<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2000
Commission File #0-9305
REEVES TELECOM LIMITED PARTNERSHIP
(name changed from Reeves Telecom Associates)
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(Exact name of registrant as specified in its charter)
South Carolina 57-0700063
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(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
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(Address of General Partner) (Zip Code)
(516) 686-2201
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(Registrants telephone number including area code)
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 SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
(UNAUDITED) (AUDITED)
--------------- --------------
<S> <C> <C>
Assets
------
Current Assets:
Cash and cash equivalents $ 216,940 $ 129,954
Prepaid and other current assets 4,019 4,907
--------------- --------------
220,959 134,861
Properties held for development or sale
and related buildings and equipment, net 864,632 960,480
--------------- --------------
Total Assets $ 1,085,591 $ 1,095,341
=============== ==============
Liabilities and Partners' Capital/(Deficit)
----------------------------------------------
Current Liabilities:
Accounts payable and accrued expenses $ 72,284 $ 102,210
Accrued expenses affiliates 57,168 1,772,994
Current maturities of long term debt 128,536 140,264
--------------- --------------
257,988 2,015,468
Long Term Debt, Less: Current Maturities - 1,432
--------------- --------------
Total Liabilities 257,988 2,016,900
Partners' Capital/(Deficit) 827,603 (921,559)
--------------- --------------
Total Liabilities and
Partners' Capital/(Deficit) $ 1,085,591 $ 1,095,341
=============== ==============
</TABLE>
<PAGE> 3
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS AND PARTNERS' CAPITAL/(DEFICIT)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Operating Revenues:
Property sales $ 2,653,426 $ 463,539
Country Club revenue 273,930 285,179
Interest income & finance charges 16,253 2,871
------------ ------------
2,943,609 751,589
------------ ------------
Operating Costs and Expenses:
Direct costs of property sold 342,784 145,934
Direct costs of Country Club revenue 29,764 26,852
Selling, general and administrative
expenses of Country Club 256,261 264,758
Selling, general and administrative
expenses 379,661 359,168
Depreciation 44,138 51,957
Interest 141,060 118,566
------------ ------------
1,193,668 967,235
------------ ------------
Operating Income/(Loss) 1,749,941 (215,646)
Other Income/Expenses:
Loss on disposal of fixed assets (779) -
------------ ------------
Net Income or (Loss) 1,749,162 (215,646)
Partners' deficit at beginning of period (921,559) (544,484)
------------ ------------
Partners' capital/(deficit) at end of period $ 827,603 $ (760,130)
============ ============
Income or (loss) per partnership unit $ 0.96 $ (0.12)
============ ============
Weighted average partnership units
issued and outstanding 1,828,148 1,828,148
============ ============
</TABLE>
<PAGE> 4
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS AND PARTNERS' CAPITAL/(DEFICIT)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Operating Revenues:
Property sales $ 2,453,610 $ 98,557
Country Club revenue 77,648 80,583
Interest income & finance charges 14,483 2,150
------------ ------------
2,545,741 181,290
------------ ------------
Operating Costs and Expenses:
Direct costs of property sold 326,995 5,522
Direct costs of Country Club revenue 9,565 7,674
Selling, general and administrative
expenses of Country Club 80,536 92,462
Selling, general and administrative
expenses 165,644 117,323
Depreciation 14,870 16,916
Interest 47,022 41,403
------------ ------------
644,632 281,300
------------ ------------
Operating Income/(Loss) 1,901,109 (100,010)
Other Income/Expenses:
Loss on disposal of fixed assets - -
------------ ------------
Net Income or (Loss) 1,901,109 (100,010)
Partners' deficit at beginning of period (1,073,506) (660,120)
------------ ------------
Partners' capital/(deficit) at end of period $ 827,603 $ (760,130)
============ ============
Income or (loss) per partnership unit $ 1.04 $ (0.05)
============ ============
Weighted average partnership units
issued and outstanding 1,828,148 1,828,148
============ ============
</TABLE>
<PAGE> 5
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 1,749,162 $ (215,646)
Adjustments to reconcile net income/(loss)
to net cash used in operating activities:
Depreciation 44,138 51,957
Change in assets and liabilities:
Decrease in prepaid and other current assets 888 5,176
Decrease in property held for sale 51,710 26,305
(Decrease) in accounts payable and accrued expenses (29,926) (36,211)
------------ ------------
Net cash provided by/(used) in operating activities 1,815,972 (168,419)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land improvements, building and equipment $ - $ (137,983)
Disposition of developed property - 119,629
------------ ------------
Net cash used in investing activities - (18,354)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) in notes payable $ (11,253) $ (20,334)
Increase/(Decrease) in accrued expenses, affiliates (1,715,826) 265,844
(Repayment) under line of credit - (112,000)
Increase/(Decrease) in mortgage payable (1,907) 120,000
------------ ------------
Net cash provided (used) by financing activities (1,728,986) 253,510
------------ ------------
NET INCREASE IN CASH $ 86,986 $ 66,737
CASH BALANCE - BEGINNING 129,954 69,864
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CASH BALANCE - ENDING $ 216,940 $ 136,601
============ ============
</TABLE>
<PAGE> 6
REEVES TELECOM LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) $ 1,901,109 $ (100,010)
Adjustments to reconcile net income/(loss)
to net cash used in operating activities:
Depreciation 14,870 16,916
Change in assets and liabilities:
(Increase) in prepaid and other current assets (9) (2,930)
Decrease in property held for sale 59,497 6,034
Increase in accounts payable and accrued expenses 22,659 11,088
(Decrease) in deposits - land sale (100,000) -
------------ ------------
Net cash provided by/(used) in operating activities 1,898,126 (68,902)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land improvements, building and equipment $ - $ (5,582)
Disposition of developed property - -
------------ ------------
Net cash used in investing activities - (5,582)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) in notes payable $ (3,831) $ (13,518)
Increase/(Decrease) in accrued expenses, affiliates (1,910,566) 89,736
(Repayment) under line of credit - -
(Decrease) in mortgage payable (923) -
------------ ------------
Net cash provided (used) by financing activities (1,915,320) 76,218
------------ ------------
NET INCREASE IN CASH $ (17,194) $ 1,734
CASH BALANCE - BEGINNING 234,134 134,867
------------ ------------
CASH BALANCE - ENDING $ 216,940 $ 136,601
============ ============
</TABLE>
<PAGE> 7
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 2000
(Unaudited)
NOTE 1. Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all the information
and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of only normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30, 2000
are not necessarily indicative of the results that may be expected
for the year ending December 31, 2000. For further information,
refer to the consolidated financial statements and notes thereto
included in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1999 as filed with the Securities and
Exchange Commission on March 30, 2000.
Certain amounts in the income statement for the interim period ended
September 30, 1999 have been reclassified to conform with the
presentation of the results for the interim period ended September
30, 2000. There is no change in the net loss recorded for the
interim period ended September 30, 1999 as a result of such
reclassifications.
Subsequent to the end of the third quarter, the Partnership agreed
to sell Fox Squirrel Country Club for consideration totaling
$862,500, consisting of $150,000 in cash and $712,500 in a note
taken back from the purchaser. The note will bear interest at an
annual rate of 9.75%, require quarterly interest payments, will be
secured by a first mortgage on the assets of Fox Squirrel, and will
mature on the third anniversary of the closing date. Management
expects that the transaction will close during the first quarter of
2001.
ITEM 2. Management Discussion and Analysis of Financial Condition and Results
of Operations.
Certain matters discussed herein are forward-looking statements
about the business, financial condition and prospects of the
Partnership. The actual results could differ materially from those
indicated by such forward-looking statements because of various
risks and uncertainties. Such risks and uncertainties may include,
but are not limited to, regional and national economic conditions,
changes in consumer demand for real estate, changes in interest
rates and the availability of credit to the Partnership and/or
potential purchasers of real estate, changes in state and federal
regulations relating to environmental and health matters, and, in
connection with Fox Squirrel, weather conditions and changes in
employee relations which may adversely affect the ability of the
Partnership to maintain Fox Squirrel as desired. The Partnership
cannot control these risks and uncertainties and, in many cases,
cannot predict the risks and uncertainties that could cause its
actual results to differ materially from those indicated by the
forward-looking statements. The Partnership undertakes no obligation
to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.
During the third quarter of 2000, the Partnership completed two
transactions involving the sale of approximately 5,127 acres of land
to The Nature Conservancy. The first
<PAGE> 8
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 2000
(Unaudited)
transaction involved the sale of certain large tracts of undeveloped
land, mostly wetlands and woodlands, for an aggregate of $1,625,850
and closed in July. The second transaction involved the sale of
certain individual undeveloped lots, small tracts and certain land
suitable for commercial development for an aggregate of $774,150 and
closed in September. The Partnership realized a profit of
approximately $2,080,670 from the two transactions. Reference is
made to the more detailed information on both transactions set forth
on Form 8-K filed with the U.S. Securities and Exchange Commission
on June 29, 2000.
Revenue from property sales was $2,653,426 for the nine months ended
September 30, 2000. Excluding the two sales to The Nature
Conservancy, revenue from property sales was $253,426 resulting from
the sale of 44 small undeveloped lots. By comparison, for the nine
months ended September 30, 1999, the Partnership sold 54 small
undeveloped lots, 2 commercial lots, one developed lot, one small
commercial lot and one parcel of unplatted, undeveloped land
comprising approximately 1-1/2 acres for total revenue of $463,539.
Management attributes the decrease in revenue to fewer lots sold
this year than last, principally due to a slight lessening in demand
for real estate in the area this year compared to last year. As used
above, a "developed" lot is one on which the Partnership has built a
house with the intent of selling both the house and the lot to
generate a profit exceeding that which the Partnership would earn
had it sold only the undeveloped lot.
Revenue at Fox Squirrel Country Club during the first three quarters
of 2000 was $273,930, compared to $285,179 for the same period in
1999. Management attributes the decline principally to generally
more favorable weather in the Northeast during the first half of
2000 than in last year, which meant fewer golfers traveling from the
Northeast to the Wilmington, NC - Myrtle Beach, SC corridor than
last year. An increase in greens fees per non-member round partially
offset the decline in non-member rounds played.
Direct cost of property sold for the first three quarters of 2000
was $342,784. The land sold to The Nature Conservancy had a cost
basis of $79,331, which amount is the difference between the gross
book value of $1,347,977 and the applicable valuation allowance of
$1,268,646. Excluding the sales to The Nature Conservancy, the
direct cost of land sold was $18,457, compared to $145,934 for the
same period in 1999. Management attributes the decline principally
to the fact that no developed lots were sold this year, whereas one
such lot was sold last year and the cost of land sales includes the
construction cost of the sold house.
Selling, general and administrative expenses were $379,661 and
$359,168 for the nine months ended September 30, 2000 and 1999,
respectively. Management attributes the increase principally to
higher property taxes and employee compensation compared to last
year.
Selling, general and administrative expenses for Fox Squirrel for
the nine months ended September 30, 2000 and 1999 were $256,261 and
$264,758, respectively. Management attributes the decline
principally to lower equipment rental and maintenance costs, which
more than offset somewhat higher insurance costs and costs
associated with the Dining Service.
<PAGE> 9
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 2000
(Unaudited)
Subsequent to the end of the third quarter, the Partnership agreed
to sell Fox Squirrel Country Club for consideration totaling
$862,500, consisting of $150,000 in cash and $712,500 in a note
taken back from the purchaser. The note will bear interest at an
annual rate of 9.75%, require quarterly interest payments, will be
secured by a first mortgage on the assets of Fox Squirrel, and will
mature on the third anniversary of the closing date. Management
expects that the transaction will close during the first quarter of
2001.
<PAGE> 10
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 2000
(Unaudited)
PART II
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Attached as an exhibit to this Form 10-Q is a copy of the
agreement relating to the sale of Fox Squirrel Country Club.
(b) No reports were filed on Form 8-K for the quarter ended
September 30, 2000.
<PAGE> 11
REEVES TELECOM LIMITED PARTNERSHIP
SEPTEMBER 30, 2000
(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, thereto duly authorized.
REEVES TELECOM LIMITED PARTNERSHIP
By: Grace Property Management Inc.
General Partner
By: /s/ JOHN S. GRACE
----------------------
John S. Grace
President
November 13, 2000
