<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, 1998.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM APRIL 1, 1998 TO JUNE 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 June 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 Second Quarter of 1998 Compared with Second
Quarter of 1997
The Partnership activities for the second quarter of 1998 and the
second quarter of 1997 were focused on the sale of Partnership property. During
the second quarter of 1998 there were no sales of Partnership property. During
the second quarter of 1997 the Partnership sold property which netted $91,709.
Other receipts during the second quarter of 1998 consisted of interest income of
$7,556 compared with $5,421 in the second quarter of 1997.
Expenses in the second quarter of 1998 included general and
administrative expenses of $14,683 versus $2,602 in the second 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 second quarter of
1998 as compared with $6,221 in the second quarter of 1997. Real estate taxes in
the second quarter of 1998 were $6,226 compared with $8,822 in the second
quarter of 1997 as a result of the Partnership owning less property in the 1998
period. Insurance in the second quarter of 1998 was $367 compared with $127 in
the second quarter of 1997.
Inflation did not have any material impact on operations during the
second 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 $527,638 at June 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 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.
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 second
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 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 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 (for SEC use only)
<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
- --------- ----- ----
/s/ RICHARD W. SORENSON Member, August 10, 1998
- ------------------------------ Southern Management
Richard W. Sorenson Group, LLC
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
(UNAUDITED)
----------- -----------
ASSETS
<S> <C> <C>
LAND HELD FOR SALE $ 3,996,875 $ 4,376,416
CASH AND CASH EQUIVALENTS 527,638 504,876
RECEIVABLE FROM AFFILIATE -- 13,954
PREPAID EXPENSES 680 --
----------- -----------
$ 4,525,193 $ 4,895,246
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 17,785 $ 19,311
ESCROW PAYABLE -- 20,000
PAYABLE TO PREVIOUS GENERAL PARTNER 3,584 3,584
PARTNERS' EQUITY:
GENERAL PARTNER (43,604) (46,319)
LIMITED PARTNERS (12,400 UNITS OUTSTANDING) 4,547,428 4,898,670
----------- -----------
4,503,824 4,852,351
----------- -----------
$ 4,525,193 $ 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 SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
-------------------------------- -----------------------------
1998 1997 1998 1997
----------- ----------- ---------- ----------
<S> <C> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ -- $ 91,709 $ 309,897 $ 91,709
INTEREST INCOME 7,556 5,421 14,228 9,034
OTHER INCOME -- 175 -- 325
----------- ----------- ---------- ----------
$ 7,556 $ 97,305 324,125 101,068
----------- ----------- ---------- ----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 14,683 2,602 24,665 4,542
MANAGEMENT FEE 6,625 6,221 13,250 12,443
REAL ESTATE TAXES 6,226 8,822 14,058 17,735
INSURANCE 367 127 679 254
----------- ----------- ---------- ----------
27,901 17,772 52,652 34,974
----------- ----------- ---------- ----------
NET INCOME (LOSS) (20,345) 79,533 271,473 66,094
PARTNERS' EQUITY,
BEGINNING OF PERIOD 5,144,169 4,844,001 4,852,351 4,857,440
----------- ----------- ---------- ----------
CAPITAL DISTRIBUTION (620,000) -- (620,000) --
PARTNERS' EQUITY,
END OF PERIOD $ 4,503,824 $ 4,923,534 $4,503,824 $4,923,534
=========== =========== ========== ==========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 12,400 12,400 12,400 12,400
=========== =========== ========== ==========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ (1.62) $ 6.35 $ 21.67 $ 5.28
=========== =========== ========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
----------------------------
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 687,938 $ 198,943
INTEREST INCOME RECEIVED 14,228 9,034
OTHER INCOME RECEIVED -- 325
CASH PAID FOR OPERATING EXPENSES (59,404) (22,628)
--------- ---------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 642,762 185,674
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO LIMITED PARTNERS (620,000) --
--------- ---------
INCREASE IN CASH 22,762 185,674
CASH, BEGINNING OF PERIOD 504,876 359,293
--------- ---------
CASH, END OF PERIOD $ 527,638 $ 544,967
========= =========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME $ 271,473 $ 66,094
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (309,897) (91,709.00)
NET PROCEEDS FROM SALE OF LAND, NET OF ESCROW DEPOSIT OF $20,000 687,938 198,943.00
(DECREASE) INCREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (1,527) 18,695
INCREASE IN PREPAID EXPENSES (679) (127)
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 $ 642,762 $ 185,674
========= =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
SOUTHEAST ACQUISITIONS III, LP
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Six Months Ended June 30, 1998
(Unaudited)
A. ACCOUNTING POLICIES
The unaudited financial statements presented herein have been prepared
in accordance with the instructions to Form 10Q 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 10K 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 six-month period ended
June 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 six months were as follows:
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Management Fees $13,250 $12,443
Accounting Fees -- --
Transfer Fees $ 1,050 --
</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 JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 527,638
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 680
<PP&E> 3,996,875
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,525,193
<CURRENT-LIABILITIES> 21,369
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,503,824
<TOTAL-LIABILITY-AND-EQUITY> 4,525,193
<SALES> 309,897
<TOTAL-REVENUES> 324,125
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 52,652
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 271,473
<INCOME-TAX> 0
<INCOME-CONTINUING> 271,473
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 271,473
<EPS-PRIMARY> 21.67
<EPS-DILUTED> 21.67
</TABLE>
