<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, 1998.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM JULY 1, 1998 TO SEPTEMBER 30, 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 September 30, 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 Third Quarter of 1998 Compared with Third
Quarter of 1997
The Partnership activities for the third quarter of 1998 and the third
quarter of 1997 were focused on the sale of Partnership property. During the
third quarter of 1998 there were no sales of Partnership property. During the
third quarter of 1997 there were no sales of Partnership property. Other
receipts during the third quarter of 1998 consisted of interest income of $5,188
compared with $7,225 in the third quarter of 1997.
Expenses in the third quarter of 1998 included general and
administrative expenses of $4,460 versus $41,925 in the third quarter of 1997.
The latter amount includes $40,000 for legal and printing costs related to the
proxy statement of September 22, 1997 which made revisions to the Partnership
Agreement including the selection of a new General Partner. In addition, the
Partnership had $6,625 of management fees in the third quarter of 1998 as
compared with $3,751 in the third quarter of 1997. Real estate taxes in the
third quarter of 1998 were $7,403 compared with $7,895 in the third quarter of
1997 as a result of the Partnership owning less property in the 1998 period.
Insurance in the third quarter of 1998 was $341 compared with $126 in the third
quarter of 1997.
Inflation did not have any material impact on operations during the
third quarter of 1998 and it is not expected to materially impact future
operations.
<PAGE> 3
Liquidity and Capital Resources
The Partnership had cash reserves of $523,875 at September 30, 1998,
which will be used to cover the following: 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 third
quarter of 1998.
Item 3 - Defaults Upon Senior Securities
During the third quarter of 1998 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 1998.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
<PAGE> 4
Reports on Form 8-K
None
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Exhibit Numbers Description Page Number
- --------------- ----------- -----------
27 Financial Data Schedule
<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.
Signature Title Date
- --------- ----- ----
Richard W. Sorenson Member, October 26, 1998
- ----------------------------- Southern Management -----------
Richard W. Sorenson Group, LLC
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, December 31,
1998 1997
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Land held for sale $ 3,996,991 $ 4,376,416
Cash and cash equivalents 523,875 504,876
Receivable from affiliate -- 13,954
Prepaid expenses 339 --
----------- -----------
$ 4,521,205 $ 4,895,246
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued expenses $ 27,323 $ 19,311
Escrow payable -- 20,000
Payable to previous general partner 3,584 3,584
Partners' equity:
General partner (43,739) (46,319)
Limited partners (12,400 units outstanding) 4,534,037 4,898,670
----------- -----------
4,490,298 4,852,351
----------- -----------
$ 4,521,205 $ 4,895,246
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE> 7
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPT 30 ENDED SEPT 30
---------------------------- ---------------------------
1998 1997 1998 1997
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Gain on sale of land $ -- $ -- $ 310,012 $ 91,709
Interest income 5,188 7,225 19,416 16,259
Other income -- 500 -- 825
----------- ----------- ----------- ----------
$ 5,188 $ 7,725 329,428 108,793
----------- ----------- ----------- ----------
EXPENSES:
General and administrative 4,460 41,925 29,125 46,467
Management fee 6,625 3,751 19,875 16,194
Real estate taxes 7,403 7,895 21,461 25,630
Insurance 341 126 1,020 380
----------- ----------- ----------- ----------
18,829 53,697 71,481 88,671
----------- ----------- ----------- ----------
NET INCOME (LOSS) (13,641) (45,972) 257,947 20,122
Partners' equity,
Beginning of period 4,503,939 4,923,534 4,852,351 4,857,440
----------- ----------- ----------- ----------
Capital distribution -- -- (620,000) --
Partners' equity,
End of period $ 4,490,298 $ 4,877,562 $ 4,490,298 $4,877,562
=========== =========== =========== ==========
Weighted average number
of limited partnership
units outstanding 12,400 12,400 12,400 12,400
=========== =========== =========== ==========
Income (loss) from operations
per limited partnership
interest $ (1.09) $ (3.67) $ 20.59 $ 1.61
=========== =========== =========== ==========
</TABLE>
See notes to financial statements.
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPT 30
------------------------
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Proceeds from sale of land $ 687,938 $ 198,943
Interest income received 19,416 16,259
Other income received -- 825
Cash paid for operating expenses (68,355) (8,849)
--------- ---------
Net cash provided by
operating activities 638,999 207,178
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to limited partners (620,000) --
--------- ---------
Increase in cash 18,999 207,178
Cash, beginning of period 504,876 359,293
--------- ---------
Cash, end of period $ 523,875 $ 566,471
========= =========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 257,947 $ 20,122
Adjustments to reconcile net income
to net cash provided by
operating activities:
Gain on sale of land (310,012) (91,709.00)
Net proceeds from sale of land, net of escrow deposit of $20,000 687,938 198,943.00
Increase in accounts payable and accrued expenses 8,011 86,044
Increase in prepaid expenses (339) --
Decrease in due to affiliate -- (6,222)
Decrease in due from affiliate 13,954 --
Increase in land (18,500) --
--------- ---------
Net cash provided by operating
activities $ 638,999 $ 207,178
========= =========
</TABLE>
See notes to financial statements.
<PAGE> 9
SOUTHEAST ACQUISITIONS III, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Nine Months Ended September 30, 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 nine-month period ended
September 30, 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 nine months were as follows:
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Management Fees $19,875 $16,194
Accounting Fees -- --
Transfer Fees $ 1,675 --
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 523,875
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 339
<PP&E> 3,996,991
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,521,205
<CURRENT-LIABILITIES> 30,907
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,490,298
<TOTAL-LIABILITY-AND-EQUITY> 4,521,205
<SALES> 310,012
<TOTAL-REVENUES> 329,428
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 71,481
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 257,947
<INCOME-TAX> 0
<INCOME-CONTINUING> 257,947
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 257,947
<EPS-PRIMARY> 20.59
<EPS-DILUTED> 20.59
</TABLE>
