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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, 2000
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.)
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 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 August 8, 2000.
Page 1 of 8 Sequentially Numbered Pages
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
AS OF JUNE 30, 2000, AND DECEMBER 31, 1999
June 30,
2000 December 31,
(Unaudited) 1999
----------- -----------
ASSETS:
Land Held for Sale $ 6,450,000 $ 6,450,000
Cash and Cash Equivalents (1,104) 3,443
Other 39,493 39,493
----------- -----------
$ 6,488,389 $ 6,492,936
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT):
Accrued Liabilities $ 223,326 $ 214,164
Note Payable 202,754 194,754
----------- -----------
426,080 408,918
----------- -----------
Class A Limited Partners' Interest 6,062,381 6,084,088
Subordinated Limited Partners' Interest 85 85
General Partners' Interest (157) (155)
----------- -----------
6,062,309 6,084,018
----------- -----------
$ 6,488,389 $ 6,492,936
=========== ===========
See Notes to Condensed Financial Statements
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCOME:
Interest Income $ 43 $ 19 $ 61 $ 42
------- -------- -------- --------
43 19 61 42
EXPENSES:
Property Taxes 47 47 94 94
Insurance Expense 354 356 354 356
Professional and Legal Fees 1,792 1,240 8,257 7,905
General and Administrative Costs 2,700 2,953 3,997 4,878
Interest Expense 4,534 4,514 9,068 8,184
------- -------- -------- --------
9,428 9,110 21,770 21,417
------- -------- -------- --------
NET LOSS ($9,385) ($ 9,091) ($21,709) ($21,375)
======= ======== ======== ========
NET LOSS ALLOCATION:
General Partners (1) (1) (2) (2)
Class A Limited Partners (9,384) (9,090) (21,707) (21,373)
------- -------- -------- --------
($9,385) ($ 9,091) ($21,709) ($21,375)
======= ======== ======== ========
CLASS A LIMITED PARTNERSHIP
UNITS OUTSTANDING 7,650 7,650 7,650 7,650
------- -------- -------- --------
NET LOSS PER CLASS A UNIT ($ 1.23) ($ 1.19) ($ 2.84) ($ 2.79)
======= ======== ======== ========
</TABLE>
See Notes to Condensed Financial Statements
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Subordinated
General Limited Limited
Partners Partners Partner Total
-------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Partners' Equity (Deficit)
at December 31, 1998 ($141) $ 6,217,905 $88 $ 6,217,852
Net Loss for the Six Months
Ended June 30, 1999 (2) (21,373) 0 (21,375)
----- ----------- --- -----------
Partners' Equity (Deficit)
at June 30, 1999 ($143) $ 6,196,532 $88 $ 6,196,477
===== =========== === ===========
</TABLE>
<TABLE>
<CAPTION>
Subordinated
General Limited Limited
Partners Partners Partner Total
-------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Partners' Equity (Deficit)
at December 31, 1999 ($155) $ 6,084,088 $85 $ 6,084,018
Net Loss for the Six Months
Ended June 30, 2000 (2) (21,707) 0 (21,709)
----- ----------- --- -----------
Partners' Equity (Deficit)
at June 30, 2000 ($157) $ 6,062,381 $85 $ 6,062,309
===== =========== === ===========
</TABLE>
See Notes to Condensed Financial Statements
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
Six Months Six Months
Ended Ended
June 30, 2000 June 30, 1999
(Unaudited) (Unaudited)
------------- -------------
CASH FLOW FROM OPERATING
ACTIVITIES:
Net Loss ($21,709) ($21,375)
Adjustments to reconcile net loss to net
cash used for operations:
Increase in Accrued Liabilities 9,162 19,534
-------- --------
Net Cash Used for Operating Activities (12,547) (1,841)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Note Payable 8,000 4,345
-------- --------
Net Cash Provided by Financing Activities 8,000 4,345
Increase (Decrease) in Cash and Cash Equivalents (4,547) 2,503
Cash and Cash Equivalents at Beginning
of Period 3,443 849
-------- --------
Cash and Cash Equivalents at End of Period ($ 1,104) $ 3,352
======== ========
See Notes to Condensed Financial Statements
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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2000
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, 2000, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000.
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 August 8, 2000, there were 774
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 August 8, 2000,
the Partnership held all 145 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, 2000, the Registrant had overdrawn cash and cash equivalents by
$1,104. The overdraft is temporary until the receipt of additional funding from
the general partner. The Registrant has executed a note payable to the general
partner in the amount of $202,754. The general partner plans to continue to fund
the operating cost of the Partnership through additional advances under the
note. The note will extend through the term of the partnership and accrue
interest at prime plus two percent.
Until the Registrant disposes of the Property, its only sources of additional
capital are additional loans and proceeds from the sale of resources (i.e.,
timber) on the property, if any.
2. RESULTS OF OPERATIONS
The Registrant's net loss was $21,709 for the six months ended June 30, 2000 as
compared to $21,375 for the six months ended June 30, 1999. The loss reflects
higher legal fees paid in the course of reviewing offer to purchase contracts.
Professional and legal fees increased from $7,905 as of June 30, 1999, to $8,257
for the six months ended June 30, 2000. Legal fees are higher due to the fees
incurred for review of documents pertaining to the proposed sale
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of the property. Slightly higher accounting fees were paid for the annual audit
and tax returns in the first quarter of this year. General and administrative
costs are down from $4,878 as of June 30, 1999, to $3,997 for the current
six-month period. Interest expense increased from $8,184 for the six months
ended June 30, 1999, to $9,068 for the six months ended June 30, 2000. This
increase reflects interest paid on a higher principal balance. Taxes and
insurance costs were comparable with the 1999 figures.
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.
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
$8,866,000 in aggregate. In December 1999, the Partnership entered into a
contract to sell the property for approximately $6,600,000. However, on March
17, 2000, Crescent Resources, the potential purchaser, canceled the contract.
On June 29, 2000, the Partnership entered into a contract with
Greenfield Development Company, LLC, to sell approximately 97 acres of the land
for approximately $4,165,000, which is $45,000 per acre (assuming that the total
wetlands acreage does not exceed 6 acres). The potential purchaser deposited
$50,000 earnest money with a title agency. Under the terms of the contract, the
potential purchaser has 90 days from the date that the limited partners vote
their majority agreement to the sale, to complete their due diligence. Limited
partners have voted their majority as of this filing. Notice of limited partner
majority vote approving the sale was given on August 7, 2000. The contract also
includes the pruchase of approximately 97 acres of land owned by Interstate Land
Investors I. A majority of the investors in that Partnership have approved the
sale. The contract closing date is 30 days after completion of the due diligence
period, making the probable closing date in early December 2000.
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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 required to be filed during the
six months ended June 30, 2000.
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: AUGUST 8, 2000
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