<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, 1999.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
- ------ SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM JANUARY 1, 1999 TO MARCH 31, 1999.
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, 1999 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 1999 Compared with First
Quarter of 1998
The Partnership activities for the first quarter of 1999 and the first
quarter of 1998 were focused on the sale of Partnership property. During the
first quarter of 1999 the Partnership completed the sale of all of the remaining
land in Henry County, Georgia (approximately 150 acres) for a sale price of
$2,282,776. 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. Other income during the first quarter of
1999 consisted of interest income of $3,907 as compared with $6,672 in the first
quarter of 1998. The decrease in interest income was primarily due to a lower
cash reserve during the first quarter of 1999.
At the end of the quarter, the Partnership has two executed sales
contracts. Both should close during 1999 but both are subject to conditions such
as zoning, soil conditions, and utilities which, if not met, allows the
purchasers to cancel the contracts. The first contract is for approximately 6.75
acres of Partnership land in Columbia, South Carolina for $38,000 per acre less
up to $100,000 for certain water line connections. The second contract is for
100 acres of Partnership land in Fulton County, Georgia for $18,000 per acre.
Expenses in the first quarter of 1999 included general and
administrative expenses of $6,382 versus $9,982 in the first quarter of 1998.
The decrease was primarily due to decreased accounting and legal costs. In
addition, the Partnership had $6,625 of management fees, the same as was
incurred during the first quarter of 1998. Real estate taxes in the first
quarter of
<PAGE> 3
1999 were $6,509 compared with $7,832 in the first quarter of 1998 as a result
of the Partnership owning less property in the 1999 period. Insurance in the
first quarter of 1999 was $323 compared with $312 in the first quarter of 1998.
Inflation did not have any material impact on operations during the
first quarter of 1999 and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
The Partnership had cash reserves of $2,527,409 at March 31, 1999,
which will be used to cover the following: a distribution to the limited
partners of $2,046,000 during 1999, a reserve for Fulton County Georgia sewer of
$200,000, and annual expenses for management fees $26,500, accounting $12,500,
legal $8,000, insurance $1,300, property taxes $26,036, and other general and
administrative expenses $9,000. 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 first
quarter of 1999.
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 1999.
<PAGE> 4
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)
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 person 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
- ------------------------- President, May 12, 1999
Richard W. Sorenson Southern Management ----------------
Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
ASSETS (UNAUDITED)
----------- -----------
<S> <C> <C>
LAND HELD FOR SALE $ 3,204,859 $ 3,996,991
CASH AND CASH EQUIVALENTS 2,527,409 493,350
ACCOUNTS RECEIVABLE 1,660 --
PREPAID EXPENSES 970 --
----------- -----------
$ 5,734,898 $ 4,490,341
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 14,154 $ 13,558
PAYABLE TO PREVIOUS GENERAL PARTNER 3,584 3,584
PARTNERS' EQUITY:
GENERAL PARTNER (31,470) (43,909)
LIMITED PARTNERS (12,400 UNITS OUTSTANDING) 5,748,630 4,517,108
----------- -----------
5,717,160 4,473,199
----------- -----------
$ 5,734,898 $ 4,490,341
=========== ===========
</TABLE>
<PAGE> 7
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
-------------------------
1999 1998
---------- ----------
<S> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $1,260,124 $ 309,897
INTEREST INCOME 3,907 6,672
---------- ----------
1,264,031 316,569
---------- ----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 6,382 9,982
MANAGEMENT FEE 6,625 6,625
REAL ESTATE TAXES 6,509 7,832
INSURANCE 323 312
DELAWARE FRANCHISE AND EXCISE TAX 230 --
---------- ----------
20,069 24,751
---------- ----------
NET INCOME (LOSS) 1,243,962 291,818
PARTNERS' EQUITY,
BEGINNING OF PERIOD 4,473,199 4,852,351
---------- ----------
PARTNERS' EQUITY,
END OF PERIOD $5,717,161 $5,144,169
========== ==========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 12,400 12,400
========== ==========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ 99.32 $ 23.30
========== ==========
</TABLE>
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MAR 31
----------------------------
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 2,052,255 $ 687,938
INTEREST INCOME RECEIVED 3,907 6,672
CASH PAID FOR OPERATING EXPENSES (22,103) (15,072)
----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,034,059 679,538
CASH, BEGINNING OF PERIOD 493,350 504,876
----------- -----------
CASH, END OF PERIOD $ 2,527,409 $ 1,184,414
=========== ===========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME $ 1,243,962 $ 291,818
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (1,260,124) (309,897.00)
NET PROCEEDS FROM SALE OF LAND 2,052,256 687,938.00
INCREASE (DECREASE) IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES 595 (1,131)
INCREASE IN PREPAID EXPENSES (970) (3,144)
INCREASE IN ACCOUNTS RECEIVABLE (1,660) --
DECREASE IN DUE FROM AFFILIATE -- 13,954
----------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 2,034,059 $ 679,538
=========== ===========
</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, 1999
(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, 1998.
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, 1999 may not be indicative of the results that
may be expected for the year ending December 31, 1999.
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>
1999 1998
---- ----
<S> <C> <C>
Management Fees $6,625 $6,625
Accounting Fees --- ---
Transfer Fees $ 200 $ 65
</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, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,527,409
<SECURITIES> 0
<RECEIVABLES> 1,660
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 970
<PP&E> 3,204,859
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,734,898
<CURRENT-LIABILITIES> 17,738
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,717,160
<TOTAL-LIABILITY-AND-EQUITY> 5,734,898
<SALES> 1,260,124
<TOTAL-REVENUES> 1,264,031
<CGS> 0
<TOTAL-COSTS> 20,069
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,243,962
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,243,962
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,243,962
<EPS-PRIMARY> 99.32
<EPS-DILUTED> 99.32
</TABLE>
