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FORM 10-Q.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended September 30, 1998
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: 33-22908-A
NORTH BY NORTHEAST, LTD.
(Exact name of Registrant as specified in its charter)
Tennessee 62-1356792
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
4400 Harding Road, Suite 500, Nashville, Tennessee 37201
(Address of principal executive office) (Zip Code)
(615) 292-1040
(Registrant's telephone number, including area code)
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 at least the past 90 days.
YES X NO
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statement
NORTH BY NORTHEAST, LTD.
(A Tennessee Limited Partnership)
FINANCIAL STATEMENTS
For The Three and Nine Months Ended September 30,
1998 and 1997
INDEX
Financial Statements
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
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<TABLE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
ASSETS
<CAPTION>
September 30, December 31,
1998 1997
<S> <C> <C>
CASH $ 323,170 $ 279
INVESTMENT IN PARTNERSHIP 23,275 223,570
Total Assets $ 346,445 $ 223,849
======= =======
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE TO AFFILIATE $ - $ 88,000
PARTNERS' EQUITY:
Limited Partners (1,875 units
outstanding) 370,784 370,784
General Partner (24,339) (234,935)
TOTAL PARTNERS' EQUITY 346,445 135,849
Total Liabilities
& Partners' Equity $346,445 $223,849
======= =======
<FN>
See notes to financial statements.
/TABLE
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<TABLE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Quarter to Date Year to Date
Ending September 30,
1998 1997 1998 1997
REVENUES:
<S> <C> <C> <C> <C>
Interest Income $ - $ - $ 615 $ 898
Equity in income from
investment in Partnership 194,692 47,934 224,705 50,397
Miscellaneous - - 1,482 -
Total Revenues 194,692 47,934 226,802 51,295
EXPENSES:
Legal & Accounting 400 - 16,174 5,975
Interest Expense - 4,260 - 13,329
General & Administrative - - 32 617
Total expenses 400 4,260 16,206 19,921
Net Income $194,292 $43,674 $210,596 $ 31,374
========= ========= ======== ========
<FN>
See notes to financial statements
/TABLE
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<TABLE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Year to date
September 30,
1998 1997
Cash Flows from Operating Activities:
<S> <C> <C>
Net income $ 210,596 $ 31,374
Adjustments to reconcile Net income
to Net Cash Used by
Operating Activities:
Equity In Income from Investment
in Partnership (224,705) (50,397)
Decrease in Accrued Interest - (4,355)
Decrease In Accounts Payable
to Affiliate (88,000) (100,000)
Net Cash Used by Operating
Activities (102,109) (123,378)
Cash Flows from Investing Activities:
Distributions from Investment
In Partnership 425,000 110,000
Net Increase (Decrease) in Cash 322,891 (13,378)
CASH AT JANUARY 1 279 29,358
CASH AT SEPTEMBER 30 $323,170 $ 15,980
======== ========
<FN>
See notes to financial statements.
/TABLE
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 1998
(Unaudited)
A. ACCOUNTING POLICIES
The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures required by
generally accepted accounting principles. These statements should
be read in conjunction with the financial statements and notes
thereto included in the Partnership's Form 10-K for the year ended
December 31, 1997. In the opinion of management, such financial
statements include all adjustments, consisting only of normal
recurring adjustments, necessary to summarize fairly the
Partnership's financial position and results of operations. The
results of operations for the nine month period ended September 30,
1998 may not be indicative of the results that may be expected for
the year ending December 31, 1998.
B. INVESTMENT IN LAND PARTNERSHIP
The Partnership has 50% ownership interest in North by Northeast
Land Partners, a general partnership. The remaining 50% is owned
by an unrelated Trammell Crow Company entity. Summarized results
of operations of the Land Partnership are presented below.
Statement of Operations
For The Nine Months Ending September 30, 1998
REVENUES:
Sales of Land and Improvements $ 905,000
Cost of Land and Improvements Sold (369,595)
Selling Expenses (65,513)
Gain on Sale of Land and Improvements 469,892
Interest 2,264
Miscellaneous 10,838
________
TOTAL REVENUES $ 482,994
EXPENSES:
Partnership Admin./Prop Mgmt. fees 9,000
Legal and accounting fees 14,174
Insurance 250
Property Taxes 7,903
Land maintenance 2,258
-------
33,585
NET EARNINGS $ 449,409
Allocation to Trammell Crow entity $ 224,704
Income from Investment in Partnership $ 224,705
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (cont.)
For the Three and Nine Months Ended September 30, 1998
(Unaudited)
C. RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively
involved in managing the Partnership's Operations. Compensation
earned for these services in the first nine months were as follows:
1998 1997
Accounting Fees $ 3,400 $ 0
D. COMPREHENSIVE INCOME
Effective January 1, 1998, the Partnership adopted Statement
of Financial Accounting Standards (SFAS) No. 130. Reporting
Comprehensive Income. SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components in
a full set of general-purpose financial statements and requires
that all components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as
other financial statements. Comprehensive income is defined as the
change in equity of a business enterprise, during a period,
associated with transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during
a period except those resulting from investments by owners and
distributions to owners. During the nine month periods ended
September 30, 1998, and 1997, the Partnership had no components of
comprehensive income. Accordingly, comprehensive income for each of
the periods was the same as net income.
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Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
Due to the nature of the Partnership, the majority of its activity
on a regular basis is to reflect the activity from the investment
in North By Northeast Land Partners ("Land Partnership"). The
operations of the Partnership revolve around that of the Land
Partnership.
During the third quarter, the Land Partnership sold approximately
3 acres for $650,000. From the sale proceeds $300,000 was
distributed to the Registrant from the Land Partnership. Earlier
in the year, the Land Partnership sold approximately 2 acres for
$255,000. From the sale proceeds $125,000 was distributed to the
Registrant from the Land Partnership.
At December 31, 1997, the note payable to North Lenders, LP was
retired in full. This reduction in debt explains the decline in
interest expense for 1998. The increase in legal and accounting
fees is due to the Registrant assuming certain expenses of the
Lender Partnership which was dissolved in 1997. The expenses are
not expected to repeat.
Except for the above mentioned fluctuations, operations of the
Registrant have remained comparable and are excepted to be
comparable in the future.
The General Partner has evaluated the impact of year 2000 issues on
our computer systems and applications. The Registrant is affected
by a single personal computer and a commercial software package.
Both are Y2K compliant.
Financial Condition and Liquidity
The General Partner does not intend to further develop the property
except development required by sales contracts.
At October 31, 1998, the Registrant had $323,170 in funds to meet
its future operational needs. Since future operations are expected
to be comparable to the recent past, the General Partner believes
that the present cash balance will be sufficient to cover the
operating expenses for the year.
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PART II. OTHER INFORMATION
Item 6.Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) No 8-K's have been filed during this quarter.
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SIGNATURES
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.
NORTH BY NORTHEAST, LTD.
By: 222 NORTH, LTD.
General Partner
Date: November 16, 1998 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partner
Date: November 16, 1998 By: /s/ Michael A. Hartley
Secretary/Treasurer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<CASH> 323,170
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 346,445
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 346,445
<TOTAL-LIABILITY-AND-EQUITY> 346,445
<SALES> 0
<TOTAL-REVENUES> 226,802
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16,206
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 210,596
<INCOME-TAX> 0
<INCOME-CONTINUING> 210,596
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 210,596
<EPS-PRIMARY> 112.32
<EPS-DILUTED> 112.32
</TABLE>
