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SECURITIES AND EXCHANGE COMMISSION  FORM 10-K [X]
    
    ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003.
 [  ]
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
 COMMISSION FILE NUMBER: 0-18454 (FORMERLY 33-26759)   SOUTHEAST ACQUISITIONS III, L.P.   (Name of issuer in its charter) Delaware
(State of Incorporation)
    
    23-2532708
(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 ninety (90) days. Yes [X] No [  ] 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 [  ]




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TABLE OF CONTENTS PART IITEM 1.
    
    BUSINESS
    
    
    1Background
    
    
    1Material Recent Developments
    
    
    1Employees
    
    
    1Competition
    
    
    2Trademarks and Patents
    
    
    2ITEM 2.
    
    PROPERTIES
    
    
    2ITEM 3.
    
    LEGAL PROCEEDINGS
    
    
    2ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    2PART IIITEM 5.
    
    MARKET FOR THE
PARTNERSHIPS UNITS OF LIMITED PARTNERSHIP INTEREST AND RELATED SECURITY HOLDER MATTERS
    
    
    3ITEM 6.
    
    SELECTED FINANCIAL DATA
    
    
    3SELECTED QUARTERLY FINANCIAL DATA
    
    
    4ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    5Background
    
    
    5Results of Operations
    
    
    52003 Compared to 2002
    
    
    52002 Compared to 2001
    
    
    6Liquidity and Capital Resources
    
    
    6Controls and Procedures
    
    
    6ITEM 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
    
    
    8ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    
    
    9Security Ownership of Management
    
    
    9Changes in Control
    
    
    9
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##### Table of Contents



ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    9ITEM 14.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
    
    
    10(a) Index to
Financial Statements  Liquidation Basis
    
    
    10(b) Reports on Form 8-K
    
    
    10(c) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
    
    
    10SIGNATURESEX-31.1 SECTION 302 CERTIFICATIONSEX-32.1 SECTION 906 CERTIFICATIONS
  -ii-




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PART I 
 ITEM 1. BUSINESS 
 Background Southeast Acquisitions III, L.P. (the Partnership) was formed on
November 4, 1988, as a Delaware limited partnership. The Partnerships public
offering of 12,400 units of limited partnership interest (Units) commenced on
May 2, 1989 and terminated on August 29, 1989 when all 12,400 Units were sold.
The Partnership was originally scheduled to terminate on December 31, 1999. 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, 1999 to December 31, 2001; (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. The Partnership has been operating in
liquidation mode since January 1, 2002. Since all of the land was sold in
December 2003, the Partnership is in the process of being dissolved. The
Partnership has filed a Certificate of Cancellation of its Certificate of
Limited Partnership with the state of Delaware. The Partnership has also filed
Form 15 as Certification and Notice of Termination of Registration under
section 12(g) of the Securities Exchange Act of 1934. The Partnership originally purchased the following five parcels of
unimproved land in 1989: 208 acres in Fulton County, Georgia; 265 acres in
Henry County, Georgia; 24 Acres in Nashville, Tennessee; 47 acres in Fort
Myers, Florida; and 51 acres in Columbia, South Carolina. The Partnerships
primary business objective was to realize appreciation in the value of the five
parcels of unimproved land (each a Property, collectively the Properties),
by holding the Properties for investment and eventual sale. The Partnership has sold all of its land, with the final sale occurring on
December 31, 2003. The purchaser provided the Partnership with a note for the
sale proceeds and related extension fees at the closing. On January 5, 2004,
the Partnership received cash from the sale, which consisted of the sales
proceeds, net of closing costs and commissions, and extension fees. 
 Material Recent Developments During 2003, all of the remaining Fulton County, Georgia Property was sold
for a sales price of $3,250,000. The purchaser provided the Partnership with a
note for the sales proceeds and related extension fees at the closing. On
January 5, 2004, the Partnership received cash of $2,948,750, which consisted
of sales proceeds of $2,918,750, net of closing costs and commissions, and
extension fees of $30,000. The Partnership prepares its financial statements
using the liquidation basis of accounting. In accordance with the liquidation
basis of accounting, the Partnership recorded an unrealized gain of $2,219,073
during the year ended December 31, 2003 to increase the carrying value of its
land to net realizable value, based on the net sales proceeds received during
January 2004 of $2,918,750. The December 31, 2003 sale was not recognized for
financial statement purposes during the year ended December 31, 2003 since the
Partnership did not receive a down payment by December 31, 2003 sufficient to
allow recognition of the sale under generally accepted accounting principles.
This sale was recognized during the year ended December 31, 2003 for income tax
purposes. During 2002, all of the remaining Columbia, South Carolina Property was
sold for a sales price of $500,000, and the Partnership recognized a loss of
$1,850. During 2001, the Partnership sold 100.01 acres of the Fulton County,
Georgia land for a sales price of $2,000,000 and recognized a gain of
$1,147,677. During 1999, 2000 and 2001, the Partnership also received
extension fees and interest income totaling $372,781 related to the extension
of the closing of this sale, which originally closed in escrow in November
1999. In 2001 the Partnership also sold 1.59 acres of the Columbia, South
Carolina Property for a sales price of $25,000 and recognized a loss of $5,992. 
 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). 1




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Competition Not Applicable 
 Trademarks and Patents The Partnership has no trademarks or patents. 
 ITEM 2. PROPERTIES Fulton County, Georgia Property All of the Fulton County, Georgia Property has been sold. The property
consisted of approximately 208 acres. During 2001, the Partnership sold
approximately 100 acres at a sales price of $2,000,000, less commissions and
expenses. In 2003, the remaining land was sold for a sales price of
$3,250,000, less commissions and expenses. Fort Myers, Florida Property All of the Fort Myers, Florida Property has been sold. The Property
consisted of approximately 47 acres and was sold at a sales price of
$1,300,000, less commissions and expenses. Columbia, South Carolina Property All of the Columbia, South Carolina Property has been sold. During 2001,
the Partnership sold approximately 1.59 acres at a sales price of $25,000, less
commissions and expenses. The remaining 33 acres were sold in January 2002 at
a sales price of $500,000, less commissions and expenses. 
 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 MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of security holders in 2003. 2




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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 since the Partnership is in the
process of liquidating. The Partnership commenced an offering to the public on
May 2, 1989 of 12,400 Units of limited partnership interests. The offering of
$12,400,000 was fully subscribed and terminated on August 29, 1989. As of
December 31, 2003, there were 709 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
    
    $
    2,250,309
    ***
    
    $
    3,085
    
    
    $
    1,328,458
    
    
    $
    393,435
    
    
    $
    1,343,860Net Income (Loss)
    
    $
    2,221,312
    ***
    
    $
    (32,034
    )
    
    $
    1,027,182
    **
    
    $
    289,363
    
    
    $
    1,113,511
    *Net Income (Loss)
per
Unit of Limited
Partnership
Interest
    
    $
    179.14
    
    
    $
    (2.58
    )
    
    $
    82.84
    
    
    $
    23.34
    
    
    $
    89.80Total Assets
    
    $
    2,978,594
    
    
    $
    753,414
    
    
    $
    1,238,158
    
    
    $
    2,526,397
    
    
    $
    3,597,804Long Term
Obligations
    
    None
    
    None
    
    None
    
    None
    
    NoneCash
Distributions
Declared per
Unit of Limited
Partnership
Interest
    
    $
    0
    
    
    $
    30
    
    
    $
    160
    
    
    $
    140
    
    
    $
    165
  *
    
    Includes a provision for loss on land of $141,147.**
    
    Includes a provision for lose on land of $140,844.***
    
    Includes an unrealized gain on increase in value of land of $2,219,073, in
accordance with the liquidation basis of accounting. 3




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SELECTED QUARTERLY FINANCIAL DATA For the
    
    For the
    
    For the
    
    For theQuarter Ended
    
    Quarter Ended
    
    Quarter Ended
    
    Quarter EndedDecember 31,
    
    September 30,
    
    June 30,
    
    March 31,2003
    
    2003
    
    2003
    
    2003Operating Revenues
    
    $
    2,219,271
    ***
    
    $
    232
    
    
    $
    30,369
    
    
    $
    437Gross Profit*
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ANet Income (Loss)
before Extra -
ordinary Items and
Cumulative Effect
of a Change in
Accounting
    
    $
    2,211,254
    ***
    
    $
    (6,694
    )
    
    $
    23,946
    
    
    $
    (7,194
    )Net Income (Loss)
per Unit of Limited
Partnership
Interest
    
    $
    178.33
    
    
    $
    (0.54
    )
    
    $
    1.93
    
    
    $
    (0.58)
    *Net Income
(Loss)
    
    $
    2,211,254
    ***
    
    $
    (6,694
    )
    
    $
    23,946
    
    
    $
    (7,194
    )
   [Continued from above table, first column(s) repeated] For the
    
    For the
    
    For the
    
    For theQuarter Ended
    
    Quarter Ended
    
    Quarter Ended
    
    Quarter EndedDecember 31,
    
    September 30,
    
    June 30,
    
    March 31,2002
    
    2002
    
    2002
    
    2002Operating Revenues
    
    $
    2,432
    
    
    $
    711
    
    
    $
    651
    
    
    $
    (709
    )Gross Profit*
    
    
    N/A
    
    
    
    N /A
    
    
    
    N/A
    
    
    
    N /ANet Income (Loss)
before Extra-
ordinary Items and
Cumulative Effect
of a Change in
Accounting
    
    $
    (6,426)
    **
    
    $
    (10,389
    )
    
    $
    (6,701
    )
    
    $
    (8,518
    )Net Income (Loss)
per Unit of Limited
Partnership
Interest
    
    $
    (0.51)
    *
    
    $
    (0.84)
    *
    
    $
    (0.54)
    *
    
    $
    (0.69
    )Net Income
(Loss)
    
    $
    (6,426
    )
    
    $
    (10,389
    )
    
    $
    (6,701
    )
    
    $
    (8,518
    )
  *
    
    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.**
    
    Includes a provision for loss on land of $140,844.***
    
    Includes an unrealized gain on increase in value of land of $2,219,073, in
accordance with the liquidation basis of accounting. 4




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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. The Partnership originally purchased 595 acres
of unimproved land at five locations. The status of these Properties at
December 31, 2003 is as follows: Property Sold Prior to
    
    Remaining PropertyPlace
    
    Property Purchased
    
    December 31, 2003
    
    Held for SaleFulton County, Georgia
    
    208 acres
    
    208 acres
    
    0 acresHenry County, Georgia
    
    265 acres
    
    265 acres
    
    0 acresFort Myers, Florida
    
    47 acres
    
    47 acres
    
    0 acresColumbia, South Carolina
    
    51 acres
    
    51 acres
    
    0 acresNashville, Tennessee
    
    24 acres
    
    24 acres
    
    0 acres
 
 Results of Operations The Partnership had no operations from the date of its formation on
November 4, 1988 until June 1, 1989 when it acquired the initial Property and
sold 6,215 Units of Limited Partnership interest. During 1989 the Partnership
acquired four additional Properties and sold 6,185 additional Units of Limited
Partnership interests. 
 2003 Compared to 2002 During 2003, the Partnership sold all of the remaining property in Fulton
County, Georgia. Since the Partnership received a note for the sale proceeds
and did not receive at least a 20% down payment, the Partnership was not able
to recognize the gain on this sale in 2003. However, since the Partnerships
financial statements were presented on the liquidation basis of accounting due
to its impending liquidation, the Partnership recorded an unrealized gain of
$2,219,073 during 2003 to increase the carrying value of its land to net
realizable value. The Partnership also realized $30,000 of non-refundable
extension fees related to the sales contract that closed during December 2003.
During 2002, the Partnership sold all of the remaining property in Columbia,
South Carolina, which resulted in a net loss of $1,850. Interest income earned
in 2003 was $1,236 compared to $3,085 earned in 2002. The decrease in interest
income was primarily due to a lower cash reserve during 2003. There were no
distributions in 2003 as compared to distributions of $372,000, or $30 per
Unit, to the Limited Partners in 2002. Expenses for 2003 were $28,997, consisting of general and administrative
expenses of $24,837, franchise and excise taxes of $100, real estate taxes of
$3,844 and insurance of $216. The general and administrative expenses were
$3,769 lower than what was incurred in 2002. In 2002, the general and
administrative expenses included $4,096 for the recognition of bad debt expense
related to a receivable of $4,596 for the proration of Columbia, South Carolina
property taxes resulting from a February 2000 sale of 7.29 acres in Columbia,
South Carolina. The buyer paid the Partnership $500 in February 2002,
but subsequently filed for bankruptcy. The 5




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Partnership incurred no bad debt expense in 2003. The real estate taxes in
2002 were $4,316. The $472 decrease in tax was due to a decrease in the tax
rate in Fulton County, Georgia. In 2002, the Partnership incurred a loss on
sale of land of $1,850 related to the Columbia, South Carolina Property. There
was no such loss in 2003. 
 2002 Compared to 2001 During 2002, the Partnership sold all of the remaining property in
Columbia, South Carolina, which resulted in a net loss of $1,850. During 2001,
the Partnership had one sale of the Fulton County, Georgia Property, recognized
non-refundable extension fees and interest income related to the Fulton County,
Georgia sale and had one sale of the Columbia, South Carolina Property. The
revenues recognized from these transactions totaled $1,311,829. The only
Partnership revenue in 2002 consisted of $3,085 in interest income, as compared
to $10,218 in interest income earned in 2001. The decrease in interest income
was primarily due to a lower cash reserve during 2002, which resulted from a
distribution to the Limited Partners in the first quarter of the year. During
2001 the Partnership also recognized other income of $6,411, $6,319 of which
was for payment of prior year real estate taxes related to the Fulton County,
Georgia sale. There was no such income in 2002. During 2002, a distribution
of $30 per Unit was made to the Limited Partners compared to a distribution per
Unit of $160 per unit in 2001. Expenses for 2002 were $35,119 consisting of general and administrative
expenses of $28,606, franchise and excise taxes of $125, real estate taxes of
$4,316, insurance of $222 and loss on sale of land of $1,850. The general and
administrative expenses included $4,096 for the recognition of bad debt
expense, as previously discussed. The Partnership incurred no such expense in
2001. The general and administrative expenses for 2002 also included $18,800
in legal and accounting fees, which represents a $4,205 decrease for 2001. In
2002 the Partnership did not require the additional legal assistance that had
been needed for the Fulton County, Georgia Property sale in 2001. The general
and administrative expenses for 2002 also included professional fees of $2,591,
a $6,342 decrease from 2001. In 2002 the Partnership did not require
environmental study fees or engineering fees that were needed in 2001 for the
sale of the remaining Columbia, South Carolina Property. The 2002 franchise
and excise taxes were $14,437 lower than the same taxes in 2001. The 2001 tax
liability to Tennessee was primarily related to the interest income from the
Fulton County, Georgia Property sale. The 2002 real estate taxes were $79,429
lower than 2001. In 2001 the Partnership had incurred $80,146 in Greenbelt
rollback taxes. The taxes, along with a provision for loss on land of
$140,844, are both related to the sale of the remaining Columbia, South
Carolina Property, which occurred in January 2002. Since the Partnership was
operating in the liquidation mode, it paid no management fees in 2002, as
compared to $26,500 that were paid in 2001. Inflation did not have a material impact on operations during 2003, 2002
or 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 $29,269
at December 31, 2003. This cash reserve, along with the cash received on
January 5, 2004 from the sale proceeds and extension fees of $2,948,750, will
be used to pay all liabilities of the Partnership. The General Partner will
reserve funds, which it deems reasonably necessary to provide for contingent
and unforeseen liabilities or obligations of the Partnership. The General
Partner will then make a final distribution to the limited partners based on
the terms of the Partnership Agreement. This distribution is estimated to be
approximately $2,948,000. 
 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. 6




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(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. The
Partnership has been operating in liquidation mode since January 1, 2002. At
December 31, 2003, the Partnership was in the process of liquidating since its
remaining land was sold during December 2003. All cash proceeds from the sale
were received in January 2004. The accompanying financial statements are
presented on the liquidation basis of accounting. Accordingly, assets are
stated at net realizable value, and liabilities are stated at the amounts
expected to be paid during liquidation, including costs of liquidating the
Partnership. It is not presently determinable whether the amounts that
creditors will ultimately receive will differ from the amounts shown in the
accompanying financial statements; however, any differences are not expected to
be material. Upon full payment of the Partnerships liabilities, all remaining
cash will be distributed to the limited partners. The financial statements as of December 31, 2002 and for the years ended
December 31, 2002 and 2001, as previously issued, were not labeled as being
prepared on the liquidation basis of accounting. However, the notes to those
financial statements contained a statement that no adjustments were necessary
to present the financial statements on the liquidation basis of accounting.
Therefore, no changes have been made to the accompanying financial statements
as of December 31, 2002 and for the years ended December 31, 2002 and 2001 in
order to present them on the liquidation basis of accounting. 
 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. 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. 7




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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 architecture services for SVLLC. Mr. Plummer is responsible for
facility programming, planning, master planning, facility assessment and
design. Before joining SV 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 SV 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 SV in 1988, he has been responsible for the disposition of
land encompassing industrial, office and retail developments. Mr. West is past
director of the Nashville Board of Realtors and past president of the boards
commercial investment division. 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 SV 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. Randall 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 MetroCenter Properties and
formed MetroCenter Management, Inc. where he served as President through 1997. 
 ITEM 11. EXECUTIVE COMPENSATION During the fiscal year ended December 31, 2003, the Partnership did not
pay compensation to any officers of the General Partner. The Partnership paid
the General Partner a management fee of $26,500 in the fiscal year ended
December 31, 2001. No management fees were paid during the fiscal years ended
2003 and 2002 since the Partnership was operating in liquidation mode. See
Item 13 of this report, Certain Relationships and Related Transactions. 8




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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 by the
Partnership to beneficially own more than five percent 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 a return of their capital
contributions plus cumulative distributions equal to a 10% non-compounded
Cumulative Annual Return of their Adjusted 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 to November 5, 1997, the Partnership paid $24,886 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 $207,244,which limit was reached and paid during 1997
as provided in the Partnership Agreement. As of November 5, 1997, the Limited
Partners voted and agreed to pay the new General Partner, Southern Management
Group, LLC, a fee of $4,066 for the period November 5, 1997 through December
31, 1997 and annual fees of $26,500 from January 1, 1998 through December 31,
2001. No management fees were paid during 2002 and 2003 since the Partnership
was operating in liquidation mode. As previously discussed, the Partnership agreement provides for the
General Partner to receive 30% of cash distributions after the Limited Partners
have received (i) a return of their Capital Contributions plus (ii) cumulative
distributions equal to a 10% Cumulative Annual Return on their Adjusted 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 price of the property. Any such real estate
commission or disposition fee that is paid to the General Partner will reduce
any distributions 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. At December 31, 2003, the carrying value of the Partnerships
land had been reduced by commissions of $131, 200 that were paid to the General
Partner during January 2004 related to the sale of the Partnerships remaining
land. During the years ended December 31, 2002 and 2001, the Partnership paid
real estate commissions of $25,000 and $41,250 respectively, to the General
Partner. 9




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PART IV 
 ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K 
  (a)
    
    Index to Financial StatementsLiquidation Basis PageReport of Independent Auditors
    
    
    F-1Balance Sheets
    
    
    F-2Statements of Operations
    
    
    F-3Statements of Partners Equity (Deficit)
    
    
    F-4Statements of Cash Flows
    
    
    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 2003. 
  (c)
    
    Exhibits (numbered in accordance with Item 601 of Regulation S-K) 10




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##### Table of Contents



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 Partnership Agreement
    
    E-111
    
    Not Applicable12
    
    Not Applicable13
    
    Not Applicable16
    
    Not Applicable18
    
    Not Applicable19
    
    Not Applicable22
    
    Not Applicable24
    
    Not Applicable25
    
    Not Applicable28
    
    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 to section
906 of the Sarbanes-Oxley Act of 2002.
 11




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*
    
    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. 33-26759.**
    
    Incorporated by reference to Exhibit 3.2 filed as part of the Partnerships
Registration Statement on Form S-18, Registration No. 33-26759. 12




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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 III, L.P.a Delaware limited partnershipBy:
    
    SOUTHERN MANAGEMENT GROUP, LLCGeneral PartnerBy:
    
    - s - Richard W. SorensonRICHARD W. SORENSONPresident 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
 13




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




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




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(WILLIAMS BENATOR & LIBBY, LLP LOGO) 
 INDEPENDENT AUDITORS REPORT Partners
Southeast Acquisitions III, L.P.
Nashville, Tennessee We have audited the accompanying balance sheetsliquidation basis of Southeast
Acquisitions III, L.P. (a Delaware limited partnership in liquidation) as of
December 31, 2003 and 2002, and the related statements of
operationsliquidation basis, partners equity (deficit)liquidation basis,
and cash flowsliquidation basis 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. As described in Note A to the financial statements, the Partnership has been
operating in liquidation mode since January 1, 2002, and at December 31, 2003,
the Partnership was in the process of liquidating. As a result, the
accompanying financial statements have been presented using the liquidation
basis of accounting. In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Southeast Acquisitions III,
L.P. (a limited partnership in liquidation) 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
applied on the basis described in the proceeding paragraph. (WILLIAMS BENATOR & LIBBY, LLP) Atlanta, Georgia
January 13, 2004 1040 Crown Pointe Parkway, NE      Suite 400      Atlanta, Ga 30338
t) 770.512.0500      f) 770.512.0200      www.wblcpa.com
Member of American Institute of Certified Public Accountants and Russell Bedford International -1-




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BALANCE SHEETSLiquidation Basis SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) December 312003
    
    2002ASSETSLand and improvements held for saleNote E
    
    $
    2,918,750
    
    
    $
    699,677Cash and cash equivalents
    
    
    29,269
    
    
    
    53,737Extension fees and other receivablesNotes D and E
    
    
    30,575
    
    
    
    -0-$
    2,978,594
    
    
    $
    753,414LIABILITIES AND PARTNERS EQUITY (DEFICIT)Accounts payable and accrued expensesNote B
    
    $
    20,477
    
    
    $
    16,609Payable to previous general partnerNote B
    
    
    3,584
    
    
    
    3,584Partners equity (deficit)Note CGeneral partner
    
    
    -0-
    
    
    
    (19,929
    )Limited partners (12,400 units outstanding)
    
    
    2,954,533
    
    
    
    753,1502,954,533
    
    
    
    733,221$
    2,978,594
    
    
    $
    753,414
 See independent auditors report and notes to financial statements. -2-




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STATEMENTS OF OPERATIONSLiquidation Basis SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) Year Ended December 312003
    
    2002
    
    2001Revenues:Unrealized gain on increase in value of land
Note E
    
    $
    2,219,073
    
    
    $
    -0-
    
    
    $
    -0-Gain on sale of land
    
    
    -0-
    
    
    
    -0-
    
    
    
    1,141,685Interest and other income
    
    
    1,236
    
    
    
    3,085
    
    
    
    16,629Extension fees and interest income related to
land salesNotes D and E
    
    
    30,000
    
    
    
    -0-
    
    
    
    170,1442,250,309
    
    
    
    3,085
    
    
    
    1,328,458Expenses:General and administrative
    
    
    24,837
    
    
    
    28,606
    
    
    
    35,403Management feesNote B
    
    
    -0-
    
    
    
    -0-
    
    
    
    26,500Franchise and excise taxes
    
    
    100
    
    
    
    125
    
    
    
    14,562Real estate taxes
    
    
    3,844
    
    
    
    4,316
    
    
    
    83,745Insurance
    
    
    216
    
    
    
    222
    
    
    
    222Loss on sale of land
    
    
    -0-
    
    
    
    1,850
    
    
    
    -0-Provision for loss on landNote E
    
    
    -0-
    
    
    
    -0-
    
    
    
    140,84428,997
    
    
    
    35,119
    
    
    
    301,276Net income (loss)Note C:General partner
    
    
    19,929
    
    
    
    (320
    )
    
    
    10,271Limited partners
    
    
    2,201,383
    
    
    $
    (31,714
    )
    
    
    1,016,911$
    2,221,312
    
    
    $
    (32,034
    )
    
    $
    1,027,182Net income (loss) per limited partnership unit
    
    $
    179.14
    
    
    $
    (2.58
    )
    
    $
    82.84
 See independent auditors report and notes to financial statements. -3-




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STATEMENTS OF PARTNERS EQUITY (DEFICIT)Liquidation Basis SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) General
    
    LimitedPartner
    
    Partners
    
    TotalBalance at January 1, 2001
    
    $
    (29,880
    )
    
    $
    2,123,953
    
    
    $
    2,094,073Net income for the year ended December 31, 2001
    
    
    10,271
    
    
    
    1,016,911
    
    
    
    1,027,182Distributions ($160 per unit)
    
    
    -0-
    
    
    
    (1,984,000
    )
    
    
    (1,984,000
    )Balance at December 31, 2001
    
    
    (19,609
    )
    
    
    1,156,864
    
    
    
    1,137,255Net loss for the year ended December 31, 2002
    
    
    (320
    )
    
    
    (31,714
    )
    
    
    (32,034
    )Distributions ($30 per unit)
    
    
    -0-
    
    
    
    (372,000
    )
    
    
    (372,000
    )Balance at December 31, 2002
    
    
    (19,929
    )
    
    
    753,150
    
    
    
    733,221Net income for the year ended December 31, 2003
    
    
    19,929
    
    
    
    2,201,383
    
    
    
    2,221,312Balance at December 31, 2003
    
    $
    -0-
    
    
    $
    2,954,533
    
    
    $
    2,954,533
 See independent auditors report and notes to financial statements. -4-




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##### Table of Contents



STATEMENTS OF CASH FLOWSLiquidation Basis SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) Year Ended December 312003
    
    2002
    
    2001CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
    
    $
    2,221,312
    
    
    $
    (32,034
    )
    
    $
    1,027,182Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities:Unrealized gain on increase in value of land
    
    
    (2,219,073
    )
    
    
    -0-
    
    
    
    -0-Loss (gain) on sale of land
    
    
    -0-
    
    
    
    1,850
    
    
    
    (1,141,685
    )Proceeds from sale of land, net of escrowed
cash of $412,164 at December 31, 2001
    
    
    -0-
    
    
    
    448,150
    
    
    
    1,408,243Provision for loss on land
    
    
    -0-
    
    
    
    -0-
    
    
    
    140,844(Increase) decrease in extension fees and other
receivables
    
    
    (30,575
    )
    
    
    4,621
    
    
    
    17,630Increase (decrease) in accounts payable and
accrued expenses
    
    
    3,868
    
    
    
    (80,710
    )
    
    
    80,743NET CASH (USED IN) PROVIDED
BY OPERATING ACTIVITIES
    
    
    (24,468
    )
    
    
    341,877
    
    
    
    1,532,957CASH FLOWS FROM FINANCING ACTIVITIESDistributions paid to limited partners
    
    
    -0-
    
    
    
    (372,000
    )
    
    
    (1,984,000
    )DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (24,468
    )
    
    
    (30,123
    )
    
    
    (451,043
    )Cash and cash equivalents at beginning of year
    
    
    53,737
    
    
    
    83,860
    
    
    
    534,903CASH AND CASH EQUIVALENTS
AT END OF YEAR
    
    $
    29,269
    
    
    $
    53,737
    
    
    $
    83,860
 See independent auditors report and notes to financial statements. -5-




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NOTES TO FINANCIAL STATEMENTS SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) December 31, 2003 NOTE ADESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Southeast Acquisitions III, L.P. (a limited Partnership in liquidation) (the
Partnership) is a Delaware limited partnership that was formed to acquire
undeveloped land. The Partnership was formed during November 1988 and received
equity contributions totaling $12,373,480 through the sale of 12,400 limited
partnership units during 1989. The Partnership was originally scheduled to
terminate on December 31, 1999. However, during November 1997, concurrent with
the replacement of the previous general partner, the term of the Partnership
was extended to December 31, 2001. During 1989, the Partnership purchased undeveloped land as follows:
approximately 211 acres in Fulton County, Georgia, approximately 265 acres in
Henry County, Georgia, approximately 24 acres in Nashville, Tennessee,
approximately 48 acres in Fort Myers, Florida, and approximately 51 acres in
Columbia, South Carolina. This land was purchased from an affiliate of the
previous general partner. At December 31, 2002, the Partnerships property
consisted of approximately 104.8 acres of the Fulton County, Georgia land. As
more fully described in Note E, the Partnership closed the sale of this land on
December 31, 2003. The following accounting policies are presented to assist the reader in
understanding the Partnerships financial statements: Basis of Accounting and Liquidation of Partnership: The Partnership has been
operating in liquidation mode since January 1, 2002. At December 31, 2003, the
Partnership was in the process of liquidating since its remaining land was sold
during December 2003. All cash proceeds from the sale were received in January
2004. The accompanying financial statements are presented on the liquidation
basis of accounting. Accordingly, assets are stated at net realizable value,
and liabilities are stated at the amounts expected to be paid during
liquidation, including costs of liquidating the Partnership. It is not
presently determinable whether the amounts that creditors will ultimately
receive will differ from the amounts shown in the accompanying financial
statements; however, any differences are not expected to be material. Upon
full payment of the Partnerships liabilities, all remaining cash will be
distributed to the limited partners. The financial statements as of December 31, 2002 and for the years ended
December 31, 2002 and 2001, as previously issued, were not labeled as being
prepared on the liquidation basis of accounting. However, the notes to those
financial statements contained a statement that no adjustments were necessary
to present the financial statements on the liquidation basis of accounting.
Therefore, no changes have been made to the accompanying financial statements
as of December 31, 2002 and for the years ended December 31, 2002 and 2001 in
order to present them on the liquidation basis of accounting. -6-




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NOTES TO FINANCIAL STATEMENTSContinued SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) NOTE ADESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Continued Land: At December 31, 2003, land held for sale was stated at net realizable
value, which was based on a contract for the sale of that land, more fully
described in Note E, net of related selling costs. In accordance with the
liquidation basis of accounting, the Partnership recorded an unrealized gain of
$2,219,073 during the year ended December 31, 2003 to increase the carrying
value of the land to the net proceeds from that sale of $2,918,750. At December 31, 2002, the Partnerships land was carried net of write-downs to
fair value on the remaining acreage of $1,828,423, less estimated selling
costs. Cumulative original write-downs to fair value on the Fulton County,
Georgia land through December 31, 2002 totaled $3,622,126 and had been
determined by independent appraisals. 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. Write-downs of the lands carrying value that were recorded for
financial statement purposes in previous years are not recognized for income
tax purposes until the land is sold. As more fully described in Note E, the
sale of the Partnerships land on December 31, 2003 was not recognized for
financial statement purposes during the year ended December 31, 2003. However,
the sale was recognized for income tax purposes during the year ended December
31, 2003. Therefore, remaining write-downs of $1,828,423 that had previously
been recognized for financial statement purposes on the Fulton County, Georgia
land were recognized for income tax purposes during the year ended December 31,
2003. Estimates: The preparation of financial statements in conformity with the
liquidation basis of accounting 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 and 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 $94,000 in excess
of federally insured limits. -7-




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NOTES TO FINANCIAL STATEMENTSContinued SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) NOTE BRELATED PARTY TRANSACTIONS During the year ended December 31, 2001, the Partnership paid management fees
of $26,500 to the general partner, as provided for in the amendment to the
partnership agreement that was adopted during November 1997. No management
fees were paid during the years ended December 31, 2003 and 2002 since the
Partnership was operating in liquidation mode. At December 31, 2003 and 2002, the Partnership had commissions payable to its
previous general partner of $3,584. At December 31, 2003, the carrying value
of the Partnerships land had been reduced by commissions of $131,200 that were
paid to the current general partner during January 2004 related to the sale of
the Partnerships remaining land. During the years ended December 31, 2002 and
2001, the Partnership paid commissions to the current general partner related
to the sale of land of $25,000 and $41,250, respectively. 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
$3,022, $2,750 and $2,455, respectively. Accounts payable to the general
partners members totaled $1,613 and $638 at December 31, 2003 and 2002,
respectively. 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:  (a)
    
    Cash DistributionsExcept for distributions in connection with the
liquidation of the Partnership, cash distributions, if any, are to be made
100% to the limited partners until the limited partners have received (i)
a return of their capital contributions ($4,065,337 at December 31, 2003)
plus (ii) cumulative distributions equal to their 10% noncompounded
cumulative annual return on their adjusted capital contributions, as
defined ($13,902,363 at December 31, 2003); thereafter distributions are
to 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.   -8-




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTSContinued SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) NOTE C PARTNERS EQUITYContinued  (b)
    
    Profits and losses are to be allocated as provided in the partnership
agreement. Generally, profits will be allocated 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. In no
event will the general partner be allocated less than 1% of profits or
losses for any year. Upon dissolution and termination of the Partnership, the Partnership agreement
requires the general partner to contribute to the capital of the Partnership an
amount equal to any negative amount in its capital account. Any amount so
contributed is to be distributed to the limited partners in proportion to their
positive capital account balances. The general partner will not be required to
make such a capital contribution upon termination since the general partners
capital account was zero at December 31, 2003. During the years ended December 31, 2002 and 2001, the Partnership paid
distributions to the limited partners of $372,000 and $1,984,000, respectively,
or $30 and $160 per unit, respectively, representing a return of their capital
contributions. No distributions were paid during the year ended December 31,
2003. Cumulative distributions to the limited partners since inception of the
Partnership are expected to total approximately $11,258,000 upon the
termination of the Partnership and payment of final distributions to the
limited partners. Total compensation paid to all persons, including the general partner, upon
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 that it would otherwise be entitled to pursuant to the partnership
agreement. NOTE DEXTENSION FEES AND INTEREST INCOME RELATED TO LAND SALES As more fully described in Note E, during the year ended December 31, 2003, the
Partnership recognized revenues from non-refundable extension fees of $30,000
related to a sales contract that closed during December 2003. During the year ended December 31, 2001, the Partnership received
non-refundable extension fees of $132,534 and interest income of $37,610
related to a sales contract that closed during May 2001.   -9-




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NOTES TO FINANCIAL STATEMENTSContinued SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) NOTE ESUMMARY OF PROPERTY ACTIVITY At December 31, 2003, land consisted of the following: Description
    
    Initial Cost
    
    Carrying Amount
    
    Date Acquired104.8 acres of undeveloped land in
Fulton County, Georgia
    
    $
    2,528,100
    
    
    $
    2,918,750
    
    
    June 1989
 Land activity during the years ended December 31, 2001, 2002 and 2003 consisted
of the following: Balance at January 1, 2001
    
    $
    1,969,243Cost of land sold
    
    
    (678,722
    )Write-down to lower of cost or fair value,
less estimated cost to sell, based on the committed
contract price for land sold during January 2002
    
    
    (140,844
    )Balance at December 31, 2001
    
    
    1,149,677Cost of land sold
    
    
    (450,000
    )Balance at December 31, 2002
    
    
    699,677Increase in value of land, based on sales contract that
closed on December 31, 2003, net of related selling
costs
    
    
    2,219,073Balance at December 31, 2003
    
    $
    2,918,750
 On December 31, 2003, the Partnership closed the sale of its remaining land for
a sales price of $3,250,000. The purchaser provided the Partnership with a
note for the sales proceeds and related extension fees at the closing. On
January 5, 2004, the Partnership received cash of $2,948,750, which consisted
of sales proceeds of $2,918,750, net of closing costs and commissions, and
extension fees of $30,000. In accordance with the liquidation basis of accounting, the Partnership
recorded an unrealized gain of $2,219,073 during the year ended December 31,
2003 to increase the carrying value of its land to net realizable value, based
on the net sales proceeds received during January 2004 of $2,918,750. The
December 31, 2003 sale was not recognized for financial statement purposes
during the year ended December 31, 2003 since the Partnership did not receive a
down payment by December 31, 2003 sufficient to allow recognition of the sale
under Statement of Financial Accounting Standards No. 66, Accounting for Sales
of Real Estate. -10-




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##### Table of Contents



NOTES TO FINANCIAL STATEMENTSContinued SOUTHEAST ACQUISITIONS III, L.P.
(A Limited Partnership in Liquidation) NOTE ESUMMARY OF PROPERTY ACTIVITYContinued There were no liens on the land as of December 31, 2003. At December 31, 2003,
the aggregate carrying value of this land for income tax purposes was $-0-
since the sale that occurred on December 31, 2003 was recognized during the
year ended December 31 2003 for income tax purposes. -11-