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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 33-28493-A
CONDEV LAND FUND III, LTD.
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(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, 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 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 1999 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, 1999 AND DECEMBER 31, 1998
ASSETS
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June 30, 1999 December 31, 1998
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(Unaudited) *
Cash and Cash Equivalents $ 64,189 $ 67,118
Accounts Receivable - -
Investment in Joint Venture (2) - 533,596
Land, at cost (3) 454,196 405,625
Organization Costs 2,311 2,311
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Total Assets: $520,696 $1,008,650
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LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Liabilities
Accounts Payable $ 48,571 $ -
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Partner's Capital:
General Partner $ (882) $ (996)
Limited Partners 473,007 1,009,646
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Total Partners' Capital: $472,125 $1,008,650
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Total Liabilities and Partners'
Capital: $520,696 $1,008,650
======== ==========
* 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, 1999 AND JUNE 30, 1998
(UNAUDITED)
June 30, 1999 June 30, 1998
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INCOME
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Interest and Other Income $ 573 $2,410
Equity in Income of Joint Venture 22,793 -
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Total Income $23,366 $2,410
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OPERATING EXPENSES
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Professional fees - -
Equity in loss of Joint Venture - 68
Management fees 936 936
Other expense - 16
Office expense 1,539 1,339
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Total Operating Expenses: $ 2,475 $2,359
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Net Profit (Loss) $20,891 $ 51
======= ======
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, 1999 AND JUNE 30, 1998
(UNAUDITED)
June 30, 1999 June 30, 1998
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INCOME
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Interest and Other Income $ 1,277 $ 3,658
Equity in Income of Joint Venture 20,993 -
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Total Income $22,270 $ 3,658
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OPERATING EXPENSES
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Professional fees 7,000 7,100
Equity in loss of Joint Venture - 2,317
Management fees 1,872 1,872
Other expense 250 43
Office expense 1,769 1,872
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Total Operating Expenses: $10,891 $ 13,204
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Net Profit (Loss) $11,379 $ (9,546)
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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
THREE MONTHS ENDED MARCH 31, 1999 AND MARCH 31, 1998
March 31, 1999 March 31, 1998
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Cash Flows from Operating Activities:
Net Income (Loss) $ 11,379 $(9,546)
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities:
Equity in (income) loss of
joint venture (20,993) 2,317
Cash provided by changes in:
Accounts receivable - 2,494
Accounts payable 48,571 (487)
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Net Cash Provided in Operating Activities: $ 38,957 $(4,234)
Cash Flows from Investing Activities:
Capitalized land related costs $ (48,571) $ -
Investments in joint venture 554,589 -
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Net Cash Used in Investing Activities: $ 506,018 $ -
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Cash Flows from Financing Activities:
Distributions to Partners $(547,904) $ (-)
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Net Cash Provided by Financing Activities: $(547,904) $ (-)
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Net increase (decrease) in Cash $ (2,929) $(5,222)
Cash and cash equivalents, beginning of year 67,118 90,357
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Cash and cash equivalents, end of period $ 64,189 $85,135
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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:
Until the sale of Condev Osceola Joint Venture's last parcel of land, the
partnership owned a 90% interest in Condev Osceola Joint Venture. On April 23,
1999, Condev Osceola Joint Venture concluded the sale of its 2.94 acre tract of
land in the Kyng's Heath subdivision on SR 535 and US Hwy 192 in Osceola County,
Florida. The buyer was Sierra Land Company, and the purchase price was $700,000.
After expenses of the sale, which included legal fees, closing costs and a 10%
real estate commission paid to non-affiliated real estate brokers, the Joint
Venture realized net proceeds of $617,039.74. The Joint Venture has distributed
a total of $606,000 of the net proceeds to the Joint Venture partners, including
$545,400 to Condev Land Fund III, Ltd. and $60,600 to Condev Osceola, Ltd. In
turn, the Partnership is distributing a total of $547,904, or $56 per unit to
limited partners at this time. Since this was the last parcel of land owned by
Condev Osceola Joint Venture, the Joint Venture was terminated.
Note 3 INVESTMENT IN LAND:
At June 30, 1999 and December 31, 1998, land consisted of a ten-acre parcel,
zoned commercial in Lake County, Florida. As part of the Partnership's
commitment to design and construct an entry road from US Hwy 27 to service the
property, approximately 0.354 acres of land was used for construction of the
spine road. This road was dedicated to Lake County on December 29, 1998,
reducing the property size to 9.646 acres. On March 8, 1999, the Partnership
entered into a contract for sale of this parcel with the neighboring property
owner. The Buyer requested a 15-day extension of the Closing date pursuant to
the terms of the contract. This request was granted. The Buyer asked for an
additional 15 day extension, but to date has not been willing to accept the
Partnership's terms for the extension. Notice has been given to the Buyer that
the contract is no longer in effect.
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
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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 5a 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, 1999, a total of $ 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,
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.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATIONS
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During the six months ended June 30, 1999, the Partnership continued
to manage the portfolio properties with the objective of selling the properties
at fair market prices. As discussed in Note 2 above, Condev Osceola Joint
Venture was terminated after its only remaining property was sold and the net
proceeds were distributed to limited partners. As discussed in Note 3 above, the
Partnership's is currently attempting to work out a satisfactory solution for
sale of its remaining property. In the interim, the Contract Buyer has been
notified that the contract has lapsed and is no longer in effect. If the General
Partner is successful in coming to terms with the prospective buyer and the
transaction closes, there will be a final distribution to limited partners and
the Partnership will be terminated
Year 2000
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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 revisions to the system is 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 $22,270, compared
with total revenues of $3,658 for the six months ended June 30, 1998. The 1999
period included equity in the income of Joint Venture in the amount of $20,993.
See Joint Venture below. Other 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 $10,891, a decrease from
$13,294 for the six months ended June 30 31, 1998. In both periods, operating
expenses
7
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represent the normal costs of operating the Partnership and managing the
Partnership properties.
Joint Venture. For the six months ended June 30, 1999, Condev Osceola Joint
- -------------
Venture had one sale of land in the amount of $700,000, and reported a net
profit of $23,325. Having sold its only remaining land, the Joint Venture
distributed all of its cash to the joint venture partners and was terminated.
Liquidity and Capital Resources at March 31, 1999
- -------------------------------------------------
Total assets decreased from $1,008,650 at December 31, 1998 to $520,696 at June
30, 1999. This reflects the sale of property and liquidation of Condev Osceola
Joint Venture and 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 cash equivalents decreased
slightly from $67,118 at 1998 year-end to $64,189 at June 30, 1999.
If the Partnership is successful in selling its one remaining property, the
Partnership will finalize all of its financial obligations and will make a final
distribution to the partners, whereupon the Partnership will be terminated.
PART II
Item 1. LEGAL PROCEEDINGS:
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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
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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 19, 1999 /s/ Robert N. Gardner
- ------------- ----------------------------
DATE Robert N. Gardner, Partner
July 19, 1999 /s/ Joseph J. Gardner
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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> 64,189 85,135
<SECURITIES> 0 0
<RECEIVABLES> 0 2,494
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 454,196 405,467
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 520,696 1,024,968
<CURRENT-LIABILITIES> 48,572 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 472,125 1,024,968
<TOTAL-LIABILITY-AND-EQUITY> 520,696 1,024,968
<SALES> 0 0
<TOTAL-REVENUES> 22,270 3,658
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 10,891 13,204
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 11,379 (9,546)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 11,379 (9,546)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 11,379 (9,546)
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
</TABLE>
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July 26, 1999
Condev Land Fund III, Ltd.
Second Quarter 1999
The financial statements of the Partnership for the first six months quarter of
1999 are on the reverse side hereof. There was one sale of property and a
distribution to limited partners totaling $547,904 during the quarter. As of
June 30, 1999, the net asset value (book value) per unit of limited partner
interest was $48.34. The decrease in net asset value reflects the April
distribution to limited partners. As of June 30, 1999, the Partnership owned or
had an interest in one remaining properties:
US Highway 27. On March 8, 1999, the Partnership entered into a contract for
- -------------
sale of this parcel with the neighboring property owner. Closing was agreed to
be on June 30, 1999. The Buyer requested a 15-day extension of the Closing date
pursuant to the terms of the contract. This request was granted. The Buyer has
asked for an additional 15 day extension, but to date has not been willing to
accept the Partnership's terms for the extension. Notice has been given to the
Buyer that the contract is no longer in effect. The General Partner is hopeful
that differences with this buyer can be worked out and that we can proceed to a
timely closing, but there can be no assurance that we will be successful.
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
