<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 JUNE 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 July 21, 1999
Page 1 of 9 Sequentially Numbered Pages
<PAGE> 2
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
Condensed Balance Sheets
As of June 30, 1999, and December 31, 1998
<TABLE>
<CAPTION>
June 30,
1999 December 31,
(Unaudited) 1998
----------- -----------
<S> <C> <C>
ASSETS:
Land Held for Sale $ 4,261,551 $ 4,261,551
Cash and Cash Equivalents 128,174 145,111
Other Assets 1,059 1,059
----------- -----------
$ 4,390,784 $ 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 4,275,967 4,292,962
Subordinated Limited Partners' Interest 98 98
General Partners' Interest (50) (48)
----------- -----------
4,276,015 4,293,012
----------- -----------
$ 4,390,784 $ 4,407,721
=========== ===========
</TABLE>
See Notes to Condensed Financial Statements
2
<PAGE> 3
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
Condensed Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
INCOME:
Interest Income $ 1,345 $ 62 $ 2,770 $ 102
Other Income - Legal Settlement 0 500,000 0 500,000
--------- -------- --------- ---------
1,345 500,062 2,770 500,102
EXPENSES:
Property Taxes 30 28 60 57
Insurance Expense 216 216 216 216
Professional and Legal Fees 1,000 2,713 6,650 9,063
General and Administrative Costs 2,293 1,666 3,313 4,453
Interest Expense 0 786 0 1,757
--------- -------- --------- ---------
Total Expenses 3,539 5,409 10,239 15,546
--------- -------- --------- ---------
NET INCOME (LOSS) before taxes ($ 2,194) $494,653 ($ 7,469) $ 484,556
Income Tax Expense 9,528 0 9,528 0
--------- -------- --------- ---------
NET INCOME (LOSS) (11,722) 494,653 (16,997) 484,556
========= ======== ========= =========
NET INCOME (LOSS) ALLOCATION:
General Partners (1) 49 (2) (2)
Class A Limited Partners (11,721) 494,604 (16,995) 484,508
--------- -------- --------- ---------
Total Net Income (Loss)
Allocated to Partners ($ 11,722) $494,653 ($ 16,997) $ 484,506
========= ======== ========= =========
CLASS A LIMITED PARTNERSHIP
UNITS OUTSTANDING 5,100 5,100 5,100 5,100
--------- -------- --------- ---------
NET INCOME (LOSS) PER CLASS A
LIMITED PARTNERSHIP UNIT ($ 2.30) $ 96.99 ($ 3.33) $ 95.00
========= ======== ========= =========
</TABLE>
See Notes to Condensed Financial Statements
3
<PAGE> 4
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
Condensed Statement of Partners' Equity (Deficit)
For the Six Months Ended June 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 Six Months
Ended June 30, 1998 48 484,508 0 484,556
----------- ----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
AT JUNE 30, 1998 ($ 48) $ 4,608,092 $ 86 $ 4,608,130
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Subordinated
General Limited Limited
Partners Partners Partner Total
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Partners' Equity (Deficit)
at December 31, 1998 ($ 48) $ 4,292,962 $ 98 $ 4,293,012
Net Income (Loss) for the Six Months
Ended June 30, 1999 (2) (16,995) 0 (16,997)
----------- ----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
AT JUNE 30, 1999 ($ 50) $ 4,275,967 $ 98 $ 4,276,015
=========== =========== =========== ===========
</TABLE>
See Notes to Condensed Financial Statements
4
<PAGE> 5
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
Condensed Statements of Cash Flows
For the six months ended June 30, 1999, and 1998
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
June 30, June 30,
1999 1998
(Unaudited) (Unaudited)
--------- ---------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) ($ 7,469) $ 484,556
Adjustments to reconcile net income (loss) to
net cash provided by (used for) operations:
Increase in Accrued Liabilities 60 1,116
--------- ---------
Net Cash Provided by (Used for) Operating Activities (7,409) 485,672
CASH FLOWS FROM FINANCING ACTIVITIES:
Income Tax Expense (9,528) 0
Distributions to Limited Partners 0 0
Increase (Decrease) in Note Payable 0 (37,137)
--------- ---------
Net Cash Used for Provided by (Used for) Financing Activities (9,528) (37,137)
Increase (Decrease) in Cash and Cash Equivalents (16,937) 448,535
--------- ---------
Cash and Cash Equivalents at Beginning of period 145,111 145,111
--------- ---------
Cash and Cash Equivalents at End of Period $ 128,174 $ 593,646
========= =========
</TABLE>
See Notes to Condensed Financial Statements
5
<PAGE> 6
INTERSTATE LAND INVESTORS I LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 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 six month period ended June 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 July 21, 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 July 21, 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 June 30, 1999, the Registrant had excess cash on hand in the amount of
$128,174. This amount reflects the remainder of the $500,000 proceeds received
from the William Garith Allen legal settlement and the payoff of the $50,337
outstanding loan. Approximately $160,000 was retained for working capital and
$306,000 was distributed to the partners on August 11, 1998.
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 $16,997 for the six months ended
June 30, 1999, as compared to the net income of $484,556 for the six months
ended June 30, 1998. The net loss is a return to the status quo for the June 30,
1999, quarter as the income for the June 30, 1998, quarter includes the proceeds
from the settlement of the lawsuit with William Garith Allen that resulted in
$500,000 in extraordinary income for that quarter.
Professional and legal fees decreased from $9,063 to $6,650 reflecting
reduced legal activity due to the settlement of the above referenced lawsuit.
General and administrative expenses decreased from $4,453 to $3,313. The
Partnership was required to pay NC State income tax in the amount of $9,528 on
income earned in 1998. Interest expense decreased from $1,757 for the six months
ended June 30, 1998 to zero for the current quarter. This decrease reflects the
payoff of the outstanding loan. All other expenses were roughly in line with
1998 second quarter results.
7
<PAGE> 8
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Partnership has 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.
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 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.
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.
8
<PAGE> 9
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 six months ended June
30, 1999.
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: July 21, 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 6 MONTHS ENDED
JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 128,174
<SECURITIES> 0
<RECEIVABLES> 1,059
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,261,551
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,390,784
<CURRENT-LIABILITIES> 114,769
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,276,015
<TOTAL-LIABILITY-AND-EQUITY> 4,390,784
<SALES> 2,770
<TOTAL-REVENUES> 2,770
<CGS> 0
<TOTAL-COSTS> 7,469
<OTHER-EXPENSES> 9,528
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,469)
<INCOME-TAX> 9,528
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,997)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
