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
For the fiscal year ended
December 31, 2003
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _______to_______
Commission File Number
33-3955-A
MOORE'S LANE PROPERTIES, LTD.
(Exact name of Registrant as specified in its charter)
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Tennessee |
62-1271931 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
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3310 West End Avenue, Suite 490 |
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Nashville, Tennessee |
37203 |
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(Address of principal executive offices) |
(Zip Code) |
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Registrant's telephone number, including area code: (615) 292-1040 |
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(615)292-1040 |
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Securities registered pursuant to Section 12(b) of the Act: |
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Title of Each Class |
Name of each exchange on which registered |
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None |
None |
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Securities registered pursuant to Section 12(g) of the Act: |
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Units of Limited Partnership Interest |
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(Title of Class) |
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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]
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes No X
The aggregate sales price of the Units of Limited Partnership Interest to non-affiliates was $7,500,000 as of April 22, 1986. 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 22, 1986, as filed pursuant to Rule 424(b) of the Securities and Exchange Commission.
Item 1. Business
General Development of Business
Moore's Lane Properties, Ltd. ("Registrant"), is a Tennessee limited partnership organized in December 1985, pursuant to the provisions of the Tennessee Uniform Limited Partnership Act, Chapter 2, Title 61, Tennessee Code Annotated, as amended. The General Partner of the Registrant is 222 Partners, Inc. The Partnership is a venturer in Moore's Lane Venture Associates (the "Joint Venture") and has controlling interest in this Joint Venture.
Registrant's primary objective, as a consolidated entity with the Joint Venture, is to sell certain undeveloped real property located in Franklin, Williamson County, Tennessee (the "Property") and distribute to the limited partners, a return of capital from the net proceeds of the sales.
Financial Information about Industry Segments
The Registrant's activity, sale of land, is within one industry segment and geographical area. Therefore, financial data relating to the industry segment and geographical area is included in Item 6 - Selected Financial Data.
Narrative Description of Business
As of December 31, 2003, the Joint Venture owned approximately 2 salable acres of partially developed land in Franklin, Tennessee. The Property is held for sale. The Property is included in the 1,150-acre Cool Springs Corporate and Retail Center.
The development of the Property is complete. This work included construction of several major roads and interchanges, grading and utility installation.
Competition:
The Cool Springs Corporate and Retail Center is in various stages of development and is being developed for retail, office and mixed commercial uses similar to those considered suitable for the Property. Cool Springs Real Estate Associates, LP ("CSREA") owns much of the undeveloped land in the immediate vicinity of the Property. CSREA is an institutional real estate investor. Their asking prices are currently comparable to the Registrant's. There are several other competitive retail sites at the I-65 and Moore's Lane Boulevard intersection. However, the General Partner feels that the market can ultimately absorb all these sites and that the Registrant's low cost in its land will allow it to compete effectively.
The Registrant has no employees. 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, 2003, the Joint Venture, of which the Registrant has a controlling interest, owned 2 acres of land in Franklin, Williamson County, Tennessee. The Property is included in the Cool Springs Retail and Corporate Center. The Property is located along the perimeter of the Cool Springs Galleria Mall.
Item 3. Legal Proceedings
The Registrant is not a party to, nor is any of the 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 matters during the fiscal year covered by this report.
Item 5. Market for Registrant's Units of Limited Partnership Interest and Related Security Holder Matters
There is no established market for the Registrant's Units of Limited Partnership Interest, and it is not anticipated that any will exist in the future. The Registrant commenced an offering to the public on April 22, 1986 of 7,500 Units of limited partnership interests. The offering of $7,500,000 was fully subscribed and closed on May 30, 1986. As of February 28, 2004, there were 562 holders of record of 7,500 Units of limited partnership interests.
There are no material restrictions upon Registrant's present or future ability to make distributions in accordance with the provisions of Registrant's Limited Partnership Agreement.
Item 6. Selected Financial Data
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For the Year Ending December 31, |
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2003 |
2002 |
2001 |
2000 |
1999 |
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Total revenue |
$1,134,173 |
$1,318 |
$6,095 |
$1,056,726 |
$1,836,691 |
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Net income (loss) |
$791,543 |
$(101,057) |
$(129,076) |
$661,700 |
$1,312,394 |
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Net income (loss) per limited partner unit |
$70.29 |
($9.30) |
($11.88) |
$60.88 |
$53.46 |
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Total assets |
$282,061 |
$553,255 |
$642,311 |
$852,404 |
$1,336,934 |
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Cash distributions per limited partner unit |
$100.00 |
$-- |
$-- |
$110.00 |
$155.00 |
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Sales
On July 8, 2003, the Registrant sold 5 acres of land for gross proceeds of $1.5 million. Of the proceeds, approximately $1.3 million was distributed to the partners of the joint venture. The remaining proceeds were retained to meet operating expenses. The Registrant has 2 acres left for sale. There were no sales of Property during 2002 or 2001.
Operations
Other than the sales activity noted above, operations of the Registrant are comparable during 2003, 2002, and 2001, except for the following. The decrease in interest income during the years is due to lower interest rates and lower cash balances held during the year, especially in the restricted cash-escrow accounts. The increase in state taxes is due to an accrual for state excise tax on the gain on sale.
Liquidity and Capital Resources
At February 28, 2004, the Registrant had $45,203 in cash to meet its 2004 operating expenses. The General Partner believes that this cash balance is sufficient to meet the operational needs of the Registrant for the year 2004.
Critical Accounting Policies
As discussed in Note 1 to the financial statements, land and improvements held for sale are reported at the lower of the carrying value or estimated fair value less estimated costs to sell (Fair Value). To determine the Fair Value, management estimates the future discounted net cash flows using a discount rate commensurate with the risk associated with the property. If this land is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated Fair Value. Inherent in the calculation of future discounted net cash flows are certain significant management judgments and estimates including, among others, liquidation period, discount rate, selling price, and costs to sell, which significantly impact the estimated Fair Value. Based upon management's analysis of the Partnership's land and improvements held for sale, no impairment charge was necessary at December 31, 2003.
Contractual Obligations and Commitments
At December 31, 2003, the Partnership has no capital lease obligations, operating leases, unconditional purchase obligations or other long term obligations. The Partnership does not enter into derivative transactions. Further, the Partnership does not have lines of credit, guarantees, or other commercial commitments. At December 31, 2003 and 2002, the Partnership has restricted cash balances of $96,502 and $32,252, respectively, to be used to fund property improvements, consisting of road and utility work, and property taxes. The restricted cash secures a letter of credit in the same amount to ensure that the required developments were made. The Partnership may borrow from the General Partner in order to meet cash flow needs and may have amounts payable to the General Partner for management fees or other services. At December 31, 2003, the Partnership had no borrowings from the General Partner. Transactions with the General Partner and affiliates are discussed in footnote 4 to the fina ncial statements.
Recently Issued Accounting Standards
During 2003, the Registrant adopted FASB Statement 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, FASB Statement 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equities, FASB Statement 132 (revised 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits, FASB Interpretation 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, and FASB Interpretation 46, Consolidation of Variable Interest Entities. Adoption of the new standards did not materially affect the Company's operating results or financial condition.
In December 2003, the FASB revised Interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of ARB No. 51. This Interpretation addresses the consolidation by business enterprises of variable interest entities as defined in the Interpretation. Interpretation 46, as revised in December 2003, changes the accounting model for consolidation from one based on consideration of control through voting interests. The decision to consolidate an entity will now also consider whether that entity has sufficient equity at risk to enable it to operate without additional financial support, whether the equity owners in that entity lack the obligation to absorb expected losses or the right to receive residual returns of the entity, or whether voting rights in the entity are not proportional to the equity interest and substantially all the entity's activities are conducted for an investor with few voting rights. The Interpretati on applies immediately to variable interests in variable interest entities created after January 31, 2003, and to variable interests in variable interest entities obtained after January 31, 2003. The Interpretation requires certain disclosures in financial statements issued after January 31, 2003 if it is reasonably possible that the Registrant will consolidate or disclose information about variable interest entities. The application of this Interpretation has not had a material effect on the Registrant's financial statements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
The Registrant has no significant market risk exposure as defined by Item 305 of Regulation S-K of the Securities Exchange Act of 1934.
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
Form 8-K filed on April 17, 2003 states a change in the Registrant's accounting firm. In a letter dated April 4 2003 and received by the Registrant on April 10, 2003, KPMG LLP ("KPMG") declined to stand for re-election as independent public accountants for the Registrant.
The audit reports issued by KPMG on the consolidated financial statements of the Registrant as of and for the years ended December 31, 2002 and December 31, 2001, did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified, as to uncertainty, audit scope or accounting principles.
During the two most recent fiscal years ended December 31, 2002 and December 31, 2001, and the subsequent interim period from January 1, 2003 through April 4 2003, there have been no disagreements between the Registrant and KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG, would have caused KPMG to make reference to the subject matter thereof in its report on the Registrant's consolidated financial statements for such periods.
During the two most recent fiscal years and through April 4 2003, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
The Registrant requested KPMG to furnish a letter addressed to the Securities and Exchange Commission stating whether it agrees with the above statements. A copy of such letter is filed as Exhibit 16.1 to this Current Report on Form 8-K.
The Registrant has appointed Crowe Chizek and Company LLC as its new independent public accountants effective as of April 17 2003. The selection of Crowe Chizek and Company LLC was approved by the Board of Directors of the General Partner of the Registrant on April 17 2003. During the fiscal years ended December 31, 2002 and December 31, 2001 and through April 17, 2003, the Registrant has not consulted Crowe Chizek and Company LLC regarding any matters described in, and required to be disclosed pursuant to, Item 304(a)(2)(i) and (ii) of Regulation S-K.
Item 9(a) Controls and Procedures
The Registrant maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Registrant files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the filing date of this report, the President and Vice President of General Partner of the Registrant concluded that the Registrant's disclosure controls and procedures were adequate.
There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation
Item 10. Directors and Executive Officers of the Registrant
Registrant does not have any directors or officers. 222 Partners, Inc. is the General Partner of the Registrant 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 executive officers and directors of 222 Partners, Inc. are as follows:
Steven D. Ezell, age 51, serves as a director, president and sole shareholder of the corporate general partner. He has been an officer of 222 Partners, Inc. from September 17, 1986 through the current period. Mr. Ezell is President and 50% owner of Landmark Realty Service Corporation. He was active for the four years prior to joining Landmark in property acquisitions for Dean Witter Realty Inc. in New York City, most recently as Senior Vice President. He is the son of W. Gerald Ezell.
Michael A. Hartley, age 44, is Secretary/Treasurer and Vice President of the corporate general partner. He has been an officer of 222 Partners, Inc. from September 17, 1986 through the current period. He also serves as Vice President and 50% owner of Landmark Realty Services Corporation. For the three years prior to joining Landmark, Mr. Hartley was a Vice President of Dean Witter Realty Inc., a New York-based real estate investment company.
W. Gerald Ezell, age 74, is a director of the corporate general partner. Mr. Ezell is also a general partner of affiliated limited partnerships, which own various real estate properties. Until November 15, 1985, Mr. Ezell had been for over 20 years an agency manager for Fidelity Mutual Life Insurance Company and a registered securities principal of Capital Analysts Incorporated, a wholly owned subsidiary of Fidelity Mutual Life Insurance Company.
Item 11. Executive Compensation
During 2003, the Registrant was not required to and did not pay remuneration to any partners of the General Partners or any affiliates, except as set forth in Item 13 of this report, "Certain Relationships and Related Transactions." The General Partners do participate in the Profits, Losses, and Distributions of the Partnership as set forth in the Partnership Agreement.
The proceeds distributed from the 1997 sales allowed the Registrant to fully return all capital and preferred return to the Limited Partners. As stated in the Limited Partnership Agreement, all future cash distributions will be allocated 69% to the limited partners and 31% to the general partner and special limited partners. The allocation ratio of limited partner to General Partner and special limited partners prior to the return of capital was 99:1.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Security Holder Matters
As of February 28, 2004, no person or "group" ( as that term is used in Section 3 (d) (3) of the Securities Exchange Act of 1934) was known by the Registrant to beneficially own more than five percent of the Units of Registrant. Also as of the above date, no director of 222 Partners, Inc. was known by the Registrant to beneficially own any of the units of the Registrant. There are no arrangements known by the Registrant, the operation of which may, at a subsequent date, result in a change in control of the Registrant.
Item 13. Certain Relationships and Related Transactions
No affiliated entities have, for the year ending December 31, 2003, earned or received compensation or payments for services from the Registrant in excess of $60,000.
For a listing of miscellaneous transactions with affiliates refer to Note 4 of the notes to Consolidated Financial Statements herein.
Item 14. Principal Accountant Fees and Services
Audit Related Fees
Our principal accountants billed us an aggregate of $13,000 in fees and expenses for professional services rendered in connection with the audit of our financial statements for the calendar year ended December 31, 2003, and reviews of the financial statements included in our quarterly reports on Form 10-Q during such calendar year. Our former accountants billed us the same amount in fees and expenses for professional services rendered in connection with the audit of our financial statements for the calendar year ended December 31, 2002, and reviews of the financial statements included in our quarterly reports on Form 10-Q during such calendar year.
Our principal accountants did not bill us any additional fees that are not disclosed under audit fees in each of the last two calendar years for assurance and related services that are reasonably related to the performance of our audit or review of our financial statements.
Tax Fees
No tax fees were paid to our principal accountants or our former accountants for tax compliance, tax advice and tax planning during calendar years ended December 31, 2003 and 2002.
All Other Fees
No other fees were paid to our principal accountants or former accountants during calendar years ended December 31, 2003 and 2002 for products and services other than those products and services described above
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
Because the Registrant's units of Limited Partnership are not traded, the General Partner acts as the audit committee. The General Partner pre-approves all audit and non-audit services provided by the independent auditors prior to the engagement of the independent auditors with respect to such services.
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Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K |
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(a) |
(1) |
Financial Statements |
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Independent Auditors' Reports |
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Financial Statements: |
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Consolidated Balance Sheets |
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Consolidated Statements of Operations |
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Consolidated Statements of Partners' Equity |
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Consolidated Statements of Cash Flows |
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Notes to Consolidated Financial Statements |
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(2) |
Financial Statement Schedule |
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Independent Auditors' Reports |
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Schedule III - Real Estate and Accumulated Depreciation |
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All other Schedules have been omitted because they are inapplicable, not required or the information is included in the Consolidated Financial Statements or notes thereto. |
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(3) |
Exhibits |
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3 |
Amended and Restated Certificate and Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of Registrant dated April 22, 1986 filed pursuant to Rule 424(b) of the Securities and Exchange Commission. |
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21 |
Subsidiaries |
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31.1 |
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Steven D. Ezell, the President of 222 Partners, Inc., the General Partner of Moore's Lane Properties, Ltd. on March 30, 2004. |
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31.2 |
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Michael A. Hartley, the Vice President of 222 Partners, Inc., the General Partner of Moore's Lane Properties, Ltd. on March 30, 2004. |
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32 |
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Steven D. Ezell, the President and Michael A. Hartley, the Vice President of 222 Partners, Inc., the General Partner of Moore's Lane Properties, Ltd. on March 30, 2004. |
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(b) |
No reports on Form 8-K have been filed during the last quarter of 2003. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act or 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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MOORE'S LANE PROPERTIES, LTD. |
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By: 222 Partners, Inc. |
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General Partner |
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DATE: March 30, 2004 |
By:/s/ Steven D. Ezell |
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President and Director |
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DATE: March 30, 2004 |
By:/s/ Michael A. Hartley |
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Vice President and Director |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the dates indicated.
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MOORE'S LANE PROPERTIES, LTD. |
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By: 222 Partners, Inc. |
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General Partner |
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DATE: March 30, 2004 |
By:/s/ Steven D. Ezell |
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President and Director |
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DATE: March 30, 2004 |
By:/s/ Michael A. Hartley |
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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.
The Partners
Moore's Lane Properties, Ltd.:
We have audited the accompanying consolidated balance sheet of Moore's Lane Properties, Ltd. (a limited partnership) as of December 31, 2003, and the related consolidated statements of operations, partners' equity, and cash flows for the year then ended. 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 audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Moore's Lane Properties, Ltd. at December 31, 2003, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Crowe Chizek and Company LLC
Brentwood, Tennessee
January 30, 2004
Independent Auditors' Report
The Partners
Moore's Lane Properties, Ltd.:
We have audited the accompanying consolidated balance sheet of Moore's Lane Properties, Ltd. (a limited partnership) and subsidiary as of December 31, 2002, and the related consolidated statements of operations, partners' equity, and cash flows for each of the years in the two year period ended December 31, 2002. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Moore's Lane Properties, Ltd. and subsidiary at December 31, 2002, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America.
KPMG LLP
Nashville, Tennessee
February 1, 2003
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY
(A Limited Partnership)
Consolidated Balance Sheets
December 31, 2003 and 2002
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Assets |
2003 |
2002 |
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Cash and cash equivalents |
$63,110 |
$157,608 |
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Restricted cash |
96,502 |
32,252 |
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Land and improvements held for sale |
122,449 |
363,395 |
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Total Assets |
$282,061 |
$553,255 |
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Liabilities and Partners' Equity |
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Liabilities: |
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Property taxes payable |
$12,506 |
$30,100 |
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Payable to related party |
12,971 |
12,780 |
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Accounts payable and accrued expenses |
9,125 |
3,500 |
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State taxes payable |
38,753 |
2,756 |
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Minority interest in consolidated joint venture |
100 |
100 |
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Total liabilities |
73,455 |
49,236 |
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Partners' equity: |
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Limited partners (7,500 units outstanding) |
124,964 |
347,773 |
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General Partner |
2,704 |
3,423 |
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Special limited partner |
80,938 |
152,823 |
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Total partners' equity |
208,606 |
504,019 |
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Total liabilities and partners' equity |
$282,061 |
$553,255 |
See accompanying independent auditors' reports.
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY
(A Limited Partnership)
Consolidated Statements of Operations
Years ended December 31, 2003, 2002, and 2001
|
Revenue |
2003 |
2002 |
2001 |
|
Sales: |
|
|
|
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Sales of land and improvements |
$1,500,000 |
$- |
$- |
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Cost of land and improvements sold |
(240,946) |
- |
- |
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Selling expenses |
(125,064) |
- |
- |
|
Gain on land sale |
1,133,990 |
- |
- |
|
Interest income |
183 |
1,068 |
6,095 |
|
Miscellaneous income |
- |
250 |
- |
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Total revenue |
1,134,173 |
1,318 |
6,095 |
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Expenses |
|
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|
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Property taxes |
30,473 |
35,564 |
30,098 |
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Partnership and property management fee |
15,604 |
15,604 |
15,604 |
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Legal and accounting |
27,946 |
40,060 |
31,849 |
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General and administrative |
6,661 |
3,915 |
8,459 |
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Architect and engineering fees |
- |
275 |
7,203 |
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Land maintenance |
3,600 |
4,725 |
39,721 |
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State taxes |
37,346 |
2,232 |
2,237 |
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Total expenses |
121,630 |
102,375 |
135,171 |
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Income(Loss) before minority interest |
1,012,543 |
(101,057) |
(129,076) |
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Minority interest |
221,000 |
- |
- |
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Net (loss) income |
$791,543 |
$(101,057) |
$(129,076) |
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Net (loss) income allocated to: |
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|
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General Partner |
$2,650 |
$(314) |
$(400) |
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Special limited partner |
261,702 |
(31,014) |
(39,613) |
|
Limited partners |
527,191 |
(69,729) |
(89,063) |
|
Net income(loss) per limited partner unit |
$70.29 |
($9.30) |
($11.88) |
|
Weighted average units outstanding |
7,500 |
7,500 |
7,500 |
See accompanying independent auditors' reports.
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY
(A Limited Partnership)
Consolidated Statements of Partners' Equity
Years ended December 31, 2003, 2002, and 2001
|
Units |
Limited Partners |
Special Limited Partner |
General Partner |
Total |
|
|
Balance at January 1, 2001 |
7,500 |
$506,565 |
$223,450 |
$4,137 |
$734,152 |
|
Net loss |
(89,063) |
(39,613) |
(400) |
(129,076) |
|
|
Balance at December 31, 2001 |
7,500 |
417,502 |
183,837 |
3,737 |
605,076 |
|
Net loss |
(69,729) |
(31,014) |
(314) |
(101,057) |
|
|
Balance at December 31, 2002 |
7,500 |
347,773 |
152,823 |
3,423 |
504,019 |
|
Cash distributions |
(750,000) |
(333,587) |
(3,369) |
(1,086,956) |
|
|
Net income |
527,191 |
261,702 |
2,650 |
791,543 |
|
|
Balance at December 31, 2003 |
7,500 |
$124,964 |
$80,938 |
$2,704 |
$208,606 |
See accompanying independent auditors' reports.
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY
(A Limited Partnership)
Consolidated Statements of Cash Flows
Years ended December 31, 2003, 2002, and 2001
|
2003 |
2002 |
2001 |
|
|
Cash flows from operating activities: |
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|
Net income (loss) |
$791,543 |
$(101,057) |
$(129,076) |
|
Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities: |
|||
|
(Increase ) decrease in restricted cash |
(64,250) |
26,000 |
220,590 |
|
Cost of land and improvements sold |
240,946 |
- |
- |
|
Increase (decrease) in accounts payable and accrued expenses |
5,625 |
(1,500) |
(30,145) |
|
Increase in payable to related party |
191 |
12,780 |
- |
|
(Decrease) increase in property tax payable |
(17,594) |
2 |
(8,309) |
|
Increase (decrease) in state taxes payable |
35,997 |
719 |
(42,563) |
|
Net cash provided by (used in) operating activities |
992,458 |
(63,056) |
10,497 |
|
Cash flows from financing activities - Distributions |
(1,086,956) |
- |
- |
|
Net (decrease) increase in cash and cash equivalents |
(94,498) |
(63,056) |
10,497 |
|
Cash and cash equivalents at beginning of year |
157,608 |
220,664 |
210,167 |
|
Cash and cash equivalents at end of year |
$63,110 |
$157,608 |
$220,664 |
|
Supplemental disclosure of cash flow information: |
|||
|
Cash paid during the year for state taxes |
$- |
$- |
$44,600 |
See accompanying independent auditors' reports.
MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY
(A Limited Partnership)
Notes to Consolidated Financial Statements
December 31, 2003 and 2002
Cash belonging to the Partnership is combined in an account with Funds from other Partnerships related to the General Partner.
Land and improvements held for sale are recorded at cost and include approximately 2 acres at December 31, 2003 and 7 acres held at December 31, 2002. Land costs include amounts to acquire and hold land, including interest and property taxes during the development period. Costs to hold land, including interest, insurance and property taxes were charged to expense in 2003, 2002, and 2001 since development was substantially complete. Land improvement costs include development costs expended subsequent to the acquisition of the tract.
Effective December 15, 2001 the Financial Accounting Standards Board (FASB) issued the Statement of Financial Accounting Standard Number 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS No. 144") SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets.
This Statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Land and improvements held for sale are reported at the lower of the carrying value or estimated fair value less estimated costs to sell (Fair Value). To determine the Fair Value, management estimates the future discounted net cash flows using a discount rate commensurate with the risk associated with the property. If this land is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated Fair Value. Inherent in the calculation of future discounted net cash flows are certain significant management judgments and estimates including, among others, liquidation period, discount rate, selling price, and costs to sell which significantly impact the estimated Fair Value.
Income from sales of land and improvements held for sale 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.
No provision has or will be made for Federal income taxes since such taxes are the personal responsibility of the partners. Annually, the partners receive, from the Partnership IRS Form K-1's that provide them with their respective share of taxable income or losses, deductions, and other tax related information. The partnership pays state taxes on earnings from Tennessee operations.
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). Any remaining net profit is allocated 99% to the limited partners and 1% to the general 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 bal ance to the capital account balances, in excess of adjusted capital contributions and unpaid preferred returns, of all limited partners is 31% to 69%. Thereafter, profits are generally allocated 31% to the General Partner and 69% to the limited partners. Net losses are allocated 69% to the limited partners and 31% to the General Partner.
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, 69% to the limited partners and 31% to the General Partner.
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 ended December 31, 2003, 2002, and 2001, the Partnership had no components of other comprehensive income (loss). Accordingly, other comprehensive income (loss) for each of the years was the same as net income (loss).
During 2003, the Partnership adopted FASB Statement 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, FASB Statement 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equities, FASB Statement 132 (revised 2003), Employers' Disclosures about Pensions and Other Postretirement Benefits, FASB Interpretation 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, and FASB Interpretation 46, Consolidation of Variable Interest Entities. Adoption of the new standards did not materially affect the Company's operating results or financial condition.
In December 2003, the FASB revised Interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of ARB No. 51. This Interpretation addresses the consolidation by business enterprises of variable interest entities as defined in the Interpretation. Interpretation 46, as revised in December 2003, changes the accounting model for consolidation from one based on consideration of control through voting interests. The decision to consolidate an entity will now also consider whether that entity has sufficient equity at risk to enable it to operate without additional financial support, whether the equity owners in that entity lack the obligation to absorb expected losses or the right to receive residual returns of the entity, or whether voting rights in the entity are not proportional to the equity interest and substantially all the entity's activities are conducted for an investor with few voting rights. The Interpretati on applies immediately to variable interests in variable interest entities created after January 31, 2003, and to variable interests in variable interest entities obtained after January 31, 2003. The Interpretation requires certain disclosures in financial statements issued after January 31, 2003 if it is reasonably possible that the Registrant will consolidate or disclose information about variable interest entities. The application of this Interpretation has not had a material effect on the Registrant's financial statements.
2. Restricted Cash
At December 31, 2003 and 2002, the Partnership has restricted cash balances of and $96,502 and $32,252, respectively, to be used to fund property improvements, consisting of road and utility work, and property taxes. The restricted cash secures a letter of credit in the same amount to ensure that the required developments are made.
3. Moore's Lane Venture Associates
On May 29, 1986, Moore's Lane Venture Associates (the Joint Venture) was formed with the Partnership and Southeast Venture Companies (Southeast) as joint venturers. On March 4, 1987, the Partnership contributed its land held for sale to the Joint Venture. The contribution of land was accounted for at book value.
Southeast contributes services for overseeing the implementation of the master land use plan and ensuring that any improvements proceed on schedule. The joint venture agreement provides that Southeast will receive 17% of the proceeds of any disposition of the property after the limited partners have received an amount equal to their capital contributions plus their preferred return as defined in the partnership agreement.
Affiliates of the General Partner receive fees and commissions as consideration for performing certain services. Expenses incurred for these services during 2003, 2002, and 2001 are as follows:
|
|
2003 |
2002 |
2001 |
|
Sales commission paid to minority interest holder |
$45,000 |
$- |
$- |
|
Development fees (Selling expense) |
30,000 |
- |
- |
|
Commission paid to affiliate |
45,000 |
- |
- |
|
Accounting fees |
14,471 |
14,030 |
14,500 |
|
Partnership and property management fee |
15,604 |
15,604 |
15,604 |
The components of land and improvements held for sale are as follows:
|
|
2003 |
2002 |
|
Land and carrying costs |
45,313 |
134,476 |
|
Land improvements |
77,136 |
228,919 |
|
Cost for Federal income tax |
131,814 |
363,395 |
On July 16, 2003, the Partnership distributed $750,000 ($100 per unit) to the limited partners, $ 3,369 to the general partner and $ 333,587 to the special limited partners from the sale proceeds. No distributions were made for the year ended December 31, 2002.
The Partners
Moore's Lane Properties, Ltd.:
Our report on our audit of the 2003 basic financial statements of Moore's Lane Properties, Ltd. appears elsewhere herein. That audit was conducted for the purpose of forming an opinion on the 2003 basic financial statements taken as a whole. The 2003 Schedule III, Real Estate and Accumulated Depreciation is presented for purposes of additional analysis and is not a required part of the basic financial statements. The 2003 information has been subjected to the auditing procedures applied in the audit of the basic 2003 financial statements and, in our opinion, such information is fairly stated in all material respects in relation to the 2003 basic financial statements taken as a whole.
Crowe Chizek and Company LLC
Brentwood, Tennessee
January 30, 2004
Independent Auditors' Report
The Partners
Moore's Lane Properties, Ltd.:
Under date of February 1, 2003, we reported on the consolidated balance sheet of Moore's Lane Properties, Ltd. and subsidiary as of December 31, 2002, and the related consolidated statements of operations, partners' equity, and cash flows for each of the years in the two-year period ended December 31, 2002. The consolidated financial statements and our report thereon are included elsewhere herein. In connection with our audits of the aforementioned consolidated financial statements, we have also audited the 2002 and 2001 information in the related financial statement Schedule III, Real Estate and Accumulated Depreciation. 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 2002 and 2001 information in the financial statement schedule, when considered in relation to the 2002 and 2001 basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
KPMG LLP
Nashville, Tennessee
February 1, 2003
MOORE'S LANE PROPERTIES, LTD. and Subsidiary
(A Limited Partnership)
Real Estate and Accumulated Depreciation
December 31, 2003
|
|
|
Initial Cost to Partnership |
Cost capitalized subsequent to acquisition |
Gross amount at which carried at close of period |
|
|
|
||||
|
Description |
Encumbrances |
Land |
Buildings and improvements |
Improvements |
Carrying costs |
Land |
Buildings and improvements |
Total |
Accumulated depreciation |
Date of construction |
Date acquired |
|
2 acres in Williamson county, Tennessee |
None |
$25,820 |
-- |
77,135 |
19,494 |
122,449 |
-- |
$122,449 |
-- |
-- |
12/11/1985 |
MOORE'S LANE PROPERTIES, LTD. and Subsidiary
(A Limited Partnership)
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2003 and 2002
(Continued)
|
2003 |
2002 |
2001 |
|
|
(1) Balance at beginning of Period |
$363,395 |
$363,395 |
$363,395 |
|
Additions during period: |
|||
|
Improvements |
-- |
-- |
-- |
|
Deductions during period: |
|||
|
Cost of land and improvements sold |
(240,946) |
-- |
-- |
|
Balance at close of period |
$122,449 |
$363,395 |
$363,395 |
|
(2) Aggregate cost for Federal income tax purposes |
$131,814 |
$363,395 |
$363,395 |
MOORE'S LANE PROPERTIES, LTD.
(A Tennessee Limited Partnership)
MOORE'S LANE VENTURE ASSOCIATES
A Tennessee Joint Venture
3310 West End Avenue, Suite 490
Nashville, TN 37203
EIN 62-1310146
Exhibit 31.1
CERTIFICATION
I, Steven D. Ezell, certify that:
1. I have reviewed this annual report on Form 10-K of Moore's Lane Properties, Ltd.
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure and control procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the Registrant's fourth quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the registant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
|
MOORE'S LANE PROPERTIES, LTD. |
|||
|
|
By: 222 Partners, Inc. |
||
|
|
General Partner |
||
|
DATE: March 30, 2004 |
By:/s/ Steven D. Ezell |
||
|
|
President and Director |
||
|
|
|||
Exhibit 31.2
CERTIFICATION
I, Michael A Hartley, certify that:
1. I have reviewed this annual report on Form 10-K of Moore's Lane Properties, Ltd.
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure and control procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the Registrant's fourth quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the registant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. .
|
MOORE'S LANE PROPERTIES, LTD. |
|||
|
|
By: 222 Partners, Inc. |
||
|
|
General Partner |
||
|
DATE: March 30, 2004 |
By:/s/ Michael A. Hartley |
||
|
|
Vice President and Director |
||
EXHIBIT 32
To my knowledge, this Report on Form 10-K for the year ended December 31, 2003, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of Moore's Lane Properties, Ltd.
|
MOORE'S LANE PROPERTIES, LTD. |
||||||
|
By: |
222 PARTNERS, INC. |
|||||
|
General Partner |
||||||
|
Date: March 30, 2004 |
By: |
/s/ Steven D. Ezell |
||||
|
President and Chief Executive Officer |
||||||
|
Date: March 30, 2004 |
By: |
/s/ Michael A. Hartley |
||||
|
Secretary/Treasurer and Chief Financial Officer |
||||||