<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 MARCH 31, 1996
Commission file number 33-30312
INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
NORTH CAROLINA 56-1681116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
INTERSTATE TOWER
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 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.
7,650 limited partnership units outstanding at April 30, 1996
Page 1 of 8 Sequentially Numbered Pages
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
AS OF MARCH 31, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
March 31,
1996 December 31,
(Unaudited) 1995
----------- ------------
<S> <C> <C>
ASSETS:
Land Held for Sale $6,534,310 $6,534,310
Cash and Cash Equivalents 4,064 591
Organizational Costs, Net 0 0
Other 31,252 30,722
---------- ----------
$6,569,626 $6,565,623
========== ==========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT):
Accrued Liabilities $ 107,434 $ 100,370
Note Payable 121,280 111,280
---------- ----------
228,714 211,650
---------- ----------
Class A Limited Partners' Interest 6,340,950 6,354,010
Subordinated Limited Partners' Interest 91 91
General Partners' Interest (129) (128)
---------- ----------
6,340,912 6,353,973
---------- ----------
$6,569,626 $6,565,623
========== ==========
</TABLE>
See Notes to Condensed Financial Statements
2
<PAGE> 3
INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Three
Months Months
Ended Ended
March 31, March 31,
1996 1995
(Unaudited) (Unaudited)
----------- -----------
<S> <C> <C>
INCOME:
Interest Income $ 544 $ 531
-------- --------
544 531
EXPENSES:
Property Taxes 0 553
Professional and Legal Fees 9,670 10,482
Amortization of Organizational Cost 0 6,627
General and Administrative Costs 923 0
Interest Expense 3,012 2,308
-------- --------
$ 13,605 $ 19,970
-------- --------
NET LOSS (13,061) (19,439)
======== ========
NET LOSS ALLOCATION:
General Partners (1) ($2)
Class A Limited Partners (13,060) (19,437)
-------- --------
$(13,061) $(19,439)
======== ========
CLASS A LIMITED PARTNERSHIP
UNITS OUTSTANDING 7,650 7,650
-------- --------
NET LOSS PER CLASS A UNIT $ (1.71) $ (2.54)
======== ========
</TABLE>
See Notes to Condensed Financial Statements
3
<PAGE> 4
INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
Subordinated
General Limited Limited
Partners Partners Partner Total
-------- -------- ------------ -----
<S> <C> <C> <C> <C>
Partners' Equity (Deficit)
at December 31, 1994 $(124) $6,397,968 $92 $6,397,936
Net Loss for the Three Months
Ended March 31,1995 (2) (19,437) 0 (19,439)
----- ---------- --- ----------
Partners' Equity (Deficit)
at March 31, 1995 $(126) $6,378,531 $92 $6,378,497
===== ========== === ==========
Partners' Equity (Deficit)
at December 31, 1995 $(128) $6,354,010 $91 $6,353,973
Net Loss for the Three Months
Ended March 31, 1996 (1) (13,060) 0 (13,061)
----- ---------- --- ----------
Partners' Equity (Deficit)
at March 31, 1996 $(129) $6,340,950 $91 $6,340,912
===== ========== === ==========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1996 March 31, 1995
(Unaudited) (Unaudited)
-------------- --------------
<S> <C> <C>
CASH FLOW FROM OPERATING
ACTIVITIES:
Net Loss $(13,061) $(19,439)
Adjustments to reconcile net loss to net
cash used for operations:
Amortization of Organizational Costs 0 6,627
Increase in Property Taxes Payable 0 553
Increase in Accrued Liabilities 7,064 12,790
Increase in Other Assets (530) (530)
-------- --------
6,534 19,440
Net Cash Used for Operating Activities (6,527) 1
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Note Payable 10,000 0
-------- --------
Net Cash used for Financing Activities 10,000 0
Increase in Cash and Cash Equivalents 3,473 1
Cash and Cash Equivalents at Beginning
of Period 591 40
-------- --------
Cash and Cash Equivalents at End of Period $ 4,064 $ 41
======== ========
</TABLE>
See Notes to Condensed Financial Statements
5
<PAGE> 6
INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED) MARCH 31, 1996
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 three month period ended March 31, 1996 are not
necessarily indicative of the results that may be expected for the year to end
December 31, 1996.
2. ORGANIZATION:
Interstate Land Investors II Limited Partnership ("Registrant" or
"Partnership") is a North Carolina limited partnership. The Partnership filed
registration statements in 1989 and 1990 and offered the sale of the limited
partnership interests to persons who were admitted as limited partners. The
initial offering became effective September 29, 1989 and was terminated
November 3, 1989. The post effective amendment was filed in August 1990,
approved in November 1990 and closed November 30, 1990. Capital contributions
of $100 were received from the general partners and $7,650,000 from the limited
partners. The limited partnership units were sold in $1,000 units. On April
30, 1996, there were 769 unit holders of record. The Partnership's business
now consists of holding for investment, disposing and otherwise dealing in 145
acres of undeveloped land ("the Property") located in York County, South
Carolina. As of April 30, 1996, the Partnership held all 145 acres of the
Property.
INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1996, the Registrant had $4,063 on hand in the form of cash and
cash equivalents. These funds will be maintained as working capital reserves
to fund the costs of ad valorem taxes, insurance, administrative expenses and
other costs and expenses associated with owning the Property. The Registrant
anticipates that it will incur operating expenses during 1996 in excess of the
cash and cash equivalents on hand as of March 31, 1996. The Registrant has
executed a note payable to the General Partner in the amount of $150,000 which
will payoff the existing line of credit balance of $94,732 and provide any
additional funds needed for working capital. The note will extend through the
term of the partnership and accrue interest at prime plus two percent.
6
<PAGE> 7
Until the Registrant disposes of the Property, its only sources of additional
capital are loans.
2. RESULTS OF OPERATIONS
The Registrant's net loss decreased from $19,439 for the three months ended
March 31,1995 to $13,061 for the three months ended March 31, 1996. The change
is primarily due to the following:
Interest expense increased from $2,308 for the three months ended March 31,
1995 to $3,012 for the three months ended March 31, 1996 due to the increased
outstanding balance on the note payable.
Amortization expense decreased from $6,627 for the three months ended March 31,
1995 to $0 for the three months ended December 31, 1996 as all deferred costs
were fully amortized during the first quarter of 1995.
INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None. There were no matters submitted for vote during the quarter
covered by this report.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27 - Financial Data Schedule (for SEC use only)
7
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(b) Reports on Form 8-K
No reports on Form 8-K were required to be filed during the
three months ended March 31, 1996.
INTERSTATE LAND INVESTORS II 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 II
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: MAY 10, 1996
------------
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF INTERSTATE LAND INVESTORS II FOR THE THREE MONTHS ENDED
MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 4,064
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,064
<PP&E> 6,534,310
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,569,626
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 6,340,912
<TOTAL-LIABILITY-AND-EQUITY> 6,569,626
<SALES> 0
<TOTAL-REVENUES> 544
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,593
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,012
<INCOME-PRETAX> (13,061)
<INCOME-TAX> 0
<INCOME-CONTINUING> (13,061)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,061)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
