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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Six Months Ended June 30, 1996
Commission File Number 33-06419-A
CONDEV LAND GROWTH FUND '86, LTD.
---------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-2766359
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(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
2487 Aloma Avenue
Winter Park, Florida 32792
(Address of principal executive offices)
Registrant's telephone number, including area code: (407) 679-1748
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 report), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO .
---- ----
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CONDEV LAND GROWTH FUND '86, LTD.
INDEX
PART I. FINANCIAL INFORMATION: PAGE NUMBER
ITEM 1. Financial Statements
Statement of Assets,
Liabilities and Partner's
Capital - June 30, 1996
and December 31, 1995 3
Statement of Income & Expense
Three Months Ended June 30, 1996
and June 30, 1995 4
Statement of Income & Expense
Six Months Ended June 30, 1996
and June 30, 1995 5
Statement of Cash Receipts and
Disbursements - Six Months
Ended June 30, 1996 6
Notes to Financial Statements 7 - 10
ITEM 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 10
PART II. OTHER INFORMATION:
ITEM 6. Exhibits and Reports on Form 8-K 11
2
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
---------------------
The accompanying financial statements, in the opinion of Condev Associates, the
general partner of Condev Land Growth Fund '86, Ltd., reflect all adjustments
(which include only normal recurring adjustments) necessary to a fair statement
of the financial position, the results of operations and the changes in cash
position for the periods presented. For a full description of accounting
policies, see notes to financial statements in the 1995 annual report on Form
10-K.
CONDEV LAND GROWTH FUND '86, LTD.
STATEMENT OF ASSETS, LIABILITIES AND PARTNER'S CAPITAL
JUNE 30, 1996 AND DECEMBER 31, 1995
ASSETS
------
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- ------------------
(AUDITED)
<S> <C> <C>
Cash & Cash Equivalents $ 190,201 $ 196,814
Land, at Cost (Note 2) 1,482,249 1,482,249
Investments in Joint
Ventures (Note 3) 1,514,891 l,915,871
Organization Costs, Net 24,169 24,169
---------- ----------
Total Assets $3,211,510 $3,619,103
========== ==========
LIABILITIES AND PARTNER'S CAPITAL
---------------------------------
Partner's Capital -
General Partner 5,840 4,516
Limited Partners 3,205,670 3,614,587
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Total Partner's Capital $3,211,510 $3,619,103
---------- ----------
Total Liabilities and
Partner's Capital $3,211,510 $3,619,103
========== ==========
</TABLE>
3
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CONDEV LAND GROWTH FUND '86, LTD.
STATEMENT OF INCOME AND EXPENSE
THREE MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1996 June 30, 1995
------------- -------------
INCOME
- ------
<S> <C> <C>
Interest and Other Income $ 2,265 $ 24,267
Gain on land sale 0 695,360
Equity in Income of Joint Venture 149,348 0
-------- --------
Total Income $151,613 $719,627
OPERATING EXPENSES
- ------------------
Professional Services 1,376 8,200
Other 1,682 0
Taxes and permits 0 0
Office Expense 3,843 2,250
-------- --------
Total Operating Expense $ 6,901 $ 10,450
-------- --------
Net Income/(Loss) $144,712 $709,177
======== ========
</TABLE>
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CONDEV LAND GROWTH FUND '86, LTD.
STATEMENT OF INCOME AND EXPENSE
SIX MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1996 June 30, 1995
------------- -------------
INCOME
- ------
<S> <C> <C>
Interest and Other Income $ 4,338 $ 25,855
Gain on land sale 0 695,360
Equity in Income of Joint Venture 147,789 0
-------- --------
Total Income $152,127 $721,215
OPERATING EXPENSES
- ------------------
Professional Services 11,466 9,013
Other 1,985 242
Taxes and permits 0 198
Office Expense 6,269 5,384
-------- --------
Total Operating Expense $ 19,720 $ 14,837
-------- --------
Net Income/(Loss) $132,407 $706,378
======== ========
</TABLE>
5
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CONDEV LAND GROWTH FUND '86, LTD.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Cash flows from operating activities:
<S> <C>
Net Income $ 132,407
Adjustments to reconcile net loss
to net cash used for operating
activities:
Equity in Income of Joint
Venture, net (147,789)
Cash used for changes:
Accounts Receivable 0
Deposits on land 0
---------
Net cash used in operating
activities (15,382)
---------
Cash flows from financing activities:
Land development costs 0
Distribution from Joint Venture, net 551,100
Investment in Joint ventures (2,331)
---------
Net cash from financing
activities 548,769
---------
Cash flows from investing activities:
Distributions to partners (540,000)
---------
Net cash used in financing
activities (540,000)
---------
Net decrease in cash 6,613
---------
Cash and cash equivalents at beginning of year 196,814
Cash and cash equivalents at end of period $ 190,201
=========
</TABLE>
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CONDEV LAND GROWTH FUND '86, LTD.
NOTES TO FINANCIAL STATEMENTS
Note 1 BUSINESS:
---------
Condev Land Growth Fund '86, Ltd. is a Florida Limited
Partnership formed on April 17, 1986 under the Florida Uniform
Partnership Act. The Partnership was formed for the purpose of
acquiring and holding for investment predevelopment land in
Central Florida. The Partnership registered with the Securities
and Exchange Commission a total of 7,500 units of limited
partnership interests ("Units"). The Partnership had collected
$7,500,000 in Partnership Capital as of December 31, 1987, the
expiration of the offering period.
As provided under the terms of the Partnership agreement the
Partnership was to be in existence until December 31, 1993. In
accordance with the Florida Limited Partnership Law and the
Partnership Agreement, after December 31, 1993 the Partnership
has been in liquidation with no change in the status of the
limited partners or general partner.
The Partnership has fully invested all available funds in
properties located in the Central Florida area. Refer to Note 2
INVESTMENT IN LAND and Note 3 INVESTMENT IN JOINT VENTURES for
details.
Note 2 INVESTMENT IN LAND:
-------------------
At June 30, 1996, land consisted of the following:
2.83 acre parcel (zoned commercial) in
southeast Orange County, Florida $ 322,791
7.00 acre parcel (zoned commercial) in
Brevard County, Florida 420,503(a)
6.61 acre parcel (zoned commercial) in
Orange County, Florida 738,955(b)
----------
$1,482,249
==========
(a) On January 12, 1996, the Partnership entered into a Contract
for Sale of this parcel with a developer who intends to develop a
retail center on the site. In April, the prospective purchaser
made a non-refundable deposit under the terms of the contract.
We expect a closing to occur during the third quarter of 1996.
(b) On July 25, 1995, the Partnership entered into a contract
with a convenience store operator for the sale of approximately
1.2 acres of this site. The contract has been amended a number
of times since its original signing. The contract now provides
for the sale of approximately 1 acre. The Buyer has announced
its intention to construct a Handy Way convenience store,
Church's Chicken drive-through restaurant and Citgo service
station on the site. In conjunction with its acquisition of this
site, the Buyer has agreed to construct access roads which will
service both their site and the balance of the property, as well
as water retention for the entire property, so the Partnership
expects to have the remainder of the property fully and ready to
market when all improvements are completed. Closing on the
corner parcel is anticipated during the third quarter of 1996.
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For full details of investment in land, including a description
of each parcel, please refer to the notes in Form 10-K filed as
of December 31, 1995.
Note 3 INVESTMENT IN JOINT VENTURES:
-----------------------------
The Partnership is a party to two joint ventures which have
investments in land. The Partnership investment as of June 30,
1996 in the joint ventures for the period then ended are
summarized as follows:
Investment
West 50 Joint Venture $ l,514,891
Condev/McCulloch Road
Joint Venture 0(a)
-----------
$ 1,514,891
===========
The operations of both joint ventures consist primarily of
professional services and real estate taxes.
The Partnership owns a 59% interest in West 50 Joint Venture (A
Florida Joint Venture) whose purpose is to acquire and hold a
133-acre parcel of land in Lake County, Florida for investment
purposes. The remaining 41% interest is owned by Condev West 50,
Ltd., an affiliate of the general partner. The Partnership's
investment is carried at its equity in the net underlying assets.
A summary of the assets, liabilities, and venturers' capital of
West 50 Joint Venture as of June 30, 1996 is as follows:
Assets
------
Cash $ 1,446
Accounts Receivable 0
Investment in land 2,565,732
-----------
$ 2,567,178
===========
Liabilities and Venturers' Capital
----------------------------------
Liabilities 0
Venturers' capital 2,567,178
-----------
$ 2,567,178
===========
(a) The Partnership owns a 50.1% interest in Condev/McCulloch
Road Joint Venture (A Florida Joint Venture) whose purpose is to
acquire and hold a 19 acre parcel of land in Seminole County,
Florida for investment purposes. The remaining 49.9% interest is
owned by Condev Land Fund II, Ltd., an affiliate of the general
partner. The Partnership's investment is carried at its
underlying equity in the net assets. A summary of the assets,
liabilities and venturers' capital of Condev/McCulloch Road Joint
Venture as of June 30, 1996 is as follows:
8
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Assets
------
Cash $ 602
Investment in land 0
------
$ 602
======
Liabilities and Venturers' Capital
----------------------------------
Liabilities $ 602
Venturers' capital 0
------
Total Liabilities and Venturer's Capital $ 602
======
During the first quarter of 1995, the Partnership entered into a
Contract for Sale and Purchase relating to this property with
Royal Apartments USA based in Champaign, Illinois. On April 22,
1996, Condev/McCulloch Road Joint Venture concluded the sale.
The Purchase Price for this parcel was $1,190,000, which includes
an amount of $35,000 paid by the purchaser as additional
consideration to extend the closing date from December 22, 1995
to April 22, 1996. After expenses of the sale, the net proceeds
realized by the Joint Venture were $1,104,330.01. The Joint
Venture paid $737,355 for this parcel on February 6, 1989. In
addition, the Joint Venture had $62,769 in additional capitalized
costs relating to the property. Therefore, the Joint Venture had
a net gain on the sale of this parcel of $304,206.01.
As provided in the Partnership Agreement, reserves may be
retained by the Partnerships to provide for anticipated future
expenses. The General Partner determined that additional
reserves of $11,100 are appropriate and necessary for Condev Land
Growth Fund '86. In addition the Joint Venture retained reserves
of $4,330 to cover final audit and attorney's fees. Aggregate
distributions to limited partners in the amount of $1,080,000
were made on May 2, 1996, $540,000 to limited partners of Condev
Land Growth Fund '86, Ltd. and Condev Land Fund II, Ltd.,
respectively.
Note 4 DISTRIBUTIONS TO PARTNERS:
--------------------------
Pursuant to the partnership agreement, cash flow generated each
year by the Partnership is to be distributed 99% to the limited
partners and 1% to the general partner. There were no cash flow
distributions during the first six months of 1996.
Pursuant to the partnership agreement, proceeds realized from the
sale of properties, after the establishment of reserves for
future operating costs, are to be distributed at least annually.
During the first six months a total of $540,000 was distributed
to limited partners as described under Note 3 above.
Note 5 RELATED PARTY TRANSACTIONS:
---------------------------
The Partnership Agreement provides for the reimbursement to the
general partner of administrative expenses incurred in the
9
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direct operation of the partnership. For the six months ended
June 30, 1996, $3,870 was reimbursed to the general partner for
direct expenses incurred.
When properties are sold, under certain circumstances an
affiliate of the general partner may be paid real estate
commissions in amounts customarily charged by others rendering
similar services with such commissions plus commissions paid to
nonaffiliates not to exceed 10% of the gross sales price. No
real estate commissions have been paid to the general partner or
any affiliate of the general partner during the first six months
of 1996.
The general partner is obligated to loan up to $100,000 to the
Partnership during its term to meet working capital requirements.
The General Partner has previously advanced $156,048.27 of
working capital to the Partnership, which advance was repaid in
December, 1993. Since the General Partner has met its obligation
to advance funds, it is not required to make further advances.
Note 6 OTHER INFORMATION:
------------------
None
Item 2 Management's discussion and analysis of financial condition and
----------------------------------------------------------------
results of operations
---------------------
Interest and other income for the six months ended June 30, 1996
was $4,338. This compares to interest and other income of $25,855
for the first six months of 1995. The 1995 period includes
$25,000 in interest on a purchase money mortgage which was
outstanding at the time. This mortgage was repaid during 1995.
Total income for the six months ended June 30, 1996 was $152,127,
including equity in the income of Condev/McCulloch Road Joint
Venture as a result of the sale of its parcel in Seminole County,
Florida. See Note 3, Investment in Joint Ventures. Total income
for the comparable 1995 period was $721,360 which included a gain
on the sale of land totalling $695,360. Operating expenses for
the six months ended June 30, 1996 were $ 19,720 compared to $
14,837 for the six months ended June 30, 1995. The primary
reason for this increase was slightly higher expenses for
professional services, which increased from $ 9,013 in 1995 to
$11,466 in 1996. This occurred because of additional efforts to
plan use of the land owned by the Partnership for future sale and
to insure that existing development rights are vested to the
fullest extent possible. Office expenses increased from $5,384
in 1995 to $6,269 for the first six months of 1996. Net income
for the six months ended June 30, 1996 was $132,407, compared to
a net income of $ 706,378 for the six months ended June 30, 1995.
Total assets of the partnership declined from $3,619,103 at
December 31, 1995 to $3,211,510 at June 30, 1996, a decrease of
$407,593. This reflects the sale of land by the partnership
during the period. Total assets can be expected to decrease as
land is sold and the net proceeds are distributed to limited
partners. Liquidity remained at a satisfactory level of $190,201
at June 30, 1996, compared to $196,814 at 1995 year end.
10
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PART II
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
---------------------------------
(A) Exhibits / Index.
None
(B) Reports on Form 8-K.
There were no reports on form 8-K for the six months
ended June 30, 1996.
11
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CONDEV LAND GROWTH FUND '86, LTD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned.
CONDEV LAND GROWTH FUND '86, LTD.
By: Condev Associates, General Partner
August 1, 1996 /s/ Robert N. Gardner
- --------------- ---------------------------
DATE Robert N. Gardner, Partner
August 1, 1996 /s/ Joseph J. Gardner
- --------------- ---------------------------
DATE Joseph J. Gardner, Partner
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> APR-01-1996 JAN-01-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 190,201 190,201
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 3,211,510 3,211,510
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 3,211,510 3,211,510
<TOTAL-LIABILITY-AND-EQUITY> 3,211,510 3,211,510
<SALES> 0 0
<TOTAL-REVENUES> 151,613 152,127
<CGS> 0 0
<TOTAL-COSTS> 6,901 19,720
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 144,712 132,407
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 144,712 132,407
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 144,712 132,407
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
