FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For the fiscal year ended September 30, 1996
OR
[ ] 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 0-11533
GREEN GOLD CONSOLIDATED
_________________________________________________
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0023916
(State or other jurisdiction(I.R.S. Employer
of incorporation or organization)Identification Number)
340 Rosewood Avenue, Suite D, Camarillo, CA 93010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805)
987-6921
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(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. [ X ]
State the aggregate market value of the voting stock
held by non-affiliates of the registrant. Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
Item 1. BUSINESS
General
Green Gold Consolidated ("Consolidated") is a limited
partnership which
was organized under the Uniform Limited Partnership Act of
the State of
California in 1982. The general partner of Consolidated is
Economic
Consultants (the "General Partner"), a general partnership
composed of
Daniel Lee Stephenson and Tom A. Leevers, as managing
partners, and the
spouse of Mr. Leevers.
Consolidated was formed for the purpose of
participating in the
transactions contemplated by a plan and agreement of
exchange dated
February 1983 (the "Exchange Agreement"), as executed by
Consolidated and
12 other California limited partnerships (the "Predecessor
Partnerships"). The
Predecessor Partnerships had been formed between the years
1972 and 1976
for the purpose of purchasing agricultural real estate in
the Southern
California Counties of Riverside and Ventura for
development as avocado and
citrus orchards. In 1983, in accordance with the
provisions of the Exchange
Agreement, the Predecessor Partnerships transferred to
Consolidated all of
their assets, subject to all of their liabilities, in
exchange for 10,000,000 limited
partnership interests (the "Interests") of Consolidated
(the "Exchange
Transaction"). In 1983 the Predecessor Partnerships
distributed their allocable
shares of the Interests to their respective limited
partners and were dissolved.
Pursuant to the Exchange Transaction, Consolidated
acquired an
aggregate of 86 parcels of agricultural property
(cultivated and uncultivated)
including approximately 1,930 acres of avocado and citrus
groves. Since
consummation of the Exchange Transaction, Consolidated has
sold or
otherwise disposed of substantially all of these parcels.
(Information
respecting the parcels which were sold during the last
three fiscal years is set
forth in the table below.)
In 1993 Consolidated completed the subdivision of its
remaining land,
which has been assigned to four tracts. Subdivision
activity was undertaken
to facilitate the sale of the remaining land, which
consists of approximately
146 acres.
Based on the above, the General Partner considers
Consolidated
principally to be in the business of selling property,
rather than in the
agricultural business; notwithstanding, in 1994
Consolidated reacquired a five-acre parcel located adjacent
to other land owned by Consolidated.
Recent Sales Transactions
During the last three fiscal years Consolidated sold
one parcel of
property, together with the groves and all other
improvements thereon, to
unaffiliated parties. As set forth more fully in the
following table,
Consolidated received an aggregate consideration of
approximately $70,000 for
this property sale, consisting of: (i) cash down payment
of $5,000; and (ii) a
promissory note given to Consolidated in the amount of
$65,000.
Promissory
Purchase Cash
Note to
Date of Sale Price Down-Payment
Consolidated(1)
1996 - 2nd Quarter$ 70,000 $ 5,000
$ 65,000
_______________________________
(1) The promissory note payable to
Consolidated bears interest at 10%
per
annum and matures February 2006.
Farming Operations
As discussed in greater detail in this Item 1 and in Item
7, "Management's
Discussion and Analysis of Financial Condition and Results
of Operations,"
Consolidated's principal business is considered to be the
sale of its remaining
land. However, pending consummation of the sale of all the
remaining
cultivated land (approximately 59 acres including
approximately 5,600 trees),
Consolidated continues to engage in the production of
avocados.
(1) The Avocado Industry
Although yields vary considerably from year to year, the
General Partner
estimates that approximately 75% of the avocados produced
in the United
States today are grown in California and 25% are grown in
Florida. Virtually
all of California's avocados are grown in the southern
counties, which include
San Diego, Ventura, Santa Barbara, Los Angeles, Orange,
Riverside and San
Bernardino.
Varieties of avocados include Hass, Fuerte, Bacon, Zutano
and MacArthur.
All of Consolidated's trees are of the Hass variety.
(2) Partnership Operations
A. Farm Management
Pursuant to an agreement dated January 1, 1985 and last
amended on
December 16, 1991, Agrispect, the farm manager, agreed to
perform, manage
and supervise agricultural operations on the Partnership's
properties. The
total amount paid to Agrispect for management fees and
cultural care
expenses during fiscal year 1996 was approximately $42,000.
Effective January
1, 1993, Consolidated pays Agrispect a cultural care fee of
$565 per acre per
year, and reimbursement for all actual costs incurred. The
extensive use of
irrigation water is costly. Accordingly, the ultimate cost
to Consolidated for
cultural costs will depend in large part upon rainfall
quantity and general
climatic conditions throughout each year. In this regard,
rainfall quantity at
the properties was generally below normal in the 1994 crop
year and generally
above normal in the 1995 crop year. Rainfall was normal in
1996; however,
the summer months were hotter than usual requiring
significant irrigation.
B. Crop Production and Marketing
As indicated above, Consolidated owns approximately 87
uncultivated acres
and approximately 59 acres planted to Hass variety avocado
trees located in
Rancho California.
Consolidated has consistently produced avocados on a per
acre basis in excess
of the average produced in the Rancho California area.
During the 1996 crop
year, Consolidated produced an average of approximately
6,500 pounds per
acre, or about 1,500 pounds per acre greater than other
producers in the
Rancho California area. Consolidated's greater than
average production
results from "state of the art" cultural care.
Consolidated's avocado crop is picked by independent
contractors pursuant to
standards established by the industry from year to year.
Consolidated's crop
for the 1996 crop year was picked by Agrispect and other
contractors, at a
total cost of approximately $44,000. The availability of
labor in the vicinity of
the properties is sufficient for the cultivation and
harvest of Consolidated's
crops. All labor costs are included in the payments to
Consolidated's
independent contractors, as Consolidated has no employees.
Consolidated's avocado crop is packaged and marketed by
McDaniel Fruit
Company, an independent contractor, and by Calavo (a
non-profit cooperative
handler which sells its members crops at the price deemed
best for the
interests of all members, less a pro rata portion of
administrative costs
attributable to each member).
C. Pest Infestation
The Persea mite has become a problem for avocado trees, and
is present on
trees throughout California. The registered chemical agent
previously used
by Consolidated and other producers to control infestation
was withdrawn
from the market in 1995 by the Environmental Protection
Agency. No other
appropriate chemical agent is available at the present
time. Consolidated
introduced predator insects to establish biological control
of the Persea mites
in 1995, and continues to follow all other
industry-recommended actions,
including aggressive water and fertilizer applications.
The impact of the
persea mite on 1996 and subsequent years' crop production
cannot be
determined.
Partnership Management
Las Posas Investment Company ("Manager") implements
Consolidated's
business plans, furnishes financial reports and documents
to and for
Consolidated, administers Consolidated's accounts, assists
Consolidated in the
sale of its land holdings from time to time, and manages
the overall day-to-day operations and assets of
Consolidated. For its services, Manager receives
a monthly fee of 2% of the gross Partnership cash receipts
(not to exceed
$50,000 during any calendar year) plus $5,676. The
management agreement
may be terminated by either party upon 90 days' written
notice.
Manager is a California corporation whose sole shareholder
is Neno N.
Spondello, Jr. Mr. Spondello has been affiliated with
certain purchasers of
properties from Consolidated. As of September 30, 1996,
all promissory notes
received by Consolidated in connection with the sale of
properties to such
purchasers have been paid in full.
Item 2. PROPERTIES
The properties owned by Consolidated (all of which are
described in Item 1
above) are located in the Rancho California area of
Riverside County,
California, between Los Angeles and San Diego. It is an
established area for
light industry, commercial activity and shopping, parks,
residences, agriculture,
thoroughbred farms and ranches.
Item 3. LEGAL PROCEEDINGS
There are no pending legal proceedings as of November 10,
1996.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
Inapplicable.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Market Information
The Interests are not freely transferable and no market in
the Interests has
developed or is expected to develop.
Holders
As of November 10, 1996, a total of 2,125 persons (the
"Limited Partners")
held the Interests.
Dividends
Distributions are paid from either "Cash Available for
Distribution" or "Sale
or Refinancing Proceeds."
"Cash Available for Distribution" is defined in the
Partnership Agreement as
"Cash Flow," less adequate cash reserves for obligations of
Consolidated for
which there is no provision. Cash Flow means cash funds
provided from
operations of Consolidated, without deduction for
depreciation or
amortization, but after deducting such funds used to pay or
provide for the
payment of debt service, capital improvements and
replacements and the
operating expenses of each of the properties. All
distributions of Cash
Available for Distribution are divided in the ratio of
93.5% to the Limited
Partners and 6.5% to the General Partner.
"Sale or Refinancing Proceeds" is defined in the
Partnership Agreement as the
cash proceeds from a sale, financing or refinancing of a
property remaining
after retirement of mortgage debt and all expenses related
to the transaction.
All distributions of Sale or Refinancing Proceeds are
allocated as follows: (i)
first, to the Limited Partners until they have received an
amount which, when
added to all prior distributions of Sale or Refinancing
Proceeds to them,
equals the sum of (a) $18,411,968 (the "Carried Capital
Contribution"), and
(b) a sum equal to a 6% per annum cumulative (but not
compounded) return
on such portion of the Carried Capital Contribution which
has not been
previously returned to the Limited Partners through
distributions of Sale or
Refinancing Proceeds, less the sum of all prior
distributions of Cash Available
for Distribution, (ii) second, to the General Partner until
it has received 6.5%
of all Sale or Refinancing Proceeds in excess of the
Carried Capital
Contribution, and (iii) the balance, to the Limited
Partners.
The following distributions of Cash Available for
Distribution or Sale or
Refinancing Proceeds were made by the Partnership during
the three most
recent fiscal years:
Date of Amount Distr. Amount Distr. Amt.
Dist.
Distribution to Limited Partners Per
Unit to General
Partners
Dec. 1993 $ 150,000 $0.015 -0-
Dec. 1994 $ 300,000 $0.03 $ 59,000
Dec. 1995 $ 400,000 $0.04 $ 12,000
Dec. 1996 $ 250,000 $0.025 $ 10,000
Item 6. SELECTED FINANCIAL DATA
The following is selected financial data for the five years
ended September 30,
1992 through 1996. Due to the nature of Consolidated's
business operations,
particularly the sales activities which have occurred
during the last five years,
the data is not comparable from year to year.
For the Years
Ended September 30
1996 1995 1994 1993 1992
Sale of property -
gross revenues$ 70,000$ -0- $ -0- $360,000 $425,000
Crop sales -
gross revenues$266,000$285,000$356,000 $202,000 $627,000
Net income (loss)$105,000$214,000$275,000 $66,000 $359,000
Net income (loss)
allocable to
Limited Partners$ 99,000$205,000$259,000$64,000 $343,000
Net income (loss)
per Interest $ 0.01 $ 0.02 $ 0.03 $0.006 $0.03
Total assets $2,703,000$3,020,000$3,193,000$3,067,000$3,155,000
Cash distributions
per Interest $ 0.04 $ 0.03 $ 0.015 $ 0.015 $ 0.04
For an explanation of some of the data included in the
preceding table, see
Item 5 - Market for Registrant's Common Equity and Related
Stockholder
Matters and Item 7 - Management's Discussion and Analysis
of Financial
Condition and Results of Operations.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Consolidated is a limited partnership which
commenced active
operations in June 1983. Since that date, Consolidated has
operated its
cultivated properties for the production of avocados.
Consolidated currently
owns approximately 59 acres of cultivated properties and 87
acres of
uncultivated properties. Its principal business is now
considered to be the sale
of its remaining properties.
The General Partner believes that Consolidated's
liquidity, defined
as its ability to generate cash flow to satisfy its cash
requirements (other than
distributions to Limited Partners), is sufficient.
Consolidated's cash flow depends principally upon
(i) collection of
outstanding notes receivable from previous sales of
properties; (ii) receipt of
proceeds from future sales of properties; (iii) market
conditions of the
California avocado industry; and (iv) avocado production
from Consolidated's
groves.
Consolidated's cash requirements primarily arise
from costs
attributable to cultural care, professional services,
management services,
property taxes, investor services and other operating
expenses. None of the
properties owned by Consolidated are subject to mortgage
indebtedness.
Each of Consolidated's sources and uses of cash is
discussed in
greater detail below.
Notes Receivable
As of September 30, 1996, Consolidated held notes
receivable in the
amount of $1,910,000 (before reduction for deferred profit
and an allowance
for doubtful accounts in the aggregate amount of
$1,031,000). The notes
receivable bear interest at rates ranging from 10% to 11%
per annum and
mature at varying dates through February 2006.
The partnership has one note that is considered
impaired; however,
the borrower continues to make payments and no losses are
anticipated.
Should an obligor on a note receivable secured by a first
deed of trust default
in payment thereof, Consolidated would likely reacquire the
encumbered
property and again offer it for sale at the best price then
obtainable. As a
result, Consolidated has established an allowance for
doubtful accounts, which,
as of September 30, 1996, was in the amount of $99,000.
Sales of Properties; Cost of Subdivision
Consolidated completed the subdivision of its
properties (all of
which are located in the Rancho California area) in 1993.
Subdivision
activities are complete and no further amounts are expected
to be incurred in
this regard. There were no property sales in 1994 or 1995.
Consolidated is
marketing the lots for sale as individual home sites and
will endeavor to sell
all lots as soon as economically feasible.
There was one property sold for $70,000 in 1996.
This sale
consisted of the five-acre property reacquired in 1994 for
$46,000.
Based on the General Partner's understanding of
sales activity for
comparable properties in the Rancho California area, the
General Partner
ultimately expects to sell the remaining properties and
will likely receive
compensation consisting of cash payments equal to 15% of
the gross sales
price, and the balance in the form of promissory notes
bearing interest at
rates ranging from 10% to 11% per annum and maturing in ten
years. Each
of the promissory notes is expected to be secured by a
first deed of trust.
However, no assurance can be given that Consolidated will
be able to sell any
of its remaining properties or that it will sell its
remaining properties on the
preceding terms or at a profit. Consolidated has a book
basis in its remaining
properties of $1,162,000 (after reduction for depreciation).
Avocado Operations; Cultural Care Costs
Consolidated's avocado production generally is in
excess of the
average production of the Rancho California area.
Consolidated's gross revenues from crop sales
decreased 19.9% from
1994 to 1995 (from $356,000 to $285,000). Gross revenues
from crop sales
decreased 6.7% from 1995 to 1996 (from $285,000 to
$266,000). The decrease
of $71,000 from 1994 to 1995 results from an $.08 per pound
decrease in
Consolidated's avocado prices and a decrease of 49,000
pounds picked. The
decrease of $19,000 from 1995 to 1996 results from a $.04
per pound decrease
in Consolidated avocado prices and a decrease of 3,000
pounds picked. Crop
production has fluctuated due to weather conditions,
including rain and
normal tree cycles. Consolidated's average pounds per acre
were 7,300, 6,600
and 6,500 in 1994, 1995 and 1996, respectively.
Cultural care costs increased 8.6% from 1994 to 1995
(from
$187,000 to $203,000). Cultural care costs increased 2.9%
from 1995 to 1996
(from $203,000 to $209,000). The increase from 1994 to
1995 was a Calavo
retained funds amount charged to culture care expense. The
increase from
1995 to 1996 was primarily a result of increased water
costs resulting from
higher than average temperatures during the summer months.
Avocado production and cultural care costs next year
will continue
to be impacted by the effects of the avocado Persea mite in
the Rancho
California area. The primary effect of this pest is
defoliation of trees which
results in burnt fruit. The registered chemical agent
previously used by
Consolidated and other producers to control infestation was
withdrawn from
the market in 1995 by the Environmental Protection Agency.
No other
appropriate chemical agent is available at the present
time. Consolidated
introduced predator insects in 1995 to establish biological
control of the
Persea mites, and is following all other
industry-recommended actions,
including aggressive water and fertilizer applications.
However, the impact of
the Persea mite on 1996 and subsequent crop production
cannot be determined.
It is possible that Consolidated may generate a loss
from its
agricultural activities in 1997, as it did in 1993.
However, the General Partner
believes that the value of Consolidated's cultivated
properties is enhanced by
the presence of producing avocado trees; accordingly
agricultural activities
will continue at the cultivated properties through the
respective dates of sale
thereof.
Professional Services
Professional services costs increased by 29.4% from
1994 to 1995
(from $17,000 to $22,000). These costs increased by 4.5%
from 1995 to 1996
(from $22,000 to $23,000). Professional services costs are
expected to remain
at 1996 levels in 1997.
Management Services
Management services increased by 4.8% from 1994 to
1995 (from
$84,000 to $88,000). These costs remained the same from
1995 to 1996.
Management fees are determined as a function of gross
Partnership cash
receipts. The components of cash receipts are (i) cash
received on sale of
property, (ii) cash received on sale of crops, (iii) cash
principal payments
made on notes receivable, and (iv) cash interest payments
made on notes
receivable. Management fees are expected to remain stable
in 1997.
Property Taxes
Property taxes increased 2% from 1994 to 1995 (from
$42,000 to
$43,000) and increased 9.3% from 1995 to 1996 (from $43,000
to $47,000).
Property taxes are expected to decrease as additional
properties are sold.
Investor Services
Investor service costs decreased 44.4% from 1994 to
1995 (from
$27,000 to $15,000). These costs remained the same from
1995 to 1996. In
1994 the increase resulted from computer costs associated
with upgrading the
Investor Services system. Investor service costs are
expected to remain at
1996 levels in 1997.
Other Operating Expenses
Other operating expenses increased by $13,000 from
1994 to 1995
(from $1,000 to $14,000). These expenses increased by
$6,000 from 1995 to
1996 (from $14,000 to $20,000). In 1994 the unusually low
cost resulted from
reversing an accrual for legal fees no longer necessary
because there were no
pending legal matters. The increase in 1996 mainly results
from investor
system upgrades and training.
Item 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Financial Statements and Notes to Financial
Statements which
follow as pages F-1 through F-9.
Item 9.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Inapplicable.
Report of Independent Accountants
November 13, 1996
To the General and Limited Partners of Green Gold
Consolidated
In our opinion, the accompanying balance sheets and the
related statements
of operations, of changes in partners' equity (deficit) and
of cash flows present
fairly, in all material respects, the financial position of
Green Gold
Consolidated at September 30, 1996 and 1995, and the
results of its operations
and its cash flows for each of the three years in the
period ended September
30, 1996, in conformity with generally accepted accounting
principles. These
financial statements are the responsibility of the
Partnership's management;
our responsibility is to express an opinion on these
financial statements based
on our audits. We conducted our audits of these statements
in accordance
with generally accepted auditing standards which 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, assessing the accounting principles
used and significant
estimates made by management, and evaluating the overall
financial statement
presentation. We believe that our audits provide a
reasonable basis for the
opinion expressed above.
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Balance Sheets
September 30,
1996 1995
Assets
Cash and cash equivalents $ 591,000 $ 874,000
Notes receivable 879,000 858,000
Accrued interest receivable 38,000 29,000
Inventories of growing crops 15,000 15,000
Property held for sale 1,162,000 1,214,000
Other assets 18,000 30,000
$ 2,703,000 $ 3,020,000
Liabilities and Partners' Equity (Deficit)
Accounts payable $ 11,000 $ 13,000
Accrued liabilities 38,000 46,000
49,000 59,000
Partners' equity (deficit):
General partners' (268,000) (262,000)
Limited partners' 2,922,000 3,223,000
2,654,000 2,961,000
$ 2,703,000 $ 3,020,000
See accompanying notes to financial statements
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Statements of Operations
September 30,
1996 1995 1994
Revenues:
Sales of property $ 70,000 $ $
Profit deferred on sales
of property (22,000)
Recognition of deferred profit 21,000 95,000 27,000
Crop sales 266,000 285,000 356,000
335,000 380,000 383,000
Costs and expenses:
Cost of property sold 48,000
Culture care costs -
tree crops 209,000 203,000 187,000
Professional services 23,000 22,000 17,000
Management services 88,000 88,000 84,000
Property taxes 47,000 43,000 42,000
Depreciation 9,000 20,000 20,000
Investor services 15,000 15,000 27,000
Other operating expenses 20,000 14,000 1,000
459,000 405,000 378,000
(Loss) income
from operations (124,000)(25,000) 5,000
Other income:
Interest income 220,000 234,000 257,000
Other income 9,000 5,000 13,000
229,000 239,000 270,000
Net income $ 105,000 $ 214,000 $ 275,000
Net income allocable to
general partner $ 6,000 $ 9,000 $ 16,000
Net income allocable to
limited partners $ 99,000 $ 205,000 $ 259,000
Net income per limited
partnership unit $ .01 $ .02 $ .03
Weighted average number of limited
partnership units outstanding
during the period used to compute
earnings per limited partnership
unit 9,986,000 9,986,000 9,986,000
See accompanying notes to financial statements
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Statement of Changes in Partners' Equity (Deficit)
General Limited
Partner Partners Total
Partners' (deficit) equity at
September 30, 1993 $ (228,000)$3,209,000 $2,981,000
Distributions (450,000)(450,000)
Net income 16,000 259,000 275,000
Partners' (deficit) equity at
September 30, 1994 (212,000)3,018,000 2,806,000
Distributions (59,000) (59,000)
Net income 9,000 205,000 214,000
Partners' (deficit) equity at
September 30, 1995 (262,000)3,223,000 2,961,000
Distributions (12,000)(400,000)(412,000)
Net income 6,000 99,000 105,000
Partners' (deficit) equity at
September 30, 1996 $ (268,000)$2,922,000 $2,654,000
See accompanying notes to financial statements
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Statements of Cash Flows
Year ended September 30,
1996 1995 1994
Cash flows from operating activities:
Net income $ 105,000 $ 214,000 $ 275,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense 9,000 20,000 20,000
Deferred profit recognized (21,000) (95,000) (27,000)
Changes in assets and liabilities:
Accounts receivable 18,000
Accrued interest receivable (9,000) 7,000 (12,000)
Other assets 12,000 4,000 (10,000)
Accounts payable (2,000)(34,000) 23,000
Accrued liabilities (8,000) 6,000 (22,000)
Net cash provided by
operating activities 86,000 122,000 265,000
Cash flows from investing activities:
Additions to property (1,000) (23,000)
Reimbursement of capitalized
subdivision costs 16,000
Collections on notes receivable 43,000 294,000 194,000
Net cash provided by
investing activities 43,000 309,000 171,000
Cash flows from financing activities:
Distr. to general partner(12,000)(59,000)
Distr. to limited partners (400,000) (300,000) (150,000)
Net cash used in financing
activities (412,000) (359,000) (150,000)
Net increase (decrease) in cash
and cash equivalents (283,000) 72,000 286,000
Cash and cash equivalents at
beginning of year 874,000 802,000 516,000
Cash and cash equivalents at
end of year $ 591,000 $ 874,000 $ 802,000
See accompanying notes to financial statements
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Notes to Financial Statements
NOTE 1 - THE PARTNERSHIP
Green Gold Consolidated, a California Limited Partnership
(the Partnership),
was organized in accordance with the provisions of the
California Uniform
Limited Partnership Act for the purpose of receiving the
assets and liabilities
of twelve limited partnerships under common management and
thereby
consolidating the operations of those partnerships under an
exchange
transaction effective June 30, 1983. Under the exchange
transaction, the
Partnership issued 10,000,000 limited partnership interests
(pro rata) to the
holders of interests in the twelve individual limited
partnership in exchange for
the assets and liabilities of those partnerships. The
General Partner is
Economic Consultants, a general partnership. The
combination of the twelve
partnerships into one partnership was treated as a
reorganization of entities
under common control, accounted for similar to a "pooling
of interest."
Allocation of profits and losses and cash distributions
from operations and
cash distributions from sales are made pursuant to the
terms of the
Partnership Agreement.
The Partnership is involved in the development and sales of
real estate. Real
estate markets are cyclical in nature; accordingly, the
Partnership's ability to
realize its assets is dependent upon market conditions.
All of the
Partnership's assets are located within the Inland Empire
submarket of the
Southern California region. Consequently, the book value
of the partnership's
real estate ($1,162,000) and the collectibility of any
notes receivable,
collateralized by real estate ($879 000), may be affected
by the economic
strength of the real estate industry in Southern California.
The Partnership currently contracts with Las Posas
Investment Company
(LPIC), formerly known as Ventura Pacific Capital Company.
LPIC is a
California corporation which performs financial accounting,
data processing,
marketing, legal, investor relations, asset management and
consulting services
for the Partnership. These services are performed pursuant
to an annual
contract which is terminable by either party on 90 days'
notice. LPIC is not
an affiliate of the Partnership or the General Partner.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements, in conformity with
generally accepted
accounting principles, requires management to make
estimates and
assumptions that affect the reported amounts of assets and
liabilities and
disclosure of contingent assets and liabilities at the date
of the financial
statements and the reported amounts of revenues and
expenses during the
reporting period. Actual results could differ from those
estimates.
Cash and cash equivalents
The Partnership considers all highly liquid investments
with an original
maturity of three months or less to be cash and cash
equivalents. Cash and
cash equivalents include $337,700 and $599,000 of
certificates of deposit at
September 30, 1996 and 1995, respectively.
Inventories
Inventories of growing crops are valued at the lower of
cost or market under
the first-in, first-out (FIFO) method. Cost is defined as
cultural care costs
related to the growing crops.
Property held for sale
Property held for sale is stated at the lower of historical
cost or estimated net
realizable value. In 1993 and 1992, the Partnership had
its property held for
sale appraised to determine its net realizable value.
Based on the results of
these appraisals and reviews of current sales activity in
the area, it is
management's opinion that carrying values of property held
for sale are not
in excess of net realizable value. If it was determined
that property was
recorded at an amount in excess of net realizable value, an
appropriate write-down would be recorded.
Depreciation on improvements and tress is provided on a
straight-line basis
over the estimated useful lives of the respective assets,
which range from five
to twenty-two years.
In March 1995, the FASB issued SFAS 121 "Accounting for the
Impairment
of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of." The
Partnership intends to adopt SFAS 121 in fiscal 1997, s
required. This
statement requires that long-lived assets and certain
identifiable intangibles to
be held and used by an entity be reviewed for impairment
whenever events or
changes in circumstances indicate that the carrying amount
of an asset may
not be recoverable. This statement also generally requires
that long-lived
assets and certain identifiable intangibles to be disposed
of be reported at the
lower of the net carrying amount of fair value less
disposal costs. The
adoption of SFAS 121 is not expected to have a material
effect on the
partnership's financial position or results of operations.
Income taxes
The Partnership's records are maintained on the accrual
basis consistent with
the Internal Revenue Code. No provision for income taxes
is included in the
accompanying financial statements, as the partnership's
results of operations
are allocated to the partners for inclusion in their
respective income tax
returns. Net income (loss) and Partners' equity (deficit)
for financial
reporting purposes will differ from the Partnership's
income tax return
because the Partnership's return is filed on a different
fiscal year end and
different accounting methods are used for financial
reporting and income tax
reporting for certain items, principally inventory and
property sales.
At September 30, 1996 and 1995, Partners' equity on the tax
basis exceeded
Partners' equity on the financial reporting basis by
approximately $462,000 and
$460,000, respectively. Additionally, the Partnership
reported taxable income
of $166,000 and $319,000 for the tax years ended December
31, 1995 and 1994,
respectively.
Profit recognition on real estate sales
Revenue from the sale of real estate is recognized at the
close of escrow when
title has passed, minimum down payment requirements are
met, and the
Partnership is relieved of any requirements for continued
involvement with the
property, thus allowing recognition of profits using the
full accrual method of
accounting in accordance with Financial Accounting
Standards Board
Statement No. 66, "Accounting for Sales of Real Estate."
Until such time as
profit can be recognized under the full accrual method, the
installment sales
method is used.
Recognition of crop sales revenue
Revenue from the sale of crops is recognized when crops are
harvested and
sold. All of the Partnership's crop sales were made to two
customers for the
years ended September 30, 1996 and 1995, and three
customers for the year
ended September 30, 1994.
Net income per limited partnership unit
Net income per limited partnership unit is calculated using
the weighted
average number of limited partnership units outstanding
during the year and
the limited partners' allocable share of net income.
Impaired notes receivable
In 1996 the Partnership adopted the provisions of Financial
Accounting
Standards No. 114 (SFAS 114) "Accounting by Creditors for
Impairment of
a Loan." Under SFAS 114, impaired notes are measured based
on the present
value of expected future cash flows discounted at the
notes' effective interest
rate. The adoption of SFAS 114 did not have a material
effect on the
Partnership's financial position or results of operations.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Partnership's management agreement with LPIC and Mr.
Neno
Spondello, Jr. requires that LPIC manage, market and
provide property
management services for the Partnership's properties. The
agreement
provides for a management fee equal to 2% of gross
partnership receipts and
reimbursement of certain administrative expenses incurred
while managing the
properties. Fees and costs reimbursed under this agreement
totalled $88,000,
$88,000 and $84,000 for the years ended September 30, 1996,
1995, and 1994,
respectively.
NOTE 4 - NOTES RECEIVABLE
September 30,
1996 1995
First trust deed notes $1,910,000 $1,839,000
Subordinated trust deed notes - 49,000
1,910,000 1,888,000
Less:
Deferred profit on real estate sales(932,000) (931,000)
Allowance for doubtful accounts (99,000) (99,000)
$ 879,000 $ 858,000
Notes receivable resulted from sales of Partnership
properties. The notes
receivable bear interest at rates ranging from 10 percent
to 11 percent and
mature at various dates through February 2006.
As of September 30, 1996, the Partnership has one note
receivable with a
principal balance of $128,200 which is deemed impaired.
The Company does
not anticipate incurring any loss on the impaired note.
Interest income on
such note is recognized as collected.
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Notes to Financial Statements
NOTE 5 - PROPERTY
September 30,
1996 1995
Land
$1,166,000 $1,209,000
Improvements 149,000 149,000
Trees 274,000 274,000
1,589,000 1,632,000
Less: accumulated depreciation (427,000) (418,000)
$1,162,000 $1,214,000
NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION
Year ended September
1996
Schedule of non-cash investing and
financing activities:
Sales price of real estate $ 70,000
Closing costs (5,000)
Notes receivable from buyer (65,000)
Net cash proceeds from
sales of real estate
- - -
There were no non-cash investing and financing activities
in 1996 and 1995.
No cash was paid for interest or income taxes during the
years ended
September 30, 1996, 1995 and 1994.
NOTE 7 - SUBSEQUENT EVENT
On November 12, 1996, a $250,000, or $.025 per unit, cash
distribution to the
Limited Partners was approved by the Management Committee
to be paid in
December 1996.
PART III
Item 10. DIRECTORS AND EXECUTIVE
OFFICERS OF THE
REGISTRANT
Economic Consultants, the General Partner, is a
California general
partnership composed of Daniel Lee Stephenson and Tom A.
Leevers, as
managing general partners, and the spouse of Mr. Leevers.
Daniel L. Stephenson, age 53, Chairman of the Board
of Directors,
President, Chief Executive Officer and Chief Financial
Officer of Rancon
Financial Corporation ("Rancon") founded Rancon in 1971 for
the purpose of
establishing Rancon as a commercial, industrial and
residential property
syndication, development and brokerage concern. From April
1, 1995 to
present, Mr. Stephenson is Chairman of the Board,
President, Chief Executive
Officer and Chief Financial Officer of Rancon. Mr.
Stephenson was President
and Chief Executive Officer of Rancon from 1971 to 1986,
and from August
1991 to September 1992. Mr. Stephenson is also the general
partner of
various partnerships sponsored by Rancon.
On July 19, 1996, Rancon Corporate, L.P., a limited
partnership
("Corporate Center") of which Mr. Stephenson and Rancon are
the general
partners, filed a voluntary petition for protection under
Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court.
Corporate Center
is a debtor-in-possession under the control of Mr.
Stephenson.
Mr. Stephenson is a graduate of the University of
Southern California
(B.S., Finance and Real Estate, 1966). He was awarded a
Certificate of
Completion of the Executive Program for Small Companies by
the Graduate
School of Business of Stanford University (1981), and a
Certificate of
Completion of the Smaller Company Management Program,
Series I and II,
by the Graduate School of Business, Harvard University
(1990). He is a
licensed real estate broker and a National Association of
Securities Dealers,
Inc. registered principal.
Tom A. Leevers, age 53, has been President of
Countryside Realty,
a real estate brokerage firm incorporated in California,
since its organization
in 1981. He was a principal shareholder and Executive Vice
President of
Rancon from 1971 to 1981. Mr. Leevers is a graduate of
California State
University at Long Beach (B.S., Economics, 1966), licensed
real estate agent,
a former Director of the Rancho California Water District
and a former
member of the California Avocado Commission, serving on the
board of
directors and finance and advertising committees of the
Commission.
Item 11. EXECUTIVE COMPENSATION
The General Partner has a 6.5% interest in all
distributions of Cash
Available for Distribution. During fiscal years ended
September 30, 1996 and
1995, the General partner received distributions of cash in
the amounts of
$12,000 and $59,000, respectively. The General Partner is
also entitled to
receive 6.5% of distributions from Sale or Refinancing
Proceeds, but only
after payment to the Limited Partners of an amount equal to
100% of their
Carried Capital Contribution and a return thereon as
discussed in Item 5 -
Market for Registrant's Common Equity and Related
Stockholder Matters.
As of the date hereof, the General Partner has not received
any distributions
of Sale or Refinancing Proceeds.
The General Partner and its affiliates may perform
real estate
brokerage services for Consolidated in connection with the
sale of property by
Consolidated; provided that the aggregate compensation
therefor to the
General Partner or its affiliates and to any independent
broker participating
in such transaction with the General Partner or its
affiliates shall not exceed
the lesser of (i) the compensation customarily charged in
arm's-length
transactions by other rendering similar services as an
ongoing public activity
in the same geographic location and for comparable property
or (ii) 5% of the
gross sales price of each property. Affiliates of the
General Partner received
real estate commissions from Consolidated during the fiscal
year ended
September 30, 1996 totaling $3,500 from one sale of real
estate that occurred
during the year.
For a discussion of Consolidated's agreement with the
Manager
respecting partnership management services, see Item 1 -
Business. Pursuant
to this arrangement, the manager received $88,000 in each
of the fiscal years
ended September 30, 1996 and 1995.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
No person is known by Consolidated to be the
beneficial owner of
more than 5% of the Interests.
Security Ownership of Management
Amount and
Name of Nature of
Title of Beneficial Beneficial
Percent
Class Owner Ownership of Class
Interests Daniel Lee 16,050 -
(2)
Stephenson in trust (1)
Interests Tom A. Leevers 2,738 -
(2)
direct
Interests Rancon Financial 15,625 -
(2)
Corporation direct
__________________________________
(1) Interests are held in trust for the benefit of the
family of Mr.
Stephenson.
(2) Less than 1% of class.
Changes in Control
The Limited Partners have no right, power or
authority to act for
or bind Consolidated. However, the Limited Partners have
the power to vote
upon the following matters affecting the basic structure of
Consolidated, each
of which shall require the approval of Limited Partners
holding a majority of
the outstanding Interests: (i) amendment of Consolidated's
Amended and
Restated Certificate and Agreement of Limited Partnership;
(ii) dissolution
of Consolidated; (iii) sale, exchange or pledge of all or
substantially all of the
assets of Consolidated; (iv) removal of the General
Partner or any successor
General Partner; and (v) election of a new General Partner
or General
Partners upon the removal, retirement, death, insanity,
insolvency, bankruptcy
or dissolution of the General Partner or any successor
General Partner.
Item 13. CERTAIN RELATIONSHIPS AND
RELATED
TRANSACTIONS
Other than as set forth in Item 11 of this report
under the caption
"Executive Compensation," Consolidated has not been a
party to the
relationships or transactions required to be reported by
this item.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
A. Documents filed as part of this report
(1) Financial Statements
Included in Part II of this report:
Report of Independent Accountants
Balance Sheets at September 30, 1996 and 1995
Statements of Operations for the Years Ended
September
30, 1996, 1995 and 1994
Statements of Changes in Partners' Equity
(Deficit) for the
Years Ended September 30, 1996, 1995 and 1994
Statements of Cash Flows for the Years Ended
September
30, 1996, 1995 and 1994
Notes to Financial Statements
(2) Financial Statement Schedules
Included in Part IV of this report:
Schedule II - Valuation and Qualifying Accounts
&
Reserves for the Year Ended September 30, 1996
Schedule III - Real Estate and Accumulated
Depreciation -
September 30, 1996
(3) Exhibits
3.1 and 4.1 Partnership Agreement, filed
as Exhibit 3 and
4 to the annual report on Form 10-K of
Consolidated for
the fiscal year ended September 30, 1984, is
hereby
incorporated by reference as an exhibit herein.
3.2 and 4.2 Amendment to Partnership
Agreement, filed
as Exhibit 3.2 and 4.2 to the annual report on
Form 10-K of
Consolidated for the fiscal year ended
September 30, 1991,
is hereby incorporated by reference as an
exhibit herein.
10.1 Agricultural Management Agreement and
First Amendment thereto between Agrispect and
Consolidated, filed as Exhibit 10.2 to the
annual report on
Form 10-K of Consolidated for the fiscal year
ended
September 30, 1985, are hereby incorporated by
reference
as an exhibit herein.
10.2 Second Amendment to Agricultural
Management Agreement between Agrispect and
Consolidated, filed as Exhibit 10.2 to the
annual report on
Form 10-K of Consolidated for the fiscal year
ended
September 30, 1991, is hereby incorporated by
reference as
an exhibit herein.
10.3 Third Amendment to Agricultural
Management Agreement between Agrispect and
Consolidated, filed as Exhibit 10.3 to the
annual report on
Form 10-K of Consolidated for the fiscal year
ended
September 30, 1991, is hereby incorporated by
reference as
an exhibit herein.
10.4 Calavo Bylaws and Marketing
Agreement,
filed as Exhibit 10.1 to the annual report on
Form 10-K of
Consolidated for the fiscal year ended
September 30, 1987,
is hereby incorporated by reference as an
exhibit herein.
10.5 Partnership Management Agreement
between
Ventura Pacific Capital Company and
Consolidated, filed as
Exhibit 10.2 to the annual report on Form 10-K
of
Consolidated for the fiscal year ended
September 30, 1986,
is hereby incorporated by reference as an
exhibit herein.
10.6 First Amendment to Partnership
Management Agreement between Ventura Pacific
Capital
Company and Consolidated, filed as Exhibit 10.6
to the
annual report on Form 10-K of Consolidated for
the fiscal
year ended September 30, 1991, is hereby
incorporated by
reference as an exhibit herein.
10.7 Second Amendment to Partnership
Management Agreement between Ventura Pacific
Capital
Company and Consolidated, filed as Exhibit 10.7
to the
annual report on Form 10-K of Consolidated for
the fiscal
year ended September 30, 1991, is hereby
incorporated by
reference as an exhibit herein.
(B) Reports on Form 8-K
Consolidated filed no current reports on Form 8-K
during the
last quarter of the fiscal year covered by this
report.
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.
Date: December 15, 1995 GREEN GOLD CONSOLIDATED
By: ECONOMIC CONSULTANTS,
General Partner
By:
Daniel Lee Stephenson,
General Partner
By:
Tom A. Leevers,
General Partner
Pursuant to the requirements of the Securities Exchange
Act of 1934, this
report has been signed below by the following persons on
behalf of the
registrant and in the capacities and on the dates indicated:
SIGNATURE
CAPACITY DATE
Principal executive
Dec.15, 1995
DANIEL LEE STEPHENSON officer, principal
financial officer,
principal accounting
officer and General
Partner of Economic
Consultants
General Partner of
Dec.15, 1995
TOM A. LEEVERS Economic Consultants
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Valuation and Qualifying Accounts and Reserves
For the Year Ended September 30, 1996
_____________________________________________________________________________________________
____________
Column A
Column B
Column C
Column D
Column E
_____________________________________________________________________________________________
____________
Additions
Balance at
Charged to
Charged to
beginning
costs and
other accounts-
Deductions-
Balance at
Description
of period
expenses
describe
describe end of period
_____________________________________________________________________________________________
____________
Allowance for
doubtful
accounts
$99,000
-
-
- $99,000
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Real Estate and Accumulated Depreciation
(In Thousands)
_____________________________________________________________________________________________
____________
Reconciliation of gross amount at which real estate was carried:
1996
1995
1994
INVESTMENT IN REAL ESTATE
Balance at beginning of period
$ 1,632
$ 1,647
$ 1,604
Additions during period:
Land improvements, etc.
-
1
43
Sales during period
(43)
- - -
-
Reimbursement of subdivision costs
-
(16)
-
Balance at end of period $ 1,589
$ 1,632 $ 1,647
ACCUMULATED DEPRECIATION
Balance at beginning of period $ 418 $ 398 $ 378
Additions charged to costs and expenses
9
2
0
20
Sales during period
-
-
-
Balance at end of period $ 427 $ 418 $ 398
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Real Estate and Accumulated Depreciation
September 30, 1996
(In Thousands)
COLUMN A
COLUMN B
COLUMN C
COLUMN D
________________________________________________________________________________
Cost Capitalized
Initial Cost to
Subsequent to
Partnershi
p
Acquisitio
n
________________________________________________________________________________
Trees
and
Land
Carrying
Description
Encumbrances
Lan
d
Improve.
Improve.
Cost
Unimproved Land;
Riverside Co.,
California:
1-4/24247
$ -0-
$ 173
$ 150
$ 239
$ -0-
49 acres
1,2&4/24248
-0-
99
93
187
-0-
31 acres
1-7/24249
-0-
140
100
225
-0-
42 acres
1&3/24867
-0-
21
80
82
-0-
24 acres
$ -0-
$ 433
$ 423
$ 733
$ -0-
GREEN GOLD CONSOLIDATED
(A California Limited Partnership)
Real Estate and Accumulated Depreciation
September 30, 1996 Continued. . .
(In Thousands)
COLUMN E
COLUMN F
COLUMN G
COLUMN H
COLUMN I
________________________________________________________________________________
Gross Amount Carried
at September 30, 199
6
________________________________________________________________________________
Trees
Date
Life
and
Accum.
Constr.
Date
Depreciated
Land
Improve.
Total
Depreciation
Began
Acquired
Over
$ 412
$ 150
$ 562
$ 151
N/A
12/74
5-22 yrs
286
93
379
94
N/A
12/74
5-22 yrs
365
100
465
101
N/A
3/85 5-22 yrs
103
80
183
81
N/A 11/86 5-22 yrs
$1,166
$ 423
$1,589
$ 427
