<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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<PAGE>
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
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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
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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<PAGE>
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<PAGE>
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<PAGE>
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).
<PAGE>
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
<PAGE>
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
<PAGE>
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<PAGE>
<TABLE>
LMR LAND COMPANY, LTD.
(A Limited Partnership)
Schedule III
Real Estate and Accumulated Depreciation
<CAPTION>
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
<S>________ <C>___ <C>_ <C>_____ <C>_____ <C>_____ <C>_ <C>_____ <C>__ <C>____ <C>____
<C>_
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.
</TABLE> S-2<PAGE>
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
<PAGE>
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
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000809938
<NAME> LMR LAND COMPANY, LTD.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 120,260
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,764,039
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,900,075
<CURRENT-LIABILITIES> 27,402
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,872,673
<TOTAL-LIABILITY-AND-EQUITY> 2,900,075
<SALES> 1,898,070
<TOTAL-REVENUES> 381,108
<CGS> 1,380,464
<TOTAL-COSTS> 1,528,042
<OTHER-EXPENSES> 113,865
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 267,243
<INCOME-TAX> 0
<INCOME-CONTINUING> 267,243
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 267,243
<EPS-PRIMARY> 35.63
<EPS-DILUTED> 35.63
</TABLE>
