-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BwGr7dmmMHf+/3muR51SPXzpqjzrcK7CggyxVTGy0ziJOkjapPeXwzCG3reH1SAV jAvYTYnE+OL48T+mnuZmhw== 0000740124-99-000004.txt : 19991223 0000740124-99-000004.hdr.sgml : 19991223 ACCESSION NUMBER: 0000740124-99-000004 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREEN GOLD CONSOLIDATED CENTRAL INDEX KEY: 0000740124 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 330023916 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-11533 FILM NUMBER: 99778881 BUSINESS ADDRESS: STREET 1: 711 DAILY DR., SUITE 120 CITY: CAMARILLO STATE: CA ZIP: 93010 BUSINESS PHONE: 8059876921 MAIL ADDRESS: STREET 2: 591 W. LOS ANGELES AVE CITY: MOORPARK STATE: CA ZIP: 93021 10-K 1 10-K FILING FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended September 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 Number 0-11533 GREEN GOLD CONSOLIDATED _________________________________________________ (Exact name of registrant as specified in its charter) CALIFORNIA 33-0023916 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 711 Daily Dr., Suite 120, Camarillo, CA 93010 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (805)987-6921 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Units of Limited Partnership Interest (Title of Class) 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 [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] State the aggregate market value of the voting stock held by non-affiliates of the registrant. Not applicable. DOCUMENTS INCORPORATED BY REFERENCE None. PART I Item 1. BUSINESS General Green Gold Consolidated ("Consolidated") is a limited partnership which was organized under the Uniform Limited Partnership Act of the State of California in 1982. The general partner of Consolidated is Economic Consultants (the "General Partner"), a general partnership composed of Daniel Lee Stephenson and Tom A. Leevers, as managing partners, and the spouse of Mr. Leevers. Consolidated was formed for the purpose of participating in the transactions contemplated by a plan and agreement of exchange dated February 1983 (the "Exchange Agreement"), as executed by Consolidated and 12 other California limited partnerships (the "Predecessor Partnerships"). The Predecessor Partnerships had been formed between the years 1972 and 1976 for the purpose of purchasing agricultural real estate in the Southern California Counties of Riverside and Ventura for development as avocado and citrus orchards. In 1983, in accordance with the provisions of the Exchange Agreement, the Predecessor Partnerships transferred to Consolidated all of their assets, subject to all of their liabilities, in exchange for 10,000,000 limited partnership interests (the "Interests") of Consolidated (the "Exchange Transaction"). In 1983 the Predecessor Partnerships distributed their allocable shares of the Interests to their respective limited partners and were dissolved. Pursuant to the Exchange Transaction, Consolidated acquired an aggregate of 86 parcels of agricultural property (cultivated and uncultivated) including approximately 1,930 acres of avocado and citrus groves. Since consummation of the Exchange Transaction, Consolidated has sold or otherwise disposed of substantially all of these parcels. (Information respecting the parcels which were sold during the last three fiscal years is set forth in the table below.) In 1993 Consolidated completed the subdivision of its then remaining land, which was assigned to four tracts. Subdivision activity was undertaken to facilitate the sale of the remaining land, which as of September 30, 1999 consisted of approximately 50 acres. Pursuant to the terms of of its Partnership Agreement (as defined below) Consolidated will dissolve on December 31, 1999. Upon dissolution, Consolidated will be in a winding up phase during which it will continue to market its remaining properties and notes receivable. Upon conversion of all its asset to cash, the satisfaction of all its liabilities, and the distribution of the net proceeds to its partners, Consolidated will be terminated. Based on the above, the General Partner considers Consolidated principally to be in the business of selling property, rather than in the agricultural business. Recent Sales Transactions During the last three fiscal years Consolidated sold twelve parcels of property, together with the groves and all other improvements thereon, to unaffiliated parties. As set forth more fully in the following table, Consolidated received an aggregate consideration of approximately $1,268,000 for property sales, consisting of: (i) a cash down of $1,051,000; and (ii) promissory notes given to Consolidated in the amount of $217,000. Cash Promissory Note Date of Sale Purchase Price Received to Consolidated 1999-1st Qtr. $ 143,000 $ 50,000 $ 93,000 (1) 1999-1st Qtr. 128,000 30,000 98,000 (2) 1999-3rd Qtr. 111,000 111,000 -0- 1999-4th Qtr. 96,000 96,000 -0- --------- -------- --------- 478,000 287,000 191,000 --------- -------- --------- 1998-4th Qtr. 73,000 73,000 -0- 1998-4th Qtr. 85,000 59,000 26,000 (3) 1998-4th Qtr. 74,000 74,000 -0- 1998-4th Qtr. 89,000 89,000 -0- 1998-4th Qtr. 85,000 85,000 -0- 1998-4th Qtr. (4) 240,000 240,000 -0- 1998-4th Qtr. 144,000 144,000 -0- --------- -------- --------- 790,000 764,000 26,000 --------- -------- --------- Totals $ 1,268,000 $1,051,000 $217,000 ========= ========= ========= (1) Note paid in August 1999. (2) Note paid in November 1999. (3) Note paid in October 1998. (4) Includes two parcels. Farming Operations As discussed in greater detail in this Item 1 and in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," Consolidated's principal business is considered to be the sale of its remaining land. However, pending consummation of the sale of all the remaining cultivated land (approximately 16 acres including approximately 1,600 trees as of September 30, 1999), Consolidated continues to engage in the production of avocados. (1) The Avocado Industry Although yields vary considerably from year to year, the General Partner estimates that approximately 75% of the avocados produced in the United States today are grown in California and 25% are grown in Florida. Virtually all of California's avocados are grown in the southern counties, which include San Diego, Ventura, Santa Barbara, Los Angeles, Orange, Riverside and San Bernardino. Varieties of avocados include Hass, Fuerte, Bacon, Zutano and MacArthur. All of Consolidated's trees are of the Hass variety. (2) Partnership Operations A. Farm Management Pursuant to an agreement dated January 1, 1985 and last amended on December 16, 1991, Agrispect, the farm manager, agreed to perform, manage and supervise agricultural operations on the Partnership's properties. The total amount paid to Agrispect for management fees and cultural care expenses during fiscal year 1999 was approximately $26,000. Effective January 1, 1993, Consolidated pays Agrispect a cultural care fee of $565 per acre per year, and reimbursement for all actual costs incurred. The extensive use of irrigation water is costly. Accordingly, the ultimate cost to Consolidated for cultural costs will depend in large part upon rainfall quantity and general climatic conditions throughout each year. In this regard, rainfall quantity at the properties was below normal in the 1997 crop year and above normal in 1998; however, the summer months were hotter than usual requiring significant irrigation. Rainfall was below normal in 1999. B. Crop Production and Marketing As indicated above, as of September 30, 1999 Consolidated owned approximately 34 uncultivated acres and approximately 16 acres planted to Hass variety avocado trees located in Rancho California. Consolidated has consistently produced avocados on a per acre basis in excess of the average produced in the Rancho California area. During the 1999 crop year, Consolidated produced an average of approximately 4,700 pounds per acre, compared to the industry's average of 4,200 pounds per acre. Consolidated's greater than average production results from "state of the art" cultural care. Consolidated's avocado crop is picked by independent contractors pursuant to standards established by the industry from year to year. Consolidated's crop for the 1999 crop year was picked by Agrispect and other contractors, at a total cost of approximately $18,000. The availability of labor in the vicinity of the properties is sufficient for the cultivation and harvest of Consolidated's crops. All labor costs are included in the payments to Consolidated's independent contractors, as Consolidated has no employees. Consolidated's avocado crop is packaged and marketed by McDaniel Fruit Company, an independent contractor, and by Calavo (a non-profit cooperative handler which sells its members' crops at the price deemed best for the interests of all members, less a pro rata portion of administrative costs attributable to each member). Partnership Management Las Posas Investment Company ("Manager") implements Consolidated's business plans, furnishes financial reports and documents to and for Consolidated, administers Consolidated's accounts, assists Consolidated in the sale of its land holdings from time to time, and manages the overall day-to-day operations and assets of Consolidated. For its services, Manager receives a monthly fee of 2% of the gross Partnership cash receipts (not to exceed $50,000 during any calendar year) plus $5,676. The management agreement may be terminated by either party upon 90 days' written notice. Manager is a California corporation whose sole shareholder is Neno N. Spondello, Jr. Mr. Spondello has been affiliated with certain purchasers of properties from Consolidated. As of September 30, 1999, all promissory notes received by Consolidated in connection with the sale of properties to such purchasers have been paid in full without discount. Item 2. PROPERTIES As of December 20, 1999, Consolidated owns one parcel of land consisting of approximately 13 acres of uncultivated land. The property is located in the Rancho California area of Riverside County, California, between Los Angeles and San Diego. It is an established area for light industry, commercial activity and shopping, parks, residences, agriculture, thoroughbred farms and ranches. The property is in escrow to be sold. Item 3. LEGAL PROCEEDINGS There are no pending legal proceedings as of November 11, 1999. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Inapplicable. PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Market Information The Interests are not freely transferable and no market in the Interests has developed or is expected to develop. Holders As of November 11, 1999, a total of 2,157 persons (the "Limited Partners") held the Interests. Dividends Distributions are paid from either "Cash Available for Distribution" or "Sale or Refinancing Proceeds." "Cash Available for Distribution" is defined in Consolidated's Amended and Restated Certificate of Limited Partnership Agreement (the "Partnership Agreement") as "Cash Flow," less adequate cash reserves for obligations of Consolidated for which there is no provision. Cash Flow means cash funds provided from operations of Consolidated, without deduction for depreciation or amortization, but after deducting such funds used to pay or provide for the payment of debt service, capital improvements and replacements and the operating expenses of each of the properties. All distributions of Cash Available for Distribution are divided in the ratio of 93.5% to the Limited Partners and 6.5% to the General Partner. "Sale or Refinancing Proceeds" is defined in the Partnership Agreement as the cash proceeds from a sale, financing or refinancing of a property remaining after retirement of mortgage debt and all expenses related to the transaction. All distributions of Sale or Refinancing Proceeds are allocated as follows: (i) first, to the Limited Partners until they have received an amount which, when added to all prior distributions of Sale or Refinancing Proceeds to them, equals the sum of (a) $18,411,968 (the "Carried Capital Contribution"), and (b) a sum equal to a 6% per annum cumulative (but not compounded) return on such portion of the Carried Capital Contribution which has not been previously returned to the Limited Partners through distributions of Sale or Refinancing Proceeds, less the sum of all prior distributions of Cash Available for Distribution, (ii) second, to the General Partner until it has received 6.5% of all Sale or Refinancing Proceeds in excess of the Carried Capital Contribution, and (iii) the balance, to the Limited Partners. The following distributions of Cash Available for Distribution or Sale or Refinancing Proceeds were made by the Partnership during the two most recent fiscal years: Date of Amount Dist. To Amount Dist. Amount Dist. Partner Dist. Ltd. Partners Per Unit to General Partner Dec. 1997 $320,000 $0.032 $11,000 Dec. 1998 $900,000 $0.090 $ 8,000 Item 6. SELECTED FINANCIAL DATA The following is selected financial data for the five years ended September 30, 1995 through 1999. Due to the nature of Consolidated's business operations, particularly the sales activities which have occurred during the last five years, the data is not comparable from year to year. For the Years Ended September 30 1999 1998 1997 1996 1995 ---- ---- ---- ---- ---- Sale of property-gross $478,000 $790,000 $ -0- $ 70,000 $ -0- Crop sales-gross $174,000 $287,000 $312,000 $266,000 $285,000 Net income $670,000 $213,000 $242,000 $105,000 $214,000 Net income allocable to Limited Partners $660,000 $208,000 $234,000 $ 99,000 $205,000 Net income per limited partnership unit $0.07 $0.02 $0.02 $0.01 $0.02 Total assets $2,328,000 $2,567,000 $2,685,000 $2,703,000 $3,020,000 Cash distributions per limited partnership unit $0.090 $0.032 $0.025 $0.04 $0.03
For an explanation of some of the data included in the preceding table, see Item-5 - Market for Registrant's Common Equity and Related Stockholder Matters and Item-7 Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General Consolidated is a limited partnership which commenced active operations in June 1983. Since that date, Consolidated has operated its cultivated properties for the production of avocados. As of September 30, 1999, Consolidated owned approximately 16 acres of cultivated properties and 34 acres of uncultivated properties. As of December 20, 1999, it owned one parcel of approximately 13 uncultivated acres, which was in escrow to be sold. By the terms of the Partnership Agreement, Consolidated is scheduled for termination by December 31, 1999. If the General Partner is unable to sell all remaining properties and notes receivable before the termination date, it will proceed in an orderly manner to wind-up the affairs of the Partnership. Consolidated will then distribute the proceeds thereof to the Limited Partners in liquidation of their Interests. The General Partner believes that, for the balance of Consolidated's term, Consolidated's liquidity, defined as its ability to generate cash flow to satisfy its cash requirements (other than distributions to Limited Partners), is sufficient. Consolidated's cash flow depends principally upon (i) collection of outstanding notes receivable from previous sales of properties; (ii) receipt of proceeds from future sales of properties; (iii) market conditions of the California avocado industry; and (iv) avocado production from Consolidated's groves. Consolidated's cash requirements primarily arise from costs attributable to cultural care, professional services, management services, property taxes, investor services and other operating expenses. None of the properties owned by Consolidated are subject to mortgage indebtedness. Each of Consolidated's sources and uses of cash is discussed in greater detail below. Notes Receivable As of September 30, 1999, Consolidated held 5 notes receivable in the amount of $432,000 (before reduction for deferred profit and an allowance for doubtful accounts in the aggregate amount of $192,000). The notes receivable bear interest at rates ranging from 10% to 11% per annum and mature at varying dates through February 2006. Four notes receivable have maturity dates beyond the expiration of Consolidated's term. The aggregate principal amounts of these notes is approximately $383,000. As of December 20, 1999, one of the five notes had been retired at the full amount and one at a discount. Negotiations for retiring the remaining three notes continue. Consolidated has no notes in default as of December 20, 1999. If Consolidated would have any defaults on the three remaining notes, the property would be foreclosed upon and again offered for sale at the best price obtainable. Consolidated does not anticipate incurring any loss on such event based on the appraised equity position. As a result, the established allowance for doubtful accounts, which, as of September 30, 1999 is in the amount of $34,000, is considered adequate. Consolidated implemented a note discount program with the objective of providing an incentive for the borrowers to payoff their notes. Each note holder was offered a discount % based on the loan-to-value or appraised equity and maturity date of the loan. During the year, ten borrowers paid $871,000 to retire their notes and received discounts totaling $82,000. Consolidated expects the three remaining borrowers will participate in the discount program during 2000. Sales of Properties Consolidated completed the subdivision of its properties in 1993. Through the date hereof Consolidated actively marketed its lots for sale as individual home sites. There were sales of four parcels totaling approximately 46 acres in 1999. The sale amount for these parcels totaled $478,000, consisting of $287,000 cash proceeds and two notes for $191,000. One of the these notes was paid-off in August 1999, and the other in November 1999. There were sales of eight parcels totaling approximately 69 acres in 1998. The sale amount of these parcels totaled $790,000, consisting of $764,000 cash proceeds and one note for $26,000 due in October 1998 which was paid. There were no property sales in 1997. Based on the General Partner's understanding of sales activity for comparable properties in the Rancho California area, the General Partner expects that Consolidated will sell the last remaining parcel prior to dissolution of Consolidated and that Consolidated will likely receive all cash compensation. However, no assurance can be given that Consolidated will be able to sell its remaining property on the preceding terms or at a profit. Avocado Operations; Cultural Care Costs Consolidated's avocado production generally is in excess of the average production of the Rancho California area. Consolidated's gross revenues from crop sales decreased 8.0% from 1997 to 1998 (from $312,000 to $287,000). Gross revenues from crop sales decreased 39.4% from 1998 to 1999 (from $287,000 to $174,000). The decrease of $25,000 from 1997 to 1998 results from the combined effect of a $.06 per pound price increase and a decrease of 62,000 pounds picked (416,000 to 354,000). The decrease of $113,000 from 1998 to 1999 results from the combined effect of a $.62 per pound increase and a decrease of 232,000 pounds picked (354,000 to 122,000). The main reason for the decline of pounds picked is due to property sales. Crop production also fluctuates due to weather conditions including rain, wind and normal tree cycles. In December, 1997 the Rancho California area realized winds of up to 50 miles per hour resulting in fruit losses that ranged from 5% to 40% for growers in the area. Consolidated's groves may have realized an average crop loss of 15% to 20% from these winds. The exact amount is difficult to determine. Consolidated's average pounds per acre were 7,400, 5,800 and 4,700 in 1997, 1998 and 1999, respectively. Cultural care costs decreased 14.0% from 1997 to 1998 (from $228,000 to $196,000). Cultural care costs decreased 49.5% from 1998 to 1999 (from $196,000 to $99,000). The decrease from 1997 to 1998 was primarily a result of significantly reduced water costs ($32,000) resulting from heavy rains in 1998. The decrease from 1998 to 1999 resulted from fewer cultivated acres and pounds picked as a result of property sales. Professional Services Professional services costs remained the same in 1997 and 1998 ($27,000). The costs increased 11.1% from 1998 to 1999 (from $27,000 to $30,000) The majority of the increase in 1999 resulted from appraisal costs related to the note discount program. Management Services Management services costs increased 9.8% from 1997 to 1998 (from $82,000 to $90,000). These costs increased by 12.2% from 1998 to 1999 (from $90,000 to $101,000). Management fees are determined as a function of gross Partnership cash receipts. The components of cash receipts are (i) cash received on sale of property, (ii) cash received on sale of crops, (iii) cash principal payments made on notes receivable, and (iv) cash interest payments made on notes receivable. Management fees are expected to decrease 20% in 2000. Property Taxes Property taxes increased 27.3% from 1997 to 1998 (from $44,000 to $56,000). These costs decreased 58.9% from 1998 to 1999 (from $56,000 to $23,000). The increase in 1998 mainly results from payment of delinquent taxes on one foreclosed property. Property taxes declined in 1999 as a result of property sales. Other Operating Expenses Other operating expenses increased 4.5% from 1997 to 1998 (from $22,000 to $23,000). These expenses decreased 34.8% from 1998 to 1999 (from $23,000 to $15,000). The 1998 costs included approximately $5,000 related to a foreclosure. These costs are expected to remain at 1999 levels in 2000. Investor Services Investor services costs increased 35.7% from 1997 to 1998 (from $14,000 to $19,000). These costs increased 10.5% from 1998 to 1999 (from $19,000 to $21,000). The increase mainly results from computer system upgrades. Other Financial Information The Manager has investigated its computer hardware and software and, based on such investigations, does not anticipate any potential Year 2000 problem with respect thereto. The Manager has not investigated and does not know whether any Year 2000 problems may arise with respect to Consolidated's other third party vendors and service providers. As indicated above, it is possible that Consolidated will have sold all its assets (including its real properties and and notes receivable) and have been terminated by December 31, 1999. If not, and if significant third party vendors or service providers such as utility providers and banks, among others) have Year 2000 problems, the ability of Consolidated to conduct business would be compromised. No contingency plans have been developed in this regard. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Inapplicable Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Financial Statements and Notes to Financial Statements which follow. Report of Independent Accountants To the General and Limited Partners of Green Gold Consolidated In our opinion, the financial statements listed in the index appearing under Item 14(a)(1) present fairly, in all material respects, the financial position of Green Gold Consolidated at September 30, 1999 and 1998, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 1999, in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedules listed in the index appearing under Item 14(a)(2) present fairly, in all material respects, the information set forth therein when read in conjuction with the related financial statements. These financial statements and financial statement schedules are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements and finacial statement schedules based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP San Diego, California November 11, 1999 GREEN GOLD CONSOLIDATED (A California Limited Partnership) Balance Sheet September 30, 1999 1998 Assets Cash and cash equivalents $1,693,000 $ 777,000 Short-term investments - 427,000 Notes and accounts receivable, net 240,000 666,000 Accrued interest receivable 8,000 17,000 Inventories of growing crops - 8,000 Property held for sale 384,000 655,000 Other assets 3,000 17,000 ---------- ---------- $2,328,000 $2,567,000 ========== ========== Liabilities and Partners' Equity (Deficit) Accounts payable $ 5,000 $ 10,000 Accrued liabilities 43,000 39,000 ---------- ---------- 48,000 49,000 ---------- ---------- Partners' equity (deficit): General partner's (274,000) (276,000) Limited partners' 2,554,000 2,794,000 ---------- ---------- 2,280,000 2,518,000 ---------- ---------- $2,328,000 $2,567,000 ========== ==========
The accompanying notes are an integral part of these financial statements. GREEN GOLD CONSOLIDATED (A California Limited Partnership) Statement of Operations Year ended September 30, 1999 1998 1997 Revenues: Sales of property held for sale $ 478,000 $ 790,000 - Profit deferred on sales of property held for sale (110,000) - - Recognition of deferred profit 562,000 53,000 $ 145,000 Crop sales 174,000 287,000 312,000 --------- -------- --------- 1,104,000 1,130,000 457,000 --------- -------- --------- Costs and expenses: Cost of property sold 320,000 678,000 - Cultural care costs - tree crops 99,000 196,000 228,000 Professional services 30,000 27,000 27,000 Management services 101,000 90,000 82,000 Property taxes 23,000 56,000 44,000 Other operating expenses 15,000 23,000 22,000 Investor services 21,000 19,000 14,000 --------- -------- -------- 609,000 1,089,000 417,000 --------- -------- -------- Income from operations 495,000 41,000 40,000 --------- -------- -------- Other income: Interest income 163,000 165,000 194,000 Other income 12,000 7,000 8,000 --------- -------- -------- 175,000 172,000 202,000 --------- -------- -------- Net income $ 670,000 $ 213,000 $ 242,000 ========= ======== ======== Net income allocable to general partner $ 10,000 $ 5,000 $ 8,000 ======== ========= ======== Net income allocable to limited partners $ 660,000 $ 208,000 $ 234,000 ======== ========= ======== Net income per limited partnership unit $0.07 $0.02 $0.02 ====== ======= ======= Weighted average number of limited partnership units outstanding during the period used to compute earnings per limited partnership unit 9,986,000 9,986,000 9,986,000 ========= ========= =========
The accompanying notes are an integral part of these financial statements. GREEN GOLD CONSOLIDATED (A California Limited Partnership) Statement of Changes in Partners' Equity (Deficit) General Limited Partner Partners Total c> Partners' equity (deficit) at September 30, 1996 $(268,000) $2,922,000 $2,654,000 Distributions (10,000) (250,000) (260,000) Net income 8,000 234,000 242,000 --------- --------- ---------- Partners' equity (deficit) at September 30, 1997 (270,000) 2,906,000 2,636,000 Distributions (11,000) (320,000) (331,000) Net income 5,000 208,000 213,000 -------- --------- ---------- Partners' equity (deficit) at September 30, 1998 (276,000) 2,794,000 2,518,000 Distributions (8,000) (900,000) (908,000) Net income 10,000 660,000 670,000 -------- --------- --------- Partners'equity (deficit) at September 30, 1999 $(274,000) $2,554,000 $2,280,000 ======== ========= =========
The accompanying notes are an integral part of these financial statements. GREEN GOLD CONSOLIDATED (A California Limited Partnership) Statement of Cash Flows Year ended September 30, 1999 1998 1997 Cash flows from operating activities Net income $ 670,000 $ 213,000 $ 242,000 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sales of property (48,000) (112,000) - Recognition of deferred profit (562,000) (53,000) (145,000) Changes in assets and liabilities Accrued interest receivable 9,000 15,000 6,000 Inventories of growing crops 8,000 7,000 - Other assets 14,000 (1,000) 5,000 Accounts payable (5,000) (5,000) 4,000 Accrued liabilities 4,000 5,000 (4,000) -------- ------- -------- Net cash provided by operating activities 90,000 69,000 108,000 -------- -------- -------- Cash flows from investing activities: Collections on notes and accounts receivable, net 1,069,000 259,000 217,000 Sales of short-term investments 427,000 210,000 - Purchases of short-term investments - (427,000) (210,000) Sales of property held for sale 238,000 600,000 - Additions to property held for sale - (49,000) - -------- --------- -------- Net cash provided by investing activities 1,734,000 593,000 7,000 ---------- --------- -------- Cash flows from financing activities: Distributions to general partner (8,000) (11,000) (10,000) Distributions to limited partners (900,000) (320,000) (250,000) --------- --------- -------- Net cash used in financing activities (908,000) (331,000) (260,000) --------- --------- --------- Net increase (decrease) in cash and cash equivalents 916,000 331,000 (145,000) Cash and cash equivalents at beginning of year 777,000 446,000 591,000 -------- --------- --------- Cash and cash equivalents at end of year $1,693,000 $ 777,000 $ 446,000 ========== ========= =========
The accompanying notes are an integral part of these financial statements. Notes to Financial Statements NOTE 1 - THE PARTNERSHIP Green Gold Consolidated, a California Limited Partnership (the Partnership), was organized in accordance with the provisions of the California Uniform Limited Partnership Act for the purpose of receiving the assets and liabilities of twelve limited partnerships under common management and thereby consolidating the operations of those partnerships under an exchange transaction effective June 30, 1983. Under the exchange transaction, the Partnership issued 10,000,000 limited partnership interests (pro rata) to the holders of interests in the twelve individual limited partnerships in exchange for the assets and liabilities of those partnerships. The General Partner is Economic Consultants, a general partnership. The combination of the twelve partnerships into one partnership was treated as a reorganization of entities under common control, accounted for similar to a "pooling of interest." Allocation of profits and losses and cash distributions from operations and cash distributions from sales are made pursuant to the terms of the Partnership Agreement. The Partnership is involved in the development and sale of real estate. Real estate markets are cyclical in nature, accordingly, the Partnership's ability to realize its assets is dependent upon market conditions. All of the Partnership's assets are located within the Inland Empire submarket of the Southern California region. Consequently, the carrying value of the Partnership's real estate ($384,000) and the collectibility of any notes receivable, collateralized by real estate ($240,000), may be affected by the economic strength of the real estate industry in Southern California. The Partnership currently contracts with Las Posas Investment Company (LPIC), formerly known as Ventura Pacific Capital Company. LPIC is a California corporation which performs financial accounting, data processing, marketing, legal, investor relations, asset management and consulting services for the Partnership. These services are performed pursuant to an annual contract which is terminable by either party on 90 days notice. LPIC is not an affiliate of the Partnership or the General Partner. The Partnership is in the process of selling the remaining parcels of land and collecting the outstanding notes receivable. As of September 30, 1999. the Partnership has five parcels of land and five notes receivable. Dissolution of the Partnership will occur upon liquidation of the above assets. Management has estimated the final selling and collecting will occur within fiscal year 2000. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates 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 period. Actual results could differ from those estimates. Cash and cash equivalents The Partnership considers all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Cash and cash equivalents include $1,583,000 and $504,000 of certificates of deposit at September 30, 1999 and 1998, respectively. Short-term investments At September 30, 1998, the Partnership held investments in U.S. Government and agency securities with maturities of one year or less in the aggregate amount of $427,000. Management determines the appropriate classification of its investment securities at the time of purchase and reevaluates such designation as of each balance sheet date. The Partnership has recorded these securities at fair value as it has designated them as "available for sale." The amount of unrealized gain or loss at September 30, 1998 was not material. Inventories Inventories of growing crops are valued at the lower of cost or market under the first-in, first-out (FIFO) method. Cost is defined as cultural care costs related to the growing crops. Property held for sale Property held for sale is recorded at the lower of carrying amount or fair value less cost to sell. In accordance with Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of", the Partnership reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an assets may not be recoverable. An impairment loss would be recognized when the estimated future cash flows is less than the carrying amount of the asset. No impairment losses have been identified by the Partnership. Income taxes The Partnership's records are maintained on the accrual basis consistent with the Internal Revenue Code. No provision for income taxes is included in the accompanying financial statements, as the Partnership's results of operations are allocated to the partners for inclusion in their respective income tax returns. Net income and Partners' equity (deficit) for financial reporting purposes will differ from the Partnership's income tax return because the Partnership's return is filed on a different fiscal year end and different accounting methods are used for financial reporting and income tax reporting for certain items, principally inventory and property sales. At September 30, 1999 and 1998, Partners' equity on the tax basis exceeded Partners' equity on the financial reporting basis by approximately $265,000 and $541,000, respectively. Additionally, the Partnership reported taxable income of $445,000 and $215,000 for the tax years ended December 31, 1998 and 1997, respectively. Profit recognition on real estate sales Revenue from the sale of real estate is recognized at the close of escrow when title has passed, minimum down payment requirements are met, and the Partnership is relieved of any requirements for continued involvement with the property, thus allowing recognition of profits using the full accrual method of accounting in accordance with SFAS No. 66, "Accounting for Sales of Real Estate." Until such time as profit can be recognized under the full accrual method, the installment sales method is used. Recognition of crop sales revenue Revenue from the sale of crops is recognized when crops are harvested and sold. All of the Partnership's crop sales were made to one customer for the year ended September 30, 1999, two customers for the year ended September 30, 1998 and three customers for the year ended September 30, 1997. Net income per limited partnership unit Net income per limited partnership unit is calculated using the weighted average number of limited partnership units outstanding during the year and the limited partners' allocable share of net income. Impaired notes receivable Impaired notes are measured based on the present value of expected future cash flows discounted at the notes' effective interest rate. At September 30, 1999, there are no impaired notes. Comprehensive Income Effective October 1, 1998, the Partnership adopted SFAS No. 130, Reporting Comprehensive Income. This statement requires that all components of comprehensive income be reported in the financial statements in the period in which they are recognized. During the years ended September 30, 1999, 1998 and 1997, the Partnership did not have any components of comprehensive income. Segment Information Effective October 1, 1998, the Partnership adopted SFAS No. 131, Disclosure About Segments of an Enterprise and Related Information. This statement requires disclosure of certain information about the Partnership's operating segments, products, geographic areas in which it operates and its major customers. This statement also allows a Partnership to aggregate similar segments for reporting purposes. Management has determined that its operations can be aggregated into one reportable segment. Additionally, as the Partnership operates within the U.S. no segment disclosures have been included in the accompanying notes to the financial statements. NOTE 3 - RELATED PARTY TRANSACTIONS The Partnership's management agreement with LPIC and Mr. Neno Spondello, Jr. requires that LPIC manage, market and provide property management services for the Partnership's properties. The agreement provides for a management fee equal to 2% of gross partnership receipts and reimbursement of certain administrative expenses incurred while managing the properties. Fees and costs reimbursed under this agreement totaled $101,000, $90,000 and $82,000 for the years ended September 30, 1999, 1998, and 1997, respectively. During fiscal 1999, affiliates of the General Partner received real estate commissions totaling $6,400 related to sales of properties. NOTE 4 - NOTES RECEIVABLE September 30, 1999 1998 First trust deed notes $ 432,000 $ 1,317,000 Accounts receivable -0- 75,000 --------- ---------- 432,000 1,392,000 Less: Deferred profit on real estate sales (158,000) (627,000) Allowance for doubtful accounts (34,000) (99,000) ---------- ---------- $ 240,000 $ 666,000 =========== ===========
Notes and accounts receivable result from sales of Partnership properties. The notes receivable bear interest at rates ranging from 10 percent to 11 percent and mature at various dates through February 2006. The accounts receivable were due from escrow at September 30, 1998 and were entirely received in October, 1998. During fiscal 1999, management reduced its estimate for the allowance for doubtful accounts to $34,000. The reduction of the provision has been included in recognition of deferred profit of $562,000 for the year ended September 30, 1999. NOTE 5 - PROPERTY HELD FOR SALE September 30, 1999 1998 Land $ 384,000 $ 651,000 Improvements 48,000 81,000 Trees 118,000 158,000 ---------- --------- 550,000 890,000 Less accumulated depreciation (166,000) (235,000) ---------- ---------- $ 384,000 $ 655,000 =========== =========
NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION September 30, 1999 1998 Schedule of non-cash investing and financing activities: Sales price of real estate $ 478,000 $ 790,000 Closing costs (49,000) (89,000) Notes and accounts receivable (191,000) (101,000) -------- -------- Net cash proceeds from sales of real estate $ 238,000 $ 600,000 ========== =========
No cash was paid for interest or income taxes during the years ended September 30, 1999, 1998 and 1997. NOTE 7 - SUBSEQUENT EVENT On November 10, 1999, a $1,200,000 cash distribution to the Limited Partners was approved by the Management Committee to be paid in December 1999. On November 9, 1999, a $9,000 cash distribution to the General Partner was made. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURE Inapplicable. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Economic Consultants, the General Partner, is a California general partnership composed of Daniel Lee Stephenson and Tom A. Leevers, as managing general partners, and the spouse of Mr. Leevers. Daniel L. Stephenson, age 56, Chairman of the Board of Directors, President, Chief Executive Officer and Chief Financial Officer of Rancon Financial Corporation ("Rancon") founded Rancon in 1971 for the purpose of establishing Rancon as a commerical, industrial and residential property syndication, development and brokerage concern. Mr. Stephenson is also the general partner of various partnerships sponsored by Rancon. Mr. Stephenson is a graduate of the University of Southern California (B.S., Finance and Real Estate, 1966). He was awarded a Certificate of Completion of the Exeuctive Program for Small Companies by the Graduate School of Business of Stanford University (1981), and a Certificate of Completion of the Smaller Company Management Program, Series I and II, by the Graduate School of Business, Harvard University (1990). He is a licensed real estate broker and a National Association of Securities Dealers, Inc. registered principal. Tom A. Leevers, age 56, has been President of Countryside Realty, a real estate brokerage firm incorporated in California, since its organization in 1981. He was a principal shareholder and Executive Vice President of Rancon from 1971 to 1981. Mr. Leevers is a graduate of California State University at Long Beach (B.S., Economics, 1966), licensed real estate agent, a former Director of the Rancho California Water District and a former member of the California Avocado Commission, serving on the board of directors and finance and advertising committees of the Commission. In 1998, Mr. Leevers was convicted in California of second degree murder, of driving while intoxicated causing great bodily injury, and driving with a blood alcohol level of .08 percent or higher. Mr. Leevers was sentenced in November, 1998. Item 11. EXECUTIVE COMPENSATION Consolidated has no executive officers. The General Partner has a 6.5% interest in all distributions of Cash Available for Distribution. During the fiscal year ended September 30, 1999 the General Partner received distributions of Cash Available for Distribution in the amounts of $8,000. The General Partner is also entitled to receive 6.5% of distributions from Sale or Refinancing Proceeds, but only after payment to the Limited Partners of an amount equal to 100% of their Carried Capital Contribution and a return thereon as discussed in Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters. As of the date hereof, the General Partner has not received and is not expected to ever receive any distributions of Sale or Refinancing Proceeds. The General Partner and its affiliates may perform real estate brokerage services for Consolidated in connection with the sale of property by Consolidated; provided that the aggregate compensation therefore to the General Partner or its affiliates and to any independent broker participating in such transaction with the General Partner or its affiliates shall not exceed the lesser of (i) the compensation customarily charged in arm's-length transactions by other rendering similar services as an ongoing public activity in the same geographic location and for comparable property or (ii) 5% of the gross sales price of each property. For a discussion of Consolidated's agreement with the Manager respecting partnership management services, see Item 1 - Business. Pursuant to this arrangement, the Manager received $101,000 for the fiscal year ended September 30, 1999. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Security Ownership of Certain Beneficial Owners No person is known by Consolidated to be the beneficial owner of more than 5% of the Interests. Security Ownership of Management Amount and Name of Nature of Title of Beneficial Beneficial Percent Class Owner Ownership of Class ---------- ----------------- ------------ --------- Interest Daniel Lee 16,050 - Stephenson in trust (1) (2) Interest Tom A. Leevers 2,738 - direct (2) Interest Rancon Financial 15,625 - Corporation direct (2) - -------------------------------------- (1) Interests are held in trust for the benefit of the family of Mr. Stephenson. (2) Less than 1% of class. Changes in Control The Limited Partners have no right, power or authority to act for or bind Consolidated. However, the Limited Partners have the power to vote upon the following matters affecting the basic structure of Consolidated, each of which shall require the approval of Limited Partners holding a majority of the outstanding Interests: (i) amendment of the Partnership; (ii) dissolution of Consolidated; (iii) sale, exchange or pledge of all or substantially all of the assets of Consolidated; (iv) removal of the General Partner or any successor General Partner; and (v) election of a new General Partner or General Partners upon the removal, retirement, death, insanity, insolvency, bankruptcy or dissolution of the General Partner or any successor General Partner. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Other than as set forth in Item 11 of this report under the caption "Executive Compensation," Consolidated has not been a party to the relationships or transactions required to be reported by this item. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K A. Documents filed as part of this report (1) Financial Statements Included in Part II of this report: Report of Independent Accountants Balance Sheets at September 30, 1999 and 1998 Statements of Operations for the Years Ended September 30, 1999, 1998 and 1997 Statements of Changes in Partners' Equity (Deficit) for the Years Ended September 30, 1999, 1998 and 1997 Statements of Cash Flows for the Years Ended September 30, 1999, 1998 and 1997 Notes to Financial Statements (2) Financial Statement Schedules Included in Part IV of this report: Schedule II - Valuation and Qualifying Accounts & Reserves for the Year Ended September 30, 1999 Schedule III - Real Estate and Accumulated Depreciation - September 30, 1999 (3) Exhibits 3.1 and 4.1 Partnership Agreement, filed as Exhibit 3 and 4 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1984, is hereby incorporated by reference as an exhibit herein. 3.2 and 4.2 Amendment to Partnership Agreement, filed as Exhibit 3.2 and 4.2 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1991, is hereby incorporated by reference as an exhibit herein. 10.1 Agricultural Management Agreement and First Amendment thereto between Agrispect and Consolidated, filed as Exhibit 10.2 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1985, are hereby incorporated by reference as an exhibit herein. 10.2 Second Amendment to Agricultural Management Agreement between Agrispect and Consolidated, filed as Exhibit 10.2 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1991, is hereby incorporated by reference as an exhibit herein. 10.3 Third Amendment to Agricultural Management Agreement between Agrispect and Consolidated, filed as Exhibit 10.3 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1991, is hereby incorporated by reference as an exhibit herein. 10.4 Calavo Bylaws and Marketing Agreement, filed as Exhibit 10.1 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1987, is hereby incorporated by reference as an exhibit herein. 10.5 Partnership Management Agreement between Ventura Pacific Capital Company and Consolidated, filed as Exhibit 10.2 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1986, is hereby incorporated by reference as an exhibit herein. 10.6 First Amendment to Partnership Management Agreement between Ventura Pacific Capital Company and Consolidated, filed as Exhibit 10.6 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1991, is hereby incorporated by reference as an exhibit herein. 10.7 Second Amendment to Partnership Management Agreement between Ventura Pacific Capital Company and Consolidated, filed as Exhibit 10.7 to the annual report on Form 10-K of Consolidated for the fiscal year ended September 30, 1991, is hereby incorporated by reference as an exhibit herein. B.Reports on Form 8-K Consolidated filed no current reports on Form 8-K during the last quarter of the fiscal year covered by this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Date: December 22, 1999 GREEN GOLD CONSOLIDATED By: ECONOMIC CONSULTANTS, General Partner By: Daniel Lee Stephenson, General Partner Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: SIGNATURE CAPACITY Dec. 22, 1999 DANIEL LEE STEPHENSON Principal executive officer, principal financial officer, principal accounting officer and General Partner of Economic Consultants SCHEDULE II GREEN GOLD CONSOLIDATED (A CALIFORNIA LIMITED PARTNERSHIP) Valuation and Qualifying Accounts and Reserves For the Three Year Period Ended September 30, 1999 Allowance Date for Doubtful Accounts ------------- --------------------- Balance, September 30, 1996 $ 99,000 Provision - Write-off - Recovery - Change in estimate - -------- Balance, September 30, 1997 $ 99,000 Provision - Write-off - Recovery - Change in estimate - -------- Balance, September 30, 1998 $ 99,000 Provision - Write-off - Recovery - Change in estimate (65,000) -------- Balance, September 30, 1999 $ 34,000 --------
SCHEDULE III GREEN GOLD CONSOLIDATED (A CALIFORNIA LIMITED PARTNERSHIP) Real Estate and Accumulated Depreciation September 30, 1999 (In thousands)
Cost Capitalized Initial Cost to Subsequent to Partnership Acquisition ------------------------ ------------------------ Trees & Land Carrying Description Encumbrances Land Improvements Improvements Cost Unimproved land: Riverside Co., California: 1&2/24248 -0- 73 71 115 115 21 acres 1/24249 -0- 16 14 27 27 5 acres 1&3/24867 -0- 21 81 132 132 24 acres -------- ------- ----- ------ ----- $ -0- $ 110 $ 166 $ 274 $ 274 -------- ------- ------ ------ ----- Gross Amount Carried at Sept. 30, 1999 -------------------------------- Date Life Trees & Accumulated Construction Date Depreciated Description Land Improvements Total Depreciation Began Acquired Over 1&2/24248 188 71 259 71 N/A 12/74 5-22 yrs 1/24249 43 14 57 14 N/A 3/85 5-22 yrs 1&3/24867 153 81 234 81 N/A 11/86 5-22 yrs ----- ------ ------ ------ $ 384 $ 166 $ 550 $ 166 ----- ----- ------ -----
Notes to Schedule III Green Gold Consolidated (A California Limited Partnership) Real Estate and Accumulated Depreciation (In thousands)
Reconciliation of gross amount at which real estate was carried: Year ended September 30, 1999 1998 1997 INVESTMENT IN REAL ESTATE Balance at beginning of period $ 890 $ 1,586 $ 1,586 Additions during period: Land improvements, etc. 85 Sales during period (340) (781) ------- ------- ------ Balance at end of period $ 550 $ 890 $ 1,586 ------- ------- ------ ACCUMULATED DEPRECIATION Balance at beginning of period $ 235 $ 427 $ 427 Sales during period (69) (192) Additions charged to costs and expenses ------- ------- ------ Balance at end of period $ 166 $ 235 $ 427 ------- ------- ------
EX-27 2
5 1000 YEAR SEP-30-1999 SEP-30-1999 1693 0 432 (34) 0 1763 550 (166) 2328 48 0 0 0 0 2280 2328 1104 1279 609 609 0 0 0 670 0 0 0 0 0 670 .07 .07
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