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 ~~September~~March 3031, ~~2012~~2013

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

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

REEVES TELECOM LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

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

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

~~Indicate~~c/o byGrace ~~check~~Property ~~mark whether~~Management, ~~the~~Inc. ~~registrant~~55 ~~has~~Brookville ~~submitted electronically and posted on its corporate Web site~~Road, ifGlen ~~any~~Head, ~~every~~New ~~Interactive~~York ~~Data~~11545 ~~File~~(Address ~~required to be submitted and posted pursuant to Rule 405~~ of ~~Regulation~~principal ~~S-T~~executive ~~('232.405 of~~offices, ~~this~~ZIP ~~chapter~~code) ~~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~~

Registrant’s telephone number, including area code:

(516) 686-2221

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 ¨

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

~~Indicate~~(Do not by check ~~mark~~if ~~whether the registrant is~~ a ~~shell~~smaller ~~company~~reporting ~~(as defined in Rule 12b-2 of the Exchange Act~~company)~~. Yes o No x~~

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

REEVES TELECOM LIMITED PARTNERSHIP

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		1
Item 1	Financial Statements	1
Item 1.	Financial Statements	1
	Condensed Balance Sheets at September 30, 2012 (Unaudited) and December 31, 2011	1
	Condensed Balance Sheets at March 31, 2013 (Unaudited) and December 31, 2012	1
	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 Three Months Ended March 31, 2013 and 2012 (Unaudited)	2
	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 Three Months Ended March 31, 2013 and 2012 (Unaudited)	3
	Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (Unaudited)	4
	Notes to Condensed Financial Statements (Unaudited)	4
	Notes to Condensed Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 3	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	21
Item 4	Controls and Procedures	24
PART II. OTHER INFORMATION		22
PART II. OTHER INFORMATION		25
Item 1A.	Risk Factors	22
Item 1A	Risk Factors	26
Item 6.	Exhibits	22
Item 6	Exhibits	26
SIGNATURES		23
SIGNATURES		27

[THIS PAGE LEFT BLANK INTENTIONALLY]

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

REEVES TELECOM LIMITED PARTNERSHIP

CONDENSED BALANCE SHEETS

AT ~~SEPTEMBER~~MARCH 3031, ~~2012~~2013 AND DECEMBER 31, ~~2011~~2013

	At September 30, 2012		At December 31, 2011
	March 31,		December 31,
	2013		2012
	(Unaudited)
Assets
Cash and cash equivalents	$	1,~~651~~115,~~813~~119	$	1,~~935~~288,~~978~~909
Prepayments		47,525		4,975
Properties held for sale and property and equipment
Properties held for sale		295,441		391,197
Properties held for sale, net		295,441		295,441
Property and equipment, net		~~225~~223,~~280~~505		~~227~~224,~~939~~393
Other assets		3,350		3,350
Total assets	$	21,~~175~~684,~~884~~940	$	21,~~558~~817,~~464~~068
Liabilities and Partners' Capital
Current liabilities
Accounts payable and accrued expenses	$	~~120~~44,~~244~~746	$	~~201~~3,~~908~~033
Accrued expenses - affiliates		~~84,750~~0		~~44,800~~0
Total current liabilities		~~204~~44,~~994~~746		~~246~~3,~~708~~033
Commitments and contingencies
Partners' capital		1,~~970~~640,~~890~~194		21,~~311~~814,~~756~~035
Total liabilities and partners' capital	$	21,~~175~~684,~~884~~940	$	21,~~558~~817,~~464~~068
The accompanying notes are an integral part of these condensed financial statements.

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 ~~SEPTEMBER~~MARCH 3031, ~~2012~~ 2013 AND ~~2011~~2012

(Unaudited)

	Three Months Ended September 30,
	Three Months Ended March 31,
	2012			2011
	2013			2012
Revenues
Property sales	$	~~3,967~~0		$	238,~~811~~850
Interest income		~~166~~50			~~1,899~~189
Other income		0385			~~1,311~~0
Total revenues		~~4,133~~435			279,~~021~~039
Operating expenses
Direct costs of property sold		~~255~~0			~~708~~262
Selling, general and administrative expenses		~~115~~173,~~817~~389			~~120~~123,~~913~~352
Depreciation		887			887
Total operating expenses		~~116~~174,~~959~~276			~~122~~124,~~508~~501
Net loss		(~~112~~173,~~826~~841	)		(95115,~~487~~462	)
Partners' capital at beginning of period		21,~~083~~814,~~716~~035			2,~~569~~311,~~296~~756
Partners' capital at end of period	$	1,~~970~~640,~~890~~194		$	2,~~473~~196,~~809~~294
Net loss per partnership unit	$	(0.0610	)	$	(0.0506	)
Weighted average partnership units issued and
Weighted average partnership units issued and outstanding		1,811,062			1,811,062
outstanding		1,811,062			1,811,062

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

REEVES TELECOM LIMITED PARTNERSHIP

CONDENSED STATEMENTS OF ~~OPERATIONS~~CASH ~~AND PARTNERS’ CAPITAL~~FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2012~~ 2013 AND ~~2011~~2012

(Unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2012			2011
	2013			2012
Revenues
Cash flows from operating activities
Property sales	$	12,817		$	66,678
Net loss	$	(173,841	)	$	(115,462	)
Interest income		542			4,243
Adjustments to reconcile net loss to net cash used in operating activities:
Other income		0			1,583
Depreciation		887			887
Total revenues		13,359			72,504
Changes in operating assets and liabilities
Operating expenses
Prepaid and other current assets		(42,550	)		0
Direct costs of property sold		517			2,752
Property held for sale, net		0			10,614
Selling, general and administrative expenses		351,049			347,906
Accounts payable and accrued expenses		41,714			(119,178	)
Depreciation		2,659			2,662
Accrued expenses - affiliates		0			(50	)
Total operating expenses		354,225			353,320
Net cash used in operating activities		(173,790	)		(223,189	)
Net loss		(340,866	)		(280,816	)
Net decrease in cash and cash equivalents		(173,790	)		(223,189	)
Partners' capital at beginning of period		2,311,756			2,754,625
Cash and cash equivalents - beginning of period		1,288,909			1,935,978
Partners' capital at end of period	$	1,970,890		$	2,473,809
Cash and cash equivalents - end of period	$	1,115,119		$	1,712,789
Net loss per partnership unit	$	(0.18	)	$	(0.15	)
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.

REEVES TELECOM LIMITED PARTNERSHIP

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(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

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Operations

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. The Plan, which was determined by the Internal Revenue Service to qualify 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.

The remaining assets of the Partnership are primarily: (a) approximately ~~817~~816 acres of land held for sale and some related assets (the “Property”) within the City of Boiling Spring Lakes, North Carolina (the “City”), and (b) cash. The Property is all that remains from a 14,000-acre development in Brunswick County, North Carolina that was begun in 1962 by the Corporation. The cash was generated primarily from real estate sales, including the sale of a golf club during the first quarter of 2001. Upon any sales of the remaining assets, the Partnership may acquire additional properties or make distributions to the partners. 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 believes the carrying value of the Property is less than its net realizable value. Nevertheless, should the Partnership elect to effect a bulk sale and/or abandonment, the net amount realized could be less than the carrying value.

~~The~~Because we are a limited partnership, we have no officers or directors. Pursuant to our Limited Partnership’s Agreement, Grace Property Management, Inc., our General Partner, is responsible for the management of our business and performs functions generally performed by officers and directors. Grace Property Management, Inc. is a Delaware corporation engaged in the business of real estate management, and has served as our General Partner since May 15, 1980.

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

On April 30, 2013, we filed definitive proxy soliciting material with the Securities and Exchange Commission (the “SEC”) for a special meeting of the Partners to be held on May [24], 2013 to seek approval of amendments to the Limited Partnership Agreement to effect a reverse unit split and certain other matters (the “Reverse Unit Split Proposal”). The Reverse Unit Split Proposal, if approved by the Partners, will result in 101 old units being exchanged for one new unit (the “Reverse Unit Split”). Upon effectiveness of the Reverse Unit Split, each holder of less than 101 units will receive $0.81 in cash for each old unit and will therefore cease to be a unit holder. It is expected that after the Reverse Unit Split, there will be approximately 378 holders of units, which will allow the Partnership to seek to terminate the registration of the units under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Upon termination of registration of the units under the Exchange Act, the Partnership will no longer be required to file annual and periodic reports with the SEC. Upon effectiveness of the Reverse Unit Split, no fractional new units will be issued to the remaining unit holders, but such unit holders will be entitled to receive $0.81 for each old unit not exchanged for a whole new unit.

Summary of Significant Accounting Policies

a. Basis of presentation - 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 ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2012~~2013. 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~~2012 as filed with the SEC on ~~March~~February 3019, ~~2012~~2013.

The accompanying unaudited condensed financial statements have been prepared using the accrual basis of accounting. ~~The Partnership’s assets have been written down, from time to time, to reflect their fair values based upon appraisals.~~

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Estimates - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Property sales - Property sales represent primarily individual building lots and other undeveloped land sold for cash and may from time to time represent the gross sales price of residential houses built or acquired by the Partnership for resale. 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 amount of the total initial project costs, after 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.

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.

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.

Significant concentrations of credit risk - The Federal Deposit Insurance Corporation (“FDIC”), an independent agency of the United States government, insures bank deposits up to $250,000 per depositor, per bank, subject to certain conditions. In the event that any bank where the Partnership holds funds becomes insolvent, the Partnership may lose some or all of any excess over FDIC-insured limits held at that bank. From time to time, the Partnership has had, and in the future may have, cash balances at its principal bank in excess of FDIC-insured amounts. At March 31, 2013, the amount of cash balances in excess of FDIC-insured amounts was $615,119, primarily because $500,000 of U.S. Treasury Bills matured on March 28, 2013 and the funds were held at the Partnership’s bank. Also at March 31, 2013, the Partnership held CDs at two banks other than its principal bank, in each case in the initial amount of $250,000.

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

~~Properties~~The ~~held~~Securities ~~for~~Investor ~~sale~~Protection ~~generally~~Corporation ~~represent~~(“SIPC”), ~~undeveloped~~a ~~lots~~non-profit ~~for~~corporation ~~which~~set ~~depreciation~~up ~~expense~~and isfunded ~~not~~by ~~recorded~~the brokerage industry, insures investors’ accounts at member brokerage firms up to $500,000 per investor, subject to certain conditions, in the event that a member brokerage firm goes bankrupt, and cash and securities are missing from customer accounts. The ~~Partnership~~SIPC ~~assesses~~provides for supplementing the ~~realizability~~recovery by customers of ~~the~~a ~~carrying~~failed ~~value~~brokerage offirm ~~its~~by ~~properties~~up ~~held~~to ~~for~~$500,000 ~~sale~~per ~~and~~customer, ~~related~~including ~~buildings~~up ~~and~~to ~~equipment~~$250,000 ~~whenever~~for ~~events~~cash claims. Typically, most or ~~changes~~all inof ~~circumstance~~the ~~indicate~~Partnership’s ~~that~~funds ~~impairment~~held ~~may~~at ~~have~~its ~~occurred~~brokerage firm are invested in ~~accordance~~brokered ~~with~~certificates ~~the~~of ~~provisions~~deposit, each of ~~ASC~~which ~~360-10-35-21~~is fully insured by the FDIC, ~~“When~~although, toat ~~Test~~times asignificant ~~Long~~amounts held at the brokerage firm have not been, and in the future may not be, invested in FDIC-~~Lived~~insured ~~Asset~~certificates ~~for~~of ~~Recoverability~~deposit.” ~~The~~In the event the brokerage firm where the Partnership maintains its accounts becomes insolvent or amounts in the Partnership’s ~~assets~~accounts ~~have~~are ~~been~~lost ~~written~~or ~~down,~~go ~~from~~missing ~~time~~due to ~~time~~fraud or otherwise, the Partnership may lose some or all of such excess over SIPC-insured amounts to ~~reflect~~the ~~their~~extent ~~fair~~that ~~values~~the ~~based~~Partnership’s ~~upon~~accounts ~~appraisals~~are not invested in FDIC-insured certificates of deposit. At March 31, 2013, the Partnership had no account balances in excess of SIPC-insured amounts.

e. Significant concentrations of credit risk - The Federal Deposit Insurance Corporation (“FDIC”), an independent agency of the United States government, insures bank deposits up to $250,000 per depositor, per bank, subject to certain conditions. In addition, effective from December 31, 2010 through December 31, 2012, the FDIC insures all bank deposits in noninterest bearing transaction accounts, such as checking accounts, without limitation as to amount. In the event that any bank where the Partnership holds funds becomes insolvent, the Partnership may lose some or all of any excess over FDIC-insured limits held at that bank. From time to time, the Partnership has had, and in the future may have, cash balances at its principal bank in excess of FDIC-insured amounts.

The Securities Investor Protection Corporation (“SIPC”), a non-profit corporation set up and funded by the brokerage industry, insures investors’ accounts at member brokerage firms up to $500,000 per investor, subject to certain conditions, in the event that a member brokerage firm goes bankrupt, and cash and securities are missing 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 claims. Typically, most or all of the Partnership’s funds held at its brokerage firm are invested in brokered certificates of deposit, each of which is fully insured by the FDIC, although, at times significant amounts held at the brokerage firm have not been, and in the future may not be, invested in FDIC-insured certificates of deposit. In the event the brokerage firm where the 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 such excess over SIPC-insured amounts to the extent that the Partnership’s accounts are not invested in FDIC-insured certificates of deposit. At September 30, 2012, the Partnership had no account balances in excess of SIPC-insured amounts.

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.

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 $500,000 of CD’s during the three months ended March 31, 2013.

Impairment of long-lived assets - The Partnership’s long-lived assets, primarily real estate held for sale, are carried at cost unless circumstances indicate that the carrying value of the assets may not be recoverable. The Partnership obtains an appraisal of the Property periodically (typically, every two years). The most recent appraisal was dated as of December 31, 2012. Management evaluates the carrying value of the Property based on the latest appraisal at the time the appraisal is received and periodically thereafter. Based upon Management’s latest evaluation, the Partnership does not expect to reduce the carrying value of the Property in the near future.

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

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 short-term investments at various times during the nine months ended September 30, 2011. The Partnership held no short-term investments during the nine months ended September 30, 2012.

h. Impairment of long-lived assets - The Partnership’s long-lived assets, primarily real estate held for sale, are carried at cost unless circumstances indicate that the carrying value of the assets may not be recoverable. The Partnership obtains an appraisal of the Property periodically (typically, every two years). The most recent appraisal was dated as of December 31, 2011. Management evaluates the carrying value of the Property based on the latest appraisal at the time the appraisal is received and periodically thereafter. Based upon Management’s latest evaluation, the Partnership does not expect to reduce the carrying value of the Property in the near future.

The 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.

8The amount of the valuation allowance at both March 31, 2013 and December 31, 2012 is $534,388.

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

The amount of the valuation allowance at September 30, 2012 and December 31, 2011 is $534,388 and $535,243, respectively.

Fair value measurements - The Partnership adopted FASB ASC 820, “Fair Value Measurements and Disclosures”. FASB ASC 820 defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. The statement indicates, among other things, that 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, in the absence of a principal market, the most advantageous market for the asset or liability based upon an exit price model.

j. Recent accounting pronouncements – In May 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common 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 fair value hierarchy, and requires additional disclosures. ASU No. 2011-04 applies only to the Partnership’s disclosures, if any, related to the fair value of assets and liabilities and has not had a significant impact on the Partnership’s footnote disclosures.

All other new and recently 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.

3. Commitments and Contingent Liabilities

Dam Repairs

The 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~~such as 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

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Commitment for Municipal Water Service

The 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 assessments from 2004 through 2011. ~~The~~ 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~~Each ~~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 subsequently 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.

In May 2010, the City transferred ownership of the municipal water system to Brunswick County, North Carolina (the “County”) in exchange for the County’s construction of a wastewater collection system within a portion of the City. AsIn aconnection with ~~condition of~~ the transfer, the City retained the cash surplus in the municipal water assessment fund. In March 2012, the City began to refund the cash surplus to eligible property owners, including the Partnership, who had previously paid water assessments. ~~The Partnership received refunds totaling $82,126 through September 30, 2012, or 87%~~ ~~of the $94,200 that the Partnership expects to receive.~~ The ~~actual amount of additional~~ refunds tohave bebeen ~~received~~completed may be more or less than the Partnership presently expects. Each refund check identifies the lot(s) or tract(s) of land to which the refund applies. During the first and second quarters of 2012, the Partnership reduced the cost basis of the lots to which the $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.

Most 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.

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REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Commitment for Municipal Sewer Service

The City lacks ~~municipal~~ 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~~waste water 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~~ along a stretch of State Road 87, the main road into and out of the City. The Partnership owns approximately ~~231.75~~219 acres of land zoned or intended for commercial use and most of that land fronts on State Road 87. In September 2012, the County began installation of sewer lines along all of State Road 87 that lies within the City, with a total preliminary cost estimate of $3.0 million. 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 completed as or when planned or that the actual cost will not differ significantly from what is currently contemplated. The County has not 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, but, based on publicly available information, the Partnership may face total assessments for the sewer lines commencing in 2014 in the estimated amount of $1,040,338. The County has stated that any assessment may be paid in full at a 5% discount or paid over 10 years at an interest rate of 2.84%. 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 Partnership has made no provision in the financial statements related to this contingent liability.

~~In September 2012,~~Environmental the County determined that it will install sewer lines along all of State Road 87 that lies within the City, with a total preliminary cost estimate of approximately $3.4 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.Matters

11The Partnership is 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.

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Environmental Matters

The Partnership is 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.

Endangered / Protected Species

Some sections of the City, including 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.

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.

12The 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.

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(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.

Water Level of Lakes

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.

13The 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.

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(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.

Building and Maintaining Roads

The Partnership is responsible for maintaining certain roads, most of which are unpaved, and certain 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 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.

REEVES TELECOM LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

4. Related Party Transactions

The General Partner is entitled to receive from the Partnership a general partner’s fee. The amount of the ~~general~~General ~~partner~~Partner’s fee ~~for the three months and nine months ended September 30, 2012~~ was $40,000 ~~and~~for ~~$120,000,~~both ~~respectively. The amount of~~ the ~~general partner’s fee for the~~ three months ~~and nine months~~ ended ~~September~~March 3031, ~~2011~~2013 ~~was $40,000~~ and ~~$120,000~~2012. At ~~September 30~~March 31, ~~2012~~2013, the Partnership ~~accrued~~prepaid $8040,000 for ~~general~~General ~~partner~~Partner’s fees due ~~but~~for ~~not~~the ~~yet~~second ~~paid~~quarter 2013.

The Partnership pays for accounting services and rent to an affiliate of the General Partner for office space located at 55 Brookville Road, Glen Head, New York. The amount of rent was $4,750 for both the three months ~~and nine months~~ ended March ~~September 30~~31, ~~2012~~2013 ~~was $4,750~~ and ~~$14~~2012,~~250,~~ ~~respectively.~~while ~~The~~the amount of ~~rent~~accounting ~~for~~service ~~the~~expense ~~three months and nine months ended September 30, 2011~~ was $410,~~750~~000 and $140,~~250,~~ respectively., for the same periods. At ~~September~~March 3031, ~~2012~~2013, the Partnership ~~accrued~~prepaid $47,~~750~~525 for rent due ~~but~~for ~~not~~all of the second quarter of 2013 and a portion of the ~~yet~~rent ~~paid~~due for the third quarter of 2013.

The Partnership reimburses the General Partner ~~and~~or 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 both the three months ~~and nine months~~ ended ~~September 30,~~March ~~2012 was $149 and $1~~31,~~070,~~ ~~respectively.~~2013 ~~The amount of out-of-pocket expenses subject to reimbursement incurred~~ and ~~paid~~ ~~for~~2012 ~~the three months and six months ended September 30, 2011~~ was $0 and $~~207~~0, respectively.

[THE REST OF THIS PAGE IS BLANK]

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used herein, the terms “we,” “us,” and “our” refer to Reeves Telecom Limited Partnership, a South Carolina limited partnership. As used herein, the terms “management,” “our general partner,” and “General Partner” refer to Grace Property Management, Inc., a Delaware corporation, and/or its successors or additional general partners, as the context requires.

The following discussion should be 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.

Special Note on Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q 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.

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~~2012 as filed with the SEC on ~~March~~February 3019, ~~2012~~2013; 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.

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REEVES TELECOM LIMITED PARTNERSHIP

General

Our principal asset is our undeveloped land in Boiling Spring Lakes, ~~Brunswick County, NC~~ comprising approximately ~~817~~816 acres. As of ~~September~~March 3031, ~~2012~~2013, we owned the following undeveloped land:

• Approximately 354 acres, divided into 1,~~070~~072 platted individual lots, both recorded and unrecorded, intended for residential use.

•

Approximately 244 acres intended for residential use.

•

Approximately 219 acres intended for commercial use.

Our business is primarily the 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.

Local Real Estate Market Conditions

We believe that ~~local financial institutions have maintained tight credit requirements, due, in part, to concerns that~~ the prices of residential and commercial real estate may ~~continue~~have toflattened ~~decline~~out and will slightly improve during ~~2012~~2013 and, perhaps, even into ~~2013~~2014. WeHowever, we believe that ~~these~~the 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.

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., Weand ~~have~~we ~~not~~may ~~decided when to~~ resume the program in 2013. 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.

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REEVES TELECOM LIMITED PARTNERSHIP

Residential

The real estate market in Brunswick County has ~~seen~~been, aat ~~rise in the number of existing home sales~~best, sluggish and ~~a slight improvement in prices~~uneven, 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):

• Existing home sales: The number of home sales infor the month ofended ~~August~~March 31, ~~2012~~2013 ~~(197)~~ was 175% ~~higher~~lower than for the month ofended ~~August~~March 31, ~~2011 (169)~~2012. ~~Year over year July sales were 52% higher.~~

• Average sales price of existing homes: The average sales ~~prices~~price for ~~August~~March ~~2012~~2013 ~~and~~was ~~August 2011 were~~ $~~228~~227,~~545 and $207~~271,~~027,~~ ~~respectively, or~~ a 1012% ~~improvement~~increase from March 2012.

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.

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Three Months Ended ~~September~~March 3031, ~~2012 Compared~~2013 Compared to Three Months Ended ~~September~~March 3031, ~~2011~~2012

■

Revenue

Property Sales

Revenue from property sales was $~~3,967~~0 for the three months ended ~~September~~March 3031, ~~2012~~2013, compared to $238,~~811~~850 for the three months ended ~~September~~March 3031, ~~2011~~2012. The Partnership sold 1no ~~individual undeveloped~~ lots during the three months ended ~~September~~March 3031, ~~2012~~2013, compared to 31 individual undeveloped ~~lots~~ lot sold during the three months ended ~~June~~March 3031, ~~2011~~2012.

Management believes that the amount of revenue from property sales and the number of lots sold during the ~~three~~first ~~quarters~~quarter of ~~2012~~2013 and the first quarter and full year of ~~2011~~ 2012 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.

Interest Income

Interest income was $~~166~~50 for the three months ended ~~September~~March 3031, ~~2012~~2013, compared to $~~1,899~~189 for the three months ended ~~September~~March 3031, ~~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 is to keep cash entirely liquid atduring a time when interest rates earned on certificates of deposit are near historical lows.

■

Direct Costs of Property Sold

Direct cost of property sold was $~~255~~0 for the three months ended ~~September~~March 3031, ~~2012~~2013, compared to $~~708~~262 for the three months ended ~~September~~March 3031, ~~2011~~2012. ~~The~~Management attributes ~~change~~the isdecline ~~due~~ to ~~the~~having ~~difference in the number of undeveloped lots~~ sold inno ~~each period~~lots.

■

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended ~~September~~March 3031, ~~2012~~2013 were $~~115~~173,~~817~~389, ~~compared~~$50,037 toor 41% higher than the $~~120~~123,~~913~~352 for the ~~three months~~ ~~ended~~same ~~September~~period ~~30,~~of ~~2011~~2012. The ~~change~~increase is ~~immaterial.~~due principally to the following changes in components of selling, general and administrative expenses:

19Legal Expenses

Legal expenses for the first quarter of 2013 were $41,083, an increase of $36,008 over the first quarter of 2012. The increase reflects non-recurring expenses related to the work on proxy and other filings with the SEC and other matters in connection with the Reverse Unit Split Proposal.

REEVES TELECOM LIMITED PARTNERSHIP

Accounting Fees and Expenses

Accounting fees and expenses for the three months ended March 31, 2013 were $15,565, an increase of $6,327 over the $9,238 for the three months ended March 31, 2012. The increase is related to auditor fees related to the proxy filings with the SEC in connection with the Reverse Unit Split Proposal, in addition to the 10K Annual Report filing with the SEC.

■

Depreciation

Depreciation was $887 for the three months ended ~~September~~March 3031, ~~2012~~2013, ~~consistent~~unchanged ~~with~~from ~~$887 for~~ the three months ended ~~September~~March 3031, ~~2011~~2012.

Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011

■ Revenue

Property Sales

Revenue from property 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.

Management believes that the amount of revenue from property sales and the number of lots sold during the three 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.

Interest Income

Interest income was $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.

REEVES TELECOM LIMITED PARTNERSHIP

■ Direct Costs of Property Sold

Direct cost of property 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.

■ Selling, General and Administrative Expenses

Selling, general and administrative 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.

■ 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.

Liquidity and Capital Resources

■

General

At ~~September~~March 3031, ~~2012,~~ 2013, we had $1,~~651~~115,~~813~~119 in cash, of which amount $1114,~~400,997~~439 was held in a non-interest bearing checking account, ~~because~~$500,000 ~~the FDIC insures~~in ~~balances~~CD’s inand ~~such~~$500,680 ~~accounts without limit. Substantially all of the remainder was held~~ in ~~interest-bearing~~a money market ~~accounts at local financial institutions~~account. Accounts payable and accrued expenses, including accrued expenses owed to affiliates, as of such date totaled $~~204~~44,~~994~~746.

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.

•

Roads: Much 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.

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 beginning in 2014, relating to the installation of sewer lines. The total of such assessments is likely to be substantial. We have made no provision in our financial statements for such assessments.

REEVES TELECOM LIMITED PARTNERSHIP

• 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.

Cash is generated 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.

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Cash Flows from Operating Activities

Operating activities used $~~284~~173,~~165~~790 of net cash during the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013, compared to $~~311~~223,~~714~~189 of net cash used during the same ~~period~~ period of ~~2011~~2012. ~~The~~Although ~~reduction~~the ofnet ~~$27.549~~loss ofincreased ~~net~~for ~~cash~~the ~~used~~reasons indescribed ~~operating~~above ~~activities~~and in the ~~2012~~prepayment ~~period~~in is2013 ~~primarily~~of ~~the~~amounts ~~result~~due ofto affiliates increased cash flow, we attribute the ~~receipt~~net ofcash ~~$82,126~~flow asreduction aprimarily ~~refund~~due to the combined effect of ~~water~~prepayment ~~assessments~~of ~~offset~~property bytaxes during a2012 ~~decline~~and elimination of ~~$60,050~~accounts inpayable ~~net~~and ~~income~~accrued inexpenses as compared to the ~~nine~~first ~~month~~quarter ~~period~~of 2012.

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Cash Flows from Investing Activities

~~Investing~~There ~~activities provided~~were $0no ~~during the first nine months of 2012, compared to $1,641,650 of net~~ cash ~~provided during the same period of 2011. The~~ ~~change~~flows isfrom ~~due~~investing toactivities ~~the fact that no investments matured~~ during the ~~period~~first ~~because~~three wemonths ~~did not reinvest proceeds previously received upon maturity~~ of ~~investments,~~2013 ~~resulting in no investments being held at September 30, 2012~~ and ~~December 31, 2011~~2012.

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Long-term Debt

The Partnership had no long-term debt outstanding during the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013 or the same period of ~~2011~~2012.

22Off Balance Sheet Arrangements

The Partnership does not utilize off balance sheet arrangements, and there were none during the first three months of 2013 or 2012.

REEVES TELECOM LIMITED PARTNERSHIP

■ Off Balance Sheet Arrangements

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

■ Contingencies

The Partnership learned in September 2012 that its estimated assessment for the sewer project will be $1,040,338. See Note 3 to Notes to Condensed Financial Statements, “Commitment for Municipal Sewer 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~~close to 0% 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 ~~third~~first quarter of ~~2012~~2013, 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~~0,~~669,~~ and, at ~~September~~March 3031, ~~2012~~2013, we had cash of $~~250,166~~0 held in interest-bearing money market accounts.

23• 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 first quarter of 2013, we had $500,000 invested in certificates of deposit.

Had the average level of annual interest rates earned on our cash balances during the three months ended March 31, 2013 been higher or lower by 100 basis points or one percent (1%), our net income would have been approximately $1,250 more and $0 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%.

REEVES TELECOM LIMITED PARTNERSHIP

•We ~~Certificates~~had ofno ~~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 debt ~~interest~~outstanding atduring ~~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~~first 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~~2013.

Had the average level of annual interest rates earned on our cash balances during the three months ended September 30, 2012 been higher or lower by 100 basis points or one percent (1%), our net income would have been approximately $4,129 more and $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 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

Mr. Peter Metz, the president ~~President~~ of our General Partner, ~~carried~~carries out the functions of our principal executive officer and principal financial officer, and, accordingly, he ~~was~~is deemed to be our “management” for the purpose of evaluating our disclosure controls and procedures and the effectiveness thereof. ~~from~~Mr. Metz has, as of the ~~General~~end ~~Partner.~~of ~~Mr.~~the ~~Metz~~period ~~evaluated~~covered by this Quarterly Report on Form 10-Q, 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, heMr. Metz has concluded that, as of ~~September 30~~March 31, ~~2012~~2013, our disclosure controls and procedures were effective in 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.

REEVES TELECOM LIMITED PARTNERSHIP

Changes in Internal Control Over Financial Reporting

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 ~~third~~first fiscal quarter of ~~2012~~2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting..

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REEVES TELECOM LIMITED PARTNERSHIP

PART II. OTHER INFORMATION

Item 1A. 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~~2012 as filed with the SEC on ~~March~~February 3019, ~~2012~~2013. 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.

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 32 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section.

** 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 18 of the Exchange Act, and is otherwise not subject to liability under these sections.22

26REEVES TELECOM LIMITED PARTNERSHIP

SIGNATURES

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: ~~October~~May 246, ~~2012~~2013

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