<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, 2000.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM JANUARY 1, 2000 TO
MARCH 31, 2000.
Commission File number: 0-17680 (formerly 33-20255)
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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.)
3011 Armory Drive, Suite 310
Nashville, Tennessee 37204
(Address of Principal Executive Offices)
Issuer's Telephone Number: 615-834-0872
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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 (b) 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, 2000 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 2000 Compared with First
Quarter of 1999
The Partnership activities for the first quarter of 2000 and the first
quarter of 1999 were focused on the sale of Partnership property. During the
first quarter of 2000 the Partnership completed the sale of all of the remaining
land in Henry County, Georgia, approximately 67 acres, for a sales price of
$298,100. There was no property sold in the first quarter of 1999. Income during
the first quarter of 2000 also consisted of interest income of $1,561 as
compared to $4,470 of interest earned in the first quarter of 1999. The decrease
in interest earned is a result of having a lower average cash reserve during the
quarter compared to the same quarter of 1999. There was an increase to the cash
reserve resulting from the above-mentioned sale, but this did not occur until
the last month of the quarter. In 2000, the Partnership also received $500 from
a builder who had inadvertently encroached on a small portion of the Henry
County Property. A quitclaim deed was prepared to convey the land to the
builder.
Expenses in the first quarter of 2000 included general and
administrative expenses of $6,118 versus $5,186 in the first quarter of 1999.
The increase was primarily due to increased legal charges. In addition, the
Partnership had $4,750 of management fees in the first quarter of 2000 which was
the same amount that was paid in the first quarter of 1999. Real estate taxes in
the first quarter of 2000 were $711 compared with $5,514 in the first quarter of
1999. This decrease was due primarily to the sale of land during 1999 and 2000.
Insurance in the first quarter of 2000 was $51 compared with $192 in the first
quarter of 1999.
Inflation did not have any material impact on operations during 2000
and it is not expected to materially impact future operations.
<PAGE> 3
Liquidity and Capital Resources
The Partnership had cash reserves of $404,542 at March 31, 2000, which
will be used to cover the following estimated annual costs: accounting fees of
$13,200, legal fees of $5,000, insurance costs of $210, property taxes of $224,
management fees of $19,000, and other administrative costs of $7,000. A
distribution of $289,500 will be made to the limited partners during the second
quarter of 2000. In the General Partner's opinion, the Partnership=s reserves
will be sufficient for an additional year. However, if additional expenses are
incurred or if the Properties cannot be sold within the next year, 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 2000.
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 2000.
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 15, 2000
- -------------------------- Southern Management ------------
Richard W. Sorenson Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31,
2000 DECEMBER 31,
ASSETS (UNAUDITED) 1999
----------- ----------
<S> <C> <C>
LAND HELD FOR SALE $ 800,184 $ 962,574
CASH AND CASH EQUIVALENTS 404,542 164,629
RECEIVABLE FROM SALE OF UTILITY EASEMENT 17,658 17,658
PREPAID INSURANCE 153 --
---------- ----------
$1,222,537 $1,144,861
========== ==========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 4,276 $ 21,582
PARTNERS' EQUITY:
GENERAL PARTNER 27,192 26,231
LIMITED PARTNERS (9,650 UNITS OUTSTANDING) 1,191,069 1,097,048
---------- ----------
1,218,261 1,123,279
---------- ----------
$1,222,537 $1,144,861
========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 7
SOUTHEAST ACQUISITIONS II, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
2000 1999
---- ----
<S> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ 105,587 $ --
INTEREST INCOME 1,561 4,470
OTHER INCOME 500 50
----------- -----------
107,648 4,520
----------- -----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 6,118 5,186
MANAGEMENT FEE 4,750 4,750
REAL ESTATE TAXES 711 5,514
INSURANCE 51 192
DELAWARE FRANCHISE AND EXCISE TAX -- 230
----------- -----------
11,630 15,872
----------- -----------
NET INCOME (LOSS) 96,018 (11,352)
PARTNERS' EQUITY,
BEGINNING OF PERIOD 1,123,279 2,296,351
----------- -----------
CAPITAL DISTRIBUTION (1,037) --
PARTNERS' EQUITY,
END OF PERIOD $ 1,218,260 $ 2,284,999
=========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 9,650 9,650
=========== ===========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ 9.85 $ (1.16)
=========== ===========
</TABLE>
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MAR 31
-------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 267,978 $ --
INTEREST INCOME RECEIVED 1,561 4,470
OTHER INCOME RECEIVED 500 50
CASH PAID FOR OPERATING EXPENSES (29,089) (33,695)
--------- ---------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 240,950 (29,175)
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO LIMITED PARTNERS (1,037) --
--------- ---------
INCREASE (DECREASE) IN CASH 239,913 (29,175)
CASH, BEGINNING OF PERIOD 164,629 632,128
--------- ---------
CASH, END OF PERIOD $ 404,542 $ 602,953
========= =========
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 96,018 $ (11,352)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (105,587) --
NET PROCEEDS FROM SALE OF LAND 267,978 --
DECREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (17,306) (43,828)
INCREASE IN PREPAID EXPENSES (153) (626)
DECREASE IN ACCOUNTS RECEIVABLE -- 26,631
--------- ---------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 240,950 $ (29,175)
========= =========
</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, 2000
(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, 1999. 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, 2000 may not be
indicative of the results that may be expected for the year ending
December 31, 2000.
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>
2000 1999
---- ----
<S> <C> <C>
Management Fees $ 4,750 $ 4,750
Accounting Fees -- --
Transfer Fees $ 350 $ 125
Reimbursements $ 256 $ 1,495
Commissions $ 7,453 $ --
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SOUTHEAST ACQUISITIONS II, LP FOR THE THREE MONTHS ENDED
MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 404,542
<SECURITIES> 0
<RECEIVABLES> 17,658
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 153
<PP&E> 800,184
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,222,537
<CURRENT-LIABILITIES> 4,276
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,218,261
<TOTAL-LIABILITY-AND-EQUITY> 1,222,537
<SALES> 105,587
<TOTAL-REVENUES> 107,648
<CGS> 0
<TOTAL-COSTS> 11,630
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 96,018
<INCOME-TAX> 0
<INCOME-CONTINUING> 96,018
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 96,018
<EPS-BASIC> 9.85
<EPS-DILUTED> 9.85
</TABLE>
