SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

COMMISSION FILE NUMBER: 0-17680 (FORMERLY 33-20255)

SOUTHEAST ACQUISITIONS II, L.P.

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

TABLE OF CONTENTS

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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.

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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.

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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.

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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

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     SELECTED QUARTERLY FINANCIAL DATA

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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:

     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

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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.

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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.

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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

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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

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-K
			No 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)

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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.

     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.

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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

Audited Financial Statements

SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode)

December 31, 2003

(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

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BALANCE SHEETS

SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode)

See notes to financial statements.

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STATEMENTS OF OPERATIONS

SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode)

See notes to financial statements.

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STATEMENTS OF PARTNERS’ EQUITY

SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode)

See notes to financial statements.

-4-

STATEMENTS OF CASH FLOWS

SOUTHEAST ACQUISITIONS II, L.P.
(A Limited Partnership Operating in Liquidation Mode)

See notes to financial statements.

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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.

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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:

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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.

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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:

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:

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.

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