<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 SEPTEMBER 30, 1999.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
----- SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM JULY 1, 1999 TO SEPTEMBER 30, 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 (1) 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 September 30, 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 Third Quarter of 1999 Compared with Third
Quarter of 1998
The Partnership activities for the third quarter of 1999 and the third
quarter of 1998 were focused on the sale of Partnership property. During the
third quarter of 1999 the Partnership sold all of the remaining land in
Greenville, South Carolina, approximately 18.9 acres, for $699,448. This sale,
after commission and closing costs, netted the Partnership $626,765. The two
contracts for the Rutherford County, Tennessee property that were stated in the
second quarter 10-Q report did not close and the contracts have been terminated.
The local government was opposed to this use, which may ultimately be in the
Partnership's best interest as the existing commercial zoning could result in
sales amounts greater than the terminated transaction. The second contract for
12.91 acres of commercial land did not close because a majority of the land was
to be used by a major automobile dealer. When the buyer was advised that a
proposed Ford dealership could not be obtained, the contract was terminated.
During the third quarter of 1998 the Partnership closed three sales,
two in Greenville (Simpsonville), South Carolina, which were 17.316 acres for
$95,000 per acre and 2.049 acres for $171,498 per acre, and one sale in Henry
County Georgia of 44.325 acres for $4,750 per acre. These three sales, after
commissions and closing costs, netted the Partnership $1,985,325.
Expenses in the third quarter of 1999 included general and
administrative expenses of $4,804 versus $5,917 in the third quarter of 1998.
Real estate taxes in the third quarter of 1999 were $3,341 compared to $12,123
in the third quarter of 1998. This decrease was due to the sale
<PAGE> 3
of land in 1998. Management fees of $4,750 and insurance premiums of $192 was
comparable to the fees charged in the third quarter of 1998.
Inflation did not have any material impact on operations during the
third quarter of 1999 and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
The Partnership has cash reserves of $900,503 at September 30, 1999. In
the fourth quarter there will be a distribution to the limited partners totaling
$723,750, which will leave a reserve of $176,753 to cover the following
estimated annual costs: accounting fees of $12,500, legal fees of $5,000,
insurance premiums of $770, property taxes of $16,623, management fees of
$19,000, other administrative costs of $7,000, and Tennessee franchise taxes
estimated at $2,000. In the General Partner's opinion, the Partnership's
reserves will be sufficient for an additional fifteen months. However, if
additional expenses are incurred or if the Properties cannot be sold within
fifteen months, 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 third
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 third
quarter of 1999.
Item 5 - Other Information
None
<PAGE> 4
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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Richard W. Sorenson Member, November 5, 1999
- ----------------------- Southern Management
Richard W. Sorenson Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
ASSETS (UNAUDITED)
------------- -----------
<S> <C> <C>
LAND HELD FOR SALE $ 962,574 $1,602,084
CASH AND CASH EQUIVALENTS 900,503 632,129
ESCROW - SEWER CONSTRUCTION 0 88,406
ACCOUNTS RECEIVABLE 2,572 0
PROPERTY TAX REIMBURSEMENT DUE FROM PURCHASE OF LAND 0 26,631
PREPAID INSURANCE 192 --
---------- ----------
$1,865,841 $2,349,250
========== ==========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 26,666 $ 52,899
PARTNERS' EQUITY:
GENERAL PARTNER 26,152 26,122
LIMITED PARTNERS (9,650 UNITS OUTSTANDING) 1,813,023 2,270,229
---------- ----------
1,839,175 2,296,351
---------- ----------
$1,865,841 $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 FOR THE NINE MONTHS
ENDED SEPT 30 ENDED SEPT 30
------------------------- ---------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ 39,452 $ 1,359,480 $ 39,519 $ 1,608,691
INTEREST INCOME 4,193 6,138 13,706 14,432
OTHER INCOME -- -- 50 --
---------- ----------- ----------- -----------
43,645 1,365,618 53,275 1,623,123
---------- ----------- ----------- -----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 4,804 5,917 21,003 41,429
MANAGEMENT FEE 4,750 4,750 14,250 14,250
REAL ESTATE TAXES 3,341 12,123 14,105 33,106
INSURANCE 192 211 576 633
DELAWARE FRANCHISE & EXCISE TAX -- -- 330 --
---------- ----------- ----------- -----------
13,087 23,001 50,264 89,418
---------- ----------- ----------- -----------
NET INCOME (LOSS) 30,558 1,342,617 3,011 1,533,705
PARTNERS' EQUITY,
BEGINNING OF PERIOD 1,808,617 2,658,006 2,296,351 2,466,918
---------- ----------- ----------- -----------
CAPITAL DISTRIBUTION -- (1,785,250) (460,187) (1,785,250)
PARTNERS' EQUITY,
END OF PERIOD $1,839,175 $ 2,215,373 $ 1,839,175 $ 2,215,373
========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 9,650 9,650 9,650 9,650
========== =========== =========== ===========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ 3.14 $ 137.74 $ 0.31 $ 157.34
========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPT 30
-------------------------
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 751,016 $ 2,294,413
INTEREST INCOME RECEIVED 13,706 14,432
OTHER INCOME RECEIVED 50 --
CASH PAID FOR OPERATING EXPENSES (36,210) (231,952)
--------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 728,562 2,076,893
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO LIMITED PARTNERS (460,187) (1,785,250)
--------- -----------
DECREASE IN CASH 268,375 291,643
CASH, BEGINNING OF PERIOD 632,128 344,476
--------- -----------
CASH, END OF PERIOD $ 900,503 $ 636,119
========= ===========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME $ 3,011 $ 1,533,705
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (39,518) (1,608,691)
NET PROCEEDS FROM SALE OF LAND 751,016 2,294,413
DECREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (26,233) (1,087)
INCREASE IN PREPAID EXPENSES (192) (211)
DECREASE IN PAYABLE TO AFFILIATE -- (13,954)
DECREASE IN OTHER LIABILITIES -- (99,000)
DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE 40,478 (28,282)
--------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 728,562 $ 2,076,893
========= ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
SOUTHEAST ACQUISITIONS II, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Nine Months Ended September 30, 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 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 nine-month period ended September 30, 1999 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 nine months were as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Management Fees $14,250 $14,250
Accounting Fees --- ---
Transfer Fees $ 450 $ 1,125
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 900,503
<SECURITIES> 0
<RECEIVABLES> 2,572
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 192
<PP&E> 962,574
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,865,841
<CURRENT-LIABILITIES> 26,666
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,839,175
<TOTAL-LIABILITY-AND-EQUITY> 1,865,841
<SALES> 39,519
<TOTAL-REVENUES> 53,275
<CGS> 0
<TOTAL-COSTS> 50,264
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,011
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,011
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,011
<EPS-BASIC> 0.31
<EPS-DILUTED> 0.31
</TABLE>
