<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, 2000.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
----- SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM JULY 1, 2000 TO SEPTEMBER 30, 2000.
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.)
3011 Armory Drive, Suite 310
Nashville, Tennessee 37204
(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 September 30, 2000 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"): 208 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; 47 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. At September 30, 2000, the remaining land consisted of
approximately 208 acres of the Fulton County, Georgia land, approximately 47
acres of the Fort Myers, Florida land, and approximately 35 acres of the
Columbia, South Carolina land.
Results of Operations for Third Quarter of 2000 Compared with Third
Quarter of 1999
The Partnership activities for the third quarter of 2000 and the third
quarter of 1999 were focused on the sale of Partnership property. During the
third quarter of 2000, the Partnership recognized $24,822 in non-refundable
earnest money, which represents interest at the rate of eight percent (8%) per
annum, to extend the closing on approximately 100 acres of the Fulton County
Property that closed in escrow during the fourth quarter of 1999. This sale is
now scheduled to be funded no later than March 31, 2001. Other income during the
third quarter of 2000 consisted of interest income of $3,158 as compared with
$3,475 in the third quarter of 1999. The decrease in interest earned is a result
of having a lower average cash reserve during the quarter compared to the same
quarter of 1999. There was a decrease to the cash reserve resulting from a
distribution to the limited partners.
Expenses in the third quarter of 2000 included general and
administrative expenses of $6,862 versus $5,619 in the third quarter of 1999.
The increase was primarily due to an increase in legal fees. In addition, the
Partnership had $6,625 of management fees, the same as was incurred in the third
quarter of 1999. Real estate taxes in the third quarter of 2000 were $16,483
compared with $9,518 in the third quarter of 1999. This increase was primarily
due to the reclassification of the Fort Myers, Florida Property. This Property
was reclassified from Agricultural property to Commercial property. Insurance in
the third quarter of 2000 was $10 compared with $323 in the third quarter of
1999.
<PAGE> 3
At the end of the third quarter of 2000, all of the Fort Myers, Florida
land was under contract for a sales price of $1,300,000. This contract closed on
October 2, 2000.
Inflation did not have any material impact on operations during the
third quarter of 2000, and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
The Partnership has cash reserves of $300,113 at September 30, 2000,
which will be used to cover the following estimated annual costs: management
fees of $26,500, accounting fees of $13,500, legal fees of $8,000, insurance
premiums of $150, property taxes of $9,300, and other general and administrative
expenses of $4,000. There will be a distribution to the limited partners when
the previously mentioned Fort Myers land sale is funded in the fourth quarter.
In the General Partner's opinion, the Partnership's reserves will be sufficient
for an additional year and three months. However, if additional expenses are
incurred 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 2000.
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 have 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 2000.
Item 5 - Other Information
None
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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 9, 2000
Richard W. Sorenson Southern Management ----------------
Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
ASSETS (Unaudited)
------------- ------------
<S> <C> <C>
Land held for sale $ 3,050,188 $ 3,063,712
Cash and cash equivalents 300,113 528,342
Deposit - water line extension -- 5,750
Prepaid expenses 43 --
----------- -----------
$ 3,350,344 $ 3,597,804
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued expenses $ 41,408 $ 13,510
Escrow on pending sale of land 40,000 40,000
Payable to previous general partner 3,584 3,584
Partners' equity:
General partner (29,328) (32,774)
Limited partners (12,400 units outstanding) 3,294,680 3,573,484
----------- -----------
3,265,352 3,540,710
----------- -----------
$ 3,350,344 $ 3,597,804
=========== ===========
</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 SEPTEMBER 30 ENDED SEPTEMBER 30
---------------------------- ----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Gain on sale of land $ -- $ -- $ 144,643 $ 1,260,124
Extension fees and interest income 24,822 -- 272,041 --
Interest income 3,158 3,475 12,993 19,037
----------- ----------- ----------- -----------
$ 27,980 $ 3,475 429,677 1,279,161
----------- ----------- ----------- -----------
EXPENSES:
General and administrative 6,862 5,619 27,628 27,279
Management fee 6,625 6,625 19,875 19,875
Real estate taxes 16,483 9,518 36,706 19,589
Insurance 10 323 130 970
Delaware franchise & excise tax -- -- 100 330
Tennessee state tax -- -- 596 --
----------- ----------- ----------- -----------
29,980 22,085 85,035 68,043
----------- ----------- ----------- -----------
NET INCOME (LOSS) (2,000) (18,610) 344,642 1,211,118
Partners' equity,
Beginning of period 3,267,352 3,656,927 3,540,710 4,473,199
----------- ----------- ----------- -----------
Capital distribution -- -- (620,000) (2,046,000)
Partners' equity,
End of period $ 3,265,352 $ 3,638,317 $ 3,265,352 $ 3,638,317
=========== =========== =========== ===========
Weighted average number
of limited partnership
units outstanding 12,400 12,400 12,400 12,400
=========== =========== =========== ===========
Income (loss) from operations
per limited partnership
interest $ (0.16) $ (1.49) $ 27.52 $ 96.69
=========== =========== =========== ===========
</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 SEPTEMBER 30
--------------------------
2000 1999
--------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Proceeds from sale of land $ 258,167 $ 2,052,256
Extension fee and interest income received 272,041 --
Interest income received 12,993 19,037
Cash paid for operating expenses (57,180) (57,646)
Cash paid for water line extension (94,250) --
--------- -----------
Net cash provided by
operating activities 391,771 2,013,647
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to limited partners (620,000) (2,046,000)
--------- -----------
Decrease in cash (228,229) (32,353)
Cash, beginning of period 528,342 493,350
--------- -----------
Cash, end of period $ 300,113 $ 460,997
========= ===========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 344,642 $ 1,211,118
Adjustments to reconcile net income
to net cash provided by
operating activities:
Gain on sale of land (144,643) (1,260,124)
Net proceeds from sale of land 258,167 2,052,256
Increase in land - water line extension (94,250) --
Increase in accounts payable and accrued expenses 27,898 10,720
Increase in prepaid expenses (43) (323)
--------- -----------
Net cash provided by operating
activities $ 391,771 $ 2,013,647
========= ===========
</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, 2000
(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, 1999. 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, 2000 may not be
indicative of the results that may be expected for the year ending December
31, 2000.
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>
2000 1999
---- ----
<S> <C> <C>
Management Fees $19,875 $19,875
Commissions $ 7,477 $57,069
Reimbursements $ 2,325 $ 3,638
</TABLE>
