UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2012

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: 000-9305

REEVES TELECOM LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)

South Carolina		57-0700063
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

c/o Grace Property Management, Inc. 55 Brookville Road, Glen Head, New York 11545
(Address of principal executive offices, ZIP code)

Registrant’s telephone number, including area code:	(516) 686-2221

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ('232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o¨ Accelerated filer o¨ Non-accelerated filer o¨ Smaller reporting company x (Do not check if a smaller reporting company)

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

REEVES TELECOM LIMITED PARTNERSHIP

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		1
Item 1	Financial Statements	1
	Condensed Balance Sheets at June 30, 2012 (Unaudited) and December 31, 2011	1
	Condensed Balance Sheets at September 30, 2012 (Unaudited) and December 31, 2011	1
	Condensed Statements of Operations and Partners’ Capital for the Three Months Ended June 30, 2012 and 2011 (Unaudited)	2
	Condensed Statements of Operations and Partners’ Capital for the Three Months Ended September30, 2012 and 2011 (Unaudited)	2
	Condensed Statements of Operations and Partners’ Capital for the Six Months Ended June 30, 2012 and 2011 (Unaudited)	3
	Condensed Statements of Operations and Partners’ Capital for the Nine Months Ended September 30, 2012 and 2011 (Unaudited)	3
	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011 (Unaudited)	4
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (Unaudited)	4
	Notes to Condensed Financial Statements (Unaudited)	5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4	Controls and Procedures	24
PART II. OTHER INFORMATION		25
Item 1A	Risk Factors	26
Item 6	Exhibits	26
SIGNATURES		27

[THIS PAGE LEFT BLANK INTENTIONALLY]

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

REEVES TELECOM LIMITED PARTNERSHIP

CONDENSED BALANCE SHEETS

AT ~~JUNE~~SEPTEMBER 30, 2012 AND DECEMBER 31, 2011

	At June 30, 2012		At December 31, 2011
	At September 30, 2012		At December 31, 2011
	(Unaudited)
Assets
Cash and cash equivalents	$	1,~~693~~651,~~818~~813	$	1,935,978
Properties held for sale and property and equipment
Properties held for sale		~~298~~295,~~456~~441		391,197
Property and equipment, net		~~226~~225,~~168~~280		227,939
Other assets		3,350		3,350
Total assets	$	2,~~221~~175,~~792~~884	$	2,558,464
Liabilities and Partners' Capital
Current liabilities
Accounts payable and accrued expenses	$	93120,~~326~~244	$	201,908
Accrued expenses - affiliates		4484,750		44,800
Total current liabilities		~~138~~204,~~076~~994		246,708
Commitments and contingencies
Partners' capital		21,~~083~~970,~~716~~890		2,311,756
Total liabilities and partners' capital	$	2,~~221~~175,~~792~~884	$	2,558,464
The accompanying notes are an integral part of these condensed financial statements.

REEVES TELECOM LIMITED PARTNERSHIP

CONDENSED STATEMENTS OF OPERATIONS AND PARTNERS’ CAPITAL

FOR THE THREE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2012 AND 2011

(Unaudited)

	Three Months Ended June 30,
	Three Months Ended September 30,
	2012			2011
Revenues
Property sales	$	03,967		$	1623,~~939~~811
Interest income		~~187~~166			1,~~045~~899
Other income		0			~~272~~1,311
Total revenues		~~187~~4,133			1827,~~256~~021
Operating expenses
Direct costs of property sold		0255			~~215~~708
Selling, general and administrative expenses		~~111~~115,~~880~~817			~~111~~120,~~965~~913
Depreciation		~~885~~887			~~930~~887
Total operating expenses		~~112~~116,~~765~~959			~~113~~122,~~110~~508
Net loss		(112,~~578~~826	)		(9495,~~854~~487	)
Partners' capital at beginning of period		2,~~196~~083,~~294~~716			2,~~664~~569,~~150~~296
Partners' capital at end of period	$	21,~~083~~970,~~716~~890		$	2,~~569~~473,~~296~~809
Net loss per partnership unit	$	(0.06	)	$	(0.05	)
Weighted average partnership units issued and
outstanding		1,811,062			1,811,062
The accompanying notes are an integral part of these condensed financial statements.

2The accompanying notes are an integral part of these condensed financial statements.

~~REEVES TELECOM LIMITED PARTNERSHIP~~2

~~CONDENSED~~REEVES ~~STATEMENTS OF~~TELECOM ~~OPERATIONS~~LIMITED ~~AND PARTNERS’ CAPITAL~~PARTNERSHIP

~~FOR~~CONDENSED ~~THE~~STATEMENTS ~~SIX MONTHS~~OF ~~ENDED~~OPERATIONS ~~JUNE 30, 2012~~ AND ~~2011~~PARTNERS’ CAPITAL

~~(Unaudited)~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

	Six Months Ended June 30,
	2012			2011
Revenues
Property sales	$	8,850		$	42,867
Interest income		376			2,344
Other income		0			272
Total revenues		9,226			45,483
Operating expenses
Direct costs of property sold		262			2,044
Selling, general and administrative expenses		235,232			226,993
Depreciation		1,772			1,775
Total operating expenses		237,266			230,812
Net loss		(228,040	)		(185,329	)
Partners' capital at beginning of period		2,311,756			2,754,625
Partners' capital at end of period	$	2,083,716		$	2,569,296
Net loss per partnership unit	$	(0.13	)	$	(0.10	)
Weighted average partnership units issued and
outstanding		1,811,062			1,811,062

(Unaudited)

The accompanying notes are an integral part of these condensed financial statements.


	Nine Months Ended September 30,
	2012			2011

Revenues
Property sales	$	12,817		$	66,678
Interest income		542			4,243
Other income		0			1,583
Total revenues		13,359			72,504
Operating expenses
Direct costs of property sold		517			2,752
Selling, general and administrative expenses		351,049			347,906
Depreciation		2,659			2,662
Total operating expenses		354,225			353,320

Net loss		(340,866	)		(280,816	)

Partners' capital at beginning of period		2,311,756			2,754,625

Partners' capital at end of period	$	1,970,890		$	2,473,809

Net loss per partnership unit	$	(0.18	)	$	(0.15	)

Weighted average partnership units issued and
outstanding		1,811,062			1,811,062

3The accompanying notes are an integral part of these condensed financial statements.

~~REEVES TELECOM LIMITED PARTNERSHIP~~3

~~CONDENSED~~REEVES ~~STATEMENTS OF~~TELECOM ~~CASH~~LIMITED ~~FLOWS~~PARTNERSHIP

~~FOR~~CONDENSED ~~THE~~STATEMENTS ~~SIX MONTHS~~OF ~~ENDED~~CASH ~~JUNE 30, 2012 AND 2011~~FLOWS

~~(Unaudited)~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

	Six Months Ended June 30,
	2012			2011
Cash flows from operating activities
Net loss	$	(228,040	)	$	(185,329	)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation		1,772			1,775
Changes in operating assets and liabilities
Prepaid and other current assets		0			7,910
Property held for sale, net		92,740			2,044
Accounts payable and accrued expenses		(108,582	)		(76,394	)
Accrued expenses - affiliates		(50	)		0
Net cash used in operating activities		(242,160	)		(249,994	)
Cash flows from investing activities
Purchase of investments		0			(490,000	)
Proceeds from sale of investments		0			1,255,000
Increase in other assets, net		0			(500	)
Net cash provided by investing activities		0			764,500
Net increase in cash and cash equivalents		(242,160	)		514,506
Cash and cash equivalents - beginning of period		1,935,978			458,956
Cash and cash equivalents - end of period	$	1,693,818		$	973,462
The accompanying notes are an integral part of these condensed financial statements.

(Unaudited)

	Nine Months Ended September 30,
	2012			2011
Cash flows from operating activities
Net loss	$	(340,866	)	$	(280,816	)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation		2,659			2,662
Changes in operating assets and liabilities
Prepaid and other current assets		0			9,126
Property held for sale, net		95,756			2,752
Accounts payable and accrued expenses		(81,664	)		(45,438	)
Accrued expenses - affiliates		39,950			0
Net cash used in operating activities		(284,165	)		(311,714	)
Cash flows from investing activities
Purchase of investments		0			(490,000	)
Proceeds from sale of investments		0			2,135,000
Increase in other assets, net		0			(3,350	)
Net cash provided by investing activities		0			1,641,650

Net increase in cash and cash equivalents		(284,165	)		1,329,936
Cash and cash equivalents - beginning of period		1,935,978			458,956
Cash and cash equivalents - end of period	$	1,651,813		$	1,788,892

The accompanying notes are an integral part of these condensed financial statements.

~~REEVES TELECOM LIMITED PARTNERSHIP~~4

~~NOTES~~REEVES TOTELECOM ~~CONDENSED~~LIMITED ~~FINANCIAL STATEMENTS~~PARTNERSHIP

~~(Unaudited)~~NOTES TO CONDENSED FINANCIAL STATEMENTS

~~1. Nature of Operations~~(Unaudited)

~~On May 17, 1979, the stockholders of Reeves Telecom Corporation (the “Corporation”) approved a plan of liquidation (the “Plan”) for the Corporation and its subsidiaries~~1. ~~The Plan, which was determined by the Internal Revenue Service to~~ ~~qualify~~Nature ~~as a Section 337 liquidation, authorized the Corporation’s Board~~ of Directors to sell the Corporation’s assets and distribute any remaining unsold assets to its stockholders and/or a liquidation trust. On May 8, 1980, stockholders at a special meeting approved an amendment to the Plan whereby assets not sold within one year of the date the Plan was approved could be transferred, at the discretion of the Board of Directors, from the Corporation to a South Carolina limited partnership which would undertake to sell the remaining assets on behalf of the stockholders. Pursuant to the Plan, the Corporation sold all of its broadcasting assets and substantially all of the land held for development and sale at one of its two land development locations and distributed to its stockholders cash of $0.90 per share on February 29, 1980 and $2.30 per share on May 14, 1980. On May 15, 1980, the Corporation was liquidated and all of its unsold assets and liabilities were transferred to Reeves Telecom Associates, a South Carolina limited partnership (“us”, “we”, or the “Partnership”). Stockholders of the Corporation received one partnership unit in exchange for each share of common stock. The units are not listed on any national securities exchange. In January 1987, pursuant to a change in South Carolina law, the Partnership’s legal name was changed from Reeves Telecom Associates to Reeves Telecom Limited Partnership.Operations

~~The remaining~~On ~~assets~~May of17, 1979, the stockholders ~~Partnership~~of ~~are~~Reeves ~~primarily:~~Telecom Corporation (athe “Corporation”) ~~approximately~~approved ~~817~~a ~~acres~~plan of ~~land~~liquidation ~~held~~(the “Plan”) for ~~sale~~the Corporation and ~~some~~its ~~related~~subsidiaries. ~~assets~~The (Plan, which was determined by the Internal Revenue Service to qualify as a Section ~~“Property”)~~337 ~~within~~liquidation, authorized the ~~City~~Corporation’s Board of ~~Boiling~~Directors ~~Spring~~to ~~Lakes,~~sell ~~North~~the ~~Carolina~~Corporation’s ~~(the~~assets ~~“City”),~~and distribute any remaining unsold assets to its stockholders and/or ~~(b)~~a ~~cash~~liquidation trust. ~~The~~On ~~Property is~~May ~~all~~8, ~~that~~1980, ~~remains~~stockholders ~~from~~at a ~~14,000-acre~~special ~~development~~meeting inapproved an ~~Brunswick~~amendment ~~County,~~to ~~North~~the ~~Carolina~~Plan ~~that~~whereby assets not sold within one year of the date the Plan was ~~begun~~approved incould ~~1962~~be bytransferred, at the discretion of the Board of Directors, from the Corporation. to a South Carolina limited partnership which would undertake to sell ~~The~~the ~~cash~~remaining ~~was~~assets ~~generated~~on ~~primarily~~behalf ~~from~~of ~~real~~the ~~estate~~stockholders. ~~sales~~Pursuant to the Plan, ~~including~~the Corporation sold all of its broadcasting assets and substantially all of the land held for development and sale at one of aits ~~golf~~two ~~club during~~land ~~the~~development ~~first~~locations ~~quarter~~and distributed to its stockholders cash of ~~2001~~$0.90 per share on February 29, 1980 and $2.30 per share on May 14, 1980. On May 15, 1980, the Corporation ~~Upon~~was ~~any~~liquidated ~~sales~~and all of ~~the~~its ~~remaining~~unsold assets and liabilities were transferred to Reeves Telecom Associates, ~~the~~a ~~Partnership~~South ~~may~~Carolina ~~acquire~~limited partnership ~~additional~~(“us”, ~~properties~~“we”, or ~~make~~the ~~distributions~~“Partnership”). toStockholders of the ~~partners.~~Corporation received one partnership unit in exchange for each share of common stock. The ~~Partnership~~units ~~currently~~are ~~has~~not nolisted ~~intent~~on any national securities exchange. In January 1987, pursuant to ~~acquire~~a ~~additional~~change ~~properties~~in ~~but~~South isCarolina ~~not~~law, ~~precluded~~the Partnership’s legal name was changed from ~~doing~~Reeves soTelecom Associates to Reeves Telecom Limited Partnership.

The ~~Partnership~~ ~~intends~~remaining toassets of ~~continue~~the toPartnership ~~sell~~are ~~land~~primarily: in(a) ~~the~~approximately ~~normal~~817 ~~course~~acres of ~~business~~land ~~and,~~held ~~while~~for nosale ~~assurances~~and ~~can~~some berelated ~~given,~~assets (the ~~Partnership~~“Property”) ~~believes~~within the ~~carrying~~City ~~value~~ of Boiling Spring Lakes, North Carolina (the “City”), and (b) cash. The Property is ~~less~~all ~~than~~that ~~its~~remains from ~~net~~a ~~realizable~~14,000-acre ~~value.~~development ~~Nevertheless~~in Brunswick County, ~~should~~North Carolina that was begun in 1962 by the ~~Partnership~~Corporation. ~~elect~~The cash was generated toprimarily ~~effect~~from areal ~~bulk~~estate sales, including the sale ~~and/or~~of ~~abandonment~~a golf club during the first quarter of 2001. Upon any sales of the remaining assets, the ~~net~~Partnership ~~amount~~may ~~realized~~acquire ~~could~~additional beproperties ~~less~~or ~~than~~make distributions to the ~~carrying~~partners. ~~value~~The Partnership currently has no intent to acquire additional properties but is not precluded from doing so.

The Partnership intends to continue to sell land in the normal course of business and, while no assurances can be given, the Partnership’s ~~General~~believes ~~Partner~~the iscarrying value ~~Grace~~of the Property ~~Management~~is less than its net realizable value. Nevertheless, ~~Inc~~should the Partnership elect to effect a bulk sale and/or abandonment, the net amount realized could be less than the carrying value.

5The Partnership’s General Partner is Grace Property Management, Inc.

~~REEVES TELECOM LIMITED PARTNERSHIP~~5

~~NOTES~~REEVES TOTELECOM ~~CONDENSED~~LIMITED ~~FINANCIAL STATEMENTS~~PARTNERSHIP

~~(Unaudited)~~NOTES TO CONDENSED FINANCIAL STATEMENTS

~~2. Summary of Significant Accounting Policies~~(Unaudited)

a2. ~~Basis~~Summary of ~~presentation~~Significant - The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). 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 of the Partnership’s results of operations and financial condition have been included. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. For further information, refer to the financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011 as filed with the SEC on March 30, 2012.Accounting Policies

a. Basis of presentation - The accompanying unaudited condensed financial statements have been prepared ~~using~~in accordance with accounting principles generally accepted in the ~~accrual~~United ~~basis~~States of America (“U.S. GAAP”) for interim financial information and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. ~~The~~In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the Partnership’s ~~assets~~results of operations and financial condition have been ~~written~~included. ~~down~~Operating results for the nine months ended September 30, ~~from~~2012 ~~time~~are tonot ~~time~~necessarily indicative of the results that may be expected for the year ending December 31, 2012. For further information, refer to ~~reflect~~the ~~their~~financial ~~fair~~statements ~~values~~and ~~based~~notes ~~upon~~thereto ~~appraisals~~included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011 as filed with the SEC on March 30, 2012.

~~b. Estimates -~~ The ~~preparation~~accompanying ofunaudited condensed financial statements inhave ~~conformity~~been ~~with~~prepared ~~U.S.~~using ~~GAAP requires management to make estimates and assumptions that affect~~ the ~~amount~~accrual basis of ~~assets~~accounting. ~~and~~The ~~liabilities~~Partnership’s ~~and disclosure of contingent~~ assets ~~and~~have ~~liabilities~~been atwritten ~~the~~down, ~~date~~from oftime ~~the~~to ~~financial~~time, ~~statements~~to ~~and~~reflect ~~the~~their ~~reported~~fair ~~amounts~~values ofbased ~~revenues~~upon ~~and expenses during the reporting period~~appraisals. ~~Actual results could differ from those estimates.~~

cb. ~~Property~~Estimates ~~sales~~ - ~~Property~~The ~~sales~~preparation ~~represent~~of ~~primarily~~financial ~~individual~~statements ~~building~~in ~~lots~~conformity ~~and~~with ~~other~~U.S. ~~undeveloped~~GAAP ~~land~~requires ~~sold~~management ~~for~~to ~~cash~~make estimates and ~~may~~assumptions ~~from~~that ~~time~~affect ~~to time represent~~ the ~~gross~~amount ~~sales price~~ of ~~residential~~assets ~~houses~~and ~~built~~liabilities orand ~~acquired~~disclosure byof ~~the~~contingent ~~Partnership~~assets ~~for~~and ~~resale.~~liabilities ~~The revenue from these sales is recognized~~ at the ~~closing~~ date unless a deferral is required pursuant to The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-20, “Real Estate Sales.” Land cost included in direct costs of ~~property sold represents~~ the ~~proportionate~~financial ~~amount~~statements ofand the ~~total~~reported ~~initial~~amounts ~~project costs, after recorded valuation allowances, based on the sales value~~ of ~~the~~revenues ~~land~~and ~~sold~~expenses toduring the ~~total~~reporting ~~estimated~~period. ~~project~~Actual ~~sales~~results ~~value~~could ~~plus~~differ ~~the~~from ~~value~~those ~~of any capital improvements made subsequent to the initial project costs~~estimates.

dc. ~~Properties~~Property ~~held~~sales ~~for~~- ~~sale~~Property ~~and~~sales ~~property~~represent primarily individual building lots and ~~equipment~~other -undeveloped ~~Property~~land sold for cash and ~~equipment~~may ~~are~~from ~~stated~~time atto ~~cost~~time ~~less~~represent ~~accumulated~~the ~~depreciation.~~gross ~~Depreciation~~sales price of residential houses built or acquired by the Partnership for ~~financial~~resale. ~~reporting~~The ~~purposes~~revenue from these sales is ~~calculated~~recognized onat the ~~straight~~closing date unless a deferral is required pursuant to The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-~~line~~20, ~~basis~~“Real ~~over~~Estate ~~the~~Sales.” ~~estimated~~Land ~~useful~~cost ~~lives~~included in direct costs of 8property tosold 40represents ~~years~~the ~~for~~proportionate ~~buildings~~amount ~~and~~of 5the tototal 20initial ~~years~~project ~~for~~costs, ~~equipment~~after ~~and~~recorded valuation allowances, based on the sales value of the land sold to the total estimated project sales value plus the value of any capital improvements made subsequent to the initial project costs.

6d. Properties held for sale and property and equipment - Property and equipment are stated at cost less accumulated depreciation. Depreciation for financial reporting purposes is calculated on the straight-line basis over the estimated useful lives of 8 to 40 years for buildings and 5 to 20 years for equipment and land improvements.

~~REEVES TELECOM LIMITED PARTNERSHIP~~6

~~NOTES~~REEVES TOTELECOM ~~CONDENSED~~LIMITED ~~FINANCIAL STATEMENTS~~PARTNERSHIP

~~(Unaudited)~~NOTES TO CONDENSED FINANCIAL STATEMENTS

Properties held for sale generally represent undeveloped lots for which depreciation expense is not recorded. The Partnership assesses the realizability of the carrying value of its properties held for sale and related buildings and equipment whenever events or changes in circumstance indicate that impairment may have occurred in accordance with the provisions of ASC 360-10-35-21, “When to Test a Long-Lived Asset for Recoverability.” The Partnership’s assets have been written down, from time to time, to reflect their fair values based upon appraisals.(Unaudited)

e.Properties ~~Significant~~held ~~concentrations~~for ofsale ~~credit~~generally ~~risk~~represent -undeveloped ~~The~~lots ~~Federal~~for ~~Deposit~~which ~~Insurance~~depreciation ~~Corporation~~expense ~~(“FDIC”),~~is annot ~~independent~~recorded. ~~agency~~The ofPartnership assesses the ~~United~~realizability ~~States~~of ~~government,~~the ~~insures~~carrying ~~bank~~value ~~deposits~~of upits toproperties ~~$250,000~~held ~~per~~for ~~depositor,~~sale ~~per~~and ~~bank,~~related ~~subject~~buildings toand ~~certain~~equipment ~~conditions.~~whenever Inevents ~~addition,~~or ~~effective~~changes ~~from~~in ~~December~~circumstance ~~31,~~indicate ~~2010~~that ~~through~~impairment ~~December~~may ~~31,~~have ~~2012,~~occurred ~~the FDIC insures all bank deposits~~ in ~~noninterest~~accordance ~~bearing~~with ~~transaction~~the ~~accounts,~~provisions ~~such~~of asASC ~~checking accounts~~360-10-35-21, ~~without~~“When ~~limitation as~~ to ~~amount.~~Test Ina ~~the~~Long-Lived ~~event~~Asset ~~that~~for ~~any~~Recoverability.” ~~bank~~The ~~where the~~ Partnership’s ~~holds~~assets ~~funds~~have ~~becomes~~been ~~insolvent~~written down, ~~the~~from ~~Partnership may lose some or all of any excess over FDIC-insured limits held at that bank. From~~ time to time, ~~the~~to ~~Partnership~~reflect ~~has~~their ~~had,~~fair ~~and~~values inbased ~~the~~upon ~~future may have, cash balances at its principal bank in excess of FDIC-insured amounts~~appraisals.

e. Significant concentrations of credit risk - The ~~Securities~~Federal ~~Investor~~Deposit ~~Protection~~Insurance Corporation (“~~SIPC~~FDIC”), aan ~~non-profit~~independent ~~corporation~~agency ~~set~~of ~~up and funded by~~ the ~~brokerage~~United ~~industry~~States government, insures ~~investors’~~bank ~~accounts~~deposits ~~at member brokerage firms~~ up to $~~500~~250,000 per ~~investor~~depositor, per bank, subject to certain conditions,. inIn ~~the event that a member brokerage firm goes bankrupt~~addition, ~~and~~effective ~~cash and securities are missing~~ from ~~customer~~December ~~accounts. The SIPC provides for supplementing the recovery by customers of a failed brokerage firm by up to $500~~31,~~000~~ ~~per~~2010 ~~customer,~~through ~~including~~December ~~up to $250~~31,~~000~~ ~~for cash claims. Typically~~2012, ~~most or all of~~ the ~~Partnership’s~~FDIC ~~funds~~insures ~~held~~all atbank ~~its~~deposits ~~brokerage firm are invested~~ in ~~brokered~~noninterest ~~certificates~~bearing oftransaction ~~deposit~~accounts, ~~each~~such ofas ~~which~~checking ~~is fully insured by the FDIC~~accounts, ~~although,~~without atlimitation ~~times~~as ~~significant~~to ~~amounts held at the brokerage firm have not been, and in the future may not be, invested in FDIC-insured certificates of deposit~~amount. In the event ~~the~~that ~~brokerage~~any ~~firm~~bank where the Partnership ~~maintains~~holds ~~its~~funds ~~accounts~~ becomes insolvent ~~or amounts in the Partnership’s accounts are lost or go missing due to fraud or otherwise~~, the Partnership may lose some or all of ~~such~~any excess over ~~SIPC~~FDIC-insured ~~amounts~~limits toheld ~~the~~at ~~extent~~ that ~~the~~bank. ~~Partnership’s~~From ~~accounts~~time ~~are~~to ~~not~~time, ~~invested~~the inPartnership ~~FDIC-insured~~has ~~certificates~~had, ofand ~~deposit.~~in Atthe ~~June~~future ~~30,~~may ~~2012~~have, ~~the~~cash ~~Partnership~~balances ~~had~~at noits ~~account~~principal ~~balances~~bank in excess of ~~SIPC~~FDIC-insured amounts.

f.The ~~Cash~~Securities ~~and~~Investor ~~cash~~Protection ~~equivalents~~Corporation (“SIPC”), a non-profit ~~For~~corporation ~~purposes~~set ofup and funded by the ~~statements~~brokerage ofindustry, ~~cash~~insures ~~flows~~investors’ accounts at member brokerage firms up to $500,000 per investor, subject to certain conditions, in the ~~Partnership~~event ~~considers~~that ~~cash~~a member brokerage firm goes bankrupt, and cash ~~equivalents~~and assecurities ~~cash~~are onmissing ~~hand~~from customer accounts. The SIPC provides for supplementing the recovery by customers of a failed brokerage firm by up to $500,000 per customer, including up to $250,000 for cash ~~deposited~~claims. inTypically, ~~financial~~most ~~institutions~~or ~~(other~~all ~~than~~of the Partnership’s funds held at its brokerage firm are invested in brokered certificates of deposit), ~~money~~each ~~market~~of ~~accounts~~which is fully insured by the FDIC, although, at times significant amounts held at the brokerage firm have not been, and ~~U.S.~~in ~~Treasury~~the ~~securities~~future ~~with~~may ~~maturities~~not be, invested in FDIC-insured certificates of ~~less~~deposit. ~~than~~In 91the ~~days~~event atthe brokerage firm where the ~~date~~Partnership maintains its accounts becomes insolvent or amounts in the Partnership’s accounts are lost or go missing due to fraud or otherwise, the Partnership may lose some or all of ~~purchase.~~such ~~Cash~~excess ~~equivalents~~over SIPC-insured amounts to the extent that the Partnership’s accounts are ~~stated~~not atinvested ~~cost~~in FDIC-insured certificates of deposit. At September 30, ~~which~~2012, ~~approximates~~the ~~market~~Partnership ~~value~~had no account balances in excess of SIPC-insured amounts.

7f. Cash and cash equivalents - For purposes of the statements of cash flows, the Partnership considers cash and cash equivalents as cash on hand, cash deposited in financial institutions (other than certificates of deposit), money market accounts, and U.S. Treasury securities with maturities of less than 91 days at the date of purchase. Cash equivalents are stated at cost, which approximates market value.

~~REEVES TELECOM LIMITED PARTNERSHIP~~7

~~NOTES~~REEVES TOTELECOM ~~CONDENSED~~LIMITED ~~FINANCIAL STATEMENTS~~PARTNERSHIP

~~(Unaudited)~~NOTES TO CONDENSED FINANCIAL STATEMENTS

g. Short-term investments - From time to time, the Partnership has invested in certificates of deposit issued by various financial institutions. These certificates of deposit were designated as held to maturity and were reported at their cost, which was not materially different from their fair market value. The Partnership held some short-term investments during the six months ended June 30, 2011. The Partnership held no short-term investments during the six months ended June 30, 2012.(Unaudited)

hg. ~~Impairment of long~~Short-~~lived~~term ~~assets~~investments - ~~The~~From ~~Partnership’s~~time ~~long-lived~~to ~~assets~~time, ~~primarily~~the ~~real~~Partnership ~~estate~~has ~~held~~invested ~~for~~in ~~sale,~~certificates ~~are~~of ~~carried~~deposit atissued ~~cost~~by ~~unless~~various ~~circumstances~~financial ~~indicate~~institutions. ~~that~~These ~~the~~certificates ~~carrying value~~ of ~~the~~deposit ~~assets~~were ~~may~~designated ~~not~~as beheld ~~recoverable.~~to ~~The~~maturity ~~Partnership~~and ~~obtains~~were anreported ~~appraisal~~at oftheir ~~the Property periodically (typically~~cost, ~~every~~which ~~two years). The most recent appraisal~~ was ~~dated~~not asmaterially ofdifferent ~~December~~from ~~31,~~their ~~2011.~~fair ~~Management~~market ~~evaluates the carrying~~ value. ofThe ~~the~~Partnership ~~Property~~held ~~based~~short-term oninvestments ~~the~~at ~~latest~~various ~~appraisal~~times atduring the ~~time~~nine ~~the~~months ~~appraisal~~ended isSeptember ~~received~~30, ~~and periodically thereafter~~2011. ~~Based~~The ~~upon Management’s latest evaluation, the~~ Partnership ~~does~~held ~~not~~no ~~expect~~short-term toinvestments ~~reduce~~during the ~~carrying~~nine ~~value~~months ofended ~~the~~September ~~Property~~30, ~~in the near future~~2012.

~~The Partnership~~h. ~~applies~~Impairment ~~a valuation allowance to land if such land is unsuitable for the installation~~ of anlong-lived ~~individual~~assets ~~septic~~- ~~system as~~The ~~determined~~Partnership’s bylong-lived ~~testing conducted by the local health department or~~assets, inprimarily ~~the~~real ~~absence~~estate ofheld ~~such~~for ~~testing~~sale, asare ~~determined~~carried byat ~~the~~cost ~~Partnership based~~unless ~~upon~~circumstances ~~topography.~~indicate ~~Land~~ that the ~~Partnership~~carrying ~~believes~~value toof ~~be suitable for~~ the ~~installation~~assets ~~of an individual septic system based upon topography~~ may, bynot ~~subsequent testing,~~ be ~~determined to be unsuitable~~recoverable. ~~More~~The ~~typically, land that the~~ Partnership ~~believes to~~obtains bean ~~unsuitable~~appraisal ~~for~~of ~~septic~~the ~~based~~Property ~~upon~~periodically ~~topography may~~(typically, byevery ~~subsequent~~two ~~testing, be determined to be suitable~~years). The ~~valuation~~most ~~allowance is~~recent ~~allocated among the land held for sale only following each periodic~~ appraisal, ~~while~~was ~~the~~dated ~~determination of a particular lot or parcel of land~~ as ~~being suitable or unsuitable for septic may be made at any time prior to the sale~~ of ~~such~~December ~~land~~31, 2011. ~~Since~~Management ~~the direct~~evaluates ~~cost of land sold is net of~~ the ~~applicable~~carrying ~~valuation~~value ~~allowance, the direct cost~~ of ~~a lot or parcel of land that~~ the ~~Partnership believes~~Property tobased ~~be suitable for septic that,~~ on the ~~basis~~latest ofappraisal ~~testing,~~at ~~is subsequently determined to be unsuitable may, therefore, exceed~~ the ~~sales~~time ~~price of such land, in which case~~ the ~~Partnership~~appraisal ~~would~~is ~~realize~~received aand ~~loss~~periodically ~~on the sale of such land~~thereafter. ToBased ~~the~~upon ~~best of~~ Management’s ~~knowledge~~latest evaluation, the Partnership ~~has~~does ~~never~~not ~~realized~~expect ~~such a loss due~~ to ~~the~~reduce ~~unsuitability of land for septic, and if such a loss or losses were to occur, Management believes that~~ the ~~aggregate~~carrying ~~amount~~value of ~~such~~the ~~losses~~Property ~~would~~in ~~not materially affect~~ the ~~Partnership’s~~near ~~financial condition or results from operations~~future.

8The Partnership applies a valuation allowance to land if such land is unsuitable for the installation of an individual septic system as determined by testing conducted by the local health department or, in the absence of such testing, as determined by the Partnership based upon topography. Land that the Partnership believes to be suitable for the installation of an individual septic system based upon topography may, by subsequent testing, be determined to be unsuitable. More typically, land that the Partnership believes to be unsuitable for septic based upon topography may, by subsequent testing, be determined to be suitable. The valuation allowance is allocated among the land held for sale only following each periodic appraisal, while the determination of a particular lot or parcel of land as being suitable or unsuitable for septic may be made at any time prior to the sale of such land. Since the direct cost of land sold is net of the applicable valuation allowance, the direct cost of a lot or parcel of land that the Partnership believes to be suitable for septic that, on the basis of testing, is subsequently determined to be unsuitable may, therefore, exceed the sales price of such land, in which case the Partnership would realize a loss on the sale of such land. To the best of Management’s knowledge, the Partnership has never realized such a loss due to the unsuitability of land for septic, and if such a loss or losses were to occur, Management believes that the aggregate amount of such losses would not materially affect the Partnership’s financial condition or results from operations.

~~REEVES TELECOM LIMITED PARTNERSHIP~~8

~~NOTES~~REEVES TOTELECOM ~~CONDENSED~~LIMITED ~~FINANCIAL STATEMENTS~~PARTNERSHIP

~~(Unaudited)~~NOTES TO CONDENSED FINANCIAL STATEMENTS

~~The amount of the valuation allowance at June 30, 2012 and December 31, 2011 is $534,785 and $535,243, respectively.~~(Unaudited)

~~i. Fair value measurements -~~ The amount ~~Partnership~~of ~~adopted~~the ~~FASB~~valuation ~~ASC~~allowance ~~820,~~at ~~“Fair~~September ~~Value Measurements and Disclosures”. FASB ASC 820 defines fair value~~30, ~~establishes~~2012 ~~a framework for measuring fair value~~ and ~~expands~~December ~~the related disclosure requirements. The statement indicates~~31, ~~among~~2011 ~~other~~is ~~things~~$534,388 ~~that~~and ~~a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or~~$535, ~~in the absence of a principal market~~243, ~~the most advantageous market for the asset or liability based upon an exit price model~~respectively.

ji. ~~Recent~~Fair ~~accounting~~value ~~pronouncements~~measurements –- InThe ~~May~~Partnership ~~2011,~~adopted ~~the~~ FASB ~~issued~~ASC ~~Accounting Standards Update (“ASU”) No. 2011-04~~820, “Fair Value ~~Measurement~~Measurements ~~(Topic~~and ~~820):~~Disclosures”. ~~Amendments~~FASB toASC ~~Achieve~~820 ~~Common~~defines ~~Fair~~fair ~~Value~~value, ~~Measurement~~establishes ~~and~~a ~~Disclosure~~framework ~~Requirements~~for inmeasuring ~~U.S.~~fair ~~GAAP~~value and ~~IFRS.~~expands ~~Effective~~the ~~for~~related ~~periods~~disclosure ~~beginning~~requirements. ~~after~~The ~~December~~statement 15indicates, ~~2011,~~among ~~ASU~~other ~~No.~~things, ~~2011-04~~that ~~clarifies how~~ a ~~principal~~fair ~~market~~value ismeasurement ~~determined,~~assumes ~~addresses~~that the ~~fair~~transaction ~~value~~to ~~measurement~~sell ofan ~~instruments~~asset ~~with offsetting market~~ or ~~counterparty~~transfer ~~credit~~a ~~risks~~liability ~~and~~occurs in the ~~concept~~principal ofmarket ~~valuation~~for ~~premise~~the ~~and~~asset ~~highest~~or ~~and~~liability ~~best use~~or, ~~extends~~in the ~~prohibition~~absence ~~on blockage factors to all three levels~~ of ~~the~~a ~~fair~~principal ~~value hierarchy~~market, ~~and requires additional disclosures. ASU No. 2011-04 applies only to~~ the ~~Partnership’s~~most ~~disclosures,~~advantageous ifmarket ~~any,~~for ~~related to~~ the ~~fair~~asset ~~value~~or ofliability ~~assets~~based ~~and~~upon ~~liabilities~~an ~~and~~exit ~~has~~price ~~not had a significant impact on the Partnership’s footnote disclosures~~model.

~~All other~~j. ~~new~~Recent ~~and~~accounting ~~recently~~pronouncements ~~issued~~– In May 2011, ~~but~~the ~~not~~FASB ~~yet~~issued ~~effective~~Accounting Standards Update (“ASU”) No. 2011-04, ~~accounting~~Fair ~~pronouncements~~Value ~~have~~Measurement ~~been~~(Topic ~~deemed~~820): Amendments to beAchieve ~~not~~Common ~~relevant~~Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. Effective for periods beginning after December 15, 2011, ASU No. 2011-04 clarifies how a principal market is determined, addresses the fair value measurement of instruments with offsetting market or counterparty credit risks and the concept of valuation premise and highest and best use, extends the prohibition on blockage factors to all three levels of the ~~Partnership~~ fair value hierarchy, and ~~therefore~~requires ~~are~~additional ~~not~~disclosures. ~~expected~~ASU No. 2011-04 applies only to ~~have~~the Partnership’s disclosures, if any, related to the fair value of assets and liabilities and has not had a significant impact ~~once~~on ~~adopted~~the Partnership’s footnote disclosures.

3.All other ~~Commitments~~new and ~~Contingent~~recently ~~Liabilities~~issued, but not yet effective, accounting pronouncements have been deemed to be not relevant to the Partnership and therefore are not expected to have any impact once adopted.

~~Dam~~3. ~~Repairs~~Commitments and Contingent Liabilities

~~The~~Dam Partnership is responsible for the maintenance and repair of a dam within the City. Since 2001, the Partnership has spent approximately $185,000 to maintain and repair the dam. The Partnership intends to deed the dam to the City, but the City requires certain additional repairs before accepting ownership. There can be no assurance that the City will not require the Partnership to perform yet additional work on the dam or that the City will accept title upon the completion of such work. Further, the Partnership believes that damage to the dam, which could occur during a hurricane or a flood, before the transfer of title could result in significant repair costs in addition to those required by the City. The Partnership has made no provision in the financial statements related to this contingent liability.Repairs

9The Partnership is responsible for the maintenance and repair of a dam within the City. Since 2001, the Partnership has spent approximately $185,000 to maintain and repair the dam. The Partnership intends to deed the dam to the City, but the City requires certain additional repairs before accepting ownership. There can be no assurance that the City will not require the Partnership to perform additional work on the dam or that the City will accept title upon the completion of such work. Further, the Partnership believes that damage to the dam, which could occur during a hurricane or a flood, before the transfer of title could result in significant repair costs in addition to those required by the City. The Partnership has made no provision in the financial statements related to this contingent liability.

~~REEVES TELECOM LIMITED PARTNERSHIP~~9

~~NOTES~~REEVES TOTELECOM ~~CONDENSED~~LIMITED ~~FINANCIAL STATEMENTS~~PARTNERSHIP

~~(Unaudited)~~NOTES TO CONDENSED FINANCIAL STATEMENTS

~~Commitment for Municipal Water Service~~(Unaudited)

~~The~~Commitment City began to phase in municipal water service, including to certain portions of the Property, in 2004. The most recent expansion of the water distribution system was completed in January 2011. The Partnership has paid a total of $136,500 for ~~water~~Municipal ~~assessments from~~Water 2004 through 2011. The Partnership capitalized each assessment by increasing the cost basis of the land affected by the phase of the water system to which the assessment relates. The most recent assessment, $49,500 paid in 2009 and 2010, was based upon a formula that allowed adjoining lots to be aggregated into a group and counted as one lot for assessment purposes. The manner in which this assessment was originally structured provided that, in the event that the Partnership were to sell some, but not all, of the lots that were aggregated into a group, an additional assessment might have to be paid by the Partnership with respect to such lots at the time the sale of such lots is closed. The Partnership has made no provision in the financial statements related to this contingent liability. The Partnership believes that the transfer of the municipal water system and refund of a portion of assessments paid described below may eliminate some or all of this contingent liability.Service

InThe City began to phase ~~May~~in ~~2010~~municipal water service, ~~the~~including ~~City~~to ~~transferred~~certain ~~ownership~~portions of the ~~municipal~~Property, ~~water~~in ~~system~~2004. toThe ~~Brunswick~~most ~~County~~recent inexpansion ~~exchange~~of ~~for~~ the ~~County’s~~water distribution ~~construction~~system ofwas acompleted ~~wastewater~~in ~~collection~~January ~~system~~2011. ~~within~~The Partnership has paid a ~~portion~~total of ~~the~~$136,500 ~~City~~for water assessments from 2004 through 2011. The AsPartnership acapitalized ~~condition~~each ofassessment ~~the~~by ~~transfer,~~increasing the ~~City~~cost ~~retained~~ basis of the ~~cash~~land ~~surplus~~affected inby the ~~municipal~~phase of the water system to which the assessment ~~fund~~relates. InThe ~~March~~most ~~2012~~recent assessment, ~~the~~$49,500 ~~City~~paid ~~began~~in to2009 ~~refund~~and ~~the~~2010, ~~cash~~was ~~surplus~~based toupon ~~eligible~~a formula that allowed ~~property~~adjoining ~~owners,~~lots ~~including~~to ~~the~~be ~~Partnership,~~aggregated ~~who~~into ~~had~~a ~~previously~~group ~~paid~~and ~~water~~counted ~~assessments~~as one lot for assessment purposes. The ~~Partnership~~manner ~~received~~in ~~refunds~~which ~~totaling~~this assessment ~~$82,126~~was ~~through~~originally ~~June~~structured ~~30,~~provided ~~2012~~that, orin ~~87% of~~ the ~~$94,200~~event that the Partnership ~~expects~~were to ~~receive.~~sell ~~The~~some, ~~actual~~but ~~amount~~not all, of ~~additional~~the lots that were ~~refunds~~aggregated tointo bea ~~received~~group, ~~may~~an beadditional ~~more~~assessment ormight ~~less~~have ~~than~~to be paid by the Partnership ~~presently~~with ~~expects.~~respect ~~Each~~to ~~refund~~such ~~check~~lots ~~identifies~~at the ~~lot(s) or~~time ~~tract(s)~~the sale of ~~land~~such tolots ~~which~~is ~~the~~closed. ~~refund~~The ~~applies.~~Partnership ~~During~~has made no provision in the ~~first~~financial ~~and~~statements ~~second~~related ~~quarters~~to ofthis ~~2012,~~contingent ~~the~~liability. The Partnership ~~reduced~~believes that the ~~cost~~transfer ~~basis~~ of the ~~lots~~municipal towater ~~which~~system ~~the~~and ~~$82,126~~refund ~~relates.~~of ~~The~~a ~~Partnership~~portion ~~has~~of ~~made~~assessments nopaid ~~provision~~described below inmay ~~the~~eliminate ~~financial~~some ~~statements~~or ~~for~~all ~~refunds~~of ~~received after~~this ~~June~~contingent ~~30, 2012~~liability.

~~Most of~~In May 2010, the ~~Property~~City transferred ~~still~~ownership ~~lacks~~of the municipal water ~~service.~~system Into Brunswick County in exchange for the ~~event~~County’s construction of ~~future~~a ~~expansion~~wastewater collection system within a portion of the ~~water~~City. ~~distribution~~As ~~system~~a condition of the transfer, athe ~~significant~~City retained the cash surplus in the municipal ~~portion~~water ofassessment fund. In March 2012, the ~~cost~~City ofbegan ~~that~~to ~~expansion~~refund the cash surplus to ~~any~~eligible ~~portion~~property ofowners, including the ~~Property~~Partnership, who ~~must~~had bepreviously ~~borne~~paid bywater ~~the~~assessments. The Partnership orreceived byrefunds ~~subsequent~~totaling ~~purchasers~~$82,126 through September 30, 2012, or 87% of the ~~affected~~$94,200 ~~land~~that the Partnership expects to receive. The ~~Partnership~~actual ~~has~~amount ~~made~~of noadditional ~~provision~~refunds into be received may be more or less than the ~~financial~~Partnership ~~statements~~presently ~~for~~expects. ~~future~~Each ~~assessments~~refund ~~related~~check identifies the lot(s) or tract(s) of land to ~~any~~which the refund applies. ~~additional~~During ~~expansion~~the first and second quarters of 2012, the ~~municipal~~Partnership ~~water~~reduced ~~system~~the cost basis of the lots to which the ~~Property~~$82,126 relates. There were no refunds received by the Partnership during the third quarter of 2012. The Partnership has made no provision in the financial statements for refunds received after September 30, 2012.

10Most of the Property still lacks municipal water service. In the event of future expansion of the water distribution system, a significant portion of the cost of that expansion to any portion of the Property must be borne by the Partnership or by subsequent purchasers of the affected land. The Partnership has made no provision in the financial statements for future assessments related to any additional expansion of the municipal water system to the Property.

~~REEVES TELECOM LIMITED PARTNERSHIP~~10

~~NOTES~~REEVES TOTELECOM ~~CONDENSED~~LIMITED ~~FINANCIAL STATEMENTS~~PARTNERSHIP

~~(Unaudited)~~NOTES TO CONDENSED FINANCIAL STATEMENTS

~~Commitment for Municipal Sewer Service~~(Unaudited)

~~The~~Commitment ~~City lacks municipal sewer service. In May 2010, the City transferred ownership of the municipal water system to Brunswick County in exchange~~ for ~~the~~Municipal ~~County’s~~Sewer construction of a wastewater collection system within a portion of the City. A significant portion of the costs of the sewer system must be borne by property owners who will benefit from the sewer system. The County’s plans for the first phase of municipal sewer service involve sewer lines for the commercial area that runs along a stretch of State Road 87, the main road into and out of the City. The Partnership owns approximately 219 acres of land zoned or intended for commercial use and most of that land fronts on State Road 87. In August 2011, the Partnership learned that the County is pursuing detailed cost and financing analyses of two plans:Service

•The ~~installing~~City lacks municipal sewer service. In May 2010, the City transferred ownership of the municipal water system to Brunswick County in exchange for the County’s construction of a wastewater collection system within a portion of the City. A significant portion of the costs of the sewer system must be borne by property owners who will benefit from the sewer system. The County’s plans for the first phase of municipal sewer service involve sewer lines for the commercial area that runs along a ~~all~~stretch of State Road 87, ~~that~~the ~~lies~~main ~~within~~road into and out of the City,. ~~with~~The aPartnership ~~total~~owns ~~preliminary~~approximately ~~cost~~231.75 ~~estimate~~acres of ~~approximately~~land ~~$3.4~~zoned or ~~million,~~intended for commercial use and most of that land fronts on State Road 87.

•In ~~installing~~September ~~sewer~~2012, the ~~lines~~County ~~along~~determined ~~most~~that ~~but~~it ~~not~~will install sewer lines along all of State Road 87 that lies within the City, with a total preliminary cost estimate of approximately $13.54 million, and has decided to assess at $4,489 per acre the cost of the sewer lines to the property owners, including but not limited to the Partnership, who will benefit from the sewer lines. The Partnership’s estimated future assessment will be $1,040,338, based on 231.75 acres. The Partnership believes that the sewer lines should be completed by the end of 2013, though there can be no assurance that construction will be commenced or completed as or when planned, that the actual cost will not differ significantly from what is currently contemplated, or that assessments of the property owners, including but not limited to the Partnership, whose land will stand to benefit from the sewer lines will not differ significantly from current estimates. If the Partnership were to sell any land intended to benefit from sewer lines prior to the Partnership being assessed, of which there can be no assurance, the selling price of that land would likely be reduced by the anticipated amount of such assessment. The Partnership expects to capitalize any such assessment paid by it by increasing the cost basis of the land held for sale.

The County has not yet determined which of the two plans will be undertaken, nor has the County determined what method will be used to allocate the cost of the sewer lines to the property owners, including but not limited to the Partnership, who will benefit from the sewer lines. Depending upon the final construction cost, the financing structure used by the County to fund the sewer lines, and the method used to allocate the cost to property owners, the Partnership may face total assessments for the sewer lines ranging from $184,000 to $750,000 if the shorter sewer line plan is adopted and from $1 million to $1.9 million if the longer sewer line plan is adopted. The Partnership believes that the sewer lines should be completed by the end of 2013, though there can be no assurance that construction will be commenced or completed as or when planned, that the actual cost will not differ significantly from what is currently contemplated, or that assessments of the property owners, including but not limited to the Partnership, whose land will stand to benefit from the sewer lines will not differ significantly from current estimates. If the Partnership were to sell any land intended to benefit from sewer lines prior to the Partnership being assessed, of which there can be no assurance, the selling price of that land would likely be reduced by the anticipated amount of such assessment. The Partnership expects to capitalize any such assessment paid by it by increasing the cost basis of the land held for sale. At this time, the Partnership cannot estimate the amount of any such assessments that the Partnership might face, nor can it predict when such assessments will be due. Accordingly, the Partnership has made no provision in the financial statements related to this contingent liability.11

11REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES~~NOTES ~~TELECOM~~TO ~~LIMITED~~CONDENSED ~~PARTNERSHIP~~FINANCIAL STATEMENTS

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~(Unaudited)

~~(Unaudited)~~Environmental Matters

~~Environmental~~The Partnership is ~~Matters~~subject to various federal, state, and local laws, ordinances, and regulations regarding environmental matters. The Partnership may be required to investigate and clean up hazardous or toxic substances or petroleum product releases on land currently or formerly owned by it, and may be liable to a governmental entity or to third parties for property damage and the cost of investigation, removal, and decontamination incurred by such parties. The penalty may be imposed whether or not the Partnership was aware of, or responsible for, the hazardous or toxic substances, and the liability under such laws has been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of responsibility. The cost of investigation, removal, and decontamination of substances could be substantial. If such substances are found on the Property, or there is a failure to properly remove or decontaminate the affected land, the affected land and, possibly, nearby land could be difficult to sell, rent, or develop. Some environmental laws create a lien on a contaminated site in favor of the government for damages and costs it incurs in connection with such contamination. Also, the Partnership may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site. As of the date of this report, the Partnership is not aware of any environmental matters that would have a material effect on the financial statements and, accordingly, the Partnership has accrued no liabilities in these financial statements. However, it is at least reasonably possible that such matters may exist at the date of this report, and the effect on the Partnership and these financial statements could be substantial. The Partnership has made no provision in the financial statements related to this contingent liability.

~~The~~Endangered ~~Partnership~~/ isProtected subject to various federal, state, and local laws, ordinances, and regulations regarding environmental matters. The Partnership may be required to investigate and clean up hazardous or toxic substances or petroleum product releases on land currently or formerly owned by it, and may be liable to a governmental entity or to third parties for property damage and the cost of investigation, removal, and decontamination incurred by such parties. The penalty may be imposed whether or not the Partnership was aware of, or responsible for, the hazardous or toxic substances, and the liability under such laws has been interpreted to be joint and several unless the harm is divisible and there is a reasonable basis for allocation of responsibility. The cost of investigation, removal, and decontamination of substances could be substantial. If such substances are found on the Property, or there is a failure to properly remove or decontaminate the affected land, the affected land and, possibly, nearby land could be difficult to sell, rent, or develop. Some environmental laws create a lien on a contaminated site in favor of the government for damages and costs it incurs in connection with such contamination. Also, the Partnership may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site. As of the date of this report, the Partnership is not aware of any environmental matters that would have a material effect on the financial statements and, accordingly, the Partnership has accrued no liabilities in these financial statements. However, it is at least reasonably possible that such matters may exist at the date of this report, and the effect on the Partnership and these financial statements could be substantial. The Partnership has made no provision in the financial statements related to this contingent liability.Species

~~Endangered~~Some sections of the /City, ~~Protected~~including ~~Species~~but not limited to portions of the Property, and the surrounding area are known or believed to be the habitat of various species of flora and fauna which have been identified as endangered or protected species. Development of the Property is subject to various laws and regulations intended to limit disturbance of endangered and protected species.

~~Some sections~~The ofRed-cockaded ~~the~~Woodpecker (Picoides ~~City,~~borealis) ~~including~~is ~~but~~one ~~not~~endangered ~~limited~~species known to inhabit portions of the Property, and the surrounding area. ~~are~~During 2006, ~~known~~the orU.S. ~~believed~~Fish and Wildlife Service (“Fish and Wildlife”) undertook certain initiatives to be preserve the habitat of ~~various~~the ~~species~~endangered ofwoodpecker. ~~flora~~Subsequently, the City and ~~fauna~~Fish ~~which~~and ~~have~~Wildlife ~~been~~determined ~~identified~~the aslocation ~~endangered~~of known or ~~protected~~suspected ~~species~~nesting or foraging areas, and the City limits the issuance of building permits within such areas. ~~Development~~The Partnership believes that not more than approximately 200 acres, or approximately 24%, of the Property ismay ~~subject~~be affected by restrictions on building relating to ~~various~~the Red-cockaded ~~laws~~Woodpecker, although the amount of the Partnership’s land affected could increase under certain circumstances. Management believes that the Partnership’s land sales will continue to be adversely affected by these restrictions until the City has developed and ~~regulations~~implemented ~~intended~~a conservation plan to ~~limit~~protect ~~disturbance~~the habitat of ~~endangered~~the Red-cockaded Woodpecker or until other means of addressing the concerns of Fish and ~~protected~~Wildlife ~~species~~can be implemented.

The Red-cockaded Woodpecker (Picoides borealis) is one endangered species known to inhabit portions of the Property and the surrounding area. During 2006, the U.S. Fish and Wildlife Service (“Fish and Wildlife”) undertook certain initiatives to preserve the habitat of the endangered woodpecker. Subsequently, the City and Fish and Wildlife determined the location of known or suspected nesting or foraging areas, and the City limits the issuance of building permits within such areas. The Partnership believes that not more than approximately 200 acres, or approximately 24%, of the Property may be affected by restrictions on building relating to the Red-cockaded Woodpecker, although the amount of the Partnership’s land affected could increase under certain circumstances. Management believes that the Partnership’s land sales will continue to be adversely affected by these restrictions until the City has developed and implemented a conservation plan to protect the habitat of the Red-cockaded Woodpecker or until other means of addressing the concerns of Fish and Wildlife can be implemented.12

12REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES~~NOTES ~~TELECOM~~TO ~~LIMITED~~CONDENSED ~~PARTNERSHIP~~FINANCIAL STATEMENTS

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~(Unaudited)

~~(Unaudited)~~The Partnership has not made any representations or warranties to buyers of land as to the restrictions, if any, that may be imposed due to the Red-cockaded Woodpecker, to any other endangered or protected species, or to protected or endangered species generally. Nevertheless, it is reasonably possible that one or more such buyers may seek compensation from the Partnership or seek rescission of their purchase of land from the Partnership, owing to the presence of protected or endangered species on or near the land or to restrictions on issuing building permits designed to preserve the habitat of protected or endangered species, preventing such buyer from utilizing the land in the manner intended. If any litigation is instituted seeking compensation or rescission due to endangered and protected species, the Partnership believes that it would prevail, although no such assurances can be given, but the cost of defending such litigation could be substantial. As of the date of this report, there is no pending litigation, and the Partnership is not aware of any potential claims or actions relating to these matters. The Partnership has made no provision in the financial statements related to this contingent liability.

~~The Partnership~~Water ~~has~~Level ~~not made any representations or warranties to buyers~~ of ~~land as to the restrictions, if any, that may be imposed~~ due to the Red-cockaded Woodpecker, to any other endangered or protected species, or to protected or endangered species generally. Nevertheless, it is reasonably possible that one or more such buyers may seek compensation from the Partnership or seek rescission of their purchase of land from the Partnership, owing to the presence of protected or endangered species on or near the land or to restrictions on issuing building permits designed to preserve the habitat of protected or endangered species, preventing such buyer from utilizing the land in the manner intended. If any litigation is instituted seeking compensation or rescission due to endangered and protected species, the Partnership believes that it would prevail, although no such assurances can be given, but the cost of defending such litigation could be substantial. As of the date of this report, there is no pending litigation, and the Partnership is not aware of any potential claims or actions relating to these matters. The Partnership has made no provision in the financial statements related to this contingent liability.Lakes

~~Water~~Many of the lakes in ~~Level~~the City have one or more dams to retain water. The Partnership believes that the lakes are recreational and scenic attractions to potential buyers of ~~Lakes~~land within the Property. The Partnership’s ability to sell land at its asking prices would be adversely affected if the water level in the lakes were to be substantially below normal for any length of time. Due to drought or near drought conditions for much of 2007, nearly all the lakes in the City, including Boiling Spring Lake, the City’s largest lake, had a water level substantially below normal. As a result of these conditions, sinkholes developed in the bed of Boiling Spring Lake. Remedial measures taken by the City solved the issue of the sinkholes; however, the lack of normal rainfall prevented the water level in the lakes, including Boiling Spring Lake, from returning to approximately normal levels for some time after the remedial measures were taken. The water level in most of the lakes, including Boiling Spring Lake, has since returned to approximately normal. Low water levels in the lakes could occur again in the future due to protracted drought conditions, damage to one or more dams, or intentional lowering of the water level to enable work to be performed on one or more dams. The City has preliminary plans to construct a new spillway for the dam retaining Boiling Spring Lake. The work is tentatively scheduled for 2014 or 2015 but may occur earlier. Should that work take place, which is not assured, the water level in that lake may be intentionally lowered during the construction period, and it is possible that, once the construction is completed, lack of rainfall may cause the water level in Boiling Spring Lake to remain lower than normal for a protracted period of time.

Many of the lakes in the City have one or more dams to retain water. The Partnership believes that the lakes are recreational and scenic attractions to potential buyers of land within the Property. The Partnership’s ability to sell land at its asking prices would be adversely affected if the water level in the lakes were to be substantially below normal for any length of time. Due to drought or near drought conditions for much of 2007, nearly all the lakes in the City, including Boiling Spring Lake, the City’s largest lake, had a water level substantially below normal. As a result of these conditions, sinkholes developed in the bed of Boiling Spring Lake. Remedial measures taken by the City solved the issue of the sinkholes; however, the lack of normal rainfall prevented the water level in the lakes, including Boiling Spring Lake, from returning to approximately normal levels for some time after the remedial measures were taken. The water level in most of the lakes, including Boiling Spring Lake, has since returned to approximately normal. Low water levels in the lakes could occur again in the future due to protracted drought conditions, damage to one or more dams, or intentional lowering of the water level to enable work to be performed on one or more dams. The City has preliminary plans to construct a new spillway for the dam retaining Boiling Spring Lake. The work is tentatively scheduled for 2014 or 2015 but may occur earlier. Should that work take place, which is not assured, the water level in that lake may be intentionally lowered during the construction period, and it is possible that, once the construction is completed, lack of rainfall may cause the water level in Boiling Spring Lake to remain lower than normal for a protracted period of time.13

13REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES~~NOTES ~~TELECOM~~TO ~~LIMITED~~CONDENSED ~~PARTNERSHIP~~FINANCIAL STATEMENTS

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~(Unaudited)

~~(Unaudited)~~The Partnership has not made any representations or warranties to buyers of land as to the water level in the lakes or in any particular lake. Nevertheless, it is reasonably possible that one or more of such buyers may seek compensation from the Partnership or seek rescission of their purchase of land from the Partnership, owing to the water level in one or more of the lakes being substantially below normal for a protracted period of time. If any litigation is instituted seeking compensation or rescission, the Partnership believes that it would prevail, although no such assurances can be given, but the cost of defending such litigation could be substantial. As of the date of this report, there is no pending litigation, and the Partnership is not aware of any potential claims or actions relating to these matters. The Partnership has made no provision in the financial statements related to this contingent liability.

~~The Partnership~~Building has not made any representations or warranties to buyers of land as to the water level in the lakes or in any particular lake. Nevertheless, it is reasonably possible that one or more of such buyers may seek compensation from the Partnership or seek rescission of their purchase of land from the Partnership, owing to the water level in one or more of the lakes being substantially below normal for a protracted period of time. If any litigation is instituted seeking compensation or rescission, the Partnership believes that it would prevail, although no such assurances can be given, but the cost of defending such litigation could be substantial. As of the date of this report, there is no pending litigation, and ~~the Partnership~~ isMaintaining ~~not aware of any potential claims or actions relating to these matters. The Partnership has made no provision in the financial statements related to this contingent liability.~~Roads

~~Building~~The Partnership is responsible for maintaining certain roads, most of which are unpaved, and ~~Maintaining~~certain ~~Roads~~road rights-of-way within the City. The Partnership no longer owns any land on some of these roads. The Partnership may complete some or all of the roads, but there is no contractual obligation to do so. The Partnership has not set aside any money or entered into any bond, escrow, or trust agreement to assure completion of the roads. It may be difficult or impossible for the Partnership to sell lots it owns on uncompleted roads. The City will not assume any road that is not paved with asphalt, and the City need not assume any paved road. Accordingly, unless and until the Partnership completes a road and has it paved with asphalt, and the road has been assumed by the City, the Partnership will be responsible for maintaining such road and the right-of-way, whether or not the Partnership still owns land on such road. Since 2001, the Partnership has spent approximately $193,000 for rocking and paving roads.

The ~~Partnership~~ isfailure ~~responsible~~by ~~for~~the Partnership ~~maintaining~~to ~~certain~~provide ~~roads,~~proper ~~most~~maintenance of ~~which~~the ~~are~~roads ~~unpaved,~~ and ~~certain road~~ rights-of-way ~~within~~which ~~the City.~~have ~~The~~not ~~Partnership~~been noassumed ~~longer~~by ~~owns~~the ~~any~~City ~~land~~may onsubject ~~some of these roads. The~~ the Partnership ~~may~~to ~~complete~~risk ~~some or all~~ of ~~the~~litigation ~~roads,~~from ~~but there~~persons isadversely noaffected ~~contractual~~by ~~obligation~~such ~~to do so~~failure. ~~The~~If ~~Partnership~~such ~~has~~litigation ~~not~~were ~~set~~to ~~aside~~be ~~any money or entered into any bond~~initiated, ~~escrow, or trust agreement to assure completion of~~ the ~~roads. It may be difficult or impossible for the~~ Partnership to ~~sell~~believes ~~lots~~that it ~~owns~~would onprevail, ~~uncompleted~~but ~~roads. The City will not assume any road~~ that isthe ~~not~~cost ~~paved~~of ~~with~~defending ~~asphalt, and~~ the ~~City~~ ~~need~~case ~~not~~could ~~assume~~be ~~any paved road. Accordingly~~substantial, ~~unless~~ and ~~until~~should the Partnership ~~completes a road and has it paved~~ ~~with~~not ~~asphalt~~prevail, ~~and~~ the ~~road~~cost ~~has~~of ~~been~~building ~~assumed~~any ~~by the City, the Partnership will be responsible for maintaining~~ such road ~~and~~could ~~the right-of-way,~~be ~~whether~~substantial. The ~~or not the~~ Partnership ~~still~~has ~~owns~~made ~~land~~no onprovision ~~such~~in ~~road. Since 2001,~~ the ~~Partnership has spent approximately~~financial ~~$193,000~~statements ~~for~~related ~~rocking~~to ~~and~~this ~~paving~~contingent ~~roads~~liability.

The failure by the Partnership to provide proper maintenance of the roads and rights-of-way which have not been assumed by the City may subject the Partnership to risk of litigation from persons adversely affected by such failure. If such litigation were to be initiated, the Partnership believes that it would prevail, but that the cost of defending the case could be substantial, and should the Partnership not prevail, the cost of building any such road could be substantial. The Partnership has made no provision in the financial statements related to this contingent liability.14

14REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES~~NOTES ~~TELECOM~~TO ~~LIMITED~~CONDENSED ~~PARTNERSHIP~~FINANCIAL STATEMENTS

~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~(Unaudited)

~~(Unaudited)~~4. Related Party Transactions

4The General Partner is entitled to receive from the Partnership a general partner’s fee. The amount of the general partner’s ~~Related~~fee ~~Party~~for ~~Transactions~~the three months and nine months ended September 30, 2012 was $40,000 and $120,000, respectively. The amount of the general partner’s fee for the three months and nine months ended September 30, 2011 was $40,000 and $120,000. At September 30, 2012, the Partnership accrued $80,000 for general partner’s fees due but not yet paid.

The Partnership pays rent to an affiliate of the General Partner isfor ~~entitled~~office tospace ~~receive~~located ~~from~~at ~~the~~55 ~~Partnership~~Brookville aRoad, ~~general~~Glen ~~partner’s~~Head, New ~~fee~~York. The amount of ~~the~~rent ~~general partner’s fee~~ for the three months and ~~six~~nine months ended ~~June~~September 30, 2012 was $404,~~000~~ 750 and $8014,~~000~~250, respectively. The amount of ~~the~~rent ~~general partner’s fee~~ for the three months and ~~six~~nine months ended ~~June~~ September 30, 2011 was $404,~~000~~750 and $8014,~~000~~250, respectively. At ~~June~~September 30, 2012, the Partnership accrued $404,~~000~~750 for ~~general~~rent ~~partner’s fees~~ due but not yet paid.

The Partnership ~~pays rent to an affiliate of~~ reimburses the General Partner ~~for~~and ~~office~~its ~~space~~president ~~located~~for atout-of-pocket 55expenses ~~Brookville~~incurred ~~Road,~~by ~~Glen~~them ~~Head,~~on ~~New~~behalf ~~York~~of the Partnership. The amount of ~~rent~~out-of-pocket expenses subject to reimbursement incurred and paid for the three months and ~~six~~nine months ended ~~June~~ September 30, 2012 was $~~4,750~~149 and $91,~~500~~070, respectively. The amount of ~~rent~~ out-of-pocket expenses subject to reimbursement incurred and paid for the three months and six months ended ~~June~~September 30, 2011 was $~~4,750~~0 and $9207,~~500,~~ respectively. ~~At June 30, 2012, the Partnership accrued $4,750 for rent due but not yet paid.~~

~~The Partnership~~ [THE ~~reimburses~~REST ~~the~~OF ~~General~~THIS ~~Partner~~PAGE ~~and~~IS its president for out-of-pocket expenses incurred by them on behalf of the Partnership. The amount of out-of-pocket expenses subject to reimbursement incurred and paid for the three months and six months ended June 30, 2012 was $1,021 and $1,021, respectively. The amount of out-of-pocket expenses subject to reimbursement incurred and paid for the three months and six months ended June 30, 2011 was $0 and $207, respectively.BLANK]

~~[THE REST OF THIS PAGE IS BLANK]~~15

15REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES~~Item ~~TELECOM~~2. ~~LIMITED~~Management’s ~~PARTNERSHIP~~Discussion and Analysis of Financial Condition and Results of Operations

~~Item~~ As 2.used ~~Management’s~~herein, the ~~Discussion~~terms “we,” “us,” and ~~Analysis~~“our” ofrefer ~~Financial~~to ~~Condition~~Reeves Telecom Limited Partnership, a South Carolina limited partnership. As used herein, the terms “management,” “our general partner,” and ~~Results~~“General ofPartner” refer ~~Operations~~to Grace Property Management, Inc., a Delaware corporation, and/or its successors or additional general partners, as the context requires.

~~As used~~The ~~herein,~~following ~~the~~discussion should ~~terms~~be ~~“we,”~~read ~~“us,”~~in ~~and~~conjunction ~~“our”~~with ~~refer~~the tocondensed ~~Reeves~~financial ~~Telecom~~statements ~~Limited~~and ~~Partnership, a~~notes ~~South~~appearing ~~Carolina~~elsewhere ~~limited~~in ~~partnership~~this report. AsHistorical results ~~used herein, the terms “management,” “our general partner,”~~ and ~~“General~~ ~~Partner”~~trends ~~refer~~which tomight ~~Grace~~appear ~~Property~~in ~~Management,~~the ~~Inc.,~~condensed afinancial ~~Delaware~~statements ~~corporation,~~should ~~and/or~~not ~~its~~be ~~successors~~interpreted ~~or additional general partners,~~ as ~~the~~being ~~context~~indicative ~~requires~~of future operations.

~~The following~~Special ~~discussion~~Note ~~should~~on beForward-Looking read in conjunction with the condensed financial statements and notes appearing elsewhere in this report. Historical results and trends which might appear in the condensed financial statements should not be interpreted as being indicative of future operations.Statements

~~Special~~In addition to historical ~~Note~~information, this Quarterly Report on ~~Forward~~Form 10-~~Looking~~Q ~~Statements~~contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable securities laws. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in those laws and include this statement for purposes of complying with these safe harbor provisions. These forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, achievements, or events, and may contain forward-looking words or phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “project,” “should,” “strategies,” “will,” “will be,” “will continue,” “will likely result,” and similar terms and their negatives that convey uncertainty of future events or outcomes. These statements represent our (including the General Partner’s) beliefs, expectations, intentions, and plans, and, as such, are not guarantees of future outcomes or future performance, and are subject to risks and uncertainties that are beyond our control and could cause our actual results to differ materially from those reflected in the forward-looking statements.

InReaders are cautioned ~~addition~~not to ~~historical~~place ~~information,~~undue ~~this~~reliance ~~Quarterly~~upon ~~Report~~these ~~on Form 10-Q contains certain “~~forward-looking statements~~” within~~, ~~the~~which ~~meaning~~reflect ofManagement’s ~~the~~analysis ~~Private~~only ~~Securities~~as ~~Litigation~~to ~~Reform~~the ~~Act of 1995 and other applicable securities laws~~date hereof. WeReaders ~~intend~~should ~~such forward-looking~~carefully ~~statements~~review ~~to be covered by~~ the ~~safe~~risk ~~harbor~~factors ~~provisions~~described ~~for forward-looking statements contained~~ in ~~those~~Part ~~laws and include this statement for purposes of complying with these safe harbor provisions. These forward-looking statements include~~I, ~~without~~ ~~limitation,~~Item ~~any statement that may predict~~1A, ~~forecast,~~“Risk ~~indicate,~~Factors” orwithin ~~imply~~our ~~future results, performance, achievements, or~~Annual ~~events,~~Report ~~and~~on ~~may~~Form ~~contain forward~~10-~~looking~~K ~~words~~for orthe ~~phrases~~year ~~such~~ended asDecember ~~“anticipate~~31,” ~~“believe,”~~2011 ~~“could,” “estimate,”~~as ~~“expect,”~~filed ~~“intend,”~~with ~~“may,”~~the ~~“might,”~~SEC ~~“plan,” “potential,”~~on ~~“project,”~~March ~~“should~~30,” ~~“strategies,”~~2012; ~~“will,”~~the ~~“will be,”~~footnotes ~~“will~~to ~~continue,”~~the ~~“will~~financial statements ~~likely~~contained ~~result,”~~in ~~and~~this ~~similar~~quarterly ~~terms~~report; and ~~their~~other ~~negatives~~documents that ~~convey~~we ~~uncertainty of~~have ~~future~~filed ~~events~~and orfrom ~~outcomes.~~time ~~These~~to ~~statements~~time ~~represent~~will ~~our~~file ~~(including~~with the ~~General Partner’s) beliefs, expectations, intentions,~~ ~~and~~SEC ~~plans,~~which ~~and,~~could ascause ~~such,~~actual ~~are~~results ~~not~~to ~~guarantees~~differ ofmaterially ~~future~~from ~~outcomes~~those orin ~~future~~these ~~performance,~~forward-looking ~~and~~statements. We ~~are~~undertake ~~subject~~no obligation to ~~risks~~publicly ~~and~~update ~~uncertainties that~~or ~~are~~revise ~~beyond~~any ~~our~~forward-looking ~~control~~statement, ~~and~~whether ~~could~~as ~~cause~~a ~~our~~result ~~actual~~of ~~results~~new toinformation, future ~~differ~~events ~~materially~~or ~~from those reflected in the forward-looking statements~~otherwise.

Readers are cautioned not to place undue reliance upon these forward-looking statements, which reflect Management’s analysis only as to the date hereof. Readers should carefully review the risk factors described in Part I, Item 1A, “Risk Factors” within our Annual Report on Form 10-K for the year ended December 31, 2011 as filed with the SEC on March 30, 2012; the footnotes to the financial statements contained in this quarterly report; and other documents that we have filed and from time to time will file with the SEC which could cause actual results to differ materially from those in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.16

16REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES TELECOM LIMITED PARTNERSHIP~~General

~~General~~Our principal asset is our undeveloped land in Boiling Spring Lakes, Brunswick County, NC comprising approximately 817 acres. As of September 30, 2012, we owned the following undeveloped land:

~~Our principal~~• ~~asset~~Approximately is354 ~~our~~acres, ~~undeveloped~~divided ~~land~~into in1,070 ~~Boiling~~platted ~~Spring~~individual ~~Lakes~~lots, ~~Brunswick~~both ~~County,~~recorded NCand ~~comprising approximately 817 acres. As of June 30~~unrecorded, ~~2012,~~intended wefor ~~owned~~residential ~~the following undeveloped land:~~use.

• Approximately ~~354~~244 acres, ~~divided into 1,072 platted individual lots, both recorded and unrecorded,~~ intended for residential use.

• Approximately ~~244~~219 acres intended for ~~residential~~commercial use.

•Our ~~Approximately~~business ~~219~~is ~~acres~~primarily the ~~intended~~sale ~~for~~of ~~commercial~~the ~~use~~individual lots, concentrating on those lots situated on existing paved roads and rocked roads. From time to time, we may add to our inventory of individual lots situated on paved roads and rocked roads by paving or rocking roads that are currently unpaved or not rocked.

~~Our business~~Local isReal ~~primarily~~Estate ~~the~~Market sale of the individual lots, concentrating on those lots situated on existing paved roads and rocked roads. From time to time, we may add to our inventory of individual lots situated on paved roads and rocked roads by paving or rocking roads that are currently unpaved or not rocked.Conditions

~~Local~~We ~~Real~~believe that local ~~Estate~~financial ~~Market~~institutions ~~Conditions~~have maintained tight credit requirements, due, in part, to concerns that the prices of residential and commercial real estate may continue to decline during 2012 and, perhaps, even into 2013. We believe that these restrictive lending practices by area banks have contributed, in part, to a sluggish local real estate market and to a reduction in our real estate sales, and may have the effect of reducing our real estate sales in the future.

~~We believe~~The ~~that~~market ~~local~~for ~~financial~~undeveloped land ~~institutions~~within ~~have~~the ~~maintained~~City ~~tight~~has ~~credit~~continued ~~requirements,~~to ~~due,~~be inadversely ~~part~~affected by efforts, tocommenced ~~concerns~~in ~~that~~April ~~the~~2006, ~~prices of~~by ~~residential~~Fish and ~~commercial~~Wildlife ~~real estate may continue~~ to ~~decline~~protect the ~~during~~habitat ~~2012~~of ~~and,~~the ~~perhaps,~~endangered ~~even~~Red-cockaded ~~into~~Woodpecker ~~2013~~(Picoides borealis). We believe that ~~these restrictive~~certain ~~lending~~restrictions ~~practices~~that bywent into ~~area~~effect ~~banks~~in ~~have~~2006 ~~contributed,~~on building in ~~part,~~the City within proximity to aknown ~~sluggish~~or ~~local~~suspected ~~real~~nesting ~~estate~~or ~~market~~foraging ~~and~~areas toof athe ~~reduction~~Red-cockaded inWoodpecker have had the effect of reducing our real estate sales since 2006, and ~~may~~will likely have the effect of reducing our real estate sales in the future from what might otherwise have been realized in the absence of such restrictions. In 2007, we began a program to study tree density in known foraging areas to determine the potential for coexistence where sufficient tree density exists, that is, where houses can be built on land now owned by us while retaining a sufficiently vibrant foraging area for the woodpeckers. Work on this program was paused during 2010 while we reviewed the progress and the program costs. We have not decided when to resume the program. We believe that this program may reduce the amount of the Property that is subject to restrictions on development because of the Red-cockaded Woodpecker, although there can be no assurance that any such reduction will occur or, if it occurs, that such reduction will have a material affect on our business.

The market for undeveloped land within the City has continued to be adversely affected by efforts, commenced in April 2006, by Fish and Wildlife to protect the habitat of the endangered Red-cockaded Woodpecker (Picoides borealis). We believe that certain restrictions that went into effect in 2006 on building in the City within proximity to known or suspected nesting or foraging areas of the Red-cockaded Woodpecker have had the effect of reducing our real estate sales since 2006, and will likely have the effect of reducing our real estate sales in the future from what might otherwise have been realized in the absence of such restrictions. In 2007, we began a program to study tree density in known foraging areas to determine the potential for coexistence where sufficient tree density exists, that is, where houses can be built on land now owned by us while retaining a sufficiently vibrant foraging area for the woodpeckers. Work on this program was paused during 2010 while we reviewed the progress and the program costs, and we may resume the program in 2012. We believe that this program may reduce the amount of the Property that is subject to restrictions on development because of the Red-cockaded Woodpecker, although there can be no assurance that any such reduction will occur or, if it occurs, that such reduction will have a material affect on our business.17

17REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES TELECOM LIMITED PARTNERSHIP~~Residential

~~Residential~~The real estate market in Brunswick County has seen a rise in the number of existing home sales, and a slight improvement in prices, as evidenced by the following data from the North Carolina Association of Realtors for the Brunswick County Multiple Listing Service region (which region includes, in North Carolina, all of Bladen, Brunswick, and Columbus Counties and a portion of New Hanover County, and, in South Carolina, a portion of Horry County):

~~The real~~• ~~estate~~Existing ~~market~~home insales: ~~Brunswick~~The ~~County has seen a rise in the~~ number of ~~existing~~ home sales, ~~and a slight improvement~~ in ~~prices, as evidenced by~~ the ~~following~~month ~~data from the North Carolina Association~~ of ~~Realtors~~August, ~~for~~2012 ~~the Brunswick County Multiple Listing Service region~~ (~~which~~197) ~~region~~was ~~includes,~~17% inhigher ~~North~~than ~~Carolina,~~the ~~all~~month of ~~Bladen~~August, ~~Brunswick,~~2011 ~~and~~(169). ~~Columbus~~Year ~~Counties~~over ~~and~~year aJuly ~~portion~~sales ofwere ~~New~~52% ~~Hanover County, and, in South Carolina, a portion of Horry County):~~higher.

• ~~Existing~~Average ~~home~~ sales: ~~The~~price ~~number~~ of ~~home~~existing ~~sales~~homes: inThe ~~the~~average ~~month~~sales ofprices ~~May,~~for August 2012 ~~(177)~~and ~~was~~August ~~25%~~2011 ~~higher~~were ~~than~~$228,545 ~~the~~and ~~month~~$207,027, ~~of May~~respectively, ~~2011~~or ~~(142).~~a ~~Year over year April sales were 12~~10% ~~higher~~improvement.

•It ~~Average~~is unclear at this time when the real estate market in Brunswick County and, more particularly, for our land will see any significant improvement. The local real estate market continues to see short sales, ~~price~~that is, sales of ~~existing~~houses at prices less than the amount of debt on the property, as well as foreclosures, both of which have the effect of increasing the supply of homes: ~~The~~for ~~average~~sale ~~sales~~and thereby reducing the selling prices of such homes. Until the market for ~~May~~existing ~~2012~~homes ~~and~~improves ~~May~~significantly, ~~2011~~the ~~were~~market ~~$237~~for buildable lots,~~946~~ such as those we sell, will continue to be sluggish, at best. There remains a large inventory of lots available for sale in the City and ~~$233~~the surrounding area,~~629~~ and relatively few transactions are being completed. We expect to see no significant improvement in real estate sales until the number of short sales and foreclosures in the local market moderates, ~~respectively~~economic conditions improve, and financial institutions loosen credit requirements. In addition, we believe that certain restrictions that went into effect in 2006 on building in the City within proximity to known or asuspected 2%nesting ~~improvement~~or foraging areas of the Red-cockaded Woodpecker have contributed to our lack of, or very limited, real estate sales in recent years by limiting new construction in the City, and will continue to have such effect.

It is unclear at this time when the real estate market in Brunswick County and, more particularly, for our land will see any significant improvement. The local real estate market continues to see short sales, that is, sales of houses at prices less than the amount of debt on the property, as well as foreclosures, both of which have the effect of increasing the supply of homes for sale and thereby reducing the selling prices of such homes. Until the market for existing homes improves significantly, the market for buildable lots, such as those we sell, will continue to be sluggish, at best. There remains a large inventory of lots available for sale in the City and the surrounding area, and relatively few transactions are being completed. We expect to see no significant improvement in real estate sales until the number of short sales and foreclosures in the local market moderates, economic conditions improve, and financial institutions loosen credit requirements. In addition, we believe that certain restrictions that went into effect in 2006 on building in the City within proximity to known or suspected nesting or foraging areas of the Red-cockaded Woodpecker have contributed to our lack of, or very limited, real estate sales in recent years by limiting new construction in the City, and will continue to have such effect.Commercial

Historically, our sales of commercial land have been sporadic, and we have not sold any commercial land since the second quarter of 2007. Commercial development in the City has largely been concentrated along a stretch of State Road 87, the main road into and out of the City, along which road most of our commercial land is located. The local commercial real estate market has traditionally not been very strong, due to the City’s relatively small population, the lack of sewer service, and the availability of shopping and services in nearby towns, especially Southport, and large regional shopping centers in and close to Wilmington.

18REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES~~Three ~~TELECOM~~Months ~~LIMITED~~Ended ~~PARTNERSHIP~~September 30, 2012 Compared to Three Months Ended September 30, 2011

~~Three Months~~■ ~~Ended June 30, 2012 Compared to Three Months Ended June 30, 2011~~Revenue

~~■ Revenue~~Property Sales

~~Property~~Revenue from property ~~Sales~~sales was $3,967 for the three months ended September 30, 2012, compared to $23,811 for the three months ended September 30, 2011. The Partnership sold 1 individual undeveloped lots during the three months ended September 30, 2012, compared to 3 individual undeveloped lots sold during the three months ended June 30, 2011.

~~Revenue~~Management believes ~~from~~that ~~property~~the ~~sales~~amount ~~was~~of $0revenue ~~for~~from ~~the~~property ~~three~~sales ~~months~~and ~~ended~~the ~~June~~number ~~30,~~of ~~2012,~~lots ~~compared~~sold toduring ~~$16,939 for~~ the three ~~months~~quarters ~~ended~~of ~~June~~2012 ~~30,~~and full year of 2011. ~~The~~are ~~Partnership~~too ~~sold~~low 0to ~~individual~~discern ~~undeveloped~~any ~~lots~~trend. ~~during~~The ~~the~~matters ~~three~~described ~~months~~under ~~ended~~“Local ~~June~~Real ~~30,~~Estate ~~2012,~~Market ~~compared~~Conditions” toabove 3are ~~individual undeveloped~~expected ~~lots~~to ~~sold~~continue ~~during~~to ~~the~~have ~~three~~an ~~months~~adverse ~~ended~~effect ~~June~~on ~~30,~~property ~~2011~~sales.

~~Management believes~~Interest that the amount of revenue from property sales and the number of lots sold during the second and first quarters of 2012 and full year of 2011 are too low to discern any trend. The matters described under “Local Real Estate Market Conditions” above are expected to continue to have an adverse effect on property sales.Income

Interest income was ~~Income~~$166 for the three months ended September 30, 2012, compared to $1,899 for the three months ended September 30, 2011. We attribute the 91% decrease principally to the fact that during the three months ended September 30, 2012 we held most of our cash in a non-interest bearing checking account and had no investments in certificates of deposit. The decrease in the amount invested in certificates of deposit reflects, in part, our lack of significant revenues from property sales during 2012 and 2011 and our consequent need to use cash received at maturity of some of our investments to pay our operating expenses, and, in part, Management’s desire to keep cash entirely liquid at a time when interest rates earned on certificates of deposit are near historical lows.

~~Interest~~■ ~~income~~Direct ~~was~~Costs $187 for the three months ended June 30, 2012, compared to $1,045 for the three months ended June 30, 2011. We attribute the 82% decrease principally to the facts that during the three months ended June 30, 2012 we held most of ~~our~~Property cash in a non-interest bearing checking account and had no investments in certificates of deposit. The decrease in the amount invested in certificates of deposit reflects, in part, our lack of significant revenues from property sales during 2011 and our consequent need to use cash received at maturity of some of our investments to pay our operating expenses, and, in part, Management’s desire to keep cash entirely liquid at a time when interest rates earned on certificates of deposit are near historical lows.Sold

■ Direct ~~Costs~~cost of ~~Property~~property sold ~~Sold~~was $255 for the three months ended September 30, 2012, compared to $708 for the three months ended September 30, 2011. The change is due to the difference in the number of undeveloped lots sold in each period.

~~Direct~~■ ~~cost of property sold was $0 for the three months ended June 30~~Selling, ~~2012,~~General ~~compared~~and toAdministrative ~~$215 for the three months ended June 30, 2011. The change is due to the difference in the number of undeveloped lots sold in each period.~~Expenses

■ Selling, ~~General~~general and administrative ~~Administrative~~expenses ~~Expenses~~for the three months ended September 30, 2012 were $115,817, compared to $120,913 for the three months ended September 30, 2011. The change is immaterial.

~~Selling, general and administrative expenses for the three months ended June 30, 2012 were $111,880, compared to $111,965 for the three months ended June 30, 2012. The change is immaterial.~~19

19REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES TELECOM LIMITED PARTNERSHIP~~■ Depreciation

■ Depreciation was $887 for the three months ended September 30, 2012, consistent with $887 for the three months ended September 30, 2011.

~~Depreciation was~~Nine ~~$885~~Months ~~for~~Ended ~~the~~September ~~three months ended June~~ 30, 2012, Compared ~~compared~~ to ~~$930~~Nine ~~for~~Months ~~the~~Ended ~~three~~September ~~months ended June~~ 30, 2011~~. The change is immaterial.~~

~~Six Months~~■ ~~Ended June 30, 2012 Compared to Six Months Ended June 30, 2011~~Revenue

~~■ Revenue~~Property Sales

~~Property~~Revenue from property ~~Sales~~sales was $12,817 for the nine months ended September 30, 2012, compared to $66,678 for the nine months ended September 30, 2011. The Partnership sold 2 individual undeveloped lots during the nine months ended September 30, 2012, compared to 10 individual undeveloped lots sold during the nine months ended September 30, 2011.

~~Revenue~~Management believes ~~from~~that ~~property~~the ~~sales~~amount ~~was~~of ~~$8,850~~revenue ~~for~~from ~~the~~property ~~six~~sales ~~months~~and ~~ended~~the ~~June~~number ~~30,~~of ~~2012,~~lots ~~compared~~sold toduring ~~$42,867~~the ~~for~~three ~~the~~quarters ~~six~~of ~~months~~2012 ~~ended~~and ~~June~~full ~~30,~~year of 2011. ~~The~~are ~~Partnership~~too ~~sold~~low 1to ~~individual~~discern ~~undeveloped~~any ~~lot~~trend. ~~during~~The ~~the~~matters ~~six~~described ~~months~~under ~~ended~~“Local ~~June~~Real ~~30,~~Estate ~~2012,~~Market ~~compared~~Conditions” toabove 7are ~~individual undeveloped~~expected ~~lots~~to ~~sold~~continue ~~during~~to ~~the~~have ~~six~~an ~~months~~adverse ~~ended~~effect ~~June~~on ~~30,~~property ~~2011~~sales.

Interest income was ~~Income~~$542 for the nine months ended September 30, 2012, compared to $4,243 for the nine months ended September 30, 2011. We attribute the 87% decrease principally to the facts that during the nine months ended September 30, 2012 we held most of our cash in a non-interest bearing checking account and had no investments in certificates of deposit. The decrease in the amount invested in certificates of deposit reflects, in part, our lack of significant revenues from property sales during 2012 and 2011 and our consequent need to use cash received at maturity of some of our investments to pay our operating expenses, and, in part, Management’s desire to keep cash entirely liquid at a time when interest rates earned on certificates of deposit are near historical lows.

Interest income was $376 for the six months ended June 30, 2012, compared to $2,344 for the six months ended June 30, 2011. We attribute the 84% decrease principally to the facts that during the six months ended June 30, 2012 we held most of our cash in a non-interest bearing checking account and had no investments in certificates of deposit. The decrease in the amount invested in certificates of deposit reflects, in part, our lack of significant revenues from property sales during 2011 and our consequent need to use cash received at maturity of some of our investments to pay our operating expenses, and, in part, Management’s desire to keep cash entirely liquid at a time when interest rates earned on certificates of deposit are near historical lows.20

20REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES~~■ Direct ~~TELECOM~~Costs ~~LIMITED~~of ~~PARTNERSHIP~~Property Sold

■ Direct ~~Costs~~cost of ~~Property~~property sold ~~Sold~~was $517 for the nine months ended September 30, 2012, compared to $2,752 for the nine months ended September 30, 2011. The change is due to the difference in the number of undeveloped lots sold in each period.

~~Direct~~■ ~~cost of property sold was $262 for the six months ended June 30~~Selling, ~~2012,~~General ~~compared~~and toAdministrative ~~$2,044 for the six months ended June 30, 2011. The change is due to the difference in the number of undeveloped lots sold in each period.~~Expenses

■ Selling, ~~General~~general and administrative ~~Administrative~~expenses ~~Expenses~~for the nine months ended September 30, 2012 were $351,049, compared to the $347,906 for the same period of 2011. This increase is immaterial.

~~Selling,~~■ ~~general and administrative expenses for the six months ended June 30, 2012 were $235,232, compared to the $226,993 for the same period of 2011. This 4% increase is~~Depreciation

Depreciation was $2,659 for the nine months ended September 30, 2012, compared to $2,662 for the nine months ended September 30, 2011. The change is immaterial.

~~■ Depreciation~~Liquidity and Capital Resources

~~Depreciation~~■ ~~was $1,772 for the six months ended June 30, 2012, compared to $1,775 for the six months ended June 30, 2011. The change is immaterial.~~General

~~Liquidity~~At September 30, 2012, we had $1,651,813 in cash, of which amount $1,400,997 was held in a non-interest bearing checking account because the FDIC insures balances in such accounts without limit. Substantially all of the remainder was held in interest-bearing money market accounts at local financial institutions. Accounts payable and ~~Capital~~accrued ~~Resources~~expenses, including accrued expenses owed to affiliates, as of such date totaled $204,994.

■We require cash primarily ~~General~~for the payment of operating expenses and overhead, and capital expenditures incurred with respect to the property we own, principally the following.

~~At June~~• 30Roads: Much of our land is accessible only by roads that are incomplete, ~~2012~~or that are unpaved or lack a rocked surface, or that require repairs. Management believes that we ~~had~~will ~~$1,693,818~~be inable ~~cash,~~to ofsell ~~which~~such ~~amount~~land $1only if incomplete roads are completed,~~441,998~~ ~~was~~the ~~held~~roads inthat aare ~~non-interest~~now ~~bearing~~unpaved ~~checking~~or ~~account~~that ~~because the~~lack ~~FDIC~~a ~~insures~~rocked ~~balances~~surface are rocked, and the roads in ~~such~~need ~~accounts~~of ~~without~~repairs ~~limit~~are repaired. ~~Substantially~~In ~~all~~addition, ofwe ~~the~~believe ~~remainder~~that ~~was~~we ~~held~~can inachieve ~~interest-bearing~~higher ~~money market~~sales ~~accounts~~prices atfor ~~local~~many ~~financial~~of ~~institutions~~our lots by paving certain roads with asphalt. ~~Accounts~~The ~~payable~~cost ~~and~~of ~~accrued~~such ~~expenses~~road improvements, ~~including~~if ~~accrued~~and ~~expenses~~when ~~owed~~we decide to ~~affiliates~~make such improvements, as ofcould ~~such~~be ~~date~~substantial. ~~totaled~~We ~~$138,076~~have made no provision in our financial statements for such improvements.

~~We require cash primarily for the payment of operating expenses and overhead, and capital expenditures incurred with respect to the property we own, principally the following.~~21

•REEVES ~~Roads:~~TELECOM ~~Much~~LIMITED of our land is accessible only by roads that are incomplete, or that are unpaved or lack a rocked surface, or that require repairs. Management believes that we will be able to sell such land only if incomplete roads are completed, the roads that are now unpaved or that lack a rocked surface are rocked, and the roads in need of repairs are repaired. In addition, we believe that we can achieve higher sales prices for many of our lots by paving certain roads with asphalt. The cost of such road improvements, if and when we decide to make such improvements, could be substantial. We have made no provision in our financial statements for such improvements.PARTNERSHIP

21• Water and sewer: We may have to bear assessments relating to the installation of water and sewer lines installed by the City and others. We expect to incur assessments, payable in 2012, 2013, or 2014, relating to the installation of sewer lines; however, we cannot reliably estimate the amounts of these or any future assessments, nor can we accurately predict when these or any future assessments will become due. The total of such assessments is likely to be substantial. We have made no provision in our financial statements for such assessments.

~~REEVES~~Cash ~~TELECOM~~is ~~LIMITED~~generated ~~PARTNERSHIP~~primarily from individual lot sales. When that source of cash has not been sufficient to meet our liquidity requirements, as has been the case in recent years, we have supplemented cash generated from lot sales by drawing upon cash reserves and accruing general partner fees and certain other fees and expenses payable to the General Partner and its affiliates. We may seek to supplement our current cash balances and short-term investments by selling certain non-real estate assets, borrowing from local banks or the General Partner and/or its affiliates, negotiating credit facilities, issuing debt on such terms and conditions as the General Partner deems prudent, or seeking other forms of debt or equity financing as the General Partner deems appropriate, although it cannot be determined at this time what, if any, financing alternatives may be available and at what cost.

•■ Cash ~~Water~~Flows ~~and~~from ~~sewer:~~Operating We may have to bear assessments relating to the installation of water and sewer lines installed by the City and others. We expect to incur assessments, payable in 2012, 2013, or 2014, relating to the installation of sewer lines; however, we cannot reliably estimate the amounts of these or any future assessments, nor can we accurately predict when these or any future assessments will become due. The total of such assessments is likely to be substantial. We have made no provision in our financial statements for such assessments.Activities

~~Cash~~Operating activities isused ~~generated~~$284,165 ~~primarily from individual lot sales. When that source~~ of net cash ~~has~~during ~~not~~the ~~been~~nine ~~sufficient~~months toended ~~meet~~September ~~our~~30, ~~liquidity requirements~~2012, as ~~has~~compared ~~been~~to ~~the case in recent years~~$311,714 weof ~~have~~net ~~supplemented~~ cash ~~generated~~used ~~from~~during ~~lot~~the ~~sales by drawing upon cash reserves and accruing~~same ~~general~~period ~~partner~~of ~~fees~~2011. ~~and~~The ~~certain~~reduction ~~other~~of ~~fees and expenses payable to the General Partner and its affiliates~~$27.549 Weof ~~may~~net ~~seek to supplement our current~~ cash ~~balances~~used ~~and~~in ~~short-term~~operating ~~investments~~activities byin ~~selling~~the ~~certain~~2012 ~~non-real~~period ~~estate~~is ~~assets,~~primarily ~~borrowing~~the ~~from~~result ~~local banks or~~of the ~~General~~receipt ~~Partner~~of ~~and/or its affiliates~~$82,126 ~~negotiating credit facilities, issuing debt on such terms and conditions~~ as ~~the~~a ~~General Partner~~refund ~~deems prudent, or seeking other forms~~ of ~~debt~~water orassessments ~~equity~~offset ~~financing~~by asa ~~the~~decline ~~General~~of ~~Partner deems appropriate~~$60,050 ~~although~~in ~~it cannot~~net beincome ~~determined~~in atthe ~~this~~nine ~~time~~month ~~what, if any, financing alternatives may be available and at what cost~~period.

■ Cash Flows from ~~Operating~~Investing Activities

~~Operating~~ Investing activities provided ~~used~~ $~~242,160~~0 ~~of net cash~~ during the ~~six~~first nine months ~~ended~~of ~~June 30,~~ 2012, compared to $~~249~~1,~~994~~641,650 of net cash ~~used~~provided during the same period of 2011. The change is due to the fact that no investments matured during the period because we did not reinvest proceeds previously received upon maturity of investments, resulting in no investments being held at September 30, 2012 and December 31, 2011.

■ ~~Cash~~Long-term ~~Flows from Investing Activities~~ Debt

~~Investing~~The Partnership had ~~activities~~no ~~provided~~long-term $0debt outstanding during the ~~first~~nine ~~six~~ months ofended ~~2012,~~September ~~compared to $764~~30,~~500~~ of2012 ~~net~~or ~~cash provided during~~ the same period of ~~2011.~~ ~~The change is due to the fact that we did not reinvest proceeds received upon maturity of our investments, resulting in no investments being held at June 30, 2012 and December 31,~~ 2011.

~~■ Long-term Debt~~22

~~The Partnership~~REEVES ~~had~~TELECOM noLIMITED ~~long-term debt outstanding during the six months ended June 30, 2012 or the same period of 2011.~~PARTNERSHIP

22■ Off Balance Sheet Arrangements

~~REEVES~~The ~~TELECOM~~Partnership ~~LIMITED~~does not ~~PARTNERSHIP~~utilize off balance sheet arrangements, and there were none during the first nine months of 2012 or 2011.

~~Off Balance~~■ ~~Sheet Arrangements~~Contingencies

The Partnership ~~does~~learned in ~~not~~September ~~utilize~~2012 ~~off~~that ~~balance~~its ~~sheet~~estimated ~~arrangements~~assessment for the sewer project will be $1,040,338. ~~and~~See ~~there~~Note ~~were~~3 ~~none~~to ~~during~~Notes ~~the~~to ~~first~~Condensed ~~six~~Financial Statements, ~~months~~“Commitment offor ~~2012~~Municipal orSewer ~~2011~~Service.”

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our 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 our control. Changes in the general level of interest rates can affect our revenue from property sales because 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 decreasing, the market for real estate increases. Despite the current environment of low interest rates, however, we have generated no significant property sales since mid-2007 because of other reasons discussed elsewhere in this Quarterly Report on Form 10-Q. Management believes that the extent of such interest rate risk is neither quantifiable nor predictable because of the variability of future interest rates and because of the highly variable nature of our real estate sales due to reasons other than interest rates.

We also have exposure to market risk for changes in interest rates due primarily to the following:

• Cash: The portion of our cash that is deposited in money market accounts at local financial institutions bears interest at a variable rate. If interest rates were to increase, we would earn more interest income on such cash balances. If interest rates were to decrease, we would earn less interest income on such cash balances. For the ~~second~~third quarter of 2012, our average cash balance invested in money market accounts, calculated as the average of the balances on the first and last days of the quarter, was $250,~~983~~669, and, at ~~June~~September 30, 2012, we had cash of $~~251~~250,~~170~~166 held in interest-bearing money market accounts.

• Certificates of deposit: From time to time, we invest a portion of our cash in certificates of deposit having a maturity of less than one year because we are able to earn a higher rate of interest on cash invested in certificates of deposit than on cash held in a money market account bearing interest at a variable rate. All of such securities are classified as securities held to maturity; hence, we bear substantially no risk of loss due to a change in the market value of any certificate of deposit we own resulting from a change in interest rates prior to maturity of such certificate of deposit. If interest rates were to increase, upon sale or maturity of any certificates of deposit then held, we would earn more interest income upon reinvestment of the proceeds due to a higher interest rate on the certificates of deposit then purchased. If interest rates were to decrease, upon sale or maturity of any certificates of deposit then held, we would earn less interest income upon reinvestment of the proceeds due to a lower interest rate on the certificates of deposit then purchased. During the second quarter of 2012, we had no cash invested in certificates of deposit.23

23REEVES TELECOM LIMITED PARTNERSHIP

~~REEVES~~• ~~TELECOM~~Certificates ~~LIMITED~~of ~~PARTNERSHIP~~deposit: From time to time, we invest a portion of our cash in certificates of deposit having a maturity of less than one year because we are able to earn a higher rate of interest on cash invested in certificates of deposit than on cash held in a money market account bearing interest at a variable rate. All of such securities are classified as securities held to maturity; hence, we bear substantially no risk of loss due to a change in the market value of any certificate of deposit we own resulting from a change in interest rates prior to maturity of such certificate of deposit. If interest rates were to increase, upon sale or maturity of any certificates of deposit then held, we would earn more interest income upon reinvestment of the proceeds due to a higher interest rate if we were then to purchase certificates of deposit. If interest rates were to decrease, upon sale or maturity of any certificates of deposit then held, we would earn less interest income upon reinvestment of the proceeds due to a lower interest rate if we were then to purchase certificates of deposit. During the third quarter of 2012, we had no cash invested in certificates of deposit.

Had the average level of annual interest rates earned on our cash balances during the three months ended ~~June~~September 30, 2012 been higher or lower by 100 basis points or one percent (1%), our net income would have been approximately $4,~~234~~129 more and $~~187~~166 less, respectively. The foregoing estimate of the change in net income is based upon the average of cash balances on the first and last days of the quarter as described above, and assumes that the interest rate on any cash balance bearing an interest rate of one percent (1%) or less would be reduced to 0%.

We had no interest-bearing debt outstanding during the ~~second~~third quarter of 2012.

We do not enter into derivative contracts for our own account to hedge against the risk of changes in interest rates.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

~~On June 14, 2012,~~ Mr. ~~Davis~~Peter ~~P. Stowell~~Metz, the President of our General Partner, resigned. Mr. Peter Metz had been elected the new President of our General Partner on the same day as Mr. Stowell’s resignation. The Partnership filed form 8-K with the SEC on June 15, 2012. Mr. Stowell (and then his replacement, Mr. Metz) carried out the functions of our principal executive officer and principal financial officer, and, accordingly, ~~they~~he was deemed to be our “management” for the purpose of evaluating our disclosure controls and procedures and the effectiveness thereof from the General Partner. ~~Messrs~~Mr. ~~Stowell and~~ Metz evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon that evaluation, ~~they~~he ~~have~~has concluded that, as of ~~June~~September 30, 2012, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

~~Changes in Internal Control Over Financial Reporting~~ 24

~~With exception~~REEVES toTELECOM ~~the~~LIMITED change in management, there has been no change in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 of the Exchange Act that occurred during the second fiscal quarter of 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.PARTNERSHIP

24Changes in Internal Control Over Financial Reporting

~~REEVES~~There ~~TELECOM~~has ~~LIMITED~~been ~~PARTNERSHIP~~no change in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 of the Exchange Act that occurred during the third fiscal quarter of 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting..

[THE REST OF THIS PAGE IS BLANK]

~~REEVES~~PART ~~TELECOM~~II. ~~LIMITED~~OTHER ~~PARTNERSHIP~~INFORMATION

~~PART~~Item II1A. ~~OTHER~~ ~~INFORMATION~~Risk Factors

Investors should carefully consider the risks described in Part I, Item 1A., “Risk Factors” within our Annual Report on Form 10-K for the year ended December 31, 2011 as filed with the SEC on March 30, 2012. There have been no material changes from the risk factors described in that Annual Report on Form 10-K. The risks and uncertainties described in that Annual Report on Form 10-K are not the only ones we or our unit holders face and there may be additional risks and uncertainties that we do not presently know of or that we currently consider not likely to have a material impact. If any of these risks and uncertainties develop into an actual event, it could materially and adversely affect our business, financial condition, results of operations, and/or cash flows.

~~Investors should carefully consider the risks described in Part I,~~ Item ~~1A, “Risk Factors” within our Annual Report on Form 10-K for the year ended December 31, 2011 as filed with the SEC on March 30, 2012~~6. There have been no material changes from the risk factors described in that Annual Report on Form 10-K. The risks and uncertainties described in that Annual Report on Form 10-K are not the only ones we or our unit holders face and there may be additional risks and uncertainties that we do not presently know of or that we currently consider not likely to have a material impact. If any of these risks and uncertainties develop into an actual event, it could materially and adversely affect our business, financial condition, results of operations, and/or cash flows.Exhibits

Item 6. Exhibits

Exhibit 31		Rule 13a-14(a)/15d-14(a) Certification.

Exhibit 32		Section 1350 Certification*.

Exhibit 101.INS		XBRL Instance Document**

Exhibit 101.SCH		XBRL Taxonomy Extension Schema**

Exhibit 101.CAL		XBRL Taxonomy Extension Calculation Linkbase**

Exhibit 101.LAB		XBRL Taxonomy Extension Label Linkbase**

Exhibit 101.PRE		XBRL Taxonomy Extension Presentation Linkbase**

* Exhibit ~~31 Rule~~ ~~13a-14(a)/15d-14(a)~~32 ~~Certification~~shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section.

~~Exhibit 32~~ ** In accordance with Rule 406T of Regulation S-T, XBRL information shall not be deemed “filed” for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, shall not be deemed “filed” for purposes of Section ~~1350~~18 Certification*of the Exchange Act, and is otherwise not subject to liability under these sections.

~~Exhibit 101.INS XBRL Instance Document~~26

~~Exhibit 101.SCH XBRL Taxonomy Extension Schema~~SIGNATURES

~~Exhibit~~Pursuant to the requirements ~~101.CAL XBRL~~of ~~Taxonomy~~the ~~Extension~~Securities ~~Calculation~~Exchange ~~Linkbase~~Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~Exhibit 101.LAB XBRL~~REEVES ~~Taxonomy~~TELECOM ~~Extension~~LIMITED ~~Label Linkbase~~PARTNERSHIP

~~Exhibit 101.PRE XBRL~~Signatures ~~Taxonomy~~Title ~~Extension~~By: ~~Presentation~~Grace ~~Linkbase~~Property Management, Inc. General Partner

*By: ~~Exhibit~~/S/ 32PETER ~~shall~~METZ ~~not~~Peter beMetz ~~deemed~~President ~~“filed” for purposes~~ of ~~Section~~General 18Partner of(Principal ~~the~~Executive ~~Exchange~~Officer, ~~Act~~Principal orFinancial ~~otherwise~~Officer, ~~subject~~Principal toAccounting ~~the liability of that Section.~~Officer)

26Date: October 24, 2012

~~REEVES TELECOM LIMITED PARTNERSHIP~~27

~~SIGNATURES~~[THIS PAGE LEFT BLANK INTENTIONALLY]

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 thereunto duly authorized.

REEVES TELECOM LIMITED PARTNERSHIP

Signatures Title By: Grace Property Management, Inc. General Partner

By: /S/ PETER METZ Peter Metz President of General Partner (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer)

Date: July 27, 2012

REEVES TELECOM LIMITED PARTNERSHIP

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