<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, 1996.
______ 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: 0-17680 (formerly 33-20255)
SOUTHEAST ACQUISITIONS II, L.P.
(Exact name of registrant)
Delaware 23-2498841
(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 II, L.P.
(the "Partnership") at June 30, 1996 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
the following properties by holding them for investment and eventual sale (each
a "Property," collectively the "Properties"): 353 acres of undeveloped land in
Henry County, Georgia; 91 acres of undeveloped land near Greenville, South
Carolina; and 135 acres of undeveloped land in Rutherford County, Tennessee.
However, there can be no assurance that the Partnership's objectives will be
realized.
Results of Operations
The Partnership had no operations from the date of its formation on
December 14, 1987 until June 24, 1988 when it acquired the first property and
had sold 3,165 Units of limited partnership interest. During 1988, the
Partnership acquired three additional Properties and sold 6,485 additional
Units of limited partnership interest.
The Partnership's activities during the second quarter of 1996 were
primarily focused on selling the properties. Revenues for the second quarter of
1996 consisted of interest income of $173 and partnership transfer fees of
$350. Expenses for the second quarter of 1996 consisted of general and
administrative costs of $3,948, management fees of 4,686, real estate taxes of
$4,599 and insurance of $88.
During the first quarter of fiscal year 1996, the Partnership sold 2
acres of the Greenville, South Carolina property for a gain of $215,288.
Revenues for the first quarter of 1996 consisted of interest income of $2,384
and partnership transfer fees of $408. Expenses for the first quarter of 1996
consisted of general and administrative costs of $5,079, management fees of
$4,688, real estate taxes of $4,538 and insurance costs of $87.
During 1995, the Partnership sold 6 acres of the Henry County, Georgia
property, 4 acres of the Rutherford County, Tennessee property and 3 acres of
the Greenville, South Carolina property for a gain of $920,590. Also, during
1995, the Partnership sold 19 acres of the Henry County, Georgia property for a
loss of $10,389. Other revenues consisted of interest income of $14,175 and
partnership transfer fees of $725. Expenses for 1995 consisted of general and
administrative costs of $21,847, management fees of $18,753, real estate taxes
of $18,964 and insurance costs of $528.
2
<PAGE> 3
During 1994, the partnership sold 73 acres of the Henry County,
Georgia parcel for a gain of $99,765. Other revenues consisted of interest
income of $8,297 and partnership transfer fees of $725. Expenses for 1994
consisted of general and administrative costs of $29,603, management fees of
$18,753, real estate taxes of $22,528 and insurance costs of $6,717.
Inflation did not have any material impact on operations during 1995
and it is not expected to materially impact future operations, except for
possible appreciation in the value of the properties.
The General Partner continues, as in the past, to actively market and
sell portions of all three properties.
Liquidity and Capital Resources
The Partnership has cash reserves of $33,360 at June 30, 1996.
Although there is only $33,360 in cash reserves at June 30, 1996, the General
Partner is negotiating a sale for approximately 7 acres of the Greenville,
South Carolina property at $110,000 an acre. The current cash reserves along
with proceeds from the sale, adjusted for limited partnership distributions,
will be used to cover the following estimated annual costs: $9,374 annual
administration fee to the General Partner, $20,000 per year for auditing,
accounting, tax and other administrative services, $350 per year for insurance
and $18,274 per year for real estate taxes. In the General Partner's opinion,
the Partnership's reserves will be sufficient for an additional two years.
However, if additional expenses are incurred or if the property cannot be sold
within two years, the reserves may be inadequate to cover the Partnership's
operating expenses. If the reserves are exhausted, the partnership may have to
dispose of a portion of the Properties or incur indebtedness on unfavorable
terms.
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
P.S. 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 1996.
3
<PAGE> 4
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 1996.
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
- --------------- ----------- -----------
3.1(a) Certificate of Limited *
Partnership
3.1(b) & (4) Restated Limited Partnership **
Agreement
9 not applicable
* 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.
33-20255.
** Incorporated by reference to Exhibit 3.2 filed as part of the
Partnership's Registration Statement on Form S-18, Registration No. 33- 20255.
4
<PAGE> 5
11 not applicable
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
5
<PAGE> 6
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/ JAMES W. KELICAN, JR. Vice President, August 9, 1996
- --------------------------- Director of
James W. Kelican, Jr. Southeast
Acquisitions,
Inc.
/s/ MARGARET TAMASITIS Assistant August 9, 1996
- --------------------------- Secretary of
Margaret Tamasitis Southeast
Acquisitions,
Inc.
</TABLE>
6
<PAGE> 7
EXHIBIT A
SOUTHEAST ACQUISITIONS II, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
------------ ------------
<S> <C> <C>
ASSETS
Land $ 2,910,317 $ 2,963,920
Cash and cash equivalents 33,360 86,137
Prepaid insurance 87 -
------------ ------------
$ 2,943,764 $ 3,050,057
============ ============
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses $ 17,482 $ 16,877
Due to affiliates - 4,688
Other (Non-refundable deposit) 35,000 -
Partners' Equity 2,891,282 3,028,492
------------ ------------
$ 2,943,764 $ 3,050,057
============ ============
</TABLE>
1
<PAGE> 8
SOUTHEAST ACQUISITIONS II, 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,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Interest income $ 173 $ 1,826 $ 2,557 $ 10,272
Gain on sale of land - - 215,288 744,007
Other income 350 200 758 275
------------ ------------ ------------ ------------
523 2,026 218,603 754,554
------------ ------------ ------------ ------------
EXPENSES:
General and administrative 3,948 2,256 9,027 4,440
Management fee 4,686 4,689 9,374 9,377
Real estate taxes 4,599 5,076 9,137 10,230
Insurance 88 147 175 294
------------ ------------ ------------ ------------
13,321 12,168 27,713 24,341
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (12,798) $ (10,142) $ 190,890 730,213
Partners' equity,
Beginning of period 2,904,080 3,241,588 3,028,492 3,610,983
Capital distribution - - (328,100) (1,109,750)
------------ ------------ ------------ ------------
Partners' equity,
End of period $ 2,891,282 $ 3,231,446 $ 2,891,282 $ 3,231,446
============ ============ ============ ============
Weighted Average Number
of Limited Partnership
Units Outstanding 9,650 9,650 9,650 9,650
============ ============ ============ ============
Income (Loss) from Operations
per Limited Partnership
Interest $ (1.31) $ (1.04) $ 19.58 $ 74.91
============ ============ ============ ============
</TABLE>
2
<PAGE> 9
SOUTHEAST ACQUISITIONS II, L.P.
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
------------------------------------------------
1996 1995 1994
-------------- -------------- --------------
<S> <C> <C> <C>
REVENUES:
Interest income $ 2,557 $ 10,272 $ 2,885
Gain on sale of land 215,288 744,007 1,596
Other income 758 275 725
------------ ------------ ------------
218,603 754,554 5,206
------------ ------------ ------------
EXPENSES:
General and administrative 9,027 4,440 17,507
Management fee 9,374 9,377 9,377
Real estate taxes 9,137 10,230 14,859
Insurance 175 294 4,380
------------ ------------ ------------
27,713 24,341 46,123
------------ ------------ ------------
NET INCOME (LOSS) $ 190,890 $ 730,213 $ (40,917)
Partners' equity,
Beginning of period 3,028,492 3,610,983 3,579,797
Capital distribution (328,100) (1,109,750) -
------------ ------------ ------------
Partners' equity,
End of period $ 2,891,282 $ 3,231,446 $ 3,538,880
============ ============ ============
Weighted Average Number
of Limited Partnership
Units Outstanding 9,650 9,650 9,650
============ ============ ============
Income (Loss) from Operations
per Limited Partnership
Interest $ 19.58 $ 74.91 $ (4.20)
============ ============ ============
</TABLE>
3
<PAGE> 10
SOUTHEAST ACQUISITIONS II, L.P.
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
--------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Proceeds from sale of land $ 303,890 $ 811,423 $ 10,578
Cash paid for operating expenses (31,882) (15,441) (63,844)
Interest income received 2,557 10,272 2,885
Other income received 758 275 725
----------- ----------- -----------
Net cash flows (used in)
operating activities 275,323 806,529 (49,656)
Distribution to Limited Partners (328,100) (1,109,750) -
----------- ----------- -----------
Increase (decrease) in cash (52,777) (303,221) (49,656)
Cash, beginning of period 86,137 467,018 250,147
----------- ----------- -----------
Cash, end of period $ 33,360 $ 163,797 $ 200,491
=========== =========== ===========
RECONCILIATION OF NET INCOME(LOSS) TO NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 190,890 $ 730,213 $ (40,917)
Adjustments to reconcile net income(loss)
to net cash provided by
operating activities:
Decrease in land 53,603 76,924 8,983
Increase in prepaid expenses (87) (147) (2,190)
Increase (decrease) in due to
affiliates (4,688) (4,688) (4,688)
Increase (decrease) in accrued
expenses 605 4,227 (10,844)
Increase in other liabilities 35,000 - -
Distribution to Limited Partners (328,100) (1,109,750) -
----------- ----------- -----------
Net cash provided by (used in)
operating activities $ (52,777) $ (303,221) $ (49,656)
=========== =========== ===========
</TABLE>
4
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 33,447
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33,447
<PP&E> 2,910,317
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,943,764
<CURRENT-LIABILITIES> 52,482
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,891,282
<TOTAL-LIABILITY-AND-EQUITY> 2,943,764
<SALES> 218,603
<TOTAL-REVENUES> 218,603
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 27,713
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 190,890
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 190,890
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
