<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, 1997
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
0-19233
COOL SPRINGS, L.P.
(Exact name of Registrant as specified in its charter)
Tennessee 62-1424812
(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 $6,349,000 as of February 28, 1998.
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 May 21, 1990, as filed pursuant to
Rule 424(b) of the Securities and Exchange Commission.
<PAGE>
PART 1
Item 1. Business
Cool Springs, L.P. ("Registrant"), is a Tennessee limited
partnership organized on September 20, 1989, pursuant to the
provisions of the Tennessee Uniform Limited Partnership Act,
Chapter 2, Title 61, Tennessee Code Annotated, as amended. The
general partner of the Registrant is 222 C.S., L.P., a Tennessee
limited partnership. Steven D. Ezell, Michael A. Hartley, and 222
Partners, Inc. are the general partners of 222 C.S., L.P.
Registrant's primary business is to acquire, develop, and
dispose of certain undeveloped real properties located in Franklin,
Williamson County, Tennessee; (the "Property"). Registrant's
investment objectives are preservation of capital, appreciation
through the passage of time, growth in the surrounding areas, and
the development of the property 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 geographical area and the industry segment is
included in Item 6 - Selected Financial Data.
Narrative Description of Business
The Registrant purchased for investment approximately 71
acres of land in the Cool Springs Development, a 1,150 acre mixed-
use project in Williamson County, Tennessee. The Property
consisted of two parcels of land situated along I-65 near the
Galleria Mall ("the Mall"). The larger parcel of 56 acres is
situated at the southwest corner of the intersection of Interstate
65 and Cool Springs Boulevard, bordered by Mallory Lane on the west
and Jordan Road to the south. The smaller parcel, consisting of 15
acres, borders Mallory Lane between the Mall and Cool Springs
Boulevard. Both parcels were zoned for interchange commercial
allowing for a wide variety of commercial uses. As of December 31,
1997, the Registrant held one acre.
The general area surrounding the Registrant's property 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. CSREA, the special limited partner of
the Registrant, owns much of the undeveloped land 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.
There are several unaffiliated 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 of these sites at
reasonable prices.
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, 1997, Registrant owned approximately 1
acre of undeveloped land in Franklin, Tennessee. See Item 1 for
a more detailed description.
Item 3. Legal Proceedings
In February 1997, a suit was filed against the Partnership in
the Chancery Court for Williamson County Tennessee, Case No. 24528,
C.M. Patel v. Cool Springs, L.P. The plaintiff alleges that the
Partnership breached a contract to sell a parcel of land to the
plaintiff. The Partnership has denied that it was obligated to
sell the parcel to the plaintiff and will vigorously defend the
lawsuit. The plaintiff amended the Complaint in February 1998 to
add JDN Development Company, Inc.("JDN") as a defendant. The
plaintiff has requested specific performance, to set aside the
conveyance of certain real property, including the parcel at issue,
from the Partnership to JDN and, in the alternative, monetary
damages.
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 May 21, 1990 of 7,500 Units
of Limited Partnership Interest. Due to uncertainties regarding
Cool Springs Venture, the former owner and developer of the Cool
Springs project, the general partner terminated the offering in
September 1990. As February 28, 1997, there were 536 holders of
record of the 6,349 Units of Limited Partnership Interests.
The Registrant distributed $6,729,940 and $476,175, or $1,060
and $75 per unit, to the partners during 1997 and 1996. 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.
<PAGE>
Item 6. Selected Financial Data
For the Year Ended
December 31,
1997 1996 1995 1994 1993
Total Revenues $1,951,452 238,381 3,185 880 383
Net earnings (loss)$1,639,779 197,630 (90,351) (69,044) (55,704)
Net earnings (loss)
per limited
partner unit $220.45 27.12 (10.74) (8.21) (6.62)
Distributions per
limited partner
unit $1,060 75 - - -
Total Assets $1,034,394 7,440,602 7,311,981 7,246,913 7,230,373
Note Payable - - 250,000 100,000 -
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
During 1997, the Registrant sold 57 acres for $10.8 million. From these
proceeds, $7.6 million was distributed to the partners, $1.7 million was
spent on development related to the sales, and a $500,000 payment was made on
the development payable.
During 1996, the Registrant sold 6.1 acres for $1.8 million. From
these proceeds, $537,413 was distributed to the partners, $617,637 was
escrowed for development related to the sales, the $250,000 note payable was
retired in full and the remainder was retained to meet operating expenses.
There were no sales of property in 1995. The escrowed sales proceeds are
included in restricted cash on the balance sheet. See Note(2) in Notes to
the Financial Statements for more information.
Overall operations of the Registrant have not changed
significantly. The increase in property taxes is due to rollback taxes paid
on the property sold. Most of the land sold in 1997 had been taxed at a
lower agricultural rate while the Registrant held the land undeveloped. The
Registrant was allowed to keep this agricultural tax rate, even though, the
land was included in the Cool Springs Corporate and Retail Center in return
for paying rollback taxes upon the sale and development of the property. The
city and county assess rollback taxes on the date of sale and the tax is
equal to approximately three years taxes at a commercial rate.
The 1997 increase in legal and accounting expense is due to the increase
sales activity in 1997. The decline in interest is due to the retirement of
the Note Payable in the first quarter of 1996. The 1995 property maintenance
costs are higher because the Registrant incurred additional costs preparing
for the sale in March of 1996.
Financial Condition and Liquidity
As of February 28, 1998, the Registrant had cash balances of
$111,057. The Registrant also holds only one acre of land which it expects
to sell in 1998. Upon the sale of the remaining acre, the Registrant will
satisfy all payables, distribute the remaining cash, and dissolve the
partnership. The current cash balance is sufficient to maintain the
partnership until the partnership can be dissolved.
We have considered the impact of Year 2000 issues on our computer
systems and applications and developed a remediation plan. We expect the
cost of upgrading computers and software to be immaterial to the Partnership.<PAGE>
Item 8. Financial Statements and Supplementary Data
COOL SPRINGS, L.P.
(A Limited Partnership)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1997, 1996, AND 1995
INDEX
Page
Number
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 of Financial Statements F-7
<PAGE>
Independent Auditors' Report
The Partners
Cool Springs, L.P.:
We have audited the accompanying balance sheets of Cool Springs, L.P. (a
limited partnership) as of December 31, 1997 and 1996, and the related
statements of operations, partners' equity, and cash flows for each of the
years in the three-year period ended December 31, 1997. 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 Cool
Springs, L.P. at December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1997, in conformity with generally accepted accounting
principles.
As discussed in Note 1, 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" on January 1, 1996.
KPMG Peat Marwick LLP
Nashville, Tennessee
January 30, 1998
F-1
<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Balance Sheets
December 31, 1997 and 1996
Assets 1997 1996
Cash and cash equivalents $ 208,395 57,166
Restricted cash (note 2) 425,999 633,192
Land and improvements
held for investment (note 3) 400,000 6,750,244
Total assets $ 1,034,394 7,440,602
Liabilities and Partners' Equity
Liabilities:
Accounts payable $ 5,634 -
Accrued property taxes 92,000 -
Payable to related party (note 4) - 9,141
Development payable 200,000 739,041
Total liabilities 297,634 748,182
Partners' equity:
Limited partners (6,349 units
outstanding) 700,468 6,030,784
Special limited partners 36,292 661,636
General partner - -
Total partners' equity 736,760 6,692,420
Commitments and contingencies (notes 2 and 4)
Total liabilities and
partners' equity $ 1,034,394 7,440,602
See accompanying notes to financial statements.
F-2
<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Statements of Operations
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
Revenue:
Sales of land and
improvements $ 10,883,493 1,805,000 -
Cost of land and
improvements sold (8,085,428)(1,407,343) -
Selling expenses (note 4) (849,975) (163,548) -
Gain on sale of land
and improvements 1,948,090 234,109 -
Interest revenue 3,362 4,272 3,185
------- ------- -------
Total revenue 1,951,452 238,381 3,185
Expenses:
Property maintenance costs 4,180 2,393 16,060
Property taxes 271,004 746 12,200
Legal and accounting
fees (note 4) 22,253 16,647 14,323
General and administrative
(note 4) 14,236 14,973 15,746
Amortization - 1,007 9,169
Interest - 4,985 26,038
Total expenses 311,673 40,751 93,536
Net earnings (loss) $1,639,779 197,630 (90,351)
Net earnings (loss) allocated to:
General partner $ 67,978 4,710 -
Special limited partner $ 172,177 20,751 (22,136)
Limited partners $1,399,624 172,169 (68,215)
Net earnings (loss)
per limited partner unit $ 220.45 27.12 (10.74)
Weighted average units
outstanding 6,349 6,349 6,349
See accompanying notes to financial statements.
F-3<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Statements of Partners' Equity
Years ended December 31, 1997, 1996 and 1995
Limited Special
partners limited General Total
units amounts partners partner
Balance at
December 31, 1994 6,349 $ 5,473,254 1,649,200 100 7,122,554
Net loss - (68,215) (22,136) - (90,351)
_______ _______ _______ _______ _______
Balance at
December 31, 1995 6,349 5,405,039 1,627,064 100 7,032,203
Net earnings - 172,169 20,751 4,710 197,630
Transfer of partnership
interest (note 3) - 929,751 (929,751) - -
Distributions
to partners
(note 6) - (476,175) (56,428) (4,810) (537,413)
_______ _______ _______ _______ _______
Balance at
December 31, 1996 6,349 6,030,784 661,636 - 6,692,420
Net earnings - 1,399,624 172,177 67,978 1,639,779
Distributions
to partners(note 6) - (6,729,940) (797,521) (67,978) (7,595,439)
-------- ------- ------- -------- ---------
Balance at
December 31, 1997 6,349 $ 700,468 36,292 - 736,760
See accompanying notes to financial statements.
F-4
<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1997, 1996 and 1995
<TABLE>
1997 1996 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 1,639,779 197,630 (90,351)
Adjustments to reconcile net earnings(loss)
to net cash provided by (used in) operating activities:
Amortization - 1,007 9,169
Cost of land and improvements sold 8,085,428 1,407,343 -
Decrease (increase) in restricted cash 207,193 (633,192) -
Cost of land improvements (1,735,184) (941,248) (2,289)
Decrease in prepaid interest - - 551
Increase (decrease) in accounts payable 5,634 (221) (2,149)
(Decrease) increase in accrued interest payable - (8,034) 8,034
Increase (decrease) in accrued property taxes 92,000 (12,382) (466)
(Decrease) increase in development payable (539,041) 739,041 -
Decrease in payable to related party (9,141) - -
Net cash provided by(used in) operating activities7,746,668 749,944 (77,501)
Cash flows from financing activities
Note payable proceeds - - 150,000
Principal payments on Note payable - (250,000) -
Distributions to partners (7,595,439) (537,413) -
Net cash (used) provided by financing activities (7,595,439) (787,413) 150,000
Net increase (decrease) in cash
and cash equivalents 151,229 (37,469) 72,499
F-5<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
Cash and cash equivalents at
beginning of year 57,166 94,635 22,136
Cash and cash equivalents at
end of year $ 208,395 57,166 94,635
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest $ - 13,019 17,453
See accompanying notes to financial statements.
F-6<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1997 and 1996
(1) Summary of Significant Accounting Policies
(a) Organization
Cool Springs, L.P. (the Partnership), a Tennessee Limited
Partnership, was organized on September 20, 1989, to
acquire undeveloped land located in Franklin, Tennessee.
The general partner is 222 C.S., L.P. The general
partners of 222 C.S., L.P.are 222 Partners, Inc., Steven
D. Ezell and Michael A. Hartley. The Partnership
prepares financial statements and income tax returns on
the accrual method of accounting. The financial
statements include only those assets, liabilities and
results of operations which relate to the Partnership.
(b) Estimates
Management of the Partnership has made 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 Partnership's land and
improvements held for investment in accordance with the
provisions of Statement of Financial Accounting Standards
No. 121. Actual results could differ from those
estimates.
(c) 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.
(d) Land and Improvements Held for Investment
Land and improvements held for investment is recorded at
cost and includes two tracts of undeveloped land
representing approximately 1 and 58 acres at December 31,
1997 and 1996, respectively. Land costs include amounts
to acquire and hold land, including interest and property
taxes during the development period. The tax basis of
the land and improvements held for
F-7<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
investment is $402,283 and $6,562,566 at December 31, 1997 and
1996, respectively.
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" on January 1,
1996. 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 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.
(e) Loan Costs
Loan costs were amortized by the straight-line method over the
two year term of the note payable.
(f) Income Recognition
Income from sales of land and improvements 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 <PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
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.
(g) Income Taxes
No provision has or will be made for Federal or state
income taxes since such taxes are the responsibility of
the partners.
Annually, the partners receive, from the Partnership, IRS
Form K-1's which provide them with their share of taxable
income or losses, deductions, and other tax information.
The only difference between the tax basis and reported
amounts of the Partnership's assets and liabilities
relates to the valuation of land and improvements held
for investment. For income tax purposes certain costs
were capitalized as additional land improvement costs.
(h) 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:
Partnership profits are allocated first to the special
limited partner in proportion to the special limited
partner interest. Any profits not allocated to the
special limited partner are allocated 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 profit allocations are then made to the
limited partners until the taxable year in which
cumulative profits to the limited partners equal their
adjusted capital contribution plus an unpaid preferred
<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
return (12% annual cumulative return on capital
contributed). 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 25% to 75%.
Thereafter, profits are generally allocated 25% to the
general partner and 75% to the limited partners. Net
losses not allocated to the special limited partner are
allocated to the limited partners and general partners in
proportion to their positive capital accounts.
Partnership distributions are allocated to the special
limited partner in proportion to the special limited
partner interest, then 99% to the limited partners and
1% to the general partner in an amount equal to their
preferred return (12% annual cumulative return on capital
contributed), 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 then 75% to the limited partners and 25% to the
general partner.
Cumulative unpaid preferred returns are $36,274 and
$4,464,468 at December 31, 1997 and 1996, respectively.
(i) Reclassifications
Certain reclassifications have been made to conform to
the current year presentation.
(2) Restricted Cash
At December 31, 1997 and 1996, the Partnership has
restricted cash balances of $425,999 and $633,192,
respectively, to be used to fund property improvements,
consisting of road and utility work.
(3) Land and Improvements Held for Investment
The components of land and improvements held for investment at
December 31 are as follows:
1997 1996
Land and carrying costs $ 271,427 6,318,315
Land improvements 128,573 431,929
$ 400,000 6,750,244 <PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(3) Land and Improvements Held for Investment
During 1990 the Partnership acquired approximately 71
acres of land from Cool Springs Venture (CSV), an
affiliate of the general partner. The purchase price was
$6,873,000, which was the Seller's allocated cost of the
land and related improvements. If the Partnership were
successful in selling 7,500 limited partnership units,
$6,185,700 of the purchase price was to be paid in cash
and the remaining $687,300 was to be paid by allocating
CSV a 10% special limited partnership interest in the
Partnership. If the Partnership sold less than 7,500
limited partnership units, the cash portion of the
purchase price was to be reduced, and the special limited
partnership interest increased.
The Partnership sold a total of 6,349 limited partnership
units. The offering was suspended on September 28, 1990,
and there is no intention of reopening the offering at
this time. In accordance with the land purchase
agreement, the Partnership bid $5,120,385 in cash and
granted CSV a 25.5% special limited partnership interest.
During 1991, CSV was unable to fund certain specified
development activities. The Partnership funded $40,719
of these improvements which has been recorded as a
redemption of a portion of CSV's special limited
partnership interest. In return for this funding, the
Partnership was assigned an additional 1% interest from
CSV, reducing CSV's special limited partnership interest
from 25.5% to 24.5% at December 31, 1991. CSV did not
complete certain other specified development activities
by December 31, 1992.
During 1993, CSV was succeeded by Cool Springs Real
Estate Associates (CSREA), which assumed all
responsibilities of CSV relating to infrastructure
development as well as the 24.5% special partnership
interest in Cool Springs, L.P. The Partnership extended
the deadline for development responsibilities from
December 31, 1992 to December 31, 1995. CSREA did not
complete the specified development activities by December
31, 1995. As a result, CSREA forfeited an additional 14%
of its special limited partnership interest.
<PAGE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(4) Related Party Transactions
Through December 31, 1997, the general partner and its
affiliates have been actively involved in managing the
Partnership. Affiliates of the general partner receive
fees for performing certain services. Expenses incurring
for these services are as follows:
1997 1996 1995
Real Estate commissions $443,315 - -
Accounting, tax and management
consulting fees 2,600 2,800 2,000
Partnership administration
reimbursement 12,000 12,000 12,000
Engineering fees 1,000 - -
The payable to a related party, totaling $9,141 at December
31, 1996, represents amounts due to affiliates for partnership
administration fees and property taxes paid on behalf of Cool
Springs, L.P. This amount was non interest-bearing and was
repaid in 1997.
(5) Fair Value of Financial Instruments
At December 31, 1997 and 1996, the Partnership had financial
instruments including cash and cash equivalents, restricted
cash, accounts payable, accrued property taxes and other
payables. The carrying amounts of the financial instruments
approximate their fair value because of the short maturity of
those financial instruments.
(6) Distributions
For the years ended December 31, 1997 and 1996, the
Partnership made distributions to the limited partners of
$6,729,940 and $476,175 ($1,060 per unit and $75 per unit),
respectively. There were no distributions in 1995.
(7) Contingency
In February 1997, a suit was filed against the
Partnership alleging that the Partnership breached a
contract to sell a parcel of land to the plaintiff. The
suit requests specific performance, to set aside the
conveyance of certain real property, including the parcel
of land at issue, and in the alternative, monetary
damages. The Partnership believes the suit is without
merit and intends to vigorously defend it. The suit when
finally concluded, in the opinion of management of the
Partnership, based on information it presently possesses,
will not have a material adverse effect on the
Partnership's financial position.
<PAGE>
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 C.S.,L.P.
is the general partner. Steven D. Ezell, Michael A. Hartley and
222 Partners, Inc. are the general partners of the general partner
and as such have general responsibility and ultimate authority in
matters affecting Registrant's business.
The general partners of 222 C.S., L.P. are as follows:
Steven D. Ezell
Steven D. Ezell, age 45, is a general partner of 222 C.S., L.P. He
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. For the prior four years,
Mr. Ezell was 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 38, is a general partner of 222 C.S., L.P.
He 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.
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.
Other directors of 222 Partners, Inc. are as follows:
W. Gerald Ezell
W. Gerald Ezell, age 67, 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.
Item 11. Executive Compensation
During 1997, 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 Registrant as set forth in the Partnership
Agreement.
Item 12. Security Ownership of Certain Beneficial Owners and
Management As of February 28, 1998 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,
1997, earned or received compensation services from the Registrant
in excess of $60,000 except for the real estate commissions earned
by Landmark Realty Services Corporation of $443,315.
For more information regarding this commission and a listing
of miscellaneous transactions with affiliates refer to Note 4 of
the Notes to Financial Statements in Item 8.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) (1) Financial Statements
See Financial Statements Index in Item 8. hereof.
(2) Financial Statement Schedule
See Financial Statement Schedule Index following.
(3) Exhibits
3.1 Amended and Restated Certificate and Agreement of
Limited Partnership, incorporated by reference to
Exhibit A to the Prospectus of Registrant dated
May 21, 1990 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 the last quarter of
1997.
<PAGE>
Financial Statement Schedule Filed Pursuant to Item 14(a)(2):
COOL SPRINGS, L.P.
( A Tennessee Limited Partnership)
ADDITIONAL INFORMATION
FOR THE YEARS ENDED
DECEMBER 31, 1997
INDEX
Additional financial information furnished
pursuant to the requirement of Form 10-K:
Financial Statement Schedule -
Independent Auditors' Report S-1
Schedule III - 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.
<PAGE>
Independent Auditors' Report
The Partners
Cool Springs, L.P.:
Under date of January 30, 1998. We reported on the balance sheets
of Cool Springs, L.P. as of December 31, 1997 and 1996, and the
related statements of operations, partners' equity, and cash flows
for each of the years in the three-year period ended December 31,
1997. 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 herein.
As discussed in Note 1, 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" on January 1, 1996.
KPMG PEAT MARWICK LLP
Nashville, Tennessee
January 30, 1998.
S-1
<PAGE>
</TABLE>
<TABLE>
COOL SPRINGS, L.P.
(A Limited Partnership)
Schedule III
Real Estate and Accumulated Depreciation
<CAPTION>
Initial Cost to Cost capitalized Gross amount at
Partnership subsequent which carried
to acquisition at close of period
Description Encum- Land Building Improve- Carrying Land Building Total Accumu- Date of Date
brances and improve- ments costs and improve- lated de- construc-
acquired ments ments preciation tion
<S>________ <C>____ <C>__ <C>_____ <C>_____ <C>_____ <C>_ <C>_____ <C>__ <C>____ <C>____<C>_
1 acre of land
in Williamson Co., TN - $ 271,427 - 128,573 - 271,427 128,573 400,000 - 6/96
*Assets scheduled above represent land and non-depreciable land improvements, therefore accumulated depreciation and depreciable
lives are not applicable.
1997 1996 1995
(1) Balance at beginning
of period $6,750,244 7,216,339 7,214,050
Land improvements 1,735,184 941,248 2,289 -
Cost of land sold 8,085,428 (1,407,343) -
Balance at end of period 400,000 6,750,244 7,216,339
(2) Aggregate cost for Federal
income tax purposes $ 402,283 6,562,566 7,216,339
</TABLE>
S-2
<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.
COOL SPRINGS, L.P.
By: 222 C.S., L.P.
General Partner
DATE: March 31, 1998 By: /s/ Steven D. Ezell
General Partner
DATE: March 31, 1998 By: /s/ Michael A. Hartley
General Partner
By: 222 Partners, Inc.
General Partner
DATE: March 31, 1998 By: /s/ Michael A. Hartley
Secretary/Treasurer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
COOL SPRINGS, L.P.
By: 222 C.S., L.P.
General Partner
DATE: March 31, 1998 By: /s/ Steven D. Ezell
General Partner
DATE: March 31, 1998 By: /s/ Michael A. Hartley
General Partner
By: 222 Partners, Inc.
General Partner
DATE: March 27, 1998 By: /s/ Michael A. Hartley
Secretary/Treasurer
Supplement 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>
Exhibits filed to Item 14(a)(3):
COOL SPRINGS, L.P.
(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 May 21, 1990 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> 0000856141
<NAME> COOL SPRINGS, L.P.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 208,395
<SECURITIES> 425,999
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 400,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,034,394
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 736,760
<TOTAL-LIABILITY-AND-EQUITY> 1,034,394
<SALES> 10,883,493
<TOTAL-REVENUES> 1,951,452
<CGS> 8,085,428
<TOTAL-COSTS> 8,935,403
<OTHER-EXPENSES> 311,673
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,639,779
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,639,779
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,639,779
<EPS-PRIMARY> 220.45
<EPS-DILUTED> 220.45
</TABLE>
