10-Q 1 g72753e10-q.txt INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP 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 September 30, 2001 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 November 8, 2001 Page 1 of 9 Sequentially Numbered Pages INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP Condensed Balance Sheets As of September 30, 2001 and December 31, 2000

See attached notes to the condensed financial statements 2 INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP Condensed Statement of Operations (Unaudited)

See attached notes to the condensed financial statements 3 INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP Condensed Statement of Partners' Equity (Deficit) For the Nine Months ended September 30, 2001 and 2000 (Unaudited)

See attached notes to the condensed financial statements 4 INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP Condensed Statements of Cash Flows For the Nine Months ended September 30, 2001 and 2000

See attached notes to the condensed financial statements 5 INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) September 30, 2001 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 nine month period ended September 30, 2001, are not necessarily indicative of the results that may be expected for the year to end December 31, 2001. 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 November 8, 2001, there were 776 unit holders of record. The Partnership's business now consists of holding for investment, disposing and otherwise dealing in the remaining 48 acres out of the original 145 acres of undeveloped land ("the Property") located in York County, South Carolina. As of May 11, 2001, the Partnership sold 97 acres of the property to Greenfield Development Company and the Partnership now holds 48 of the remaining acres of the Property which it continues to market for sale. ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 1. Liquidity and Capital Resources As of September 30, 2001, the Registrant had $132,736 on hand in the form of cash and cash equivalents. The Registrant will retain this cash to pay ongoing partnership expenses. Until the Registrant disposes of the Property, its only sources of additional capital are additional loans from the general partner and proceeds from the sale of resources (i.e., timber) on the property. On May 11, 2001, the Partnership sold 96.9 acres of the property to Greenfield Development Company LLC. 6 The gross sale price of the facility was $4,338,360. A portion of the sale proceeds in the amount of $313,543 was used to pay debts to the General Partner. Closing costs and pro-rations incurred at settlement totaled $447,609 leaving net cash proceeds to the partnership of $3,577,208. On June 14, 2001, a .33 acre right-of-way was purchased by South Carolina Dept. of Transportation for $15,000. On June 29, 2001, a distribution of $3,467,975 (representing $453 per unit) was distributed to the limited partners. 2. RESULTS OF OPERATIONS For the nine months ended September 30, 2001, the Partnership reported a net loss of $308,667 as compared to a net loss of $31,080 for the nine months ended September 30, 2000. The loss reflects the loss realized on the sale of the 96.9 acres. Professional and legal fees increased from $8,513 as of September 30, 2000, to $12,949 for the nine months ended September 30, 2001. These fees are higher due to the fees incurred for review of documents pertaining to the sale of the property. Closing costs from the sale of the property totaled $447,609. General and administrative costs were up from $7,195 as of September 30, 2000, to $11,703 for the current nine-month period. The increase is due to database maintenance fees. All other expenses were roughly in line with those incurred during the third quarter 2000. 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. 7 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 was listed for sale at $8,866,000 in aggregate. In December 1999, the Partnership entered into a contract to sell the entire 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, approximately $45,000 per acre. Limited partners voted their majority and notice of limited partner majority vote approving the sale was given on August 7, 2000. The contract also included the purchase of approximately 97 acres of land owned by Interstate Land Investors I. A majority of the investors in that Partnership approved the sale and the sale closed on May 11, 2001. On June 14, 2001, a .33 acre right-of-way was purchased by South Carolina Dept. of Transportation for $15,000. On June 29, 2001, a cash distribution in the amount of $3,467,975 or $453 per unit was distributed to the limited partners. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits None (b) Reports on Form 8-K No reports on Form 8-K were required to be filed during the nine months ended September 30, 2001. 8 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 By: ISC REALTY CORPORATION As Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer of the Registrant By: /S/ J. Christopher Boone ------------------------ J. Christopher Boone President Date: November 8, 2001 9

INTERSTATE LAND INVESTORS II LTD PARTNERSHIP 10-Q