Item 1. Business
General Development of Business
Moore's Lane Properties, Ltd. ("Registrant"), is a Tennessee limited partnership organized in December 1985, pursuant to the provisions of the Tennessee Uniform Limited Partnership Act, Chapter 2, Title 61, Tennessee Code Annotated, as amended. The General Partners of Registrant are W. Gerald Ezell and 222 Partners, Inc. The Partnership is a venturer in Moore's Lane Venture Associates (the "Joint Venture") and has controlling interest in this Joint Venture.
Registrant's primary business, as a consolidated entity with the Joint Venture, is to hold for investment certain undeveloped real property located in Franklin, Williamson County, Tennessee (the "Property"). Registrant's investment objectives are preservation of investment capital and appreciation of the value of the Property due to development of the immediately surrounding areas and the growth of the community generally.
Financial Information About Industry Segments
The Registrant's activity, investment in land, is within one industry segment and geographical area. Therefore, financial data relating to the industry segment and geographical area is included in Item 6 - Selected Financial Data.
Narrative Description of Business
As of December 31, 1995, the Joint Venture owned approximately 61 saleable acres of partially developed land in Franklin, Tennessee. The Property is held for resale. The Property is included in the 1,150 acre Cool Springs Corporate and Retail Center.
The majority of the Property development work was completed in 1991. This work included construction of the Cool Springs Interchange and Mallory Lane north of Cool Springs Boulevard. Mallory Lane North was relocated and improved from a two lane to a four-lane boulevard. South Springs Drive, which runs through the property, was constructed as a four-lane boulevard. During 1995, the General Partner began a new phase of development on the Property. This development, which was initiated by a sale in December 1995, includes (i) finishing Mallory Station Road through the Property with utilities and (ii) constructing two detention ponds. This development is expected to cost approximately $700,000, of which $358,000 was retained from the December sale.
Competition:
The Cool Springs Corporate and Retail Center is in various stages of development and is being developed for retail, office and mixed commercial uses similar to those considered suitable for the Property. Cool Springs Real Estate Associates, L.P. ("CSREA") owns much of the undeveloped land in the immediate vicinity of the Property. CSREA is an institutional real estate investor. Their asking prices are currently comparable to the Registrant's. There are several other competitive retail sites at the I-65 and Moore's Lane intersection, one mile north of the Cool Springs Boulevard intersection. However, the General Partner feels that the market can ultimately absorb all these sites and that the Registrant's low cost in its land will allow it to compete effectively.
An affiliate of the General Partner owns 65 acres in the immediate vicinity of the Property and therefore may have objectives similar to those of the Registrant. As a result, the Registrant is likely to be in competition for potential buyers of the Property with this affiliate. The General Partner believes that potential purchasers will survey all available property in making their decision, and their choice of location is generally made without regard to the ownership of the land.
The Registrant has no employees. Partnership 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, 1995, the Joint Venture of which the Registrant has a controlling interest owned 61 acres of land in Franklin, Williamson County, Tennessee. The Property is included in the Cool Springs Retail and Corporate Center. The Property is located along Mallory Lane, west and south of the Cool Springs Galleria mall.
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 matters 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 22, 1986 of 7,500 Units of limited partnership interests. The offering of $7,500,000 was fully subscribed and closed on May 30, 1986. As of February 29, 1996, there were 565 holders of record of the 7,500 Units of limited partnership interests.
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 Ending December 31,
1995 1994 1993 1992 1991 Total Income $1,437,479 $ 258,112 $ 902,322 $ 664,567 $ 560,651 Net Income 1,364,037 131,947 786,068 126,319 608,072 Net Income Per Unit 181.87 17.59 104.81 16.84 81.08 Total Assets 2,964,702 3,469,752 3,593,804 4,255,290 4,415,067 Notes Payable - 0 - 175,000 500,251 982,125 1,200,000 Cash Distributions 220 - 0 - -0- -0- -0- per unit
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
1995 Sales In February, the Registrant sold approximately 2.2 acres for approximately $682,000 in gross proceeds to a medical office user. In March, 3.3 acres were sold to a hotel developer for approximately $1,071,000. In November, 2.2 acres were sold to another hotel developer for approximately $583,000. In December, 6.8 acres were sold to a manufacturer for $445,000. From these sale proceeds, $1,650,000 was distributed to the partners, the $175,000 Note payable - private was retired and the remaining proceeds were retained for development and operating expenses.
1994 Sales
The Registrant sold approximately two acres for $428,000 to Saturn Corporation, who was expanding their original site purchased from the Registrant in 1992. Proceeds were used to reduce the Note Payable-Private.
1993 Sales
The Registrant sold 7.72 acres for $1,200,000 and reduced a $722,591 development obligation to a purchaser by transferring title to 1.7 acres. Sale proceeds were used to retire the Note payable to bank, to pay property taxes, and to fund certain site improvement on the sale site. The remaining proceeds were reserved to meet future operational needs.
Operations
Although there has been some variance between accounts, overall operations of the Registrant have not fluctuated significantly, except for the change in sales explained by the number of acres sold (14.5, 2 and 9.42 in 1995, 1994 and 1993, respectively). Interest expense has declined through the years due to lower principal balances. Property tax payments have declined through the years due to reductions in land. The 1994 property tax expense included a $6,000 credit received from a 1993 sale. The increase in 1994 architect and engineering fees is due to the fees incurred in preparation for the car dealership sale in 1994 and the two 1995 sales.
Financial Condition
Development
During 1995, the General Partner began a new phase of development on the Property. This development was initiated by the sale to the manufacturer in 1995 but also benefits the surrounding area. This development includes finishing Mallory Station Road through the Property with utilities and constructing two detention ponds. This development is expected to costs approximately $700,000, of which $358,000 was retained from the sale in December 1995. The General Partner expects to fund the remaining development costs with proceeds from future sales.
Liquidity & Capital Resources
As of February 29, 1996, the Registrant has cash of approximately $60,000, which the General Partner believes is sufficient to meet operating needs for 1996.
Throughout 1995, W. Gerald Ezell, the Registrant's general partner, continued to operate under Chapter 11 of the United States Bankruptcy Code. The Bankruptcy court has approved Mr. Ezell's plan to liquidate his assets and satisfy his creditors. The plan includes the sale of Mr. Ezell's partnership interests, including his general partnership interest in the Registrant. In accordance with the partnership agreement, Mr. Ezell can sell his interest in profits, losses and distributions, but the purchaser does not assume his responsibilities as Managing General Partner. Therefore, upon the sale of Mr. Ezell's partnership interest, the general partner's interest will be converted into a special limited partner interest and his general partner responsibilities will be transferred to the remaining general partner.
In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121 Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of (Statement 121). It requires that long-lived assets that are to be disposed of be reported at the lower of carrying amount or fair value less costs to sell. If quoted prices are not available, the estimated fair value is determined using the best information available. After implementation, any material impairments must be recorded to reflect an excess of the carrying amount over the estimated fair value.
Statement 121 is applicable for fiscal years beginning after December 15, 1995, and it will be implemented by the Registrant effective January 1, 1996. Implementation of Statement 121 is not expected to have a material impact on the financial statements of the Registrant.
Item 8.
Item 8. Financial Statement 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 Disclosures
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
Registrant does not have any directors or officers. W. Gerald Ezell and 222 Partners, Inc. are the General Partners of the Registrant and as such have general responsibility and ultimate authority in matters affecting Registrant's business.
The general partners are as follows:
W. Gerald Ezell
W. Gerald Ezell, age 65, is the Managing General Partner of the Partnership. Mr. Ezell is also a general partner of affiliated limited partnerships which own various real estate properties. Until November 15, 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.
Throughout 1995, W. Gerald Ezell continued to operate under Chapter 11 of the United States Bankruptcy Code. The Bankruptcy court has approved Mr. Ezell's plan to liquidate his assets and satisfy his creditors. The plan includes the sale of Mr. Ezell's partnership interests, including his general partnership interest in the Registrant. In accordance with the partnership agreement, Mr. Ezell can sell his interest in profits, losses and distributions but the purchaser does not assume his responsibilities as Managing General Partner. Upon sale of Mr. Ezell's partnership interest, the general partner's interest will be converted into a special limited partner interest and his general partner responsibilities will be transferred to the remaining general partner.
222 Partners Inc.
222 Partners, Inc. was formed in September, 1986 and serves as general partner for several other real estate investment limited partnerships.
The executive officers and directors of 222 Partners, Inc. are as follows:
Steven D. Ezell, age 43, serves as a director, president and sole shareholder of the corporate general partner. 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 Service Corporation. He was active for the four years prior to joining Landmark in property acquisitions for Dean Witter Realty Inc. in New York City, most recently as Senior Vice President. He is the son of W. Gerald Ezell.
Michael A. Hartley, age 36, is Secretary/Treasurer and Vice President of the corporate general partner. He has been an officer of 222 Partners, Inc. from September 17, 1986 through the current period. He also serves as Vice President and 50% owner of Landmark Realty Services Corporation. For the three years prior to joining Landmark, Mr. Hartley was a Vice President of Dean Witter Realty Inc., a New York-based real estate investment company.
Item 11.
Item 11. Executive Compensation
During 1995, the Registrant was not required to and did not pay remuneration to any partners of the 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 Partnership as set forth in the Partnership Agreement.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of February 29, 1996, no person or "group" (as that term is used in Section 3 (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. Also as of the above date, no director of 222 Partners, Inc. was known by the Registrant to beneficially own 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, 1995, earned or received compensation or payments for services from the Registrant in excess of $60,000. For a listing of miscellaneous transactions with affiliates refer to Note 4 of the notes to consolidated Financial Statements herein.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1) Financial Statements The following Consolidated Financial Statements are included herein:
Independent Auditors' Report
Financial Statements Consolidated Balance Sheets Consolidated Statements of Earnings Consolidated Statements of Changes in Partners' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements
(2) Financial Statement Schedule Independent Auditors's Report on Schedule S-1
Schedule XI - Real Estate and Accumulated Depreciation S-2
All other Schedules have been omitted because they are inapplicable, not required or the information is included in the Consolidated Financial Statements or notes thereto.
(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 22, 1986 filed pursuant to Rule 424(b) of the Securities and Exchange Commission.
22 Subsidiaries
27 Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last quarter of 1995.
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, thereunto duly authorized.
MOORE'S LANE PROPERTIES,LTD.
DATE: March 29, 1996 By: /s/W.Gerald Ezell W. Gerald Ezell General Partner
By: 222 Partners, Inc. General Partner
DATE: March 29, 1996 By:/s/ Steven D. Ezell Steven D. Ezell President and Director
DATE: March 29, 1996 By:/s/ Michael A. Hartley Michael A. Hartley Vice President and Director
SIGNATURES (Cont'd.)
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.
MOORE'S LANE PROPERTIES, LTD.
DATE: March 29, 1996 By:/s/W. Gerald Ezell W. Gerald Ezell General Partner
By:222 Partners, Inc. General Partner
DATE: March 29, 1996 By:/s/ Steven D. Ezell Steven D. Ezell President and Director
DATE: March 29, 1996 By:/s/ Michael A. Hartley Michael A. Hartley Vice President and Director
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 Moore's Lane Properties, Ltd.:
We have audited the accompanying consolidated balance sheets of Moore's Lane Properties, Ltd. (a limited partnership) and subsidiary as of December 31, 1995 and 1994, and the related consolidated statements of earnings, partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1995. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated 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 consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Moore's Lane Properties, Ltd. and subsidiary at December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1995, in conformity with generally accepted accounting principles.
As discussed in Note 9, the Partnership adopted in 1995 the provisions of Statement of Financial Accounting Standards No. 107, Disclosures about Fair Value of Financial Instruments.
KPMG Peat Marwick LLP
Nashville, Tennessee January 19, 1996
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Consolidated Balance Sheets
December 31, 1995 and 1994
[FN]
See accompanying notes to financial statements.
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Consolidated Statements of Partners' Equity
Years ended December 31, 1995, 1994 and 1993
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Consolidated Statements of Cash Flows
Years ended December 31, 1995, 1994 and 1993
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Consolidated Statements of Cash Flows, Continued
Years ended December 31, 1995, 1994 and 1993
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Notes to Consolidated Financial Statements
December 31, 1995 and 1994
(1) Summary of Significant Accounting Policies
(a) Organization
Moore's Lane Properties, Ltd. (the Partnership) was organized on December 10, 1985 as a Tennessee limited partnership to acquire and hold for investment approximately 174 acres of unimproved real property in Williamson County, Tennessee. On May 30, 1986, a public offering of limited partnership units closed whereby the Partnership issued 7,500 limited partnership units and the original limited partner withdrew. The General Partners are W. Gerald Ezell (see note 8) and 222 Partners, Inc.
(b) Principles of Consolidation
The consolidated financial statements include the accounts of Moore's Lane Properties, Ltd. and the accounts of a majority-owned joint venture. All significant intercompany accounts and transactions have been eliminated.
(c) Income Taxes
The Partnership prepares 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. No provision has or will be made for Federal or state income taxes since such taxes are the personal responsibility of the partners.
(d) Land Held for Investment
Land held for investment is recorded at cost and includes approximately 72 and 93 acres at December 31, 1995 and 1994, respectively. Of these amounts, management believes that 61 and 76 acres are sellable at December 31, 1995 and 1994, respectively. Land costs include amounts to acquire and hold land, including interest and property taxes during the development period. Costs to hold land, including insurance and property taxes are charged to expense once development is substantially complete. Land improvement costs include development costs expended subsequent to the acquisition of the tract.
(Continued)
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Notes to Consolidated Financial Statements
(e) Revenue Recognition
Sales are recorded at the time of closing. A portion of sales proceeds is deferred if additional construction is required and is recognized on the percentage of completion method as the construction is completed.
(f) Partnership Allocations
Net earnings, losses, and distributions of cash flow of the Partnership are allocated among the limited partners and general partners, in accordance with the agreement of the limited partnership.
(g) Cash and Cash Equivalents
The Partnership considers all short-term investments with original maturities of three months or less at the date of purchase to be cash equivalents.
Cash belonging to the Partnership is combined in an account with funds from other partnerships related to the general partner.
(h) Estimates
Management of the Partnership has made estimates and assumptions to prepare these financial statements. Actual results could differ from those estimates.
(2) Restricted Cash
At December 31, 1995, the Partnership has restricted cash balances of $358,320 to be used to fund property improvements, consisting of road and utility work, and property taxes.
(3) Moore's Lane Venture Associates
On May 29, 1986, Moore's Lane Venture Associates (the Joint Venture) was formed with the Partnership and Southeast Venture Companies (Southeast) as joint venturers. On March 4, 1987, the Partnership contributed its land held for investment to the Joint Venture. The contribution of land was accounted for at book value.
(Continued)
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Notes to Consolidated Financial Statements
Southeast will contribute services for overseeing the implementation of the master land use plan and ensuring that any improvements proceed on schedule. The joint venture agreement provides that Southeast will receive 17% of the proceeds of any disposition of the property after the limited partners have received an amount equal to their capital contributions plus their preferred return as defined in the partnership agreement.
(4) Related Party Transactions
The General Partner and its affiliates have been actively involved in managing the property. Affiliates of the General Partner receive fees and commissions as consideration for performing certain services. Expenses incurred for these services during 1995, 1994 and 1993 are as follows:
(5) Land Held for Investment
The components of land held for investment at December 31, are as follows:
Aggregate cost for federal income tax purposes for this property was $2,673,705 and $3,634,383 at December 31, 1995 and 1994, respectively.
(Continued)
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Notes to Consolidated Financial Statements
(6) Note Payable
On April 28, 1994, the Partnership entered into a $825,000 term loan agreement with a private lending source. At December 31, 1994, the balance outstanding was $175,000 which was paid in full in 1995. The note accrues simple interest at an annual rate of 4% over a local bank's prime lending rate (12.5% at December 31, 1994). The note is secured by a mortgage on the land held for investment. Semi-annual interest payments are due on April 28 and October 28. The note matures on April 28, 1996. At December 31, 1995, the Partnership can make additional draws under the loan agreement in the amount of $300,000.
In addition, the term loan agreement entitles the lender to receive a profit participation equal to 25% of profits, as defined in the loan agreement. At December 31, 1995, the Partnership has accrued $4,594 under this agreement.
(7) Note Payable - Other
On February 3, 1993, the Joint Venture conveyed to a purchaser approximately 1.7 acres of land held for investment. Such conveyance satisfied $722,591 of amounts due to the purchaser of $856,530 for infrastructure improvements. In addition to the conveyance of land, the consideration included a cash payment of $33,939 and the issuance of a note payable to the purchaser of $100,000. The note payable was due on February 3, 1995, and had no stated rate of interest. The note was secured by a deed of trust on certain of the Joint Venture's property. On May 3, 1994, the note was retired in full with proceeds from the note payable discussed in note 6.
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Notes to Consolidated Financial Statements
(8) General Partner Bankruptcy
On February 25, 1991, W. Gerald Ezell, a general partner of the Partnership, elected to file for reorganization under Chapter 11 of the United States Bankruptcy Code. This election is designed to allow Mr. Ezell to satisfy his personal creditors in an orderly manner. The filing has no impact on the legal standing of the Partnership. Mr. Ezell has retained his role as an active general partner and continues to fulfill his general partner responsibilities.
(9) Distributions
For the year ended December 31, 1995, the Partnership made a distribution of $1,656,335. Of this amount, $1,650,000 ($220 per unit) was allocated to the limited partners and $6,335 was allocated to the general partner. There were no distributions in 1994 or 1993.
(10) Fair Value of Financial Instruments
At December 31, 1995, the Partnership had financial instruments including cash and cash equivalents of $156,971,restricted cash of $358,320, and accrued liabilities of $55,767. The carrying amounts of cash and cash equivalents, restricted cash, and accrued liabilities approximate fair value because of the short maturity of those financial instruments.
Independent Auditors' Report __________________________
The Partners Moore's Lane Properties, Ltd.:
Under date of January 19, 1996, we reported on the consolidated balance sheets of Moore's Lane Properties, Ltd. and subsidiary as of December 31, 1995 and 1994, and the related consolidated statements of earnings, partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1995. The consolidated financial statements and our reports thereon are included elsewhere herein. In connection with our audits of the aforementioned consolidated financial statements, we have also audited the related financial statement schedule as listed in the accompanying index. 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 audits.
In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Nashville, Tennessee January 19, 1996
S-1
Schedule XI MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership)
Real Estate and Accumulated Depreciation
December 31, 1995
See accompanying independent auditors' report. S-2 Schedule XI
Schedule XI
Exhibits filed pursuant to Item 14(a)(3):
MOORE'S LANE PROPERTIES, LTD. (A Tennessee Limited Partnership)
Exhibit Index
Exhibit
3 Amended and Restated Certificate and Agreement of Limited Partnership, incorporated by reference to Exhibit to a Prospectus of Registrant dated April 22, 1986 (Registration No. 33-3395-A)
22 Subsidiaries
27 Financial Data Schedule