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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, 2000.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
--- EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM APRIL 1, 2000 TO
JUNE 30, 2000.
Commission File number: 0-17680 (formerly 33-20255)
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SOUTHEAST ACQUISITIONS II, L.P.
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(Exact name of registrant)
Delaware 23-2498841
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(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 (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 [ ]
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
The unaudited financial statements of Southeast Acquisitions II, L.P.
(the "Partnership") at June 30, 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. At June 30, 2000, the remaining land consisted of approximately 95
acres of the Tennessee land.
The Partnership is scheduled to terminate on December 31, 2000. There
are currently no plans to extend the Partnership agreement. If there is land
remaining at December 31, 2000, the current General Partner will continue to run
operations through the liquidation mode.
Results of Operations for Second Quarter of 2000 Compared with Second
Quarter of 1999
The Partnership activities for the second quarter of 2000 and the
second quarter of 1999 were focused on the sale of Partnership property. There
was no property sold in the second quarter of 2000. During the second quarter of
1999 the Partnership closed one sale in Henry County, Georgia, selling 69.122
acres for a sales price of $138,244. Income during the second quarter of 2000
consisted of interest income of $1,923 as compared to $5,043 of interest earned
in the second 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 a decrease to the cash reserve resulting from a
distribution to the limited partners.
At the close of the second quarter of 2000, the Partnership had a
contract, which was executed May 12th, to sell 51.39 acres of the Rutherford
County, Tennessee property for $50,000 per acre. The contract calls for closing
during September of 2000, but also provides for one thirty-day extension upon
payment of $15,000. However, contract contingencies could allow the purchaser to
terminate the agreement. There can be no assurance that this transaction will
close.
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In addition, on May 10, 2000, the Partnership executed a contract to
sell 44 acres of its Rutherford County, Tennessee property for $100,000 per
acre. The contract provided for a closing by August 8, 2000, but also provides
that the closing can be extended for two 90-day periods upon payment of $25,000
for each such extension. Accordingly, the closing could be as late as February,
2001. There can be no assurance that this transaction will close.
If the two sales described above close, the Partnership will have then
sold all of the property.
Expenses in the second quarter of 2000, included general and
administrative expenses of $6,961 versus $11,013 in the second quarter of 1999.
The decrease was primarily due to decreased professional fees. The 1999
professional fees included $3,441 for a land title survey that was done for a
prospective sale, which did not occur. There was no such expense in the second
quarter of 2000. Real estate taxes in the second quarter of 2000 were $56
compared to $5,250 in the second quarter of 1999. This decrease was due to the
sale of land which occurred in the first quarter of 2000 and the year 1999.
Management fees of $4,750, insurance costs of $51 and Delaware franchise and
excise tax fees of $100 was comparable to the fees charged in the second quarter
of 1999.
Inflation did not have any material impact on operations during the
second quarter of 2000 and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
After making a $289,320 distribution to the limited partners, the
Partnership had cash reserves of $106,467 at June 30, 2000, which will be used
to cover the following estimated costs: accounting fees of $7,750, legal fees of
$2,500, insurance costs of $50, property taxes of $750, management fees of
$9,500, and other administrative costs of $3,500. In the General Partner's
opinion, the Partnership's reserves will be sufficient for an additional six
months. However, if additional expenses are incurred or if the Property 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 remaining Property 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 second
quarter of 2000.
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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 have 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 2000.
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)
<TABLE>
<CAPTION>
Exhibit Numbers Description Page Number
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<S> <C> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>
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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
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<S> <C> <C>
/s/ Richard W. Sorenson Member, August 11, 2000
---------------------------- Southern Management
Richard W. Sorenson Group, LLC
</TABLE>
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EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30
2000 DECEMBER 31,
ASSETS (UNAUDITED) 1999
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<S> <C> <C>
LAND HELD FOR SALE $ 800,183 $ 962,574
CASH AND CASH EQUIVALENTS 106,467 164,629
RECEIVABLE FROM SALE OF UTILITY EASEMENT 17,658 17,658
PREPAID INSURANCE 102 --
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$ 924,410 $1,144,861
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LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 5,465 $ 21,582
PARTNERS' EQUITY:
GENERAL PARTNER 27,091 26,231
LIMITED PARTNERS (9,650 UNITS OUTSTANDING) 891,854 1,097,048
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918,945 1,123,279
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$ 924,410 $1,144,861
========== ==========
</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 SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
---------------------------- ------------------------------
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ -- $ 67 $ 105,587 $ 67
INTEREST INCOME 1,923 5,043 3,484 9,513
OTHER INCOME -- -- 500 50
----------- ----------- ----------- -----------
1,923 5,110 109,571 9,630
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EXPENSES:
GENERAL AND ADMINISTRATIVE 6,961 11,013 13,079 16,199
MANAGEMENT FEE 4,750 4,750 9,500 9,500
REAL ESTATE TAXES 56 5,250 767 10,764
INSURANCE 51 192 102 384
DELAWARE FRANCHISE & EXCISE TAX 100 100 100 330
----------- ----------- ----------- -----------
11,918 21,305 23,548 37,177
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NET INCOME (LOSS) (9,995) (16,195) 86,023 (27,547)
PARTNERS' EQUITY,
BEGINNING OF PERIOD 1,218,260 2,284,999 1,123,279 2,296,351
----------- ----------- ----------- -----------
CAPITAL DISTRIBUTION (289,320) (460,187) (290,357) (460,187)
PARTNERS' EQUITY,
END OF PERIOD $ 918,945 $ 1,808,617 $ 918,945 $ 1,808,617
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 9,650 9,650 9,650 9,650
=========== =========== =========== ===========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ (1.03) $ (1.66) $ 8.83 $ (2.83)
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS II, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
-------------------------
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 267,978 $ 124,251
INTEREST INCOME RECEIVED 3,484 9,513
OTHER INCOME RECEIVED 500 50
CASH PAID FOR OPERATING EXPENSES (39,767) (29,530)
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NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 232,195 104,284
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO LIMITED PARTNERS (290,357) (460,187)
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DECREASE IN CASH (58,162) (355,903)
CASH, BEGINNING OF PERIOD 164,629 632,128
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CASH, END OF PERIOD $ 106,467 $ 276,225
========= =========
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 86,023 $ (27,547)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (105,587) (67)
NET PROCEEDS FROM SALE OF LAND 267,978 124,252
DECREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (16,117) (18,601)
INCREASE IN PREPAID EXPENSES (102) (384)
DECREASE IN ACCOUNTS RECEIVABLE -- 26,631
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NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 232,195 $ 104,284
========= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
SOUTHEAST ACQUISITIONS II, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Six Months Ended June 30, 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 six-month period ended June 30, 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 six months were as follows:
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Management Fees $9,500 $9,500
Reimbursements $1,101 $1,830
Commissions $7,453 $4,147
</TABLE>
