Item 1. Business
LMR Land Company, Ltd. ("Registrant"), is a Tennessee limited partnership organized on December 22, 1986, pursuant to the provisions of the Tennessee Uniform Limited Partnership Act, Chapter 2, Title 61, Tennessee Code Annotated, as amended. The General Partner of Registrant is 222 LMR,Ltd.
Registrant's primary business is to acquire, own, and hold for investment certain undeveloped real properties located in Lebanon, Tennessee; and Macon, Georgia (collectively, the "Property"). Registrant's investment objectives are preservation of investment capital and appreciation of the value of the Property due to development of the surrounding areas and the completion of improvements to the Properties prior to resale.
Financial Information About Segment
The Registrant's activity, investment in land, lies within the domestic United States and is within one industry segment. Therefore, financial data relating to the geographic area and industry segment is included in Item 6 - Selected Financial Data.
Narrative Description of Business
At December 31, 1999, the Registrant is holding for investment approximately 114 acres of land in Macon, Georgia (the "Property").
The property consists of 114 acres at December 31, 1999, which includes approximately 10 acres that are unsalable attributable to roads, right of ways, and landscaping. The property is located at the intersection of Eisenhower Parkway and Log Cabin Road southwest of downtown Macon. The property is zoned for retail, service center and service warehouse type uses. The property is served by municipal gas, electricity, water, and sewer. No development has occurred on the Property.
The Registrant has no employees. Property management services are being provided under a contractual agreement with Landmark Realty Services Corporation, an affiliate of the General Partner.
Item 2.
Item 2. Properties
As of December 31, 1999, Registrant owned approximately 114 acres of undeveloped land, which includes approximately 10 acres that are unsalable attributable to roads, right of ways, and landscaping. For further information concerning the Property, reference is made to the material in Item 1.
Item 3.
Item 3. Legal Proceedings
Registrant is not a party to, nor is any of Registrant's property the subject of, any material legal proceedings.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
The security holders of Registrant did not vote on any matter during the fiscal year covered by this report.
PART II
Item 5.
Item 5. Market for Registrant's Units of Limited Partnership
Interest and Related Security Holder Matters
There is no established market for the Units and it is not anticipated that any will exist in the future. The Registrant commenced an offering to the public on April 1, 1987 of 7,500 Units of Limited Partnership Interests. The offering of $7,500,000 was fully subscribed and closed on June 8, 1987. As of February 28, 1999 there were 625 holders of record of the 7,500 Units of Limited Partnership Interests.
During 1999, there were no distributions. During 1998, the Registrant distributed $195/Unit to its limited partners for a total of $1,462,500. During 1997, the Registrant distributed $30/unit to its limited partners for a total of $225,000. There are no material restrictions upon Registrant's present or future ability to make distributions in accordance with the provisions of Registrant's Limited Partnership Agreement.
Item 6.
Item 6. Selected Financial Data
For the Year ended December 31,
1999 1998 1997 1996 1995
Total Revenue $ 131,336 381,108 8,963 133,601 57,641 Net Income(Loss) 2,017 267,243 (97,773) 26,101 (47,591) Net Income (Loss) per limited partner unit 0.27 35.63 (13.04) 3.48 (6.35) Total Assets 2,892,335 2,900,075 4,110,579 4,430,651 4,499,958 Cash Distributions per unit - 195.00 30.00 - -
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Sales
During 1999, the Registrant sold the remaining 3 acres of the Lebanon Property. The proceeds were retained to meet the operational needs of the Registrant.
During 1998, the Registrant sold approximately 46 acres of Lebanon Property. These combined proceeds were used to make a $1,462,500 cash distribution to the limited partners.
There were no sales in 1997.
Analysis of Operations
There have been no significant fluctuations in the Registrant's operations except for sales described in the above paragraph. The fluctuations in property maintenance costs are due to additional costs incurred preparing the Lebanon land for sale.
Financial Condition
As of February 29, 2000 the Registrant had a cash balance of $276,712. The General Partner believes this cash balance is sufficient to meet the needs of the Registrant for the year 2000.
Year 2000
In 1998, the Partnership initiated a plan ("Plan") to identify, and remediate "Year 2000" issues within each of its significant computer programs and certain equipment which contain microprocessors. The Plan addressed the issue of computer programs and embedded computer chips being unable to distinguish between the year 1900 and the year 2000, if a program or chip uses only two digits rather than four to define the applicable year. The Partnership divided the Plan into five major phases-assessment, planning, conversion, implementation and testing. The plan was completed in mid 1999. The total remediation costs for the plan were not material to the operations or liquidity of the partnerships. The registrant had no significant operational difficulties related to Year 2000 issue. Management does not expect any future operational problems related to Year 2000 issues.
Item 8.
Item 8. Financial Statements and Supplementary Data
The Financial Statements required by Item 8 are filed at the end of this Report.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
Registrant does not have any directors or officers. 222 LMR, Ltd. is the General Partner. 222 Partners, Inc. is the general partner of the General Partner and as such has general responsibility and ultimate authority in matters affecting the Registrant's business.
222 Partners Inc.
222 Partners, Inc. was formed in September, 1986, and serves as co-general partner for several other real estate investment limited partnerships. Steven D. Ezell is the president and sole shareholder of 222 Partners, Inc. The directors of 222 Partners, Inc. are W. Gerald Ezell, Steven D. Ezell and Michael A. Hartley. The directors of 222 Partners, Inc. are elected by the shareholder to serve one year or until their successors are elected by the Board of Directors and serve until their successors are elected and qualified.
The officers and directors of 222 Partners, Inc. are as follows:
W. Gerald Ezell
W. Gerald Ezell, age 69, serves on the Board of Directors of 222 Partners, Inc. Mr. Ezell is also a general partner of affiliated limited partnerships which own various real estate properties. Until November, 1985, Mr. Ezell had been for over 20 years an agency manager for Fidelity Mutual Life Insurance Company and a registered securities principal of Capital Analysts Incorporated, a wholly owned subsidiary of Fidelity Mutual Life Insurance Company.
Steven D. Ezell
Steven D. Ezell, age 46, is the President and sole shareholder of 222 Partners, Inc. He has been an officer of 222 Partners, Inc. from September 17, 1986 through the current period. Mr. Ezell is President and 50% owner of Landmark Realty Services Corporation. He was for the prior four years involved in property acquisitions for Dean Witter Realty Inc. in New York City, most recently as Senior Vice President. Steven D. Ezell is the son of W. Gerald Ezell.
Michael A. Hartley
Michael A. Hartley, age 40, is Secretary/Treasurer and a Vice President of 222 Partners, Inc. He has been an officer of 222 Partners, Inc. from September 17, 1986 through the current period. Mr. Hartley is Vice President and 50% owner of Landmark Realty Services Corporation. Prior to joining Landmark in 1986, Mr. Hartley was Vice President of Dean Witter Realty Inc., a New York- based real estate investment firm.
Item 11.
Item 11. Executive Compensation
During 1998, Registrant was not required to and did not pay remuneration to any executives, partners of General Partner or any affiliates, except as set forth in Item 13 of this report, "Certain Relationships and Related Transactions."
The General Partner does participate in the profits, losses and distributions of the Registrant as set forth in the Partnership agreement.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of January 31, 2000, no person or "group" (as that term is used in Section 13(d) (3) of the Securities Exchange Act of 1934) was known by the Registrant to beneficially own more than five percent of the Units of Registrant.
As of the above date, the Registrant knew of no officers or directors of 222 Partners, Inc. that beneficially owned any of the Units of the Registrant.
There are no arrangements known by the Registrant, the operation of which may, at a subsequent date, result in a change in control of the Registrant.
Item 13.
Item 13. Certain Relationships and Related Transactions
No affiliated entities have, for the year ending December 31, 1999, earned or received compensation or payments for services from the Registrant in excess of $60,000. For a listing of miscellaneous transactions with affiliates which were less than $60,000 refer to Note 3 of Financial Statements in Item 8.
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-k
(a) (1) Financial Statements
The following Financial Statements are included herein:
Independent Auditors' Report
Financial Statements Balance Sheets Statements of Operations Statements of Partners' Equity Statements of Cash Flows Notes to Financial Statements
(2) Financial Statement Schedule
Independent Auditors' Report S-1
Schedule III- Real Estate and Accumulated Depreciation S-2
(3) Exhibits
3 Amended and Restated Certificate and Agreement of Limited Partnership incorporated by reference to Exhibit A to the Prospectus of Registrant dated April 1, 1987 filed pursuant to Rule 424(b) of the Securities and Exchange Commission.
22 Subsidiaries-Registrant has no subsidiaries.
27 Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last quarter of 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
LMR LAND COMPANY, LTD.
By: 222 LMR, Ltd. General Partner
By: 222 Partners, Inc. General Partner
DATE: January 31, 2000 By: /s/Steven D. Ezell President and Director
DATE: January 31, 2000 By: /s/Michael A. Hartley Secretary/Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
LMR LAND COMPANY, LTD.
By: 222 LMR, Ltd. General Partner
By: 222 Partners, Inc. General Partner
DATE: January 31, 2000 By: /s/Steven D. Ezell President and Director
DATE: January 31, 2000 By: /s/Michael A. Hartley Secretary/Treasurer
Supplemental Information to be Furnished with Reports filed Pursuant to Section 15(d) of the Act by Registrant Which Have Not Registered Securities Pursuant to Section 12 of the Act:
No annual report or proxy material has been sent to security holders.
Independent Auditors' Report
The Partners LMR Land Company, Ltd.:
We have audited the accompanying balance sheets of LMR Land Company,Ltd. (a limited partnership) as of December 31, 1999 and 1998, and the related statements of operations, partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1999. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of LMR Land Company, Ltd. at December 31, 1999 and 1998, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 1999, in conformity with generally accepted accounting principles.
KPMG LLP
Nashville, Tennessee January 21, 2000
LMR LAND COMPANY, LTD. (A Limited Partnership)
Balance Sheets
December 31, 1999 and 1998
Assets 1999 1998
Cash $ 310,703 120,260 Restricted cash 10,523 15,776 Accounts Receivable 4,041 - Land and improvements held for investment 2,567,088 2,764,039
Total assets $2,892,355 2,900,075
Liabilities and Partners' Equity:
Accounts payable and accrued expenses $ 17,665 27,402
Partners' equity:
Limited partners (7,500 units outstanding) 2,874,592 2,872,575 General partner 98 98
Total partners' equity 2,874,690 2,872,673
Commitments
Total liabilities and partners' equity $ 2,892,355 2,900,075
See accompanying notes to financial statements.
LMR LAND COMPANY, LTD. (A Limited Partnership)
Statements of Operations
Years ended December 31, 1999, 1998, and 1997
1999 1998 1997 Revenue: Land sales: Sale proceeds $ 370,000 1,898,070 - Cost of land and improvements sold (196,951) (1,380,464) - Closing costs (44,400) (147,578) - Gain on land sales 128,649 370,028 - Interest 2,437 10,792 8,713 Miscellaneous income 250 288 250
Total revenue 131,336 381,108 8,963
Expenses: Property management fees and maintenance costs 54,647 36,605 24,694 Property taxes 47,640 52,195 61,898 Legal and accounting fees 19,586 20,284 17,638 Other operating expenses 7,446 4,781 2,506
Total expenses 129,319 113,865 106,736
Net income(loss) $ 2,017 267,243 (97,773)
Net income (loss) allocated to:
Limited partners $ 2,017 267,243 (97,772) General partner - - -
Net income (loss) per limited partner unit $ 0.27 35.63 (13.04) Weighted average units outstanding 7,500 7,500 7,500
See accompanying notes to financial statements.
LMR LAND COMPANY, LTD. (A Limited Partnership)
Statements of Partners' Equity
Years ended December 31, 1999, 1998, and 1997
Limited General partners partner Total units amounts Balance at
December 31, 1996 7,500 $4,390,604 99 4,390,703
Distributions to - (225,000) - (225,000) partners
Net loss - (97,772) (1) (97,773)
Balance at December 31, 1997 7,500 4,067,832 98 4,067,930
Distributions to partners - (1,462,500) - (1,462,500)
Net Income - 267,243 - 267,243
Balance at December 31, 1998 7,500 2,872,575 98 2,872,673
Net Income - 2,017 - 2,017
Balance at December 31, 1999 7,500 $2,874,592 98 2,874,690
See accompanying notes to financial statements.
LMR LAND COMPANY, LTD. (A Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1999, 1998, and 1997
1999 1998 1997
Cash flows from operating activities:
Net income (loss) $ 2,017 267,243 (97,773) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Decrease (Increase) in restricted cash 5,253 (15,776) - Increase in accounts receivable (4,041) - - Decrease in receivable from affiliate - - 40,628 Cost of land & improvements - (180,592) (88,500) Cost of land and improvements sold 196,951 1,380,464 - (Decrease) increase in accounts payable (9,737) (15,247) 2,701
Net cash provided by (used in) operating activities 190,443 1,436,092 (142,944)
Cash flows from financing activities:
Distributions to partners - (1,462,500) (225,000)
Net increase(decrease) in cash $190,443 (26,408) (367,944)
Cash at beginning of year $120,260 146,668 514,612 Cash at end of year $310,703 120,260 146,668
See accompanying notes to financial statements.
LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements December 31, 1999 and 1998
(1) Summary of Significant Accounting Policies
(a) Organization
LMR Land Company, Ltd. (the Partnership) is a Tennessee Limited Partnership organized on December 22, 1986, to acquire, own, and hold for investment certain undeveloped land located in Lebanon, Tennessee; and Macon, Georgia. The general partner is 222 LMR, Ltd. The general partner of the general partner is 222 Partners, Inc. The Partnership prepares its financial statements and Federal income tax returns on the accrual method and includes only those assets, liabilities and results of operations which relate to the business of the Partnership.
(b) Estimates
Management of the partnership has made certain estimates and assumptions to prepare these financial statements in accordance with generally accepted accounting principles. These estimates include the determination of the estimated fair value of the land and improvements held for investment. Actual results could differ from those estimates.
(c) Cash
Cash belonging to the Partnership is combined in an account with funds from other partnerships related to the general partner.
(d) Land and Improvements Held For Investment
During 1997, an additional 2 acres of land were purchased from a related party for $88,500. Land and improvements held for investment are recorded at acquisition cost plus development costs. Insurance and property taxes are capitalized as carrying costs of the property during the development period. Insurance and property taxes are charged to expense once development of the property is substantially complete. Remaining acreage is approximately 114 and 117 acres at December 31, 1999 and 1998, respectively, which includes approximately 10 acres which are unsalable attributable to roads, right of ways, and landscaping.
Long-lived assets to be disposed of be reported at the lower of the carrying amount or fair value less estimated costs to sell. The fair value of the assets can be determined externally, using appraisals, or internally using discounted future net cash flows. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets less estimated costs to sell.
LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements
(1) Summary of Significant Accounting Policies(continued)
(d) Land and Improvements Held For Investment(continued)
Impairment is recognized through the establishment of an allowance for impairment with a corresponding charge to operations. Losses upon the sale of the assets are charged to the allowance. Based upon management's analysis of discounted future net cash flows, the Partnership's land and improvements held for investment are not impaired. Accordingly, land and improvements held for investment is recorded at cost with no allowance for impairment necessary.
(1) Summary of Significant Accounting Policies (continued)
(e) Partnership Allocations
Net profits, losses and distributions of cash flow of the Partnership are allocated to the partners in accordance with the Partnership agreement as follows:
Net profits are allocated first to any partner with a negative balance in their capital account, determined at the end of the taxable year as if the Partnership had distributed cash flow, in proportion to the negative capital balance account of all partners until no partner's capital account is negative. Net profit allocations are then made to the limited partners up to the difference between their capital account balances and the sum of their adjusted capital contributions (capital balance, net of cumulative cash distributions in excess of preferred returns - 12% annual cumulative return on capital contributed)and unpaid preferred returns. Any remaining net profits are allocated to the limited partners until the taxable year in which cumulative distributions to the limited partners equal their adjusted capital contribution plus an unpaid preferred return. Net profits are then allocated to the general partner until the ratio of the general partner's capital account balance to the capital account balances, in excess of adjusted capital contributions and unpaid preferred return, of all limited partners is 27.5% to 72.5%. Thereafter, profits are generally allocated 27.5% to the general partner and 72.5% to the limited partners. Net losses are allocated to the partners in proportion to their positive capital accounts.
Partnership distributions are allocated to the limited partners in an amount equal to their preferred return (12% annual cumulative return on capital contributed) to the extent unpaid to date. Any remaining distributions are allocated 99% to the limited partners and 1% to the general partner until the limited partners have received an amount equal to their adjusted capital contributions, and thereafter, 72.5% to the limited partners and 27.5% to the general partner. Cumulative unpaid preferred returns are $5,178,852 at December 31, 1999.
LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements
(1) Summary of Significant Accounting Policies(continued)
(f) Income Taxes
No provision has been made in the financial statements for Federal and state income taxes, since such taxes are the responsibilities of the partners. Annually, the partners receive, from the Partnership, IRS Form K-1's which provide them with their share of taxable income (or losses), deductions and other tax information. The only difference between the tax basis and reported amounts of the Partnership's assets and liabilities relates to the valuation of land and improvements held for investment.
(g) Income Recognition
Income from sales of land held for investment is generally recorded on the accrual basis when the buyer's financial commitment is sufficient to provide economic substance to the transaction, and when other criteria of SFAS No. 66 "Accounting for Sales of Real Estate" are satisfied. For sales of real estate where both cost recovery is reasonably certain and the collectibility of the contract price is reasonably assured, but the transaction does not meet the remaining requirements to be recorded on the accrual basis, profit is deferred and recognized under the installment method, which recognizes profit as collections of principal are received. If developments subsequent to the adoption of the installment method occur which cause the transaction to meet the requirements of the full accrual method, the remaining deferred profit is recognized at that time. Any losses on sales of real estate are recognized at the time of the sale.
(h) Comprehensive Income
Comprehensive income is defined as the change in equity of a business enterprise, during a period, associated with transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. During the years 1999, 1998, and 1997, the Partnership had no components of other comprehensive income. Accordingly, comprehensive income for each of the periods was the same as net income (loss).
LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements
(2) Land and Improvements Held for Investment
The components of land and improvements held for investment at December 31, 1999 and 1998 are as follows:
1999 1998
Land $ 2,567,088 2,722,669 Land Improvements -0- 41,370 __________ _________ $ 2,567,088 2,764,039
Aggregate cost for Federal income tax purposes for the land held for investment was $2,544,108 and $2,741,400 at December 31, 1999 and 1998, respectively.
(3) Related Party Transactions
The general partner and its affiliates have been actively involved in managing the Partnership. Affiliates of the General Partner receive fees as consideration for performing certain services. Expenses incurred for these services during the years ended December 31, 1999, 1998, and 1997 are as follows:
1999 1998 1997 Accounting Fees 3,100 3,459 3,327 Engineering fees - - 2,100 Program Management fees 14,000 14,000 14,000
Included in accounts payable and accrued expense at December 31, 1999 and 1998 is $10,499 to an affiliate for commissions on the sale of property. The amounts due to affiliates are noninterest-bearing.
(4) Distributions
The partnership had no distributions for the year ended December 31, 1999. The Partnership made distributions to limited partners of $1,462,500 and $225,000 ($195 and $30 per unit),respectively, for the years ended December 31, 1998 and 1997.
Independent Auditors' Report
The Partners LMR Land Company, Ltd.:
Under date of January 21, 2000, we reported on the balance sheets of LMR Land Company, Ltd. as of December 31, 1999 and 1998, and the related statements of operations, partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1999. These financial statements and our report thereon are included elsewhere herein. In connection with our audits of the aforementioned financial statements, we have also audited the related financial statement Schedule III, Real Estate and Accumulated Depreciation. This financial statement schedule is the responsibility of the Partnership's management. Our responsibility is to express an opinion on this financial statement schedule based on our audit.
In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
KPMG LLP
Nashville, Tennessee January 21, 2000
S-1
S-2 LMR LAND COMPANY, LTD. (A Limited Partnership)
Schedule III
Real Estate and Accumulated Depreciation
1999 1998 1997
(1) Balance at beginning of Period $2,764,039 3,963,911 3,875,411
Additions during period: Improvements - 180,592 - Purchase of Land - - 88,500
Deductions during period: Cost of real estate sold 196,951 1,380,464 - Return of Escrow Deposits - - -
Balance at close of period $ 2,567,088 2,764,039 3,963,911
(2) Aggregate cost for Federal income tax purposes $ 2,544,108 2,741,400 3,943,661
See accompanying independent auditors' report.
S-3
Exhibits filed pursuant to Item 14(a) (3):
LMR LAND COMPANY, LTD. (A Tennessee Limited Partnership)
Exhibit Index
Exhibit
3 Amended and Restated Certificate and Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of registrant dated April 1, 1987 filed pursuant to Rule 424(b) of the Securities and Exchange Commission.
22 Subsidiaries-Registrant has no subsidiaries.
27 Financial Data Schedule