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FORM 10-Q.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 31326, eff. 10/22/92.)
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 June 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)
Former Address:
(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 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 Six Months Ended June 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>
June 30, December 31,
1998 1997
<S> <C> <C>
CASH $ 23,570 $ 279
INVESTMENT IN PARTNERSHIP 128,583 223,570
Total Assets $ 152,153 $ 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 (218,631) (234,935)
TOTAL PARTNERS' EQUITY 152,153 135,849
Total Liabilities
& Partners' Equity $152,153 $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 June 30,
1998 1997 1998 1997
REVENUES:
<S> <C> <C> <C> <C>
Interest Income $(1,902) $ 897 $ 615 $ 897
Equity in income
from investment
in Partnership 1,692 5,200 30,013 2,463
Miscellaneous 1,482 - 1,482 -
Total Revenues 1,272 6,097 32,110 3,360
EXPENSES:
Legal & Accounting 6,474 5,975 15,774 5,975
Interest Expense - 4,585 - 9,119
General & Administrative 8 - 32 617
Total expenses 6,482 10,560 15,806 15,711
Net income (loss)$ (5,210) $(4,463) $16,304 $(12,351)
========= ========= ======== ========
<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
June 30,
1998 1997
Cash Flows from Operating Activities:
s> <C> <C>
Net income (loss) $ 16,304 $ (12,351)
Adjustments to reconcile Net income
(loss) to Net Cash (Used) provided
by Operating Activities:
Equity In Income from Investment
in Partnership (30,013) (2,463)
Increase in Accrued Interest - 9,119
Increase in Accounts Payable - 5,975
Decrease In Accounts Payable
to Affiliate (88,000) -
Net Cash (Used) provided by Operating
Activities: (101,709) 280
Cash Flows from Investing Activity-
Distributions from investment
in Partnership 125,000 -
Net Increase in Cash 23,291 280
CASH AT JANUARY 1 279 29,359
CASH AT JUNE 30 $ 23,570 $ 29,639
======== ========
<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 Six Months Ended June 30, 1998 and 1997
(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 six month period ended June 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.
<TABLE>
<CAPTION> Statement of Operations
For The Six Months Ended June 30, 1998
REVENUES:
<S> <C>
Sales of Land and Improvements 255,000
Cost of Land and Improvements Sold (158,507)
Selling Expenses (18,603)
Gain on Sales of Land and Improvements 77,890
Interest 2,264
Miscellaneous 9,988
________
TOTAL REVENUES 90,142
EXPENSES:
Partnership Admin./Prop Mgmt. fees 6,000
Legal and accounting fees 14,174
Insurance 250
Propety Taxes 8,361
Land maintenance 1,332
-------
30,117
NET EARNINGS $60,025
Allocation to Trammell Crow entity 30,012
Income from Investment in Partnership 30,013<PAGE>
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (continued)
For the Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
C. 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 three and six month periods
ended June 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 loss.
/TABLE
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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 accrue interest on the Lender Financing
and to reflect the activity from the investment in North By
Northeast Land Partners. The operations of the Partnership revolve
around that of the Land Partnership. Interest and principal
payments are not due until property is sold at the Land Partnership
level.
In 1998, the Land Partnership sold approximately 2 acres for
$255,000. From the sale proceeds $250,000 was distributed to the
partners of the Land Partnership. The Registrant received
$125,000.
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.
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 continues to monitor the impact of year 2000
issues on our computer systems and applications and has developed
a remediation plan. We expect the cost of upgrading computers and
software to be immaterial to the Registrant.
Financial Condition and Liquidity
The General Partner does not intend to further develop the property
except development required by sales contracts.
At July 30, 1998, the Registrant had $23,170 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: August 14, 1998 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partner
Date: August 14, 1998 By: /s/ Michael A. Hartley
Secretary/Treasurer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1998
<CASH> 23570
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 152153
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 152153
<TOTAL-LIABILITY-AND-EQUITY> 152153
<SALES> 0
<TOTAL-REVENUES> 32110
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16806
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 16304
<INCOME-TAX> 0
<INCOME-CONTINUING> 16304
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16304
<EPS-PRIMARY> 8.70
<EPS-DILUTED> 8.70
</TABLE>
