SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
Securities Exchange Act of 1934
Commission File
For the year ended December 31, 1994 Number 2-95219
-------------------- -------
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
Massachusetts 04-2859087
(State of organization) (IRS Employer Identification No.)
One International Place, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (617) 330-8600
--------------
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 ]
No market exists for the limited partnership interests of the Registrant,
and, therefore, no aggregate market value can be computed.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Part of the Form 10-K Document Incorporated by Reference
I Pages 19-20, 22-36, 38-41 of the Registrant's Prospectus
dated December 16, 1985 (the "Prospectus")
III Pages 48-50 and 53-55 of the Prospectus
<PAGE>
PART I
Item 1. Business.
Indian River Citrus Investors Limited Partnership (the "Registrant")
was organized under the Revised Uniform Limited Partnership Act of the
Commonwealth of Massachusetts on December 24, 1984 for the purpose of owning and
operating a commercial citrus grove located near Stuart, Martin County, Florida.
The Registrant was initially capitalized with a contribution of $1,000 from
Winthrop Agricultural Management II, Inc. (the "General Partner"), the general
partner of the Partnership. The General Partner is a Massachusetts corporation
wholly-owned by Winthrop Financial Associates, a Limited Partnership, a Maryland
limited partnership ("WFA").
Until December 22, 1994, Arthur J. Halleran, Jr. was the sole general
partner of Linnaeus Associates Limited Partnership ("Linnaeus") which is the
sole general partner of WFA. On December 22, 1994, pursuant to an Investment
Agreement entered into among Nomura Asset Capital Corporation ("NACC"), Mr.
Halleran and certain other individuals who comprise the senior management of
WFA, the general partnership interest in Linnaeus was transferred to W.L.
Realty, L.P. ("W.L. Realty"). W.L. Realty is a Delaware limited partnership, the
general partner of which is A.I. Realty Company, LLC ("Realtyco"). The equity
securities of Realtyco are currently held by certain employees of NACC. Such
securities are subject to a call option agreement pursuant to which NACC may, at
any time, elect to purchase such securities for $1.00.
On January 9, 1985, the Registrant filed a Registration Statement on
Form S-1 (SEC File No. 2-95219) (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") with respect to a public
offering of 25,000 units of limited partnership interest ("Units") in the
Registrant which was amended by Amendment No. 3 thereto to reduce the size of
the offering to 15,500 Units at a purchase price of $1,000 per Unit (as so
amended, the "Registration Statement"). The Registration Statement was declared
effective on December 16, 1985. The offering terminated on March 31, 1986, at
which time 15,500 Units representing $15,500,000 of capital contributions from
Limited Partners, had been subscribed for.
The Registrant's only business is owning and operating a commercial
citrus grove consisting of approximately 3,150 acres of land and related
improvements and equipment located near Stuart, Martin County, Florida (the
"Grove" or "Property"). The Grove and the Registrant's financing arrangements
therefor are described at pages 19-20 and 38-41 under the captions "The Grove"
and "Acquisition of the Grove and Financing Arrangements," in the Registrant's
Prospectus dated December 16, 1985 (the "Prospectus") contained in the
Registration Statement, which description is incorporated herein by this
reference. The Registrant's business is described at pages 22-36 of the
Prospectus under the caption "Business", which description is incorporated
herein by this reference.
On April 12, 1993, the Registrant borrowed $8 million from NationsBank of
Florida (the "New Loan") for the purpose of refinancing the existing $8 million
first mortgage loan encumbering the Grove. Interest only is payable at a
variable rate equal to NationsBank's prime rate, less 1%. Principal is payable
in full on the maturity date, January 31, 1996. The New Loan is nonrecourse and
is secured by a first mortgage on the Grove and by guarantees given by the
General Partner and by First Winthrop Corporation, a wholly-owned subsidiary of
WFA. The liability under the guarantees is limited to $2 million. See Note 7 of
Notes to Financial Statements for additional information related to existing
financing arrangements.
Item 2. Properties.
The Registrant owns no properties other than the Grove which is
described under Item 1 above.
Item 3. Legal Proceedings.
The Registrant is not a part, nor are any of its properties subject, to
any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted.
PART II
Item 5. Market for the Registrant's United Limited Partnership Interests and
Related Security Holder Matters.
(a) Market Information. The Registrant is a partnership and thus has no
common stock. There is no active market for the Units. Trading in the Units is
sporadic and occurs solely through private transactions.
(b) Holders. As of March 1, 1995, there were 1,345 holders of record who
owned the 15,500 outstanding Units.
(c) Dividends. All profits and losses of Registrant are allocated to the
holders of Registrant's partnership interests. Distribution of cash are made in
accordance with Registrant's partnership agreement. On May 15, 1990, cash
distributions totalling $1,665,389 or $96.70 per $1,000 Unit, were made. On
August 14, 1991, cash distributions totalling $391,414 or $25.00 per $1,000 Unit
were made. There were no distributions made in 1992, 1993, and 1994.
<PAGE>
Item 6. Selected Financial Data.
<TABLE>
For the Year Ended December 31,
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Fruit Sales $ 3,749,884 $ 3,793,558 $ 4,300,580 $ 4,439,871 $ 6,319,461
Net Earnings (Loss) ( 1,284,757) ( 2,059,825) (1,278,743) (1,107,610) 616,915
Net Earnings (Loss) ( 1,156,281) ( 1,853,843) (1,150,869) (996,849) 555,223
allocable to the
Limited Partners
Net Earnings (Loss) (74.60) (119.60) (74.25) (64.31) 35.82
allocable to the
Limited Partners
per $1,000 Unit
Net Earnings (Loss) (128,476) (205,982) (127,874) (110,761) 61,692
allocable to the
General Partner
Cash Distributions 0 0 0 391,414 1,665,389
to Partners
Cash Distributions per 0 0 0 25.00 96.70
Limited Partnership
$1,000 Unit
Cash Distribution to 0 0 0 3,914 166,539
General Partner
Total Assets 24,156,366 24,179,888 25,307,344 25,844,033 27,137,416
Total Liabilities 22,927,688 21,666,453 20,734,084 19,992,030 19,786,389
Partner's Capital 1,228,678 2,513,435 4,573,260 5,852,003 7,351,027
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Registrant has completed its ninth full year of citrus operations
at the Grove. Citrus production at the Grove is estimated to be approximately
733,000 boxes for the 1994-1995 crop year, an 11% increase from the 660,000
boxes produced in the 1993-1994 crop year, and a 5.5% increase from the
1992-1993 production level of 695,000.
Orange production for the State of Florida is expected to increase from
176 million boxes (for the 1993-1994 crop year) to 203 million boxes (for the
1994-1995 crop year).
Strong production levels in Florida and Brazil since the 1991-1992 crop
have kept market prices paid to grower for oranges in the range of $.80 to $1.00
per pound solid;
<PAGE>
accordingly the prices received by the Grove are principally determined by the
floor price levels set forth in the Grove's long-term fruit sales contracts.
Results of Operations
The 4,524,800 pound-solid yield for the 1993-1994 season represents a
7% decrease over the 1992-1993 season yield of 4,862,800 pounds solid and a 2%
increase over the 1991- 1992 season yield of 4,423,000 pounds solid. "Pound
solid yield" is the residual sugar content of the fruit, and is the mechanism by
which price and revenue are derived. Average price per pound solid of $1.01
received for the 1993-1994 season fruit increased by $.01 and decreased by $.24
compared to the 1992-1993 and 1991-1992 average season prices of $1.00 and $1.25
per pound solid, respectively.
Seasonal revenues are not comparable to calendar year revenue due to
the nature of the Grove's business insofar as the harvesting of a single
season's crop is not completed within a single calendar year and due to the
timing differences of final settlements. Fruit sales for the year ended December
31, 1994 declined by $169,665 or 3% compared to the same period in 1993 and
fruit sales declined by $550,941 or 10% compared to the fiscal year ended
December 31, 1992. The decrease in the comparisons of calendar year revenues
with season revenues is attributable to pricing differences, size of crop and
the timing of harvesting. Specifically, approximately 20% of the crop which
bloomed in 1992 was picked by the corresponding year-end. The comparable figure
for 1993 and 1994 was 36% and 23%, respectively. The decrease in 1993 revenues
(compared to 1992) was caused by the decrease in the price per pound solid
received for the 1992-1993 crop and the smaller 1993-1994 crop. The decrease in
the 1994 revenues (compared to 1993) is principally due to the timing of
harvesting the 1994-1995 fruit crop.
Harvesting expenses of $1,283,069 for the year ended December 31, 1994
decreased by $125,991 compared to $1,409,060 for the same period in 1993, and
decreased by $245 compared to $1,283,314 for the year ended December 31, 1992.
During 1994, 1993 and 1992 boxes harvested were 657,830, 743,820 and 674,973,
respectively, so that havesting costs were $1.95, $1.89 and $1.90 per box,
respectively.
<PAGE>
Cost of fruit sales decreased by 13% or $342,633 compared to 1993 and
increased 1% or $14,286 compared to 1992. Cost of sales consists of (1) a
portion of the inventoriable horticultural care and depreciation costs for the
current calendar year, which is not allocated to inventory (fruit remaining on
trees) for the current calendar year and (2) the portion of such inventoriable
costs which was allocated to inventory for the prior year. The total prediction
expenditures for a calendar year generally fluctuate only for changes in
required horticultural care; accordingly, cost of goods sold is heavily
influenced by the portions of current and prior year crops picked during a given
reporting period. This accounts for the majority of the decrease in the 1994
costs of goods sold.
Interest expense in 1994 decreased by $286,150 as compared to 1993 as a
result of the reduction of the interest rate.
Grove management fees for the years ended 1994, 1993, and 1992 were
$201,837, $213,685 and 344,436 respectively. The fees are made up of a base
management fee and an incentive management fee of a specified percentage of
available cash flow, as defined. The decrease in management fees for 1994
compared to either 1993 or 1992 is the result of the execution of a new
management fee arrangement.
Real estate taxes for 1994 and 1993, and 1992 were $56,071, $133,950
and $148,390 respectively. The 1994 decrease is the result of a change in the
methods and rates of assessing the value of the property. Real estate taxes for
citrus groves are being calculated based upon a state wide averaging formula
that pools values and yields across the state.
Financial Condition
Cash and cash equivalents at December 31, 1994 increased by $648,947 or
26% compared to $2,475,681 at December 31, 1993. This increase is a result of
the increase in accrued interest expense, which is determined by contractual
provision.
Accounts receivable at December 31, 1994 of $99,102 decreased by
$198,544 compared to the December 31, 1993 balance of $297,646. Accounts
receivable consist of the fruit harvested as of December 31st for which the
revenue will not be received until after January 1st.
Inventory (fruit remaining on trees) at December 31, 1994, increased
$202,559 as compared to December 31, 1993. Inventory includes a portion of the
inventoriable horticultural care and depreciation costs for the calendar year.
The other portion of such costs is allocated to cost of sales for fruit
harvested in the same year but which were not included in inventory the prior
year. The increase in inventory is principally due to the slower pace of the
harvesting of the 1994-1995 fruit.
The Purchase Money Mortgage specifies an annual payment of the lesser of
$1,000,000 or 100% available cash flow as defined. Any accrued but unpaid
interest for the year is added to the principal balance. Accordingly, the
long-term notes payable increased by $551,221 at December 31, 1994 compared to
December 31, 1993.
Item 8. Financial Statements and Supplementary Data.
For financial statements included in this report, see "Item 14.
Exhibits, Financial Statement Schedules and Reports on Form 8-K".
Item 9. Changes In and Disagreements on Accounting and Financial
Disclosure. None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
(a) and (b) Identification of directors and executive officers. The
following table set forth the names and ages of the directors and executive
officers of the General Partner and the position held by each of them.
<TABLE>
Position Held With
Name The General Partner Age
<S> <C> <C>
Arthur J. Halleran, Jr. Director and President 47
Jonathan W. Wexler Vice President, Treasurer & 44
Assistant Clerk
Richard J. McCready Vice President and Clerk 36
</TABLE>
Mr. Halleran and Mr. Wexler have served in a executive capacities with the
Managing General Partner since its organization and Mr. McCready in 1990. All of
these individuals will continue to serve in such capacities until their
successors are duly elected and qualified.
(c) Identification of certain significant employees. None.
(d) Family relationships. None.
(e) Business Experience.
The Managing General Partner was incorporated in Massachusetts in
October 1978. The background and experience of the executive officers and
directors of The Managing General Partner, described above in Items 10(a) and
(b), are as follows:
<PAGE>
Arthur J. Halleran, Jr. is the Chairman of WFA. He is also Director and
President of the Managing General Partner and other subsidiaries of WFA. In such
capacities he is responsible for all aspects of the business of WFA and its
subsidiaries, with special emphasis on the evaluation, acquisition and
structuring of real estate investments. Mr. Halleran joined the Winthrop
organization in 1977. He is a graduate of Villanova University and holds an
M.B.A. degree from the Harvard Business School.
Jonathan W. Wexler is a Vice Chairman and Vice President of WFA and a
Vice President, Treasurer and Assistant Clerk of the Managing General Partner
and other subsidiaries of WFA. His primary responsibility is the evaluation,
acquisition and structuring of real estate investments. Mr. Wexler joined the
Winthrop organization in 1977. He is a graduate of the Massachusetts Institute
of Technology and holds a Master of Science degree from the Sloan School of
Management of the Massachusetts Institute of Technology.
Richard J. McCready is a Managing Director, Vice President and Clerk of WFA
and a Vice President and Clerk of the Managing General Partner and other
subsidiaries of WFA. He also has responsibility for all the legal affairs of WFA
and its affiliates. Mr. McCready is a graduate of the University of New
Hampshire and holds a J.D. degree from Boston College Law School.
One or more of the above persons are also directors or officers of a
general partner (or general partner of a general partner) of the following
limited partnerships which either have a class of securities registered pursuant
to Section 12(g) of the Securities and Exchange Act of 1934, or are subject to
the reporting requirements of Section 15(d) of such Act: Winthrop Partners 79
Limited Partnership; Winthrop Partners 80 Limited Partnership; Winthrop Partners
81 Limited Partnership; Winthrop Residential Associates I, A Limited
Partnership; Winthrop Residential Associates II, A Limited Partnership; Winthrop
Residential Associates III, A Limited Partnership; 1626 New York Associates
Limited Partnership; 1999 Broadway Associates Limited Partnership; Nantucket
Island Associates Limited Partnership; One Financial Place Limited Partnership;
Presidential Associates I Limited Partnership; Riverside Park Associates Limited
Partnership; Sixty-Six Associates Limited Partnership; Springhill Lake Investors
Limited Partnership; Twelve AMH Associates Limited Partnership; Winthrop
California Investors Limited Partnership; Winthrop Growth Investors I Limited
Partnership; Winthrop Interim Partners I, A Limited Partnership; Winthrop
Financial Associates, A Limited Partnership; Southeastern Income Properties
Limited Partnership; Southeastern Income Properties II Limited Partnership;
Winthrop Miami Associates Limited Partnership; and Winthrop Apartment Investors
Limited Partnership.
(f) Involvement in certain legal proceedings. None.
Item 11. Executive Compensation.
The General Partner and its affiliates are entitled to receive various
fees, commissions, cash distributions, allocations of taxable income, or loss
and expense reimbursements from the Partnership. The amounts of these items and
the times at which they are payable to the General Partner and its affiliates
are described at pages 48-50 and 53-55 of the Prospectus under the aptions
"Compensation and Fees of the General Partner and its Affiliates" and "Income,
Losses, Tax Credits and Cash Distributions," which descriptions are incorporated
herein by this reference.
The following table sets forth the amounts of the fees, commissions and
cash distributions which the Registrant paid to or accrued for the account of
the General Partner and its affiliates for the year ended December 31, 1994:
<TABLE>
Type of Amount of
Receiving Entity Compensation Compensation
<S> <C> <C>
Winthrop Agricultural Property Management Fee $200,000
Management II, Inc.
First Winthrop Corporation Annual Administrative Fee 136,140
$336,140
</TABLE>
For the year ended December 31, 1994 the Registrant allocated $(64,943)
of taxable losses and $11,619 of portfolio income to the General Partner.
See Notes 8 & 9 of Notes to Financial Statements for additional
information about transactions between the Partnership and the General Partner
and its affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) Security ownership of certain beneficial owners. No person or
group is known by the Registrant to be the beneficial owner of more than 5%
of the outstanding Units at March 1, 1994. Under the Amended and Restated
Agreement of Limited Partnership of the Registrant (the "Partnership
Agreement"), the voting rights of the Limited Partners are limited and, in
some circumstances, are subject to the prior receipt of certain opinions of
counsel or judicial decisions.
Under the Partnership Agreement, the right to manage the business of
the Registrant is vested in the General Partner. See Item 1 above for a
description of the General Partner.
(b) Security ownership of management. As of March 1, 1995, the
directors and executive officers of the General Partner, beneficially own
200 Units, all of which are owned by Mr. Wexler.
(c) Changes in control. There exists no arrangement known to the
Registrant the operation of which may at a subsequent date result in a
change in control of the Registrant.
Item 13. Certain Relationships and Related Transactions.
<PAGE>
See Notes 8 and 9 of Notes to Financial Statements for information
about transactions between the Registrant and the General Partner and its
affiliates. See Item 11 above for information concerning the fees, commissions
and cash distributions which the Registrant paid to or accrued for the account
of the General Partner and its affiliates for the year ended December 31, 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) Financial Statements - The Financial Statements listed on the
accompanying Index to Financial Statements are filed as a part of
this Annual Report.
(2) Exhibits - The Exhibits listed on the accompanying Index to
Exhibits are filed as part of this Annual Report and incorporated
in this Annual Report as set forth in said Index.
(b) Reports on Form 8-K - The Partnership filed one Current Report on Form
8-K during the fourth quarter of 1994. That report was filed on
December 16, 1994 and reported a Change in Control of Registrant (Item
1 of Form 8-K). No financial statements were filed with that Form 8-K.
<PAGE>
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.
INDIAN RIVER CITRUS INVESTORS
LIMITED PARTNERSHIP
By: WINTHROP AGRICULTURAL
MANAGEMENT II, INC.,
General Partner
Date: April 7, 1995 By: /s/Arthur J. Halleran, Jr.
--------------------------
Arthur J. Halleran, Jr.
President of 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.
/s/Arthur J. Halleran, Jr. Sole Director and President of
Arthur J. Halleran, Jr. the General Partner
Date: April 7, 1995
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
FINANCIAL STATEMENTS INDEX
FINANCIAL STATEMENTS
Independent Auditors' Report
Balance Sheets as of December 31, 1994 and 1993
Statements of Operations for the years ended December 31, 1994, 1993 and 1992
Statement of Changes in Partners' Capital for years ended December 31,
1994, 1993 and 1992
Statements of Cash Flows for the years ended December 31, 1994, 1993 and 1992
Notes to Financial Statements
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners of Indian River Citrus Investors
Limited Partnership
We have audited the accompanying balance sheets of Indian River Citrus Investors
Limited Partnership (a Massachusetts limited partnership) as of December 31,
1994 and 1993, and the related statements of operations, partners' capital and
cash flows for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express and 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 financial statements present fairly, in all material
respects, the financial position of the Partnership at December 31, 1994 and
1993, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles.
/s/Deloitte & Touche LLP
February 22, 1995
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
BALANCE SHEETS
ASSETS
<TABLE>
1994 1993
----------- --------
<S> <C> <C>
Current Assets:
Cash and cash equivalents (Note 2)................................ $ 3,124,628 $ 2,475,681
Accounts receivable (Note 3)...................................... 99,102 297,646
Inventory (Note 2)................................................ 1,769,116 1,566,557
Other assets...................................................... 48,757 17,058
----------- -----------
Total current assets.............................................. $ 5,041,603 $ 4,356,942
Property, net (Notes 2 and 4)......................................... 19,064,407 19,726,925
Deferred financing costs (Note 5).................................... 50,356 96,021
----------- -----------
$24,156,366 $24,179,888
=========== ===========
</TABLE>
LIABILITIES AND PARTNERS' CAPITAL
<TABLE>
<S> <C> <C>
Current Liabilities:
Accrued interest.................................................. $ 1,186,622 $ 438,188
Other accrued liabilities (including accrued
liabilities to related parties totaling $61,793
and $83,038 in 1994 and 1993, respectively).................. 124,206 162,626
----------- -----------
Total current liabilities......................................... 1,310,828 600,814
Long-term notes payable (Note 7)...................................... 21,616,860 21,065,639
----------- -----------
Partners' Capital: (Note 1)
Limited Partners, $1,000 stated value per
Unit; 15,500 Units authorized, issued
and outstanding in 1994 and 1993............................. 2,256,415 3,412,696
General partner................................................... (1,027,737) (899,261)
------------
Total partners' capital........................................... 1,228,678 2,513,435
------------
$ 24,156,366 $24,179,888
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Fruit Sales:
Fruit sales (Notes 2 and 10)........................ $ 5,032,953 $ 5,202,618 $ 5,583,894
Less harvesting expenses............................. 1,283,069 1,409,060 1,283,314
----------- ------------ ------------
Net fruit sales...................................... 3,749,884 3,793,558 4,300,580
Cost of fruit sales (Note 2)................................. 2,225,083 2,567,716 2,210,797
----------- ------------ ------------
Operating margin.............................................. 1,524,801 1,225,842 2,089,783
----------- ------------ ------------
Interest income.............................................. 116,190 70,009 125,536
Expenses:
Interest expense..................................... 2,214,165 2,500,315 2,561,081
Grove management fees (Note 9)...................... 201,837 213,685 344,436
Partnership management fees (Note 8)................. 336,140 334,204 330,947
Real estate taxes.................................... 56,071 133,950 148,390
Amortization (Notes 5)............................... 45,665 96,690 33,547
General and administrative........................... 62,397 67,359 66,188
Depreciation (Notes 2 and 4)......................... 9,473 9,473 9,473
------------ ----------- -----------
Total................................................ 2,925,748 3,355,676 3,494,062
Net loss (Note 11)............................................ $(1,284,757) $(2,059,825) $(1,278,743)
============ =========== ===========
Net loss allocated to General Partner......................... $ (128,476) $ (205,982) $ (127,874)
============ =========== ===========
Net loss allocated to Limited Partners........................ $(1,156,281) $(1,853,843) $(1,150,869)
============ =========== ===========
Net loss per Unit of Limited Partnership .....................
Interest (Note 6).................................... $ (74.60) $ (119.60) $ (74.25)
============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
Units of
Limited Limited General
Partnership Partners' Partners' Total
Interest Capital Capital Capital
<S> <C> <C> <C> <C>
Balance, December 31, 1991 15,500 $6,417,408 $(565,405) 5,852,003
Net loss (1,150,869) (127,874) (1,278,743)
-------- ----------- ----------- ----------
Balance, December 31, 1992 15,500 5,266,539 (693,279) 4,573,260
-------- ----------- ----------- ----------
Net loss (1,853,843) (205,982) (2,059,825)
-------- ----------- ----------- ----------
Balance, December 31, 1993 15,500 3,412,696 (899,261) 2,513,435
-------- ----------- ----------- ----------
Net loss (1,156,281) (128,476) (1,284,757)
-------- ----------- ----------- ----------
Balance, December 31, 1994 15,500 $ 2,256,415 $(1,027,737) $1,228,678
======== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
STATEMENTS OF CASH FLOWS
<TABLE>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Cash flow provided by (used in) operating activities:
Cash received from customers............................. $5,237,764 $5,082,940 5,625,048
Cash paid to suppliers.................................... (3,772,413) (4,029,905) (3,818,720)
Interest received......................................... 109,250 75,136 119,983
Interest paid............................................. (914,510) (1,468,337) (1,677,120)
----------- ----------- -----------
Net cash provided by (used in) operating activities....... 660,091 (340,166) 249,191
----------- ----------- -----------
Cash flow used in investing activities:
Capital expenditures...................................... (11,144) (106,473) (324,732)
------------ ---------- -----------
Net cash used in investing activities..................... (11,144) (106,473) (324,732)
------------ ---------- -----------
Cash flow used in financing activities:
Proceeds from mortgage refinancing........................ - 8,000,000 -
Paydown on first mortgage................................. - (8,000,000) -
Deferred mortgage costs................................... - (90,932) -
Cash Distributions........................................ - - -
----------- ----------- --------
Net cash used in financing activities..................... - (90,932) -
-----------
Net increase (decrease) in cash and cash
equivalents............................................... 648,947 (537,571) (75,541)
Cash and cash equivalents, beginning.......................... 2,475,681 3,013,252 3,088,793
----------- ----------
Cash and cash equivalents, ending............................. $ 3,124,628 $2,475,681 $ 3,013,252
=========== ========== ===========
Reconciliation of net loss to net cash provided by operating activities:
Net loss...................................................... $(1,284,757) $(2,059,825) $(1,278,743)
Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities:
Depreciation and amortization........................ 55,138 106,163 43,021
Decrease (increase) in:
Accounts receivable............................. 198,544 (119,678) 41,151
Inventory.................................................. (202,559) 120,067 88,622
Other assets............................................... (31,699) 46,170 37,177
Increase (decrease) in:
Accrued interest................................ 748,434 (241,760) (7,172)
Other liabilities............................... (38,420) (99,610) (141,906)
Depreciation capitalized to inventory................ 664,189 634,568 575,909
Accrued interest on refinanced
Long-term debt.................................. 551,221 1,273,739 891,132
----------- ----------- -----------
Net cash provided by (used in) operating activities........... $ 660,091 $ (340,166) $ 249,191
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
1. ORGANIZATION AND ACQUISITION
Indian River Citrus Investors Limited Partnership (the "Partnership")
was organized in December 1984 under the Uniform Limited Partnership
Act of the Commonwealth of Massachusetts to acquire from Caulkins
Citrus Company, Limited approximately 3,150 gross acres of land
located in Martin County, Florida, and to operate a commercial citrus
grove (the "Grove") for the production of oranges. The Partnership
will terminate on December 31, 2010, or sooner, in accordance with the
terms of the Limited Partnership Agreement (the "Agreement"), as
amended November 13, 1985.
In accordance with the Agreement, as amended, net income or net
losses, tax credits and net cash flow, as defined, are generally
allocated 99% to the Limited Partners and 1% to the General Partner
for the period ended December 31, 1985, and 90% to the Limited
Partners and 10% to the General Partner, thereafter. Gains, losses and
proceeds from capital transactions are generally allocated 70% to the
Limited Partners and 30% to the General Partner. These allocations are
subject to certain priority returns to the Limited Partners, as
defined in the Agreement.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fruit Sales - Fruit sales are recognized when fruit is delivered to
processsors. Sales are comprised of advances received for fruit
delivered the fruit season and the receipt of any final settlements,
90% of which are received by December 31 of the year in which
harvesting is completed.
Inventory - Inventory consists of fruit remaining on the trees at
December 31, 1994 and 1993. Inventory is valued at the lower of cost
or market. Inventory cost includes caretaking costs and inventoriable
depreciation at December 31, 1994 and 1993, which are both allocated
between fruit harvested and fruit remaining on the trees. Market value
was determined by utilizing crop estimates, specified minimum contract
prices, and quoted market prices reported by the Florida Citrus
Processor's Association.
Property - The Partnership provides for deprecation on the grove and
improvements, the building and the trucks using the straight-line
method over estimated useful lives of 30 years, 10 years and 5 years,
respectively. Depreciation expense of $9,473 was recognized on the
building during each of the three years ended December 31, 1994.
Depreciation of the grove and improvements and trucks is included in
inventory and ultimately charged to cost of fruit sales as the fruit
is harvested and sold. Depreciation of 664,189 and $634,568 was
included in inventory for the years ended December 31, 1994 and 1993,
respectively.
Maintenance, repairs and minor renewals are charged to expense as
incurred while major renewals and betterments are capitalized.
Income Taxes - Since the Partnership is not a taxable entity, the
revenues and expenses flow through to the partners for tax purposes.
The tax returns and the amount of distributable Partnership income or
loss are subject to examination by the federal and state taxing
authorities. If such examinations result in changes to distributable
partnership income or loss, the tax liability of the partners would be
changed accordingly.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Cash Equivalents - The Partnership considers all highly liquid debt
instruments purchased with a maturity of three months or less to be
cash equivalents. The majority of cash and cash equivalents are in
excess of federal deposit insurance coverage at December 31, 1994 and
1993.
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
3. ACCOUNTS RECEIVABLE
Accounts receivable consist of amounts due for fruit harvested and are
carried at net realizable value. Net realizable value was calculated
based on the fruit delivered utilizing spot and contract market prices
published by the Florida Citrus Processor's Association per the terms
of the fruit purchase agreements. As of December 31, 1994 and 1993,
there was no provision for doubtful accounts.
4. PROPERTY
At December 31, property consists of the following:
<TABLE>
1994 1993
<S> <C> <C>
Land................................................ $ 5,225,071 $ 5,225,071
Grove and improvements.............................. 19,106,795 18,341,378
Building............................................ 94,732 94,732
Trucks.............................................. 30,979 19,835
Pre-productive costs................................ 0 765,417
--------------- -----------
Total............................................... 24,457,577 24,446,433
Less accumulated depreciation....................... (5,393,170) (4,719,508)
----------- -----------
Property - net...................................... $19,064,407 $19,726,925
=========== ===========
</TABLE>
5. DEFERRED FINANCING COSTS
Deferred financing costs consist of costs associated with obtaining
financing and are amortized on a straight-line basis over the lives of
the related debt. As a result of the refinancing further discussed in
Note 7, deferred mortgage costs totalling $198,507 along with
associated accumulated amortization of $143,919 were written off when
the related mortgage was paid down. Costs of $90,932 related to
obtaining the new financing were capitalized in 1993 and will be
amortized over the life of the new mortgage. Deferred financing costs
at December 31, 1994 and 1993 are net of accumulated amortization of
$178,682 and $133,018, respectively. Amortization of deferred
financing costs of $45,665, $96,690 and $33,547 has been recognized in
the accompanying financial statements for the years ended December 31,
1994, 1993 and 1992 respectively.
The accompanying notes are an integral part of these financial statements.
<PAGE>
6. NET LOSS PER UNIT
Net loss per unit of Limited Partnership interest is computed based on
15,500 units outstanding at December 31, 1994, 1993 and 1992.
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
7. LONG TERM NOTES PAYABLE
Notes payable of the Partnership at December 31, 1994 and 1993 were as
follows:
<TABLE>
1994 1993
----------- --------
<S> <C> <C>
5% first mortgage note payable to Nationsbank of Florida dated April
12, 1993. Interest paid monthly at the bank's prime rate less 1%
until January 31, 1996. Principal and accrued interest thereon
are due in full on January 31, 1996. These notes are
collateralized by a first mortgage on the Grove property and
$2,000,000 is guaranteed by
the General Partner............................ $8,000,000 $8,000,000
10% purchase money second mortgage note payable to Caulkins Citrus
Company, Limited dated December 31, 1985. Annual payments due
beginning January 31, 1987, based on the lesser of $500,000 for
each of the first three years ($1,000,000 for each of the next
four years) or available cash flow, as defined. Any accrued but
unpaid interest for any year will be added to the principal
balance as of the annual date. At no time shall the total
principal exceed $17,500,000. Principal and accrued interest
thereon are due in full on or before January 31, 1996. This note
is collateralized by a second mortgage on the
grove property................................. 14,138,049 13,934,884
Less discount on the purchase money second mortgage note adjusting the
stated interest rate to 14.5% (estimated fair market rate on
the date of the note).......................... (521,189) (869,245)
------------ ------------
Long-term notes payable............................. $ 21,616,860 $ 21,065,639
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
7. NOTES PAYABLE (Continued)
The discount on the purchase money second mortgage note was calculated
based on the projected principal balance assuming payments based on
the Partnership's projected cash flow, as defined. To the extent
actual payments differ from those projected, the calculation of the
discount will be adjusted in future years.
The discount is being amortized using the effective interest rate
method. The borrower's incremental borrowing rate used to discount the
projected note payments was that assumed for similar debt as of the
date of issuance (i.e. 14.5%).
During April 1993, the Partnership completed a refinancing of a
$8,000,000 first mortgage note.
8. RELATED PARTY TRANSACTIONS
The General Partner receives an annual management fee of $200,000.
Accordingly, partnership management fees of $200,000 were expensed for
each of the three years in the period ended December 31, 1994.
First Winthrop Corporation ("First Winthrop") receives $100,000 each
year, adjusted by the annual consumer price index, for accounting,
clerical and administrative services provided to the Partnership.
During the years ended December 31, 1994, 1993 and 1992, such fees in
the amount of $136,140, $134,204, and $130,947, respectively, were
expensed.
9. MANAGEMENT FEES
As of April 1, 1993, the Partnership entered into a property
management agreement with AgriManagement for a fixed fee of $148,400
plus two incentive fees described as Incentive Fee A and Incentive Fee
B. Incentive Fee A is 2.5% of Net Cash flow from Operations. Incentive
Fee B is 15% of net cash flow from operations (as defined) less the
sum of $1,800,000, base fees, accounting services and Incentive Fee B.
Prior to April 1, 1993, the Grove was managed under a Grove Management
Agreement with a grove manager in which an affiliate of the General
Partner has a noncontrolling beneficial interest.
The agreement which terminated March 31, 1993 called for an annual
base management fee of $180,000 payable in equal monthly installments
and an incentive management fee calculated for the first quarter of
1993 and 1992 at 7.5% of the Partnership's cash flow from operations,
respectively, as defined. Payment of the calendar year incentive
management fee for each year was payable on April 1 of the following
year. Grove Management fees expensed under that agreement were $74,930
for the year ended December 31, 1993.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Grove management fees of $201,837, $213,685 and $344,436 were expensed
for the years ended December 31, 1994, 1993 and 1992, respectively.
INDIAN RIVER CITRUS INVESTORS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
10. SIGNIFICANT CUSTOMERS
The Partnership sells most of its fruit under two fruit sales
agreements with citrus processing plants. Under the terms of the first
agreement, the Partnership was obligated to deliver and sell to this
processing plant at least 80% of the Grove's harvested fruit for the
1987 through 1991 harvests and 10% of the Grove's harvested fruit
thereafter through the 1994-1995 harvest. For the years ended December
31, 1994, 1993 and 1992, 13%, 11% and 12%, respectively, of the
Partnership's fruit sales were recognized under this agreement.
The Partnership entered into another fruit sales agreement under which
it was obligated to deliver and sell 90% if the fruit not committed
under the agreement described in the paragraph above for the 1987
through 1990 harvests and 90% of the Grove's harvested fruit
thereafter through the 1996-1997 harvest. This agreement provides for
a variable minimum sales price, but not less than $1.00 per pound
solid, through the 1996-1997 harvest. For the years ended December 31,
1994, 1993 and 1992, 87%, 89% and 88% of the Partnership's fruit sales
were recognized under this agreement, respectively.
11. TAXABLE LOSS
<TABLE>
The Partnership's taxable loss for the years ended December 31, 1994,
1993 and 1992 was calculated as follows:
1994 1993 1992
----------- ----------- ---------
<S> <C> <C> <C>
Net income (loss) per accompanying statements
of operations......................................... $(1,284,757) $(2,059,825) $(1,278,743)
Tax depreciation less than (in excess of)
that used for financial reporting
purposes.............................................. (128,782) 259,330 558,737
Reversal of prior year I.R.C. Section 263A costs
in excess of (less than) amount capitalized to
inventory for tax purposes but not for financial
reporting purposes, and other items affecting
operating margin...................................... 175,278 207,532 442,226
Portfolio income directly allocated to partners......... (116,190) (70,009) (125,536)
Imputed interest expense not recorded for tax
purposes.............................................. 443,310 357,944 292,665
Current year costs capitalized under I.R.C. Section
263A in excess of (less than) amount capitalized
for financial reporting purposes...................... 261,708 45,962 3,493
------------- ----------- -------------
Taxable loss............................................ $ (649,433) $(1,259,066) $ (107,158)
============= =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INDEX TO EXHIBITS
Exhibit No Title of Document
3, 4 Agreement and Certificate of Limited Partnership, as amended
to date(1)
10A Long-Term Fruit Purchase(Orange) Agreement Tropicana
Products, Inc., Indian River Citrus Investors Limited
Partnership(2)
10B Property Management Agreement between Bariston Management,
Inc. and Indian River Citrus Investors Limited Partnership,
dated August 27, 1987, as amended(2)
10C Purchase and Sale Agreement dated as of December 28, 1984
by and between Registrant and Caulkins Citrus Company Limited
(including, as exhibits thereto, the forms of Temporary
Harvesting Easement, Caulkins Second Mortgage Note, Grove
Management Agreement, Fruit Purchase Agreement and Indemnity
Agreement) filed January 9, 1985(2)
First Amendment to Purchase and Sale Agreement dated as of November
1, 1985 by and between Registrant and Caulkins Citrus Company Limited
(including as exhibits thereto the forms of Caulkins Second Mortgage
Note, Grove Management Agreement and Fruit Purchase Agreement) filed
November 14, 1985(3)
10D Securities Indemnity Agreement dated as of December 18,
1984 by and among Caulkins Citrus Company Limited, the
Registrant, Winthrop Agricultural Management II, Inc.
and First Winthrop Corporation filed January 9, 1985(1)
10E.1 Management Agreement dated as of December 28, 1984 by
and between the Registrant and Winthrop Agricultural
Management II, Inc. filed January 9, 1985(2)
10E.2 Amendment to Management Agreement dated as of November
13, 1985 by and between Registrant and Winthrop
Agricultural Management II, Inc. filed November 14,
1985(3)
10F Incentive Asset Management Agreement dated as of
December 12, 1985 by and between the Registrant and
Winthrop Financial Associates, A Limited Partnership,
filed December 12, 1985(3)
10G Accounting Services Agreement dated as of April 2,
1985 by and between the Registrant and First Winthrop
Corporation filed April 8, 1985(3)
Amendment of Accounting Services Agreement dated as
of November 13, 1985 by and between the Registrant
and Winthrop Agricultural Management II, Inc. filed
November 14, 1985(3)
10H Form of Promissory Note and Assignment of Registrant
filed April 8, 1985(3)
10I Form of Assumption Agreement by the General Partner
of Registrant filed November 14, 1985(3)
10J Fruit Participation Contract dated April 17, 1990
by and between Caulkins Indiantown Citrus Company
and Partnership(4)
10K Grove Management Agreement dated as of April 1, 1993
between the Registrant and AgriManagement,
Incorporated(5)
10L Termination Agreement dated as of March 31, 1993 terminating
(i) the Management Agreement dated as of April 15, 1986
between the General Partner and Bariston Associates, Inc.;
(ii) the Incentive Asset Management Agreement dated as of April 15,
1986 between WFA and Bariston Associates, Inc.; and (iii) the
Accounting Services Agreement dated as of April 15, 1986 between
First Winthrop Corporation and Bariston
Associates, Inc.(5)
10M Amended and Restated Consulting Agreement dated as
of March 31, 1993(5)
25 Power of Attorney filed January 9, 1985(3)
25A Appraisal of Caulkins Citrus Company Grove, Citrus
Boulevard, Indiantown, Florida, dated October 1,
1984, prepared by Peter D. Armfield, MAI,
Armfield-Houck Appraisal Research, Inc. filed
January 9, 1985(3)
Supplemental letter dated November 12, 1985 from
Peter D. Armfield filed November 14, 1985(3)
28A Pages 19-20, 22-36, 38-41, 48-50 and 53-55 of
Registrant's Prospectus dated December 16, 1985
which was filed with the Commission pursuant to Rule 424(b) P
28B Agricultural Engineering Evaluation of Caulkins
Citrus Company Grove dated January 25, 1985
prepared by Kenneth A. Harris, P.E. filed April 18, 1985(3)
Supplemental letter dated November 8, 1985 from
Kenneth A. Harris, P.E. filed November 14, 1985(3)
28C Horticultural Evaluation of Caulkins Citrus
Company Grove dated December 10, 2984 and Update
of the Horticultural Evaluation dated March 12,
1985 filed April 18, 1985(3)
28D Summary of Horticultural Evaluation of Caulkins
Citrus Company Grove Supplemental dated Novem-
ber 12, 1985 from John R. King, Ph.D. (included
as Exhibit C of Prospectus)(3)
- ------------------
(1) Incorporated herein by reference to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1985.
(2) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1987.
(3) Incorporated by reference to the Registrant's Registration Statement on
Form S-1, as amended, File No. 2-95219.
(4) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1990.
(5) Incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1993.
