<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended June 30, 1996
or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ______________ to ______________
Commission File #0-18431
Inland Land Appreciation Fund, L.P.
(Exact name of registrant as specified in its charter)
Delaware #36-3544798
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation
or organization)
2901 Butterfield Road, Oak Brook, Illinois 60521
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 630-218-8000
N/A
_______________________________________
(Former name, former address and former
fiscal year, if changed since last report)
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
___ __
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<PAGE> 2
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Balance Sheets
June 30, 1996 and December 31, 1995
(unaudited)
Assets
______
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents (Note 1).............. $ 47,590 626,942
Accounts and accrued interest receivable........ 16,896 7,224
Mortgage loans receivable (Note 5).............. 35,662 73,614
Other current assets............................ 834 1,165
------------ ------------
Total current assets.......................... 100,982 708,945
Other assets...................................... 19,915 19,915
Investments in land and improvements, at cost
(including acquisition fees paid to Affiliates
of $1,475,347 and $1,476,810 at June 30, 1996
and December 31, 1995, respectively) (Notes 1,
2 and 3)........................................ 25,627,274 24,846,973
------------ ------------
Total assets...................................... $25,748,171 25,575,833
============ ============
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE> 3
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Balance Sheets
(continued)
June 30, 1996 and December 31, 1995
(unaudited)
Liabilities and Partners' Capital
_________________________________
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Current liabilities:
Accounts payable................................ $ 48,082 131,772
Accrued real estate taxes....................... 44,687 47,733
Due to Affiliates (Notes 2 and 6)............... 3,038 13,855
Notes payable to Affiliate (Note 6)............. 320,279 -
Unearned income................................. 29,996 20,707
Current portion of deferred gain on sales....... 8,619 14,926
------------ ------------
Total current liabilities......................... 454,701 228,993
------------ ------------
Partners' capital (Notes 1 and 2):
General Partner:
Capital contribution.......................... 500 500
Cumulative net income......................... 167,876 168,497
Cumulative cash distributions................. (153,743) (153,743)
------------ ------------
14,633 15,254
------------ ------------
Limited Partners:
Units of $1,000. Authorized 30,001 Units,
29,760.25 and 29,792.25 Units outstanding
at June 30, 1996 and December 31, 1995,
respectively (net of offering costs
of $3,768,113, of which $1,069,764 was
paid to Affiliates)......................... 26,013,253 26,040,820
Cumulative net income......................... 3,411,988 3,437,161
Cumulative cash distributions................. (4,146,404) (4,146,395)
------------ ------------
25,278,837 25,331,586
------------ ------------
Total Partners' capital....................... 25,293,470 25,346,840
------------ ------------
Total liabilities and Partners' capital........... $25,748,171 25,575,833
============ ============
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE> 4
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Operations
For the three and six months ended June 30, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
Three months Six months
ended ended
June 30, June 30,
-------------------- ------------------
1996 1995 1996 1995
---------- -------- ------- --------
<S> <C> <C> <C> <C>
Income:
Sale of investments in land
(Notes 1 and 3)............... $ 52,811 92,911 59,117 139,127
Rental income (Note 4)........... 35,538 62,560 92,897 123,302
Interest income.................. 1,533 18,191 8,497 38,068
Other income..................... - - 30 -
---------- -------- ------- --------
89,882 173,662 160,541 300,497
---------- -------- ------- --------
Expenses:
Cost of investments in land sold. 22,785 65,218 22,785 97,827
Professional services to
Affiliates..................... 3,004 6,738 13,564 13,133
Professional services to
non-affiliates................. 3,884 13 27,464 24,563
General and administrative
expenses to Affiliates......... 4,894 5,890 13,462 14,591
General and administrative
expenses to non-affiliates..... 7,031 6,515 10,797 10,390
Marketing expenses to Affiliates. (5,188) 7,428 27,052 42,659
Marketing expenses to
non-affiliates................. 6,213 5,575 18,561 10,377
Land operating expenses to
Affiliates..................... 14,671 14,414 28,927 28,861
Land operating expenses to
non-affiliates................. 10,712 20,421 23,723 34,170
---------- -------- ------- --------
68,006 132,212 186,335 276,571
---------- -------- ------- --------
Net income (loss).................. $ 21,876 41,450 (25,794) 23,926
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 5
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Operations
(continued)
For the three and six months ended June 30, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
Three months Six months
ended ended
June 30, June 30,
-------------------- ---------------------
1996 1995 1996 1995
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net income (loss) allocated to:
General Partner.................. $ (81) 1 (621) (174)
Limited Partners................. 21,957 41,449 (25,173) 24,100
--------- --------- ---------- ----------
Net income......................... $ 21,876 41,450 (25,794) 23,926
========== ========== ========== ==========
Net income (loss) allocated to the
one General Partner Unit......... $ (81) 1 (621) (174)
========== ========== ========== ==========
Net income allocated to Limited
Partners per weighted average
Limited Partnership Units (29,774
and 29,792 for the three months
ended June 30, 1996 and 1995,
and 29,783 and 29,809 for the
six months ended June 30, 1996
and 1995, respectively).......... $ .73 1.39 (.85) .81
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE> 6
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the six months ended June 30, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)............................... $ (25,794) 23,926
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Gain on sale of investments in land........... (36,332) (41,300)
Changes in assets and liabilities:
Accounts and accrued interest receivable.... (9,672) (30,197)
Other current assets........................ 331 (3,580)
Accounts payable............................ (83,690) (1,810)
Accrued real estate taxes.................. (3,046) 8,012
Due to Affiliates........................... (10,817) (46)
Unearned income............................. 9,289 (3,435)
------------ ------------
Net cash used in operating activities............. (159,731) (48,430)
------------ ------------
Cash flows from investing activities:
Additions to investments in land................ (803,086) (515,875)
Notes payable to Affiliate...................... 320,279 -
Principal payments collected on mortgage
loans receivable.............................. 37,952 -
Proceeds from disposition of investments in land 52,810 139,127
------------ ------------
Net cash used in investing activities............. (392,045) (376,748)
------------ ------------
Cash flows from financing activities:
Repurchase of Limited Partnership Units......... (27,567) (5,418)
Foreign Partners' withholding................... (9) -
------------ ------------
Net cash used in financing activities............. (27,576) (5,418)
------------ ------------
Net decrease in cash and cash equivalents......... (579,352) (430,596)
Cash and cash equivalents at beginning of period.. 626,942 1,267,942
------------ ------------
Cash and cash equivalents at end of period........ $ 47,590 837,346
============ ============
</TABLE>
See accompanying notes to financial statements.
-6-
<PAGE> 7
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
June 30, 1996
(unaudited)
Readers of this Quarterly Report should refer to the Partnership's audited
financial statements for the fiscal year ended December 31, 1995, which are
included in the Partnership's 1995 Annual Report, as certain footnote
disclosures which would duplicate those contained in such audited financial
statements have been omitted from this Report.
(1) Organization and Basis of Accounting
Inland Land Appreciation Fund, L.P. (the "Partnership") was organized on
October 23, 1987 by the filing of a Certificate of Limited Partnership, which
was restated on August 25, 1988, under the Revised Uniform Limited Partnership
Act of the State of Delaware. On October 12, 1988, the Partnership commenced
an Offering of 10,000 (subject to increase to 30,000) Limited Partnership Units
pursuant to a Registration under the Securities Act of 1933. The Offering
terminated on October 6, 1989, with total sales of 30,000 Units at $1,000 per
Unit, resulting in $30,000,000 in gross offering proceeds, not including the
General Partner's contribution of $500 or the Initial Limited Partner's
contribution of $1,000. All of the holders of these Units have been admitted
to the Partnership. As of June 30, 1996, the Partnership has repurchased a
total of 240.75 Units for $219,636 from various Limited Partners through the
Unit Repurchase Program. Under this program Limited Partners may under certain
circumstances have their Units repurchased for an amount equal to their
Invested Capital. Inland Real Estate Investment Corporation is the General
Partner.
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 periods.
Actual results could differ from those estimates.
Deferred organization costs were amortized over a 60-month period. Offering
costs have been offset against the Limited Partners' capital accounts.
The Partnership considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents and are carried at
cost, which approximates fair value because of the relative short maturity of
these instruments.
Investments in land held by the Partnership are carried at the lower of
aggregate cost or net realizable value. Periodically, the Partnership reviews
the portfolio and if management determines that parcels suffered an impairment
in value which is deemed to be other than temporary, the carrying value of the
parcels would be reduced to their net realizable value through the direct
write-off method. Through June 30, 1996, there were no such impairments.
-7-
<PAGE> 8
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 1996
(unaudited)
Except as described in footnote (b) to Note (3) of these notes, the Partnership
uses the area method of allocation, which approximates relative sales method of
allocation, whereby a per acre price is used as the standard allocation method
for land purchases and sales. The total cost of parcel is divided by the total
number of acres to arrive at a per acre price.
The fair value of the mortgage loans receivable approximates their carrying
value due to their short term to maturity.
No provision for Federal income taxes has been made as the liability for such
taxes is that of the partners rather than the Partnership.
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets to Be Disposed Of" was issued in March 1995 and
is effective for fiscal years beginning after December 15, 1995. This
pronouncement is not expected to have a material effect on the financial
position or results of operations of the Partnership.
In the opinion of management, the financial statements contain all the
adjustments necessary, which are of a normal recurring nature, to present
fairly the financial position and results of operations for the periods
presented herein. Results of interim periods are not necessarily indicative of
results to be expected for the year.
(2) Transactions with Affiliates
The General Partner and its Affiliates are entitled to reimbursement for
salaries and expenses of employees of the General Partner and its Affiliates
relating to the administration of the Partnership. Such costs are included in
professional services to Affiliates and general and administrative expenses to
Affiliates, of which $1,505 and $13,440 was unpaid as of June 30, 1996 and
December 31, 1995, respectively.
-8-
<PAGE> 9
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 1996
(unaudited)
The General Partner is entitled to receive Asset Management Fees equal to one-
quarter of 1% of the original cost to the Partnership of undeveloped land
annually, limited to a cumulative total over the life of the Partnership of 2%
of the land's original cost to the Partnership. Such fees of $28,927 and
$28,861 have been incurred for the six months ended June 30, 1996 and 1995,
respectively, and are included in land operating expenses to Affiliates, of
which $0 and $415 was unpaid as of June 30, 1996 and December 31, 1995,
respectively.
An Affiliate of the General Partner performed marketing and advertising
services of the Partnership's land investments and was reimbursed (as set forth
under terms of the Partnership Agreement) for direct costs, all of which have
been paid as of June 30, 1996.
An Affiliate of the General Partner performed property upgrades, rezoning,
annexation and other activities to prepare the Partnership's land investments
for sale and was reimbursed (as set forth under terms of the Partnership
Agreement) for direct costs. Such costs of $27,027 and $59,042 have been
incurred for the six months ended June 30, 1996 and 1995, respectively, and are
included in investments in land and improvements, all of which have been paid
as of June 30, 1996.
-9-
<PAGE> 10
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(3) Investments in Land and Improvements
<TABLE>
<CAPTION>
Total
Gross Costs Remaining Current
Acres Purchase/ Initial Costs Capitalized Costs of Costs of Year Gain
-------------------------------------
Location: Purchased Sales Original Acquisition Subsequent to Property Parcels at on Sale
Parcel County /(Sold) Date Costs Costs Total Acquisition Sold 6/30/96 Recognized
- ------ --------- --------- --------- ----------- ------------- -------- ------------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 Kendall 84.7360 01/19/89 $ 423,680 61,625 485,305 1,118,788 - 1,604,093 -
2 McHenry 223.4121 01/19/89 650,000 95,014 745,014 16,762 611,505 150,271 -
(183.3759) 12/27/90
3 Kendall 20.0000 02/09/89 189,000 13,305 202,305 - 202,305 - -
(20.0000) 05/08/90
4 Kendall 69.2760 04/18/89 508,196 38,126 546,322 132,330 235,275 443,377 -
(.4860) 02/28/91
(27.5750) 08/25/95
5 Kendall (a) 372.2230 05/03/89 2,532,227 135,943 2,668,170 25,408 160,313 2,533,265 -
(Option) 04/06/90
6 Kendall (b) 78.3900 06/21/89 416,783 31,691 448,474 126,949 - 575,423 -
7 Kendall (b) 77.0490 06/21/89 84,754 8,163 92,917 111,371 - 204,288 -
8 Kendall (b) 5.0000 06/21/89 60,000 5,113 65,113 - 65,113 - -
(5.0000) 10/06/89
9 McHenry (b) 51.0300 08/07/89 586,845 22,482 609,327 585 - 609,912 -
10 McHenry (b) 123.9400 08/07/89 91,939 7,224 99,163 600 99,763 - -
(123.9400) 12/06/89
11 McHenry (b) 30.5920 08/07/89 321,216 22,641 343,857 5,404 - 349,261 -
12 Kendall 90.2710 10/31/89 907,389 41,908 949,297 65 7,456 941,906 -
(.7090) 04/26/91
13 McHenry 92.7800 11/07/89 251,306 19,188 270,494 2,767 - 273,261 -
14 McHenry 76.2020 11/07/89 419,111 23,402 442,513 42,570 - 485,083 -
15 Lake 84.5564 01/03/90 1,056,955 85,283 1,142,238 646,440 - 1,788,678
--------- ------- --------- --------- --------- --------- ---------
Subtotal 8,499,401 611,108 9,110,509 2,230,039 1,381,730 9,958,818 -
</TABLE>
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<PAGE> 11
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(3) Investments in Land and Improvements (continued)
<TABLE>
<CAPTION>
Total
Gross Costs Remaining Current
Acres Purchase/ Initial Costs Capitalized Costs of Costs of Year Gain
------------------------------------
Location: Purchased Sales Original Acquisition Subsequent to Property Parcels at on Sale
Parcel County /(Sold) Date Costs Costs Total Acquisition Sold 6/30/96 Recognized
- ------ --------- --------- -------- ---------- ------------- --------- ------------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subtotal 8,499,401 611,108 9,110,509 2,230,039 1,381,730 9,958,818 -
16 Kane/Kendall 72.4187 01/29/90 1,273,537 55,333 1,328,870 43,273 - 1,372,143 -
17 McHenry 99.9240 01/29/90 739,635 61,038 800,673 119,981 - 920,654 -
18 McHenry 71.4870 01/29/90 496,116 26,259 522,375 15,484 11,109 526,750 -
(.5000) 06/05/90
(.5000) 12/11/90
(.5200) 03/11/93
19 McHenry 63.6915 02/23/90 490,158 29,158 519,316 6,283 - 525,599 -
20 Kane 224.1480 02/28/90 2,749,800 183,092 2,932,892 200,014 3,651 3,129,255 -
(.2790) 10/17/91
21 Kendall 172.4950 03/08/90 1,327,459 75,822 1,403,281 64,507 - 1,467,788 -
22 McHenry 254.5250 04/11/90 2,608,881 136,559 2,745,440 21,683 - 2,767,123 -
23 Kendall 140.0210 05/08/90 1,480,000 116,240 1,596,240 390,015 1,196,909 789,346 6,306
(4.4100) var 1993
(35.8800) var 1994
(3.4400) var 1995
24 Kendall 298.4830 05/23/90 1,359,774 98,921 1,458,695 12,798 83,663 1,387,830 30,026
(12.4570) 05/25/90
(4.6290) 04/01/96
25 Kane 225.0000 06/01/90 2,600,000 168,778 2,768,778 13,190 - 2,781,968 -
------------ ------------ ------------ -------------- ------------ ------------- ------------
$23,624,761 1,562,308 25,187,069 3,117,267 2,677,062 25,627,274 36,332
============ ============ ============ ============== ============ ============= ============
</TABLE>
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<PAGE> 12
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(3) Investments in Land and Improvements (continued)
a. Included in the purchase agreement of Parcel 5 was a condition that
required the Partnership to buy an option to purchase an additional 243
acres immediately to the west of this parcel. The sale transaction
relates to the sale of this option.
b. The Partnership purchased from two third parties, two sets of three
contiguous parcels of land (Parcels 6,7 & 8; and Parcels 9, 10 and 11).
The General Partner believes that the total value of this land will
be maximized if it is treated and marketed to buyers as six separate
parcels and closed the transactions as six separate purchases to
facilitate this. Parcels 6, 7, and 8 will be treated as one parcel and
Parcels 9, 10 and 11 will be treated as one parcel for purposes of
computing Parcel Capital (as defined) and distributions to the Partners.
c. Reconciliation of real estate owned:
<TABLE>
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Balance at January 1,........... $24,846,973 24,106,379
Additions during period......... 803,086 1,069,759
Sales during period............. 22,785 329,165
----------- ----------
Balance at end of period........ $25,627,274 24,846,973
=========== ==========
</TABLE>
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<PAGE> 13
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 1996
(unaudited)
(4) Farm Rental Income
The Partnership has determined that all leases relating to the farm parcels are
operating leases. Accordingly, rental income is reported when earned.
As of June 30, 1996, the Partnership had farm leases of generally one year in
duration, for approximately 2,145 acres of the approximately 2,678 acres owned.
(5) Mortgage Loans Receivable
As a result of the sale of four lots in Parcel 23, the Partnership received
mortgage loans receivable totaling $155,921. As of December 31, 1995, two
mortgage loans receivable totaling $82,307 had been prepaid. During 1996 an
additional mortgage loan receivable of $37,952 was prepaid. The Partnership
will continue to receive interest only payments based on an interest rate of 9%
per annum on the remaining mortgage loan which has principal due in the fourth
quarter of 1996.
(6) Notes Payable to Affiliate
On May 1, 1996 and June 1, 1996, the Partnership obtained two separate lines of
credit from the General Partner, Inland Real Estate Investment Corporation, in
the aggregate amounts of $1,000,000 and $3,000,000, to be used specifically for
the pre-development improvements on two of the Partnership's land investments,
Parcel 15 and Parcel 1, respectively. As of June 30, 1996, notes payable to
Affiliate was $320,279, all of which was applicable to the note collateralized
by Parcel 15. The Partnership is required to pay a 1% loan fee to the General
Partner on each line of credit as money is funded. As of June 30, 1996, loan
fees paid to the General Partner totaled $3,203, all of which have been paid
and included in investment in land and improvements. The note collateralized
by Parcel 15, accrues interest at 10.9%, and requires a principal paydown of
$150,000 on October 1, 1996, and thereafter Net Sales Proceeds from Parcel 15
will be applied first to paydown the note. This note has a maturity date of May
1, 1997. The note collateralized by Parcel 1, accrues interest at 10.9%, and
requires monthly principal paydowns of $200,000 commencing January 1, 1997, and
thereafter Net Sales Proceeds from Parcel 1 will be applied first to paydown
the note. This note has a maturity date of June 30, 1998. As of June 30,
1996, accrued interest to the General Partner totaled $1,533, which is included
in investments in land and improvements, of which $1,533 was unpaid as of June
30, 1996.
-13-
<PAGE> 14
INLAND LAND APPRECIATION FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 1996
(unaudited)
(7) Subsequent Events
On August 8, 1996, the Partnership sold two lots in the Countryside Glen
Subdivision (Parcel 15) to unaffiliated third parties for a total of $159,980.
The cost allocated to these lots was approximately $120,000, resulting in a
gain on sale of approximately $40,500, net of closing costs.
-14-
<PAGE> 15
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
On October 12, 1988, the Partnership commenced an Offering of 10,000 (subject
to increase to 30,000) Limited Partnership Units pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933. The Offering
terminated on October 6, 1989, with total sales of 30,000 Units at $1,000 per
Unit, resulting in $30,000,000 in gross offering proceeds, not including the
General Partner's contribution of $500 or the Initial Limited Partner's
contribution of $1,000. The Limited Partners of the Partnership will share in
their portion of benefits of ownership of the Partnership's real property
investments according to the number of Units held.
The Partnership used $25,187,069 of gross offering proceeds to purchase, on an
all-cash basis, twenty-five parcels of undeveloped land and an option to
purchase undeveloped land. These investments included the payment of the
purchase price, acquisition fees and acquisition costs of such properties.
Fourteen of the parcels were purchased during 1989 and eleven during 1990. As
of June 30, 1996, the Partnership has had multiple sales transactions, through
which it has disposed of approximately 424 acres of the approximately 3,102
acres originally owned. As of June 30, 1996, cumulative distributions of net
sales proceeds have totaled $4,146,404 to the Limited Partners (which
represents a return of Invested Capital, as defined in the Partnership
Agreement) and $153,743 to the General Partner. As of June 30, 1996, the
Partnership has used $3,117,267 of working capital reserve for rezoning and
other activities and such amount is included in investments in land and
improvements.
The Partnership's capital needs and resources will vary depending upon a number
of factors, including the extent to which the Partnership conducts rezoning and
other activities relating to utility access, the installation of roads,
subdivision and/or annexation of land to a municipality, changes in real estate
taxes affecting the Partnership's land, and the amount of revenue received from
leasing. As of June 30, 1996, the Partnership owns, in whole or in part,
twenty-two of its original parcels, the majority of which are leased to local
tenants and are generating sufficient cash flow from leases to cover property
taxes and insurance.
At June 30, 1996, the Partnership had cash and cash equivalents of $47,590.
The Unit Repurchase Program has approximately $168,000 remaining for the
repurchase of Units. There are currently no requests for repurchase, but the
Partnership plans to replenish cash available for this program through future
parcel sales. The Partnership has increased its parcel sales effort in
anticipation of rising land values.
-15-
<PAGE> 16
The Partnership plans to enhance the value of its land through pre-development
activities such as rezoning annexation and land planning. The Partnership has
already been successful in, or is in the process of pre-development activity on
a majority of the Partnership's land investments. Parcel 1, zoned and its
preliminary plan approved by the Village of Oswego, has improvements underway
and sites are being marketed to potential buyers. Parcel 15, zoned and annexed
to the Village of Hawthorne Woods, also has improvements underway and sites are
being marketed to potential buyers. Two contracts are pending the buyers' due
diligence on Parcel 15. Reference is made to Note 7 of the Notes to Financial
Statements for further discussion on the sale of two lots of Parcel 15.
Results of Operations
As of June 30, 1996, the Partnership owned twenty-two parcels of land
consisting of approximately 2,678 acres. Of the 2,678 acres owned,
approximately 2,145 acres are tillable and leased to local farmers and are
generating sufficient cash flow to cover property taxes, insurance and other
miscellaneous expenses. The sale of investments in land income and the cost of
investments in land sold recorded for the three and six months ended June 30,
1995 is a result of the continued sale of lots of Parcel 23. The sale of
investments in land income and the cost of investments in land sold recorded
for the three and six months ended June 30, 1996 is a result of the sale of
4.629 acres of Parcel 24 and the prepayment of a mortgage loan receivable and
recognition of deferred gain relating to the 1994 lot sales of Parcel 23. The
decrease in rental income for the three and six months ended June 30, 1996, as
compared to three and six months ended June 30, 1995, is due to the decrease of
tillable acres and an overall decrease of the land portfolio as a result of
land sales and pre-development. This decrease was partially offset by the
annual increase in lease amounts from tenants. The decrease land operating
expenses to non- affiliates for the three and six months ended June 30, 1996,
as compared to the three and six months ended June 30, 1995, is due to
decreases in real estate taxes and grounds maintenance of the land portfolio as
a result of land sales.
Interest income decreased for the three and six months ended June 30, 1996, as
compared to the three and six months ended June 30, 1995, due primarily to the
Partnership utilizing its working capital reserve to fund pre-development
activity on the Partnership's land investments.
Professional services to non-affiliates increased for the three and six months
ended June 30, 1996, as compared to the three and six months ended June 30,
1995, due to an increase in in-house legal services.
Marketing expenses to Affiliates decreased for the three and six months ended
June 30, 1996, as compared to the three and six months ended June 30, 1995, due
to a decrease in expenses relating to marketing and advertising the
Partnership's land investments. Marketing expenses to non-affiliates increased
for the three and six months ended June 30, 1996, as compared to the three and
six months ended June 30, 1995, due to an increase in advertising and travel
expenses relating to marketing the land portfolio to prospective purchasers.
PART II
Items 1 through 6(b) are omitted because of the absence of conditions under
which they are required.
-16-
<PAGE> 17
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, thereunto duly authorized.
INLAND LAND APPRECIATION FUND, L.P.
By: Inland Real Estate Investment Corporation
General Partner
/S/ ROBERT D. PARKS
By: Robert D. Parks
Chairman
Date: August 12, 1996
/S/ PATRICIA A. CHALLENGER
By: Patricia A. Challenger
Senior Vice President
Date: August 12, 1996
/S/ CYNTHIA M. HASSETT
By: Cynthia M. Hassett
Principal Financial Officer and
Principal Accounting Officer
Date: August 12, 1996
-17-
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 47,590
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0
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