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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-K þ
    
    ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003.
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
 COMMISSION FILE NUMBER: 0-17680 (FORMERLY 33-20255)  SOUTHEAST ACQUISITIONS II, L.P.   Delaware
    
    23-2498841(State of incorporation)
    
    (IRS Employer Identification Organization Number)
 3011 Armory Drive, Suite 310
Nashville, Tennessee 37204   Issuers telephone no., including area code: (615) 833-8716  Securities registered pursuant to Section 12 (b) of the Act. Name of each exchange: None
Title of each class on which registered: Not Applicable Securities registered pursuant to Section 12 (g) of the Act:
Limited Partnership Units $1,000 Per Unit  Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 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   o Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained in this form, and no disclosure will be contained, to the best
of registrants knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. Yes   x    No   o




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TABLE OF CONTENTS  
 PART IITEM 1.
    
    BUSINESS
    
    
    1Background
    
    
    1Material Recent Developments
    
    
    2Employees
    
    
    2Competition
    
    
    2Trademarks and Patents
    
    
    2ITEM 2.
    
    PROPERTIES
    
    
    2ITEM 3.
    
    LEGAL PROCEEDINGS
    
    
    4ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    4PART II.ITEM 5.
    
    MARKET FOR THE PARTNERSHIPS UNITS OF LIMITED PARTNERSHIP
INTEREST AND RELATED SECURITY HOLDER MATTERS
    
    
    4ITEM 6.
    
    SELECTED FINANCIAL DATA
    
    
    4SELECTED QUARTERLY FINANCIAL DATA
    
    
    5ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    
    6Background
    
    
    6Results of Operations
    
    
    62003 Compared to 2002
    
    
    62002 Compared to 2001
    
    
    6Liquidity and Capital Resources
    
    
    7Controls and Procedures
    
    
    7ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    7ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
    
    
    7PART IIIITEM 10.
    
    DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
    
    
    7ITEM 11.
    
    EXECUTIVE COMPENSATION
    
    
    9ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
    
    
    9Security Ownership of Management
    
    
    9Changes in Control
    
    
    9EX-31.1 SECTION 302 CERTIFICATIONSEX-32.1 SECTION 906 CERTIFICATIONS
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ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    9PART IVITEM 14.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
    
    
    10(a) Index to Financial Statements
    
    
    10(b) Reports on Form 8-K
    
    
    10(c) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
    
    
    10SIGNATURES
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PART I 
 ITEM 1. BUSINESS 
 Background Southeast Acquisitions II, L.P. (the Partnership) was formed on December
14, 1987, as a Delaware limited partnership. The Partnerships public offering
of 9,650 units of limited partnership interest (Units) commenced on June 8,
1988 and terminated on July 18, 1988 when all 9,650 Units were sold. The
Partnership was scheduled to terminate on December 31, 2000. There are
currently no plans to extend the Partnership agreement. Since there is land
remaining at December 31, 2003, the current General Partner will continue to
operate in the liquidation mode until all of the Partnerships Property is
sold. The Partnership purchased the following three parcels of unimproved land
in 1988; 353 acres in Henry County, Georgia; 91 acres in Greenville, South
Carolina; and 135 acres in Rutherford County, Tennessee. The Partnerships
primary business objective is to realize appreciation in the value of the three
parcels of unimproved land (each a Property, collectively the Properties),
by holding the Properties for investment and eventual sale, although there is
no assurance that this will be attained. Since acquisition, the Partnership has sold all of its Georgia Property,
all of its South Carolina Property, and approximately 67% of its Tennessee
Property. All remaining land is currently being marketed. The timing and manner of sale will be determined by Southern Management
Group, LLC, the General Partner of the Partnership. The General Partner
generally has the right to sell Property, or portions thereof, without the
consent of the Limited Partners. The Partnership Agreement provides, however,
that a majority in interest of the Limited Partners must consent to the sale or
disposition at one time of 60% or more of the real estate acreage held by the
Partnership as of September 22, 1997 unless the sale or disposition is being
made in connection with the liquidation of the Partnership pursuant to the
Partnership Agreement or in the event that the net proceeds of the sale, when
distributed in accordance with the Partnership Agreement, will be sufficient to
provide the Limited Partners with distributions equal to the acquisition cost
of the assets sold. The General Partner believes that the Partnerships cash reserves will be
sufficient to last for at least one more year assuming no significant increases
in expenses. However, if the reserves are exhausted and the Partnership is
unable to borrow funds, the Partnership may have to sell the Property on
unfavorable terms. The General Partner has no plans to develop the Properties, except for
activities including rezoning, land planning, market surveys and other
activities necessary to prepare the Properties for sale. There can be no
assurance that necessary funds would be available should it be desirable for
the Partnership to improve the Properties to facilitate their sale. At a special meeting of Limited Partners held on November 5, 1997, the
Partnership Agreement was amended to (i) extend the term of the Partnership
from its original expiration date of December 31, 1998 to December 31, 2000;
(ii) substitute Southern Management Group, LLC for Southeast Acquisitions, Inc.
as the general partner of the Partnership; (iii) authorize new commissions and
new management fees for the new General Partner; (iv) give the new General
Partner the exclusive right to sell Partnership Property; and (v) modify the
Partnership Agreement to require that a majority in interest of the limited
Partners must consent to the sale or disposition at one time of 60% or more of
the real estate acreage held by the Partnership as of September 22, 1997 unless
the sale or disposition is being made in connection with the liquidation of the
Partnership pursuant to the Partnership Agreement or the net proceeds of the
sale, when distributed in accordance with the Partnership Agreement, will be
sufficient to provide the Limited Partners with distributions equal to the
acquisition cost of the assets sold. 1




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Material Recent Developments During 2003 there were no sales of Partnership Property. During 2002 the
Partnership sold approximately one half acre of its Rutherford, County
Tennessee Property for $112,385 and recognized a gain of $97,794. The
Partnership also entered into a sales contract for all of the remaining land in
Rutherford County, but this contract was terminated during 2003. 
 Employees The Partnership presently has no employees. The General Partner manages
and controls the affairs of the Partnership. (See Part III, Item 10, Directors
and Executive Officers of the Partnership). 
 Competition The General Partner believes that there is significant direct competition
within a five-mile radius of the Properties. The Property is located in middle
Tennessee. 
 Trademarks and Patents The Partnership has no trademarks or patents. 
 ITEM 2. PROPERTIES The Partnership owns approximately 45 acres of undeveloped land in
Rutherford County, Tennessee. Henry County, Georgia Property: All of the Henry County, Georgia Property has been sold. The Partnership sold approximately 13 acres during 1988 and 1989, 15 acres
in 1992, 47 acres in 1993, 73 acres in 1994 and 25 acres in 1995. During 1998, the Partnership sold approximately 44 acres for a gross sales
price of approximately $209,500 less commissions and expenses. During 1999, the Partnership closed the sale of 69.122 acres of Henry
County Property for $138,244 less commissions and expenses. On March 3, 2000, the Partnership closed the sale of the remaining land
for $298,100 less commissions and expenses. Greenville, South Carolina Property: All of the Greenville, South Carolina Property has been sold. During 1997, the Partnership sold approximately 1 acre of the Greenville
Property for $160,000 per acre. On April 7, 1998, the Partnership closed the sale of 1.9 acres of the
Greenville Property for approximately $317,000 less commissions and expenses. On May 11, 1998, the Partnership closed the sale of .277 acres of the
Greenville Property for approximately $27,700 less commissions and expenses. 2




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On July 30, 1998, the Partnership closed the sale of 2.049 acres of the
Greenville Property for approximately $342,000 less commissions and expenses. On August 5, 1998, the Partnership closed the sale of 17.316 acres of the
Greenville Property for approximately $1,645,000 less commissions and expenses. On August 17, 1999, the Partnership closed the sale of the remaining land
for approximately $699,500 less commissions and expenses. Rutherford County, Tennessee Property: The Rutherford County, Tennessee Property is located approximately 18
miles southeast of the Nashville Central business district and 10 miles
southeast of the Nashville Metropolitan Airport. Following a sale of four
acres in 1995, 32.514 acres in 1997, and 52.281 acres in January 2001 and .41
acres in October 2002 the Property consists of approximately 45 acres in the
northeast quadrant of the I-24/Sam Ridley interchange, with frontage on the
access road. The four acres sold in 1995 were part of the Property located at
the northwest corner of the I-24 interchange. This land was located along Sam
Ridley and was the portion of the Property located furthest from the
interchange itself and was sold for a price of $50,000 per acre. The
32.514-acre sale in 1997 and the 52.281 acre sale in January 2001, were also at
$50,000 per acre. During 1998 and 1999 there were no sales of Rutherford
County, Tennessee Property but the Partnership sold an easement for $101,500
less commissions in 1998 and another utility easement in 1999 for $17,658. In
2000, the Partnership recognized an additional $7,509 in relation to the 1999
utility easement sale. In an effort to make future development of the Property easier, all of the
Property has now been zoned for commercial use and is located entirely within
the Smyrna City Limits rather than part in the City of Smyrna and part in the
City of LaVergne. There is a small cemetery located in the northwest quadrant
of I-24, which the former general partner was aware of at the time of purchase,
and which the General Partner does not believe will have an adverse effect on
the Partnerships ability to sell the land. The I-24/Sam Ridley Parkway
interchange is one exit south of Interchange City Industrial Park, the largest
industrial park in the Nashville area, and is currently the last I-24
interchange south of the city to which sewer lines are available. At December
31, 1997, I-24 was being widened to three lanes in each direction from Bell
Road in Nashville to the Sam Ridley interchange. This widening was completed
in 1998. In 1999 I-24 was being widened to three lanes from Sam Ridley
interchange to the I-840 interchange approximately 9 miles south of the
property. This was completed in 2000. In 2001, Hospital Corporation of
America announced plans to build a major medical facility on the southeast
quadrant of the I-24 interchange. The facility is located immediately across
the street from the remaining Rutherford County, Tennessee Property. It is
estimated to cost seventy-six million dollars and was completed in 2003. The former general partner had the Rutherford County Property appraised in
1996 by Martin Appraisal Services. The appraiser had no affiliation with the
former general partner, although the president of Martin Appraisal Services
served as a vice president of an affiliate of the current General Partner from
April 1984 to August 1987. The Property was appraised in two tracts; one
consisting of 84.5 acres for $2,250,000, or approximately $26,627 per acre, and
the second consisting of 45.05 acres for $2,000,000, or approximately $44,395
per acre. The appraiser used the sales comparison (market) approach to value
the Property in bulk. The appraiser also estimated the value of the Property
if developed and sold as lots to end-users. The appraiser was able to use
several sales of land that occurred in the past few years along Sam Ridley
Parkway in the sales comparison approach. In the development analysis, the
appraiser evaluated the sale of tracts of land over a three-year period and
estimated the costs of necessary utility improvements. Due to the short period
of time estimated as an absorption period, the appraiser did not discount the
cash flow for the absorption period. The appraised value does not reflect costs, expenses and commissions,
which would be incurred in connection with a sale of the property. Moreover,
appraisals are only an approximation of current market value, which can only be
established by an actual sale. 3




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ITEM 3. LEGAL PROCEEDINGS The Partnership is not directly a party to, nor is the Partnerships
Property directly the subject of, any material legal proceedings. 
 ITEM 4. SUBMISSION OF ITEMS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders in 2003. 
 PART II 
 ITEM 5. MARKET FOR THE PARTNERSHIPS UNITS OF LIMITED PARTNERSHIP INTEREST AND RELATED SECURITY HOLDER MATTERS There is no established public trading market for the Units and it is not
anticipated that any will develop in the future. The Partnership commenced an
offering to the public on June 8, 1988 of 9,650 units of limited partnership
interests. The offering of $9,650,000 was fully subscribed and terminated on
June 24, 1988. As of December 31, 2003, there were 472 limited partners in the
Partnership. 
 ITEM 6. SELECTED FINANCIAL DATA For the Year
    
    For the Year
    
    For the Year
    
    For the Year
    
    For the YearEnded
    
    Ended
    
    Ended
    
    Ended
    
    EndedDecember 31,
    
    December 31,
    
    December 31,
    
    December 31,
    
    December 31,2003
    
    2002
    
    2001
    
    2000
    
    1999Operating Revenues
    
    $
    1,983
    
    
    $
    100,315
    
    
    $
    2,008,594
    
    
    $
    244,963
    
    
    $
    73,299Net (Loss) Income
    
    $
    (48,431
    )
    
    $
    66,579
    
    
    $
    1,938,972
    
    
    $
    198,000
    
    
    $
    10,865Net (Loss) Income per
Unit of Limited
Partnership Interest
    
    $
    (5.02
    )
    
    $
    6.90
    
    
    $
    200.93
    
    
    $
    20.52
    
    
    $
    1.13Total Assets
    
    $
    498,682
    
    
    $
    546,923
    
    
    $
    510,350
    
    
    $
    1,082,329
    
    
    $
    1,144,861Long Term Obligations
    
    NONE
    
    NONE
    
    NONE
    
    NONE
    
    NONECash Distributions
Declared per Unit
of Limited Partnership
Interest
    
    NONE
    
    $NONE
    
    $
    260
    
    
    $
    30
    
    
    $
    123
 4




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SELECTED QUARTERLY FINANCIAL DATA For the
    
    For the
    
    For the
    
    For the
    
    For the
    
    For the
    
    For the
    
    For theQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    QuarterEnded
    
    Ended
    
    Ended
    
    Ended
    
    Ended
    
    Ended
    
    Ended
    
    EndedDecember 31,
    
    September 30,
    
    June 30,
    
    March 31,
    
    December 31,
    
    September 30,
    
    June 30,
    
    March 31,2003
    
    2003
    
    2003
    
    2003
    
    2002
    
    2002
    
    2002
    
    2002Operating Revenue
    
    $
    305
    
    
    $
    372
    
    
    $
    621
    
    
    $
    685
    
    
    $
    98,531
    
    
    $
    614
    
    
    $
    581
    
    
    $
    589Gross Profit*
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ANet Income (Loss) before
Extraordinary Items and
Cumulative Effect of a
Change in Accounting
    
    $
    (11,673
    )
    
    $
    (25,122
    )
    
    $
    (5,622
    )
    
    $
    (6,014
    )
    
    $
    (87,117
    )
    
    $
    (5,680
    )
    
    $
    (7,933
    )
    
    $
    (6,925
    )Net Income (Loss)
per Unit of Limited
Partnership Interest
    
    $
    (1.22
    )
    
    $
    (2.60
    )
    
    $
    (0.58
    )
    
    $
    (0.62
    )
    
    $
    9.03
    
    
    $
    (0.59
    )
    
    $
    (0.82
    )
    
    $
    (0.72
    )Net Income (Loss)
    
    $
    (11,673
    )
    
    $
    (25,122
    )
    
    $
    (5,622
    )
    
    $
    (6,014
    )
    
    $
    87,117
    
    
    $
    (5,680
    )
    
    $
    (7,933
    )
    
    $
    (6,925
    )
   *
    
    In the real estate industry, costs of sales are netted in the gain on
sale of land and are included in operating revenues; therefore, there is no
breakdown for
gross profit. 5




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
 Background The Partnership was formed to acquire and realize appreciation in the
Property by holding it for investment and eventual sale. However, there can be
no assurance that the Partnerships objectives will be realized. 
 Results of Operations The Partnership had no operations from the date of its formation on
December 14, 1987 until June 24, 1988 when it acquired the first Property and
sold 3,165 units of limited partnership interest. During 1988 the Partnership
acquired three additional Properties and sold 6,485 additional Units of limited
partnership interests. In 1988 the Partnership purchased 579 acres of unimproved land at three
locations. The status of these Properties at December 31, 2003 is as follows: Property Sold Prior to
    
    Remaining Property HeldPlace
    
    Property Purchased
    
    December 31, 2003
    
    for SaleHenry County, Georgia
    
    353 Acres
    
    353 Acres
    
    -0- AcresGreenville, South Carolina
    
    91 Acres
    
    91 Acres
    
    -0- AcresRutherford County, Tennessee
    
    135 Acres
    
    90 Acres
    
    45 Acres
 
 2003 Compared to 2002 During 2003, the Partnership had no sales of Partnership Property as
compared to 2002, when the Partnership sold approximately one half acre in
Rutherford County, Tennessee for a gain of $97,794. Revenue in 2003 consisted
of interest earned of $1,983 compared to $2,521 in 2002. The interest was
lower due to a lower cash reserve. There were no cash distributions to the
Limited Partners in 2003 or 2002. Expenses during 2003 were $50,414 consisting of general and administrative
expenses of $46,712, franchise and excise taxes of $1,859, real estate taxes of
$1,613 and insurance of $230. The general and administrative expenses included
$17,553 in accounting and legal fees, which represents a decrease of $4,988
from 2002. In 2002 the Partnership required additional legal assistance
related to a quitclaim deed for right-of-way. The general and administrative
expenses for 2003 also included $26,920 in professional fees compared to $3,684
in 2002. The increase was due to fees paid to consultants to develop a
marketing and grading plan to subdivide the remaining property in Rutherford
County, Tennessee into 14 sites of one to two acre sites. The Partnership has
no current plans to complete this work. There were no such fees in 2002. The
franchise and excise taxes were $2,377 lower than in 2002, when the Partnership
paid $4,236 related to the gains on the sale of land. The real estate taxes in
2003 were $360 higher than in 2002, when the Partnership paid $1,253 in real
estate taxes, which included $1,167 in greenbelt rollback taxes that were paid
in relation to the Rutherford County land sale. The increase in 2003 was due
to the reclassification of one parcel of land from agricultural to commercial,
which resulted in a higher tax rate. 
 2002 Compared to 2001 During 2002, the Partnership sold approximately one half acre in
Rutherford County, Tennessee for a gain of $97,794 compared to 2001, when the
Partnership sold approximately 52 acres in Rutherford County for a gain of
$1,918,254. In 2001 the Partnership also recognized non-refundable extension
fees and interest of $72,546 related to another Rutherford County sales
contract that was subsequently cancelled by the prospective purchaser. The
Partnership had no such 6




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revenue in 2002. Other revenues in 2002 included interest of $2,521 compared
to $17,694 in 2001. The interest was lower due to a lower cash reserve. Other
revenue in 2001 included $100 for independent consideration for the
Partnerships willingness to execute a sales contract that was subsequently
terminated. There was no such income in 2002. There were no distributions to
the Limited Partners in 2002. In 2001 there was a distribution of $260 per
Unit. Expenses during 2002 were $33,736 consisting of general and administrative
expenses of $28,017, franchise and excise tax of $4,236, real estate taxes of
$1,253 and insurance of $230. The general and administrative expenses included
$22,542 in accounting and legal fees, which represents an increase of $2,283
from 2001. This increase was primarily due to additional legal assistance
related to a quitclaim deed for right-of-way. The general and administrative
expenses for 2002 also included professional fees of $3,684, which represents
an increase of $1,629 from 2001. This increase was due to civil engineering
services required for roadway modifications on the remaining Property. The
franchise and excise taxes were $41,141 lower that in 2001, when the
Partnership paid $45, 277 related to gains on the sale of land. The real
estate taxes in 2002 included $1,167 in greenbelt rollback taxes that were paid
in relation to the Rutherford County land sale. There were no such taxes in
2001. Inflation did not have a material impact on operations during 2003, 2002
and 2001. 
 Liquidity and Capital Resources Cash generated by operating activities varies from year to year based on
the level of land sale activity. The Partnership had cash reserves of $128,583
at December 31, 2003. The General Partner believes that the Partnership has
sufficient cash reserves to cover normal partnership expenses through the
liquidation mode. However, if additional expenses are incurred or should the
Partnership decide to construct infrastructure improvements to enhance the
marketability of the Property, 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 of the Property or incur indebtedness
on unfavorable terms. 
 Controls and Procedures (a) Within the ninety day period prior to the date of
this report, we carried out an
evaluation, under the supervision and with the participation of our management,
including our principal executive officer and
our principal financial officer, of the effectiveness of the design and
operation of our disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities
Exchange Act of 1934). Based upon
that evaluation, our management, including our principal executive officer and
our principal financial officer,
concluded that the design and operation of these disclosure controls and
procedures were effective to timely alert
them to any material information relating to the Partnership that must be
included in our periodic SEC filings. (b) There have been no significant changes in our
internal controls or in other factors that
could significantly affect internal controls subsequent to the date we carried
out this evaluation. 
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Partnerships financial statements for the years ended December 31,
2003, 2002 and 2001 together with the report of the Partnerships independent
auditors, Williams Benator & Libby, LLP, are included in this Form 10-K. 
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable. 
 PART III 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP The Partnership does not have any directors or officers. The General
Partner manages and controls the affairs of the Partnership and has
responsibility for all aspects of the Partnerships operations. The current
members and executive officers and directors of the General Partner are
identified and described below. 7




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The General Partner is a Tennessee limited liability company whose members
are Richard W. Sorenson, who owns a 50% interest in the General Partner and has
a 51% voting right and Southeast Venture LLC, a Tennessee limited liability
company, which owns 50% and has a 49% voting right. Mr. Sorenson, age 78, has over 40 years experience in several real estate
disciplines, including land acquisition and development, development of office
buildings, shopping centers, warehouses and medical facilities. All of these
activities occurred in the southeastern United States. Mr. Sorenson was President of Phoenix Investment Company (Phoenix), a
publicly owned, Atlanta based real estate development and investment firm from
1965 to 1970. Concurrent with his employment at Phoenix, he was President of
First Atlanta Realty Fund, a publicly owned real estate investment trust.
During his tenure with the trust, he served as a Trustee of the National
Association of Real Estate Investment Trusts. Following his departure from Phoenix in 1970, Mr. Sorenson became Vice
President of Cousins Properties in Atlanta, where he was responsible for
development of office buildings, shopping centers and apartments until 1971.
Until forming Southeast Venture Companies (SV) in 1979, Mr. Sorenson was an
independent real estate developer. Mr. Sorenson was co-founder of SV in 1979. In 1992, substantially all of
the assets of SV were sold to Southeast Venture Corporation. Mr. Sorenson is a graduate of the Northwestern University Business School
with a major in real estate. The other member of the General Partner is Southeast Venture LLC
(SVLLC). The officers and key employees of SVLLC include the following: Paul J. Plummer, age 54. Mr. Plummer is a registered architect and serves
as director of architectural services for SVLLC. Mr. Plummer is responsible
for facility programming, planning, master planning, facility assessment and
design. Before joining SVLLC in 1986, Mr. Plummer served as a partner and
director of design for the Nashville-based architecture and engineering firm of
Gresham, Smith and Partners. In that capacity he was responsible for the
design and planning of over 15 major projects throughout the United States and
Saudi Arabia. Mr. Plummer earned his bachelor of architecture degree from the
University of Kentucky and is a member of the American Institute of Architects. Wood S. Caldwell, age 50. Mr. Caldwell is responsible for all site
development activities on behalf of commercial and health care clients of
SVLLC, including managing all design consultants, permitting, scheduling,
budgeting and construction management. He contributes to SVLLCs development
team in the areas of land planning, zoning, permitting, engineering and
construction. Before joining SVC in 1985, Mr. Caldwell served as a
professional engineer for Gresham, Smith and Partners. As the prime site
design engineer for Gresham, Smith and Partners, Mr. Caldwell produced and
coordinated site development plans for over 50 separate medical facilities in
over 40 different communities throughout the southeast. Mr. Caldwell earned
his bachelor of engineering degree from the Vanderbilt University School of
Engineering. Axson E. West, age 49. Mr. West serves as vice president of brokerage
services for SVLLC, specializing in office and industrial leasing, improved
property sales and land disposition for several commercial and residential
projects. Mr. West has sold real estate and real estate securities since 1980
and, since joining SVC in 1988, he has been responsible for the disposition of
land encompassing industrial, office and retail developments. He received his
Bachelor of Arts degree from Vanderbilt University and is a Certified
Commercial Investment Member, a designation of the Commercial Investment Real
Estate Institute. Cameron W. Sorenson, age 42. Mr. Sorenson serves as director of vertical
development for SVLLC. He is primarily responsible for providing development
and project management for the clients of SVLLC. Prior to assuming these
responsibilities, Mr. Sorenson was project director for two large-scale land
development ventures for SVLLC. Prior to joining SVC in 1987, Mr. Sorenson was
with Trust Company Bank in Atlanta, as an officer in the National Division,
managing a credit portfolio in excess of $150 million. He received his
Bachelor of Science degree in finance from the MacIntyre School of Business at
the University of Virginia. Cameron Sorenson is the son of Richard W.
Sorenson, the individual majority member of the General Partner. 8




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Randy W. Parham, age 48. Mr. Parham is the President of SVLLC. He is
primarily responsible for property management, park and association management
and also specializes in real estate development and brokerage. Mr. Parham is a
licensed real estate broker and architect. Prior to joining SVLLC in 1998, Mr.
Parham was a project manager with Gresham, Smith and Partners from 1978 to 1983
and was responsible for overall project management of project team and project
financial management. Following his departure from Gresham, Smith and
Partners, Mr. Parham joined MetroCenter Properties, Inc., an 850 acre mixed-use
development in Nashville, Tennessee. He was Vice-President and was responsible
for initiation and development of new projects, land sales and lease
negotiations. In 1991 he purchased the assets of Metro Center Properties and
formed Metro Center Management, Inc. where he served as President through 1997. 
 ITEM 11. EXECUTIVE COMPENSATION During the fiscal years ended December 31, 2003, 2002 and 2001, the
Partnership did not pay compensation to any officers of the General Partner.
No management fees were paid during 2003, 2002 or 2001 since the Partnership
was operating in the liquidation mode. See Item 13 of this report, Certain
Relationships and Related Transactions. 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT As of December 31, 2003 no person or group (as that term is used in
Section 13(d) (3) of the Securities Exchange Act of 1934) was known to the
Partnership to beneficially own more than 5% of the Units of the Partnership. 
 Security Ownership of Management No individual member, or director or officer of a member, of the General
Partner nor such directors or officers as a group, owns any of the
Partnerships outstanding securities. The General Partner owns a general
partnership interest which entitles it to receive 30% of cash distributions
after the Limited Partners have received cumulative distributions equal to a
10% non-compounded Cumulative Annual Return on their Adjusted Capital
Contribution plus a return of their Capital Contributions as those terms are
defined in the Partnership Agreement. The General Partner will share in
taxable income to reflect cash distributions or, to the extent there are
losses, 1% of such losses. 
 Changes in Control There are no arrangements known to the Partnership that would at any
subsequent date result in a change in control of the Partnership. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS From 1988 through 1996, the Partnership paid $18,753 annually as an
administration fee to the former general partner. This fee was computed as one
quarter of one percent of the base cost of the land. The cumulative amount of
such fee could not exceed $150,021 and, as of December 31, 1996, fees charged
since inception amounted to $150,021. As of November 5, 1997, the Limited
Partners voted and agreed to pay the new General Partner, Southern Management
Group, LLC, a fee of $2,915 for the period November 5, 1997 through December
31, 1997 and annual fees of $19,000 from January 1, 1998 through December 31,
2000. Any fee payments would cease at a date when the Partnership was
liquidated. The General Partner will also receive 30% of cash distributions after the
Limited Partners have received (i) cumulative distributions equal to a 10%
Cumulative Annual Return on their Adjusted Capital Contributions plus (ii) a
return of their Capital Contributions (as those terms are defined in the
Partnership Agreement). During 2003, 2002 and 2001, the General Partner
received no cash distributions. At the special meeting of Limited Partners held on November 5, 1997, the
Partnership Agreement was amended to provide that total compensation paid to
all persons, including the General Partner, for the sale of the Partnerships
property is limited to a competitive real estate commission or disposition fee
not to exceed 10% of the contract 9




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##### Table of Contents



price of the sale of the property. Any such real estate commission or
disposition fee paid to the General Partner will reduce any distribution to
which it would otherwise be entitled under the amended Partnership Agreement.
In addition, the Partnership Agreement was amended to provide that the General
Partner may act as the exclusive agent for the sale of the Property. During
2002 and 2001, the Partnership paid real estate sales commissions of $7,867 and
$261,405, respectively, to the General Partner. There were no sales of land
during the year ended December 31, 2003. 
 PART IV 
 ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K 
 (a)
    
    Index to Financial Statements
    
    PageReport of Independent Auditors
    
    
    F-1Balance Sheets
    
    
    F-2Statements of Operations
    
    
    F-3Statements of Partners Equity
    
    
    F-4Statements of Cash Flow
    
    
    F-5Notes to Financial Statements
    
    
    F-6
  Schedules have been omitted because they are inappropriate,
not
required, or the information is included elsewhere in the
financial
statements or notes thereto. 
  (b)
    
    Reports on Form 8-KNo reports on Form 8-K were filed by the Partnership during
the
fourth quarter of 2002. 
  (c)
    
    Exhibits (numbered in accordance with Item 601 of
Regulation S-K) 10




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Exhibit Numbers
    
    Description
    
    Page Numbers3.1 (a)
    
    Certificate of Limited Partnership
    
    *3.1 (b) & (4)
    
    Restated Limited Partnership Agreement
    
    **3.1(c)
    
    First Amendment to Restated Limited
    
    E-1Partnership Agreement9
    
    Not Applicable11
    
    Not Applicable12
    
    Not Applicable13
    
    Not Applicable16
    
    Not Applicable18
    
    Not Applicable19
    
    Not Applicable22
    
    Not Applicable24
    
    Not Applicable25
    
    Not Applicable29
    
    Not Applicable31.1
    
    Certification Pursuant to section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
   *
    
    Incorporated by reference to Exhibit 3.1 filed as part of the Exhibits to the
Partnerships
Registration Statement on Form S-18, Registration No. 33-20255.**
    
    Incorporated by reference to Exhibit 3.2 filed as part of the Partnerships
Registration
Statement on Form S-18, Registration No. 33-20255. 11




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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. SOUTHEAST ACQUISITIONS II, L.P.
a Delaware limited partnershipBy:
    
    SOUTHERN MANAGEMENT GROUP, LLC
General PartnerBy:
    
    -s- RICHARD W. SORENSONRICHARD W. SORENSON
President and Chief Executive Officer
 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. Signature
    
    Title
    
    Date/s/ Richard W. Sorenson
    
    President and Chief Executive Officer
of Southern Management Group, LLC.
    
    March 26,2004
 12




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SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) AUDITED FINANCIAL STATEMENTS DECEMBER 31, 2003 with INDEPENDENT AUDITORS REPORT




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Audited Financial Statements SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) December 31, 2003 Independent Auditors Report
    
    
    1Balance Sheets
    
    
    2Statements of Operations
    
    
    3Statements of Partners Equity
    
    
    4Statements of Cash Flows
    
    
    5Notes to Financial Statements
    
    
    6




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##### Table of Contents



(WIILIAMS BENATOR AND LIBBY, LLP LETTERHEAD) INDEPENDENT AUDITORS REPORT Partners
Southeast Acquisitions II, L.P.
Nashville, Tennessee We have audited the accompanying balance sheets of Southeast Acquisitions II,
L.P. (a limited partnership operating in liquidation mode) as of December 31,
2003 and 2002, and the related statements of operations, partners equity, and
cash flows for the years ended December 31, 2003, 2002, and 2001. These
financial statements are the responsibility of the Partnerships management.
Our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Southeast Acquisitions II,
L.P. (a limited partnership operating in liquidation mode) as of December 31,
2003 and 2002, and the results of its operations and its cash flows for the
years ended December 31, 2003, 2002, and 2001 in conformity with accounting
principles generally accepted in the United States of America. As more fully described in Note A, according to the terms of the partnership
agreement, the Partnership was scheduled to terminate on December 31, 2000 and
is continuing to operate in liquidation mode. -s- WIILIAMS BENATOR AND LIBBY, LLP Atlanta, Georgia
January 13, 2004 -1-




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BALANCE SHEETS SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) December 312003
    
    2002ASSETSLand held for saleNote D
    
    $
    369,365
    
    
    $
    369,365Cash and cash equivalents
    
    
    128,583
    
    
    
    176,824Property tax reimbursement receivable
    
    
    734
    
    
    
    734$
    498,682
    
    
    $
    546,923LIABILITIES AND PARTNERS EQUITYAccounts payable and accrued expensesNote B
    
    $
    19,820
    
    
    $
    19,630Partners equityNote C:General partner
    
    
    47,783
    
    
    
    48,267Limited partners (9,650 units outstanding)
    
    
    431,079
    
    
    
    479,026478,862
    
    
    
    527,293$
    498,682
    
    
    $
    546,923
 See notes to financial statements. -2-




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STATEMENTS OF OPERATIONS SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) Year Ended December 312003
    
    2002
    
    2001Revenues:Gain on sale of land
    
    $
    -0-
    
    
    $
    97,794
    
    
    $
    1,918,254Extension fees and interest income on
land sales contractsNote E
    
    
    -0-
    
    
    
    -0-
    
    
    
    72,546Interest and other income
    
    
    1,983
    
    
    
    2,521
    
    
    
    17,7941,983
    
    
    
    100,315
    
    
    
    2,008,594ExpensesGeneral and administrative
    
    
    46,712
    
    
    
    28,017
    
    
    
    24,088Franchise and excise taxes
    
    
    1,859
    
    
    
    4,236
    
    
    
    45,377Real estate taxes
    
    
    1,613
    
    
    
    1,253
    
    
    
    86Insurance
    
    
    230
    
    
    
    230
    
    
    
    7150,414
    
    
    
    33,736
    
    
    
    69,622Net (loss) income:General partner
    
    
    (484
    )
    
    
    666
    
    
    
    19,390Limited partners
    
    
    (47,947
    )
    
    
    65,913
    
    
    
    1,919,582NET (LOSS) INCOME
    
    $
    (48,431
    )
    
    $
    66,579
    
    
    $
    1,938,972Net (loss) income per limited partnership unit
    
    $
    (5.02
    )
    
    $
    6.90
    
    
    $
    200.93
 See notes to financial statements. -3-




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STATEMENTS OF PARTNERS EQUITY SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) General
    
    LimitedPartner
    
    Partners
    
    TotalBalance at January 1, 2001
    
    $
    28,211
    
    
    $
    1,002,531
    
    
    $
    1,030,742Distributions ($260 per unit)
    
    
    -0-
    
    
    
    (2,509,000
    )
    
    
    (2,509,000
    )Net income for the year ended December 31, 2001
    
    
    19,390
    
    
    
    1,919,582
    
    
    
    1,938,972Balance at December 31, 2001
    
    
    47,601
    
    
    
    413,113
    
    
    
    460,714Net income for the year ended December 31, 2002
    
    
    666
    
    
    
    65,913
    
    
    
    66,579Balance at December 31, 2002
    
    
    48,267
    
    
    
    479,026
    
    
    
    527,293Net loss for the year ended December 31, 2003
    
    
    (484
    )
    
    
    (47,947
    )
    
    
    (48,431
    )Balance at December 31, 2003
    
    $
    47,783
    
    
    $
    431,079
    
    
    $
    478,862
 See notes to financial statements. -4-




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STATEMENTS OF CASH FLOWS SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) Year Ended December 312003
    
    2002
    
    2001CASH FLOWS FROM OPERATING ACTIVITIESNet (loss) income
    
    $
    (48,431
    )
    
    $
    66,579
    
    
    $
    1,938,972Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities:Gain on sale of land
    
    
    -0-
    
    
    
    (97,794
    )
    
    
    (1,918,254
    )Proceeds from sales of land, net of earnest money
of $40,000 in 2001
    
    
    -0-
    
    
    
    101,146
    
    
    
    2,305,720Increase in property tax reimbursement receivable
    
    
    -0-
    
    
    
    (734
    )
    
    
    -0-Decrease in interest and other receivables
    
    
    -0-
    
    
    
    -0-
    
    
    
    62,922Increase (decrease) in accounts payable and accrued expenses
    
    
    190
    
    
    
    (30,006
    )
    
    
    38,049NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES
    
    
    (48,241
    )
    
    
    39,191
    
    
    
    2,427,409CASH FLOWS FROM INVESTING ACTIVITIESDistributions to limited partners
    
    
    -0-
    
    
    
    -0-
    
    
    
    (2,509,000
    )(DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS
    
    
    (48,241
    )
    
    
    39,191
    
    
    
    (81,591
    )Cash and cash equivalents at beginning of year
    
    
    176,824
    
    
    
    137,633
    
    
    
    219,224CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    $
    128,583
    
    
    $
    176,824
    
    
    $
    137,633
 See notes to financial statements. -5-




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NOTES TO FINANCIAL STATEMENTS SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) December 31, 2003 NOTE ADESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Southeast Acquisitions II, L.P. (a limited partnership operating in liquidation
mode) (the Partnership) is a Delaware limited partnership that was formed to
acquire and sell undeveloped land. The Partnership was formed during December
1987 and received equity contributions totaling $9,650,000 through the sale of
9,650 limited partnership units during 1988. The Partnership was originally
scheduled to terminate on December 31, 1998. However, during November 1997,
concurrent with the replacement of the previous general partner, the term of
the Partnership was extended to December 31, 2000. The partnership is
currently operating in liquidation mode until all of the Partnerships land is
sold. No adjustments are necessary to present the financial statements on the
liquidation basis. During 1988, the Partnership purchased undeveloped land to be marketed for sale
as follows: approximately 135 acres near Nashville, Tennessee, approximately
91 acres in Greenville, South Carolina, and approximately 353 acres near
Atlanta, Georgia. This land was purchased from an affiliate of the previous
general partner. At December 31, 2003, the remaining land consisted of
approximately 45 acres of the Tennessee land. The following accounting policies are presented to assist the reader in
understanding the Partnerships financial statements: Basis of Accounting: The Partnership maintains its accounting records on the
accrual basis of accounting. Sales of land are recognized upon the closing of
an enforceable sales contract and the Partnerships execution of its
obligations under the contract. Land Held for Sale: Land is carried at the lower of cost or fair value, less
estimated cost to sell. The value of the land is reviewed for impairment
annually by considering recent sales, contract negotiations in progress, and
sale activity in the lands geographic area. The Partnerships land is carried
net of the remaining portion of an original write-down of $3,467,829 that was
recognized during 1991. Income Taxes: Federal and state income taxes have not been provided for in the
financial statements. Under existing law, the Partnership is not treated as a
taxable entity. Rather, each partner must include his allocated share of
Partnership income, loss, gain, deduction, and credit in his individual income
tax return. The write-down of the lands carrying value that has been recorded
for financial statement purposes will not be recognized for income tax purposes
until the land is sold. At December 31, 2003 and 2002, the remaining portion
of the 1991 write-down that had not been recognized for income tax purposes
totaled $1,163,714. -6-




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NOTES TO FINANCIAL STATEMENTSContinued SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) NOTE ADESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIESContinued Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. Cash Equivalents: For purposes of reporting cash flows, the Partnership
considers all demand deposits and highly liquid investments purchased with an
original maturity of three months or less which can be readily converted to
cash on demand, without penalty, to be cash equivalents. At December 31, 2003,
cash on deposit included approximately $69,000 in excess of federally insured
limits. NOTE BRELATED PARTY TRANSACTIONS During the years ended December 31, 2002 and 2001, sales commissions totaling
$7,867 and $261,405, respectively, were paid to the general partner related to
sales of land. There were no sales of land during the year ended December 31,
2003. The Partnership agreement provides for reimbursement of expenses incurred by
the general partner related to the administration and operation of the
Partnership. During the years ended December 31, 2003, 2002 and 2001,
reimbursements to the general partners members and related companies totaled
$2,175, $1,788, and $934, respectively. Accounts payable to the general
partners members totaled $1,830 and $429 at December 31, 2003 and 2002,
respectively. The Partnership agreement provided for the payment of management fees to the
general partner. However, no management fees were paid during the years ended
December 31, 2003, 2002 and 2001 since the Partnership was operating in
liquidation mode. NOTE CPARTNERS EQUITY In accordance with the partnership agreement (as amended in November 1997),
cash distributions and Partnership profits and losses are to be allocated as
follows: -7-




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NOTES TO FINANCIAL STATEMENTSContinued SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) NOTE CPARTNERS EQUITYContinued  (a)
    
    Except for distributions in connection with the liquidation of the
Partnership, cash distributions are to be made 100% to the limited
partners until the limited partners have received (i) cumulative
distributions equal to their 10% noncompounded cumulative annual return on
their adjusted capital contribution, as defined ($2,101,019 at December
31, 2003) plus (ii) a return of their capital contributions ($9,650,000 at
December 31, 2003); thereafter, distributions will be made 70% to the
limited partners and 30% to the general partner. Distributions in
connection with the Partnerships liquidation will be made in accordance
with the partners capital accounts as maintained for federal income tax
purposes.(b)
    
    Profits and losses are to be allocated as provided in the partnership
agreement. Generally, profits will be allocated to the partners to reflect
cash distributions or to offset negative balances in the partners capital
accounts, but at least 1% of profits will be allocated to the general partner.
Losses will generally be allocated 99% to the limited partners, in proportion
to their units, and 1% to the general partner, or to reduce any positive
account balances in the partners capital accounts. Upon Partnership dissolution and termination, the general partner is required
to contribute to the capital of the Partnership the lesser of any negative
amount of its capital account, as defined, or 1.01% of the capital
contributions made by the limited partners. Any amount so contributed shall be
distributed to the limited partners in proportion to their positive capital
account balances. During the year ended December 31, 2001, the Partnership paid distributions
against the limited partners cumulative annual return in accordance with the
partnership agreement of $2,509,000, or $260 per unit. No distributions were
paid during the years ended December 31, 2003 and 2002. Cumulative distributions applied against the limited partners cumulative
annual return through December 31, 2003 totaled $12,857,281, or $1,332 per
unit. Total compensation paid to all persons, including the general partner, upon the
sale of the Partnerships property is limited to a competitive real estate
commission or disposition fee not to exceed 10% of the contract price. Any
such commission or disposition fee paid to the general partner would reduce any
distribution which it would otherwise be entitled to pursuant to the
partnership agreement. The general partner or an affiliate may be given an
exclusive right to sell property for the Partnership. -8-




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NOTES TO FINANCIAL STATEMENTSContinued SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode) NOTE DSUMMARY OF PROPERTY AND ACTIVITY At December 31, 2003 and 2002, land consisted of the following: Description
    
    Initial Cost
    
    Carrying Amount
    
    Date Acquired45 acres of unimproved land
in Rutherford County, Tennessee
    
    $
    1,533,079
    
    
    $
    369,365
    
    
    June 1988
 There were no liens on the land as of December 31, 2003. At December 31, 2003,
the aggregate carrying value of the land for income tax purposes was
$1,533,079. The difference between the carrying value for financial statement
purposes and income tax purposes resulted from a write-down of the propertys
carrying value that was recorded for financial statement purposes during 1991
as more fully described in Note A. Land activity during the years ended December 31, 2001, 2002 and 2003 consisted
of the following: Balance at January 1, 2001
    
    $
    800,183Cost of land sold
    
    
    (427,466
    )Balance at December 31, 2001
    
    
    372,717Cost of land sold
    
    
    (3,352
    )Balance at December 31, 2002
    
    
    369,365Cost of land sold
    
    
    -0-Balance at December 31, 2003
    
    $
    369,365
 NOTE EEXTENSION FEES AND INTEREST INCOME ON LAND SALE CONTRACTS During April 2001, the Partnership received non-refundable extension fees of
$60,300 and interest of $2,091 related to a sales contract that was
subsequently cancelled by the prospective purchaser. The Partnership
recognized these fees and interest as income during the year ended December 31,
2001 since they were non-refundable. In addition, the Partnership received
interest of $10,155 during January 2001 related to the closing of a sale of
land during that month. -9-