<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 quarterly period ended June 30, 1999
Commission File Number 33-19736-A
CONDEV LAND FUND II, LTD.
(Exact name of registrant as specified in its charter)
Florida 59-2862457
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2479 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
---- ----
<PAGE>
CONDEV LAND FUND II, LTD.
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PART I. FINANCIAL INFORMATION:
Statement of Assets, Liabilities and
Partner's Capital - June 30, 1999
and December 31, 1998 1
Statement of Income & Expense -
Three Months Ended June 30, 1999
and June 30, 1998 2
Statement of Income & Expense -
Six Months Ended June 30, 1999
and June 30, 1998 3
Statement of Cash Flows -
Six months ended June 30, 1999
and June 30, 1998 4
Notes to Financial Statements 5 - 6
Management's Discussion and Analysis
of Financial Condition and Results of Operations 6 - 8
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings 8
Item 6 Exhibits and Reports on Form 8-K 8
Signatures 9
Second Quarter 1999 report to Limited Partners 10
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
CONDEV LAND FUND II, LTD.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
JUNE 30, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS
------
June 30, 1999 December 31, 1998
------------- -----------------
(Unaudited) *
<S> <C> <C>
Cash & Cash Equivalents $ 82,253 $ 94,530
Accounts Receivable 335,771 3,347
Prepaid expense 867 867
Land, at cost (Note 2) 2,750,531 2,571,774
Loan costs 3,094 3,094
Organization Costs 7,982 7,982
---------- ----------
Total Assets $3,180,498 $2,681,594
========== ==========
LIABILITIES AND PARTNER'S CAPITAL
---------------------------------
Mortgage note payable $ 517,806 $ 33,834
Accounts Payable 47,767 14,874
---------- ----------
565,573 48,708
Partners' Capital -
General Partner (3,370) (3,190)
Limited Partner 2,618,295 2,636,076
---------- ----------
Total Partners' Capital 2,614,925 2,632,886
---------- ----------
Total Liabilities and
Partners' Capital $3,180,498 $2,681,594
========== ==========
</TABLE>
- -------------
* Condensed from audited financial statements.
The accompanying notes are an integral part of these financial statements
1
<PAGE>
CONDEV LAND FUND II, LTD.
STATEMENT OF INCOME AND EXPENSE
THREE MONTHS ENDED JUNE 30, 1999 AND JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
INCOME
- ------
Interest and Other Income $ 2,183 $ 3,219
--------- ---------
Total Income $ 2,183 $ 3,219
--------- ---------
OPERATING EXPENSES
- ------------------
Professional Services $ 100 $ -
Office Expense 2,029 1,991
Management Fees 3,021 3,021
Other (6,207) 298
--------- ---------
Total Operating Expenses $ (1,057) $ 5,310
--------- ---------
Net Income (Loss) $ (3,240) $ (2,091)
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
2
<PAGE>
CONDEV LAND FUND II, LTD.
STATEMENT OF INCOME AND EXPENSE
SIX MONTHS ENDED JUNE 30, 1999 AND JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
INCOME
- ------
Interest and Other Income $ 1,351 $ 5,151
---------- ----------
Total Income $ 1,351 $ 5,151
---------- ----------
OPERATING EXPENSES
- ------------------
Professional Services $ 9,100 $ 9,373
Office Expense 2,645 2,682
Management Fees 6,042 6,042
Other 1,524 660
---------- ----------
Total Operating Expenses $ 19,311 $ 18,757
---------- ----------
Net Income (Loss) $ (17,960) $ (13,606)
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
CONDEV LAND FUND II, LTD.
STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999 AND MARCH 31, 1998
<TABLE>
<CAPTION>
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ (17,960) $ (13,606)
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities:
Gain on land sale (-) (-)
Cash provided by changes in:
Accounts Receivable (332,424) -
Accounts payable 32,893 (5,820)
---------- ----------
Net cash from Operating Activities (317,491) (19,426)
---------- ----------
Cash flows from Investing Activities:
Land development costs (178,757) (23,618)
Proceeds of Land sale, net - -
---------- ----------
Net cash from Investing Activities (178,757) (23,618)
---------- ----------
Cash flows from Financing Activities:
Increase in notes payable 483,971 -
Distributions to Partners (-) (-)
---------- ----------
Net cash provided by Financing Activities 483,971 (-)
---------- ----------
Net increase (decrease) in cash (12,277) (43,044)
----------
Cash and cash equivalents, beginning of year 94,530 168,989
---------- ----------
Cash and cash equivalents, end of period $ 82,253 $ 125,945
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
4
<PAGE>
CONDEV LAND FUND II, LTD.
NOTES TO FINANCIAL STATEMENTS
Note 1. BASIS OF PRESENTATION:
---------------------
The accompanying financial statements, in the opinion of Condev Associates, the
general partner of Condev Land Fund II, 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.
Note 2. INVESTMENT IN LAND:
------------------
At June 30, 1999 land consisted of the following:
8.659 acre parcel (zoned commercial) in
southeast Seminole County, Florida $ 832,532(a)
111.64 acre parcel (zoned PUD)
in Lake County, Florida 1,917,999(b)
----------
$2,769,311
==========
(a) This property has been under contract with a successful developer
of retail sites since May 1998. Closing is scheduled for July 28, 1999. The
financial details of the transaction are currently being reviewed by the
Partnership's auditors, and it is anticipated that a distribution will be made
to limited partners in mid-August, 1999.
(b) This property consists of three separate parcels: multi-family,
commercial, and single-family. The multi-family parcel has been under contract
with a developer of affordable apartments since January 1998. Originally
scheduled to close in December, 1998 this contract was extended to allow the
general partner time to complete the required sewer, water and other off-site
improvements pursuant to the terms of the sales contract. These improvements are
now substantially complete. In June, 1999, the Partnership was advised by the
contract buyer that the Florida Housing Finance Authority was in disagreement
with the Buyer over funding of this project, and the Buyer is attempting to
resolve his differences with the FHFA. In the meantime, the Contract has lapsed,
and it is uncertain as to whether the Partnership will be able to agree on
satisfactory terms with the buyer. The 71-acre single family site is under
contract with a closing date now rescheduled for July 30, 1999. However, the
buyer has requested an additional extension of the closing date for six months.
The Partnership is negotiation with the contracat holder, but there can be no
assurance that a satisfactory arrangement can be concluded. The 20-acre
commercial tract is under contract with a developer specializes in retail
development. The inspection period under this contract is until August 14, 1999
followed by closing in 90 days.
5
<PAGE>
As a condition of the Glenbrook contracts for sale, the Partnership has agreed
to extend sewer and water service to the properties, to design and construct a
spine road from U.S. Highway 27 into the development, and to construct a lift
station to serve the property after development. These improvements, now
substantially complete, are being financed under a secured line of credit
established by the Partnership with a commercial bank. The cost of these
improvements has been added to the purchase price of the contracts for sale, and
borrowings under the line of credit will be repaid from sales proceeds.
Note 3. 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 1999.
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. There were no such distributions to limited
partners during the first two quarters of 1999.
Note 4. RELATED PARTY TRANSACTIONS:
--------------------------
The Partnership Agreement provides for the reimbursement to the general partner
for direct administrative expenses incurred in the operation of the partnership.
For the six months ended June 30, 1999, $1,008 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 nonaffiliated brokers not to exceed 10% of the gross sales
price. No real estate commissions were paid to any affiliate of the general
partner during the six months ended June 30, 1999.
The general partner is obligated to loan up to $100,000 to the Partnership
during its term to meet working capital requirements. No such loans were made to
the Partnership during the six months ended June 30, 1999.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS:
- -----------------------------------
Since all of the property owned by the Partnership were under contract for sale
during the quarter ended June 30, 1999, the General Partner's main focus was on
bringing the
6
<PAGE>
pending transactions to a successful conclusion. As discussed under Note 2,
-------
Investment in Land some delays were encountered. It is believed that the current
- ------------------
obstacles to closing can be overcome. Upon sale of the remaining Partnership
properties, the Partnership will repay all of its financial obligations and a
final distribution of Partnership cash resources will be made to limited
partners, and the partnership will be dissolved.
Year 2000
- ---------
The Partnership is heavily dependent upon a computer system to accurately
maintain limited partner records, including name and address information, number
of units owned, and distribution historical records. The Partnership is
utilizing a system which was specially designed for the Partnership in 1990, and
it is possible that the system will be affected by the date change which will
occur at the end of 1999. The Partnership has engaged a computer consultant to
evaluate the potential problems, and make system changes if necessary so the
operation of the Partnership will not be affected by the date change. Work on
modifying the computer system was completed in June, 1999. The cost of
evaluating the current system and bringing it up to date to be year 2000
compliant was less than $1,000. The Partnership's computer records are backed up
on a weekly basis, so all of the stored information is available from a
secondary source. Even if the system were to be completely shut down by the date
change at the end of 1999, the data necessary to continue operation of the
Partnership is available and could readily be adapted to a new system which is
year 2000 compliant, so no significant interruption in the operations of the
Partnership is anticipated.
Results of Operations
- ---------------------
Total revenues for the six months ended June 30, 1999 were $1,351, compared with
total revenues of $5,151 for the six months ended June 30, 1998. Income is
generated from short-term cash investments, and income can be expected to
fluctuate, depending on the level of cash reserves in the Partnership and
prevailing interest rates. Operating expenses for the six months ended June 30,
1999 were $19,311, essentially unchanged from $18,757 for the six months ended
June 30, 1998. The Partnership had committed to certain improvements to the site
located in Lake County, and the cost of these improvements is being financed
under a secured line of credit from a bank. See Liquidity and Capital Resources
-------------------------------
below. In accordance with applicable accounting policies, interest is being
capitalized.
Liquidity and Capital Resources at June 30, 1999
- ------------------------------------------------
Total assets increased from $2,681,584 at December 31, 1998 to $3,180,498 at
June 30, 1999. This reflects the cost of capital improvements, specifically
sewer and water service
7
<PAGE>
plus the construction of a spine road in to the Glenbrook Planned Development,
partially offset by the net results of operations for the period. Assets can be
expected to decline in the future as properties are sold and distributions are
made to limited partners.
Liquidity remained at a satisfactory level. Cash and equivalents decreased from
$94,530 at 1998 year-end to $82,253 at June 30, 1999. As provided in the
Partnership Agreement, if necessary liquid reserves can be augmented from net
sales proceeds from land sales.
As discussed above, the Partnership is in the process of extending sewer and
water utilities and constructing a spine road in to the Glenbrook Planned
Development. The Partnership has arranged a $500,000 secured line of credit with
a commercial bank to pay for its pro rata share of expenses. Borrowings under
the line of credit will be repaid from future land sales proceeds.
PART II
Item 1. LEGAL PROCEEDINGS
-----------------
As of June 30, 1999, there were no legal proceedings in process, nor to
the knowledge of the general partner, threatened against the
Partnership
Item 6. EXHIBITS AND REPORTS ON FORM 8-K:
--------------------------------
(A) Exhibits
Second Quarter 1999 Report to Limited Partners
(B) Reports on Form 8-K
There were no reports of Form 8-K for the period ended June 30,
1999
8
<PAGE>
CONDEV LAND FUND II, 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 FUND II, LTD.
BY: Condev Associates, General Partner
July 26, 1999 /s/ Robert N. Gardner
- --------------------- ------------------------------
DATE Robert N. Gardner, Partner
July 26, 1999 /s/ Joseph J. Gardner
- --------------------- ------------------------------
DATE Joseph J. Gardner, Partner
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CURRENCY> 0
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> JUN-30-1999 JUN-30-1998
<EXCHANGE-RATE> 1.00 1.00
<CASH> 82,253 125,945
<SECURITIES> 0 0
<RECEIVABLES> 335,771 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 2,750,531 2,539,419
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 3,180,498 2,673,346
<CURRENT-LIABILITIES> 565,573 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 2,614,925 2,673,346
<TOTAL-LIABILITY-AND-EQUITY> 3,180,498 2,673,346
<SALES> 0 0
<TOTAL-REVENUES> 1,351 5,151
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 19,311 18,757
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (17,960) (13,606)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (17,960) (13,606)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (17,960) (13,606)
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
</TABLE>
<PAGE>
July 26, 1999
Condev Land Fund II, Ltd.
Second Quarter 1999
Dear Limited Partner:
The financial statements of the Partnership for the second quarter of 1999 are
on the reverse side hereof. There were no sales of property and no distributions
to limited partners during the quarter. As of June 30, 1999, the net asset value
(book value) per unit of limited partner interest was $87.87. As of June 30,
1999, the Partnership owned or had an interest in two remaining properties:
Alafaya Trail/McCulloch Road. This property has been under contract with a
- ----------------------------
successful developer of retail sites since May 1998. Closing is scheduled for
July 28, 1999. The financial details of the transaction are currently being
reviewed by the Partnership's auditors, and it is anticipated that a
distribution will be made to limited partners in mid-August, 1999.
Glenbrook P.U.D.. This property consists of three separate parcels: multi-
- ----------------
family, commercial, and single-family. The multi-family parcel has been under
contract with a developer of affordable apartments since January 1998.
Originally scheduled to close in December, 1998 this contract was extended to
allow the general partner time to complete the required sewer, water and other
off-site improvements pursuant to the terms of the sales contract. These
improvements are now substantially complete. In June, 1999, the Partnership was
advised by the contract buyer that the Florida Housing Finance Authority was in
disagreement with the Buyer over funding of this project, and the Buyer is
attempting to resolve his differences with the FHFA. In the meantime, the
contract has lapsed, and it is uncertain as to whether we will be able to agree
on satisfactory terms with the buyer. The 71-acre single family site is under
contract with a closing date now rescheduled for July 30, 1999. However, the
buyer has requested an additional extension of the closing date for six months.
The Partnership is negotiation with the contract holder, but there can be no
assurance that a satisfactory arrangement can be concluded. The 20-acre
commercial tract is under contract with a developer specializes in retail
development. The inspection period under this contract is until August 14, 1999
followed by closing in 90 days.
As a condition of the Glenbrook contracts for sale, the Partnership has agreed
to extend sewer and water service to the properties, to design and construct a
spine road from U.S. Highway 27 into the development, and to construct a lift
station to serve the property after development. These improvements, now
substantially complete, are being financed under a secured line of credit
established by the Partnership with a commercial bank. The cost of these
improvements has been added to the purchase price of the contracts for sale, and
borrowings under the line of credit will be repaid from sales proceeds.
Please feel free to contact the Investor Relations office if you have any
questions or would like additional information concerning your investment.
Sincerely yours,
CONDEV ASSOCIATES
