<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 MARCH 31, 1998.
- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM JANUARY 1, 1998 TO
MARCH 31, 1998.
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
incorporation or organization) (I.R.S. Employer Identification No.)
301 South Perimeter Park Drive
Nashville, Tennessee 37211
(Address of Principal Executive Offices)
Issuer's Telephone Number: 615-834-0872
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 March 31, 1998 are attached hereto as Exhibit A.
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.
Results of Operations for First Quarter of 1998 Compared with First
Quarter of 1997
The Partnership activities for the first quarter of 1998 and the first
quarter of 1997 were focused on the sale of Partnership property. During the
first quarter of 1998 the Partnership sold 16.918 acres of land fronting Killian
Road, as compared with no sales during the first quarter of 1997. The property
sold in the first quarter of 1998 was sold for a gross price of $44,000 per acre
and netted, after sales costs, $333,213 in revenue to the Partnership. The
conveyed property was a portion of a larger tract acquired in 1987 for $17,170
per acre and the larger tract was independently appraised in 1996 for $13,812
per acre. The site sold in the first quarter of 1998 has more value than some of
the sites in the rear portion of the tract which include 34.5 +/- acres that are
situated in the flood plain. Other income during the first quarter of 1998
consisted of interest income of $1,179 as compared with $706 in the first
quarter of 1997. The increase in interest income was primarily due to funds on
hand from the above sale.
Expenses in the first quarter of 1998 included general and
administrative expenses of $8,397 versus $1,626 in the first quarter of 1997.
The increase was primarily due to legal fees and accounting fee accruals. In
addition, the Partnership had $2,025 of management fees in the first quarter of
1998 as compared with no such fees in the first quarter of 1997, due to the
presence of a new general partner admitted to the Partnership in the third
quarter of 1997. Other expenses in the first quarter of 1998 were real estate
taxes of $73 and insurance of $81, which were comparable to the same expenses in
the first quarter of 1997
Inflation did not have any material impact on operations during the
first quarter of 1998 and it is not expected to materially impact future
operations.
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<PAGE> 3
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 was
done at no expense to the Partnership.
The Partnership has not determined to construct the stub road as of
this date.
Liquidity and Capital Resources
The Partnership has cash reserves of $355,863 at March 31, 1998, which
was used to make a distribution to Partners of $253,500 during the second fiscal
quarter of 1998 and to cover the following estimated annual costs: management
fees $8,100, accounting $14,000, legal $10,400, insurance $450, taxes $300, and
other administrative costs $3,900. In the General Partner's opinion, the
Partnership's reserves will be sufficient for an additional three years.
However, if additional 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 indebted ness on unfavorable terms.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
There are no change in the partnership's securities during the first
quarter of fiscal year 1998.
Item 3 - Defaults Upon Senior Securities
There was no default in the payment of principal, interest, a sinking
or purchase fund installment of 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 first
quarter of 1998.
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<PAGE> 4
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
- --------------- -----------
<S> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>
<PAGE> 5
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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Richard W. Sorenson President, May 19, 1998
- ------------------------------ Southern Management --------------
Richard W. Sorenson Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS I, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
ASSETS (Unaudited)
----------- -----------
<S> <C> <C>
Land held for sale $ 2,309,693 $ 2,520,000
Cash and cash equivalents 355,863 41,131
Prepaid insurance 245 --
----------- -----------
$ 2,665,801 $ 2,561,131
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued expenses $ 8,920 $ 17,739
Partners' equity:
General partner (9,629) (10,764)
Limited partners (4,225 units outstanding) 2,666,510 2,554,156
----------- -----------
2,656,881 2,543,392
----------- -----------
$ 2,665,801 $ 2,561,131
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE> 7
EXHIBIT A
SOUTHEAST ACQUISITIONS I, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
------------------------------------
1998 1997
<S> <C> <C>
REVENUES:
Gain on sale of land $ 122,887 $ --
Interest income 1,179 706
---------- -----------
124,066 706
---------- -----------
EXPENSES:
General and administrative 8,398 1,626
Management fee 2,025 --
Real estate taxes 73 73
Insurance 81 46
---------- -----------
10,577 1,745
---------- -----------
NET INCOME (LOSS) 113,489 (1,039)
Partners' equity,
Beginning of period 2,543,392 2,603,547
---------- -----------
Partners' equity,
End of period $2,656,881 $ 2,602,508
========== ===========
Weighted average number
of limited partnership
units outstanding 4,225 4,225
========== ===========
Income (loss) from operations
per limited partnership
interest $ 26.59 $ (0.24)
========== ===========
</TABLE>
See notes to financial statements.
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS I, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
----------------------------------
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Proceeds from sale of land $ 333,194 $ --
Interest income received 1,179 706
Cash paid for operating expenses (19,641) (8,188)
--------- --------
Net cash provided by (used in)
operating activities 314,732 (7,482)
Cash, beginning of period 41,131 91,596
========= ========
Cash, end of period $ 355,863 $ 84,114
========= ========
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss) $ 113,489 $ (1,039)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Gain on sale of land (122,887) --
Net proceeds from sale of land 333,194 --
Decrease in accounts payable and accrued expenses (8,819) (6,351)
Increase in prepaid expenses (245) (92)
--------- --------
Net cash provided by (used in) operating
activities $ 314,732 $ (7,482)
========= ========
</TABLE>
See notes to financial statements.
<PAGE> 9
SOUTHEAST ACQUISITIONS I, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1998
(Unaudited)
A. ACCOUNTING POLICIES
The unaudited financial statements presented herein have been prepared
in accordance with the instructions to Form 10-Q and do not include all
of the information and note disclosures required by generally accepted
accounting principles. These statements should be read in conjunction
with the financial statements and notes thereto included in the
Partnership's Form 10-K for the year ended December 31, 1997. In the
opinion of management, such financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary
to summarize fairly the Partnership's financial position and results of
operations. The results of operations for the three-month period ended
March 31, 1998 may not be indicative of the results that may be
expected for the year ending December 31, 1998.
B. RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively involved in
managing the Partnership's operations. Compensation earned for these
services in the first three months were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Management Fees $2,025 --
Accounting Fees -- --
Transfer Fees $ 400 --
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SOUTHEAST ACQUISITIONS I, L.P. FOR THE THREE MONTHS
ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 355,863
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 245
<PP&E> 2,309,693
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,665,801
<CURRENT-LIABILITIES> 8,920
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,656,881
<TOTAL-LIABILITY-AND-EQUITY> 2,665,801
<SALES> 122,887
<TOTAL-REVENUES> 124,066
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,577
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 113,489
<INCOME-TAX> 0
<INCOME-CONTINUING> 113,489
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 113,489
<EPS-PRIMARY> 26.59
<EPS-DILUTED> 26.59
</TABLE>
