SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended June 30, 2003
OR
| ¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
Commission file number 0-18407
WELLS REAL ESTATE FUND III, L.P.
(Exact name of registrant as specified in its charter)
| Georgia | 58-1800833 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
| 6200 The Corners Pkwy. Norcross, Georgia |
30092 | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant’s telephone number, including area code | (770) 449-7800 | |
(Former name, former address, and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No ¨
FORM 10-Q
WELLS REAL ESTATE FUND III, L.P.
(A Georgia Public Limited Partnership)
| Page No. | ||||||||||
| PART I. |
FINANCIAL INFORMATION | |||||||||
| Item 1. | Financial Statements |
|||||||||
| Balance Sheets—June 30, 2003 (unaudited) and December 31, 2002 |
3 | |||||||||
| 4 | ||||||||||
| 5 | ||||||||||
| Statements of Cash Flows for the Six Months Ended June 30, 2003 (unaudited) and 2002 (unaudited) |
6 | |||||||||
| 7 | ||||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | ||||||||
| Item 3. | 16 | |||||||||
| Item 4. | 16 | |||||||||
| PART II. |
OTHER INFORMATION | 17 | ||||||||
2
WELLS REAL ESTATE FUND III, L.P.
(A Georgia Public Limited Partnership)
| (unaudited) | ||||||
| June 30, 2003 |
December 31, 2002 | |||||
| ASSETS: |
||||||
| Cash and cash equivalents |
$ | 2,542,807 | $ | 2,612,963 | ||
| Investments in Joint Ventures |
10,657,804 | 10,722,303 | ||||
| Due from Joint Ventures |
228,202 | 241,190 | ||||
| Prepaid expenses and other assets |
0 | 199 | ||||
| Total assets |
$ | 13,428,813 | $ | 13,576,655 | ||
| LIABILITIES AND PARTNERS’ CAPITAL: |
||||||
| Liabilities: |
||||||
| Accounts payable, accrued expenses and refundable security deposits |
$ | 9,802 | $ | 27,245 | ||
| Partnership distributions payable |
220,905 | 238,320 | ||||
| Total liabilities |
230,707 | 265,565 | ||||
| Partners’ capital: |
||||||
| Limited partners: |
||||||
| Class A—19,635,965 units outstanding as of June 30, 2003 and December 31, 2002 |
13,198,106 | 13,311,090 | ||||
| Class B—2,544,540 units outstanding as of June 30, 2003 and December 31, 2002 |
0 | 0 | ||||
| Total partners’ capital |
13,198,106 | 13,311,090 | ||||
| Total liabilities and partners’ capital |
$ | 13,428,813 | $ | 13,576,655 | ||
See accompanying notes
3
WELLS REAL ESTATE FUND III, L.P.
(A Georgia Public Limited Partnership)
| (unaudited) Three Months Ended |
(unaudited) Six Months Ended |
|||||||||||||||
| June 30, 2003 |
June 30, 2002 |
June 30, 2003 |
June 30, 2002 |
|||||||||||||
| REVENUES: |
||||||||||||||||
| Equity in income (loss) of Joint Ventures (Note 2) |
$ | 187,310 | $ | (35,173 | ) | $ | 391,454 | $ | 21,782 | |||||||
| Interest income |
7,711 | 624 | 11,907 | 3,171 | ||||||||||||
| 195,021 | (34,549 | ) | 403,361 | 24,953 | ||||||||||||
| EXPENSES: |
||||||||||||||||
| Partnership administration |
23,940 | 19,660 | 48,049 | 33,344 | ||||||||||||
| Legal and accounting |
6,894 | 3,126 | 37,156 | 9,748 | ||||||||||||
| Other general and administrative |
2,158 | 2,003 | 3,636 | 4,374 | ||||||||||||
| 32,992 | 24,789 | 88,841 | 47,466 | |||||||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
162,029 | (59,338 | ) | 314,520 | (22,513 | ) | ||||||||||
| DISCONTINUED OPERATIONS: |
||||||||||||||||
| Operating loss |
(2,280 | ) | (58,484 | ) | (3,114 | ) | (100,719 | ) | ||||||||
| Impairment loss |
0 | (373,750 | ) | 0 | (373,750 | ) | ||||||||||
| LOSS FROM DISCONTINUED OPERATIONS |
(2,280 | ) | (432,234 | ) | (3,114 | ) | (474,469 | ) | ||||||||
| NET INCOME (LOSS) |
$ | 159,749 | $ | (491,572 | ) | $ | 311,406 | $ | (496,982 | ) | ||||||
| NET INCOME (LOSS) ALLOCATED TO CLASS A LIMITED PARTNERS |
$ | 159,749 | $ | (491,572 | ) | $ | 311,406 | $ | (496,982 | ) | ||||||
| NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| NET INCOME (LOSS) PER CLASS A LIMITED PARTNER UNIT |
$ | 0.01 | $ | (0.03 | ) | $ | 0.02 | $ | (0.03 | ) | ||||||
| NET LOSS PER CLASS B LIMITED PARTNER UNIT |
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||
| CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT |
$ | 0.01 | $ | 0.00 | $ | 0.02 | $ | 0.00 | ||||||||
See accompanying notes
4
WELLS REAL ESTATE FUND III, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS’ CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2002
AND THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
| Limited Partners |
Total Partners’ Capital |
|||||||||||
| Class A |
Class B |
|||||||||||
| Units |
Amounts |
Units |
Amounts |
|||||||||
| BALANCE, December 31, 2001 |
19,635,965 | $13,979,446 | 2,544,540 | $0 | $13,979,446 | |||||||
| Net loss |
0 | (435,555 | ) | 0 | 0 | (435,555 | ) | |||||
| Partnership distributions |
0 | (232,801 | ) | 0 | 0 | (232,801 | ) | |||||
| BALANCE, December 31, 2002 |
19,635,965 | 13,311,090 | 2,544,540 | 0 | 13,311,090 | |||||||
| Net income |
0 | 311,406 | 0 | 0 | 311,406 | |||||||
| Partnership distributions |
0 | (424,390 | ) | 0 | 0 | (424,390 | ) | |||||
| BALANCE, June 30, 2003 (unaudited) |
19,635,965 | $13,198,106 | 2,544,540 | $0 | $13,198,106 | |||||||
See accompanying notes
5
WELLS REAL ESTATE FUND III, L.P.
(A Georgia Public Limited Partnership)
| (unaudited) | ||||||||
| Six Months Ended |
||||||||
| June 30, 2003 |
June 30, 2002 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income (loss) from continuing operations |
$ | 314,520 | $ | (22,513 | ) | |||
| Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities: |
||||||||
| Equity in income of Joint Ventures |
(391,454 | ) | (21,782 | ) | ||||
| Changes in assets and liabilities: |
||||||||
| Due to affiliates |
0 | 87,720 | ||||||
| Prepaid expenses and other assets |
199 | 121 | ||||||
| Accounts payable, accrued expenses and refundable security deposits |
(17,443 | ) | 1,848 | |||||
| Net cash (used in) provided by continuing operations |
(94,178 | ) | 45,394 | |||||
| Net cash used in discontinued operations |
(3,114 | ) | (11,426 | ) | ||||
| Net cash (used in) provided by operating activities |
(97,292 | ) | 33,968 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Investment in Joint Ventures |
(39,786 | ) | (254,800 | ) | ||||
| Distributions received from Joint Ventures |
508,727 | 466,033 | ||||||
| Net cash provided by investing activities |
468,941 | 211,233 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Partnership distributions paid |
(441,805 | ) | 0 | |||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
(70,156 | ) | 245,201 | |||||
| CASH AND CASH EQUIVALENTS, beginning of period |
2,612,963 | 134,766 | ||||||
| CASH AND CASH EQUIVALENTS, end of period |
$ | 2,542,807 | $ | 379,967 | ||||