<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, 1995
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
33-18089-A
HICKORY HILLS, LTD.
(Exact name of Registrant as specified in its charter)
Tennessee 62-1336904
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 sales price of the Units of Limited
Partnership Interest to non-affiliates was $1,800,000
as of January 31, 1996. 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.
Document Incorporated by Reference in Part I, II and IV:
Prospectus of Registrant, dated December 3, 1987 as
filed pursuant to rule 424 (b) of the Securities and
Exchange Commission.
<PAGE>
PART I
Item 1. Business
Hickory Hills, Ltd. ("Registrant"), is a Tennessee
limited partnership organized on September 15, 1987
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 Hickory, Ltd., a Tennessee limited
partnership. 222 Partners, Inc. is the general partner
of 222 Hickory, Ltd.
Registrant's primary business is to acquire,
develop and dispose of certain undeveloped real
properties located in Nashville, Davidson County,
Tennessee and Hendersonville, Sumner County, Tennessee
(the "Properties"). Registrant's investment objectives
are preservation of capital and capital appreciation
through the passage of time, growth in the surrounding
areas and the development of the Properties prior to
resale.
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
The Registrant is holding for investment two
properties in the metropolitan Nashville, Tennessee
area. The Properties will be referred to respectively
as the Nashville Property and the Hendersonville
Property in the remainder of this report. The
Properties are held for resale.
The Nashville Property is approximately 210 acres
of partially developed land and is comprised of two
main parcels located in northern Davidson County,
Tennessee. During 1995, some grading work was done on
the Property as required by the sale in 1995 and a
contribution was made to the City toward the future
improvements of Old Hickory Boulevard. All development
was specific to the site sold. The General Partner has
no plans for development of this Property except for
what may be required by future sales.
<PAGE>
The Hendersonville Property is a residential
subdivision on Old Hickory Lake in Hendersonville,
Tennessee (the "Harbortowne Development") with 243
lots, of which 63 lots remain unsold as of December 31,
1995. The Property is zoned as residential planned
unit development. Roadways for the majority of the
Property have been paved, and gas, water and sewer
lines have been installed. The final phase of road and
utility development is currently under construction and
is expected to be complete in 1996. In 1991, the
General Partner negotiated an exclusive option contract
with Phillips Builders to purchase the remaining lots
in Harbortowne Development. The contract requires
minimum purchases and allows for price increases based
on a time and quantity schedule.
Competition
Nashville Property
There is a significant amount of competition for
industrial/office distribution property in northern
Davidson County, near the airport and along Brick
Church Pike, south of the Property.
Hendersonville Property
There is currently a limited amount of competition
surrounding the Harbortowne Development. The
Registrant has an exclusive contract with Phillips
Builders, Inc. pursuant to which Phillips will build
new homes in the $110,000 - $140,000 price range. The
Property is located one mile to the east of Highway 31-
E by-pass which provides excellent access to downtown
Nashville. The development offers landscaped home
sites, gas heat, and other amenities such as a swimming
pool, tennis courts, and clubhouse.
<PAGE>
The majority of the proceeds used to purchase the
Property were from a $3,454,300 promissory note (the
"Lender Financing") maturing on December 31, 1997 to
Hickory Lenders, Ltd.(the "Lender"), an affiliated
partnership sharing the same General Partner. The
principal balance accrues interest at a simple interest
rate of 10% per annum. Prior to maturity, the
Registrant is not required to make any payments with
respect to the Lender Financing, except upon the sale,
exchange or condemnation of all or any portion of the
Property. From sale proceeds, the Lender receives a
priority return of interest and principal, and 55% of
the "Net Revenues", if any. Net revenues, as defined
by the Participating loan Agreement, represent the
difference between cash proceeds earned and the
following, in this order: 1) accrued but unpaid
interest and Applicable Principal Balances; 2)accrued
preferred return (12%) on the net offering proceeds of
the Registrant: and 3) the Applicable Equity Balance.
The cumulative Applicable Principal balance due to the
Lender is $1,247,573 and is payable from future sale
proceeds, after all accrued interest is paid.
The Registrant has no employees. Program
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, 1995, Registrant owned two
parcels of land in Tennessee, composed of 237 acres in
Nashville (210 acres of which are saleable) and 63
residential lots in Hendersonville. See Item 1 above
for more detailed description.
<PAGE>
Item 3. Legal Proceedings
Registrant is not a party to, nor is any of
Registrant's property the subject of, any 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 December 3, 1987 of 1,800 Units of limited
partnership interests. The offering of $1,800,000 was
fully subscribed on December 3, 1988. As of February
29, 1996 there were 190 holders of record of the 1,800
Units of limited partnership interest.
There were no distributions made to Unit holders
during 1995. 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, other than
the obligations to Hickory Lenders, Ltd. with respect
to the Lender Financing, as described below.
<PAGE>
Item 6. Selected Financial Data
For the Year Ended
December 31,
1995 1994 1993 1992 1991
Gain (Loss) on sales of land
and improvements $152,469 $12,801 $(248,684) $(211,038) $(61,541)
Net Loss (260,709) (405,133) (688,006) (661,750) (518,227)
Net Loss per Unit (144.84) (225.07) (382.23) (367.64) (287.90)
Total Assets 3,357,454 3,592,621 3,941,564 4,763,775 5,184,920
Note Payable 3,454,300 3,454,300 3,454,300 3,454,300 3,454,300
to Affiliate
Interest Payable 1,526,399 1,486,171 1,410,944 1,574,716 1,319,529
to Affiliate
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Sales
The Registrant sold 38, 43, and 63 lots in 1995,
1994 and 1993, respectively, on the Hendersonville
property to Phillips Builders under the terms of the
exclusive option contract negotiated in 1991. Gross
sales proceeds were $770,610, $763,000 and $1,063,000
in 1995, 1994 and 1993, respectively. The Registrant
also sold 3.86 and 1.63 acres in 1995 and 1994,
respectively, of the Nashville property for gross
proceeds of $154,400 and $47,500. From these proceeds,
$310,000, $275,000 and $514,000 in 1995, 1994 and 1993,
respectively, was paid to the Lender in interest and
the remainder was retained for operations and
development. The Applicable Principal Balance assigned
to 1995, 1994 and 1993 sales is $316,860, $287,438 and
$359,100, respectively. The cumulative Applicable
Principal Balance as of December 1995 is $1,247,573 and
is payable from future sales after all accrued interest
is paid.
Comparative Analysis
Except for the fluctuations in sales described
above, overall operations of the Registrant have not
changed significantly during the last three years.
Liquidity
At December 31, 1995 the Registrant has cash and
cash equivalents of $595,186, of which $336,112
is restricted for future development, leaving an
operating cash balance of approximately $259,074. This
cash is expected to be sufficient to cover operating
expenses and the infrastructure development currently
underway. The Registrant has reserved cash of $43,750
to pay impact fees to the City of Hendersonville in the
amount of $250 per lot sold. The impact fees will be
used to improve Rockland Road. The fees will be paid
to the city when the design work on the road begins.
During 1995, the Registrant completed Phase III
development and began Phase IV of the Hendersonville
Property. Phase III cost approximately $300,000 and
opened up 30 lots which have all been sold. Phase IV
is expected to cost approximately $275,000 and will
open up an additional 31 lots. Phase V will begin
when Phase IV is completed for an estimated cost of
$300,000. Preliminary planning and engineering work
have begun on Phase V.
<PAGE>
Due to the nature of the Lender Financing, no
interest or principal payments are due until the
Properties, or portions thereof, are sold and cash is
available, or December 31, 1997, whichever is earlier.
Accrued interest payable relating to such financing was
approximately $1.5 million at December 31, 1995. The
Registrant made payments totalling $310,000 on the
accrued interest from 1995 sale proceeds. The
cumulative Applicable Principal Balance unpaid as of
December 31, 1995, is $1,247,573 and is payable from
future sale proceeds, after all accrued interest is
paid.
The Registrant has retained a portion of the sale
proceeds for development of future phases and
operations of the properties and did not use all sale
proceeds to reduce accrued interest and applicable
principal. The Registrant's and Lender's joint general
partner believes that this use of sale proceeds was
contemplated by the loan agreement. However, the loan
agreement is ambiguous on this point; therefore, this
treatment could constitute a default on the loan
agreement. In such an event the Partnership is
required to foreclose the loan and accelerate the
amounts due. Currently, the Partnership has not
foreclosed or accelerated the amounts due under the
loan agreement, nor are there any plans to do so.
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.
<PAGE>
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. Financial Statement 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 Disclosures
None.
PART III
Item 10. Directors and Executive Officers of the
Registrant
Registrant does not have any directors or officers.
222 Hickory, 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 general partner for several other real
estate investment limited partnerships. The directors
of 222 Partners, Inc. are W. Gerald Ezell, Steven D.
Ezell, and Michael A. Hartley.
W. Gerald Ezell, age 65, serves on the Board of
Directors of 222 Partners, Inc. 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.
<PAGE>
Steven D. Ezell, age 43, 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, age 36, serves as a
Secretary/Treasurer and Vice President of 222 Partners,
Inc. He has been an officer of 222 Partners, Inc. from
September 17, 1986 through the current period. He is
Vice President and 50% owner of Landmark Realty
Services Corporation. Prior to joining Landmark, Mr.
Hartley was Vice President of Dean Witter Realty Inc.,
a New York-based real estate investment firm.
Item 11. Executive Compensation
During 1995, Registrant was not required to and did
not pay remuneration to any executives, 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.
<PAGE>
Item 12. Security Ownership of Certain Beneficial
Owners and Management
(a) Security ownership of certain beneficial owners
Name and Amount and
Title Address of Nature of Percent
of Beneficial Beneficial of
Class Owner Ownership Class
Limited Partnership Michael A. Hartley 52.5 Units 2.92%
Units Steven D. Ezell 52.5 Units 2.92%
4400 Harding Road (Directly
Suite 500 owned)
Nashville, TN 37205 owned)
(b) Security ownership of management
Name and Amount and
Title Address of Nature of Percent
of Beneficial Beneficial of
Class Owner Ownership Class
Limited Partnership Michael A. Hartley 52.5 Units 2.92%
Steven D. Ezell 52.5 Units 2.92%
(Directly owned)
There are no arrangements known to 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 Transaction
No affiliated entities have, during 1995, earned
compensation for services from the Registrant in excess
of $60,000. For a listing of miscellaneous
transactions with affiliates refer to Note 3 of the
Financial Statements in Item 8.
The Registrant borrowed $3,454,300 from Hickory
Lenders, Ltd., an affiliated partnership, in 1988 and
accrued interest payable of $1,526,399 was recorded on
such obligation as of December 31, 1995.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
Page
(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 (Deficit) F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
(2) Financial Statement Schedules
Additional financial information furnished
pursuant to the requirements of Form 10-K:
Financial Statement Schedules -
Independent Auditors' Report on Schedules 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 Financial Statements or notes
thereto.
(3) Exhibits
3 Amended and Restated Certificate
and Agreement of Limited
Partnership, incorporated by
reference to Exhibit A2 to the
Prospectus of Registrant dated
December 3, 1987 filed pursuant to
Rule 424(b) of the Securities and
Exchange Commission.
10A Loan Agreement by and among Hickory
Hills, Ltd. and Hickory Lenders,
Ltd., incorporated by reference to
Exhibit 10.1 to Registrant's Form
S-18 Registration Statement as
filed on October 23, 1987.
<PAGE>
10B Deed of Trust and Security
Agreement by and among Hickory
Lenders, Ltd. and the Registrant,
incorporated by reference to
Exhibit 10.2 of the Registrant's
Form S-18 Registration Statement as
filed on October 23, 1987.
10C Promissory Note of Hickory Hills,
Ltd. to Hickory Lenders, Ltd.,
incorporated by reference to
Exhibit 10.3 to Registrant's Form
S-18 Registration Statement as
filed on October 23, 1987.
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 1995.
<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, thereunto duly authorized.
HICKORY HILLS, LTD.
By: 222 Hickory, Ltd.
General Partner
By: 222 Partners, Inc.
General Partner
DATE: March 29, 1996 By: /s/Steven D. Ezell
President and Director
DATE: March 29, 1996 By: /s/Michael A. Hartley
Vice-President and
Director
<PAGE>
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.
HICKORY HILLS, LTD.
By: 222 Hickory, Ltd.
General Partner
By: 222 Partners, Inc.
General Partner
DATE: March 29, 1996 By: /s/Steven D. Ezell
President and Director
DATE: March 29, 1996 By: /s/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.
<PAGE>
Independent Auditors' Report
____________________________
The Partners
Hickory Hills, Ltd.:
We have audited the accompanying balance sheets of Hickory Hills, Ltd.
(a limited partnership) as of December 31, 1995 and 1994, and the related
statements of operations, partners' deficit, and cash flows for each of
the years in the three-year period ended December 31, 1995. 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 Hickory
Hills, Ltd. at December 31, 1995 and 1994, and the results of its
operations and its 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 7, 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
F-1
<PAGE>
HICKORY HILLS, LTD.
(A Limited Partnership)
Balance Sheets
December 31, 1995 and 1994
Assets 1995 1994
______ _____ _____
Cash and cash equivalents (note 5) $259,074 132,479
Restricted cash (note 2) 336,112 254,851
Land and improvements held for
investment (notes 4 and 5) 2,740,975 3,204,826
Other assets 21,293 465
________ ________
Total assets $3,357,454 3,592,621
________ ________
________ ________
Liabilities and Partners' Deficit
_________________________________
Note payable to affiliate (note 5) 3,454,300 3,454,300
Accrued interest payable to
affiliate (note 5) 1,526,399 1,486,171
Accrued property taxes 9,855 35,441
Other accrued expenses 47,100 36,200
________ ________
Total liabilities 5,037,654 5,012,112
Partners' deficit (1,680,200) (1,419,491)
________ ________
Commitments and contingencies
(notes 5, 6 and 7)
Total liabilities
and partners' deficit $3,357,454 3,592,621
________ ________
________ ________
See accompanying notes to financial statements.
F-2
<PAGE>
HICKORY HILLS, LTD.
(A Limited Partnership)
Statements of Operations
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
____ ____ ____
Income:
Sale proceeds $925,010 810,500 1,063,345
Cost of land and
improvements sold (707,893) (743,616)(1,194,648)
Selling expenses (note 3) (64,648) (54,083) (117,381)
_______ _______ _______
Income (loss) on sales
of land and
improvements 152,469 12,801 (248,684)
Interest income 24,238 15,419 3,049
Miscellaneous income - 22 3,400
_______ _______ _______
Income (loss)
before expenses 176,707 28,242 (242,235)
_______ _______ _______
Expenses:
Program management
fee (note 3) 3,000 3,000 3,000
Legal and accounting
(note 3) 12,925 11,682 8,342
General and administrative 8,381 6,753 3,765
Property tax expense 39,683 35,623 45,318
Land maintenance fees 23,199 26,090 34,802
Interest expense
(notes 3 and 5) 350,228 350,227 350,228
Amortization - - 316
_______ _______ _______
Total expenses 437,416 433,375 445,771
_______ _______ _______
Net loss $(260,709) (405,133) (688,006)
_______ _______ _______
_______ _______ _______
Net loss per unit $(144.84) (225.07) (382.23)
_______ _______ _______
_______ _______ _______
See accompanying notes to financial statements.
F-3
<PAGE>
HICKORY HILLS, LTD.
(A Limited Partnership)
Statements of Partners' Deficit
Years ended December 31, 1995, 1994 and 1993
Limited General
partners partner Total
_______ _______ _____
Partners' deficit,
December 31, 1992 $(307,415) (18,937) (326,352)
Net loss (681,126) (6,880) (688,006)
_________ ______ ________
Partners' deficit,
December 31, 1993 (988,541) (25,817)(1,014,358)
Net loss (401,082) (4,051) (405,133)
_________ ______ _________
Partners' deficit,
December 31, 1994 (1,389,623) (29,868)(1,419,491)
Net loss (258,102) (2,607) (260,709)
_________ _______ _________
Partners' deficit,
December 31, 1995 $(1,647,725) (32,475)(1,680,200)
_________ _______ _________
_________ _______ _________
See accompanying notes to financial statements.
F-4
<PAGE>
HICKORY HILLS, LTD.
(A Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
____ ____ ____
Cash flows from operating activities:
Net loss $(260,709) (405,133) (688,006)
Adjustments to reconcile net
loss to net cash (used)
provided by operating
activities:
Amortization - - 316
Cost of land sold 707,893 743,616 1,194,648
Cost of land
improvements (244,042) (400,576) (60,058)
Increase in restricted
cash (81,261) (254,851) -
(Increase) decrease in
other assets (20,828) (192) 12
Increase (decrease) in
accrued interest
payable to affiliate 40,228 75,227 (163,772)
(Decrease) increase in
accrued property
taxes (25,586) (1,862) 8,539
Increase (decrease) in
other accrued
expenses 10,900 (17,175) 21,028
_______ _______ _______
Total adjustments 387,304 144,187 1,000,713
_______ _______ _______
Net cash provided
(used) by operating
activities 126,595 (260,946) 312,707
_______ _______ _______
Net increase (decrease)
in cash and cash
equivalents 126,595 (260,946) 312,707
Cash and cash equivalents
at beginning of year 132,479 393,425 80,718
_______ _______ _______
Cash and cash equivalents
at end of year $259,074 132,479 393,425
======== ======= =======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year
for interest $310,000 275,000 514,000
======== ======= ========
See accompanying notes to financial statements.
F-5
<PAGE>
HICKORY HILLS, LTD.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1995 and 1994
(1) Summary of Significant Accounting Policies
(a) Organization
____________
Hickory Hills, Ltd. (the Partnership) is a Tennessee limited
partnership organized on September 15, 1987, to acquire three
tracts of undeveloped land located in the Nashville
metropolitan and Hendersonville, Tennessee areas. The General
Partner is 222 Hickory, Ltd., and the general partner of 222
Hickory, Ltd. is 222 Partners, Inc. (see note 7).
(b) 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.
(c) Land and Land Improvements
__________________________
Land is recorded at cost and includes two tracts of
undeveloped land representing approximately 237 and 241 acres
at December 31, 1995 and 1994, respectively. Of these
amounts, management believes that 210 and 213 acres are
sellable at December 31, 1995 and 1994, respectively. In
addition, the Partnership owns one tract of land developed
into residential lots with 63 and 102 lots remaining 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 interest and property taxes are charged to
expense once development is substantially complete. Land
improvement costs include development costs expended
subsequent to the acquisition of a tract.
(d) Partnership Allocations
_____________________
Net earnings, losses, and distributions of cash flow of the
Partnership are allocated among the limited and general
partners, in accordance with the agreement of the limited
partnership.
(Continued)
F-7
<PAGE>
HICKORY HILLS, LTD.
(A Limited Partnership)
Notes to Financial Statements
(e) Cash and Cash Equivalents
________________________
The Partnership considers all short-term investments with
original maturities of three months or less to be cash
equivalents. At December 31, 1995 and 1994, the management of
the Partnership has reserved cash balances of $43,750 and
$34,250, respectively, for payment of impact fees.
Cash belonging to the Partnership is combined in an account
with funds from other partnerships related to the general
partner.
(f) Estimates
_________
Management of the Partnership has made estimates and
assumptions to prepare these financial statements. Actual
results could differ from those estimates.
(g) Reclassifications
_______________
Certain prior year amounts have been reclassified to conform
with current year presentation.
(2) Restricted Cash
______________
At December 31, 1995 and 1994, the Partnership has restricted
cash balances of $336,112 and $254,851, respectively, to be
used to fund property improvements, consisting of road and
utility work.
(3) 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 for performing certain
services. Expenses incurred for these services during 1995,
1994 and 1993 are as follows:
1995 1994 1993
____ ____ ____
Accounting fees $1,500 1,500 1,500
Program management fee 3,000 3,000 3,000
Real estate commissions 23,694 24,315 31,891
Interest expense 350,228 350,227 350,228
______ ______ ______
______ ______ ______
(Continued)
<PAGE>
HICKORY HILLS, LTD.
(A Limited Partnership)
Notes to Financial Statements
(4) Land and Improvements Held for Investment
________________________________________
The components of land held for investment at December 31, are
as follows:
1995 1994
_____ _____
Land $1,955,823 2,271,576
Land improvements 785,152 933,250
________ ________
$2,740,975 3,204,826
========= =========
The aggregate cost for federal income tax purposes was $2,740,975 and
$3,808,688 at December 31, 1995 and 1994, respectively.
(5) Note Payable to Affiliate
______________________
The note payable to affiliate represents a $3,454,300 long-
term note payable to Hickory Lenders, Ltd. (the Lender), an
affiliate sharing the same General Partner. The note accrues
simple interest at an annual rate of 10% plus "additional
interest" upon the sale of any portion of the collateral equal
to 55% of the "net revenues", as defined in the Participating
Loan Agreement. The note is secured by a mortgage on the land
held for investment and by a security interest in any cash
reserves or investment securities held by the Partnership.
Interest and principal payments become due upon the sale of
the collateral or any portion thereof to the extent cash is
available, but no later than December 31, 1997.
The Partnership has retained a portion of the net proceeds
from sales in the past and for the year ending December 31,
1995, without paying the applicable principal balance or
accrued interest to the Lender. The cumulative principal
balance payable to the Lender is $1,247,573 and $930,713 at
December 31, 1995 and 1994, respectively. The Partnership's
and Lender's joint general partner believes that retaining
sales proceeds for development and distributing only net
available cash to the Lender was contemplated by the loan
agreement. However, the loan agreement does not explicitly
authorize this use of funds; therefore, this treatment could
constitute a default on the loan agreement. In such an event
the Lender is required to foreclose the loan and accelerate
the amounts due. To date, the Lender has not foreclosed or
accelerated the amounts due under the loan agreement.
(Continued)
<PAGE>
HICKORY HILLS, LTD.
(A Limited Partnership)
Notes to Financial Statements
(6) Commitments
____________
The Partnership has granted an exclusive option to a home
builder to purchase all remaining lots in the Harbortowne
Subdivision in accordance with a specified takedown and
pricing schedule. Through May 28, 1994, the Partnership was
committed to sell lots for $17,500 per lot. After May 28,
1994, the lot price increased to $19,500. As of May 28, 1995,
the lot price increased $1,000 to $20,500 per lot. The lot
price increased another $1,000 to $21,500 per lot on November
28, 1995. After May 28, 1996, the lot price will be increased
to $23,500, with a $2,000 increase annually thereafter.
(7) General Partner Bankruptcy
________________________
On February 25, 1991, W. Gerald Ezell, a former general
partner of 222 Hickory, Ltd., 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.
On April 6, 1994, Mr. Ezell sold his general partnership
interest in 222 Hickory, Ltd. in accordance with bankruptcy
court approved plan to liquidate his assets and satisfy his
creditors. In accordance with the partnership agreement, Mr.
Ezell's interest in 222 Hickory, Ltd. was converted into a
special limited partnership interest, and his general partner
responsibilities were transferred to 222 Partners, Inc., the
remaining general partner. W. Gerald Ezell remains on the
Board of 222 Partners, Inc.
(8) Fair Value of Financial Instruments
_______________________________
At December 31, 1995, the Partnership had financial
instruments including cash and cash equivalents of $259,074,
restricted cash of $336,112, accrued interest payable of
$1,526,399, accrued liabilities of $56,955, and a note payable
of $3,454,300. The carrying amounts of cash and cash
equivalents, restricted cash, and accrued liabilities
approximate their fair values because of the short maturity of
those financial instruments.
<PAGE>
The determination of the estimated fair values of the note
payable and the related accrued interest payable was not
practicable as the note agreement does not provide for a
predictable cash payment stream.
<PAGE>
Independent Auditors' Report
_____________________________
The Partners
Hickory Hills, Ltd.:
Under date of January 19, 1996, we reported on the balance sheets of
Hickory Hills, Ltd. as of December 31, 1995 and 1994, and the related
statements of operations, partners' deficit, and cash flows for each of
the years in the three-year period ended December 31, 1995. 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
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 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
<PAGE>
Schedule XI
HICKORY HILLS, LTD.
(A Limited Partnership)
Real Estate and Accumulated Depreciation
December 31, 1995
Initial cost to Partnership
Building and
Description Encumbrances Land improvements
237 acres of land in
Davidson County, Tennessee
and 63 residential lots in
Sumner County, Tennessee $3,454,300 3,238,929 -
1995 1994 1993
(1) Balance at beginning $3,204,826 3,547,866 4,682,456
of Period
Additions during period:
Improvements 244,042 400,576 59,008
- - 1,050
-------- -------- --------
244,042 400,576 60,058
-------- -------- --------
Deductions during period:
Cost of real estate sold 707,893 743,616 1,194,648
-------- -------- --------
707,893 743,616 1,194,648
-------- -------- --------
Balance at end of period $2,740,975 3,204,826 3,547,866
========= ========== =========
(2) Aggregate cost for
Federal income tax purposes $2,740,975 3,808,688 3,874,532
======== ======== ========
See accompanying independent auditors' report.
S-2
<PAGE>
Schedule XI
HICKORY HILLS, LTD.
(A Limited Partnership)
Real Estate and Accumulated Depreciation
December 31, 1995
Cost Gross
capitalized subsequent amount at which carried
to acquisition at close of period (1)(2)
Building &
Improve- Carrying improve-
ments costs Land ments Total
2,426,259 588,834 1,955,823 785,152 2,740,975
<PAGE>
Schedule XI
HICKORY HILLS, LTD.
(A Limited Partnership)
Real Estate and Accumulated Depreciation
December 31, 1995
Accumulated Date of Date
depreciation* construction acquired
- 5/15/89-12/31/95 9/17/87-11/2/87
*Life on which depreciation in latest income statement is computed is not
applicable.
<PAGE>
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 A2 to the
Prospectus of Registrant dated
December 3, 1987 filed pursuant to
Rule 424(b) of the Securities and
Exchange Commission.
10A Loan Agreement by and among Hickory
Hills, Ltd. and Hickory Lenders,
Ltd., incorporated by reference to
Exhibit 10.1 to Registrant's Form
S-18 Registration Statement as
filed on October 23, 1987.
<PAGE>
10B Deed of Trust and Security
Agreement by and among Hickory
Lenders, Ltd. and the Registrant,
incorporated by reference to
Exhibit 10.2 of the Registrant's
Form S-18 Registration Statement as
filed on October 23, 1987.
10C Promissory Note of Hickory Hills,
Ltd. to Hickory Lenders, Ltd.,
incorporated by reference to
Exhibit 10.3 to Registrant's Form
S-18 Registration Statement as
filed on October 23, 1987.
22 Subsidiaries-Registrant has no
subsidiaries.
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 259,074
<SECURITIES> 336,112
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,740,975
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,357,454
<CURRENT-LIABILITIES> 56,955
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (1,680,200)
<TOTAL-LIABILITY-AND-EQUITY> 3,357,454
<SALES> 925,010
<TOTAL-REVENUES> 176,707
<CGS> 707,893
<TOTAL-COSTS> 772,541
<OTHER-EXPENSES> 437,416
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (260,709)
<INCOME-TAX> 0
<INCOME-CONTINUING> (260,709)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (260,709)
<EPS-PRIMARY> (144.84)
<EPS-DILUTED> (144.84)
</TABLE>
