
Another source of income is from subsurface interests which are leased for
mineral exploration, as described under "Land Holdings." At December 31, 1994,
oil and gas leases were in effect covering a total of 13,870 surface acres in
Lee and Hendry Counties, Florida. At December 31, 1994, there were four
producing oil wells on the Company's interests. Volume produced in 1994 from
these wells was 141,488 barrels, compared with 111,739 barrels in 1993. Oil
lease income and oil royalty income have in the past been much more significant
sources of income for the Company than in recent years. The Company's current
policy is to grant no releases of its reserved mineral rights in oil-producing
counties unless required to do so through contractual obligations; however,
releases of surface entry rights might be sold upon request of a surface owner
who requires such a release for financing or development purposes. As Florida
develops, such requests will no doubt increase. Sales and releases of surface
entry rights in 1994 produced revenues of $555,000.
Income from sales of forest products varies considerably from year to year
depending on economic conditions and rainfall. Our primary market today is in
pulpwood with sawtimber, plylogs, and some cypress being marketed as conditions
and the market allow. Geographic location of the timber tract is excellent. In
addition to access by major highways (Interstate 95, State Road 40, and U.S.
Highway 92), the internal road system for forestry purposes is good.
FIVE-YEAR FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
(In thousands except per share amounts)
1994 1993* 1992* 1991* 1990*
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ $ $ $ $
Summary of Operations:
Revenues:
Citrus 8,175 10,719 10,714 11,183 5,801
Real Estate 16,528 15,780 20,185 23,779 19,297
Interest and Other Income 2,623 653 1,672 2,926 335
Profit on Sales of Undeveloped Real Estate Interests 1,400 314 239 283 4
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 28,726 27,466 32,810 38,171 25,437
----------------------------------------------------------------------------------------------------------------------------------
Operating Costs and Expenses 14,980 22,029 24,834 29,537 38,200
General and Administrative Expenses 3,478 3,549 3,146 3,698 1,852
Provision for Income Taxes 3,778 672 1,803 1,845 (2,986)
Income (Loss) from Continuing Operations 6,490 1,216 3,027 3,091 (11,629)
Loss from Discontinued Operations (net of tax) (135) (759) (517) (1,087) (1,032)
Extraordinary Item-Income Tax Benefit of Net Operating
Loss Carryforward - - 1,492 1,189 -
Cumulative Effect of Change in Accounting for
Income Taxes - 329 - - -
Net Income (Loss) 6,355 786 4,002 3,193 (12,661)
Primary Earnings Per Share:
Income (Loss) from Continuing Operations 1.04 0.20 0.48 0.49 (1.86)
Net Income (Loss) 1.01 0.13 0.64 0.51 (2.02)
Fully Diluted Earnings Per Share:
Income (Loss) from Continuing Operations 1.04 0.20 0.48 0.49 (1.86)
Net Income (Loss) 1.01 0.13 0.64 0.51 (2.02)
Dividends Paid 0.35 0.30 0.20 0.20 0.20
Summary of Financial Position:
Total Assets 61,535 65,815 65,058 66,021 72,768
Shareholders' Equity 31,030 26,867 27,959 24,489 22,541
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Restated for Discontinued Resort Operations - See Note 2 to consolidated
financial statements
4
<PAGE> 7
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders of
Consolidated-Tomoka Land Co.:
We have audited the accompanying consolidated balance sheet of
Consolidated-Tomoka Land Co. and subsidiaries as of December 31, 1994, and the
related consolidated statements of operations and retained earnings and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Consolidated-Tomoka Land Co. as of December 31, 1994, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Tampa, Florida Arthur Andersen LLP
February 10, 1995
To the Board of Directors and Shareholders
Consolidated-Tomoka Land Co.
Daytona Beach, Florida
We have audited the consolidated balance sheet of Consolidated-Tomoka Land
Co. and subsidiaries as of December 31, 1993 and the related consolidated
statements of operations and retained earnings and cash flows for each of the
two years in the period ended December 31, 1993. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Consolidated-Tomoka Land Co. and subsidiaries as of December 31, 1993 and the
results of their operations and their cash flow for each of the two years in
the period ended December 31, 1993, in conformity with generally accepted
accounting principles.
As discussed in Note 4 to the consolidated financial statements, the
Company changed its method of accounting for income taxes, effective January 1,
1993.
Tampa, Florida Rex Meighen & Company
February 10, 1994 Certified Public Accountants
5
<PAGE> 8
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Calendar Year
---------------------------------------------------------
1994 1993* 1992*
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Citrus Operations (Note 15):
Sales of Fruit and Other Income $ 8,174,816 $ 10,718,876 $ 10,713,525
Production and Selling Expenses (8,088,518) (8,432,716) (7,992,862)
------------------------------------------------------------------------------------------------------------------------------------
86,298 2,286,160 2,720,663
------------------------------------------------------------------------------------------------------------------------------------
Real Estate Operations:
Sales and Other Income 16,528,217 15,779,857 20,184,673
Costs and Other Expenses (6,890,969) (13,596,198) (16,840,643)
------------------------------------------------------------------------------------------------------------------------------------
9,637,248 2,183,659 3,344,030
------------------------------------------------------------------------------------------------------------------------------------
Profit on Sales of Undeveloped Real Estate Interests 1,399,711 314,403 238,988
------------------------------------------------------------------------------------------------------------------------------------
Interest and Other Income 2,623,447 653,115 1,672,639
------------------------------------------------------------------------------------------------------------------------------------
Operating Income 13,746,704 5,437,337 7,976,320
General and Administrative Expenses (3,515,266) (3,624,650) (3,209,219)
------------------------------------------------------------------------------------------------------------------------------------
Income Before Minority Interest in Partnership 10,231,438 1,812,687 4,767,101
Minority Interest 37,424 75,616 63,282
------------------------------------------------------------------------------------------------------------------------------------
Income from Continuing Operations Before Income Taxes 10,268,862 1,888,303 4,830,383
Income Taxes (Note 4) (3,778,461) (672,319) (1,803,549)
------------------------------------------------------------------------------------------------------------------------------------
Income from Continuing Operations 6,490,401 1,215,984 3,026,834
Loss from Discontinued Resort Operations, Net of Tax (Note 2) (135,611) (759,284) (516,530)
------------------------------------------------------------------------------------------------------------------------------------
Income Before Extraordinary Item and Cumulative Effect
of Change in Accounting Principle 6,354,790 456,700 2,510,304
Extraordinary Item:
Income Tax Benefit of Net Operating Loss Carryforward (Note 4) - - 1,491,909
Cumulative Effect of Change in Accounting for Income Taxes (Note 4) - 329,442 -
------------------------------------------------------------------------------------------------------------------------------------
Net Income 6,354,790 786,142 4,002,213
Retained Earnings, Beginning of Year 18,823,370 19,915,610 16,445,605
Dividends (2,191,445) (1,878,382) (532,208)
------------------------------------------------------------------------------------------------------------------------------------
Retained Earnings, End of Year $22,986,715 $ 18,823,370 $ 19,915,610
====================================================================================================================================
Per Share Information:
Average Shares Outstanding 6,261,272 6,261,272 6,261,272
====================================================================================================================================
Income From Continuing Operations $ 1.04 $ 0.20 $ 0.48
Loss from Discontinued Resort Operations, Net of Tax (Note 2) (0.03) (0.12) (0.08)
------------------------------------------------------------------------------------------------------------------------------------
Income Before Extraordinary Item and Cumulative Effect of
Change in Accounting Principle 1.01 0.08 0.40
Extraordinary Item:
Income Tax Benefit of Net Operating Loss Carryforward - - 0.24
Cumulative Effect of Change in Accounting for Income Taxes - 0.05 -
------------------------------------------------------------------------------------------------------------------------------------
Net Income Per Share $ 1.01 $ 0.13 $ 0.64
====================================================================================================================================
Dividends Per Share $ 0.35 $ 0.30 $ .085
====================================================================================================================================
</TABLE>
* Restated for Discontinued Resort Operations-See Note 2 to consolidated
financial statements.
The accompanying notes are an integral part of these consolidated statements.
6
<PAGE> 9
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS December 31,
-----------------------------------------------------------------------------------------------------------------------------------
1994 1993*
------------ ------------
<S> <C> <C>
Cash $ 503,545 $ 2,007,440
Investment Securities (Note 3) 1,290,955 935,850
Notes Receivable (Note 5) 9,222,968 3,183,379
Accounts Receivable 1,877,220 2,154,415
Inventories 660,461 742,251
Cost of Fruit on Trees 2,435,401 2,796,926
Real Estate Held for Development and Sale (Note 6) 16,626,505 16,515,667
Net Investment in Direct Financing Lease (Note 7) 880,222 964,122
Other Assets 375,486 487,587
Deferred Income Taxes (Note 4) - 1,282,718
Net Assets of Discontinued Resort Operations (Note 2) - 6,806,561
-----------------------------------------------------------------------------------------------------------------------------------
33,872,763 37,876,916
-----------------------------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment:
Land, Timber and Subsurface Interests 3,870,205 3,855,314
Citrus Properties:
Trees 8,758,904 8,182,198
Buildings and Equipment 9,286,238 9,436,415
Income Properties 17,228,897 17,299,712
Other Buildings and Equipment 1,481,680 1,682,322
-----------------------------------------------------------------------------------------------------------------------------------
Total Property, Plant and Equipment 40,625,924 40,455,961
Less, Accumulated Depreciation and Amortization (12,963,272) (12,517,657)
-----------------------------------------------------------------------------------------------------------------------------------
Net Property, Plant and Equipment 27,662,652 27,938,304
-----------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 61,535,415 $ 65,815,220
===================================================================================================================================
LIABILITIES
-----------------------------------------------------------------------------------------------------------------------------------
Accounts Payable $ 749,277 $ 1,259,899
Notes Payable (Note 9) 24,973,283 34,974,221
Accrued Liabilities 2,134,670 1,644,663
Customer Deposits 924,268 1,007,039
Deferred Income Taxes (Note 4) 95,504 -
Income Taxes Payable (Note 4) 1,481,531 98,438
-----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 30,358,533 38,984,260
-----------------------------------------------------------------------------------------------------------------------------------
Minority Interest 146,790 (35,787)
-----------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
-----------------------------------------------------------------------------------------------------------------------------------
Preferred Stock-50,000 Shares Authorized, $100 Par Value;
None Issued
Common Stock-10,000,000 Shares Authorized, $1 Par Value;
6,261,272 Shares Issued and Outstanding (Note 12) 6,261,272 6,261,272
Additional Paid-In Capital 1,782,105 1,782,105
Retained Earnings 22,986,715 18,823,370
-----------------------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 31,030,092 26,866,747
-----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 61,535,415 $ 65,815,220
===================================================================================================================================
</TABLE>
* Restated for Discontinued Resort Operations - See Note 2 to consolidated
financial statements.
The accompanying notes are an integral part of these consolidated balance
sheets.
7
<PAGE> 10
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Calendar Year
---------------------------------------------------------
1994 1993* 1992*
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flow from Operating Activities
Cash Received from:
Citrus Sales of Fruit and Other Income (Note 15) $ 7,998,995 $10,505,368 $ 11,266,663
Real Estate Sales and Other Income 10,923,789 16,567,437 19,340,269
Sales of Undeveloped Real Estate Interests 1,399,711 314,403 238,988
Interest and Other Income 230,869 245,763 226,739
-----------------------------------------------------------------------------------------------------------------------------------
Total Cash Received from
Operating Activities 20,553,364 27,632,971 31,072,659
-----------------------------------------------------------------------------------------------------------------------------------
Cash Expended for:
Citrus Production and Selling Expenses 7,288,990 8,380,790 8,068,628
Real Estate Costs and Other Expenses 5,647,964 12,173,966 13,068,333
General and Administrative Expenses 2,019,947 2,025,707 3,058,016
Interest 1,917,447 2,219,226 2,535,417
Income Taxes (Note 4) 1,017,146 626,455 -
-----------------------------------------------------------------------------------------------------------------------------------
Total Cash Expended for
Operating Activities 17,891,494 25,426,144 26,730,394
-----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by
Operating Activities 2,661,870 2,206,827 4,342,265
-----------------------------------------------------------------------------------------------------------------------------------
Cash Flow from Investing Activities
Acquisition of Property, Plant and Equipment (1,385,731) (1,191,590) (1,533,292)
Net Proceeds from (Investments in) Investment
Securities (Note 3) (355,105) (86,991) 117,645
Direct Financing Lease (Note 7) 83,900 80,292 111,901
Proceeds from Sale of Property, Plant and Equipment 3,012,604 667,542 1,030,131
Cash Flow from Discontinued Resort Operations (Note 2) 6,670,950 (182,979) (929,060)
-----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used in)
Investing Activities 8,026,618 (713,726) (1,202,675)
-----------------------------------------------------------------------------------------------------------------------------------
Cash Flow from Financing Activities
Cash Proceeds from Debt (Note 9) 3,600,000 9,742,547 29,167,767
Payments of Debt (Note 9) (13,600,938) (7,685,256) (31,151,077)
Dividends Paid (2,191,445) (1,878,382) (1,252,254)
-----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by (Used in)
Financing Activities (12,192,383) 178,909 (3,235,564)
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash (1,503,895) 1,672,010 (95,974)
Cash, Beginning of Year 2,007,440 335,430 431,404
-----------------------------------------------------------------------------------------------------------------------------------
Cash, End of Year $ 503,545 $ 2,007,440 $ 335,430
===================================================================================================================================
</TABLE>
8
<PAGE> 11
CONSOLIDATED STATEMENTS OF CASH FLOWS
continued
<TABLE>
<CAPTION>
Calendar Year
------------------------------------------------------
1994 1993* 1992*
<S> <C> <C> <C>
==================================================================================================================================
Reconciliation of Net Income to Net Cash Provided by
Operating Activities:
Net Income $ 6,354,790 $ 786,142 $ 4,002,213
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Discontinued Resort Operation 135,611 759,284 516,530
Depreciation and Amortization 1,050,965 1,100,549 1,211,821
Gain on Sales of Property, Plant and Equipment (2,402,186) (408,792) (1,426,951)
(Increase) Decrease in Assets:
Notes Receivable (6,039,589) 870,602 (1,732,125)
Accounts Receivable 277,195 (53,950) 1,209,072
Inventories 81,790 (240,577) 26,117
Cost of Fruit on Trees 361,525 (86,292) (149,487)
Real Estate Held for Development and Sale (110,838) 558,970 2,352,320
Deferred Income Taxes 1,282,718 (382,016) -
Other Assets 112,101 101,586 (138,714)
Increase (Decrease) in Liabilities:
Accounts Payable (510,622) (1,879,453) (902,957)
Accrued Liabilities 490,007 565,732 (300,893)
Customer Deposits (82,771) 438,218 (422,498)
Deferred Income Taxes 95,504 - -
Income Taxes Payable (Note 4) 1,383,093 98,438 311,640
Increase (Decrease) in Minority Interest 182,577 (21,614) (213,823)
----------------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by
Operating Activities $ 2,661,870 $ 2,206,827 $ 4,342,265
==================================================================================================================================
</TABLE>
Supplemental Disclosure of Noncash Operating Activities:
In 1994, in connection with the sale of real estate, the Company received, as
consideration, mortgage notes receivable of $4,554,830.
* Restated for Discontinued Resort Operations-See Note 2 to consolidated
financial statements.
The accompanying notes are an integral part of these consolidated statements.
9
<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1994, 1993 and 1992
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
Consolidated-Tomoka Land Co. and its wholly owned subsidiaries:
Indigo Group Inc., Indigo Group Ltd., Placid Utilities Company and
Indigo Development Inc. (collectively, the Company). All significant
intercompany accounts and transactions have been eliminated in
consolidation.
INVENTORIES
Inventories, which are stated at the lower of cost (first-in,
first-out method) or market, consist primarily of citrus supplies.
COST OF FRUIT ON TREES
Direct and allocated indirect costs incurred in connection with the
production of crops are capitalized into cost of fruit on trees. As
the crop is harvested and sold, the related costs are charged to
production expense, on a pro-rata basis based on the boxes harvested
and sold to the estimated total boxes expected to be harvested and
sold.
REAL ESTATE HELD FOR DEVELOPMENT AND SALE
The carrying value of land and land development costs includes the
initial acquisition costs of the land, improvements thereto and
other costs incidental to the acquisition or holding of land. These
costs are allocated to properties on a per-lot basis and are charged
to cost of sales as specific properties are sold. Land and land
development costs include approximately $302,062 and $263,261 of
interest and $86,230 and $95,768 of property taxes capitalized
during 1994 and 1993, respectively. Interest expense was $1,917,447,
$2,219,226 and $2,535,417 for 1994, 1993 and 1992, respectively.
Construction in progress includes costs incurred primarily on
customer contracts for houses that had not been completed at
December 31, 1993.
Completed houses include all costs incurred for houses built without
a customer contract. Historical performance of the Company indicates
that these houses are usually sold at a price in excess of cost.
Undeveloped land represents land held for future development which
includes acquisition cost of the land, improvements thereto and
other cost incident to the acquisition or holding of land.
Sales of houses and lots and all directly related costs and expenses
are recorded at the time of closing. Payments received from buyers
prior to closing are recorded as customer deposits.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost, less accumulated
depreciation and amortization. Such properties are depreciated on a
straight-line basis over their estimated useful lives. Renewals and
betterments are charged to property accounts. The cost of
maintenance and repairs is charged against income as incurred. The
cost of property retired or otherwise disposed of, and the related
accumulated depreciation, are removed from the accounts, and any
resulting gain or loss is taken into income.
10
<PAGE> 13
NOTES
Continued
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
The amount of depreciation and amortization taken for the years
1994, 1993 and 1992, is summarized as follows:
<TABLE>
<CAPTION>
CALENDAR YEAR
-----------------------------------------------------
1994 1993 1992
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Citrus Properties $ 328,399 $ 354,380 $ 341,171
Other Properties 722,566 746,169 870,650
-------------------------------------------------------------------------------------------------
$1,050,965 $1,100,549 $1,211,821
=================================================================================================
</TABLE>
The range of estimated useful lives for property, plant and
equipment is as follows:
<TABLE>
<S> <C>
Citrus Trees 20-40 Years
Citrus Buildings and Roads 10-30 Years
Citrus Irrigation Equipment 5-20 Years
Citrus Other Equipment 3-30 Years
Income Properties 3-30 Years
Other Buildings 10-30 Years
Other Equipment 3-30 Years
</TABLE>
SALES OF REAL ESTATE:
The profit on sales of real estate is accounted for in accordance
with the provisions of the Financial Accounting Standards Board's
(FASB) Statement of Financial Accounting Standards (SFAS) No. 66,
"Accounting for Sales of Real Estate." Such method of accounting
requires deferment of income recognition if property is sold on a
deferred payment plan and the initial payment does not meet criteria
established under the accounting guidelines.
PENSIONS
The Company has a funded, non-contributory defined benefit pension
plan covering all eligible full-time employees. The Company's method
of funding and accounting for pension costs is to fund and accrue
all normal costs plus an amount necessary to amortize past service
cost over a period of 30 years.
RECLASSIFICATION OF ACCOUNTS
Certain items in the consolidated financial statements for the years
ended December 31, 1993 and 1992, have been reclassified to conform
to classifications used in the current year.
EARNINGS PER SHARE INFORMATION
Earnings per common share is computed by dividing net income by the
weighted average shares of common stock outstanding during the year.
Fully diluted earnings per share amounts are not presented, because
such dilution was immaterial for 1994, 1993 and 1992.
11
<PAGE> 14
NOTES
Continued
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of investment
securities, trade receivables and notes receivable. Concentration of
credit risk with respect to trade receivables are limited due to the
Company's large number of customers and their dispersion across
geographic areas and industries.
CITRUS PRODUCTION AND SELLING
The Company is the owner of a citrus fresh fruit packing house and
packs and sells its own fruit, together with fruit received from
Turner Foods, Inc. ("Turner"), under a pooling agreement. During the
years 1994, 1993 and 1992, the Company's charges to Turner for
handling and packing its fruit amounted to $656,281, $302,739 and
$667,224, respectively. In addition, Turner has a contract for
delivery of citrus fruit. The amounts received by the Company for
such services for years 1994, 1993 and 1992 amounted to $43,142,
$26,555 and $131,605, respectively. All of such revenues are
accounted for by the Company as a reduction of citrus production and
selling expenses.
NOTE 2 DISCONTINUED RESORT OPERATIONS
On July 14, 1994, the Company sold its resort complex for a cash
price of $7,175,000. The sale resulted in a pretax loss of $111,804
($69,732 net of tax). The results of the resort operation have been
reported separately as discontinued operations in the Consolidated
Statements of Operations and Retained Earnings. Prior year
consolidated financial statements have been restated to present
resort operations as discontinued operations. There are no remaining
assets or liabilities reflected on the balance sheet as of December
31, 1994. Summary financial information of the operation and sale is
as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1994 1993 1992
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues from Discontinued
Resort Operations $4,590,516 $ 7,185,987 $8,141,009
------------------------------------------------------------------------------------------------------------------
Loss from Discontinued Resort
Operations Before Tax (105,626) (1,217,387) (828,170)
Income Tax Benefit from
Discontinued Resort Operations 39,747 458,103 311,640
Loss on Sale of Resort Operations
(Net of Income Tax Benefit of $42,072) (69,732) - -
------------------------------------------------------------------------------------------------------------------
Total Loss From Discontinued
Resort Operations, Net of Tax $ (135,611) $ (759,284) $ (516,530)
------------------------------------------------------------------------------------------------------------------
Loss Per Share from Discontinued
Resort Operations $ (0.03) $ (0.12) $ (0.08)
===================================================================================================================
</TABLE>
12
<PAGE> 15
NOTES
Continued
NOTE 3 INVESTMENT SECURITIES
FASB has issued SFAS No. 115 "Accounting for Certain Investments in
Debt and Equity Securities," which the Company adopted effective
January 1, 1994. This standard requires classification of the
investment portfolio into three categories: held to maturity,
trading and available for sale. The Company classifies as held to
maturity those securities for which the Company has the intent and
ability to hold through its stated maturity date. Investment
securities which are classified as held to maturity are carried at
cost, adjusted for amortization of premiums and accretion of
discounts. Investments which are classified as available for sale
may be sold for liquidity or other purposes, but are not actively
traded. Investments which are classified as available for sale are
recorded at approximate fair value. Gains and losses are determined
using the specific identification method. Prior to adopting the new
standard, investment securities were carried at amortized cost. The
change in accounting did not have a material effect on the financial
statements.
Investment securities as of December 31, 1994 and 1993, are as
follows:
<TABLE>
<CAPTION>
1994 1993
----------------------------------------------------------------------------
<S> <C> <C>
Held to Maturity $ 463,304 $453,658
Available for Sale 827,651 482,192
----------------------------------------------------------------------------
$1,290,955 $935,850
============================================================================
</TABLE>
NOTE 4 INCOME TAXES
Effective January 1, 1993, the Company adopted SFAS No. 109,
"Accounting for Income Taxes." The cumulative effect of the change
in accounting principle is included in determining net income for
1993. Financial statements for prior years have not been restated.
The provision for income taxes is summarized as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-----------------------------------------------------------------------------------------------------------------
Current Deferred Current Deferred Current Deferred
------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Federal $2,193,763 $1,022,442 $629,886 $16,056 $ 504,550 $ 1,034,582
State 206,476 355,780 - 26,377 86,266 178,151
-----------------------------------------------------------------------------------------------------------------
Total Before
Extraordinary
Credit 2,400,239 1,378,222 629,886 42,433 590,816 1,212,733
Extraordinary Credit:
Income Tax Benefit of
Net Operating Loss
Carryforward - - - - (259,319) (1,232,590)
-----------------------------------------------------------------------------------------------------------------
$2,400,239 $1,378,222 $629,886 $42,433 $ 331,497 $ (19,857)
=================================================================================================================
</TABLE>
13
<PAGE> 16
NOTES
Continued
NOTE 4 INCOME TAXES (CONTINUED)
Deferred income taxes have been provided to reflect temporary
differences that represent the cumulative taxable or deductible
amounts recorded in the financial statements in different years than
recognized in the tax returns. The sources of these differences and
the related provision (credit) and deferred income tax (liabilities)
assets are summarized as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
Provision (Credit) Deferred Taxes
----------------------------------------- ----------------------------
1994 1993 1992 1994 1993
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Depreciation $ (3,955) $ 106,599 $ 40,854 $ (964,774) $ (968,729)
Sales of Real Estate 575,756 6,239 86,248 (984,365) (408,609)
Deferred Compensation (137,488) (112,223) (82,137) 472,844 335,356
Basis's Difference in Joint Venture (546,502) 347,366 891,427 1,160,545 614,043
Revolving Fund Certificate (16,336) 7,138 - 206,966 190,630
Charitable Contributions
Carryforward 372,559 (32,913) - 2,024,466 2,397,025
Alternative Minimum Tax Credit 1,032,255 (138,033) - - 1,032,255
Deferred Tax Loss Carryforward - - (1,232,590) - -
Other Reconciling Items, Net 178,907 (141,740) 276,341 122,670 301,577
Less-Valuation Allowance (76,974) - - (2,133,856) (2,210,830)
---------------------------------------------------------------------------------------------------------------
$1,378,222 $ 42,433 $ (19,857) $ (95,504) $ 1,282,718
===============================================================================================================
</TABLE>
Following is a reconciliation of the income tax computed at the
federal statutory rate of 34 percent.
<TABLE>
<CAPTION>
Calendar Year
----------------------------------------------------
1994 1993 1992
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income Tax Computed at Federal
Statutory Rate $3,491,413 $642,023 $ 1,642,330
Increase (Decrease) Resulting from:
State Income Tax, Net of Federal
Income Tax Benefit 371,089 70,601 174,514
Percentage of Depletion on Oil Royalties
and Leases (3,833) (3,199) (5,002)
Tax Exempt Interest Income (5,517) (8,014) (7,247)
Adjustment to Valuation Allowance (76,974) - -
Other Reconciling Items 2,283 (29,092) (1,046)
----------------------------------------------------------------------------------------------------------------
Provision for Income Taxes Before
Extraordinary Item 3,778,461 672,319 1,803,549
Extraordinary Item:
Income Tax Benefit of Net Operating
Loss Carryforward - - (1,491,909)
----------------------------------------------------------------------------------------------------------------
Provision for Income Taxes $3,778,461 $672,319 $ 311,640
================================================================================================================
</TABLE>
14
<PAGE> 17
NOTES
Continued
NOTE 5 NOTES RECEIVABLE
<TABLE>
<CAPTION>
Notes Receivable consisted of the following:
----------------------------------------------------------------------------------------------------------------
December 31,
---------------------------------------
1994 1993
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MORTGAGE NOTES RECEIVABLE:
Various notes with interest rates ranging from
7% to 12% with payments due from 1995
through 2003. Collateralized by real estate
mortgages held by the Company. $8,993,825 $2,998,164
OTHER NOTES RECEIVABLE:
Interest at prime rate, receivable in monthly
installments of principal and interest to
amortize the original debt over a period of
15 years, due January 2006 173,701 185,215
Interest at prime rate plus .5%, receivable in
monthly installments of principal and
interest to amortize the original debt over
one year, due December 1995 55,442 -
----------------------------------------------------------------------------------------------------------------
Total Notes Receivable $9,222,968 $3,183,379
================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Prime rate was 8.5 and 6 percent at December 31, 1994 and 1993, respectively.
----------------------------------------------------------------------------------------------------------------
The required annual principal receipts are as follows:
================================================================================================================
YEAR ENDING DECEMBER 31, AMOUNT
----------------------------------------------------------------------------------------------------------------
<S> <C>
1995 $3,763,455
1996 302,116
1997 2,564,972
1998 1,350,665
1999 74,321
2000 and thereafter 1,167,439
----------------------------------------------------------------------------------------------------------------
$9,222,968
================================================================================================================
</TABLE>
15
<PAGE> 18
NOTES
Continued
NOTE 6 REAL ESTATE HELD FOR DEVELOPMENT AND SALE
Real estate held for development and sale as of December 31, 1994
and 1993, is summarized as follows:
<TABLE>
<CAPTION>
December 31,
---------------------------------------
1994 1993
===================================================================================================================
<S> <C> <C>
Undeveloped Land $ 2,848,624 $ 3,341,070
Land and Land Development 12,977,865 11,724,987
Completed Houses 800,016 896,633
Construction in Progress - 552,977
-------------------------------------------------------------------------------------------------------------------
$16,626,505 $16,515,667
===================================================================================================================
</TABLE>
NOTE 7 NET INVESTMENT IN DIRECT FINANCING LEASE
On December 31, 1986, the Company acquired certain real estate and
equipment subject to a direct financing-type lease. The aggregate
amounts due under the lease are identical in amount to the payments
required to be made by the Company in order to amortize the debt
applicable to the properties. The required annual payments on the
lease at December 31, 1994, are summarized as follows:
<TABLE>
<CAPTION>
AMOUNT
AGGREGATE REPRESENTING NET
YEAR ENDED DECEMBER 31, PAYMENT INTEREST INVESTMENT
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1995 $ 144,924 $ 57,232 $ 87,692
1996 133,331 51,791 81,540
1997 131,804 46,071 85,733
1998 129,606 40,071 89,535
1999 128,001 33,794 94,207
Thereafter 506,817 65,302 441,515
----------------------------------------------------------------------------------------------------------------
$1,174,483 $294,261 $880,222
================================================================================================================
</TABLE>
The interest rate stated in the lease agreement is 80.65% of
prime. Prime rate was 8.5% at December 31, 1994.
NOTE 8 REVOLVING FUND CERTIFICATES
The Company owns revolving fund certificates in the
aggregate face amount of $576,554 issued by an agricultural
cooperative in connection with the citrus operations. During
1990, these certificates were replaced by equivalent value
shares of non-voting stock issued by the cooperative and are
considered to have no value for financial statement purposes.
16
<PAGE> 19
NOTES
Continued
NOTE 9 NOTES PAYABLE
Notes Payable consisted of the following:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
------------------------------------------
1994 1993
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MORTGAGE NOTES PAYABLE
Mortgage notes payable are collateralized by real estate
mortgages held by the lender. As of December 31, 1994 and
1993, mortgage notes payable consisted of the following:
Interest payable quarterly at 8.8% through April 1994;
interest and principal payments of $266,783 payable
quarterly July 1994 through April 2002; principal
balance due July 2002 $9,856,541 $10,000,000
Payable $23,757 monthly through March 2001,
including interest at 7.5% 2,897,941 2,954,157
Interest payable quarterly at 10%, principal
and outstanding interest due October 2005 1,200,000 1,200,000
Payable $1,850 monthly through March 1995,
including interest at 9% 221,297 223,480
Payable $933 monthly through July 2018,
including interest at 6.375% 138,150 140,439
Interest at 6.5%, principal due January 1998 - 142,099
INDUSTRIAL REVENUE BONDS
Industrial revenue bonds payable are collateralized by
real estate and equipment. As of December 31, 1994 and
1993, industrial revenue bonds consisted of the following:
Interest at 80.65% of prime rate, payable in monthly
installments of principal and interest to amortize
the original debt over a period of 18 years, due
January 2004 3,414,168 3,683,366
Interest at 84.2% of prime rate, payable in monthly
installments of $4,700 plus interest, remaining
principal and interest due January 2002 2,048,800 2,105,200
</TABLE>
17
<PAGE> 20
Notes
Continued
NOTE 9 NOTES PAYABLE (CONTINUED)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
--------------------------------------------
1994 1993
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LINE OF CREDIT
$15,000,000 line of credit, collateralized by
citrus facilities, interest at prime minus .5%,
payable on demand $ 2,600,000 $11,900,000
NOTE PAYABLE TO RELATED PARTY (NOTE 15)
Principal and interest payable in monthly
installments of $23,268, interest at 9.68%,
unpaid principal and interest due
December 1998 2,596,386 2,625,480
-------------------------------------------------------------------------------------------------------------------
Total Notes Payable $24,973,283 $34,974,221
===================================================================================================================
Prime rate was 8.5% and 6% at December 31, 1994 and 1993, respectively.
-------------------------------------------------------------------------------------------------------------------
The required annual principal payments on notes payable are as follows:
===================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, AMOUNT
-------------------------------------------------------------------------------------------------------------------
<S> <C>
1995 $ 3,379,287
1996 677,581
1997 731,018
1998 789,070
1999 852,144
2000 and thereafter 18,544,183
-------------------------------------------------------------------------------------------------------------------
$24,973,283
===================================================================================================================
</TABLE>
18
<PAGE> 21
NOTES
Continued
NOTE 10 PENSION PLAN
The Company maintains a defined benefit plan for all employees who
have attained the age of 21 and completed one year of service. The
pension benefits are based primarily on years of service and the
average compensation for the highest five years during the final 10
years of employment. The benefit formula generally provides for a
life annuity benefit. Due to the sale of the resort complex, the
Company recognized a curtailment and settlement gain during 1994.
Consequently, the loss from discontinued resort operations in 1994
includes a net after tax gain of $220,606 resulting from the
settlement and curtailment.
The Company's net periodic pension cost included the following
components:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
1994 1993 1992
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service Cost $225,827 $302,500 $272,307
Interest Cost on Projected Benefit Obligation 288,705 334,954 303,180
Actual Return on Plan Assets (274,796) (345,626) (308,834)
Net Amortization (11,349) (18,175) (18,175)
-------------------------------------------------------------------------------------------------------------------------
Net Periodic Pension Cost $228,387 $273,653 $248,478
=========================================================================================================================
The funded status of the Company's pension plan was as follows:
-------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
-----------------------------------------------------
1994 1993 1992
-------------------------------------------------------------------------------------------------------------------------
Actuarial Present Value of Benefit
Obligations:
Vested $(2,423,349) $(2,928,394) $(2,722,907)
Nonvested (87,591) (87,045) (54,620)
-------------------------------------------------------------------------------------------------------------------------
Accumulated Benefit Obligation (2,510,940) (3,015,439) (2,777,527)
Effect of Projected Future Salary Increases (654,568) (1,599,301) (1,473,105)
-------------------------------------------------------------------------------------------------------------------------
Projected Benefit Obligation (3,165,508) (4,614,740) (4,250,632)
Plan Assets at Fair Value, Primarily
Mutual Funds and Group Insurance
Annuity Contracts 3,215,378 4,591,368 4,347,529
-------------------------------------------------------------------------------------------------------------------------
Plan Assets in Excess (Short) of Projected
Benefit Obligation 49,870 (23,372) 96,897
Unrecognized Prior Service Cost 7,693 158,768 171,035
Unrecognized Net Gain (176,455) (497,287) (401,738)
Unrecognized Transition Asset (177,872) (265,456) (295,898)
Net Total of Other Components - 286,651 403,941
-------------------------------------------------------------------------------------------------------------------------
Accrued Pension Liability $ (296,764) $ (340,696) $ (25,763)
=========================================================================================================================
</TABLE>
19
<PAGE> 22
NOTES
Continued
NOTE 10 PENSION PLAN (CONTINUED)
The actuarial assumptions made to determine the projected benefit
obligation and the fair value of plan assets are as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
--------------------------------------------
1994 1993 1992
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Weighted Average Discount Rate 8.0% 8.0% 8.0%
Weighted Average Asset Rate of Return 8.0% 8.0% 8.0%
Compensation Scale 5.0% 6.5% 6.5%
</TABLE>
NOTE 11 POSTRETIREMENT BENEFIT PLANS OTHER THAN PENSION
The Company sponsors two defined benefit postretirement plans of
certain health care and life insurance benefits for eligible retired
employees. All full-time employees become eligible to receive these
benefits if they retire after reaching age 55 with 20 or more years
of service. The postretirement health care plan is contributory,
with retiree contributions adjusted annually; the life insurance
plan is non-contributory up to $5,000 of coverage. The accounting
for the health care plan reflects caps on the amount of annual
benefit to be paid to retirees as stipulated by the plan. The
Company pays for the plan as costs are incurred.
The Company adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," as of January 1, 1993.
This standard requires that the expected cost of these
postretirement benefits must be charged to expense during the years
that the employees render service. The Company has elected to
amortize the unfunded obligation that was measured as of January 1,
1993, over a period of 20 years. The effect of this postretirement
expense was to decrease 1994 and 1993 pre-tax income by $93,176 and
$107,935, respectively. Prior to 1993, the Company recognized
postretirement health care costs in the year that the benefits were
paid.
The following table reconciles the plan's funded status to the
accrued postretirement health care cost and life insurance cost
liability reflected on the balance sheet as of December 31, 1994 and
1993:
<TABLE>
<CAPTION>
1994 1993
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Retirees $(250,697) $(404,647)
Fully Eligible Plan Participants (301,762) (327,030)
Other Active Plan Participants (77,337) (81,540)
------------------------------------------------------------------------------------------------------------------------
Total Accumulated Postretirement
Benefit Obligation (629,796) (813,217)
Plan Assets - -
------------------------------------------------------------------------------------------------------------------------
Accumulated Postretirement Benefit Obligation
in Excess of Plan Assets (629,796) (813,217)
Unrecognized Net Gain from Changes in
Assumptions and Experience (178,222) -
Unrecognized Transition Obligation 725,240 765,531
------------------------------------------------------------------------------------------------------------------------
Accrued Postretirement Benefit Cost in the Balance Sheet $ (82,778) $ (47,686)
========================================================================================================================
</TABLE>
20
<PAGE> 23
NOTES
Continued
NOTE 11 POSTRETIREMENT BENEFIT PLANS OTHER THAN PENSION (CONTINUED)
Postretirement Expense includes the following components:
<TABLE>
<CAPTION>
1994 1993
--------------------------------
<S> <C> <C>
Service Cost $ 8,220 $ 11,236
Interest Cost on Accumulated Postretirement Benefit Obligation 44,665 56,408
Amortization of Transition Obligation over 20 years 40,291 40,291
-------------------------------------------------------------------------------------------------------------------
Postretirement Expense $93,176 $107,935
==================================================================================================================
</TABLE>
The discount rate used in determining the accumulated
postretirement benefit obligation was 7 percent. Due to the
capping of the insurance premium benefits to retirees, a health
care cost scale is not applicable.
NOTE 12 COMMON STOCK AND STOCK OPTION PLAN
The Company maintains a stock option plan (the Plans
pursuant to which 330,000 shares of the Company's common stock
may be issued.
The Plan provides for the grant of (1) incentive stock
options which satisfy the requirements of Internal Revenue Code
(IRC) Section 422, and (2) nonqualified options which are not
entitled to favorable tax treatment under IRC Section 422. No
optionee may exercise incentive stock options in any calendar
year for shares of common stock having a total market value of
more than $100,000 on the date of grant (subject to certain
carryover provisions). In connection with the grant of
nonqualified options, a stock appreciation right for each share
covered by the option may also be granted. The stock
appreciation right will entitle the optionee to receive a
supplemental payment which may be paid in whole or in part in
cash or in shares of common stock equal to all or a portion of
the spread between the exercise price and the fair market value
of the underlying share at the time of exercise.
Transactions in stock options under the Plan for the
three years ended December 31, 1994, are summarized as follows:
<TABLE>
<CAPTION>
Option Price Market Price
------------------------------ -------------------------
Number Per Per
Stock Options of Shares Share Total Share Total
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Outstanding,
January 1, 1992 139,300 $1,748,696
Granted - -
Exercised - -
------------------------------------------------------------------------------------------------------------------
Outstanding,
December 31, 1992 139,300 1,748,696
Granted 52,000 $12.37 643,240 $12.37 $643,240*
Exercised - -
------------------------------------------------------------------------------------------------------------------
Outstanding,
December 31, 1993 191,300 2,391,936
Granted 52,000 $14.87 773,240 $14.87 $773,240*
Exercised - -
------------------------------------------------------------------------------------------------------------------
Outstanding,
December 31, 1994 243,300 $3,165,176
==================================================================================================================
</TABLE>
*At dates options were granted
21
<PAGE> 24
NOTES
Continued
NOTES 12 COMMON STOCK AND STOCK OPTION PLAN (CONTINUED)
The changes in common stock and additional paid-in capital during
the three years ended December 31, 1994 are summarized as follows:
<TABLE>
<CAPTION>
Additional
Common Paid-in
Stock Capital
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Balance, December 31, 1991 $3,130,636 $ 4,912,741
Effect of Stock Split 3,130,636 (3,130,636)
------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1992 $6,261,272 $ 1,782,105
==================================================================================================================
</TABLE>
On June 24, 1992, the Company's Board of Directors declared a
two-for-one split of its common stock effected in the form of a 100%
stock dividend on outstanding stock distributed on August 17, 1992,
to holders of record on July 15, 1992. All weighted average shares
outstanding and per share data have been restated to reflect the
stock split.
NOTE 13 LEASE OBLIGATIONS
The Company leases certain equipment under operating leases expiring
in various years through 1999.
Minimum future rental payments under non-cancelable operating leases
having remaining terms in excess of one year as of December 31,
1994, are summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31 AMOUNTS
------------------------------------------------------------------------------------------------------------------
<S> <C>
1995 $271,690
1996 188,809
1997 65,888
1998 36,467
1999 4,083
------------------------------------------------------------------------------------------------------------------
$566,937
==================================================================================================================
</TABLE>
Rental expense under all operating leases amounted to $463,887,
$532,849 and $515,140 for the years ended December 31, 1994,
1993 and 1992, respectively.
22
<PAGE> 25
NOTES
Continued
NOTE 14 BUSINESS SEGMENT DATA
Information about the Company's operations in different industries
for each of the three years ended December 31 is as follows (amounts
in thousands):
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
1994 1993 1992
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Citrus $ 8,175 $10,719 $10,714
Real Estate 16,528 15,780 20,185
General, Corporate and Other 4,023 967 1,911
------------------------------------------------------------------------------------------------------------------
$28,726 $27,466 $32,810
==================================================================================================================
Income (Loss):
Citrus $ 86 $ 2,286 $ 2,721
Real Estate 9,637 2,184 3,344
General, Corporate and Other 508 (2,657) (1,298)
------------------------------------------------------------------------------------------------------------------
$10,231 $ 1,813 $ 4,767
==================================================================================================================
Identifiable Assets:
Citrus $17,349 $17,313 $16,433
Real Estate 40,813 35,728 38,276
General, Corporate and Other 3,373 5,967 3,055
Net Assets from Discontinued Resort Operations (Note 2) - 6,807 7,294
------------------------------------------------------------------------------------------------------------------
$61,535 $65,815 $65,058
==================================================================================================================
Depreciation and Amortization:
Citrus $ 329 $ 355 $ 341
Real Estate 682 706 821
General, Corporate and Other 40 40 50
------------------------------------------------------------------------------------------------------------------
$ 1,051 $ 1,101 $ 1,212
==================================================================================================================
Capital Expenditures:
Citrus $ 750 $ 725 $ 1,216
Real Estate 619 432 301
General, Corporate and Other 17 35 16
------------------------------------------------------------------------------------------------------------------
$ 1,386 $ 1,192 $ 1,533
==================================================================================================================
</TABLE>
Income (loss) represents income before income taxes and
minority interest. Identifiable assets by industry are those
assets that are in the Company's operations in each industry.
General corporate assets and assets used in the Company's other
operations consist primarily of cash, investment securities,
mortgage notes receivable and property, plant and equipment.
23
<PAGE> 26
NOTES
Continued
NOTE 15 RELATED PARTIES
Baker, Fentress & Company, a publicly owned, closed-end investment
company, owned approximately 79 percent of the Company's outstanding
common stock at December 31, 1994 and 1993.
The Company sells, under a participating marketing pool agreement, a
significant portion of its citrus fruit to Citrus World Incorporated
("Citrus World"), an agricultural cooperative of which the Company
owns a 4 percent equity interest. Citrus World is a citrus grower
and the owner of a citrus processing plant in Lake Wales, Florida.
Citrus World pools its own fruit with the fruit purchased from the
Company and other citrus growers, processes the pooled fruit and
sells the products produced.
Each participant in the pool, including Citrus World, shares ratably
in the proceeds from the sales of said products, net of Citrus
World's actual processing and marketing costs, plus a per-unit
handling fee. Citrus World makes periodic payments to all
participants on their pro rata share of net sales proceeds and makes
final payment after all the products in the pool have been sold.
During the years 1994, 1993 and 1992, the Company's pro rata share
of said net sales proceeds under the above pooling agreement
amounted to $2,993,457, $4,086,996 and $2,856,123, respectively.
A note payable in the amount of $2,596,386 and $2,625,480 at
December 31, 1994 and 1993, respectively, was payable to an
affiliate partner in a joint venture with Indigo Group Ltd.
24
<PAGE> 27
QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
------------------------------------------------------------------------------------------------------------------------------------
March 31, June 30, September 30, December 31,
1994 1993* 1994 1993* 1994 1993* 1994 1993*
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Citrus $3,594 $4,608 $2,599 $3,541 $ 30 $ 1 $ 1,952 $ 2,569
Real Estate 4,394 2,343 1,895 3,112 1,835 2,562 8,404 7,762
Interest and Other Income 43 292 49 172 (135) 133 2,667 56
Property Sales 31 1 356 158 593 5 420 152
------------------------------------------------------------------------------------------------------------------------------------
8,062 7,244 4,899 6,983 2,323 2,701 13,443 10,539
------------------------------------------------------------------------------------------------------------------------------------
Cost and Expenses:
Citrus 2,904 3,513 2,685 2,903 468 475 2,032 1,542
Real Estate 1,645 2,590 1,184 3,129 1,249 2,795 2,814 5,082
General and Administrative 1,058 1,117 950 928 1,014 1,068 493 512
------------------------------------------------------------------------------------------------------------------------------------
5,607 7,220 4,819 6,960 2,731 4,338 5,339 7,136
------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before
Minority Interest 2,455 24 80 23 (408) (1,637) 8,104 3,403
Minority Interest 16 15 4 17 10 21 7 23
------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before Income
Taxes and Cumulative Effect
of Change in Accounting
Principle 2,471 39 84 40 (398) (1,616) 8,111 3,426
Income Taxes (Note 4) (828) 4 (31) (25) 139 613 (3,058) (1,265)
------------------------------------------------------------------------------------------------------------------------------------
Income (Loss) from
Continuing Operations 1,643 43 53 15 (259) (1,003) 5,053 2,161
Income (Loss) from Discontinued
Resort Operations, Net of
Income Taxes (Note 2) 146 134 (51) (190) (229) (331) (1) (372)
------------------------------------------------------------------------------------------------------------------------------------
Income Before Cumulative
Effect of Change in
Accounting Principle 1,789 177 2 (175) (488) (1,334) 5,052 1,789
------------------------------------------------------------------------------------------------------------------------------------
Cumulative Effect of
Change in Accounting
for Income Taxes - 329 - - - - - -
------------------------------------------------------------------------------------------------------------------------------------
Net income (Loss) $1,789 $ 506 $ 2 $ (175) $ (488) $(1,334) $ 5,052 $ 1,789
====================================================================================================================================
Per Share Amounts:
Income (Loss) from
Continuing Operations $ 0.26 $0.01 $ 0.01 $ - $ (0.04) $ (0.16) $ 0.81 $ 0.35
Income (Loss) from
Discontinued Resort
Operations, Net of Tax 0.02 0.02 (0.01) (0.03) (0.04) (0.05) - (0.06)
Cumulative Effect of Change
in Accounting for
Income Taxes - 0.05 - - - - - -
------------------------------------------------------------------------------------------------------------------------------------
$ 0.28 $ 0.08 $ - $ (0.03) $ (0.08) $ (0.21) $ 0.81 $ 0.29
====================================================================================================================================
</TABLE>
* Restated for Discontinued Resort Operations-See Note 2 to consolidated
financial statements
25
<PAGE> 28
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
1994 COMPARED TO 1993
CITRUS OPERATIONS
Citrus operations profits fell 96% for the year ended December 31, 1994 to
$86,298, from profits of $2,286,160 posted one year earlier. The downturn in
profits was the result of a 16% decline in fruit harvested and sold for the
year, with a total of 956,000 boxes sold in calendar year 1994 compared to
1,144,000 boxes for the twelve-month period in 1993. This production decline
led to a fall in revenues of 24% to $8,174,816. Also contributing to the
revenue and profit reduction was a decline in the percentage of fruit sold as
higher profit margin fresh fruit, with 40% of fruit sold fresh in 1994 compared
to 1993's percentage of 43%. Pricing for both fresh and processed fruit
remained stable during 1994. Selling and production expenses decreased 4%
during the period on the lower fruit volume, but on a per box basis were higher
due to fixed and semi-variable costs being absorbed over the lower volume.
REAL ESTATE OPERATIONS
Results from real estate operations improved dramatically for the
twelve-month period of 1994 with a 341% gain in profit to $9,637,248. This
profit compares to the $2,183,659 bottom line posted in 1993. Revenues
increased 5% during the period to $16,528,217, but represent a significant
change in make up with revenues previously generated from the closed down
residential operations being replaced by higher profit margin commercial
transactions in 1994. Closings on 467 commercial acres for the year 1994
produced revenues of $12,321,509 compared to 1993 sales of 148 acres generating
total revenues of $4,766,283. The close down of residential operations improved
results from this activity 54%.
Income properties produced breakeven results in 1994, representing a
substantial improvement over 1993's $230,000 loss, as revenues from income
properties increased 10% on overall higher occupancy. Results from forestry
operations improved 108% on a 52% rise in revenues due to increased harvesting.
Revenues from subsurface interests fell modestly during the period.
GENERAL, CORPORATE AND OTHER
Profits on the sale of undeveloped real estate interests increased 345% to
$1,399,711 on the sale of 129 acres and release of surface entry rights on
8,340 acres in 1994. The sale of 15 acres and the releases of surface entry
rights on 3,837 acres generated profits of $314,403 in 1993. Interest and other
income produced profits of $2,623,447 for 1994's calendar year. The sale of 225
acres of citrus groves and lakefront property in Highlands County and the sale
of the water and sewer system at the Tomoka Heights residential development in
Highlands County provided $2,380,000 of this profit. 1993's interest and other
income included profits of $400,000 generated on the sale of three income
properties. General and administrative expenses were down 3% in 1994 primarily
due to lower interest expense on decreased borrowings.
With the sale of the resort properties on July 14, 1994, the results of
resort operations have been reported separately as discontinued operations, net
of tax. The sale of the property, for a cash price of $7,175,000, resulted in a
pre-tax loss of $111,804, $69,732 net of tax.
In 1993, the Company adopted Financial Accounting Standards No. 109
resulting in a $329,442 addition to net income from the cumulative effect of a
change in accounting principle.
26
<PAGE> 29
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
RESULTS OF OPERATIONS
1993 COMPARED TO 1992
CITRUS OPERATIONS
Citrus operations posted a profit of $2,286,160 for the year ended December
31, 1993 reflecting a 16% decline from 1992. Revenues of $10,718,876 were flat
compared to 1992, despite a 19% increase in fruit harvested to 1,144,000 boxes
as average pricing fell 21%. Both fresh fruit and processed fruit contributed
to the pricing decline. The near record Florida citrus crop for the 1992-93
crop year, totaling 186.5 million boxes, coupled with the abundant Brazil and
California crops, produced the drop in prices. Production and selling expenses
rose 6% to $8,432,716 for the calendar year 1993 primarily due to the expenses
incurred in harvesting the additional fruit. Also contributing to the rise in
production and selling expenses was a reduction in handling credits, processing
cost reimbursements, on a 75% decline in outside growers fruit processed.
RESORT OPERATIONS
Resort operations for the years ended December 31, 1993 and 1992 have been
restated as Loss From Discontinued Resort Operations, Net of Tax.
The net loss from resort operations for 1993 represents a 47% increase over
1992's loss. A $4 decline in average room rate, on stable occupancy,
contributed to the negative results as room revenues fell 6% for the year.
Overall resort revenues totaled $7,185,987, 12% behind 1992 total revenues of
$8,141,009. Also contributing to the revenue downturn was the closing of the
Red, Hot & Blue restaurant facility in April 1993 and lower revenues from golf
and tennis membership dues offset somewhat by food and beverage activity. Costs
and expenses from resort operations fell 6% primarily due to the closing of
Red, Hot & Blue. An offset to reduced costs and expenses associated with this
closing were increased costs of food and beverage sales resulting primarily
from volume gains in dinner service.
REAL ESTATE OPERATIONS
For the year ended December 31, 1993 profits from real estate operations
declined 35% from the prior year. Results from both commercial and residential
activities contributed to the downturn. Profits from commercial property sales
dropped 16% on the sale of 148 acres in 1993 compared to 1992's sale of 198
acres. The dwindling lot inventory and competitive market led to a $700,000
downturn in profitability from residential operations. House and lot closings
for 1993 amounted to 68 units compared to 129 units one year earlier.
Results from income properties improved 26% for 1993 on declining revenues
and expenses. The sale of several properties in the fourth quarter of 1992 and
in the first half of 1993 resulted in the lower revenue and expenses. Forestry
profit declined 24% compared with 1992, the direct result of an 11% fall in
revenues from harvesting. Oil royalties and mineral lease income were
substantially in line with prior year results, as no new significant leases
were recorded.
GENERAL, CORPORATE AND OTHER
General, corporate and other includes profit on sales of undeveloped real
estate, interest and other income, and general and administrative expenses.
Profit from the sale of undeveloped real estate in 1993 reflects the sale of 15
acres and the releases of surface entry rights on 3,837 acres. This profit gain
represents a 32% increase compared to 1992 when 16 acres were sold. A 61%
decline was posted from interest and other income in 1993 despite profits of
$400,000 recognized on the sale of three income properties. During 1992
interest and other income included $1,300,000 from the sale of three office
buildings and two service stations. General and administrative expenses for
1993's calendar year rose 13% over the prior year due to higher post retirement
benefit costs and increased interest expense on higher outstanding balances.
Net operating losses generated in prior years were used to offset the income
tax provision for 1992 amounting to $1,491,909. In 1993 the Company adopted
Financial Accounting Standards No. 109 resulting in a $329,442 addition to net
income from the cumulative effect of a change in accounting principle.
27
<PAGE> 30
MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
FINANCIAL POSITION
The 1994 profit of $6,354,790, equivalent to $1.01 per share, represents a
significant upturn in profitability compared to the $786,142 profit, equivalent
to $.13 per share, recorded for the calendar year 1993. Also contributing to
the Company's financial stability was the sale of the resort complex, which had
been unprofitable in recent years, as the funds generated from the sale were
used to reduce outstanding debt and related interest expense. Cash flow during
1994 was a negative $1,503,895 after the payment of dividends totaling
$2,191,445, equivalent to $.35 per share, and debt reduction of $10,000,938.
Cash flow of $2,661,870 from operating activities was generated during 1994.
Investing activities provided positive cash flow of $8,026,618 including
$6,670,950 generated from the sale and operation of the resort and $3,012,604
created from the sale of property and equipment. Funds generated from sale of
property and equipment include the sale of 225 acres of citrus groves and
lakefront property and the water and sewer system at the Tomoka Heights
residential development. Offsetting these cash contributions from investing
activities was $1,385,731 cash expended for the acquisition of property, plant
and equipment. The use of these funds centered on citrus grove development
costs and shopping center expansion. Funds generated from operations and
available financing sources will provide the cash needed to fund 1995 capital
expenditures projected at $3,200,000. Funds totaling $2,100,000 are scheduled
to be spent on the Ladies Professional Golf Association mixed-use development
during 1995, with an additional $500,000 to be expended to upgrade citrus
facilities and equipment.
Although fruit harvested during the 1994 calendar year was down from prior
years, the citrus groves, which total approximately 4,200 acres, are in
excellent condition. The first groves planted during the 1988-1992 expansion
and renovation project have begun to reach maturity. As these groves mature
their fruit production will escalate. This leads to an overall positive and
profitable outlook for citrus operations in the coming years. The grove acreage
sold during 1994 accounted for only a small portion of overall fruit production
and will have little impact on future years' results. Overall pricing has been
stable even though the current Florida round orange crop estimate, 203 million
boxes, is one of the largest on record. Brazil has experienced a drought which
may have had a negative effect on not only this season's crop but also on next
season's bloom. The extent of the damage is unknown at this time, but it may
have a positive effect on pricing, in particular processed fruit pricing.
During 1994, the first sale in the LPGA mixed-use development was
completed with the closing of 60 acres of residential land located in the
northern section of the property. Sales of homes are anticipated to begin by
spring 1995. The Interstate 95 interchange at LPGA Boulevard, which will serve
as a gateway to the project, is progressing, with a targeted completion date of
late summer 1995. The construction of the LPGA Championship signature golf
course was completed in 1994 with a grand opening in July. The course has been
very well received by the public and named one of the top new public courses by
a well-known golf magazine. The second golf course within the project is in the
design and permitting stage and is scheduled to begin construction in early
1996. With the development activity taking place, sales activity remains strong
within the project and on surrounding Company owned lands. Commercial contract
backlog totals $4.0 million. Continued strong profits from real estate
operations is projected for 1995.
The Company achieved great progress in attaining its overall goals in
1994. The value of Company owned lands continues to be enhanced through
development efforts, in particular at the LPGA project. The debt of the Company
is being reduced with funds from operating activities and the sale of assets
not in the long-term plans of the Company, such as the sale of the resort. The
Company intends to keep this course of action in the coming years and looks
forward to positive results.
28
<PAGE> 31
Common Stock Prices and Dividends
Effective September 1, 1992, the Company's common stock began trading on
the American Stock Exchange (AMEX) under the symbol CTO. The Company has paid
dividends annually on a continuous basis since 1976, the year in which its
initial dividends were paid. The following table summarizes aggregate annual
dividends paid (on a semi-annual basis) over the five years ended December 31,
1994.
<TABLE>
<S> <C>
1990 20(cent)
1991 20(cent)
1992 20(cent)
1993 30(cent)
1994 35(cent)
</TABLE>
These per share amounts have been adjusted for the 100% Stock Dividend
distributed on August 17, 1992 to shareholders of record on July 15, 1992.
Indicated below are high and low sales prices for the quarters of the last
two fiscal years. All quotations represent actual transactions.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
1994 1993
--------------------------------------------------------------------------------------------------------------------------------
High Low High Low
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ $ $ $
First Quarter 15-5/8 14 14 12-1/8
Second Quarter 14-5/8 13 15 12-3/4
Third Quarter 13-1/2 12-1/4 16-5/8 13-1/2
Fourth Quarter 13-3/4 11-7/8 15-1/2 13-3/4
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Approximate number of shareholders of record as of December 31, 1994
(without regard to shares held in nominee or street name):
325
[LOGO] This report was printed on recycled paper. We encourage recycling and
use of recycled products.
<PAGE> 1
EXHIBIT 21
Subsidiaries of the Registrant
<TABLE>
<CAPTION>
Percentage of
Organized voting securities
under owned by
laws of immediate parent
------- ----------------
<S> <C> <C> <C>
Consolidated-Tomoka Land Co. (registrant) Florida --
Placid Utilities Company Florida 100.0
Indigo Group Inc. Florida 100.0
Indigo Group Ltd. Florida 99.0*
(A Limited Partnership)
Indigo Development Inc. Florida 100.0
Palms Del Mar, Inc. Florida 100.0
</TABLE>
*Consolidated-Tomoka Land Co. is the limited partner of Indigo Group Ltd., and
owns 99.0% of the total partnership equity. Indigo Group Inc. is the general
partner, is the managing partner of the partnership, and owns 1.0% of the
partnership equity.
All subsidiaries are included in the Consolidated Financial Statements of the
Company and its subsidiaries appearing elsewhere herein.
<PAGE> 1
EXHIBIT 23.1
REX MEIGHEN & CO.
509 South Hyde Park AVenue
Tampa, Florida 33606
813-251-1010
FAX 813-251-9235
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation, by reference in the annual report
of Consolidated-Tomoka Land Co. and subsidiaries on Form 10K, of our report
dated February 10, 1994 on the audit of the consolidated financial statements
of Consolidated-Tomoka Land Co. and subsidiaries as of December 31, 1993 and
for each of the two years in the period ended December 1993, contained in the
Company's annual report to shareholders for the calendar year 1994.
Rex Meighen & Company
Tampa, Florida
March 17, 1994
<PAGE> 1
EXHIBIT 23.2
ARTHUR ANDERSEN LLP
101 E Kennedy Blvd.
Tampa, Florida 33602
813-222-4600
FAX 813-229-6229
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to
the use of our report incorporated by reference in this Form 10-K.
Arthur Andersen LLP
Tampa, Florida
February 10, 1995
