-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CjfEI7E0T+14wc/1FM3FTxdGjMPI5utddZFLIxoZ2xxMu6AEOLfWk2vmtQM0UssG Y26XNDonONHEvEQ9z7uhyw== 0000790609-99-000022.txt : 19990402 0000790609-99-000022.hdr.sgml : 19990402 ACCESSION NUMBER: 0000790609-99-000022 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LMR LAND CO LTD /TN/ CENTRAL INDEX KEY: 0000809938 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 621299384 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-16727 FILM NUMBER: 99581765 BUSINESS ADDRESS: STREET 1: 4400 HARDING RD STREET 2: STE 500 CITY: NASHVILLE STATE: TN ZIP: 37205 BUSINESS PHONE: 6152921040 MAIL ADDRESS: STREET 1: 4400 HARDING RD STREET 2: STE 500 CITY: NASHVILL STATE: TN ZIP: 37205 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHEAST LAND FUND 1987 L P DATE OF NAME CHANGE: 19870316 10-K405 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the fiscal year ended December 31, 1998 or [ ] Transition Report to Section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the transition period from _______to_______ Commission File Number 33-11396-A LMR LAND COMPANY, LTD. (Exact name of Registrant as specified in its charter) Tennessee 62-1299384 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number.) One Belle Meade Place, 4400 Harding Road, Suite 500, Nashville, Tennessee 37205 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (615) 292-1040 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered None None Securities registered pursuant to Section 12(g) of the Act: UNITS OF LIMITED PARTNERSHIP INTEREST (Title of Class) 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 at least the past 90 days. YES X NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained to the best of the registrant's knowledge, in definitive proxy of information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate sale price of the Units of Limited Partnership Interest to non-affiliates was $7,500,000 as of February 28, 1999. This does not reflect market value, but is the price at which these Units of Limited Partnership Interest were sold to the public. There is no current market for these Units. DOCUMENTS INCORPORATED BY REFERENCE Documents Incorporated by Reference in Part IV: Prospectus of Registrant, dated April 1, 1987, as filed pursuant to Rule 424(b) of the Securities and Exchange Commission. PART I 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; 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, 1998, the Registrant is holding for investment approximately 3 acres in Lebanon, Tennessee (the "Lebanon Property") and 114 acres of land in Macon, Georgia (the "Macon Property"). Lebanon The Lebanon Property consists of a 3 acre tract of land zoned for medium density residential and professional offices. The property is served by all public utilities. This type of zoning permits a wide variety of uses. The Lebanon Property is included in the Castle Heights Development. The Lebanon Property continues to have minimal competition in the city. There has been some residential development on the outer edges of the city, but there is no other mixed-use development in the city. Macon The Macon property consists of 114 acres at December 31, 1998, 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. Properties As of December 31, 1998, Registrant owned approximately 117 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. Legal Proceedings Registrant is not a party to, nor is any of Registrant's property the subject of, any material legal proceedings. 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. 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 623 holders of record of the 7,500 Units of Limited Partnership Interests. 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 were no distributions in 1996. 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. Selected Financial Data For the Year ended December 31, 1998 1997 1996 1995 1994 Total Revenue $ 381,108 8,963 133,601 57,641 76,055 Net Income (Loss) 267,243 (97,773) 26,101 (47,591) (32,783) Net Income (Loss) per limited partner unit 35.63 (13.04) 3.48 (6.35) (4.37) Total Assets 2,900,075 4,110,579 4,430,651 4,499,958 4,501,637 Cash Distributions per unit 195.00 30.00 - - - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Sales 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. As of December 31, 1998, the Registrant held 3 acres in Lebanon, Tennessee and 114 acres in Macon, Georgia. There were no sales in 1997. During 1996, the Registrant sold approximately 6.6 acres of the Lebanon Property for gross proceeds of $96,800. These proceeds were reserved to meet operating costs. During the third quarter of 1996, a sales contract for the entire Macon Property expired. The $100,000 in non-refundable earnest money was taken into income. 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 interest income are directly related to fluctuations in cash balances held during the year as a result of sales. The fluctuations in property maintenance costs are due to additional costs incurred preparing the Lebanon land for sale. Financial Condition As of February 28, 1999 the Registrant had a cash balance of $73,272. This cash is not expected to be sufficient to cover operating expenses for 1999. In the event that the Partnership has short-term cash deficiencies, the General Partner can defer the collection of fees for certain related party expenses (or grant interest-free loans from related parties until cash becomes available). 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 is addressing 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 has divided the Plan into five major phases- assessment, planning, conversion, implementation and testing. After completing the assessment and planning phases earlier year, the Partnership is currently in the conversion, implementation, and testing phases. Systems which have been determined not to be Year 2000 compliant are being either replaced or reprogrammed, and thereafter tested for Year 2000 compliance. The Plan anticipates that by mid-1999 the conversion, implementation and testing phases will be completed. Management believes that the total remediation costs for the Plan will not be material to the operations or liquidity of the Partnership. The Partnership is in the process of identifying and contacting critical suppliers and other vendors whose computerized systems interface with the Partnership's systems, regarding their plans and progress in addressing their Year 2000 issues. The Partnership has received varying information from such third parties on the state of compliance or expected compliance. Contingency plans are being developed in the event that any critical supplier or customer is not compliant. The failure to correct a material Year 2000 problem could result in an interruption in, or failure of, certain normal business activities or operations. Such failures could materially and adversely affect the Partnership's operations, liquidity and financial condition. Due to the general uncertainty inherent in the Year 2000 problem, resulting in part from the uncertainty of the Year 2000 readiness of third-party suppliers and customers, the Partnership is unable to determine at this time whether the consequences of Year 2000 failures will have a material impact on the Partnership's operations, liquidity or financial condition. Item 8. Financial Statements and Supplementary Data The Financial Statements required by Item 8 are filed at the end of this Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III 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 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 68, 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 39, 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. 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. Security Ownership of Certain Beneficial Owners and Management As of February 28, 1999, 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. Certain Relationships and Related Transactions No affiliated entities have, for the year ending December 31, 1998, 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. Exhibits, Financial Statement Schedules and Reports on Form 8-k (a) (1) Financial Statements The following Financial Statements are included herein: Independent Auditors' Report F-1 Financial Statements Balance Sheets F-2 Statements of Operations F-3 Statements of Partners' Equity F-4 Statements of Cash Flows F-5 Notes to Financial Statements F-6 (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 1998. 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: March 31, 1999 By: /s/Steven D. Ezell President and Director DATE: March 31, 1999 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 an don the dates indicated. LMR LAND COMPANY, LTD. By: 222 LMR, Ltd. General Partner By: 222 Partners, Inc. General Partner DATE: March 31, 1999 By: /s/ Steven D. Ezell President and Director DATE: March 31, 1999 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, 1998 and 1997, and the related statements of operations, partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1998. 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, 1998 and 1997, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 1998, in conformity with generally accepted accounting principles. KPMG LLP Nashville, Tennessee January 22, 1999 F-1 LMR LAND COMPANY, LTD. (A Limited Partnership) Balance Sheets December 31, 1998 and 1997 Assets 1998 1997 Cash $ 120,260 146,668 Restricted cash 15,776 - Land and improvements held for investment (note 2) 2,764,039 3,963,911 Total assets $ 2,900,075 4,110,579 Liabilities and Partners' Equity: Accounts payable (note 3) and accrued expenses $ 27,402 42,649 Partners' equity: Limited partners (7,500 units outstanding) 2,872,575 4,067,832 General partner 98 98 Total partners' equity 2,872,673 4,067,930 Commitments (note 3) Total liabilities and partners' equity $ 2,900,075 4,110,579 See accompanying notes to financial statements. F-2 LMR LAND COMPANY, LTD. (A Limited Partnership) Statements of Operations Years ended December 31, 1998, 1997, and 1996 1998 1997 1996 Revenue: Land sales: Sale proceeds $ 1,898,070 - 96,800 Cost of land and improvements sold (1,380,464) - (87,546) Closing costs (147,578) - (5,785) Gain on land sales 370,028 - 3,469 Interest 10,792 8,713 24,547 Expired purchase option - - 100,000 Miscellaneous income 288 250 5,585 Total revenue 381,108 8,963 133,601 Expenses: Property management fees and maintenance costs (note 3) 36,605 24,694 27,157 Property taxes 52,195 61,898 59,745 Legal and accounting fees (note 3) 20,284 17,638 18,295 Other operating expenses 4,781 2,506 2,303 Total expenses 113,865 106,736 107,500 Net income (loss) $ 267,243 (97,773) 26,101 Net income (loss) allocated to: Limited partners $ 267,243 (97,772) 26, 101 General partner - (1) - Net income (loss) per limited partner unit $ 35.63 (13.04) 3.48 Weighted average units outstanding 7,500 7,500 7,500 See accompanying notes to financial statements. F-3 LMR LAND COMPANY, LTD. (A Limited Partnership) Statements of Partners' Equity Years ended December 31, 1998, 1997, and 1996 Limited General partners partner Total units amounts Balance at December 31, 1995 7,500 $ 4,364,503 99 4,364,602 Net income - 26,101 - 26,101 Balance at December 31, 1996 7,500 4,390,604 99 4,390,703 Distributions to - (225,000) - (225,000) partners (note 5) Net loss - (97,772) (1) (97,773) Balance at December 31, 1997 7,500 4,067,832 98 4,067,930 Distributions to partners(note 5) - (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 See accompanying notes to financial statements. F-4 LMR LAND COMPANY, LTD. (A Limited Partnership) Statements of Cash Flows Years ended December 31, 1998, 1997, and 1996 1998 1997 1996 Cash flows from operating activities: Net income (loss) $ 267,243 (97,773) 26,101 Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Increase in restricted cash (15,776) - - Decrease in receivable from affiliate - 40,628 - Cost of land & improvements (180,592) (88,500) (8,520) Cost of land and improvements sold 1,380,464 - 87,546 (Decrease) increase in accounts payable (15,247) 2,701 4,592 Decrease increase in deposits on land sale contracts - - (100,000) Refund of escrow deposits - - 20,000 Net cash (used in) provided by operating activities 1,436,092 (142,944) 29,719 Cash flows from financing activities-Distributions to partners (1,462,500) (225,000) - Net (decrease) increase in cash (26,408) (367,944) 29,719 Cash at beginning of year 146,668 514,612 484,893 Cash at end of year $ 120,260 146,668 514,612 See accompanying notes to financial statements. F-5 LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements December 31, 1998 and 1997 (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 in accordance with the provisions of SFAS No. 121. 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 At various dates between April 27, 1987 and May 22, 1987, the Partnership acquired three tracts of undeveloped land representing approximately 210 acres. During 1989, the Partnership acquired additional tracts adjacent to the Macon, Georgia, property. During 1993, approximately 5 acres were received as partial consideration for the sale of property. During 1997, an additional 2 acres of land were purchased from a related party for $88,500. F-6 LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements (1) Summary of Significant Accounting Policies (continued) 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 117 and 162 acres at December 31, 1998 and 1997, respectively, which includes approximately 10 acres which are unsalable attributable to roads, right of ways, and landscaping. The Partnership adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" in a prior year. SFAS No. 121 requires that 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. 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 does not meet the definitions of impairment under SFAS No. 121. Accordingly, land and improvements held for investment is recorded at cost with no allowance for impairment necessary. The adoption of SFAS No.121 did not have an impact on the Partnership's financial position, results of operations, or liquidity. F-7 LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements (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 $4,428,852 and $5,141,352 at December 31, 1998 and 1997, respectively. (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. F-8 LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements (1) Summary of Significant Accounting Policies (continued) 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 Effective January 1, 1998, the Partnership adopted Statement of Financial Accounting Standards (SFAS) No. 130, Reporting Comprehensive Income. SFAS No. 130 establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements and requires that all components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. 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 1998, 1997, and 1996, 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 (1) Summary of Significant Accounting Policies (continued) (i) Reclassification Certain reclassifications have been made to conform to the current year presentation. (2) Land and Improvements Held for Investment The components of land and improvements held for investment at December 31, 1998 and 1997 are as follows: 1998 1997 Land $ 2,722,669 3,646,570 Land Improvements 41,370 317,341 __________ _________ $ 2,764,039 3,963,911 Aggregate cost for Federal income tax purposes for the land held for investment was $2,741,400 and $3,943,661 at December 31, 1998 and 1997, 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, 1998, 1997, and 1996 are as follows: 1998 1997 1996 Program management fees $ 14,000 14,000 14,000 Accounting fees 3,459 3,327 2,700 Engineering fees - 2,100 - Included in accounts payable at December 31, 1998 and 1997 is $10,499 to an affiliate for commissions on the sale of property. The amounts due to and from affiliates are non interest-bearing. F-10 LMR LAND COMPANY, LTD. (A Limited Partnership) Notes to Financial Statements (4) Fair Value of Financial Instruments At December 31, 1998 and 1997, the Partnership had financial instruments including cash and accounts payable and accrued expenses. The carrying amounts of these financial instruments approximate fair value because of the short maturity of such instruments. (5) Distributions For the year ended December 31, 1998 and 1997, the Partnership made distributions to limited partners of $1,462,500 ($195 per unit), and $225,000 ($30 per unit), respectively. There were no distributions in 1996. F-11 Independent Auditors' Report The Partners LMR Land Company, Ltd.: Under date of January 22, 1999, we reported on the balance sheets of LMR Land Company, Ltd. as of December 31, 1998 and 1997, and the related statements of operations, partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1998. 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 following. 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 22, 1999 S-1 LMR LAND COMPANY, LTD. (A Limited Partnership) Schedule III Real Estate and Accumulated Depreciation
December 31, 1998 Initial Cost to Cost capitalized Gross amount at Partnership subsequent which carried to acquisition at close of period Description Encum- Land Buildings Improve- Carrying Land Buildings Total Accumu- Date of brances and improve- ments costs and improve- lated Construc ments ments preciation tion ________ ___ _ _____ _____ _____ _ _____ __ ____ ____ _ 3 acres of undeveloped land in Lebanon, Tennessee $ _ 155,581 - 41,370 - 155,581 41,370 1,196,951 N/A None acquired in portions between 1987 and 1997.* 114 acres of undeveloped land in Macon, Georgia - 2,567,088 - - - 2,567,088 - 2,567,088 N/A None acquired in portions between 1987 and 1993.* __________ _______ _______ ______ __________ _______ _________ ______ ____ $ - 2,722,669 - 41,370 - 2,722,669 41,370 2,764,039 - - *Assets scheduled above represents land and non-depreciable land improvements, therefore accumulated depreciation and depreciable lives are non applicable.
S-2 LMR LAND COMPANY, LTD. (A Limited Partnership) Schedule III Real Estate and Accumulated Depreciation 1998 1997 1996 (1) Balance at beginning $ 3,963,911 3,875,411 3,974,437 of Period Additions during period: Improvements 180,592 - 8,520 Purchase of Land - 88,500 - Deductions during period: Cost of real estate sold 1,380,464 - 87,546 Return of Escrow Deposits - - 20,000 107,546 Balance at close of period $2,764,039 3,963,911 3,875,411 (2) Aggregate cost for Federal income tax purposes $2,741,400 3,943,661 3,855,161 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 EX-27 2
5 0000809938 LMR LAND COMPANY, LTD. 12-MOS DEC-31-1998 DEC-31-1998 120,260 0 0 0 0 0 2,764,039 0 2,900,075 27,402 0 0 0 0 2,872,673 2,900,075 1,898,070 381,108 1,380,464 1,528,042 113,865 0 0 267,243 0 267,243 0 0 0 267,243 35.63 35.63
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