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Previous: HARMONY HOLDINGS INC, 10-Q, EX-27, 2000-08-14 |
Next: INLAND CAPITAL FUND L P, 10-Q, EX-27, 2000-08-14 |
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 June 30, 1999
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 #0-21606
InLand Capital Fund, L.P.
(Exact name of registrant as specified in its charter)
|
Delaware |
#36-3767977 |
|
(State or other jurisdiction |
(I.R.S. Employer Identification Number) |
|
of incorporation or organization) |
|
|
2901 Butterfield Road, Oak Brook, Illinois |
60523 |
|
(Address of principal executive office) |
(Zip Code) |
Registrant's telephone number, including area code: 630-218-8000
_______________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 ___
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Balance Sheets
June 30, 2000 and December 31, 1999
(unaudited)
Assets
|
|
|
2000 |
1999 |
|
Current assets: |
|
|
|
|
Cash and cash equivalents (Note 1) |
$ |
267,882 |
288,022 |
|
Accounts and accrued interest receivable (Note 5) |
|
99,415 |
82,119 |
|
Other current assets |
|
940 |
1,837 |
|
|
|
|
|
|
Total current assets |
|
368,237 |
371,978 |
|
|
|
|
|
|
Other assets |
|
47,554 |
47,554 |
|
Mortgage loan receivable (Note 5) |
|
400,000 |
400,000 |
|
Investment properties and improvements (including acquisition fees paid to Affiliates of $1,076,390 at June 30, 2000 and December 31, 1999) (Notes 1 and 3) |
|
22,752,728 |
22,674,818 |
|
|
|
|
|
|
Total assets |
$ |
23,568,519 |
23,494,350 |
|
|
|
======== |
======== |
See accompanying notes to financial statements.
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Balance Sheets
(continued)
June 30, 2000 and December 31, 1999
(unaudited)
Liabilities and Partners' Capital
|
|
|
2000 |
1999 |
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
4,347 |
75,366 |
|
Accrued real estate taxes |
|
56,290 |
53,194 |
|
Due to Affiliates (Note 2) |
|
2,136 |
27,698 |
|
Unearned income |
|
246,869 |
74,537 |
|
|
|
|
|
|
Total current liabilities |
|
309,642 |
230,795 |
|
|
|
|
|
|
Deferred gain on sale of investment properties (Note 5) |
|
2,805 |
2,805 |
|
|
|
|
|
|
Partners' capital (Notes 1 and 2): |
|
|
|
|
General Partner: |
|
|
|
|
Capital contribution |
|
500 |
500 |
|
Cumulative net income. |
|
274,710 |
274,676 |
|
Cumulative cash distributions |
|
(259,418) |
(259,418) |
|
|
|
|
|
|
|
|
15,792 |
15,758 |
|
Limited Partners: |
|
|
|
|
Units of $1,000. Authorized 60,000 Units, 32,337 and 32,349 Units outstanding (net of offering costs of $4,466,765, of which $3,488,574 was paid to Affiliates) at June 30, 2000 and December 31, 1999, respectively |
|
27,876,265 |
27,884,346 |
|
Cumulative net income |
|
5,935,721 |
5,932,352 |
|
Cumulative cash distributions. |
|
(10,571,706) |
(10,571,706) |
|
|
|
|
|
|
|
|
23,240,280 |
23,244,992 |
|
|
|
|
|
|
Total Partners' capital |
|
23,256,072 |
23,260,750 |
|
|
|
|
|
|
Total liabilities and Partners' capital... |
$ |
23,568,519 |
23,494,350 |
|
|
|
========= |
========= |
See accompanying notes to financial statements.
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Statements of Operations
For the three and six months ended June 30, 2000 and 1999
(unaudited)
|
|
|
Three months |
Three months |
Six months |
Six months |
|
|
|
ended |
ended |
ended |
ended |
|
|
|
June 30, 2000 |
June 30, 1999 |
June 30, 2000 |
June 30, 1999 |
|
Income: |
|
|
|
|
|
|
Sale of investment property (Notes 1 and 3) |
$ |
- |
372,425 |
- |
3,119,357 |
|
Rental income (Note 4) |
|
59,223 |
59,850 |
130,474 |
116,056 |
|
Interest income |
|
15,487 |
49,340 |
27,234 |
83,091 |
|
|
|
|
|
|
|
|
|
|
74,710 |
481,615 |
157,708 |
3,318,504 |
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
Cost of investment property sold. |
|
- |
177,630 |
- |
1,600,379 |
|
Professional services to Affiliates. |
|
4,880 |
6,815 |
13,427 |
18,563 |
|
Professional services to non- affiliates |
|
2,002 |
875 |
27,337 |
23,465 |
|
General and administrative expenses to Affiliates |
|
2,173 |
5,758 |
9,932 |
16,887 |
|
General and administrative expenses to non-affiliates |
|
6,784 |
6,203 |
26,706 |
16,191 |
|
Marketing expenses to Affiliates. |
|
3,802 |
2,463 |
6,030 |
10,070 |
|
Marketing expenses to non- affiliates |
|
2,066 |
6,927 |
9,598 |
28,875 |
|
Land operating expenses to Affiliates |
|
12,605 |
12,780 |
25,210 |
25,560 |
|
Land operating expenses to non- affiliates |
|
20,574 |
12,277 |
36,065 |
32,945 |
|
|
|
|
|
|
|
|
|
|
54,886 |
231,728 |
154,305 |
1,772,935 |
|
|
|
|
|
|
|
|
Net income. |
$ |
19,824 |
249,887 |
3,403 |
1,545,569 |
|
|
|
========== |
========== |
========== |
========== |
See accompanying notes to financial statements.
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Statements of Operations
(continued)
For the three and six months ended June 30, 2000 and 1999
(unaudited)
|
|
|
Three months |
Three months |
Six months |
Six months |
|
|
|
ended |
ended |
ended |
ended |
|
|
|
June 30, 2000 |
June 30, 1999 |
June 30, 2000 |
June 30, 1999 |
|
|
|
|
|
|
|
|
Net income allocated to: |
|
|
|
|
|
|
General Partner. |
$ |
198 |
551 |
34 |
266 |
|
Limited Partners. |
|
19,626 |
249,336 |
3,369 |
1,545,303 |
|
|
|
|
|
|
|
|
Net income. |
|
19,824 |
249,887 |
3,403 |
1,545,569 |
|
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
|
|
|
Net income (loss) allocated to the one General Partner Unit. |
|
198 |
551 |
34 |
266 |
|
|
|
========== |
========== |
========== |
========= |
|
|
|
|
|
|
|
|
Net income per Unit allocated to Limited Partners per weighted average Limited Partnership Units of 32,341 and 32,352 for the three months ended June 30, 2000 and 1999, and 32,345 and 32,352 for the six months ended June 30, 2000 and 1999, respectively |
|
.61 |
7.71 |
.10 |
47.77 |
|
|
|
========== |
========== |
========== |
========= |
|
|
|
|
|
|
|
See accompanying notes to financial statements.
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the six months ended June 30, 2000 and 1999
(unaudited)
|
|
|
2000 |
1999 |
|
Cash flows from operating activities: |
|
|
|
|
Net income |
$ |
3,403 |
1,545,569 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
|
Gain on sale of investment properties |
|
- |
(1,518,978) |
|
Changes in assets and liabilities: |
|
|
|
|
Accrued interest and other receivables. |
|
(17,296) |
(19,921) |
|
Other current assets. |
|
897 |
2,406 |
|
Accounts payable |
|
(71,019) |
(838) |
|
Accrued real estate taxes. |
|
3,096 |
(25,681) |
|
Due to Affiliates. |
|
(25,562) |
(2,325) |
|
Unearned income.. |
|
172,332 |
1,179 |
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
65,851 |
(18,589) |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Additions to investment properties |
|
(77,910) |
(136,862) |
|
Other assets |
|
- |
(22,256) |
|
Proceeds from sale of investment properties |
|
- |
3,119,357 |
|
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
(77,910) |
2,960,239 |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Repurchase of Units |
|
(8,081) |
- |
|
|
|
|
|
|
Net cash used in financing activities |
|
(8,081) |
- |
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
(20,140) |
2,941,650 |
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
288,022 |
569,663 |
|
|
|
|
|
|
Cash and cash equivalents at end of period |
$ |
267,882 |
3,511,313 |
|
|
|
======= |
======= |
See accompanying notes to financial statements.
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Notes to Financial Statements
June 30, 2000
(unaudited)
Readers of this Quarterly Report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 1999, which are included in the Partnership's 1999 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 Capital Fund, L.P. (the "Partnership") was organized on June 21, 1991 by the filing of a Certificate of Limited Partnership under the Revised Uniform Limited Partnership Act of the State of Delaware. On December 13, 1991, the Partnership commenced an Offering of 60,000 Limited Partnership Units pursuant to a Registration under the Securities Act of 1933. The Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement") provides for Inland Real Estate Investment Corporation to be the General Partner. The Offering terminated on August 23, 1993, with total sales of 32,399.28 Units, at $1,000 per Unit, resulting in $32,399,282 in gross offering proceeds, not including the General Partner's capital contribution of $500. All of 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. As of June 30, 2000, the Partnership has repurchased and canceled a total of 62.17 Units for $56,251 from various Limited Partners through the Units Repurchase Program. Under this program, Limited Partners may under certain circumstances have their Units repurchased for an amount equal to their Invested Capital.
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.
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.
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 2000
(unaudited)
(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 and general and administrative expenses to Affiliates, of which $2,136 and $878 was unpaid as of June 30, 2000 and December 31, 1999, respectively.
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 $25,210 and $25,560 have been incurred and are included in land operating expenses to Affiliates for the six months ended June 30, 2000 and 1999, respectively, all of which was paid as of June 30, 2000 and December 31, 1999, respectively.
An Affiliate of the General Partner performed sales marketing and advertising services for the Partnership and was reimbursed (as set forth under terms of the Partnership Agreement) for direct costs. Such costs of $6,030 and $10,070 have been incurred and are included in marketing expenses to Affiliates for the six months ended June 30, 2000 and 1999, respectively, all of which was paid as of June 30, 2000 and December 31, 1999, 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 salaries and direct costs. The Affiliate did not take a profit on any project. Such costs of $60,409 and $47,297 have been incurred for the six months ended June 30, 2000 and 1999, respectively, and are included in investment properties, all of which was paid as of June 30, 2000 and December 31, 1999, respectively.
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 2000
(unaudited)
(3) Investment Properties
|
|
|
|
|
|
|
|
Costs |
|
Total |
|
|
|
|
|
|
|
|
|
Capitalized |
Cumulative |
Remaining |
Current Year |
|
|
|
Gross Acres |
|
Initial |
Initial |
Initial |
Subsequent |
Costs of |
Costs of |
Gain On |
|
|
Location: |
Purchased/ |
Purchase/ |
Original |
Acquisition |
Total |
to |
Property |
Parcels at |
Sale |
|
Parcel |
County |
Sold |
Sales Date |
Costs |
Costs |
Costs |
Acquisition |
Sold |
06/30/00 |
Recognized |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Kendall |
108.8960 |
07/22/92 |
$ 707,566 |
57,926 |
765,492 |
84,708 |
- |
850,200 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
McHenry |
201.0000 |
11/09/93 |
2,020,314 |
122,145 |
2,142,459 |
1,750,064 |
942,483 |
2,950,040 |
- |
|
|
|
(17.7420) |
08/02/95 |
|
|
|
|
|
|
|
|
|
|
(8.6806) |
Var 1997 |
|
|
|
|
|
|
|
|
|
|
(1.9290) |
Var 1998 |
|
|
|
|
|
|
|
|
|
|
(13.5030 |
Var 1999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 |
Will |
34.0474 |
03/04/94 |
1,235,830 |
88,092 |
1,323,922 |
37,857 |
1,361,779 |
- |
- |
|
|
|
(34.0474) |
02/04/99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
Will |
86.9195 |
03/30/94 |
1,778,820 |
143,817 |
1,922,637 |
428,728 |
261,286 |
2,090,079 |
- |
|
|
|
(2.3050) |
Var 1997 |
|
|
|
|
|
|
|
|
|
|
(3.3600) |
Var 1998 |
|
|
|
|
|
|
|
|
|
|
(1.0331) |
08/19/99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
LaSalle |
190.9600 |
04/01/94 |
532,000 |
18,145 |
550,145 |
69,391 |
619,536 |
- |
- |
|
|
|
(2.0600) |
04/08/98 |
|
|
|
|
|
|
|
|
|
|
(188.9000) |
10/07/99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 |
DeKalb |
59.0800 |
05/11/94 |
670,208 |
58,372 |
728,580 |
486,869 |
1,215,449 |
- |
- |
|
|
|
(4.9233) |
Apr 1998 |
|
|
|
|
|
|
|
|
|
|
(54.1567) |
07/23/98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
Kendall |
200.8210 |
07/28/94 |
1,506,158 |
82,999 |
1,589,157 |
30,894 |
- |
1,620,051 |
- |
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 2000
(unaudited)
(3) Investment Properties (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs |
|
Total |
|
|
|
|
|
|
|
|
|
Capitalized |
Cumulative |
Remaining |
Current Year |
|
|
|
Gross Acres |
|
Initial |
Initial |
Initial |
Subsequent |
Costs of |
Costs of |
Gain On |
|
|
Location: |
Purchased/ |
Purchase/ |
Original |
Acquisition |
Total |
to |
Property |
Parcels at |
Sale |
|
Parcel |
County |
Sold |
Sales Date |
Costs |
Costs |
Costs |
Acquisition |
Sold |
06/30/00 |
Recognized |
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
Kendall |
133.0000 |
08/17/94 |
1,300,000 |
106,949 |
1,406,949 |
10,950 |
- |
1,417,899 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
9 |
LaSalle |
335.9600 |
08/30/94 |
993,441 |
79,329 |
1,072,770 |
114,852 |
- |
1,187,622 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
10 |
Kendall |
223.7470 |
09/16/94 |
2,693,025 |
205,660 |
2,898,685 |
61,866 |
38,989 |
2,921,562 |
- |
|
|
|
(2.9770) |
11/03/99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10A(a) |
Kendall |
7.0390 |
09/16/94 |
206,975 |
15,806 |
222,781 |
1,327 |
224,108 |
- |
- |
|
|
|
(7.0390) |
04/21/95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
Kane |
123.0000 |
09/26/94 |
1,353,000 |
75,551 |
1,428,551 |
16,491 |
- |
1,445,042 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
12 |
Kendall |
110.2530 |
09/28/94 |
600,001 |
51,220 |
651,221 |
79,208 |
- |
730,429 |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
13 |
LaSalle |
352.7390 |
10/06/94 |
1,032,666 |
91,117 |
1,123,783 |
22,723 |
1,146,506 |
- |
- |
|
|
|
(10.0000) |
07/27/98 |
|
|
|
|
|
|
|
|
|
|
(342.7390) |
08/31/98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14 |
Kendall |
134.7760 |
10/26/94 |
1,000,000 |
81,674 |
1,081,674 |
11,587 |
85,960 |
1,007,301 |
- |
|
|
|
(10.6430) |
05/21/99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15 |
McHenry |
169.5400 |
10/31/94 |
2,900,000 |
79,196 |
2,979,196 |
262,251 |
- |
3,241,447 |
- |
|
|
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16 |
McHenry |
207.0754 |
11/30/94 |
1,760,256 |
101,388 |
1,861,644 |
254,820 |
- |
2,116,464 |
- |
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 2000
(unaudited)
(3) Investment Properties (continued)
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Costs |
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Total |
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Capitalized |
Cumulative |
Remaining |
Current Year |
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Gross Acres |
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Initial |
Initial |
Initial |
Subsequent |
Costs of |
Costs of |
Gain On |
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Location: |
Purchased/ |
Purchase/ |
Original |
Acquisition |
Total |
to |
Property |
Parcels at |
Sale |
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Parcel |
County |
Sold |
Sales Date |
Costs |
Costs |
Costs |
Acquisition |
Sold |
06/30/00 |
Recognized |
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17 |
LaSalle |
236.4400 |
12/07/94 |
1,060,286 |
74,735 |
1,135,021 |
39,571 |
- |
1,174,592 |
- |
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18 |
Kendall |
386.9900 |
11/02/95 |
934,993 |
126,329 |
1,061,322 |
501 |
1,061,823 |
- |
- |
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(386.9900) |
08/31/98 |
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$24,285,539 |
1,660,450 |
25,945,989 |
3,764,658 |
6,957,919 |
22,752,728 |
- |
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|
========= |
======== |
======== |
======== |
========= |
========= |
========= |
INLAND CAPITAL FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
June 30, 2000
(unaudited)
(3) Investment Properties (continued)
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June 30, |
December 31, |
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|
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2000 |
1999 |
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|
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Balance at January 1, |
$ |
22,674,818 |
24,946,536 |
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Additions during period |
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77,910 |
330,834 |
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Sales during period |
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- |
(2,602,552) |
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Balance at end of period |
$ |
22,752,728 |
22,674,818 |
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======== |
========= |
(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 June 30, 2000, the Partnership had farm leases of generally one year in duration, for approximately 1,943 acres of the approximately 2,209 acres owned.
(5) Mortgage Loan Receivable
As a result of the sale of the remaining acres of Parcel 6 for a sales price of $1,125,000 on July 7, 1998, the Partnership received a mortgage loan receivable of $1,125,000 and recorded a deferred gain on sale of $7,889. The deferred gain will be recognized over the life of the related mortgage loan receivable as principal payments are received, of which $5,084 has been recognized as of June 30, 2000. Of the $1,125,000 mortgage loan receivable received, $725,000 accrued interest at 9% per annum and had a maturity date of November 30, 1998 (extended from September 30, 1998). The remaining $400,000 accrues interest at 9% per annum and has a maturity date of July 7, 2001, at which time all accrued interest, as well as principal, is due. As of June 30, 2000, accrued interest receivable totaled $98,695. At June 30, 2000 the fair market value of the mortgage loan receivable approximated its carrying value.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this quarterly report on Form 10-Q constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Partnership's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; inability of borrower to meet financial obligations; uninsured losses; and potential conflicts of interest between the Partnership and its Affiliates, including the General Partner.
Liquidity and Capital Resources
On December 13, 1991, the Partnership commenced an Offering of 60,000 Limited Partnership Units ("Units") at $1,000 per Unit, pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on August 23, 1993, with total sales of 32,399.28 Units, at $1,000 per Unit, resulting in $32,399,282 in gross offering proceeds, not including the General Partner's capital contribution of $500. All of 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 $25,945,989 of gross offering proceeds to purchase, on an all-cash basis, eighteen parcels of land and one building. These investments include the payment of the purchase price, acquisition fees and acquisition costs of such properties. One of the parcels was purchased during 1992, one during 1993, fifteen during 1994 and one during 1995. As of June 30, 2000, the Partnership has had multiple sales transactions through which it has disposed of the building and approximately 1,093 acres of the 3,302 acres originally owned. As of June 30, 2000, cumulative distributions to the Limited Partners have totaled $10,571,706 (which represents a return of Invested Capital, as defined the Partnership Agreement). Through June 30, 2000, the Partnership has used $3,764,658 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 June 30, 2000, the Partnership owns, in whole or in part, thirteen of its original eighteen parcels, the majority of which are leased to local farmers and are generating sufficient cash flow from farm leases to cover property taxes and insurance.
At June 30, 2000, the Partnership had cash and cash equivalents of $267,882 of which approximately $162,000 is reserved for the repurchase of Units through the Unit Repurchase Program. The remaining amount is available, upon maturity, to be used for 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.
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 2, annexed to the village of McHenry and zoned for a business park, has one phase of improvements complete and sites are being marketed to potential buyers, of which 25 of the 190 lots were sold as of June 30, 2000. A second phase is planned for late 2000. (See Note 3 of the Notes to Financial Statements.) Parcel 4, zoned for a variety of business uses, has improvements underway and sites are being marketed to potential buyers, of which one site consisting of .87 acres was sold to a hotel chain on June 6, 1997, another site consisting of 1.435 acres was sold to a combination gas station/convenient store on August 12, 1997, a third site consisting of 1.5 acres was sold to a national fast-food chain on August 13, 1998, a fourth site consisting of 1.86 acres was sold to a different national fast-food chain on October 16, 1998 and a fifth site consisting of 1.033 acres was sold to a national discount tire retailer on August 19, 1999. (See Note 3 of the Notes to Financial Statements.) Parcels 15 and 16 have been annexed to the village of Huntley and zoned for residential and commercial development. The Partnership sold a portion of Parcels 10 and 14 and the remaining acres of Parcels 3 and 5 to unaffiliated third-parties. (See Note 3 of the Notes to Financial Statements.)
Results of Operations
Income from the sale of investment properties and the cost of investment properties sold for the six months ended June 30, 1999 is the result of the sale of approximately 36 acres, including the sale of Parcel 3 on February 4, 1999 and two additional lots of Parcel 2 on February 12, 1999. (See Note 3 of the Notes to Financial Statements.) There were no sales of investment properties for the six months ended June 30, 2000.
As of June 30, 2000, the Partnership owned thirteen parcels of land consisting of approximately 2,209 acres. Of the 2,209 acres owned, approximately 1,943 acres are tillable and leased to local farmers and are generating sufficient cash flow to cover property taxes, insurance and other miscellaneous property expenses. Rental income increased for the six months ended June 30, 2000, as compared to the six months ended June 30, 1999, due to the increase in annual lease amounts from tenants.
Interest income decreased for the six months ended June 30, 2000, as compared to the six months ended June 30, 1999, due primarily to a decrease in interest income earned on overnight investments. There was less cash available to invest due to the $2,000,000 distribution to the limited partners on December 3, 1999.
Professional services to Affiliates decreased for the six months ended June 30, 2000, as compared to the six months ended June 30, 1999, due to a decrease in accounting services required by the Partnership. Professional services to non-affiliates increased for the six months ended June 30, 2000, as compared to the six months ended June 30, 1999, due to an increase in accounting fees.
General and administrative expenses to Affiliates decreased for the six months ended June 30, 2000, as compared to the six months ended June 30, 1999, due to a decrease in investor services expenses. General and administrative expenses to non-affiliates increased for the six months ended June 30, 2000, as compared to the six months ended June 30, 1999, due primarily to an increase in the Illinois Replacement Tax.
Marketing expenses to Affiliates and non-affiliates decreased for the six months ended June 30, 2000, as compared to the six months ended June 30, 1999, due to decreases in marketing, advertising and travel expenses relating to marketing the land portfolio to prospective purchasers.
Land operating expenses to non-affiliates increased for the six months ended June 30, 2000, as compared to the six months ended June 30, 1999, due to an increase in real estate tax expense.
PART II - Other Information
Items 1 through 6(b) are omitted because of the absence of conditions under which they are required.
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.
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INLAND CAPITAL FUND, L.P. |
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By: |
Inland Real Estate Investment Corporation General Partner |
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/S/ ROBERT D. PARKS |
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By: |
Robert D. Parks |
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Chairman |
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Date: |
August 11, 2000 |
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/S/ PATRICIA A. DELROSSO |
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By: |
Patricia A. DelRosso |
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Senior Vice President |
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Date: |
August 11, 2000 |
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/S/ KELLY TUCEK |
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By: |
Kelly Tucek |
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Principal Financial Officer and |
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Principal Accounting Officer |
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Date: |
August 11, 2000 |
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