SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000.
[ ] 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 0-15571
CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP
(Exact name or registrant as specified in its charter)
North Carolina 56-1494619
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4000 Blue Ridge Road, Suite 100
Raleigh, North Carolina 27612
(Address of principal executive office)
(Zip Code)
(919) 781-1700
(Registrant's telephone number, including area code)
(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 _________
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The Exhibit Index is located on Page 12.
<PAGE>
PART I - FINANCIAL INFORMATION
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Item 1. Financial Information
a) Income Statement
<TABLE>
<CAPTION>
STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------------------- -------------------------------------------
2000 1999 2000 1999
----------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C> <C>
Interest and other income $ 2,751 $ 2,830 $ 6,714 $ 14,833
----------------- ------------------- ------------------- ---------------------
Total Income 2,751 2,830 6,714 14,833
General and
Administrative expenses 8,167 14,603 35,376 40,999
----------------- ------------------- ------------------- ---------------------
NET LOSS $ (5,416) $ (11,773) $ (28,662) $ (26,166)
================= =================== =================== =====================
Allocation of net loss to:
General Partner:
From other operations $ 0 $ 0 $ 0 $ (865)
----------------- ------------------- ------------------- ---------------------
Total to General Partner 0 0 0 (865)
----------------- ------------------- ------------------- ---------------------
Limited Partners:
From other operations (5,416) (11,773) (28,662) (25,301)
----------------- ------------------- ------------------- ---------------------
(5,416) (11,773) (28,662) (25,301)
----------------- ------------------- ------------------- ---------------------
TOTAL ALLOCATION $ (5,416) $ (11,773) $ (28,662) $ (26,166)
================= =================== =================== =====================
Net loss limited partnership unit
(based on 5,900 weighted average limited
partnership units outstanding):
From other operations $ (0.92) $ (1.99) $ (4.86) $ (4.29)
----------------- ------------------- ------------------- ---------------------
TOTAL PER UNIT $ (0.92) $ (1.99) $ (4.86) $ (4.29)
================= =================== =================== =====================
</TABLE>
See notes to unaudited financial statements.
2
<PAGE>
b) Balance Sheets
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, 2000
(Unaudited) December 31,1999
---------------------- ----------------
<S> <C> <C>
ASSETS
Cash $ 66,286 $ 74,024
Short-term investments 224,255 273,965
---------------------- ----------------
CASH AND CASH EQUIVALENTS 290,541 347,989
Land held for investment--Note B 3,594,592 3,594,592
Other assets 3,584 3,584
---------------------- ----------------
TOTAL ASSETS $ 3,888,717 $ 3,946,165
====================== ================
LIABILITIES AND PARTNERS' EQUITY
Trade accounts payable and other
accrued liabilities $ 8,934 $ 12,510
Distributions not claimed by limited partners 115,108 142,725
Accounts payable-related party 5,407 3,000
---------------------- ----------------
TOTAL LIABILITIES $ 129,449 $ 158,235
---------------------- ----------------
PARTNERS' EQUITY
General partner's equity $ 0 $ 0
Limited partners' equity; 5,900 units
authorized, issued, and outstanding 3,759,268 3,787,930
----------------------- -----------------
TOTAL PARTNERS' EQUITY $ 3,759,268 $ 3,787,930
----------------------- -----------------
TOTAL LIABILITIES
AND PARTNERS' EQUITY $ 3,888,717 $ 3,946,165
====================== ================
</TABLE>
See notes to unaudited financial statements.
3
<PAGE>
c) Statements of Changes in Partners' Capital
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (Unaudited)
<TABLE>
<CAPTION>
Limited General Limited
Partnership Partner's Partners'
Units Equity Equity Total
----------------- ------------------- --------------------- -------------------------
<S> <C> <C> <C> <C>
Balance at
January 1, 2000 5,900 $ 0 $ 3,787,930 $ 3,787,930
Net income for the
Nine months ended
September 30, 2000 0 (28,662) (28,662)
----------------- ------------------- --------------------- -------------------------
BALANCE AT
SEPTEMBER 30, 2000 5,900 $ 0 $ 3,759,268 $ 3,759,268
================= =================== ===================== =========================
Balance at
January 1, 1999 5,900 $ 865 $ 3,826,723 $ 3,827,588
Net income for the
Nine months ended
September 30, 1999 (865) (25,301) (26,166)
----------------- ------------------- --------------------- -------------------------
BALANCE AT
SEPTEMBER 30, 1999 5,900 $ 0 $ 3,801,422 $ 3,801,422
================= =================== ===================== =========================
</TABLE>
See notes to unaudited financial statements.
4
<PAGE>
d) Statements of Changes in Financial Position
STATEMENTS OF CASH FLOW (Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
-------------------------------------------
2000 1999
-------------------- --------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (28,662) $ (26,166)
Changes in assets and liabilities:
(Increase) decrease in other assets 0 (2,305)
Increase (decrease) in trade accounts payable
and distributions not claimed by limited partners (28,786) (15,116)
-------------------- --------------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (57,448) (43,587)
-------------------- --------------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (57,448) (43,587)
Cash and cash equivalents at beginning
of period 347,989 413,165
-------------------- --------------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 290,541 $ 369,578
==================== ====================
</TABLE>
Supplemental disclosures of cash flow information Cash paid for interest during
the nine months ended September 30 was $0 in 2000 and $0 in 1999.
See notes to unaudited financial statements.
5
<PAGE>
e) Notes to Financial Statements
NOTES TO UNAUDITED FINANCIAL STATEMENTS
September 30, 2000
NOTE A - SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS
Carolina Investment Partners, Limited Partnership (the "Registrant"), was
organized in 1985 to invest in real property which it will sell or lease
undeveloped or develop into office or commercial projects. Walsmith Associates
Two, a North Carolina general partnership, is the general partner (the "General
Partner").
Basis of Presentation:
The accompanying September 30, 2000 financial statements of the Registrant are
unaudited. In the opinion of the General Partner, all adjustments (consisting of
normal accruals) considered necessary for a fair presentation have been
included. Operating results for the period presented are not necessarily
indicative of the results that may be expected for the entire year.
NOTE B - LAND HELD FOR INVESTMENT AND RELATED COMMITMENTS AND TRANSACTIONS
In July 1986, the Registrant purchased for $1,223,175 an undeveloped 16.3-acre
parcel of land in Cary, North Carolina, known as the Wellington Parcel, from
Wellington Park Associates ("WPA"), an affiliate of the General Partner. The
land was carried at the lower of (i) contract cost plus capitalized purchase and
closing costs or (ii) net realizable value. The contract under which the
Registrant purchased the parcel provided that WPA would share with the
Registrant in any profits resulting from the sale of the Wellington Parcel.
In June 1986 the Registrant purchased for approximately $3,080,200 an
undeveloped 26.7-acre parcel of land in Cary, North Carolina, known as the
Martin Parcel, from an affiliate of the General Partner. The land is carried at
the lower of (i) contract cost plus capitalized purchase and closing costs or
(ii) net realizable value.
In 1996, 1997 and 1998 the Registrant sold the Wellington Parcel to a third
party under the terms of an Agreement for the Purchase and Sale of Real Estate,
as amended ("the Agreement"), between the Registrant, Wellington Center
Associates LLC (successor to Churchill & Banks, Ltd.) ("WCA"), and ADA
Corporation of North Carolina ("ADA"), an affiliate of the Registrant's General
Partner. The total sales price for the property sold, a portion of which was
owned by ADA, was $3,927,636. This sales price was allocated among the
Registrant and ADA based upon acreage sold by each, with $3,730,963 to the
Registrant and $196,673 to ADA. As of April 9, 1999, all of the Wellington
Parcel was sold.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
----------------------------------------------------------------------
The Registrant's operations resulted in net loss of $5,416 during the quarter
ended September 30, 2000 compared to a net loss of $11,773 during the same
period of 1999, and a net loss of $28,662 during the nine months ended September
30, 2000 compared to a net loss of $26,166 during the same period of 1999. The
primary differences between 2000 and 1999 were:
Three months ended September 30:
o Interest income earned in the three months ended September 30,
2000 was approximately $1,300 less than the three months ended
September 30, 1999 due to a lower amount in cash and investments.
Nine months ended September 30:
o In the first quarter of 1999, there was a refund of $6,113 from
the overpayment of property taxes. The only income of the
Registrant during the first nine months of 2000 was $6,714 of
interest and address change fees.
Changes in the Registrant's financial condition as of September 30, 2000, in
comparison to December 31, 1999, are primarily due to:
o Reclassification of checks that were classified as liabilities to
the limited partners. These checks, totaling $27,617 as of
September 30, 2000, have reduced cash and accounts payable.
As of November 10, 2000, the Registrant has $291,030 in cash and short-term
investments, which is sufficient to meet its needs during the next year.
The Registrant maintains its excess funds in a money market account and
certificates of deposit at Centura Bank. The General Partner believes these
accounts are an appropriate investment of the Registrant's funds. Until its
properties are sold, placed into development and/or refinanced, the Registrant
anticipates deficits from operations and administrative expenses.
YEAR 2000
The Registrant did not experience any material disruptions in its operations as
a result of the so-called "Year 2000 Problem." The Registrant did not incur any
material expenses in connection with its actions to assess the Year 2000 Problem
and the Year 2000 Problem did not materially affect the Registrant's financial
condition. The Year 2000 Problem did not materially affect the Martin parcel.
In addition, the Registrant is not aware that its bank or the Registrant's
General Partner experienced any material disruptions in their operations or
activities. The Registrant does not expect to encounter any Year 2000 problems
in the foreseeable future, although it continues to monitor the situation. It is
possible, however, that if Year 2000 problems are incurred by the Registrant's
bank and/or General Partner, such problems could have a negative impact on the
future operations and financial performance of the Registrant, although the
Registrant has not
7
<PAGE>
been able to specifically identify any such problems among such providers.
Furthermore, the Year 2000 Problem may impact other entities with which the
Registrant may transact business and the Registrant cannot predict the effect of
the Year 2000 Problem on such entities or the resulting effect on the
Registrant.
Cautionary Statement Identifying Important Factors That Could Cause the
Registrant's Actual Results to Differ From Those Projected in Forward Looking
Statements.
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, readers of this document, and
any document incorporated by reference herein, are advised that this
document and documents incorporated by reference into this document
contain both statements of historical facts and forward looking
statements. Forward looking statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially
from those indicated by the forward looking statements. Examples of
forward looking statements include, but are not limited to (i)
projections of revenues, income or loss, earnings or loss per share,
capital expenditures, dividends, capital structure and other financial
items, (ii) statements of the plans and objectives of the Registrant or
its management, including the introduction of new products, or
estimates or predictions of actions by customers, suppliers,
competitors or regulatory authorities, (iii) statements of future
economic performance, and (iv) statements of assumptions underlying
other statements and statements about the Registrant or its business.
This document and any documents incorporated by reference herein also
identify important factors which could cause actual results to differ
materially from those indicated by the forward looking statements.
These risks and uncertainties include uncertainties about the ability
of the Registrant to sell its other real estate assets, the price of
real estate sales, environmental and similar liabilities, future
operating expenses and the adequacy of capital resources to meet future
operating expenses, which are described herein and/or in documents
incorporated by reference herein.
The cautionary statements made pursuant to the Private Litigation
Securities Reform Act of 1995 above and elsewhere by the Registrant
should not be construed as exhaustive or as any admission regarding the
adequacy of disclosures made by the Registrant prior to the effective
date of such Act. Forward looking statements are beyond the ability of
the Registrant to control and in many cases the Registrant cannot
predict what factors would cause actual results to differ materially
from those indicated by the forward looking statements.
Item 3 Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
8
<PAGE>
Part II
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<S> <C> <C>
(a) Exhibit No. 3.1 Amended Agreement of Limited Partnership of the
Registrant (incorporated by reference to Exhibit 4.1 to
the Registrant's Annual Report filed on Form 10-K for the
year ended December 31, 1986).
Exhibit No. 10.1 Purchase Agreement between Registrant and Walsmith
Associates regarding the Martin Parcel (incorporated by
reference to Exhibit 10.1to the Registrant's Annual Report
filed on Form 10-K for the year ended December 31, 1986).
Exhibit No. 10.2 Offer to Purchase and Contract for the Sale and Purchase
of Real Estate, dated as of January 24, 1986, between
Wellington Park Associates and the Registrant
(incorporated by reference to Exhibit 6A to the
Registrant's Quarterly Report filed on Form 10-Q for the
period ended June 30, 1989).
Exhibit No. 10.3 Agreement between the North Carolina Department of
Transportation and Walsmith Associates (incorporated by
reference to Exhibit 10.3 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1986).
Exhibit No. 10.4 Assignment and Assumption Agreement between the
Registrant and Walsmith Associates (incorporated by
reference to Exhibit 10.4 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1986).
Exhibit No. 10.5 Amendment to Offer to Purchase and Contract for the Sale
and Purchase of Real Estate, dated as of February 1,
1990, between Wellington Park Associates and the
Registrant (incorporated by reference to Exhibit 10.6 to
the Registrant's Annual Report filed on Form 10-K for the
period ended December 31, 1989).
Exhibit No. 10.6 Agreement for the Purchase and Sale of Real Estate, dated
as of April 20, 1995, between Churchill & Banks, Ltd.,
ADA Corporation of North Carolina, and the Registrant
(incorporated by reference to Exhibit C to the
Registrant's current report filed on Form 8-K, dated
April 20, 1995).
Exhibit No. 10.7 First Amendment to the Agreement for the Purchase and
Sale of Real Estate, dated as of August 9, 1995, between
Churchill & Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated
9
<PAGE>
by reference to Exhibit C to the Registrant's Current
Report filed on Form 8-K, dated August 9, 1995).
Exhibit No. 10.8 Second Amendment to the Agreement for the Purchase and
Sale of Real Estate, dated as of April 19, 1996, between
Churchill & Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated by reference
to Exhibit 28.5 to the Registrant's Quarterly Report
filed on Form 10-Q for the period ended March 31, 1996).
Exhibit No. 10.9 Third Amendment to the Agreement for the Purchase and
Sale of Real Estate, dated as of September 10, 1996,
between Churchill & Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated by reference
to Exhibit 10.1 to the Registrant's Current Report filed
on Form 8-K, dated September 25, 1996).
Exhibit No. 10.10 Fourth Amendment to the Agreement for the Purchase and
Sale of Real Estate, dated as of September __, 1996,
between Churchill & Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated by reference to
Exhibit 10.2 to the Registrant's Current Report filed on
Form 8-K, dated September 25, 1996).
Exhibit No. 10.11 Fifth Amendment to the Agreement for the Purchase and
Sale of Real Estate, dated as of September 27, 1996,
between Wellington Center Associates, LLC, ADA
Corporation of North Carolina, and the Registrant
(incorporated by reference to Exhibit 10.3 to the
Registrant's Current Report filed on Form 8-K, dated
September 25, 1996).
10
<PAGE>
Exhibit No. 10.12 Sixth Amendment to the Agreement for the Purchase and
Sale of Real Estate, dated as of September 12, 1997,
between Wellington Center Associates, LLC, ADA
Corporation of North Carolina, and the Registrant
(incorporated by reference to Exhibit 10.12 to the
Registrant's Quarterly Report on Form 10-Q, dated
September 30, 1997).
Exhibit No. 10.13 Letter Agreement to amend the Agreement for the Purchase
and Sale of Real Estate, dated December 12, 1997 between
Churchill & Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated by reference to
Exhibit 10.13 to the Registrant's Quarterly Report filed
on Form 10-Q for the period ended March 31, 1998).
Exhibit No. 10.14 Eighth Amendment to the Agreement for the Purchase and
Sale of Real Estate, dated March 24, 1998 between
Churchill & Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated by reference to
Exhibit 10.14 to the Registrant's Quarterly Report filed
on Form 10-Q for the period ended March 31, 1998).
Exhibit No. 27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K. None
-------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAROLINA INVESTMENT PARTNERS
LIMITED PARTNERSHIP (Registrant)
BY: WALSMITH ASSOCIATES TWO,
General Partner
By: /s/ Alton L. Smith III
-----------------------
Alton L. Smith III, General Partner
Date: November 10, 2000
11
<PAGE>
INDEX
TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page
----------- ----------- -----
<S> <C>
3.1 Amended Agreement of Limited Partnership of
the Registrant (incorporated by reference
to Exhibit 4.1 to the Registrant's Annual
Report filed on Form 10-K for the year
ended December 31, 1986).
10.1 Purchase Agreement between Registrant and
Walsmith Associates regarding the Martin
Parcel (incorporated by reference to
Exhibit 10.1to the Registrant's Annual
Report filed on Form 10-K for the year
ended December 31, 1986).
10.2 Offer to Purchase and Contract for the Sale
and Purchase of Real Estate, dated as of
January 24, 1986, between Wellington Park
Associates and the Registrant (incorporated
by reference to Exhibit 6A to the
Registrant's Quarterly Report filed on Form
10-Q for the period ended June 30, 1989).
10.3 Agreement between the North Carolina
Department of Transportation and Walsmith
Associates (incorporated by reference to
Exhibit 10.3 to the Registrant's Annual
Report on Form 10-K for the year ended
December 31, 1986).
10.4 Assignment and Assumption Agreement between
the Registrant and Walsmith Associates
(incorporated by reference to Exhibit 10.4
to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1986).
10.5 Amendment to Offer to Purchase and
12
<PAGE>
Contract for the Sale and Purchase of Real
Estate, dated as of February 1, 1990,
between Wellington Park Associates and the
Registrant (incorporated by reference to
Exhibit 10.6 to the Registrant's Annual
Report filed on Form 10-K for the period
ended December 31, 1989).
10.6 Agreement for the Purchase and Sale of Real
Estate, dated as of April 20, 1995, between
Churchill & Banks, Ltd., ADA Corporation of
North Carolina, and the Registrant
(incorporated by reference to Exhibit C to
the Registrant's current report filed on
Form 8-K, dated April 20, 1995).
10.7 First Amendment to the Agreement for the
Purchase and Sale of Real Estate, dated as
of August 9, 1995, between Churchill &
Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated
by reference to Exhibit C to the
Registrant's Current Report filed on Form
8-K, dated August 9, 1995).
10.8 Second Amendment to the Agreement for the
Purchase and Sale of Real Estate, dated as
of April 19, 1996, between Churchill &
Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated
by reference to Exhibit 28.5 to the
Registrant's Quarterly Report filed on Form
10-Q for the period ended June 30, 1996).
10.9 Third Amendment to the Agreement for the
Purchase and Sale of Real Estate, dated as
of September 10, 1996, between Churchill &
Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated
by reference to Exhibit 10.1 to the
Registrant's Current
13
<PAGE>
Report filed on Form 8-K, dated September
25, 1996).
10.10 Fourth Amendment to the Agreement for the
Purchase and Sale of Real Estate, dated as
of September __, 1996, between Churchill &
Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated
by reference to Exhibit 10.2 to the
Registrant's Current Report filed on Form
8-K, dated September 25, 1996).
10.11 Fifth Amendment to the Agreement for the
Purchase and Sale of Real Estate, dated as
of September 27, 1996, between Wellington
Center Associates, LLC, ADA Corporation of
North Carolina, and the Registrant
(incorporated by reference to Exhibit 10.3
to the Registrant's Current Report filed on
Form 8-K, dated September 25, 1996).
10.12 Sixth Amendment to the Agreement for the
Purchase and Sale of Real Estate, dated as
of September 12, 1997, between Wellington
Center Associates, LLC, ADA Corporation of
North Carolina, and the Registrant
(incorporated by reference to Exhibit 10.12
to the Registrant's Quarterly Report filed
on Form 10-Q for the period ended September
30, 1997).
10.13 Letter Agreement to amend the Agreement for
the Purchase and Sale of Real Estate, dated
as of December 12, 1997, between Churchill
& Banks, Ltd., ADA Corporation of North
Carolina, and the Registrant (incorporated
by reference to Exhibit 10.13 to the
Registrant's Quarterly Report filed on Form
10-Q for the period ended March 31, 1998).
14
<PAGE>
10.14 Eighth Amendment to the Agreement for the
Purchase and Sale of Real Estate, dated as
of March 24, 1998 between Wellington Center
Associates, LLC, ADA Corporation of North
Carolina, and the Registrant. (incorporated
by reference to Exhibit 10.14 to the
Registrant's Quarterly Report filed on Form
10-Q for the period ended March 31, 1998).
27 Financial Data Schedule
</TABLE>
15
