<PAGE> 1
SECURITIES & EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995 Commission File #0-9305
REEVES TELECOM LIMITED PARTNERSHIP
(name changed from Reeves Telecom Associates)
South Carolina 57-0700063
(State of Incorporation) (I.R.S. Employer I.D. Number)
c/o Grace Property Management Inc.
P.O. Box 163
55 Brookville Road
Glen Head, New York 11545
- --------------------------------------------------------------------------------
(Address of General Partner) (Zip Code)
Registrants telephone number (516) 686-2201
----------------
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
--- ---
<PAGE> 2
PART 1. FINANCIAL INFORMATION
REEVES TELECOM LIMITED PARTNERSHIP
BALANCE SHEET
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
Assets 1995 1994
------ ------------- ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 87,024 $ 137,549
Receivables, net - 1,292
---------- ----------
87,024 138,841
Land held for development or sale
and related buildings and
equipment, net 914,870 811,073
Other assets 2,912 2,912
---------- ----------
$1,004,806 $ 952,826
========== ==========
Liabilities and Partners' Capital
- ---------------------------------
Current Liabilities:
Accounts payable $ 13,732 $ 13,732
Accrued expenses 461,221 505,871
Note payable 12,447 12,447
---------- ----------
487,400 532,050
Long Term Liabilities:
Note payable 200,000 -0-
---------- ----------
Total Liabilities 687,400 532,050
Partners' capital 317,406 420,776
---------- ----------
$1,004,806 $ 952,826
========== ==========
</TABLE>
<PAGE> 3
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS AND PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Operating revenues:
Land sales $ 163,712 $ 270,027
Fox Squirrel income 253,550 274,016
Interest income 1,418 2,994
Other income and sale of timber 9,693 56,794
--------- ---------
428,373 603,831
--------- ---------
Operating Costs and Expenses:
Administrative 420,060 531,321
Direct cost of land sold 83,493 122,979
Depreciation 28,190 10,220
--------- ---------
531,743 664,520
--------- ---------
Net Income or (Loss) (103,370) (60,689)
Partners' capital at beginning
of period 420,776 516,468
Sale of partnership units -- 10,000
--------- ---------
Partners' capital at end of
period $ 317,406 $ 465,779
========= =========
Income or (Loss) per partnership
unit (1,828,258 units outstanding
as of September 30, 1995 and
1994 respectively.) $(0.06) $(0.03)
====== ======
</TABLE>
<PAGE> 4
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS AND PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Operating revenues:
Land sales $ 52,105 $ 69,004
Fox Squirrel income 97,628 95,045
Interest income 791 1,151
Other income and sale of timber 905 2,114
--------- ---------
151,429 167,314
--------- ---------
Operating Costs and Expenses:
Administrative 137,617 258,460
Direct cost of land sold 26,393 (78,044)
Depreciation 10,175 1,695
--------- ---------
174,185 182,111
--------- ---------
Net Income or (Loss) (22,756) (14,797)
Partners' capital at beginning
of period 340,162 470,576
Sale of partnership units -- 10,000
--------- ---------
Partners' capital at end of
period $ 317,406 $ 465,779
========= =========
Income or (Loss) per partnership
unit (1,828,258 units outstanding
as of September 30, 1995 and 1994
respectively.) $(0.01) $(0.01)
====== =======
</TABLE>
<PAGE> 5
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS:
Net Income or (Loss) $(103,370) $ (60,689)
Items Not Using Cash:
Depreciation 28,190 10,220
--------- ---------
TOTAL (75,180) (50,469)
--------- ---------
CHANGES IN OPERATING ASSETS AND LIABILITIES
INCREASING OR (DECREASING) CASH:
Increase in other assets -- 2,442
Decrease in receivables 1,291 691
Land held for development or sale 83,493 122,979
Capital expenditures - Net of sales (215,479) (106,435)
Increase or (decrease) in accounts
payable -- --
Increase or (decrease) in accrued
expenses (44,650) (54,804)
--------- ---------
(175,345) (35,127)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of partnership units -- 10,000
Proceeds from issuance of
note payable 200,000 12,447
--------- ---------
200,000 22,447
--------- ---------
NET CASH PROVIDED OR (USED) BY
OPERATIONS $ (50,525) $ (63,149)
========= =========
CASH BALANCE - BEGINNING $ 137,549 $ 241,443
NET INCREASE OR (DECREASE) IN
CASH, AS ABOVE (50,525) (63,149)
--------- ---------
CASH BALANCE - ENDING $ 87,024 $ 178,294
========= =========
</TABLE>
<PAGE> 6
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS:
Net Income or (Loss) $ (22,756) $ (14,797)
Items Not Using Cash:
Depreciation 10,175 1,695
--------- ---------
TOTAL (12,581) (13,102)
--------- ---------
CHANGES IN ASSETS AND LIABILITIES
INCREASING OR (DECREASING) CASH:
(Increase) in other assets -- 12,634
Decrease in receivables 296 (576)
Land held for development or sale 26,393 (78,044)
Capital expenditures - Net of sales (27,253) (53)
Increase or (decrease) in accounts
payable -- 2,887
Increase or (decrease) in accrued
expenses (29,483) (8,393)
--------- ---------
(30,047) (71,545)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of partnership units -- 10,000
Proceeds from issuance of
note payable -- 12,447
--------- ---------
-- 22,447
--------- ---------
NET CASH PROVIDED OR (USED) BY
OPERATIONS $ (42,628) $ (62,200)
========= =========
CASH BALANCE - BEGINNING $ 129,652 $ 240,494
NET INCREASE OR (DECREASE)
IN CASH, AS ABOVE (42,628) (62,200)
--------- ---------
CASH BALANCE - ENDING $ 87,024 $ 178,294
========= =========
</TABLE>
<PAGE> 7
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
ITEM 2. Management Discussion and Analysis of Financial Condition and
Results of Operations.
The Partnership is a liquidating partnership and as such, quarter to
quarter comparisons and analysis are not necessarily meaningful.
For the nine months ended September 30, 1995, the Partnership sold 28
individual lots, generating aggregate revenues of $163,712, compared to
31 lots and $270,027 in land sale revenues for the same period one year
ago. The difference between 1995 and 1994 is largely attributed to the
mix of lots sold as to location and asking price during the two
periods. Individual lots adjacent to or near the golf course, for
example, generally command a higher asking price than lots which are
not so situated. Lots sold during the first three quarters of 1994 were
generally located nearer the golf course than lots sold during the same
period in 1995. For the first nine months of 1995 and 1994 the average
sales prices per lot were $5,847 and $8,711, respectively. Management
believes that the number of lots sold and revenues from land sales
during 1995 were adversely affected somewhat by lending conditions.
Most purchasers of lots at Boiling Spring Lakes require some bank
financing to complete the purchase of a lot and/or the construction of
a home. Interest rates on real estate loans were generally higher
during the period ended September 30, 1995 than in the prior year
period, and area banks tightened somewhat their lending conditions.
Revenues at Fox Squirrel Country Club ("Fox Squirrel") for the nine
months ended September 30, 1995 and 1994 were $253,550 and $274,016,
respectively. Management believes that the paving of Fox Squirrel's
cart paths in March, 1995 resulted in golf revenues being higher in
1995 than would otherwise have been the case. However, concession sales
and cart rental income were adversely effected by unusually rainy
weather, especially on week-ends, throughout much of 1995, resulting in
a decline in golf revenues over the same period of 1994. Income from
dues declined due principally to the timing of collections in September
and October.
<PAGE> 8
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
Total operating expenses at Fox Squirrel during the first three
quarters were substantially unchanged from the same period in 1994.
Higher advertising, equipment rental, and utility costs were largely
offset by lower maintenance costs and expenses relating to concessions.
Other income declined reflecting a decline in revenues from timber
cutting for the nine months ended September 30, 1995. As stated in
recent financial reports, Management has viewed timber cutting as a
source of temporary revenue with limited prospects beyond 1994. The
decline in revenues was, therefore, expected.
Direct cost of land sold during the nine months ended September 30,
1995 and 1994 was $83,493 and $122,979, respectively. The decrease is
attributable largely to the mix of lots sold as to location and book
value during the two periods.
The direct cost of land sold for the three months ended September 30,
1995 and 1994 are not directly comparable since the amount for 1994
reflects an audit adjustment. Historically, the direct cost of land
sold was estimated by the Partnership for its quarterly reports and the
Partnership's auditors made any appropriate adjustments as of the end
of each fiscal year to reflect the actual cost basis of land sold as
calculated by the auditors. Accordingly, for the fourth quarter of each
fiscal year the direct cost of land sold reflected audit adjustments.
The Partnership changed its fiscal year from September 30, to December
31, effective 1994. Beginning with the current year, audit adjustments,
if any, to direct cost of land sold will be made as of December 31,
rather than September 30, of each year.
Land held for development or sale and related buildings and equipment,
increased during the period, largely due to the completion of paving
the cart paths at Fox Squirrel. To finance the project and to provide
funds for working capital and other purposes, on June 1, 1995 the
Partnership borrowed $200,000 from the president of the General
Partner, payable in full on June 1, 1998. The promissory note issued
bears interest at a rate equal to 6% above 12-month LIBOR (12 month
LIBOR is currently 6%), requires interest to be paid
<PAGE> 9
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
quarterly commencing September 1, 1995, and allows for prepayment
without penalty. The promissory note is secured by a mortgage on Fox
Squirrel.
As part of Management's efforts to expand and improve the facilities at
Fox Squirrel, regular dining service at Fox Squirrel commenced in
December, 1994. The club- house's kitchen and dining facilities were
leased to an independent operator for a period of two years in exchange
for fixed monthly payments. In July, 1995, the Partnership agreed to
release the operator from the lease and regular dining service was
suspended beyond August, 1995 pending an agreement with a new operator.
In October, 1995 a new manager and club professional at Fox Squirrel
was hired to replace the former manager, who resigned. Management
expects that the new manager, if retained beyond the current
provisional period, would also assume responsibility for the operation
of the dining service.
The commencement of regular dining service and the paving of the cart
paths at Fox Squirrel are representative of the Partnership's
continuing efforts to improve the development at Boiling Spring Lakes
so that the Partnership will eventually be able to consistently
generate revenues in excess of operating expenses and capital
expenditures. Management believes, however, that the variable nature of
the Partnership's revenues and its current liquidity position raise
doubts about the Partnership's ability to fund its operations and
currently planned capital programs without obtaining additional
financing. Management is not certain that additional outside financing
is available and, if available, that such financing may be obtained on
terms Management believes to be acceptable.
<PAGE> 10
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
PART II OTHER INFORMATION
ITEM 3. Management has chosen to change the Partnership's fiscal year end
from September 30, to December 31. Accordingly, whereas the
Partnership's last annual report was for the twelve months ended
September 30, 1994, the next annual report will be for the period
ending December 31, 1994 and 1995.
The change in fiscal year end reflects Management's desire to avoid
having to make certain deposits to the U.S. Internal Revenue Service
(the "IRS") required by Code Section 7519 and the regulations
thereunder of the Internal Revenue Code of 1986, as amended (the
"Code"). The Code requires that any partnership having a fiscal year
end other than December 31, and which generates income taxable to its
partners during any fiscal year make such a deposit in respect of such
fiscal year. By changing its fiscal year end to December 31, the
Partnership reclaimed $9,481 held on deposit by the IRS for income
deferred through September 30, 1994. Furthermore, the Partnership will
not be required to make future deposits in the event that income
taxable to its partners is generated in the current or future years,
although there can be no assurance that the Partnership will, in fact,
generate such income.
ITEM 4. Exhibits and Reports on Form 8-K
The Partnership filed no reports on Form 8-K during the quarter ended
September 30, 1995.
The Partnership filed one report on Form 8-K for the quarter ended
March 31, 1995, relating to the change in the Partnership's fiscal year
end to December 31.
EX-27 Financial Data Schedule
<PAGE> 11
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
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.
REEVES TELECOM LIMITED PARTNERSHIP
By: Grace Property Management Inc.
General Partner
By: /s/ John S. Grace
----------------------------------
John S. Grace
President
Dated: November 8, 1995
<PAGE> 12
EXHIBIT INDEX
Exhibit No. Description Page No.
- ---------- ----------- -------
EX-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 87024
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 87024
<PP&E> 914870
<DEPRECIATION> 0
<TOTAL-ASSETS> 1004806
<CURRENT-LIABILITIES> 487400
<BONDS> 200000
<COMMON> 317406
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1004806
<SALES> 52105
<TOTAL-REVENUES> 151429
<CGS> 26393
<TOTAL-COSTS> 174185
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (22756)
<INCOME-TAX> 0
<INCOME-CONTINUING> (22756)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22756)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
