<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, 1999.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM JANUARY 1, 1999
TO MARCH 31, 1999.
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
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 II, L.P.
(the "Partnership") at March 31, 1999 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 l35 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 for First Quarter of 1999 Compared with First
Quarter of 1998
The Partnership activities for the first quarter of 1999 and the first
quarter of 1998 were focused on the sale of Partnership property. During the
first quarter of 1999 the Partnership did not contract to sell any property.
There was also no property sold in the first quarter of 1998. Income during the
first quarter of 1999 consisted of interest income of $4,470 which is comparable
to $3,655 of interest earned in the first quarter of 1998.
Expenses in the first quarter of 1999 included general and
administrative expenses of $5,186 versus $15,822 in the first quarter of 1998.
The decrease was primarily due to decreased legal and accounting charges. In
addition, the Partnership had $4,750 of management fees in the first quarter of
1999 which was the same amount that was paid in the first quarter of 1998. Real
estate taxes in the first quarter of 1999 were $5,514 compared with $10,693 in
the first quarter of 1998. This decrease was due primarily to the sale of
approximately 66 acres during 1998. There were also Delaware franchise and
excise taxes for 1998 that were expensed in the first quarter of 1999. The
Partnership was not aware of this tax liability until 1999. There will be an
additional Delaware franchise and excise tax of $100 due during the second
quarter of 1999. Insurance in the first quarter of 1999 was $192 compared with
$211 in the first quarter of 1998.
Inflation did not have any material impact on operations during 1999
and it is not expected to materially impact future operations.
<PAGE> 3
Liquidity and Capital Resources
The Partnership had cash reserves of $602,953 at March 31, 1999, which
will be used to cover the following estimated annual costs: accounting $12,500,
legal $5,000, insurance $770, property taxes $22,056, management fees $19,000,
and other administrative costs $7,000. A distribution of $386,000 will be made
to the limited partners during the second quarter of 1999. 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
Properties 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 some or all of the Properties or incur
indebtedness on unfavorable terms.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
There were no changes in the Partnership's securities during the first
quarter of 1999.
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 first
quarter of 1999.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
None
<PAGE> 4
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
<TABLE>
<CAPTION>
Exhibit Numbers Description Page Number
- --------------- ----------- -----------
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following person 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 12, 1999
Richard W. Sorenson Southern Management ------------
Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
ASSETS (UNAUDITED)
------------- -------------
<S> <C> <C>
LAND HELD FOR SALE $ 1,602,084 $ 1,602,084
CASH AND CASH EQUIVALENTS 602,953 632,129
ESCROW - SEWER CONSTRUCTION 88,406 88,406
PROPERTY TAX REIMBURSEMENT DUE FROM PURCHASE OF LAND 0 26,631
PREPAID INSURANCE 577 --
PREPAID EXPENSES 50 --
------------ -----------
$ 2,294,070 $ 2,349,250
============ ===========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 9,071 $ 52,899
PARTNERS' EQUITY:
GENERAL PARTNER 26,009 26,122
LIMITED PARTNERS (9,650 UNITS OUTSTANDING) 2,258,990 2,270,229
------------ -----------
2,284,999 2,296,351
------------ -----------
$ 2,294,070 $ 2,349,250
============ ===========
</TABLE>
See notes to financial statements.
<PAGE> 7
EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
1999 1998
---- ----
<S> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ -- $ --
INTEREST INCOME 4,470 3,655
OTHER INCOME 50 --
----------- -----------
4,520 3,655
----------- -----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 5,186 15,822
MANAGEMENT FEE 4,750 4,750
REAL ESTATE TAXES 5,514 10,693
INSURANCE 192 211
DELAWARE FRANCHISE AND EXCISE TAX 230 --
----------- -----------
15,872 31,476
----------- -----------
NET INCOME (LOSS) (11,352) (27,821)
PARTNERS' EQUITY,
BEGINNING OF PERIOD 2,296,351 2,466,918
----------- -----------
CAPITAL DISTRIBUTION -- --
PARTNERS' EQUITY,
END OF PERIOD $ 2,284,999 $ 2,439,097
=========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 9,650 9,650
=========== ===========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ (1.16) $ (2.85)
=========== ===========
</TABLE>
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MAR 31
-------------------------------
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ -- $ --
INTEREST INCOME RECEIVED 4,470 3,655
OTHER INCOME RECEIVED 50 --
CASH PAID FOR OPERATING EXPENSES (33,695) (178,136)
---------- -----------
NET CASH USED IN
OPERATING ACTIVITIES (29,175) (174,481)
CASH, BEGINNING OF PERIOD 632,128 344,476
---------- -----------
CASH, END OF PERIOD $ 602,953 $ 169,995
========== ===========
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:
NET LOSS $ (11,352) $ (27,821)
ADJUSTMENTS TO RECONCILE NET LOSS
TO NET CASH USED IN
OPERATING ACTIVITIES:
DECREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (43,828) (33,073)
INCREASE IN PREPAID EXPENSES (626) (633)
DECREASE IN PAYABLE TO AFFILIATE -- (13,954)
DECREASE IN OTHER LIABILITIES -- (99,000)
DECREASE IN ACCOUNTS RECEIVABLE 26,631 --
---------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ (29,175) $ (174,481)
========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
SOUTHEAST ACQUISITIONS II, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1999
(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, 1998. 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, 1999 may not be
indicative of the results that may be expected for the year ending December
31, 1999.
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>
1999 1998
---- ----
<S> <C> <C>
Management Fees $4,750 $4,750
Accounting Fees -- --
Transfer Fees $ 125 $ 325
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SOUTHEAST ACQUISITIONS II, L.P. FOR THE THREE MONTHS
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 691,359
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 627
<PP&E> 1,602,084
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,294,070
<CURRENT-LIABILITIES> 9,071
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,284,999
<TOTAL-LIABILITY-AND-EQUITY> 2,294,070
<SALES> 0
<TOTAL-REVENUES> 4,520
<CGS> 0
<TOTAL-COSTS> 15,872
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (11,352)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11,352)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,352)
<EPS-PRIMARY> (1.16)
<EPS-DILUTED> (1.16)
</TABLE>
