10-Q 1 form10q_86410.txt FORM 10-Q 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 quarterly period ended March 31, 2001. [ ] 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 0-15571 CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP (Exact name or registrant as specified in its charter) North Carolina 56-1494619 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 4000 Blue Ridge Road, Suite 100 Raleigh, North Carolina 27612 (Address of principal executive office) (Zip Code) (919) 781-1700 (Registrant's telephone number, including area code) (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 the past 90 days. Yes X No ----------- ------------ The Exhibit Index is located on Page 12. 1 PART I - FINANCIAL INFORMATION Item 1. Financial Information a) Income Statement STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31 2001 2000 Interest and other income $ 1,371 $ 2,390 ------------ -------------- Total Income 1,371 2,390 General and Administrative expenses 10,900 13,252 ------------ -------------- NET INCOME (LOSS) $ (9,529) $ (10,862) ============ ============== Allocation of net income (loss) to: General Partner: From other operations $ -0- $ -0- ------------ -------------- Total to General Partner ------------ -------------- Limited Partners: From other operations (9,529) (10,862) ------------ -------------- (9,529) (10,862) ------------ -------------- TOTAL ALLOCATION $ (9,529) $ (10,862) Net income (loss) per limited partnership unit (based on 5,900 weighted average limited partnership units outstanding): From other operations $ (1.62) $ (1.84) ------------ -------------- TOTAL PER UNIT $ (1.62) $ (1.84) ============ ============== ================================================================================ See notes to unaudited financial statements. 2 b) Balance Sheets

See notes to unaudited financial statements. 3 c) Statements of Changes in Partners' Capital STATEMENTS OF CHANGES IN PARTNERS' EQUITY (Unaudited)

See notes to unaudited financial statements. 4 d) Statements of Changes in Financial Position STATEMENTS OF CASH FLOW (Unaudited)

Supplemental disclosures of cash flow information Cash paid for interest during the three months ended March 31 was $0 in 2001 and $0 in 2000. See notes to unaudited financial statements. 5 e) Notes to Financial Statements NOTES TO UNAUDITED FINANCIAL STATEMENTS March 31, 2001 NOTE A - SIGNIFICANT ACCOUNTING POLICIES AND PARTNERSHIP MATTERS Carolina Investment Partners, Limited Partnership (the "Registrant"), was organized in 1985 to invest in real property which it will sell or lease undeveloped or develop into office or commercial projects. Walsmith Associates Two, a North Carolina general partnership, is the general partner (the "General Partner"). Basis of Presentation: The accompanying March 31, 2001 financial statements of the Registrant are unaudited. In the opinion of the General Partner, all adjustments (consisting of normal accruals) considered necessary for a fair presentation have been included. Operating results for the period presented are not necessarily indicative of the results that may be expected for the entire year. NOTE B - LAND HELD FOR INVESTMENT AND RELATED COMMITMENTS AND TRANSACTIONS In July, 1986, the Registrant purchased for $1,223,175 an undeveloped 16.3-acre parcel of land in Cary, North Carolina, known as the Wellington Parcel, from Wellington Park Associates ("WPA"), an affiliate of the General Partner. The land was carried at the lower of (i) contract cost plus capitalized purchase and closing costs or (ii) net realizable value. The contract under which the Registrant purchased the parcel provided that WPA would share with the Registrant in any profits resulting from the sale of the Wellington Parcel. In June, 1986 the Registrant purchased for approximately $3,080,200 an undeveloped 26.7-acre parcel of land in Cary, North Carolina, known as the Martin Parcel, from an affiliate of the General Partner. The land is carried at the lower of (i) contract cost plus capitalized purchase and closing costs or (ii) net realizable value. In 1996, 1997 and 1998 the Registrant sold the Wellington Parcel to a third party under the terms of an Agreement for the Purchase and Sale of Real Estate, as amended ("the Agreement"), between the Registrant, Wellington Center Associates LLC (successor to Churchill & Banks, Ltd.) ("WCA"), and ADA Corporation of North Carolina ("ADA"), an affiliate of the Registrant's General Partner. The total sales price for the property sold, a portion of which was owned by ADA, was $3,927,636. This sales price was allocated among the Registrant and ADA based upon acreage sold by each, with $3,730,963 to the Registrant and $196,673 to ADA. As of April 9, 1998, all of the Wellington Parcel was sold. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results ----------------------------------------------------------------------- of Operations. -------------- The Registrant's operations resulted in net loss of $ (9,529) during the quarter ended March 31, 2001 compared to a net loss of $(10,862) during the same period of 2000. The primary differences between 2001 and 2000 were: o In the first quarter of 2000, there was interest income from the money market account of $2,215 compared to interest income of $1,271 from the money market account in the first quarter of 2001. This decrease in interest income was due to a lower average account balance in the money market during the first quarter of 2001 compared to the first quarter of 2000. o Expenses in the first quarter of 2001 attributable to outside services expenses decreased approximately $4,000. As of May 10, 2001, the Registrant has $259,153 in cash and short-term investments, which is sufficient to meet its needs during the next year. The Registrant maintains its excess funds in a money market account at Centura Bank. The General Partner believes these accounts are an appropriate investment of the Registrant's funds. Until its properties are sold, placed into development and/or refinanced, the Registrant anticipates deficits from operations and administrative expenses. Cautionary Statement Identifying Important Factors That Could Cause the Registrant's Actual Results to Differ From Those Projected in Forward Looking Statements. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, readers of this document, and any document incorporated by reference herein, are advised that this document and documents incorporated by reference into this document contain both statements of historical facts and forward looking statements. Forward looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those indicated by the forward looking statements. Examples of forward looking statements include, but are not limited to (i) projections of revenues, income or loss, earnings or loss per share, capital expenditures, dividends, capital structure and other financial items, (ii) statements of the plans and objectives of the Registrant or its management, including the introduction of new products, or estimates or predictions of actions by customers, suppliers, competitors or regulatory authorities, (iii) statements of future economic performance, and (iv) statements of assumptions underlying other statements and statements about the Registrant or its business. This document and any documents incorporated by reference herein also identify important factors which could cause actual results to differ materially from those indicated by the forward looking statements. These risks and uncertainties 7 include uncertainties about the ability of the Registrant to sell its other real estate assets, the price of real estate sales, environmental and similar liabilities, future operating expenses and the adequacy of capital resources to meet future operating expenses, which are described herein and/or in documents incorporated by reference herein. The cautionary statements made pursuant to the Private Litigation Securities Reform Act of 1995 above and elsewhere by the Registrant should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by the Registrant prior to the effective date of such Act. Forward looking statements are beyond the ability of the Registrant to control and in many cases the Registrant cannot predict what factors would cause actual results to differ materially from those indicated by the forward looking statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- Not applicable. 8

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned thereunto duly authorized. CAROLINA INVESTMENT PARTNERS LIMITED PARTNERSHIP (Registrant) BY: WALSMITH ASSOCIATES TWO, General Partner By: /s/ Alton L. Smith III ----------------------- Alton L. Smith III, General Partner Date: May 10, 2001. 11 INDEX TO EXHIBITS Exhibit No. Description Page ----------- ----------- ----- 3.1 Amended Agreement of Limited Partnership of the Registrant (incorporated by reference to Exhibit 4.1 to the Registrant's Annual Report filed on Form 10-K for the year ended December 31, 1986). 10.1 Purchase Agreement between Registrant and Walsmith Associates regarding the Martin Parcel (incorporated by reference to Exhibit 10.1to the Registrant's Annual Report filed on Form 10-K for the year ended December 31, 1986). 10.2 Offer to Purchase and Contract for the Sale and Purchase of Real Estate, dated as of January 24, 1986, between Wellington Park Associates and the Registrant (incorporated by reference to Exhibit 6A to the Registrant's Quarterly Report filed on Form 10-Q for the period ended June 30, 1989). 10.3 Agreement between the North Carolina Department of Transportation and Walsmith Associates (incorporated by reference to Exhibit 10.3 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1986). 10.4 Assignment and Assumption Agreement between the Registrant and Walsmith Associates (incorporated by reference to Exhibit 10.4 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1986). 10.5 Amendment to Offer to Purchase and Contract for the Sale and Purchase of Real Estate, dated as of 12 February 1, 1990, between Wellington Park Associates and the Registrant (incorporated by reference to Exhibit 10.6 to the Registrant's Annual Report filed on Form 10-K for the period ended December 31, 1989). 10.6 Agreement for the Purchase and Sale of Real Estate, dated as of April 20, 1995, between Churchill & Banks, Ltd., ADA Corporation of North Carolina, and the Registrant (incorporated by reference to Exhibit C to the Registrant's Current Report filed on Form 8-K, dated April 20, 1995). 10.7 First Amendment to the Agreement for the Purchase and Sale of Real Estate, dated as of August 9, 1995, between Churchill & Banks, Ltd., ADA Corporation of North Carolina, and the Registrant (incorporated by reference to Exhibit C to the Registrant's Current Report filed on Form 8-K, dated August 9, 1995). 10.8 Second Amendment to the Agreement for the Purchase and Sale of Real Estate, dated as of April 19, 1996, between Churchill & Banks, Ltd., ADA Corporation of North Carolina, and the Registrant (incorporated by reference to Exhibit 28.5 to the Registrant's Quarterly Report filed on Form 10-Q for the period ended June 30, 1996). 10.9 Third Amendment to the Agreement for the Purchase and Sale of Real Estate, dated as of September 10, 1996, between Churchill & Banks, Ltd., ADA Corporation of North Carolina, and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report filed on Form 8-K, dated September 25, 1996). 13 10.10 Fourth Amendment to the Agreement for the Purchase and Sale of Real Estate, dated as of September __, 1996, between Churchill & Banks, Ltd., ADA Corporation of North Carolina, and the Registrant (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report filed on Form 8-K, dated September 25, 1996). 10.11 Fifth Amendment to the Agreement for the Purchase and Sale of Real Estate, dated as of September 27, 1996, between Wellington Center Associates, LLC, ADA Corporation of North Carolina, and the Registrant (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report filed on Form 8-K, dated September 25, 1996). 10.12 Sixth Amendment to the Agreement for the Purchase and Sale of Real Estate, dated as of September 12, 1998, between Wellington Center Associates, LLC, ADA Corporation of North Carolina, and the Registrant (incorporated by reference to Exhibit 10.12 to the Registrant's Quarterly Report filed on Form 10-Q for the period ended September 30, 1998). 10.13 Seventh Amendment to the Agreement for the Purchase and Sale of Real Estate, dated as of ______, 1998, between Churchill & Banks, Ltd., ADA Corporation of North Carolina, and the Registrant. 14 10.14 Eight Amendment to the Agreement for the Purchase and Sale of Real Estate, dated as of March 24, 1999 between Wellington Center Associates, LLC, ADA Corporation of North Carolina, and the Registrant. 15

CAROLINA INVESTMENT PARTNERS LIMITED PARTNERSHIP 10-Q