-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I+kr4D5Od/sJJEEgBILKlNb9Lbl8nnLlssXWzSiOoesDtdhOsulxhadxkirzlKQh p67bmDjFMMWV9eIGJ2T+LA== 0000950123-03-009488.txt : 20030814 0000950123-03-009488.hdr.sgml : 20030814 20030814154419 ACCESSION NUMBER: 0000950123-03-009488 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REEVES TELECOM LTD PARTNERSHIP CENTRAL INDEX KEY: 0000314741 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 570700063 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09305 FILM NUMBER: 03847435 BUSINESS ADDRESS: STREET 1: 55 BROOKVILLE RD STREET 2: PO BOX 163 CITY: GLEN HEAD STATE: NY ZIP: 11545 BUSINESS PHONE: 5166862201 MAIL ADDRESS: STREET 1: C/O GRACE PROPERTY MANAGEMENT INC STREET 2: P O BOX 163 CITY: GLEN HEAD STATE: NY ZIP: 11545 FORMER COMPANY: FORMER CONFORMED NAME: REEVES TELECOM ASSOCIATES DATE OF NAME CHANGE: 19870608 10-Q 1 y89384e10vq.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 0-9305 REEVES TELECOM LIMITED PARTNERSHIP (name changed from Reeves Telecom Associates) ------------------------------------------------------ (Exact name of registrant as specified in its charter) South Carolina 57-0700063 - ------------------------------- --------------------- (State of other jurisdiction of IRS Employer incorporation or organization) Identification Number c/o Grace Property Management, Inc. 55 Brookville Road Glen Head, New York 11545 ----------------------------------------------------- (Address of principal executive offices and zip code) (516) 686-2201 ---------------------------------------------------- (Registrant's telephone number, including area code) 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 [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] On August 9, 2003, the registrant had outstanding 1,812,062 Partnership units. PART 1. FINANCIAL INFORMATION REEVES TELECOM LIMITED PARTNERSHIP BALANCE SHEETS (Unaudited) June 30, December 31, 2003 2002 ----------- ------------ Assets ------ Cash and cash equivalents $ 710,332 $ 301,924 Prepaid and other current assets -- 18,737 Properties held for sale and property and equipment: Properties held for sale 351,292 354,009 Sales property and equipment, net 151,880 124,889 Country club property and equipment, net -- 442,587 ---------- ---------- Total properties held for sale and property and equipment, net 503,172 921,485 Long term notes receivable 147,757 -- ---------- ---------- Total Assets $1,361,261 $1,242,146 ========== ========== Liabilities and Partners' Capital - --------------------------------- Accounts payable and accrued expenses $ 49,374 $ 83,895 Accrued expenses, affiliates 34,112 54,762 Deposits on contract, net -- 280,245 Long-term debt 106,019 108,282 ---------- ---------- Total Liabilities 189,505 527,184 Partners' capital 1,171,756 714,962 ---------- ---------- Total Liabilities and Partners' Capital $1,361,261 $1,242,146 ========== ========== The accompanying notes are an integral part of these financial statements. REEVES TELECOM LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS AND PARTNERS' CAPITAL FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (Unaudited) 2003 2002 ---------- ---------- Operating revenues: Property sales $ 113,810 $ 253,304 Rental income 4,590 -- Interest income and finance charges 150,933 2,932 Gain on sale of country club 341,221 -- ---------- ---------- 610,554 256,236 ---------- ---------- Operating costs and expenses: Direct costs of property sold 3,423 7,016 Selling, general and administrative expenses 142,227 134,422 Depreciation 4,602 1,245 Interest 3,508 4,894 ---------- ---------- 153,760 147,577 ---------- ---------- Net income 456,794 108,659 Partners' capital at beginning of period 714,962 722,601 ---------- ---------- Partners' capital at end of period $1,171,756 $ 831,260 ========== ========== Income per partnership unit $ 0.25 $ 0.06 ========== ========== Weighted average partnership units issued and outstanding 1,812,062 1,812,062 ---------- ---------- The accompanying notes are an integral part of these financial statements. REEVES TELECOM LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (Unaudited) 2003 2002 --------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 456,794 $ 108,659 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 4,602 1,245 Change in assets and liabilities: Prepaid and other current assets 18,737 (2,728) Property held for sale 2,717 (9,624) Accounts payable and accrued expenses (34,521) (64,562) Gain on sale of country club (net) 14,585 39,848 --------- --------- Net cash provided by operating activities 462,914 72,838 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Increase in sales property & equipment,net (31,593) (1,918) --------- --------- Net cash provided by (used in) investing activities (31,593) (1,918) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of long-term debt (2,263) (2,260) Decrease in accrued expenses, affiliates (20,650) -- --------- --------- Net cash (used in) financing activities (22,913) (2,260) --------- --------- NET INCREASE IN CASH 408,408 68,660 CASH BALANCE - BEGINNING 301,924 296,993 --------- --------- CASH BALANCE - ENDING $ 710,332 $ 365,653 ========= ========= The accompanying notes are an integral part of these financial statements. REEVES TELECOM LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS AND PARTNERS' CAPITAL FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002 (Unaudited) 2003 2002 ----------- ----------- Operating revenues: Property sales $ 85,560 $ 58,045 Rental income 2,295 -- Interest income and finance charges 147,987 1,569 Gain on sale of country club 341,221 -- ----------- ----------- 577,063 59,614 ----------- ----------- Operating costs and expenses: Direct costs of property sold 2,013 2,376 Selling, general and administrative expenses 80,258 68,678 Depreciation 2,301 622 Interest 1,176 2,461 ----------- ----------- 85,748 74,137 ----------- ----------- Net income (loss) 491,315 (14,523) Partners' capital at beginning of period 680,441 845,783 ----------- ----------- Partners' capital at end of period $ 1,171,756 $ 831,260 =========== =========== Income (loss) per partnership unit $ 0.27 $ (0.01) =========== =========== Weighted average partnership units issued and outstanding 1,812,062 1,812,062 ----------- ----------- The accompanying notes are an integral part of these financial statements. REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) NOTE 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month and six month periods ended June 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the consolidated financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2002 as filed with the Securities and Exchange Commission on March 31, 2003. NOTE 2. Liquidity and Going Concern Issues. Cash generated from individual lot sales may not be sufficient to meet future operating costs, debt service and other cash requirements. If the Partnership's cash flow is less than management's expectations, capital programs presently planned may be either postponed, scaled back, or eliminated, and certain operating expenditures may be either deferred or, in the case of payments to the General Partner and its affiliates, accrued. Despite such contingency plans by management, the above mentioned factors indicate that the Partnership may be unable to continue in existence while attempting to complete the sale and liquidation of the Partnership's remaining assets. The Partnership intends to continue to sell lots in the normal course of business as a plan of liquidation and, while no assurances can be given, the Partnership believes the carrying value of the remaining lots is less than their net realizable value. Should the Partnership change its plans from the current longer term liquidation approach to a bulk sale and/or abandonment, the net amount realized could be less than the carrying value which could result in liabilities exceeding the Partnership's assets. The financial statements have been prepared assuming the Partnership will continue as a going concern. NOTE 3. Sale of Fox Squirrel Country Club/The Lakes Country Club and Disposal of Business Segment During the first quarter of 2001, the Partnership completed the sale of the assets of Fox Squirrel Country Club, now known as The Lakes Country Club ("Fox Squirrel/The Lakes") for consideration totaling $862,500, comprised of $150,000 in cash and a note receivable having an initial principal amount of $712,500. Since the cash down payment of $150,000 received by the Partnership REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) represents less than 25% of the total consideration paid for the assets, the transaction has been recorded on the Partnership's financial statements using the deposit method as defined in Statement of Financial Accounting Standard No. 66, "Accounting for Sales of Real Estate" ("SFAS 66"). The deposit method requires, among other things, that until the total cash received by the Partnership from the down payment and subsequent principal payments on the note receivable is at least 25% of the total consideration paid: (a) the sold assets remain on the Partnership's balance sheet as assets held for sale or disposal, (b) cash received from the buyer at closing be shown as a deposit on contract, and (c) payments received from the buyer in respect of the note receivable subsequent to closing be treated as an increase in the deposit. From March 31, 2001 through March 31, 2003, the Partnership recorded the transaction using the deposit method. At March 31, 2003, the assets held by the Partnership covered by the sale agreement were held at a net book value of approximately $442,587. During the second quarter of 2003, the Partnership received an early repayment of principal on the note of $534,748. Since as of the date of such early repayment the Partnership has received in excess of 25% of the total consideration paid for the assets, the transaction has been recorded as a sale of assets on the Partnership's financial statements for the period ended June 30, 2003. The operations of Fox Squirrel/The Lakes prior to the sale are recorded as discontinued operations. During the second quarter of 2003, the Partnership recognized a gain on the sale totaling $341,221. REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) ITEM 2. Management Discussion and Analysis of Financial Condition and Results of Operations. Certain matters discussed herein are forward-looking statements about the business, financial condition and prospects of the Partnership. The actual results could differ materially from those indicated by such forward-looking statements because of various risks and uncertainties. Such risks and uncertainties may include, but are not limited to, regional and national economic conditions, changes in consumer demand for real estate, changes in interest rates and the availability of credit to the Partnership and/or potential purchasers of real estate, and changes in state and federal regulations relating to environmental and health matters. The Partnership cannot control these risks and uncertainties and, in many cases, cannot predict the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. The Partnership undertakes no obligation to publicly update or revise any forward- looking statement, whether as a result of new information, future events or otherwise. During the first quarter of 2001, the Partnership completed the sale of the assets of Fox Squirrel/The Lakes for consideration totaling $862,500, comprised of $150,000 in cash and a note receivable having an initial principal amount of $712,500. Originally, the note bore interest at an annual rate of 9.5%, had a maturity date of March 9, 2004, was collateralized by all of the assets sold to the buyer, and provided for payments of principal and interest as follows: (i) monthly payments of $6,641 from April 9, 2001 up to and including February 9, 2004, and (ii) a final payment of $677,642 on March 9, 2004. During the second quarter of 2003, in connection with the buyer's obtaining financing from a local financial institution (the "Bank"), the terms of the note were modified to provide for an annual interest rate equal to the higher of (i) 8.75% and (ii) 2% over the Bank's prime rate, and the maturity date was extended to June 15, 2008. Assuming that the Bank's prime rate does not exceed 6.75% (meaning that the interest rate on the note remains constant at 8.75%), the note as modified provides for payments of principal and interest as follows: (i) $779 of interest only on July 9, 2003, (ii) monthly payments of $1,371 from August 9, 2003 up to and including July 9, 2008, and (iii) a final payment of $125,459 on July 15, 2008. In addition to the foregoing modifications to the note, the Partnership subordinated its lien priority on the assets sold to the buyer to that of the Bank. In consideration of the foregoing, during the second quarter of 2003, the Partnership received from the buyer an early repayment of principal of $534,748, reducing the unpaid principal amount outstanding under the note to $147,757. Since the cash down payment of $150,000 received by the Partnership during the first quarter of 2001 represents less than 25% of the total consideration paid for the assets, the transaction has been recorded on the Partnership's financial statements using the REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) deposit method as defined in SFAS 66. From March 31, 2001 through March 31, 2003, the Partnership recorded the transaction using the deposit method. At March 31, 2003, the assets held by the Partnership covered by the agreement were held at a net book value of approximately $442,587. Since as of the date of the early repayment of principal to the Partnership of $534,748 the Partnership has received in excess of 25% of the total consideration paid for the assets, the transaction has been recorded as a sale of assets on the Partnership's financial statements for the period ended June 30, 2003. The operations of Fox Squirrel/The Lakes prior to the sale are recorded as discontinued operations. During the second quarter of 2003, the Partnership recognized a gain on the sale totaling $341,221. In connection with the modification of the note's terms as described above, the Partnership and the buyer agreed to a modification of the indemnification agreement relating to certain environmental contamination from an underground storage tank formerly located on the grounds of Fox Squirrel/The Lakes. The indemnification agreement originally provided that the buyer may extend the maturity of the note beyond March 9, 2004 if by that date the Partnership had not completed remediation of such environmental contamination. There was no limitation on the duration of such extension. The agreement as modified provides that the Partnership's indemnification extends to not later than June 17, 2005, even if the North Carolina Department of Environment and Natural Resources has not furnished a closure letter formally stating that no further testing of ground water or remediation is required. Results of Operations --------------------- - REVENUE Revenue from property sales, and the number and type of property sold for the first six months of 2003 and 2002 are set forth in the table below. Six Months Ended June 30, --------------------- 2003 2002 -------- -------- PROPERTY SOLD Boiling Spring Lakes, NC: Individual undeveloped lots 9 10 Commercial land (acres) 3.63 6.30 Other land (acres) 0 20.00 Pimlico Plantation, SC: Individual undeveloped lots 1 0 REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) REVENUE Boiling Spring Lakes, NC: Individual undeveloped lots $ 68,765 $ 93,120 Commercial land 20,500 65,410 Other land 0 94,774 Pimlico Plantation, SC Individual undeveloped lots 24,545 0 -------- -------- Total Revenue $113,810 $253,304 ======== ======== Note: During the first quarter of 2002 the Partnership sold two parcels of undeveloped residential land in Boiling Spring Lakes, totaling 20.00 acres, for an aggregate of $94,774. In management's discussion and analysis in the Partnership's quarterly report on Form 10-Q for the period ended June 30, 2002, such land was included with individual undeveloped lots. In conformance to the table above, such land is listed separately. - Boiling Spring Lakes, NC Generally, the real estate market in Boiling Spring Lakes, NC, which was sluggish for most of 2002, remained so during the first six months of 2003. Despite low interest rates, demand for buildable residential lots remained low compared to 2001 and prior years. While Management believes that the real estate market in the coastal region of North Carolina in general is beginning to experience a recovery, the extent of such recovery, and the effect, if any, on the Partnership, is difficult to predict at this time. Individual Undeveloped Lots - Management attributes the decrease in revenue to a decrease in the number of lots sold, which, in turn, reflects a somewhat slower real estate market in Brunswick County, North Carolina during the first six months of 2003 than in the same period of 2002. The average sales price per lot sold was lower for the first six months of 2003 than for the same period in 2002, which is due principally to the relative mix of lots sold. Lots adjoining or close to the golf course for example, generally sell for more than lots that are not close to the golf course, and lots which are suitable for the installation of individual on-site septic systems generally sell for more than lots which are not suitable for on-site septic systems. Commercial Land - Management attributes the decline in revenue to the fact that some 3 acres were sold during the first six months of 2003, compared to some 6 acres sold in the same period of 2002. The Partnership experiences great volatility in sales from year to year as to revenue and acreage, and often the Partnership records no sales in a fiscal year. The price per acre that the Partnership realizes depends upon numerous factors, including, among others, the size of the tract and its location. REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) Other Land - Management attributes the decline in revenue to the fact that no acreage was sold during the first six months of 2003, whereas some 20 acres were sold in the same period of 2002. The Partnership experiences great volatility in sales from year to year as to revenue and acreage, and often the Partnership records no sales in a fiscal year. The price per acre that the Partnership realizes depends upon numerous factors, including, among others, the size of the tract, its location, and the extent to which portions of the tract are suitable for the installation of individual on-site septic systems. - Pimlico Plantation, SC Management attributes the increase in revenue to the fact that one lot was sold during the first six months of 2003, whereas no lots were sold in the same period of 2002. After such sale, the Partnership no longer owns any land in Pimlico Plantation, SC. - DIRECT COSTS OF PROPERTY SOLD Direct costs of property sold for the first six months of 2003 and 2002 were $3,423 and $7,016, respectively. Management attributes the decrease in costs principally to the lower number of individual undeveloped lots sold, the lower number of acres of commercial land sold, and the lower number of acres of other land sold during the first six months of 2003 than during the same period of 2002. - SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses were $142,227 for the first six months of 2003, compared to $134,422 for the same period of 2002. The principal components of the approximately 6% increase are as follows: - Real estate taxes - a 22% increase in taxes, or $5,295, is due primarily to an increase in assessed values of the Partnership's land in Boiling Spring Lakes following a reassessment for all of Brunswick County, NC. - Accounting and auditing fees - a 561% increase, or $6,669, is due primarily to the timing of receipt of invoices by the Partnership relating to accounting and auditing work. Notwithstanding such increase, Management believes that the total cost for fiscal 2003 will approximate the total cost for fiscal 2002. - State income taxes - During the six months of 2003, the Partnership paid taxes to the State of North Carolina and the State of South Carolina totaling $5,500, whereas no such payments were made during the same period of 2002. Reeves REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) Telecom for Federal income tax purposes is taxed as a partnership; accordingly all income taxes are the responsibility of each partner. However, North Carolina and South Carolina require that Reeves Telecom file a composite return and pay the tax on behalf of the non-resident partners. The sale of the assets of Fox Squirrel/The Lakes was completed on March 9, 2001 and the transaction was recorded as a sale in the Partnership's financial statements on June 30, 2003. During the intervening period, the transaction was recorded using the deposit method as defined in SFAS 66. Accordingly, there are no financial results of operations of Fox Squirrel/The Lakes for the first six months of 2003 or 2002. Inflation has had only a minor impact on the Partnership's operations during the first six months of 2003 and 2002. Capital Resources and Liquidity ------------------------------- Operating activities provided $448,329 of net cash during the first six months of 2003, compared to $32,990 of net cash provided by operating activities during the same period of 2002. The change is primarily attributable to the sale of Fox Squirrel Country Club. Investing activities used net cash of $17,008 during the first six months of 2003, compared to $37,930 provided during the same period of 2002. The change is primarily attributable to the early repayment of principal to the Partnership of $534,748 on the note receivable from the borrower in connection with the sale of the assets of Fox Squirrel/The Lakes. Financing activities used $22,913 of net cash during the first six months of 2003, compared to $2,260 of net cash used during the same period of 2002. Payment of accrued expenses to affiliates and principal payments on long-term debt continue to represent most of the cash uses. During the second quarter of 2003, the Partnership renegotiated the terms of its loan from a local financial institution to provide for a lower interest rate. Effective April 2, 2003, the note has a balance outstanding of $107,038, bears interest at a fixed rate of 5.65%, and provides for equal monthly payments of $1,020 through March 2006. The note matures on April 2, 2006, at which time the remaining principal balance will be due. The Partnership has no other long-term debt. The scheduled payments under the foregoing note after June 30, 2003 are as follows: Rest of 2003 $ 6,122 2004 12,244 2005 12,244 2006 90,302 REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) In August 2003, following the end of the second quarter of 2003, the Partnership elected to repay the existing balance of the note. After giving effect to such repayment, the Partnership has no long- term debt. Off Balance Sheet Arrangements ------------------------------ The Partnership does not utilize off balance sheet arrangements, and there were none during the first six months of 2003 or 2002. ITEM 3. Quantitative and Qualitative Disclosures About Market Risk The Partnership's principal market risk exposure is to changes in interest rates, which are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors beyond the control of the Partnership. Changes in the general level of interest rates can affect the Partnership's revenue from property sales, since the market for real estate in general varies to a large degree upon the level and stability of interest rates. Generally, when interest rates are high or are increasing, the market for real estate declines, and when interest rates are low or are stable, the market for real estate increases. The Partnership does not enter into derivative contracts for its own account to hedge against the risk of changes in interest rates. The Partnership's interest-bearing assets at June 30, 2003 are as follows: - Cash, substantially all of which is deposited at a local financial institution. The interest rate earned on the cash balance is variable. During the second quarter of 2003, cash balances averaged $450,371. - The note receivable from the buyer of the assets of Fox Squirrel/The Lakes. The stated interest rate on the note was 9.5% until June 17, 2003, when the terms of the note were modified to provide, among other things, for an annual interest rate equal to the higher of (i) 8.75% and (ii) 2% over the Bank's prime rate. Subsequent to the modification of the note's terms, the interest rate has not exceeded 8.75%. Had the average level of interest rates during the first six months of 2003 been higher or lower by 100 basis points or one percent (1%), the Partnership would have earned approximately $1,650, more or less, on its cash balances, based upon average quarterly balances. The Partnership's interest-bearing liabilities at June 30, 2003 consist only of long-term debt secured by a mortgage on an improved REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) residential lot purchased in 1999. Such debt is owed to the same institution where the Partnership maintains its cash balances. The interest rate on the outstanding principal amount of the loan was fixed at 8.65% until April 2003, when the Partnership renegotiated the terms of the loan to provide for a fixed interest rate of 5.65%. Since the interest rate on the Partnership's outstanding debt is fixed, there would have been no change in interest expense had the average level of interest rates during the first six months of 2003 been higher or lower by 100 basis points or one percent (1%). ITEM 4. Controls and Procedures Within the 90 day period prior to the filing date of this quarterly report on Form 10-Q, the General Partner, under the direction of John S. Grace and Davis P. Stowell, President and Vice President, respectively, of the General Partner (since the Partnership has no executive officers, Messrs. Grace and Stowell carry out the responsibilities of the chief executive officer and chief financial officer, respectively, of the Partnership), carried out an evaluation of the effectiveness of the design and operation of the Partnership's disclosure controls and procedures as defined in Exchange Act Rules 13a-14(c) and 15(d)-14c. Based upon that evaluation, Messrs. Grace and Stowell concluded that the Partnership's disclosure controls and procedures are effective. There have been no significant changes in the Partnership's internal controls or in other factors that could significantly affect internal controls subsequent to the date that evaluation was carried out. The General Partner intends to periodically evaluate the Partnership's disclosure controls and procedures as required by the Exchange Act Rules. REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) PART II - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits: 31(A) Certification of Quarterly Report by Principal Executive Officer Pursuant to Exchange Act Rules 13a-14 and 15d-14. 31(B) Certification of Quarterly Report by Principal Financial Officer Pursuant to Exchange Act Rules 13a-14 and 15d-14. 32(A) Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350*. 32(B) Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350*. * Exhibits 32(A) and 32(B) are to be treated as "furnished" rather than "filed" as part of this report. (b) No reports were filed on Form 8-K for the quarter ended June 30, 2003. REEVES TELECOM LIMITED PARTNERSHIP JUNE 30, 2003 (Unaudited) SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized. REEVES TELECOM LIMITED PARTNERSHIP By: Grace Property Management Inc. General Partner By: /s/ JOHN S. GRACE ------------------------------ John S. Grace President Dated: August 12, 2003 EX-31.A 3 y89384exv31wa.txt SECTION 302 CERTIFICATION EXHIBIT 31(A) CERTIFICATION I, John S. Grace, President of Grace Property Management, Inc., the general partner of Reeves Telecom Limited Partnership (the "Partnership"), acting in the capacity and carrying out the responsibilities of the chief executive officer of the Partnership, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Reeves Telecom Limited Partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly presents in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes to internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 12, 2003 By: /s/ JOHN S. GRACE ------------------------------ John S. Grace President, acting in the capacity and carrying out the responsibilities of the chief executive officer of Reeves Telecom Limited Partnership EX-31.B 4 y89384exv31wb.txt SECTION 302 CERTIFICATION EXHIBIT 31(B) CERTIFICATION I, Davis P. Stowell, Vice President of Grace Property Management, Inc., the general partner of Reeves Telecom Limited Partnership (the "Partnership"), acting in the capacity and carrying out the responsibilities of the chief financial officer of the Partnership, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Reeves Telecom Limited Partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly presents in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes to internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 12, 2003 By: /s/ DAVIS P. STOWELL ------------------------------ Davis P. Stowell Vice President, acting in the capacity and carrying out the responsibilities of the chief financial officer of Reeves Telecom Limited Partnership EX-32.A 5 y89384exv32wa.txt SECTION 906 CERTIFICATION EXHIBIT 32(A) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350* In connection with the accompanying Quarterly Report on Form 10-Q of Reeves Telecom Limited Partnership (the "Partnership") for the period ended June 30, 2003 (the "Report"), I, John S. Grace, President of Grace Property Management, Inc., the general partner of the Partnership, acting in the capacity and carrying out the responsibilities of the chief executive officer of the Partnership (Principal Executive Officer), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. A signed original of this written statement required by Section 906 has been provided to Reeves Telecom Limited Partnership and will be retained by Reeves Telecom Limited Partnership and furnished to the Securities and Exchange Commission or its staff upon request. Date: August 12, 2003 By: /s/ JOHN S. GRACE ------------------------------ John S. Grace President, acting in the capacity and carrying out the responsibilities of the chief executive officer of Reeves Telecom Limited Partnership EX-32.B 6 y89384exv32wb.txt SECTION 906 CERTIFICATION EXHIBIT 32(B) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350* In connection with the accompanying Quarterly Report on Form 10-Q of Reeves Telecom Limited Partnership (the "Partnership") for the period ended June 30, 2003 (the "Report"), I, Davis P. Stowell, Vice President of Grace Property Management, Inc., the general partner of the Partnership, acting in the capacity and carrying out the responsibilities of the chief financial officer of the Partnership (Principal Financial Officer), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. A signed original of this written statement required by Section 906 has been provided to Reeves Telecom Limited Partnership and will be retained by Reeves Telecom Limited Partnership and furnished to the Securities and Exchange Commission or its staff upon request. Date: August 12, 2003 By: /s/ DAVIS P. STOWELL ------------------------------ Davis P. Stowell Vice President, acting in the capacity and carrying out the responsibilities of the chief financial officer of Reeves Telecom Limited Partnership -----END PRIVACY-ENHANCED MESSAGE-----