<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, 1998.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM APRIL 1, 1998 TO JUNE 30, 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 June 30, 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 Second Quarter of 1998 Compared with Second
Quarter of 1997
The Partnership activities for the second quarter of 1998 and the
second quarter of 1997 were focused on the sale of Partnership property. During
the second quarter of 1998 there were no sales. In the first quarter the
Partnership completed one sale of 16.918 acres at $22,000 per acre which, after
cost of sales, netted the Partnership $333,213. In the 10-Q filing at March 31,
1998, the per acre price was incorrectly stated at $44,000 per acre.
Expenses in the second quarter of 1998 included general and
administrative expenses of $16,299 versus $2,034 in the second 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 second quarter of
1998 as compared with no such fees in the second 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 second quarter of 1998 were real estate
taxes of $70 and insurance of $82, which were comparable to the same expenses in
the second quarter of 1997.
Inflation did not have any material impact on operations during the
second quarter of 1998 and it is not expected to materially impact future
operations.
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.
<PAGE> 3
The Partnership has not determined to construct the stub road as of
this date.
Liquidity and Capital Resources
The Partnership has cash reserves of $84,583 at June 30, 1998, 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 indebtedness 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 second
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 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 1998.
<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)
Exhibit Numbers Description Page Number
- --------------- ----------- -----------
27 Financial Data Schedule (for SEC use only)
<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.
Signature Title Date
- --------- ----- ----
/s/ Richard W. Sorenson Member, August 10, 1998
- --------------------------- Southern Management
Richard W. Sorenson Group, LLC
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS I, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
(UNAUDITED)
----------- -----------
ASSETS
<S> <C> <C>
LAND HELD FOR SALE $ 2,309,693 $ 2,520,000
CASH AND CASH EQUIVALENTS 84,583 41,131
PREPAID INSURANCE 163 --
PREPAID EXPENSES 25 --
----------- -----------
$ 2,394,464 $ 2,561,131
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 7,839 $ 17,739
PARTNERS' EQUITY:
GENERAL PARTNER (9,796) (10,764)
LIMITED PARTNERS (4,225 UNITS OUTSTANDING) 2,396,421 2,554,156
----------- -----------
2,386,625 2,543,392
----------- -----------
$ 2,394,464 $ 2,561,131
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 7
SOUTHEAST ACQUISITIONS I, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
-------------------------------- ------------------------------
1998 1997 1998 1997
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ -- $ -- $ 122,887 $ --
INTEREST INCOME 1,720 791 2,899 1,497
----------- ----------- ---------- -----------
$ 1,720 $ 791 125,786 1,497
----------- ----------- ---------- -----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 16,299 2,034 24,697 3,660
MANAGEMENT FEE 2,025 -- 4,050 --
REAL ESTATE TAXES 70 73 143 146
INSURANCE 82 46 163 92
----------- ----------- ---------- -----------
18,476 2,153 29,053 3,898
----------- ----------- ---------- -----------
NET INCOME (LOSS) (16,756) (1,362) 96,733 (2,401)
PARTNERS' EQUITY,
BEGINNING OF PERIOD 2,656,881 2,602,508 2,543,392 2,603,547
----------- ----------- ---------- -----------
CAPITAL DISTRIBUTION (253,500) -- (253,500) --
PARTNERS' EQUITY,
END OF PERIOD $ 2,386,625 $ 2,601,146 $2,386,625 $ 2,601,146
=========== =========== ========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 4,225 4,225 4,225 4,225
=========== =========== ========== ===========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ (3.92) $ (0.32) $ 22.67 $ (0.56)
=========== =========== ========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS I, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
---------------------------
1998 1997
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 333,194 $ --
INTEREST INCOME RECEIVED 2,899 1,497
CASH PAID FOR OPERATING EXPENSES (39,141) (8,598)
--------- --------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 296,952 (7,101)
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO LIMITED PARTNERS (253,500) --
--------- --------
INCREASE (DECREASE) IN CASH 43,452 (7,101)
CASH, BEGINNING OF PERIOD 41,131 91,596
--------- --------
CASH, END OF PERIOD $ 84,583 $ 84,495
========= ========
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 96,733 $ (2,401)
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 (9,900) (4,654)
INCREASE IN PREPAID EXPENSES (188) (46)
--------- --------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES $ 296,952 $ (7,101)
========= ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
SOUTHEAST ACQUISITIONS I, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1998
(Unaudited)
A. ACCOUNTING POLICIES
The unaudited financial statements presented herein have been prepared
in accordance with the instructions to Form 10Q 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 10K 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 six-month period ended
June 30, 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 six months were as follows:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Management Fees $4,050 --
Accounting Fees -- --
Transfer Fees $ 550 --
</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 JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 84,583
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 188
<PP&E> 2,309,693
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,394,464
<CURRENT-LIABILITIES> 7,839
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,386,625
<TOTAL-LIABILITY-AND-EQUITY> 2,394,464
<SALES> 122,887
<TOTAL-REVENUES> 125,786
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 29,053
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 96,733
<INCOME-TAX> 0
<INCOME-CONTINUING> 96,733
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 96,733
<EPS-PRIMARY> 22.67
<EPS-DILUTED> 22.67
</TABLE>
