<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED June 30, 1997.
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: 0-16835 (formerly 33-12125-A)
SOUTHEAST ACQUISITIONS I, L.P.
(Exact name of registrant)
Delaware 23-2454443
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
250 King of Prussia Road, Radnor, PA 19087
(Address of Principal Executive Offices)
Issuer's Telephone Number: (610 964-7234)
Indicate by check mark whether the registrant (a) 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 I - FINANCIAL INFORMATION
Item 1 - Financial Statements
The unaudited financial statements of Southeast Acquisitions I, L.P.
(the "Partnership") at June 30, 1997 are attached hereto as Exhibit A.
In the opinion of management, the accompanying unaudited condensed
financial statements include all adjustments, which are of a normal recurring
nature, necessary to present fairly the Partnership's financial position as of
June 30, 1997, and the results of its operations and cash flows for the six
months ended June 30, 1997.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Background
The Partnership was formed to acquire, own and realize appreciation in
a certain 202.72 acre parcel of undeveloped land near Columbia, South Carolina
(the "Property") by holding it for investment and eventual sale. However, there
can be no assurance that the partnership's objectives will be realized. The
Partnership is scheduled to terminate on December 31, 1997.
Results of Operations
The Partnership had no operations from the date of its formation on
December 5, 1986 until January 2, 1987 when it acquired the Property. Since its
acquisition of the Property, the partnership offered and sold 4,225 Units of
limited partnership interests and obtained the rezoning of the Property, but has
had no other significant operations.
The Partnership's activities for the second quarter of fiscal year 1997
were primarily focused on selling the Property. Revenues for the second quarter
of 1997 consisted of interest income of $791. Expenses for the second quarter of
1997 consisted primarily of general and administrative costs of $2,034,
insurance of $46 and real estate taxes of $73.
The Partnership's activities for the second quarter of fiscal year 1996
were primarily focused on selling the Property. Revenues for the second quarter
of 1996 consisted of interest income of $762, timber sales of $54,000 and
partnership transfer fees of $75. Expenses for the second quarter of 1996
consisted primarily of general and administrative costs of $2,219, insurance of
$46 and real estate taxes of $73.
2
<PAGE> 3
The Partnership's activities for the second quarter of fiscal year 1995
were primarily focused on selling the Property. Revenues for the second quarter
of 1995 consisted of interest income of $427 and partnership transfer fees of
$50. Expenses for the second quarter of 1995 consisted primarily of general and
administrative costs of $1,791, insurance of $52 and real estate taxes of $71.
The Partnership's activities for the first quarter of fiscal year 1997
were primarily focused on selling the Property. Revenues for the first quarter
of 1997 consisted of interest income of $706. Expenses for the first quarter of
1997 consisted primarily of general and administrative costs of $1,626,
insurance of $46 and real estate taxes of $73.
The Partnership's activities for the first quarter of fiscal year 1996
were primarily focused on selling the Property. Revenues for the first quarter
of 1996 consisted of interest income of $368. Expenses for the first quarter of
1996 consisted primarily of general and administrative costs of $2,057,
insurance of $46 and real estate taxes of $73.
The Partnership's activities for the first quarter of fiscal year 1995
were primarily focused on selling the Property. Revenues for the first quarter
of 1995 consisted of interest income of $510 and partnership transfer fees of
$50. Expenses for the first quarter of 1995 consisted primarily of general and
administrative costs of $1,877, insurance of $53 and real estate taxes of $72.
Inflation did not have any material impact on operations during 1996
and it is not expected to materially impact future operations.
The Partnership has been marketing the Property and expects that it
will dispose of the Property as conditions warrant. The Property may be sold in
a single sale or divided into parcels which will be sold separately. The timing
and manner of sale will be determined by Southeast Acquisitions, Inc., the
General Partner of the Partnership. The General Partner has the right to sell
the Property without the consent of the Limited Partners if the net proceeds of
the sale will be sufficient to return the Limited Partners' Capital Contribution
plus their 10% Cumulative Annual Return. The General Partner believes that the
Partnership's cash reserves will be sufficient to last for at least three more
years assuming no significant increases in expenses. However, if the reserves
are exhausted and the Partnership is unable to borrow funds, the Partnership may
have to sell some or all of the Property on unfavorable terms.
To facilitate the possible sale of parcels, the Partnership may be
required to build a short, stub road off Killian Road. To minimize the expense
of building such a road, the Partnership made an agreement with a timber company
to timber the Property and to locate one of their timber roads in an area where
the Partnership would build the spine road so that the clearing for the road is
done at no expense to the Partnership.
The Partnership has not determined to construct the stub road as of
this date.
3
<PAGE> 4
Liquidity and Capital Resources
The Partnership has cash reserves of $84,495 at June 30, 1997, which
will be used to cover the following estimated annual costs: $10,000 per year for
auditing, accounting, tax, legal and other administrative services, $200 per
year for insurance and $300 per year for real estate taxes. In the General
Partner's opinion, the Partnership's reserves will be sufficient for an
additional three years. If there is any excess cash remaining in the reserve
account, the funds will be used to pay unforeseen expenses. If additional
unforeseen expenses are incurred or should the Partnership decide to construct
the stub road into the Property (as discussed earlier), the reserves may be
inadequate to cover the Partnership's operating expenses. If the reserves are
exhausted, the Partnership may have to dispose of some of the Property or incur
indebtedness on unfavorable terms.
During 1996, Management of the General Partner commissioned an
appraisal of the Property which resulted in a write-down of $996,645.
The General Partner has reviewed the conclusions of the 1996 appraisal,
met with the appraiser, had discussions with local real estate professionals and
developers, and believes that the appraisal is a reasonable approximation of the
current value of the Property.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Partnership is not a direct party to, nor is the Partnership's
property directly the subject of, any material legal proceedings. However, on
November 6, 1992, the Commonwealth Court of Pennsylvania issued an order placing
The Fidelity Mutual Life Insurance Company ("Fidelity Mutual"), the indirect
parent of the General Partner of the Partnership, into rehabilitation under the
control and authority of the Pennsylvania Insurance Commissioner pursuant to the
provisions of the Pennsylvania Insurance Department Act, 40 PS Section 221.1 et
seq. The Partnership is not a direct party to the order, but ownership of the
stock of (and consequently control of) the General Partner is vested in the
Insurance Commissioner pursuant to the Order.
Item 2 - Changes in Securities
There was no change in the partnership's securities during the second
quarter of fiscal year 1997.
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<PAGE> 5
Item 3 - Defaults Upon Senior Securities
There was no default in the payment of principal, interest, a sinking
or purchase fund installment or any other default with respect to any
indebtedness of the Partnership. The Partnership has issued no preferred stock;
accordingly, there has been no arrearages or delinquencies with respect to any
such preferred stock.
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to the Partners for a vote during the second
quarter of 1997.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Reports on Form 8-K
None
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
<TABLE>
<CAPTION>
Exhibit Numbers Description Page Number
- --------------- ----------- -----------
<S> <C> <C>
3.1(a) Certificate of Limited *
Partnership
3.1(b) & (4) Restated Limited Partnership **
Agreement
9 not applicable
11 not applicable
</TABLE>
* Incorporated by reference to Exhibit 3.1 filed as part of the Exhibits
to the Partnership's Registration Statement on Form S-18, Registration
No. 33-12125-A.
5
<PAGE> 6
** Incorporated by reference to Exhibit 3.2 filed as part of the
Partnership's Registration Statement on Form S-18, Registration No. 33-12125-A
<TABLE>
<CAPTION>
<S> <C>
12 not applicable
13 not applicable
16 not applicable
18 not applicable
19 not applicable
22 not applicable
23 not applicable
24 not applicable
25 not applicable
28 not applicable
29 not applicable
</TABLE>
6
<PAGE> 7
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Title Date
/s/ Arthur W. Mullin President, 8/11/1997
- ----------------------------- Treasurer,
Arthur W. Mullin Director of
Southeast
Acquisitions,
Inc.
/s/ James W. Kelican Jr. Vice President, 8/11/1997
- ----------------------------- Director of
James W. Kelican, Jr. Southeast
Acquisitions,
Inc.
7
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS I, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
(Unaudited)
----------- -----------
<S> <C> <C>
ASSETS
Land held for sale, net $2,520,000 $2,520,000
Cash and cash equivalents 84,495 91,596
Prepaid insurance 46 --
---------- ----------
$2,604,541 $2,611,596
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses $ 3,395 $ 8,049
Partners' Equity 2,601,146 2,603,547
---------- ----------
$2,604,541 $2,611,596
========== ==========
</TABLE>
1
<PAGE> 9
SOUTHEAST ACQUISITIONS I, L.P.
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Interest income $ 791 $ 762 $ 1,497 $ 1,130
Timber revenue - 54,000 - 54,000
Other income - 75 - 75
---------- ---------- ---------- ----------
791 54,837 1,497 55,205
---------- ---------- ---------- ----------
EXPENSES:
General and administrative 2,034 2,219 3,660 4,276
Real estate taxes 73 73 146 146
Insurance 46 46 92 92
---------- ---------- ---------- ----------
2,153 2,338 3,898 4,514
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ (1,362) $ 52,499 $ (2,401) $ 50,691
Partners' equity,
Beginning of period 2,602,508 3,556,023 2,603,547 3,557,831
---------- ---------- ---------- ----------
Partners' equity,
End of period $2,601,146 $3,608,522 $2,601,146 $3,608,522
========== ========== ========== ==========
Weighted Average Number
of Limited Partnership
Units Outstanding 4,225 4,225 4,225 4,225
========== ========== ========== ==========
Income (Loss) from Operations
per Limited Partnership
Interest $ (.32) $ 12.30 $ (.56) $ 11.88
========== ========== ========== ==========
</TABLE>
2
<PAGE> 10
SOUTHEAST ACQUISITIONS I, L.P.
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
------------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Interest income $ 1,497 $ 1,130 $ 937
Timber revenue - 54,000 -
Other income - 75 100
---------- ---------- ----------
1,497 55,205 1,037
---------- ---------- ----------
EXPENSES:
General and administrative 3,660 4,276 3,668
Real estate taxes 146 146 143
Insurance 92 92 105
---------- ---------- ----------
3,898 4,514 3,916
---------- ---------- ----------
NET INCOME (LOSS) $ (2,401) $ 50,691 $ (2,879)
Partners' equity,
Beginning of period 2,603,547 3,557,831 3,564,351
---------- ---------- ----------
Partners' equity,
End of period $2,601,146 $3,608,522 $3,561,472
========== ========== ==========
Weighted Average Number
of Limited Partnership
Units Outstanding 4,225 4,225 4,225
========== ========== ==========
Income (Loss) from Operations
per Limited Partnership
Interest $ (.56) $ 11.88 $ (.67)
========== ========== ==========
</TABLE>
3
<PAGE> 11
SOUTHEAST ACQUISITIONS I, L.P.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest income received $ 1,497 $ 1,130 $ 937
Timber revenue received - 54,000 -
Other income received - 75 100
Cash paid for operating expenses (8,598) (7,801) (7,739)
------- ------- -------
Net cash (used in)
operating activities (7,101) 47,404 (6,702)
Cash and cash equivalents,
beginning of period 91,596 47,623 55,969
------- ------- -------
Cash and cash equivalents,
end of period $ 84,495 $95,027 $49,267
======= ======= =======
RECONCILIATION OF NET INCOME(LOSS) TO NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,401) $50,691 $(2,879)
Adjustments to reconcile net income(loss)
to net cash (used in) provided
by operating activities:
Increase (decrease) in accrued expenses (4,654) (3,241) (1,745)
Increase (decrease) in due
to affiliates - - (2,025)
Increase (decrease) in
prepaid insurance (46) (46) (53)
------- ------- -------
Net cash provided by (used in)
operating activities $ (7,101) $47,404 $(6,702)
======= ======= =======
</TABLE>
4
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000810994
<NAME> SOUTHEAST ACQUISITIONS I, L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 84,495
<SECURITIES> 0
<RECEIVABLES> 46
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 84,541
<PP&E> 2,520,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,604,541
<CURRENT-LIABILITIES> 3,395
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,601,146
<TOTAL-LIABILITY-AND-EQUITY> 2,604,541
<SALES> 1,497
<TOTAL-REVENUES> 1,497
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,898
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,401)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,401)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
