<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, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM APRIL 1, 1999 TO
JUNE 30, 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 (1) 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, 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 Second Quarter of 1999 Compared with Second
Quarter of 1998
The Partnership activities for the second quarter of 1999 and the
second quarter of 1998 were focused on the sale of Partnership property. During
the second quarter of 1999 and 1998 there were no sales. In July 1998 the
Partnership executed a contract to sell 100 acres of Partnership land in South
Fulton County, Georgia for $18,000 per acre. The contract allowed the Purchaser
up to 270 days to perform land studies, planning and rezoning. Most of these
activities are complete except for land disturbance permits to be issued by the
County. On June 17, 1999 the contract was amended to provide for closing on or
before September 25, 1999. The latter date may be extended by the Purchaser to
October 25, 1999 by payment of an additional $20,000 earnest money deposit.
There can be no assurance that this contract will close.
In March 1999 the Partnership executed a contract to sell 6.5 to 7.0
acres of Partnership land in Columbia, South Carolina for $38,000 per acre. The
contract allows the Purchaser until March 1, 2000 to complete planning and
zoning. The contract further provides that up to $100,000 can be deducted from
the purchase price for the Partnership's share of costs to extend City water
lines to all of the 42 acres owned by the Partnership. There is now a likelihood
the City will install the water lines at an estimated cost of $149,500 to serve
multiple properties in the area. The Partnership's share of this cost is
estimated to be $57,500. At this date there can be no assurance that this
contract will close and/or that the City will install the water lines. Other
receipts during the second quarter of 1999 consisted of interest income of
$11,655 compared with $7,556 in the second quarter of 1998.
<PAGE> 3
Expenses in the second quarter of 1999 included general and
administrative expenses of $15,278 versus $14,683 in the second quarter of 1998.
The increase was primarily due to engineering fees incurred which are related to
a potential sale in Columbia, South Carolina. In addition, the Partnership had
$6,625 of management fees in the second quarter of 1999 and 1998. Real estate
taxes in the second quarter of 1999 were $3,562 compared with $6,226 in the
second quarter of 1998 as a result of the Partnership owning less property in
the 1999 period. Insurance in the second quarter of 1999 was $324 compared with
$367 in the second quarter of 1998. The Partnership also paid 1999 Delaware
franchise and excise taxes of $100 in the second quarter of 1999.
Inflation did not have any material impact on operations during the
second quarter of 1999 and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
In May of 1999 the Partnership made a distribution of $2,046,000 to the
limited partners, leaving the Partnership with cash reserves of $469,006 at June
30, 1999, which will be used to cover the following: a reserve for Fulton County
Georgia sewer of $200,000 and annual expenses for management fees of $26,500,
accounting fees of $12,500, legal fees of $8,000, insurance premiums of $1,300,
property taxes of $26,036, and general and administrative expenses of $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 second
quarter of 1999.
<PAGE> 4
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 1999.
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>
27 Financial Data Schedule (for SEC use only)
</TABLE>
<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 Member, August 2, 1999
- ----------------------------- Southern Management
Richard W. Sorenson Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30,
1999 December 31,
(Unaudited) 1998
----------- -----------
<S> <C> <C>
ASSETS
Land held for sale $ 3,204,859 $ 3,996,991
Cash and cash equivalents 469,006 493,350
Accounts receivable 1,631 --
Prepaid expenses 647 --
----------- -----------
$ 3,676,143 $ 4,490,341
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued expenses $ 15,632 $ 13,558
Payable to previous general partner 3,584 3,584
Partners' equity:
General partner (31,612) (43,909)
Limited partners (12,400 units outstanding) 3,688,539 4,517,108
----------- -----------
3,656,927 4,473,199
----------- -----------
$ 3,676,143 $ 4,490,341
=========== ===========
</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
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Gain on sale of land $ -- $ -- $ 1,260,124 $ 309,897
Interest income 11,655 7,556 15,562 14,228
----------- ----------- ----------- -----------
$ 11,655 $ 7,556 1,275,686 324,125
----------- ----------- ----------- -----------
EXPENSES:
General and administrative 15,278 14,683 21,660 24,665
Management fee 6,625 6,625 13,250 13,250
Real estate taxes 3,562 6,226 10,071 14,058
Insurance 324 367 647 679
Delaware franchise & excise tax 100 -- 330 --
----------- ----------- ----------- -----------
25,889 27,901 45,958 52,652
----------- ----------- ----------- -----------
NET INCOME (LOSS) (14,234) (20,345) 1,229,728 271,473
Partners' equity,
Beginning of period 5,717,161 5,144,169 4,473,199 4,852,351
----------- ----------- ----------- -----------
Capital distribution (2,046,000) (620,000) (2,046,000) (620,000)
Partners' equity,
End of period $ 3,656,927 $ 4,503,824 $ 3,656,927 $ 4,503,824
=========== =========== =========== ===========
Weighted average number
of limited partnership
units outstanding 12,400 12,400 12,400 12,400
=========== =========== =========== ===========
Income (loss) from operations
per limited partnership
interest $ (1.14) $ (1.62) $ 98.18 $ 21.67
=========== =========== =========== ===========
</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
------------------------------
1999 1998
----------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Proceeds from sale of land $ 2,052,255 $ 687,938
Interest income received 15,562 14,228
Cash paid for operating expenses (46,161) (59,404)
----------- -------------
Net cash provided by
operating activities 2,021,656 642,762
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to limited partners (2,046,000) (620,000)
----------- -------------
(Decrease) increase in cash (24,344) 22,762
Cash, beginning of period 493,350 504,876
----------- -------------
Cash, end of period $ 469,006 $ 527,638
=========== =============
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 1,229,728 $ 271,473
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 2,074 (1,527)
Increase in prepaid expenses (647) (679)
Increase in accounts receivable (1,631) --
Decrease in due from affiliate -- 13,954
Increase in land -- (18,500)
----------- -------------
Net cash provided by operating
activities $ 2,021,656 $ 642,762
=========== =============
</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, 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 six-month period ended
June 30, 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 six months were as follows:
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Management Fees $13,250 $13,250
Accounting Fees -- --
Transfer Fees $ 425 $ 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 SIX MONTHS
ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 469,006
<SECURITIES> 0
<RECEIVABLES> 1,631
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 647
<PP&E> 3,204,859
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,676,143
<CURRENT-LIABILITIES> 19,216
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,656,927
<TOTAL-LIABILITY-AND-EQUITY> 3,676,143
<SALES> 1,260,124
<TOTAL-REVENUES> 1,275,686
<CGS> 0
<TOTAL-COSTS> 45,958
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,229,728
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,229,728
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,229,728
<EPS-BASIC> 98.18
<EPS-DILUTED> 98.18
</TABLE>
