<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, 1999.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
----- EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM JULY 1, 1999 TO
SEPTEMBER 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 [ ]
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
The unaudited financial statements of Southeast Acquisitions III, L.P.
(the "Partnership") at September 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 Third Quarter of 1999 Compared with Third
Quarter of 1998
The Partnership activities for the third quarter of 1999 and the third
quarter of 1998 were focused on the sale of Partnership property. During the
third 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 was extended by the Purchaser to
October 25, 1999 by payment of an additional $20,000 earnest money deposit. On
October 24, 1999 the closing date was extended to November 1, 1999. The contract
has been further extended to November 15, 1999. The total deposit of $40,000 is
now non-refundable. 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
<PAGE> 3
receipts during the third quarter of 1999 consisted of interest income of $3,475
compared with $5,188 in the third quarter of 1998.
Expenses in the third quarter of 1999 included general and
administrative expenses of $5,619 versus $4,460 in the third quarter of 1998.
The increase was primarily due to an appraisal fee for the Fort Myers, Florida
property. In addition, the Partnership had $6,625 of management fees in the
third quarter of 1999 and 1998. Real estate taxes in the third quarter of 1999
were $9,518 compared with $7,403 in the third quarter of 1998. This increase was
primarily due to increased land value assessed on the Henry County, Georgia
property. Insurance in the third quarter of 1999 was $323 compared with $341 in
the third quarter of 1998.
Inflation did not have any material impact on operations during the
third quarter of 1999 and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
The Partnership has cash reserves of $460,997 at September 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 third
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.
<PAGE> 4
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 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, November 5, 1999
- ----------------------- Southern Management
Richard W. Sorenson Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
ASSETS (UNAUDITED)
------------- ------------
<S> <C> <C>
LAND HELD FOR SALE $ 3,204,859 $ 3,996,991
CASH AND CASH EQUIVALENTS 460,997 493,350
ACCOUNTS RECEIVABLE -- --
PREPAID EXPENSES 323 --
----------- -----------
$ 3,666,179 $ 4,490,341
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 24,278 $ 13,558
PAYABLE TO PREVIOUS GENERAL PARTNER 3,584 3,584
PARTNERS' EQUITY:
GENERAL PARTNER (31,798) (43,909)
LIMITED PARTNERS (12,400 UNITS OUTSTANDING) 3,670,115 4,517,108
----------- -----------
3,638,317 4,473,199
----------- -----------
$ 3,666,179 $ 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 NINE MONTHS
ENDED SEPT 30 ENDED SEPT 30
------------------------------ -----------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ -- $ -- $ 1,260,124 $ 310,012
INTEREST INCOME 3,475 5,188 19,037 19,416
----------- ----------- ----------- -----------
$ 3,475 $ 5,188 1,279,161 329,428
----------- ----------- ----------- -----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 5,619 4,460 27,279 29,125
MANAGEMENT FEE 6,625 6,625 19,875 19,875
REAL ESTATE TAXES 9,518 7,403 19,589 21,461
INSURANCE 323 341 970 1,020
DELAWARE FRANCHISE & EXCISE TAX -- -- 330 --
----------- ----------- ----------- -----------
22,085 18,829 68,043 71,481
----------- ----------- ----------- -----------
NET INCOME (LOSS) (18,610) (13,641) 1,211,118 257,947
PARTNERS' EQUITY,
BEGINNING OF PERIOD 3,656,927 4,503,939 4,473,199 4,852,351
----------- ----------- ----------- -----------
CAPITAL DISTRIBUTION -- -- (2,046,000) (620,000)
PARTNERS' EQUITY,
END OF PERIOD $ 3,638,317 $ 4,490,298 $ 3,638,317 $ 4,490,298
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 12,400 12,400 12,400 12,400
=========== =========== =========== ===========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ (1.49) $ (1.09) $ 96.69 $ 20.59
=========== =========== =========== ===========
</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
-------------------------------
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND $ 2,052,256 $ 687,938
INTEREST INCOME RECEIVED 19,037 19,416
CASH PAID FOR OPERATING EXPENSES (57,646) (68,355)
----------- ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,013,647 638,999
CASH FLOWS FROM FINANCING ACTIVITIES:
DISTRIBUTION TO LIMITED PARTNERS (2,046,000) (620,000)
----------- ------------
(DECREASE) INCREASE IN CASH (32,353) 18,999
CASH, BEGINNING OF PERIOD 493,350 504,876
----------- ------------
CASH, END OF PERIOD $ 460,997 $ 523,875
=========== ============
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME $ 1,211,118 $ 257,947
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (1,260,124) (310,012.00)
NET PROCEEDS FROM SALE OF LAND 2,052,256 687,938.00
INCREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES 10,720 8,011
INCREASE IN PREPAID EXPENSES (323) (339)
DECREASE IN DUE FROM AFFILIATE -- 13,954
INCREASE IN LAND -- (18,500)
----------- ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,013,647 $ 638,999
=========== ============
</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, 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 nine-month period ended September 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 nine months were as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Management Fees $19,875 $19,875
Accounting Fees -- --
Transfer Fees $ 700 $ 1,675
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 460,997
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 323
<PP&E> 3,204,859
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,666,179
<CURRENT-LIABILITIES> 27,862
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,638,317
<TOTAL-LIABILITY-AND-EQUITY> 3,666,179
<SALES> 1,260,124
<TOTAL-REVENUES> 1,279,161
<CGS> 0
<TOTAL-COSTS> 68,043
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,211,118
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,211,118
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,211,118
<EPS-BASIC> 96.69
<EPS-DILUTED> 96.69
</TABLE>
