<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, 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
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
The unaudited financial statements of Southeast Acquisitions III, L.P.
(the "Partnership") at September 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's activities for the third quarter of 1996 were focused
on attempting to sell the properties. Revenues for the third quarter of 1996
consisted of interest income of $3,196 and partnership transfer fees of $425.
Expenses for the third quarter of 1996 consisted of general and administrative
costs of $9,725, management fees of $6,222, real estate taxes of $8,892 and
insurance costs of $127.
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.
2
<PAGE> 3
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.
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. All
utilities including sewer and water are presently available to the Fort Myers,
Florida 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.
The General Partner is in the process of having new appraisals
performed and if there is any impairment to an asset, it will be recorded during
the fourth quarter of 1996.
3
<PAGE> 4
Liquidity and Capital Resources
The Partnership had cash reserves of $306,807 at September 30, 1996,
which will be used to cover the following estimated annual costs: $24,886 annual
administration fee to the General Partner, $19,000 per year for auditing,
accounting, tax, legal 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 properties
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.
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 third
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 third
quarter of 1996.
Item 5 - Other Information
None
4
<PAGE> 5
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
- --------------- ----------- -----------
<S> <C> <C>
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
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
29 not applicable
</TABLE>
* 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.
6
<PAGE> 7
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, 11/12, 1996
- ----------------------------- Director of -----
James W. Kelican, Jr. Southeast
Acquisitions,
Inc.
.
/s/ Margaret Tamasitis Assistant 11/12, 1996
- ----------------------------- Secretary of -----
Margaret Tamasitis Southeast
Acquisitions,
Inc.
</TABLE>
7
<PAGE> 8
EXHIBIT A SOUTHEAST ACQUISITIONS III, L.P.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
----------- ----
<S> <C> <C>
Land $8,896,010 $8,922,258
Cash and cash equivalents 306,807 258,680
---------- ----------
$9,202,817 $9,180,938
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses $ 38,483 $ 7,594
Due to affiliates 3,584 9,806
Partners' Equity 9,160,750 9,163,538
---------- ----------
$9,202,817 $9,180,938
========== ==========
</TABLE>
1
<PAGE> 9
SOUTHEAST ACQUISITIONS III, L.P.
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Interest income $ 3,196 $ 9,938 $ 9,396 $ 23,408
Gain on sale of land - 410,858 33,572 410,858
Timber revenue - - 14,199 -
Other income 425 300 750 700
---------- ----------- ---------- -----------
3,621 421,096 57,917 434,966
---------- ----------- ---------- -----------
EXPENSES:
General and administrative 9,725 (548) 14,826 8,292
Management fee 6,222 6,222 18,665 18,665
Real estate taxes 8,892 4,301 26,833 28,047
Insurance 127 150 381 451
---------- ----------- ---------- -----------
24,966 10,125 60,705 55,455
---------- ----------- ---------- -----------
NET INCOME (LOSS) $ (21,345) $ 410,971 $ (2,788) 379,511
Partners' equity,
Beginning of period 9,182,095 10,319,310 9,163,538 10,350,770
Capital distribution - (1,550,003) - (1,550,003)
---------- ----------- ---------- -----------
Partners' equity,
End of period $9,160,750 $ 9,180,278 $9,160,750 $ 9,180,278
========== =========== ========== ===========
Weighted Average Number
of Limited Partnership
Units Outstanding 12,400 12,400 12,400 12,400
========== =========== ========== ===========
Income (Loss) from Operations
per Limited Partnership
Interest $ (1.70) $ 32.81 $ (.22) $ 30.30
========== =========== ========== ===========
</TABLE>
2
<PAGE> 10
SOUTHEAST ACQUISITIONS III, L.P.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30
----------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Interest income $ 9,396 $ 23,408 $ 12,622
Gain on sale of land 33,572 410,858 24,894
Timber revenue 14,199 - -
Other income 750 700 725
------- -------- --------
57,917 434,966 38,241
------- -------- --------
EXPENSES:
General and administrative 14,826 8,292 8,993
Management fee 18,665 18,665 18,665
Real estate taxes 26,833 28,047 36,376
Insurance 381 451 6,503
Amortization - - 1,250
------- -------- --------
60,705 55,455 71,787
------- -------- --------
NET INCOME (LOSS) $(2,788) $379,511 $(33,546)
======= ======== ========
</TABLE>
3
<PAGE> 11
SOUTHEAST ACQUISITIONS III, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30
--------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Proceeds from sale of land $ 60,683 $ 1,338,166 $ 42,334
Interest income received 9,396 23,408 12,622
Other income received 750 700 725
Timber revenue received 14,199 - -
Cash paid for operating expenses (36,901) (45,647) (44,884)
Distribution to Limited Partners - (1,550,003) -
-------- ----------- --------
Net cash flows (used) in
operating activities 48,127 (233,376) 10,797
Cash, beginning of period 258,680 556,074 586,697
-------- ----------- --------
Cash, end of period $306,807 $ 322,698 $597,494
======== =========== ========
RECONCILIATION OF NET INCOME(LOSS) TO NET CASH FLOWS
FROM OPERATING ACTIVITIES:
Net income (loss) $(2,788) $ 379,511 $(33,546)
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 30,889 21,568 28,289
Decrease in due to affiliates (6,222) (6,222) (6,222)
Decrease in assets 26,248 918,186 17,441
Distribution to Limited Partners - (1,550,003) -
------- ----------- --------
Net cash provided by (used in)
operating activities $48,127 $ (233,376) $ 10,797
======= =========== ========
</TABLE>
4
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000846014
<NAME> SOUTHEAST ACQUISITIONS III, L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 306,807
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 306,807
<PP&E> 8,896,010
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,202,817
<CURRENT-LIABILITIES> 42,067
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,160,750
<TOTAL-LIABILITY-AND-EQUITY> 9,202,817
<SALES> 57,917
<TOTAL-REVENUES> 57,917
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 60,705
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,788)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,788)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
