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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
for Quarterly Period Ended March 31, 2001
Commission file number 33-30312
INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
NORTH CAROLINA 56-1681116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
IJL FINANCIAL CENTER, P.O. BOX 1012
CHARLOTTE, NC 28201-1012
(Address of principal executive offices)
(Zip Code)
(704) 379-9164
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant has (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve 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 the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
7,650 limited partnership units outstanding at May 9, 2001
Page 1 of [8] Sequentially Numbered Pages
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
AS OF MARCH 31, 2001, AND DECEMBER 31, 2000
March 31,
2001 December 31,
(Unaudited) 2000
--------------- ----------------
ASSETS:
Land Held for Sale $6,450,000 $6,450,000
Cash and Cash Equivalents 5,220 1,649
Other 42,362 42,362
---------- ----------
$6,497,582 $6,494,010
========== ==========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT):
Accrued Liabilities 257,384 251,359
Note Payable 227,755 212,754
---------- ----------
485,139 464,113
---------- ----------
Class A Limited Partners' Interest 6,012,693 6,029,973
Subordinated Limited Partners' Interest 84 84
General Partners' Interest (335) (160)
---------- ----------
6,012,443 6,029,897
---------- ----------
$6,497,582 $6,494,010
========== ==========
See Notes to Consolidated Financial Statements
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
Condensed Statements of Operations
Three Three
Months Months
Ended Ended
March 31, March 31,
2001 2000
(Unaudited) (Unaudited)
-------------- ---------------
INCOME:
Interest Income $ 35 $ 18
-------- --------
35 18
EXPENSES:
Professional and Legal Fees 8,604 6,465
Property Tax Expense 38 47
General and Administrative Costs 2,870 1,296
Interest Expense 5,979 4,534
-------- --------
$ 17,490 $ 12,342
-------- --------
NET LOSS (17,454) (12,324)
======== ========
NET LOSS ALLOCATION:
General Partners (175) (123)
Class A Limited Partners (17,280) (12,201)
-------- --------
($17,454) ($12,324)
======== ========
CLASS A LIMITED PARTNERSHIP
UNITS OUTSTANDING 7,650 7,650
-------- --------
NET LOSS PER CLASS A UNIT ($2.26) ($1.59)
======== ========
See Notes to Consolidated Financial Statements
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
(Unaudited)
Subordinated
General Limited Limited
Partners Partners Partner Total
-------------- -------------- -------------- ---------------
Partners' Equity (Deficit)
at December 31, 1999 ($155) $6,084,088 $ 85 $6,084,018
Net Loss for the Three Months
Ended March 31, 2000 (123) (12,201) 0 (12,324)
------ ---------- ---- ----------
Partners' Equity (Deficit)
at March 31, 2000 ($278) $6,071,887 $ 85 $6,071,694
====== ========== ==== ==========
Partners' Equity (Deficit)
at December 31, 2000 ($160) $6,029,973 $84 $6,029,897
Net Loss for the Three Months
Ended March 31, 2001 (175) (17,280) 0 (17,454)
------- ---------- ---- ----------
Partners' Equity (Deficit)
at March 31, 2001 ($335) $6,012,693 $ 84 $6,012,443
======= ========== ==== ==========
See Notes to Consolidated Financial Statements
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000
Three Months Three Months
Ended Ended
March 31, 2001 March 31, 2000
(Unaudited) (Unaudited)
------------------- --------------------
CASH FLOW FROM OPERATING
ACTIVITIES:
Net Loss ($17,454) ($12,322)
Adjustments to reconcile net loss to net
cash used for operations:
Increase in Accrued Liabilities 6,026 4,581
--------- ---------
Net Cash Used for Operating Activities (17,454) (7,741)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Note Payable 15,001 8,000
--------- ---------
Net Cash Provided by Financing Activities 15,001 8,000
Increase (Decrease) in Cash and Cash Equivalents 3,571 257
Cash and Cash Equivalents at Beginning
of Period 1,649 3,443
--------- ---------
Cash and Cash Equivalents at End of Period $5,220 $3,700
========= =========
See Notes to Consolidated Financial Statements
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2001
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 2001, are not
necessarily indicative of the results that may be expected for the year to end
December 31, 2001.
2. ORGANIZATION:
Interstate Land Investors II Limited Partnership ("Registrant" or "Partnership")
is a North Carolina limited partnership. The Partnership filed registration
statements in 1989 and 1990 and offered the sale of the limited partnership
interests to persons who were admitted as limited partners. The initial offering
became effective September 29, 1989, and was terminated November 3, 1989. The
post effective amendment was filed in August 1990, approved in November 1990,
and closed November 30, 1990. Capital contributions of $100 were received from
the general partners and $7,650,000 from the limited partners. The limited
partnership units were sold in $1,000 units. On May 8, 2001, there were 776 unit
holders of record. The Partnership's business now consists of holding for
investment, disposing and otherwise dealing in 145 acres of undeveloped land
("the Property") located in York County, South Carolina. As of May 10, 2001, the
Partnership sold 97 acres of the property to Greenfield Development Company and
the Partnership now holds 48 of the remaining acres of the Property.
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. Liquidity and Capital Resources
As of March 31, 2001, the Registrant had $5,220 on hand in the form of cash and
cash equivalents. The Registrant has executed a note payable to the General
Partner in the amount of $227,755. The general partner plans to continue to fund
the operating cost of the Partnership through additional advances under the
note. The note will extend through the term of the partnership and accrue
interest at prime plus two percent.
Until the Registrant disposes of the Property, its only sources of additional
capital are additional loans and proceeds from the sale of resources on the
property.
2. Results of Operations
The Registrant's net loss increased $12,324 for the first quarter ended March
31, 2000, to $17,454 for the same period in 2001.
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Professional and legal fees increased $6,465 for the three months ended March
31, 2000, to $8,604 for the three months ended March 31, 2001. This increase is
due to the legal work on the contract for the sale of the property. General and
administrative costs increased to $2,870 compared to $1,296 for the first
quarter of 2000. This increase is due to a higher cost of database maintenance
and the outsourcing to the same firm of the partnership transfer process.
Interest expense increased from $4,534 for the three months ended March 31, 2000
to $5,979 for the same period in 2001 due to the higher balance of the note
payable to the general partner. All other expenses were comparable with the 2000
first quarter.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submissions of Matters to a vote of Securities Holders
None.
Item 5. Other Information.
In June 2000, the Partnership entered into a contract with Greenfield
Development Company, LLC, to sell 97 acres of the 145 acres unimproved land. The
potential purchaser deposited $50,000 earnest money with a title agency. Under
the terms of the contract, the potential purchaser had until November 6, 2000,
to complete their due diligence, however, Greenfield requested two 90-day
extensions of the closing date to provide them time to obtain a wetlands permit
from the U.S. Army Corps of Engineers which permit is necessary to allow the
proposed development. An additional $25,000 earnest money was deposited with the
title agency for the first extension and $50,000 was deposited for the second
extension. The first extension expired on March 6, 2001. On May 10, 2001,
Greenfield purchased 97 acres of the property for $4,338,360, which subsequent
cash distribution will equate to approximately $450 per limited partner unit. We
will continue to market the remaining approximate 48 acres for sale.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits None
(b) Reports on Form 8-K
No reports on Form 8-K were required to be filed during the
three months ended March 31, 2001.
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
SIGNATURE
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.
INTERSTATE LAND INVESTORS II
LIMITED PARTNERSHIP
(Registrant)
BY: /s/J. Christopher Boone
----------------------------------------------
J. Christopher Boone
ISC Realty Corporation,
General Partner and Principal Executive
Officer, Principal Financial Officer of the
Registrant
DATE: May 8, 2001
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