<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 March 31, 1999
Commission File Number 33-19736-A
CONDEV LAND FUND II, LTD.
-------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2862457
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(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_______
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CONDEV LAND FUND II, LTD.
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
PART I. FINANCIAL INFORMATION:
Statement of Assets, Liabilities and
Partner's Capital - March 31, 1999
and December 31, 1998 1
Statement of Income & Expense -
Three Months Ended March 31, 1999
and March 31, 1998 2
Statement of Cash Flows -
Three months ended March 31, 1999
and March 31, 1998 3
Notes to Financial Statements 4 - 5
Management's Discussion and Analysis
of Financial Condition and Results of Operations 5 - 7
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings 7
Item 6 Exhibits and Reports on Form 8-K 7
Signatures 8
First Quarter 1999 report to Limited Partners 9
</TABLE>
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PART I. FINANCIAL INFORMATION
CONDEV LAND FUND II, LTD.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
MARCH 31, 1999 AND DECEMBER 31, 1998
ASSETS
------
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
--------------- -----------------
(Unaudited) *
<S> <C> <C>
Cash & Cash Equivalents $ 79,934 $ 94,530
Accounts Receivable - 3,347
Prepaid expense 867 867
Land, at cost (Note 2) 2,769,311 2,571,774
Loan costs 3,094 3,094
Organization Costs 7,982 7,982
---------- ----------
Total Assets $2,861,188 $2,681,594
========== ==========
LIABILITIES AND PARTNER'S CAPITAL
---------------------------------
Mortgage note payable $ 230,806 $ 33,834
Accounts Payable 18,697 14,874
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249,503 48,708
Partners' Capital -
General Partner ( 3,402) ( 3,190)
Limited Partner 2,615,087 2,636,076
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Total Partners' Capital 2,611,685 2,632,886
---------- ----------
Total Liabilities and
Partners' Capital $2,861,188 $2,681,594
========== ==========
</TABLE>
* Condensed from audited financial statements.
The accompanying notes are an integral part of these financial statements
1
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CONDEV LAND FUND II, LTD.
STATEMENT OF INCOME AND EXPENSE
THREE MONTHS ENDED MARCH 31, 1999 AND MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, 1999 March 31, 1998
--------------- ---------------
<S> <C> <C>
INCOME
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Interest and Other Income $ 407 $ 1,932
---------- ----------
Total Income $ 407 $ 1,932
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OPERATING EXPENSES
------------------
Professional Services $ 9,000 $ 9,493
Office Expense 617 691
Management Fees 3,021 3,021
Interest expense 7,188 -
Other 1,782 243
---------- ----------
Total Operating Expenses $ 21,608 $ 13,448
---------- ----------
Net Income (Loss) ($ 21,201) ($ 11,516)
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
2
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CONDEV LAND FUND II, LTD.
STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999 AND MARCH 31, 1998
<TABLE>
<CAPTION>
March 31, 1999 March 31, 1998
--------------- --------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income ($ 21,201) ($ 11,516)
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 3,347 -
Accounts payable 3,822 ( 5,820)
--------- ----------
Net cash from Operating Activities ( 14,032) ( 17,336)
--------- ----------
Cash flows from Investing Activities:
Land development costs ( 197,537) ( 450)
Proceeds of Land sale, net - -
--------- ----------
Net cash from Investing Activities ( 197,537) ( 450)
--------- ----------
Cash flows from Financing Activities:
Increase in notes payable 196,973 -
Distributions to Partners ( -) ( -)
--------- ----------
Net cash provided by Financing Activities 196,973 ( -)
--------- ----------
Net increase (decrease) in cash ( 14,596) ( 17,786)
Cash and cash equivalents, beginning of year 94,530 168,989
--------- ----------
Cash and cash equivalents, end of period $ 79,934 $ 151,203
========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
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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 March 31, 1999 land consisted of the following:
8.659 acre parcel (zoned commercial) in
southeast Seminole County, Florida $ 830,072(a)
111.64 acre parcel (zoned PUD)
in Lake County, Florida 1,939,239(b)
----------
$2,769,311
==========
(a) This property is under contract with a developer who
intends to erect a grocery-anchored retail development on the
site. A commitment has been received from the main tenant, and
the buyer is in the process of obtaining the necessary
development permits. Closing on this contract is scheduled for
June, 1999.
(b) In January 1998, the Partnership entered into a contract
for sale of the 20-acre multi-family parcel in this planned
development. The buyer intends to erect 358 apartments on the
site. The closing on this parcel has been extended to June 30,
1999 because of delays in obtaining the development permits
necessary to extend sewer and water service to the property,
which is a condition of the Contract. The 71-acre single family
parcel is under contract with a developer, with a closing of June
30, 1999 scheduled. On December 3, 1998, the Partnership entered
into a contract for sale of the commercial parcel with an
experienced developer of anchored shopping centers. Terms of the
contract called for an inspection period until March 3, 1999. The
developer was unable to get a commitment from an anchor tenant,
so the contract was terminated. The property was immediately put
under contract with another developer who represented that it had
a tenant for the property. The inspection period under the new
contract is 120 days followed by closing in 90 days.
As a condition of these contracts for sale and purchase, 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. The cost of these
improvements is being financed under a secured line of
4
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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 three 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 quarter 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 three months ended
March 31, 1999, $461 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 three months ended March 31, 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 three
months ended March 31, 1999.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS:
------------------------------------
During the quarter ended March 31, 1999, the Partnership
continued to manage the portfolio properties with the objective
of selling the properties at fair market prices. As of March
31, 1999, all of the Partnerships properties were under contract
for sale. If these contracts close during 1999, as expected, 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.
5
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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. Completion
of necessary changes to the system is expected to be completed by
June, 1999. It is anticipated that the cost of evaluating the
current system and bringing it up to date to be year 2000
compliant will be 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 three months ended March 31, 1999 were
$407, compared with total revenues of $1,932 for the three months
ended March 31, 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 three months ended
March 31, 1999 were $21,608, an increase of $8,160 from $13,448
for the three months ended March 31, 1998. The 1999 quarter
results include $7,188 in interest expense. There were no
interest expenses in the comparable 1998 quarter as there was no
outstanding bank debt. See Liquidity and Capital Resources below.
-------------------------------
Other expenses, which remained at approximately the same level,
represent the costs of operating the Partnership and managing the
Partnership properties.
Liquidity and Capital Resources at March 31, 1999
-------------------------------------------------
Total assets increased from $2,681,584 at December 31, 1998 to
$2,861,188 at March 31, 1999. This reflects the cost of capital
improvements, specifically sewer and water service 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.
6
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Liquidity remained at a satisfactory level. Cash and
equivalents decreased from $94,530 at 1998 year-end to
$79,934 at March 31, 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 March 31, 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
First Quarter 1999 Report to Limited Partners
(B) Reports on Form 8-K
There were no reports of Form 8-K for the period ended March 31,
1998
7
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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
April 19, 1999 /s/ Robert N. Gardner
- ---------------------- ----------------------------------
DATE Robert N. Gardner, Partner
April 19, 1999 /s/ Joseph J. Gardner
- ---------------------- ----------------------------------
DATE Joseph J. Gardner, Partner
8
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April 13, 1999
Condev Land Fund II, Ltd.
First Quarter 1999
Dear Limited Partner:
The financial statements of the Partnership for the first 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 March 31, 1999, the net asset value
(book value) per unit of limited partner interest was $87.76. As of March 31,
1999, the Partnership owned or had an interest in two remaining properties:
Alafaya Trail/McCulloch Road. This property is under contract with a developer
- ----------------------------
who intends to erect a grocery-anchored retail development on the site. A
commitment has been received from the main tenant, and the buyer is in the
process of obtaining the necessary development permits. Closing on this contract
is scheduled for June, 1999.
Glenbrook P.U.D.. This property consists of three separate parcels: multi-
- ----------------
family, commercial, and single-family. The multi-family parcel is under contract
with a developer of affordable apartments. Originally scheduled to close in
December, 1998 this contract has been 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. The 71-acre single family site is under
contract with a closing date of June 30, 1999 scheduled. On December 3, 1998,
the Partnership entered into a contract for sale of the commercial parcel with
an experienced developer of anchored shopping centers. Terms of the contract
called for an inspection period until March 3, 1999, and closing 120 days
thereafter. The developer was unable to get a commitment from an anchor tenant,
so the contract was terminated. The property was immediately put under contract
with another developer who represented that it had a tenant for the property.
The inspection period under the new contract is 120 days 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 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.
We hope that the remaining parcels will be sold during 1999. If that is the
case, there will be a final distribution to limited partners and the Partnership
will be terminated.
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
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 79,934 168,989
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 2,769,311 2,515,801
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 2,861,188 2,692,772
<CURRENT-LIABILITIES> 249,503 5,820
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 2,611,685 2,686,952
<TOTAL-LIABILITY-AND-EQUITY> 2,861,188 2,692,772
<SALES> 0 0
<TOTAL-REVENUES> 407 1,932
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 21,608 13,448
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (21,201) (11,516)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (21,201) (11,516)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (21,201) (11,516)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
