<PAGE>
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 Three Months Ended March 31, 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
------- ----------
(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 - March 31, 1996
and December 31, 1995 3
Statement of Income & Expense
Three Months Ended March 31, 1996
and March 31, 1995 4
Statement of Cash Receipts and
Disbursements - Three Months
Ended March 31, 1996 5
Notes to Financial Statements 6 - 8
ITEM 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION:
ITEM 6. Exhibits and Reports on Form 8-K 9
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
MARCH 31, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
ASSETS
------
March 31, 1996 December 31, 1995
-------------- ------------------
(AUDITED)
<S> <C> <C>
Cash & Cash Equivalents $ 183,737 $ 196,814
Accounts Receivable 0 0
Land, at Cost (Note 2) 1,482,249 1,482,249
Investments in Joint
Ventures (Note 3) 1,916,643 l,915,871
Organization Costs, Net 24,169 24,169
---------- ----------
Total Assets $3,606,798 $3,619,103
========== ==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND PARTNER'S CAPITAL
---------------------------------
<S> <C> <C>
Deposits on Land $ 0 $ 0
---------- ----------
Partner's Capital -
General Partner 4,393 4,516
Limited Partners 3,602,405 3,614,587
Distributions, Current Year 0 0
---------- ----------
Total Partner's Capital $3,606,798 $3,619,103
---------- ----------
Total Liabilities and
Partner's Capital $3,606,798 $3,619,103
========== ==========
</TABLE>
3
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CONDEV LAND GROWTH FUND '86, LTD.
STATEMENT OF INCOME AND EXPENSE
THREE MONTHS ENDED MARCH 31, 1996 AND MARCH 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
INCOME
- ------
Interest and Other Income $ 2,073 $ 1,588
Gain on land sale 0 0
---------- ---------
Total Income $ 2,073 $ 1,588
OPERATING EXPENSES
- ------------------
Professional Services 10,090 813
Equity in Loss of Joint Venture 1,559 0
Other 303 242
Taxes and permits 0 198
Office Expense 2,426 3,134
---------- ---------
Total Operating Expense $ 14,378 $ 4,378
---------- ---------
Net Income/(Loss) $ (2,305) $ (2,799)
</TABLE>
4
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CONDEV LAND GROWTH FUND '86, LTD.
STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996
Cash flows from operating activities:
Net Income $(12,305)
Adjustments to reconcile net loss
to net cash used for operating
activities:
Equity in loss of joint ventures 0
Cash used for changes:
Accounts Receivable 0
Deposits on land 0
Net cash used in operating
activities (12,305)
Cash flows from financing activities:
Land development costs 0
Proceeds from land sale, net 0
Investment in Joint ventures (772)
Net cash from financing
activities (772)
Cash flows from investing activities:
Distributions to partners 0
--------
Net cash used in financing
activities 0
--------
Net decrease in cash 13,077
--------
Cash and cash equivalents at beginning of year 196,814
Cash and cash equivalents at end of period $183,737
========
5
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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. Three parcels
have been sold. Refer to Note 2 INVESTMENT IN LAND and Note 3
INVESTMENT IN JOINT VENTURES for details.
Note 2 INVESTMENT IN LAND:
-------------------
At March 31, 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 build a
retail center for a nationwide home builder. Another developer
has a competing parcel in the neighborhood under contract with
the intent of building for the same retailer. We expect a
decision to be made during the month of April.
(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 retention for the entire property, so the Partnership expects
to have the
6
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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.
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 March 31,
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 401,752
-----------
$ 1,916,643
===========
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 March 31, 1996 is as follows:
Assets
------
Cash $ 9,781
Accounts Receivable 0
Investment in land 2,557,832
----------
$2,567,613
==========
Liabilities and Venturers' Capital
----------------------------------
Liabilities 0
Venturers' capital 2,567,613
----------
$2,567,613
==========
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
7
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Road Joint Venture as of March 31, 1996 is as follows:
Assets
------
Cash $ 408
Investment in land 802,930
--------
$803,338
========
Liabilities and Venturers' Capital
----------------------------------
Liabilities $ 1,438
Venturers' capital 801,900
--------
Total Liabilities and Venturer's Capital $803,338
========
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. The agreement
has been amended several times, and now provides for the
acquisition of the entire site on or before April 22, 1996. The
general partner anticipates distributing the net proceeds, after
replenishment of operating reserves, as soon as the Partnership's
auditors confirm the amount available for distribution.
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. During the first three
months there were no cash flow distributions made to the
partners.
Note 5 RELATED PARTY TRANSACTIONS:
---------------------------
The Partnership Agreement provides for the reimbursement to the
general partner of administrative expenses incurred in the direct
operation of the partnership. For the three months ended March
31, 1996, $1,935 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
during the first three 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.
8
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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 three months ended March 31,
1996 was $2,073. Total income for the period was also $2,073, as
there were no sales of land during the quarter. This compares to
total income for the comparable period in 1995 of $ 1,588.
Operating expenses for the three months ended March 31, 1996 were
$14,378 compared to $ 4,387 in 1995. The primary reason for this
increase was higher costs of professional services, which
increased from $813 in 1995 to $10,090 in 1996. This is not a
reflection of higher expenses. Rather, the quarterly invoices
were paid in March for the three months ended March 31, 1996,
while they were recorded in April, 1995. Equity in the Loss of
Joint Venture totalled $1,588 for the 1996 quarter as compared
with no expense booked in the comparable 1995 quarter. This
difference is a result of a change in accounting policy whereby
this item is recognized on a quarterly basis rather than
annually. Office expenses declined from $3,134 in 1995 to $2,426
in 1996. Net loss for the three months ended March 31, 1996 was
$12,304, compared to a net loss of $ 2,799 for the three months
ended March 31, 1995.
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 three months
ended March 31, 1996.
9
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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
April 16, 1996 /s/ Robert N. Gardner, Partner
- -------------- ------------------------------------------------------
DATE Robert N. Gardner, Partner
April 16, 1996 /s/ Joseph J. Gardner, Partner
- -------------- ------------------------------------------------------
DATE Joseph J. Gardner, Partner
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 183,737
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,606,798
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,606,798
<TOTAL-LIABILITY-AND-EQUITY> 3,606,798
<SALES> 0
<TOTAL-REVENUES> 2,073
<CGS> 0
<TOTAL-COSTS> 14,378
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (12,305)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,305)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,305)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
