<PAGE>
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 March 31, 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 #0-19220
Inland Land Appreciation Fund II, L.P.
(Exact name of registrant as specified in its charter)
Delaware #36-3664407
(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: 708-218-8000
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
___ ___
-1-
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Balance Sheets
March 31, 1996 and December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Assets
------
1996 1995
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents (Note 1).............. $ 5,500,376 5,097,705
Accounts and accrued interest receivable........ 39,731 19,900
Deposits and other current assets............... 9,477 2,544
----------- ---------
Total current assets.......................... 5,549,584 5,120,149
----------- ---------
Investment properties (including acquisition
fees paid to Affiliates of $2,040,166 and
$2,049,707 at March 31, 1996 and December 31,
1995, respectively) (Notes 1 and 3):
Land and improvements........................... 40,755,056 40,799,412
Buildings....................................... 93,082 93,082
---------- ----------
40,848,138 40,892,494
Less accumulated depreciation................... 9,955 9,179
---------- ----------
Total investment properties, net of accumulated
depreciation.................................... 40,838,183 40,883,315
---------- ----------
Total assets...................................... $46,387,767 46,003,464
=========== ==========
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Balance Sheets
(continued)
March 31, 1996 and December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Liabilities and Partners' Capital
---------------------------------
1996 1995
---- ----
<S> <C> <C>
Current liabilities:
Accounts payable................................ $ 112,792 21,907
Accrued real estate taxes....................... 114,290 97,271
Due to Affiliates (Note 2)...................... 77,294 11,167
Unearned income................................. 78,110 29,898
----------- -----------
Total current liabilities..................... 382,486 160,243
----------- -----------
Partners' capital (Notes 1 and 2):
General Partner:
Capital contribution........................... 500 500
Cumulative net income.......................... 447,673 447,723
Cumulative cash distributions.................. (93,034) (93,034)
----------- -----------
355,139 355,189
----------- -----------
Limited Partners:
Units of $1,000. Authorized 60,000 Units,
50,193.52 Units outstanding (net of offering
costs of $7,532,439, of which $2,535,445 was
paid to Affiliates)........................... 42,663,992 42,663,992
Cumulative net income.......................... 5,823,113 5,660,948
Cumulative cash distributions.................. (2,836,963) (2,836,908)
----------- -----------
45,650,142 45,488,032
----------- -----------
Total Partners' capital....................... 46,005,281 45,843,221
----------- -----------
Total liabilities and Partners' capital........... $46,387,767 46,003,464
=========== ===========
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Statements of Operations
For the three months ended March 31, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Income:
Sale of investment properties (Notes 1 and 3)... $ 430,140 154,130
Rental income (Note 4).......................... 76,740 100,501
Interest income................................. 72,947 10,276
----------- -----------
579,827 264,907
----------- -----------
Expenses:
Cost of investment properties sold.............. 263,002 117,280
Professional services to Affiliates............. 4,765 11,277
Professional services to non-affiliates......... 29,974 27,808
General and administrative expenses to
Affiliates.................................... 12,013 9,379
General and administrative expenses to
non-affiliates................................ 21,926 5,433
Marketing expenses to Affiliates................ 21,712 27,342
Marketing expenses to non-affiliates............ 5,582 3,454
Land operating expenses to Affiliates........... 23,218 25,230
Land operating expenses to non-affiliates....... 34,744 32,527
Depreciation.................................... 776 776
----------- -----------
417,712 260,506
----------- -----------
Net income........................................ $ 162,115 4,401
=========== ===========
Net income (loss) allocated to:
General Partner................................. (50) (324)
Limited Partners................................ 162,165 4,725
----------- -----------
Net income........................................ $ 162,115 4,401
=========== ===========
Net loss allocated to the one General Partner
Unit............................................ $ (50) (324)
=========== ===========
Net income allocated to Limited Partners per
weighted average Limited Partnership Units
(50,190.46 and 50,231.52 for the three months
ended March 31, 1996 and 1995, respectively).... $ 3.23 .09
=========== ===========
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Statements of Cash Flows
For the three months ended March 31, 1996 and 1995
(unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income...................................... $ 162,115 4,401
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation.................................. 776 776
Gain on sale of investment properties......... (167,138) (36,850)
Changes in assets and liabilities:
Accounts and accrued interest receivable.... (19,831) (24,393)
Deposits and other current assets........... (6,933) (4,317)
Accounts payable............................ 90,885 15,209
Accrued real estate taxes................... 17,019 18,741
Due to Affiliates........................... 66,127 74,828
Unearned income............................. 48,212 31,611
------------ ------------
Net cash provided by operating activities......... 191,232 80,006
------------ ------------
Cash flows from investing activities:
Additions to investment properties.............. (218,646) (602,916)
Proceeds from sale of investment properties..... 430,140 154,130
------------ ------------
Net cash provided by (used in) investing
activities...................................... 211,494 (448,786)
------------ ------------
Cash flows from financing activities:
Foreign Partners' withholding................... (55) (15)
------------ ------------
Net cash used in financing activities............. (55) (15)
------------ ------------
Net increase (decrease) in cash and cash
equivalents..................................... 402,671 (368,795)
Cash and cash equivalents at beginning of
period.......................................... 5,097,705 896,813
------------ ------------
Cash and cash equivalents at end of period........ $ 5,500,376 528,018
============ ============
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
March 31, 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 substantially duplicate those contained in such audited
financial statements have been omitted from this Report.
(1) Organization and Basis of Accounting
Inland Land Appreciation Fund II, L.P. (the "Partnership") was organized on
June 28, 1989 by the filing of a Certificate of Limited Partnership under the
Revised Uniform Limited Partnership Act of the State of Delaware. On October
25, 1989, the Partnership commenced an Offering of 30,000 (subject to increase
to 60,000) Limited Partnership Units pursuant to a Registration under the
Securities Act of 1933. The Offering terminated on October 24, 1991, with total
sales of 50,476.17 Units at $1,000 per Unit, resulting in $50,476,170 in gross
offering proceeds, not including the General Partner's contribution of $500.
All of the holders of these Units have been admitted to the Partnership. As of
March 31, 1996, the Partnership has repurchased a total of 282.647 Units for
$279,739 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.
Investment properties 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 March 31, 1996, there were no such impairments.
-6-
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
March 31, 1996
(unaudited)
For vacant land parcels and parcels with insignificant buildings and
improvements, 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 the parcel is divided by the total number of acres to arrive at a per
acre price. For parcels with significant buildings and improvements (Parcel 24,
described in Note 3), the Partnership records the buildings and improvements at
a cost based upon the appraised value at the date of acquisition. Building and
improvements are depreciated using the straight-line method of depreciation
over a useful life of thirty years. Repair and maintenance expenses are charged
to operations as incurred. Significant improvements are capitalized and
depreciated over their estimated useful lives.
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 period
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 $19,674 and $7,536 was unpaid as of March 31, 1996 and
December 31, 1995, respectively.
-7-
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
March 31, 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 $23,218 and
$25,230 have been incurred for the three months ended March 31, 1996 and 1995,
respectively, and are included in land operating expenses to Affiliates, of
which $23,218 was unpaid as of March 31, 1996.
An Affiliate of the General Partner performed marketing and advertising
services of the Partnership's land investments and was reimbursed (as set forth
under term of the Partnership Agreement) for direct costs, of which $25,311 and
$3,631 was unpaid as of March 31, 1996 and December 31, 1995, respectively.
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 $9,091 and $4,879 have been incurred
for the three months ended March 31, 1996 and 1995, respectively, and are
included in investment properties, of which $9,091 was unpaid as of March 31,
1996.
-8-
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
<TABLE>
<CAPTION>
(3) Investment Properties
The following real property investments are owned by the Partnership as of March 31, 1996:
Total
Gross Initial Costs Costs Remaining Current
Acres Purchase/ --------------------------------------- Capitalized Costs of Costs of Year Gain
Parcel Location: Purchased Sales Original Acquisition Subsequent to Property Parcels at on Sale
# County /Sold Date Costs Costs Total Acquisition Sold 3/31/96 Recognized
------ --------- --------- --------- ----------- ------------- --------- ------------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 McHenry 372.759 04/25/90 $ 2,114,295 114,070 2,228,365 158,253 - 2,386,618 -
2 Kendall 41.118 07/06/90 549,639 43,889 593,528 6,781 - 600,309 -
3 Kendall 120.817 11/06/90 1,606,794 101,863 1,708,657 5,593 - 1,714,250 -
4 Kendall 299.025 06/28/91 1,442,059 77,804 1,519,863 312 - 1,520,175 -
5 Kane 189.0468 02/28/91 1,954,629 94,569 2,049,198 129,310 - 2,178,508 -
6 Lake 57.3345 04/16/91 904,337 71,199 975,536 15,379 4,457 986,458 -
(.258) 10/01/94
7 McHenry 56.7094 04/22/91 680,513 44,444 724,957 223,706 - 948,663 -
8 Kane 325.394 06/14/91 3,496,700 262,275 3,758,975 23,757 - 3,782,732 -
9 Will 9.867 08/13/91 217,074 988 218,062 836 - 218,898 -
10 Will 150.66 08/20/91 1,866,716 89,333 1,956,049 56 - 1,956,105 -
11 Will 138.447 08/20/91 289,914 20,376 310,290 2,700 312,990 - -
(138.447) 05/03/93
12 Will 44.732 08/20/91 444,386 21,988 466,374 23 - 466,397 -
13 Will 6.342 09/23/91 139,524 172 139,696 - 139,696 - -
(6.342) 05/03/93
14 Kendall 44.403 09/03/91 888,060 68,210 956,270 329 - 956,599 -
15 Kendall 100.364 09/04/91 1,050,000 52,694 1,102,694 15,024 177,298 940,420 -
(5.000) 09/01/93
(11.000) 12/01/94
16 McHenry 168.905 09/13/91 1,402,058 69,731 1,471,789 77,873 - 1,549,662 -
17 Kendall 3.462 10/30/91 435,000 22,326 457,326 115 - 457,441 -
18 McHenry 139.1697 11/07/91 1,160,301 58,190 1,218,491 156,850 - 1,375,341 -
19 Kane 436.236 12/13/91 4,362,360 321,250 4,683,610 103,147 - 4,786,757 -
----------- ------------- --------- ------------- -------- ---------- ----------
Subtotal $25,004,359 1,535,371 26,539,730 920,044 634,441 26,825,333 -
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
(3) Investment Properties (continued)
Total
Gross Initial Costs Costs Remaining Current
Acres Purchase/ --------------------------------------- Capitalized Costs of Costs of Year Gain
Parcel Location: Purchased Sales Original Acquisition Subsequent to Property Parcels at on Sale
# County /Sold Date Costs Costs Total Acquisition Sold 3/31/96 Recognized
------ --------- --------- --------- ----------- ------------- ---------- ------------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Subtotal $25,004,359 1,535,371 26,539,730 920,044 634,441 26,825,333 -
20 Kane &
Kendall 400.129 01/31/92 1,692,623 101,318 1,793,941 38,126 - 1,832,067 -
21 Kendall 15.013 05/26/92 250,000 23,844 273,844 6,146 - 279,990 -
22 Kendall 391.959 10/30/92 3,870,000 283,186 4,153,186 88,801 164,804 4,077,183 94,270
(10.000) 01/06/94
(5.538) 01/05/96
23 (c) Kendall 133.2074 10/30/92 3,231,942 251,373 3,483,315 4,222,145 3,102,927 4,602,533 72,868
(11.525) 07/16/93
(48.77) Var 1995
(1.95) Var 1996
23A(a) Kendall .2676 10/30/92 170,072 12,641 182,713 - 182,713 - -
(.2676) 03/16/93
24 Kendall 3.908 01/21/93 645,000 56,316 701,316 213 - 701,529 -
24A(b) Kendall .406 01/21/93 155,000 13,533 168,533 - - 168,533 -
25 Kendall 656.687 01/28/93 1,625,000 82,536 1,707,536 22,673 1,730,209 - -
(656.687) 10/31/95
26 Kane 89.511 03/10/93 1,181,555 89,312 1,270,867 50,357 - 1,321,224 -
27 Kendall 83.525 03/11/93 984,474 54,846 1,039,320 426 - 1,039,746 -
----------- --------- ---------- --------- --------- ---------- -------
$38,810,025 2,504,276 41,314,301 5,348,931 5,815,094 40,848,138 167,138
=========== ========= ========== ========= ========= ========== =======
(a) Included in the purchase of Parcel 23 was a newly constructed 2,500 square foot house. The house, located at 213 Stonemill
Lane in the Mill Race Creek Subdivision, was sold in March 1993.
(b) Included in the purchase of Parcel 24 was a 2,400 square foot office building.
(c) Parcel 23, annexed and zoned to Oswego as part of the Mill Race Creek subdivision, consists of two parts: a 28-acre multi-
family portion and a 105-acre single-family portion. The Partnership sold the 28-acre multi-family portion on June 7, 1995 and
as of March 31, 1996, eighty-one of the 243 single-family lots. All of the remaining single-family lots are under contract for
sale with home builders. Under the purchase schedule, all lots would be sold by April 1997.
-10-
</TABLE>
<PAGE>
INLAND LAND APPRECIATION FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
March 31, 1996
(unaudited)
(3) Investment Properties (continued)
(d) Reconciliation of real estate owned:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Balance at January 1,........................... $40,892,494 43,264,960
Additions during period:
Improvements.................................... 218,646 2,257,644
------------ ------------
41,111,140 45,522,604
Sales during period............................. 263,002 4,630,110
------------ ------------
Balance at end of period........................ $40,848,138 40,892,494
============ ============
(e) Reconciliation of accumulated depreciation:
1996 1995
---- ----
Balance at January 1,........................... $ 9,179 6,076
Depreciation expense............................ 776 3,103
Sales during period............................. - -
------------ ------------
Balance at end of period........................ $ 9,955 9,179
============ ============
</TABLE>
(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 March 31, 1996, the Partnership had farm leases of generally one year in
duration, for approximately 2,910 acres of the approximately 3,584 acres owned.
-11-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
On October 25, 1989, the Partnership commenced an Offering of 30,000 (subject
to increase to 60,000) Limited Partnership Units pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933. The Offering
terminated on October 24, 1991, with total sales of 50,476.17 Units at $1,000
per Unit, resulting in $50,476,170 in gross offering proceeds, not including
the General Partner's contribution of $500. All the holders of these Units have
been admitted to the Partnership. 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 $41,314,301 of gross offering proceeds to purchase, on an
all-cash basis, twenty-seven parcels of undeveloped land and two buildings.
These investments included the payment of the purchase price, acquisition fees
and acquisition costs of such properties. Three of the parcels were purchased
during 1990, sixteen during 1991, four during 1992 and four during 1993. As of
March 31, 1996, the Partnership has had multiple sales transactions through
which it has disposed of approximately 896 acres of the approximately 4,480
acres originally owned. As of March 31, 1996, cumulative distributions have
totaled $2,836,963 to the Limited Partners and $93,034 to the General Partner.
Of the $2,836,963 distributed to the Limited Partners, $2,115,963 was net sales
proceeds (which represents a return of Invested Capital, as defined in the
Partnership Agreement) and $721,000 was from operations. As of March 31, 1996,
the Partnership has used $5,348,931 of working capital reserve for rezoning and
other activities and such amount is included in investment properties.
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 March 31, 1996, the Partnership owns, in whole or in part,
twenty-four of its original parcels and one office building, the majority of
which are leased to local tenants and are generating sufficient cash flow from
leases to cover property taxes and insurance.
At March 31, 1996, the Partnership had cash and cash equivalents of $5,500,376,
of which approximately $292,000 is reserved for the repurchase of Units through
the Unit Repurchase Program. The remaining $5,208,376 is available to be used
for the Partnership expenses and liabilities, cash distributions to partners
and other activities with respect to some or all of its land parcels. The
Partnership plans to maximize its parcel sales effort in anticipation of rising
land values.
-12-
<PAGE>
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 has been annexed
to the village of Huntley and zoned for residential and commercial development.
Parcels 5 and 19 are in annexation and zoning negotiations with the village of
Elburn for a master-planned community. Parcel 7 has been annexed to the village
of McHenry and zoned residential. Therefore, it is anticipated that Parcels 1,
5, 7, 18 and 19 will begin development and be marketed for sale in 1996.
Results of Operations
The sale of investment properties income and cost of investment properties sold
recorded for the three months ended March 31, 1996 is a result of the continued
sales at the Ponds of Mill Race Creek Subdivision (Parcel 23) and of the sale
of approximately 5 1/2 acres of Parcel 22 during January of 1996. The sale of
investment properties income and cost of investment properties sold recorded
for the three months ended March 31, 1995 is a result the sale of a portion of
one lot on February 15, 1995 and four lots on February 28, 1995. As of March
31, 1996, the Partnership has sold eighty-one of the 243 single-family lots at
The Ponds of Mill Race Creek.
As of March 31, 1996, the Partnership owned twenty-four parcels of land
consisting of approximately 3,584 acres and one office building. Of the
approximately 3,584 acres owned, 2,910 acres are leased to local farmers and
are generating sufficient cash flow to cover property taxes, insurance and
other miscellaneous expenses. The decrease in rental income and land operating
expenses to Affiliates for the three months ended March 31, 1996, as compared
to the three months ended March 31, 1995, is due to the decrease of the land
portfolio as a result of land sales. The decrease in rental income was
partially offset by the annual increase in lease amounts from tenants.
Interest income increased for the three months ended March 31 1996, as compared
to the three months ended March 31, 1995, due to the Partnership replenishing
its working capital reserve primarily from the sales at Parcels 23 and the sale
of Parcel 25 and an increase in interest rates.
Professional services to Affiliates decreased for the three months ended March
31, 1996, as compared to the three months ended March 31, 1995, due primarily
to a decrease in legal services required by the Partnership. Professional
services to non-affiliates increased for the three months ended March 31, 1996,
as compared to the three months ended March 31, 1995, due to an increase in
outside legal services.
General and administrative expenses to Affiliates increased for the three
months ended March 31, 1996, as compared to the three months ended March 31,
1995, due to increases in postage, data processing and investor services
expenses. General and administrative expenses to non-affiliates increased for
the three months ended March 31, 1996, as compared to the three months ended
March 31, 1995, due to an increase in the Illinois Replacement Tax owed by the
Partnership in 1996.
-13-
<PAGE>
Marketing expenses to Affiliates decreased for the three months ended March 31,
1996, as compared to the three months ended March 31, 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
months ended March 31, 1996, as compared to the three months ended March 31,
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.
-14-
<PAGE>
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 II, L.P.
By: Inland Real Estate Investment Corporation
General Partner
/S/ ROBERT D. PARKS
By: Robert D. Parks
Chairman
Date: May 13, 1996
/S/ CYNTHIA M. HASSETT
By: Cynthia M. Hassett
Principal Financial Officer and
Principal Accounting Officer
Date: May 13, 1996
-15-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,500,376
<SECURITIES> 0
<RECEIVABLES> 39,731
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,549,584
<PP&E> 40,848,138
<DEPRECIATION> 9,955
<TOTAL-ASSETS> 46,387,767
<CURRENT-LIABILITIES> 382,486
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 46,005,281
<TOTAL-LIABILITY-AND-EQUITY> 46,387,767
<SALES> 430,140
<TOTAL-REVENUES> 579,827
<CGS> 263,002
<TOTAL-COSTS> 57,962
<OTHER-EXPENSES> 358,974
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 162,115
<INCOME-TAX> 0
<INCOME-CONTINUING> 162,115
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 162,115
<EPS-PRIMARY> 3.23
<EPS-DILUTED> 3.23
</TABLE>
