<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: 0-18454 (formerly 33-26759)
SOUTHEAST ACQUISITIONS III, L.P.
(Exact name of registrant)
Delaware 23-2532708
(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 _____
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
The unaudited financial statements of Southeast Acquisitions III, 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"): 211 acres of undeveloped land in
Fulton County Georgia; 265 acres of undeveloped land in Henry County, Georgia;
24 acres of undeveloped land near Nashville, Tennessee; 48 acres of undeveloped
land near Fort Myers, Florida; and 51 acres of undeveloped land near Colombia,
South Carolina. 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
November 4, 1988 until June 1, 1989 when it acquired the first property and
sold 6,215 Units of limited partnership interest. During 1989, the Partnership
acquired four additional Properties and sold 6,185 additional units of limited
partnership interest. The Partnership has no other significant operations.
The Partnership's activities for the second quarter of 1996 were
focused on attempting to sell the properties. Revenues for the second quarter
of 1996 consisted of interest income of $3,337, timber revenues of $14,199 and
partnership transfer fees of $150. Expenses for the second quarter of 1996
consisted of general and administrative costs of $2,948, management fees of
$6,221, real estate taxes of $8,910 and insurance costs of $127.
The Partnership's activities for the first quarter of 1996 were
primarily focused on attempting to sell the Properties. During the first
quarter of 1996, the Partnership sold 5 acres of the Henry County, Georgia
property for a gain of $33,572. Revenues for the first quarter of 1996
consisted of interest income of $2,973 and partnership transfer fees of $175.
Expenses for the first quarter of 1996 consisted of general and administrative
costs of $2,153, management fees of $6,222, real estate taxes of $9,031 and
insurance costs of $127.
2
<PAGE> 3
The Partnership's activities for fiscal year 1995 were primarily
focused on attempting to sell the Properties. During 1995, the Partnership
sold all 24 acres of the Nashville, Tennessee parcel for a gain of $410,858.
Revenues for 1995 consisted of interest income of $26,706 and Partnership
transfer fees of $975. Expenses for 1995 consisted of general and
administrative costs of $13,469, management fees of $24,886, real estate taxes
of $36,835 and insurance of $578.
The Partnership's activities for fiscal year 1994 were primarily
focused on attempting to sell the Properties. During 1994 the partnership sold
1 acre of the Columbia, South Carolina, Property for a net profit of $24,894.
Revenues for 1994 consisted of interest income of $18,360 and partnership
transfer fees of $925. Expenses for 1994 consisted primarily of general and
administrative costs of $14,220, management fees of $24,886, real estate taxes
of $47,952 and insurance of $6,653.
Inflation did not have any material impact on operations during 1995
and it is not expected to materially impact future operations.
The General Partner continues to market and sell portions of the Henry
County, Georgia property and the Columbia, South Carolina property. Active
marketing of the Fulton County, Georgia property is not expected to begin until
after the partnership has been successful in bringing sewer to the property.
The General Partner has entered into an exclusive listing agreement for the
Fort Myers, Florida property. All utilities including sewer and water are
presently available to this property and the General Partner believes that this
is an important factor since both sewer and water facilities are necessary
before a building permit can be issued.
Liquidity and Capital Resources
The Partnership had cash reserves of $317,282 at June 30, 1996, which
will be used to cover the following estimated annual costs: $24,886 annual
administration fee to the General Partner, $10,000 per year for auditing,
accounting, tax and other administrative services, $508 per year for insurance
and $36,000 per year for real estate taxes. In the General Partner's opinion,
the Partnership's reserves will be sufficient for an additional four to five
years. However, if additional expenses are incurred or if the property cannot
be sold within five 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 property or incur
indebtedness on unfavorable terms.
3
<PAGE> 4
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 proceeding. 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.
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
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<PAGE> 5
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
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
________________________________________________________________________________
* 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.
33-26759.
** Incorporated by reference to Exhibit 3.2 filed as part of the
Partnership's Registration Statement on Form S-18, Registration No. 33- 26759.
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 III, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
------------- ------------
<S> <C> <C>
ASSETS
Land $ 8,896,011 $ 8,922,258
Cash and cash equivalents 317,282 258,680
Prepaid insurance 127 -
------------- ------------
$ 9,213,420 $ 9,180,938
============= ============
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses $ 27,741 $ 7,594
Due to affiliates 3,584 9,806
Partners' Equity 9,182,095 9,163,538
------------- ------------
$ 9,213,420 $ 9,180,938
============= ============
</TABLE>
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<PAGE> 8
SOUTHEAST ACQUISITIONS III, 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 $ 3,227 $ 6,970 $ 6,200 $ 13,470
Gain on sale of land - - 33,572 -
Timber revenue 14,199 - 14,199 -
Other income 150 200 325 400
------------ ------------ ------------- -------------
17,576 7,170 54,296 13,870
------------ ------------ ------------- -------------
EXPENSES:
General and administrative 2,948 3,173 5,101 8,840
Management fee 6,221 6,221 12,443 12,443
Real estate taxes 8,910 11,873 17,941 23,746
Insurance 127 151 254 301
------------ ------------ ------------- -------------
18,206 21,418 35,739 45,330
------------ ------------ ------------- -------------
NET INCOME (LOSS) $ (630) $ (14,248) $ 18,557 (31,460)
Partners' equity,
Beginning of period 9,182,725 10,333,558 9,163,538 10,350,770
------------ ------------ ------------- -------------
Partners' equity,
End of period $ 9,182,095 $ 10,319,310 $ 9,182,095 $ 10,319,310
============ ============ ============= =============
Weighted Average Number
of Limited Partnership
Units Outstanding 12,400 12,400 12,400 12,400
============ ============ ============= =============
Income (Loss) from Operations
per Limited Partnership
Interest $ (.05) $ (1.14) $ 1.48 $ (2.51)
============ ============ ============= =============
</TABLE>
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<PAGE> 9
SOUTHEAST ACQUISITIONS III, 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 $ 6,200 $ 13,470 $ 7,588
Gain on sale of land 33,572 - 24,894
Timber revenue 14,199 - -
Other income 325 400 525
----------- ----------- ------------
54,296 13,870 33,007
----------- ----------- ------------
EXPENSES:
General and administrative 5,101 8,840 4,232
Management fee 12,443 12,443 12,443
Real estate taxes 17,941 23,746 24,017
Insurance 254 301 4,335
Amortization - - 1,250
----------- ----------- ------------
35,739 45,330 46,277
----------- ----------- ------------
NET INCOME (LOSS) $ 18,557 $ (31,460) $ (13,270)
Partners' equity,
Beginning of period 9,163,538 10,350,770 10,401,552
Partners' equity,
End of period $ 9,182,095 $10,319,310 $ 10,388,282
=========== =========== ============
Weighted Average Number
of Limited Partnership
Units Outstanding 12,400 12,400 12,400
=========== =========== ============
Income (Loss) from Operations
per Limited Partnership
Interest $1.48 $(2.51) $(1.06)
=========== =========== ============
</TABLE>
3
<PAGE> 10
SOUTHEAST ACQUISITIONS III, L.P.
STATEMENTS 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 $ 60,683 $ - $ 41,873
Interest income received 6,200 13,470 7,588
Other income received 325 400 525
Timber revenue received 14,199 - -
Cash paid for operating expenses (22,805) (28,982) (35,090)
---------- ---------- ----------
Net cash flows (used in)
operating activities 58,602 (15,112) 14,896
Cash, beginning of period 258,680 556,074 586,697
---------- ---------- ----------
Cash, end of period $ 317,282 $ 540,962 $ 601,593
========== ========== ==========
RECONCILIATION OF NET INCOME(LOSS) TO NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 18,557 $ (31,460) $ (13,270)
Adjustments to reconcile net income(loss)
to net cash provided by
operating activities:
Amortization - - 1,250
Decrease in due from General Partner - 3,584 3,585
Increase in accrued expenses 20,147 19,136 14,279
Decrease in due to affiliates (6,222) (6,222) (6,222)
Decrease in assets 26,247 - 17,441
Increase in prepaid expenses (127) (150) (2,167)
---------- ---------- ----------
Net cash provided by (used in)
operating activities $ 58,602 $ (15,112) $ 14,896
========== ========== ==========
</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> 317,409
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 317,409
<PP&E> 8,896,011
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,213,420
<CURRENT-LIABILITIES> 31,325
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,182,095
<TOTAL-LIABILITY-AND-EQUITY> 9,213,420
<SALES> 54,296
<TOTAL-REVENUES> 54,296
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 35,739
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 18,557
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,557
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
