<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, 1998
Commission File Number 33-28493-A
CONDEV LAND FUND III, LTD.
--------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-2943405
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(State or other jurisdiction of (I.R.S. Employer
incorporation of 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 III, LTD.
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION:
Statement of Assets, Liabilities and
Partner's Capital - June 30, 1998
and December 31, 1997 1
Statement of Income & Expense -
Three Months Ended June 30, 1998
and June 30, 1997 2
Statement of Income & Expense -
Six Months Ended June 30, 1998
and June 30, 1997 3
Statement of Cash Flows -
Six Months ended June 30, 1998
and June 30, 1997 4
Notes to Financial Statements 5 - 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 - 8
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
Second Quarter 1998 Report to Limited Partners 10
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PART I. FINANCIAL INFORMATION
CONDEV LAND FUND III, LTD.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
JUNE 30, 1998 AND DECEMBER 31, 1997
ASSETS
------
June 30, 1998 December 31, 1997
-------------- -----------------
(Unaudited) *
Cash and Cash Equivalents $ 85,135 $ 90,357
Accounts Receivable - 2,494
Investment in Joint Venture (2) 532,055 534,372
Land, at cost (3) 405,467 405,467
Organization Costs 2,311 2,311
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Total Assets: $1,024,968 $1,035,001
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Liabilities $ 0 $ 487
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Partner's Capital:
General Partner $ (833) $ (738)
Limited Partners 1,025,801 1,035,252
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Total Partners' Capital: $1,024,968 $1,034,514
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Total Liabilities and Partners'
Capital: $1,024,968 $1,035,001
========== ==========
* Condensed from audited financial statements.
The accompanying notes are an integral part of these financial statements
1
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CONDEV LAND FUND III, LTD.
STATEMENT OF INCOME AND EXPENSE
THREE MONTHS ENDED JUNE 30, 1998 AND JUNE 30,1997
(UNAUDITED)
June 30, 1998 June 30, 1997
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INCOME
------
Interest and Other Income $2,410 $ 4,223
Equity in Income of Joint Venture 0 0
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Total Income $2,410 $ 4,223
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OPERATING EXPENSES
------------------
Professional fees - -
Equity in loss of Joint Venture 68 34,952
Management fees 936 1,872
Other expense 16 12
Office expense 1,339 1,062
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Total Operating Expenses: $2,359 $ 37,898
------ --------
Net Profit (Loss) $ 51 $(33,675)
====== ========
The accompanying notes are an integral part of these financial statements
2
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CONDEV LAND FUND III, LTD.
STATEMENT OF INCOME AND EXPENSE
SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997
(UNAUDITED)
June 30, 1998 June 30, 1997
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INCOME
------
Interest and Other Income $ 3,658 $ 5,209
Equity in Income of Joint Venture - -
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Total Income $ 3,658 $ 5,209
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OPERATING EXPENSES
------------------
Professional fees 7,100 7,000
Equity in loss of Joint Venture 2,317 21,830
Management fees 1,872 1,872
Other expense 43 51
Office expense 1,872 2,738
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Total Operating Expenses: $13,204 $ 33,491
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Net Profit (Loss) $(9,546) $(28,282)
======= ========
The accompanying notes are an integral part of these financial statements
3
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CONDEV LAND FUND III, LTD.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997
June 30, 1998 June 30, 1997
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Cash Flows from Operating Activities:
Net Income (Loss) $(9,546) $ (28,282)
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities:
Equity in (income) loss of
joint venture 2,317 21,830
Cash provided by changes in:
Accounts receivable 2,494 -
Accounts payable (487) -
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Net Cash Provided in Operating Activities: $(5,222) $ (6,452)
Cash Flows from Investing Activities:
Distributions from joint venture, net $ 0 $ 810,000
Investments in joint venture 0 0
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Net Cash Used in Investing Activities: $ 0 $ 810,000
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Cash Flows from Financing Activities:
Distributions to Partners $ (0) $(799,940)
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Net Cash Provided by Financing Activities: $ (0) $(799,940)
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Net increase (decrease) in Cash $(5,222) $ 3,608
Cash and cash equivalents, beginning of year 90,357 101,678
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Cash and cash equivalents, end of period $85,135 $ 105,286
======= =========
The accompanying notes are an integral part of these financial statements
4
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CONDEV LAND FUND III, LTD.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1 BASIS OF PRESENTATION.
---------------------
The accompanying financial statements, in the opinion of Condev
Associates, the general partner of Condev Land Fund III, 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 JOINT VENTURE:
---------------------------
The Partnership owns a 90% interest in Condev Osceola Joint Venture.
The joint venture partner, Condev Osceola, Ltd., is a private
partnership sponsored by the general partner. On May 31, 1991,
Condev Osceola Joint Venture purchased two parcels of land
aggregating 8.6 acres and related sewer capacity within the
Kyng's Heath commercial subdivision on S.R. 535 near its
intersection with Highway 192 in Osceola County, Florida. The
property is zoned tourist-commercial in Osceola County, Florida.
On August 28, 1996, the Joint Venture sold 5.08 acres of this parcel
to Orlando Resort Development Group for $350,000 cash and a
promissory note in the amount of $900,000. The note was repaid
in full in April 1997.
The Joint Venture continues to own 2.94 acres of land in this
location.
A summary of the assets, liabilities and venturers' capital of Condev
Osceola Joint Venture as of June 30, 1998 are as follows:
ASSETS
------
Cash $ 1,458
Investments in land 589,714
--------
$591,172
========
LIABILITIES AND VENTURERS' CAPITAL
----------------------------------
Venturers' Capital 593,747
Current Profit (Loss) (2,575)
--------
$591,172
========
5
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Note 3 INVESTMENT IN LAND:
-------------------
At June 30, 1998 and December 31, 1997, land consisted of a ten-acre
parcel, zoned commercial in Lake County, Florida,
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 1998.
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 second
quarter of 1998.
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 six months ended June 30,
1998, a total of $2,334 was reimbursed to the general partner for
direct expenses incurred.
When properties are sold, 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
the general partner or any affiliate during the six months ended
June 30, 1998
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, 1998.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
During the six months ended June 30, 1998, the Partnership continued
to manage the portfolio properties with the objective of selling the
properties at fair market prices. While there are no properties
currently under contract for sale, the properties are well-positioned
in their markets, and activity in the immediate area of each property
is vigorous.
The area of Lake County, Florida in which the Partnership's 10-acre
parcel is located has experienced heightened activity in recent
months. The key to selling this site appears to be the availability of
utilities to support commercial development. The Partnership has filed
for the necessary permits for the extension of sewer and water
utilities to the site. Completion is anticipated during the third
quarter of 1998. The general partner is working with the area utility
company and neighboring landowners to insure that every property's
needs are met and that the costs of these improvements are shared
equitably.
Results of Operations
---------------------
Total revenues for the six months ended June 30, 1998 were $3,658,
compared with total revenues of $5,209 for the six months ended June
30, 1997. The primary reason for the decline is lower interest income
on short-term bank deposits. Total expenses for the six month period
were $13,204 as compared with total expenses in the 1997 period of
$33,491. This is due to an improvement in the equity in the net loss
of the Partnership's joint venture, which decreased from $21,830 in
the first six months of 1997 to $2,317 in the comparable 1998 period.
During the first quarter of 1997 the joint venture held a mortgage
note from Orlando Resort Development Group relating to the sale of
part of the joint venture's land at Kyng's Heath. The note was repaid
in full, together with accrued interest, in April 1997. During the
second quarter of 1997, deferred real estate commissions in the amount
of $45,000 due upon repayment of the mortgage were paid to non-
affiliated real estate brokers. The 1997 result reflects interest
income from the mortgage note and the deferred commission expense.
Other operating expenses remained relatively constant from period to
period. Operating expenses represent the normal costs of operating the
Partnership and managing the Partnership properties.
Liquidity and Capital Resources at June 30, 1998
------------------------------------------------
Total assets decreased from $1,035,001 at December 31, 1997 to
$1,024,968 at June 30, 1998. This reflects 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.
7
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Liquidity remained at a satisfactory level. Cash and equivalents
decreased slightly from $90,357 at 1997 year-end to $85,135 at June
30, 1998.
PART II
Item 1. LEGAL PROCEEDINGS:
-----------------
As of June 30, 1998, 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 1998 Report to Limited Partners
(B) Reports on Form 8-K
There were no reports of Form 8-K for the period ended June 30,
1998
8
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CONDEV LAND FUND III, 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 III, LTD.
BY: Condev Associates, General Partner
July 23, 1998 /s/ Robert N. Gardner
- ---------------------- ---------------------------------
DATE Robert N. Gardner, Partner
July 23 , 1998 /s/ Joseph J. Gardner
- ---------------------- ----------------------------------
DATE Joseph J. Gardner, Partner
9
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July 14, 1998
Condev Land Fund III, Ltd.
Second Quarter 1998
The financial statement, on the reverse side hereof, shows a net loss for the
six months ended June 30, 1998 of $9,546. This represents interest income from
short term investments less the normal costs of operating the partnership and
managing the portfolio properties. There were no sales of property during the
first six months of 1998. As of June 30, 1998, the net asset value per unit of
limited partner interest was $104.84. The following is a brief description of
the status of each of the partnership's two remaining properties:
Kyng's Heath. The World Golf Center being developed by Edwin Watts on the
- ------------
property adjoining this site has received preliminary approval, and is now in
the final design stage. When finished, this 80,000 square foot facility will
include a Sam Snead's Tavern, golf museum/photo collection, and a 30,000 square
foot superstore. Eventually, an indoor teaching facility will be added. The
complex is currently scheduled to open in April, 1999. We continue to work with
interested purchasers as they are identified, but there is no contract pending
at this time.
U.S. Highway 27. This is a 10-acre commercially zoned parcel located
- ---------------
approximately 1 1/4 miles north of U.S. Highway 192 in Lake County, Florida. The
neighboring Winn-Dixie Marketplace shopping center is now open for business, and
a new apartment complex is under construction nearby. This should generate
additional purchaser interest in the Partnership's property. The Partnership has
filed for the necessary permits for the extension of sewer and water utilities
to the site. Completion is anticipated during the third quarter of 1998. The
general partner is working with the area utility company and neighboring
landowners to insure that every property's needs are met and that the costs of
these improvements are shared equitably.
We are hopeful that favorable sales results will be achieved in the coming
months.
Sincerely yours,
CONDEV ASSOCIATES
10
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<PAGE>
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<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> JUN-30-1998 JUN-30-1997
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<INCOME-CONTINUING> (9,546) (28,282)
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