<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, 1997.
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 March 31, 1997 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 first quarter of 1997 were
primarily focused on attempting to sell certain of the Properties. Revenues for
the first quarter of 1997 consisted of interest income of $3,613 and partnership
transfer fees of $150. Expenses for the first quarter of 1997 consisted of
general and administrative costs of $1,940, management fees of $6,222, real
estate taxes of $8,913 and insurance costs of $127.
The Partnership's activities for fiscal year 1996 were primarily
focused on attempting to sell certain of the Properties. During 1996, the
Partnership sold 11 acres of the Henry County, Georgia property for a gain of
$103,294. Revenues for 1996 consisted of timber revenues of $14,199, interest
income of $12,373 and partnership transfer fees of $1,225. Expenses for 1996
consisted of general and administrative costs of $27,136, management fees of
$24,886, real estate taxes of $35,773 and insurance costs of $508.
The Partnership's activities for fiscal year 1995 were primarily
focused on attempting to sell certain of the Properties. During 1995, the
Partnership sold all 24 acres of the Nashville,
2
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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.
Inflation did not have any material impact on operations during 1996
and it is not expected to materially impact future operations.
The General Partner has the right to sell the Properties without the
consent of the Limited Partners if the net proceeds of the sale will be
sufficient to return the Limited Partners' Capital Contribution plus their 10%
Non-Compounded Cumulative Annual Return. The General Partner believes that the
Partnership's cash reserves will be sufficient to last for an additional three
years, assuming no significant increases in expenses and no funding for the
construction of sewer to the Fulton County Property. However, if the reserves
are exhausted and the partnership is unable to borrow funds, the Partnership may
have to sell some or all of the Properties on unfavorable terms.
The General Partner has no plans to develop the Properties, except for
activities including rezoning, land planning, market surveys and other
activities necessary to prepare the Properties for sale. There can be no
assurance that necessary funds would be available should it be desirable for the
Partnership to improve the Properties to facilitate their sale.
Liquidity and Capital Resources
The Partnership had cash reserves of $347,333 at March 31, 1997, which
will be used to cover the following estimated annual costs: $16,194 annual
administration fee to the General Partner (1997) only, $10,000 per year for
auditing, accounting, tax, legal and other administrative services, $525 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 three years. However, if additional expenses are incurred or if the
Partnership goes forward with the construction to bring sewer to the Fulton
County Property then 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.
During 1996, appraisals were performed on the Partnership's properties
causing the Partnership to write-down the Columbia, South Carolina property by
$50,560, the Fulton County, Georgia property by $3,622,126 and the Fort Myers,
Florida property by $676,200.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
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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. ss.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 first
quarter of 1997.
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 1997.
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
- --------------- ----------- -----------
<S> <C> <C>
3.1(a) Certificate of Limited *
Partnership
3.1(b) & (4) Restated Limited Partnership **
</TABLE>
4
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<TABLE>
<S> <C>
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
</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.
5
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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
- --------- ----- ----
<S> <C> <C>
/s/ ARTHUR W. MULLIN President, 5/12 1997
- ------------------------ Treasurer, ------
Arthur W. Mullin Director of
Southeast
Acquisitions,
Inc.
/s/ JAMES W. KELICAN, JR. Vice President, 5/12 1997
- ------------------------- Director of ------
James W. Kelican, Jr. Southeast
Acquisitions,
Inc.
</TABLE>
6
<PAGE> 7
EXHIBIT A SOUTHEAST ACQUISITIONS III, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
(UNAUDITED)
----------- ----------
<S> <C> <C>
ASSETS
Land $4,517,058 $4,517,058
Cash and cash equivalents 347,333 359,293
Prepaid expenses 254 --
---------- ----------
$4,864,645 $4,876,351
========== ==========
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses $ 17,059 $ 9,105
Due to affiliates 3,585 9,806
Partners' equity 4,844,001 4,857,440
---------- ----------
$4,864,645 $4,876,351
========== ==========
</TABLE>
<PAGE> 8
SOUTHEAST ACQUISITIONS III, L.P.
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
------------------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Gain on sale of land $ -- $ 33,572 $ --
Interest income 3,613 2,973 6,500
Other income 150 175 200
------------ ------------ ------------
3,763 36,720 6,700
------------ ------------ ------------
EXPENSES:
General and administrative 1,940 2,153 5,667
Management fee 6,222 6,222 6,222
Real estate taxes 8,913 9,031 11,873
Insurance 127 127 150
------------ ------------ ------------
17,202 17,533 23,912
------------ ------------ ------------
NET INCOME (LOSS) $ (13,439) $ 19,187 $ (17,212)
Partners' equity,
Beginning of period 4,857,440 9,163,538 10,350,770
Partners' equity,
End of period $ 4,844,001 $ 9,182,725 $ 10,333,558
============ ============ ============
Weighted Average Number
of Limited Partnership
Units Outstanding 12,400 12,400 12,400
============ ============ ============
Income (Loss) from Operations
per Limited Partnership
Interest $ (1.07) $ $1.53 $ $(1.37)
============ ============ ============
</TABLE>
<PAGE> 9
SOUTHEAST ACQUISITIONS III, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
---------------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Proceeds from sale of land $ -- $ 60,683 $ --
Interest income received 3,613 2,973 6,500
Other income received 150 9,541 200
Cash paid for operating expenses (15,723) (15,485) (24,871)
--------- --------- ---------
Net cash flows (used) in
operating activities (11,960) 57,712 (18,171)
Cash, beginning of period 359,293 258,680 556,074
--------- --------- ---------
Cash, end of period $ 347,333 $ 316,392 $ 537,903
========= ========= =========
RECONCILIATION OF NET LOSS TO NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (13,439) $ 19,187 $ (17,212)
Adjustments to reconcile net loss
to net cash provided by
operating activities:
Increase in accrued expenses 7,954 9,387 5,563
Decrease in due to affiliates (6,221) (6,221) (6,221)
Decrease in assets -- 35,613 --
Increase in prepaid expenses (254) (254) (301)
--------- --------- ---------
Net cash provided by (used in)
operating activities $ (11,960) $ 57,712 $ (18,171)
========= ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000846014
<NAME> SOUTHEAST ACQUISITIONS III, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 347,333
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 254
<INVENTORY> 0
<CURRENT-ASSETS> 347,587
<PP&E> 4,517,058
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,864,645
<CURRENT-LIABILITIES> 20,644
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,844,001
<TOTAL-LIABILITY-AND-EQUITY> 4,864,645
<SALES> 3,764
<TOTAL-REVENUES> 3,764
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 17,202
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (13,439)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,439)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
