<PAGE> 1
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 SEPTEMBER 30, 1999
Commission file number 33-22420-A
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
(Exact name of Registrant as specified in its charter)
NORTH CAROLINA 56-1610635
(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 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.
5,100 limited partnership units outstanding at November 10, 1999
Page 1 of 9 Sequentially Numbered Pages
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INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
September 30,
1999 December 31,
(Unaudited) 1998
------------------- --------------------
<S> <C> <C>
ASSETS:
Land Held for Sale $4,261,551 $4,261,551
Cash and Cash Equivalents 128,089 145,111
Other Assets 1,059 1,059
------------------- --------------------
$4,390,699 $4,407,721
=================== ====================
LIABILITIES AND PARTNERS' EQUITY (DEFICIT):
Accrued Liabilities 7,144 7,084
Note Payable 107,625 107,625
------------------- --------------------
$114,769 114,709
------------------- --------------------
Class A Limited Partners' Interest 4,275,882 4,292,962
Subordinated Limited Partners' Interest 98 98
General Partners' Interest (50) (48)
------------------- --------------------
4,275,930 4,293,012
------------------- --------------------
$4,390,699 $4,407,721
=================== ====================
</TABLE>
See attached notes to the condensed financial statements
2
<PAGE> 3
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
Condensed Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
INCOME:
Interest Income $1,332 $3,749 $4,102 $3,851
Other Income - Legal Settlement $0 $0 $0 $500,000
---------------- --------------- --------------- ----------------
1,332 3,749 4,102 503,851
EXPENSES:
Property Taxes 0 29 60 86
State Tax Expense 0 0 9,528 0
Insurance Expense 0 0 216 216
Professional and Legal Fees 32 0 6,682 7,706
Interest expense 0 0 0 1,757
General and Administrative Costs 1,386 834 4,698 6,644
---------------- --------------- --------------- ----------------
Total Expenses 1,417 863 21,184 16,409
---------------- --------------- --------------- ----------------
NET INCOME (LOSS) ($85) $2,886 ($17,082) $487,442
================ =============== =============== ================
NET INCOME (LOSS) ALLOCATION:
General Partners ($0) $0 ($2) $49
Class A Limited Partners (85) 2,886 (17,080) 487,394
---------------- ------------------------------------------------
Total Net Income (Loss)
Allocated to Partners (85) 2,886 (17,082) 487,442
================ =============== =============== ================
CLASS A LIMITED PARTNERSHIP
UNITS OUTSTANDING 5,100 5,100 5,100 5,100
================ =============== =============== ================
NET LOSS PER CLASS A
LIMITED PARTNERSHIP UNIT ($0.02) $0.57 ($3.35) $95.58
================ =============== =============== ================
</TABLE>
See attached notes to the condensed financial statements
3
<PAGE> 4
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1999 1998
(Unaudited) (Unaudited)
---------------- ----------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) ($17,082) $487,442
Adjustments to reconcile net income (loss) to
net cash used for operations:
Increase in Property Taxes Payable 60 86
Increase in Accrued Liabilities 0 1,058
---------------- ----------------
60 1,144
Net Cash used for Operating Activities (17,022) 488,586
---------------- ----------------
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (Decrease) in Note Payable 0 (37,137)
---------------- ----------------
Net Cash Provided by Financing Activities 0 (37,137)
---------------- ----------------
Increase (Decrease) in Cash and Cash Equivalents (17,022) 451,449
Distributions to Limited Partners 0 (306,000)
---------------- ----------------
Cash and Cash Equivalents at Beginning of Period 145,111 953
---------------- ----------------
Cash and Cash Equivalents at End of Period $128,089 $146,402
================ ================
</TABLE>
See attached notes to the condensed financial statements
4
<PAGE> 5
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
CONDENSED STATEMENT OF PARTNERS' EQUITY (DEFICIT)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Subordinated
General Limited Limited
Partners Partners Partner Total
---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Partners' Equity (Deficit)
at December 31, 1997 ($96) $4,123,584 $86 $4,123,574
Net Income (Loss) for the Nine Months
Ended September 30, 1998 49 487,394 0 487,442
Distributions to Partners 0 (306,000) 0 (306,000)
---------------- --------------- --------------- ----------------
PARTNERS' EQUITY (DEFICIT)
AT SEPTEMBER 30, 1998 ($47) $4,304,978 $86 $4,305,016
================ =============== =============== ================
Partners' Equity (Deficit)
at December 31, 1998 ($48) $4,292,962 $98 $4,293,012
Net Income (Loss) for the Nine Months
Ended September 30, 1999 (2) (17,080) 0 (17,082)
Distributions to Partners 0 0 0
---------------- --------------- --------------- ----------------
PARTNERS' EQUITY (DEFICIT)
AT SEPTEMBER 30, 1999 ($50) $4,275,882 $98 $4,275,930
================ =============== =============== ================
</TABLE>
See attached notes to the condensed financial statements
5
<PAGE> 6
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1999
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 nine month period ended September 30, 1999, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999.
2. ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES:
Interstate Land Investors I Limited Partnership (the "Partnership" or
"Registrant") is a North Carolina limited partnership. The Partnership filed a
registration statement in 1988 and offered the sale of the limited partnership
interests to persons who were admitted as limited partners. The offering became
effective September 7, 1988, and was terminated September 30, 1988. Capital
Contributions of $100 were received from the general partners and $5,100,000
from the limited partners. The limited partnership interests were sold in $1,000
units. On November 10, 1999, there were 523 unit holders of record. The
Partnership's business now consists of holding for investment, disposing, and
otherwise dealing in 97 acres of undeveloped land (the "Property") located in
York County, South Carolina. As of November 10, 1999, the Partnership held all
97 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 September 30, 1999, the Registrant had excess cash on hand in the
amount of $128,089. This amount reflects the remainder that was retained for
working capital from the $500,000 proceeds received from the William Garith
Allen legal settlement, less the $306,000 distribution to the partners on August
11, 1998, and the payoff of the $50,337 outstanding loan.
Until the Registrant disposes of its approximately 96.74 acre tract of
land located in York County, South Carolina, its only sources of additional
capital are loans and the interest earned on its short-term investments.
6
<PAGE> 7
The Year 2000 Issue
The Registrant determined that the potential consequences of year 2000
will not have a material effect on business, results of operations, or financial
condition. This conclusion was reached after researching computer programs and
third party vendors that are currently used to manage this limited partnership.
The Registrant is not solely reliant upon outside systems or vendors for record
keeping. Information is on file in our offices which states that existing
computer software is Y2K compliant. The computer hardware and peripherals
located in the Registrant's offices are also Y2K ready.
If necessary, the Registrant can revert to manual methods for
bookkeeping, check writing, preparation of financial statements and investor
correspondence. Hard copies of essential information are available and will
continue to be available well into the year 2000.
2. RESULTS OF OPERATIONS
The Partnership reported a net loss of ($17,082) for the nine months
ended September 30, 1999, as compared to the net income of $487,442 for the nine
months ended September 30, 1998. The net loss is a return to the status quo for
this period as the gain for the September 30, 1998, period includes the proceeds
from the settlement of the lawsuit with William Garith Allen that resulted in
$500,000 in extraordinary income. Professional and legal fees decreased to
$6,682 down from $7,706 due to savings in tax and audit services and the legal
settlement. General and administrative expenses decreased to $4,698 down from
$6,644. The 1998 figure includes charges for studies performed during 1998 to
evaluate the current market value and environmental conditions in the area of
the property. Interest expense decreased to zero from $1,757 with the repayment
of the Note Payable. All other expenses were roughly in line with 1998 third
quarter results.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1998, the Partnership settled the claims against William Garith
Allen in exchange for assignment to a third party, a $500,000 cash payment and
relinquishment of his interests in the Partnership. The Partnership and Mr.
Allen have signed mutual releases in conjunction with this settlement.
7
<PAGE> 8
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
On October 12, 1999, the Partnership signed a letter of intent with
Crescent Resources, Inc. to purchase the property for $40,000 per acre for 91
acres and $20,000 per acre for a maximum of 5 acres of wetlands (purchaser is
not required to pay for any wetlands acreage in excess of 5 acres). Assuming the
amount of wetlands is 5 acres or less, the total purchase price will be
$3,740,000 A contract is being drafted at the time of this filing. The purchaser
has no money at stake until after the due diligence period that ends 90 days
after the purchaser receives approval of the sale from the limited partners.
On April 1, 1999, Interstate/Johnson Lane merged into Wachovia
Corporation and officially changed its name to Wachovia Securities, Inc. The
Registrant will be an affiliate of Wachovia Securities, Inc., but not be part of
Wachovia Corporation's banking subsidiary. Personnel and offices will continue
to operate as usual.
On October 31, 1998, the Partnership entered into a listing agreement
with The Crosland Group to sell the property . The property is listed for sale
at $45,000 per acre.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EX-27 FINANCIAL DATA SCHEDULE (FOR SEC USE ONLY)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the nine months ended
September 30, 1999.
8
<PAGE> 9
INTERSTATE LAND INVESTORS I 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 I
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: NOVEMBER 10, 1999
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF INTERSTATE LAND INVESTORS I L.P. FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 128,089
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,261,551
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,390,699
<CURRENT-LIABILITIES> 7,144
<BONDS> 107,625
0
0
<COMMON> 0
<OTHER-SE> 4,275,930
<TOTAL-LIABILITY-AND-EQUITY> 4,390,699
<SALES> 0
<TOTAL-REVENUES> 4,102
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,184
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (17,082)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
