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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 March 31, 1999
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)
One Belle Meade Place, 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 Statements
NORTH BY NORTHEAST, LTD.
(A Tennessee Limited Partnership)
FINANCIAL STATEMENTS
For The Three Months Ended March 31, 1999 and 1998
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>
March 31, December 31,
1999 1998
<S> <C> <C>
Cash $ 38,950 $ 39,425
Investment in Partnership 116,888 32,002
Total Assets $ 155,838 $ 71,427
======= =======
PARTNERS' EQUITY
PARTNERS' EQUITY:
Limited partners (1,875 units
outstanding) $ 164,534 $ 164,534
General partner (8,696) (93,107)
Total Partners' equity 155,838 71,427
Total Partners' Equity $ 155,838 $ 71,427
======= =======
<FN>
See accompanying notes to financial statements.
/TABLE
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<TABLE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three months ended
March 31,
1999 1998
<S> <C> <C>
REVENUES:
Equity in income of
Partnership $ 84,886 $ 28,321
Interest Income - 2,517
Total Revenues 84,886 30,838
EXPENSES:
Legal & Accounting 475 9,300
General & Administrative - 24
------- -------
Total expenses 475 9,324
Net Income $ 84,411 $ 21,514
======== =======
<FN>
See accompanying notes to financial statements
/TABLE
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<TABLE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three months ended
March 31,
1999 1998
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 84,411 $ 21,514
Adjustments to reconcile
Net income to Net
Cash Used in operating Activities:
Equity in income of
Partnership (84,886) (28,321)
Increase in Accounts Payable - 2,050
Decrease in Accounts Payable
to affiliate - (88,000)
Net Cash Used in
Operating Activities (475) (92,757)
Cash Flows from Investing Activities-
Distributions from Partnership - 125,000
Net (Decrease) Increase in Cash (475) 32,243
CASH AT JANUARY 1, 39,425 279
CASH AT MARCH 31, $ 38,950 $ 32,522
======== =======
<FN>
See accompanying notes to financial statements.
/TABLE
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1999 and 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, 1998. 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 three month period
ended March 31, 1999 may not be indicative of the
results that may be expected for the year ending
December 31, 1999.<PAGE>
<PAGE> 7
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1999 and 1998
(continued) (Unaudited)
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 Three Months Ending March 31, 1999
<S> <C>
REVENUES:
Miscellaneous Income $ 177,722
EXPENSES:
Grounds Maintenance $ 2,450
Partnership Admin./Prop Mgmt. fees 3,000
Legal and accounting fees 2,500
Total Expenses $ 7,950
NET EARNINGS $ 169,772
Allocation:
to Trammell Crow entity $ 84,886
to Partnership $ 84,886
</TABLE>
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1999 and 1998
(continued) (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 three
months were as follows:
1999 1998
Accounting Fees $ 400 $ -
Commission on miscellaneous income 11,344 -
D. COMPREHENSIVE INCOME
During the three month periods ended March 31, 1999, and 1998,
the Partnership had no components of other 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 for the Quarter ended March 31,
1999
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(the "Land Partnerhship").
There were no land sales in 1999. The Land Partnership did receive
a release fee from Walmart of $189,066. This fee was received in
exchange for the Land Partnership's permission to allow sales of
additional outparcels in the North by Northeast Business Park.
Operations of the Land Partnership and the Registrant were minimal
and did not fluctuate from prior quarters except as noted above.
Financial Condition and Liquidity
At April 30, 1999, the Registrant had $38,950 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.
Year 2000
In 1998, the Partnership initiated a plan ("Plan") to identify, and
remediate "Year 2000" issues within each of its significant
computer programs and certain equipment which contain
microprocessors. The Plan is addressing the issue of computer
programs and embedded computer chips being unable to distinguish
between the year 1900 and the year 2000, if a program or chip uses
only two digits rather than four to define the applicable year.
The Partnership has divided the Plan into five major phases-
assessment, planning, conversion, implementation and testing.
After completing the assessment and planning phases earlier year,
the Partnership is currently in the conversion, implementation, and
testing phases. Systems which have been determined not to be Year
2000 compliant are being either replaced or reprogrammed, and
thereafter tested for Year 2000 compliance. The Plan anticipates
that by mid-1999 the conversion, implementation and testing phases
will be completed. Management believes that the total remediation
costs for the Plan will not be material to the operations or
liquidity of the Partnership.
The Partnership is in the process of identifying and contacting
critical suppliers and other vendors whose computerized systems
interface with the Partnership's systems, regarding their plans and
progress in addressing their Year 2000 issues. The Partnership has
received varying information from such third parties on the state
of compliance or expected compliance. Contingency plans are being
developed in the event that any critical supplier or customer is
not compliant.
The failure to correct a material Year 2000 problem could result in
an interruption in, or failure of, certain normal business
activities or operations. Such failures could materially and
adversely affect the Partnership's operations, liquidity and
financial condition. Due to the general uncertainty inherent in
the Year 2000 problem, resulting in part from the uncertainty of
the Year 2000 readiness of third-party suppliers and customers, the
Partnership is unable to determine at this time whether the
consequences of Year 2000 failures will have a material impact on
the Partnership's operations, liquidity or financial condition.<PAGE>
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule for the
First Quarter of 1999.
(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: May 15, 1999 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partner
Date: May 15, 1999 By:/s/ Michael A. Hartley
Secretary/Treasurer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 38,950
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 155,838
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 155,838
<TOTAL-LIABILITY-AND-EQUITY> 155,838
<SALES> 0
<TOTAL-REVENUES> 84,886
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 475
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 84,411
<INCOME-TAX> 0
<INCOME-CONTINUING> 84,411
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84,411
<EPS-PRIMARY> 45.02
<EPS-DILUTED> 45.02
</TABLE>
