<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, 1998.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
----- EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM JANUARY 1, 1998 TO
MARCH 31, 1998.
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
incorporation or organization) (I.R.S. Employer Identification No.)
301 South Perimeter Park Drive
Nashville, Tennessee 37211
(Address of Principal Executive Offices)
Issuer's Telephone Number: 615-834-0872
------------
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 March 31, 1998 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 Columbia,
South Carolina. There can be no assurance that the partnership's objectives will
be realized.
Results of Operations for First Quarter of 1998 Compared with First
Quarter of 1997
The Partnership activities for the first quarter of 1998 and the first
quarter of 1997 were focused on the sale of Partnership property. During the
first quarter of 1998 the Partnership completed the sale of 65.98 acres of
industrial land in Henry County, Georgia for gross proceeds of $564,103 and a
second sale of 13.41 acres of industrial land in Henry County, Georgia for gross
proceeds of $161,172. No property was sold in the first quarter of 1997. Other
income during the first quarter of 1998 consisted of interest income of $6,672
as compared with $3,613 in the first quarter of 1997. The increase in interest
income was primarily due to interest earnings of the proceeds from sales of
property in the first quarter of 1998. In addition, other income earned in the
first quarter of 1997 included $150 in partnership transfer fees.
Expenses in the first quarter of 1998 included general and
administrative expenses of $9,982 versus $1,940 in the first quarter of 1997.
The increase was primarily due to increased accounting and legal costs. In
addition, the Partnership had $6,625 of management fees in the first quarter of
1998 as compared with $6,222 in the first quarter of 1997. Real estate taxes in
the first quarter of 1998 were $7,832 compared with $8,913 in the first quarter
of 1997 as a result of the Partnership owning less property in the 1998 period.
Insurance in the first quarter of 1998 was $312 compared with $127 in the first
quarter of 1997.
Inflation did not have any material impact on operations during the
first quarter of 1998 and it is not expected to materially impact future
operations.
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Liquidity and Capital Resources
The Partnership had cash reserves of $1,184,414 at March 31, 1998,
which will be used to cover the following: A distribution to partners in April,
1998 of $620,000. A reserve for Fulton County Georgia sewer of $200,000, cost of
Henry County water line extension of $18,500 and annual expenses for management
fees $26,500, accounting $15,000, legal $10,600, insurance $1,600, property
taxes $27,000, and general and administrative expenses $3,600. 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
Partners 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.
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 1998.
Item 3 - Defaults Upon Senior Securities
There was no default in the payment of principal, interest, a sinking
or purchase fund installment of 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 1998.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
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<PAGE> 4
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>
27 Financial Data Schedule (for SEC use only)
</TABLE>
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<PAGE> 5
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/ Richard W. Sorenson 5/19/1998
- ----------------------------- President,
Richard W. Sorenson Southern Management
Group, LLC
</TABLE>
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<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
----------------------------
1998 1997
---- ----
<S> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ 309,897 $ --
INTEREST INCOME 6,672 3,613
OTHER INCOME -- 150
---------- -----------
316,569 3,763
---------- -----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 9,982 1,940
MANAGEMENT FEE 6,625 6,222
REAL ESTATE TAXES 7,832 8,913
INSURANCE 312 127
---------- -----------
24,751 17,202
---------- -----------
NET INCOME (LOSS) 291,818 (13,439)
PARTNERS' EQUITY,
BEGINNING OF PERIOD 4,852,351 4,857,440
---------- -----------
PARTNERS' EQUITY,
END OF PERIOD $5,144,169 $ 4,844,001
========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 12,400 12,400
========== ===========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ 23.30 $ (1.07)
========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 7
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
------------------------------
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 687,938 $ --
INTEREST INCOME RECEIVED 6,672 3,613
OTHER INCOME RECEIVED -- 150
CASH PAID FOR OPERATING EXPENSES (15,072) (15,723)
NET CASH PROVIDED BY (USED IN) ----------- ---------
OPERATING ACTIVITIES 679,538 (11,960)
CASH, BEGINNING OF PERIOD 504,876 359,293
----------- ---------
CASH, END OF PERIOD $ 1,184,414 $ 347,333
=========== =========
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
NET INCOME (LOSS) $ 291,818 $ (13,439)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (309,897) --
NET PROCEEDS FROM SALE OF LAND, NET OF ESCROW DEPOSIT OF $20,000 687,938 --
(DECREASE) INCREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (1,131) 7,954
INCREASE IN PREPAID EXPENSES (3,144) (254)
DECREASE IN DUE TO AFFILIATE -- (6,221)
DECREASE IN DUE FROM AFFILIATE 13,954 --
DECREASE IN ASSETS -- --
----------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES $ 679,538 $ (11,960)
=========== =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
ASSETS (UNAUDITED)
------ ----------- ------------
<S> <C> <C>
LAND HELD FOR SALE $ 3,978,375 $4,376,416
CASH AND CASH EQUIVALENTS 1,184,414 504,876
RECEIVABLE FROM AFFILIATE -- 13,954
PREPAID EXPENSES 3,144 --
----------- ----------
$ 5,165,933 $4,895,246
=========== ==========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 18,180 $ 19,311
ESCROW PAYABLE -- 20,000
PAYABLE TO PREVIOUS GENERAL PARTNER 3,584 3,584
PARTNERS' EQUITY:
GENERAL PARTNER (43,401) (46,319)
LIMITED PARTNERS (12,400 UNITS OUTSTANDING) 5,187,570 4,898,670
----------- ----------
5,144,169 4,852,351
----------- ----------
$ 5,165,933 $4,895,246
=========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
SOUTHEAST ACQUISITIONS III, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three Months Ended March 31, 1998
(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, 1997. 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, 1998 may not be indicative of the results that may be
expected for the year ending December 31, 1998.
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>
1998 1997
---- ----
<S> <C> <C>
Management Fees $6,625 $6,222
Accounting Fees -- --
Transfer Fees $ 650 --
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SOUTHEAST ACQUISITIONS III, L.P. FOR THE THREE MONTHS
ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 1,184,414
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,144
<PP&E> 3,978,375
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,165,933
<CURRENT-LIABILITIES> 21,764
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,144,169
<TOTAL-LIABILITY-AND-EQUITY> 5,165,933
<SALES> 309,897
<TOTAL-REVENUES> 316,569
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 24,751
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 291,818
<INCOME-TAX> 0
<INCOME-CONTINUING> 291,818
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 291,818
<EPS-PRIMARY> 23.30
<EPS-DILUTED> 23.30
</TABLE>
