<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, 2000.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM JANUARY 1, 2000 TO
MARCH 31, 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.)
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 (b) 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, 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"): 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 2000 Compared with First
Quarter of 1999
The Partnership activities for the first quarter of 2000 and the first
quarter of 1999 were focused on the sale of Partnership property. During the
first quarter of 2000 the Partnership sold approximately 7 acres of land in
Columbia, South Carolina for a sales price of $277,020. The Partnership also
received $203,708 of non-refundable earnest money and interest to extend the
closing on 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 May 31st.
There can be no assurance that this closing will be funded. 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. Other income during the first quarter of 2000 consisted of interest
income of $5,310 as compared with $3,907 in the first quarter of 1999. The
increase in interest income was primarily due to a higher cash reserve during
the first quarter of 2000.
Expenses in the first quarter of 2000 included general and
administrative expenses of $8,588 versus $6,382 in the first quarter of 1999.
The increase was primarily due to increased accounting and legal costs. In
addition, the Partnership had $6,625 of management fees, the same as was
incurred during the first quarter of 1999. Real estate taxes in the first
quarter of 2000 were $3,955 compared with $6,509 in the first quarter of 1999 as
a result of the Partnership owning less property in the 2000 period. However,
the Partnership did incur greenbelt rollback taxes of $12,254 on the Columbia,
South Carolina property that was sold in February. There was no such tax in
1999. Insurance in the first quarter of 2000 was $43 as compared with $323 in
the
<PAGE> 3
first quarter of 1999. This decrease is primarily due to the Partnership owning
less land.
Inflation did not have any material impact on operations during the
first quarter of 2000 and it is not expected to materially impact future
operations.
Liquidity and Capital Resources
The Partnership had cash reserves of $846,745 at March 31, 2000, which
will be used to cover the following estimated annual costs: management fees of
$26,500, accounting fees of $13,200, legal fees of $8,000, insurance costs of
$173, property taxes of $14,135, and other general and administrative expenses
$9,000. There will be a distribution to the limited partners if the South Fulton
County closing, as previously mentioned, is funded in the second quarter. In the
General Partner's opinion, the Partnership's reserves will be sufficient for an
additional two years. However, if additional expenses are incurred, 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 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 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 2000.
Item 5 - Other Information
None
<PAGE> 4
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
</TABLE>
<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 15, 2000
- ------------------------- Southern Management ------------
Richard W. Sorenson Group, LLC
</TABLE>
<PAGE> 6
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31,
2000 DECEMBER 31,
ASSETS (UNAUDITED) 1999
----------- -----------
<S> <C> <C>
LAND HELD FOR SALE $ 2,954,531 $ 3,063,712
CASH AND CASH EQUIVALENTS 846,745 528,342
DEPOSIT - WATER LINE EXTENSION 100,000 5,750
ESCROW CASH RECEIVABLE 5,800 --
PREPAID EXPENSES 130 --
----------- -----------
$ 3,907,206 $ 3,597,804
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 6,844 $ 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 (29,614) (32,774)
LIMITED PARTNERS (12,400 UNITS OUTSTANDING) 3,886,392 3,573,484
----------- -----------
3,856,778 3,540,710
----------- -----------
$ 3,907,206 $ 3,597,804
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 7
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
----------------------------
2000 1999
---- ----
<S> <C> <C>
REVENUES:
GAIN ON SALE OF LAND $ 139,111 $1,260,124
EXTENSION FEES AND INTEREST INCOME 203,708 --
INTEREST INCOME 5,310 3,907
---------- ----------
348,129 1,264,031
---------- ----------
EXPENSES:
GENERAL AND ADMINISTRATIVE 8,588 6,382
MANAGEMENT FEE 6,625 6,625
REAL ESTATE TAXES 16,209 6,509
INSURANCE 43 323
DELAWARE FRANCHISE AND EXCISE TAX -- 230
TENNESSEE STATE TAX 596 --
---------- ----------
32,061 20,069
---------- ----------
NET INCOME (LOSS) 316,068 1,243,962
PARTNERS' EQUITY,
BEGINNING OF PERIOD 3,540,710 4,473,199
---------- ----------
PARTNERS' EQUITY,
END OF PERIOD $3,856,778 $5,717,161
========== ==========
WEIGHTED AVERAGE NUMBER
OF LIMITED PARTNERSHIP
UNITS OUTSTANDING 12,400 12,400
========== ==========
INCOME (LOSS) FROM OPERATIONS
PER LIMITED PARTNERSHIP
INTEREST $ 25.23 $ 99.32
========== ==========
</TABLE>
<PAGE> 8
EXHIBIT A
SOUTHEAST ACQUISITIONS III, LP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
---------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
PROCEEDS FROM SALE OF LAND, NET OF RECEIVABLE OF $5,800 $ 242,492 $ 2,052,255
EXTENSION FEE AND INTEREST INCOME RECEIVED 203,708 --
INTEREST INCOME RECEIVED 5,310 3,907
CASH PAID FOR OPERATING EXPENSES (38,857) (22,103)
CASH PAID FOR DEPOSIT ON WATER LINE EXTENSION (94,250) --
--------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 318,403 2,034,059
CASH, BEGINNING OF PERIOD 528,342 493,350
--------- -----------
CASH, END OF PERIOD $ 846,745 $ 2,527,409
========= ===========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
NET INCOME $ 316,068 $ 1,243,962
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
GAIN ON SALE OF LAND (139,111) (1,260,124)
NET PROCEEDS FROM SALE OF LAND, NET OF RECEIVABLE OF $5,800 242,492 2,052,256
(DECREASE) INCREASE IN ACCOUNTS PAYABLE AND ACCRUED EXPENSES (6,666) 595
INCREASE IN DEPOSIT (94,250) --
INCREASE IN PREPAID EXPENSES (130) (970)
INCREASE IN ACCOUNTS RECEIVABLE -- (1,660)
--------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 318,403 $ 2,034,059
========= ===========
</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, 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 three-month period ended March 31, 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 three months were as follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Management Fees $ 6,625 $ 6,625
Accounting Fees -- --
Transfer Fees $ 75 $ 200
Commissions $ 13,851 $ 57,069
Reimbursements $ 264 $ 2,076
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SOUTHEAST ACQUISITIONS III LP FOR THE THREE MONTHS ENDED
MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 846,745
<SECURITIES> 0
<RECEIVABLES> 5,800
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 100,130
<PP&E> 2,954,531
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,907,206
<CURRENT-LIABILITIES> 50,428
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,856,777
<TOTAL-LIABILITY-AND-EQUITY> 3,907,206
<SALES> 299,111
<TOTAL-REVENUES> 348,129
<CGS> 0
<TOTAL-COSTS> 32,061
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 316,068
<INCOME-TAX> 0
<INCOME-CONTINUING> 316,068
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 316,068
<EPS-BASIC> 25.23
<EPS-DILUTED> 25.23
</TABLE>
