FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the period ended SEPTEMBER 30, 2001
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: 33-18089-A
HICKORY LENDERS, LTD.
(Exact name of Registrant as specified in its charter)
Tennessee | 62-1336905 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification) |
4400 Harding Road, Suite 500,Nashville, Tennessee | 37205 |
(Address of principal executive office) | (Zip Code) |
(615) 292-1040
(Registrant's telephone number, including area code)
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 ___
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
HICKORY LENDERS, LTD.
(A Limited Partnership)
FINANCIAL STATEMENTS
For The Three and Nine Months Ended September 30, 2001 and 2000
(Unaudited)
INDEX
Financial Statements:
Balance Sheets 2
Statements of Operations 3
Statements of Cash Flows 4
Notes to Financial Statements 5
HICKORY LENDERS, LTD.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
| | September 30, 2001 | December 31, 2000 |
Assets | | |
| | | |
Cash | $11,087 | 104,454 |
Restricted cash | 104,254 | 107,267 |
Land and improvements held for sale | 1,203,219 | 1,175,739 |
| | | |
Total Assets | $1,318,560 | 1,387,460 |
| | | |
| | | |
| | | |
Liabilities and Partners' equity | | |
| | | |
Accounts payable | $3,295 | 8,692 |
Property tax payable | 19,209 | 24,868 |
Impact fee payable | 59,000 | 59,000 |
Franchise and excise payable | 2,427 | 0 |
| | | |
Total Liabilities | 83,931 | 92,560 |
| | | |
Partners' equity: | | |
| | | |
Limited partners,4,200 units outstanding | 1,234,629 | 1,294,900 |
General partner | 0 | 0 |
| | | |
Total partners' equity | 1,234,629 | 1,294,900 |
| | |
| | | |
| | | |
Total liabilities and partners' equity | $1,318,560 | 1,387,460 |
| | |
See accompanying notes to financial statements.
HICKORY LENDERS, LTD.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
| Three months ended | Nine months ended |
| | September 30, |
| | 2001 | 2000 | 2001 | 2000 |
REVENUE: | | | | |
Land Sale: | | | | |
Gross proceeds | $0 | 263,200 | 0 | 283,200 |
Cost of land sold | 0 | <99,569> | 0 | <143,160> |
selling expenses | 0 | <37,670> | 0 | <38,060> |
| | | | | |
Gain on land sale | 0 | 125,961 | 0 | 101,980 |
| | | | | |
Interest income | 838 | 1,036 | 2,539 | 3,805 |
| | | | | |
Total Revenue | 838 | 126,997 | 2,539 | 105,785 |
| | | | | |
Expenses: | | | | |
| | | | | |
State tax | 809 | 908 | 2,427 | 2,724 |
Property taxes | 6,403 | 26,644 | 19,252 | 26,760 |
Grounds maintenance expense | 8,876 | 1,374 | 8,876 | 1,485 |
Property management fee | 1,750 | 1,750 | 5,250 | 5,250 |
Professional fees | 3,000 | 400 | 21,161 | 17,370 |
General and administrative expenses | 1,372 | 1,025 | 5,844 | 2,704 |
| | | | | |
Total Expenses | 22,210 | 32,101 | 62,810 | 56,293 |
| | | | | |
| | | | | |
Net (loss) income | $<21,372> | 94,896 | <60,271> | 49,492 |
Net (loss) income per limited partner unit (4,200 units outstanding) | ($5.09) | 22.59 | (14.35) | 11.78 |
See accompanying notes to financial statements
HICKORY LENDERS, LTD.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
| | Nine months ended September 30, |
| | 2001 | 2000 |
Cash flows from operating activities: | | |
| | | |
Net (loss) income | $<60,271> | 49,492 |
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities: | | |
Decrease in restricted cash | 3,013 | 75,758 |
Cost of land improvements | <27,480> | <25,092> |
Cost of land and improvements sold | 0 | 143,160 |
Decrease in accounts payable | <5,397> | <23,113> |
(Decrease)increase in property tax payable | <5,659> | 24,468 |
Increase in franchise tax payable | 2,427 | 0 |
| | | |
Net cash (used) provided by operating activities | <93,367> | 244,673 |
| | | |
Net (decrease) increase in cash | <93,367> | 244,673 |
| | | |
Cash at beginning of period | 104,454 | 36,981 |
Cash at end of period | $11,087 | 281,654 |
See accompanying notes to financial statements.
HICKORY LENDERS, LTD.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For The Three and Nine Months Ended September 30, 2001 and 2000
(Unaudited)
A.ACCOUNTING POLICIES
The unaudited financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the financial statements and notes thereto included in the Partnership's Form 10-K for the year ended December 31, 2000. In the opinion of management, such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to summarize fairly the Partnership's financial position and results of operations. The results of operations for the nine month period ended September 30, 2001 may not be indicative of the results that may be expected for the year ending December 31, 2001.
B.RELATED PARTY TRANSACTIONS
The General partner and its affiliates have been actively involved in managing the Partnership's operations. Compensation earned for these services were as follows:
| | Nine months ended September 30, |
| | 2001 | 2000 |
| | | |
Management Fees | $5,250 | 5,250 |
Accounting Fees | 9,700 | 8,903 |
C. COMPREHENSIVE INCOME
During the nine-month periods ended September 30, 2001 and 2000 the Partnership had no components of other comprehensive income. Accordingly, comprehensive (loss) income for each of the periods was the same as net (loss) income.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2001.
The general partner and its affiliates have been actively involved in managing the Partnership, and the Property. The Property consists of approximately 155 acres in Nashville, Davidson County, Tennessee and 3 lots in a residential subdivision in Hendersonville, Sumner County, Tennessee on Old Hickory Lake. Overall operations of the Property have not fluctuated significantly from the prior quarter ended September 30, 2000 except for the lack of land sales in fiscal 2001 and the increase in professional fees. Professional fees for 2001 include increased audit fees and architect and engineering fees. There were no architect and engineering fees in the third quarter of 2000. The increase in 2001 of ground maintenance expense is due to necessary repairs on the Hendersonville property.
FINANCIAL CONDITION
LIQUIDITY
The Partnership has suffered recurring losses from operations and has a net working capital deficiency at September 30, 2001. At September 30, 2001, the Partnership had unrestricted cash of $11,087, liabilities to non-affiliated entities of $83,931. The cash is insufficient to fund ongoing operations. The Partnership owns assets with a fair value of $1,318,560 and has liabilities of $83,931. If funds are not sufficient to meet operational expenses in 2001, the General partner can defer the collection of fees for certain affiliated expenses and can provide advances until cash becomes available.
In July 2001, the FASB issued Statement 143, "Accounting for Asset Retirement Obligations" (SFAS 143). The Partnership is required to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the Partnership will capitalize a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Partnership either will settle the obligation for its recorded amount or will incur a gain or loss upon settlement. The standard is effective for fiscal years beginning after June 15, 2002, with earlier adoption permitted. The Partnership does not expect the adoption of this standard to have a material effect on the Partnership's revenue, operating results or liquidity.
In August 2001, the Financial Accounting Standards Board issued FASB Statement No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets (Statement 144), which supersedes both FASB Statement No. 121,Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (Statement 121) and the accounting and reporting provisions of APB Opinion No. 30,Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions (Opinion 30), for the disposal of a segment of a business (as previously defined in that Opinion). Statement 144 retains the fundamental provisions in Statement 121 for recognizing and measuring impairment losses on long-lived assets held for use and long-lived assets to be disposed of by sale, while also resolving significant implementation issues associated with Statement 121. For example, Statement 144 provid es guidance on how a long-lived asset that is used as part of a group should be evaluated for impairment, establishes criteria for when a long-lived asset is held for sale, and prescribes the accounting for a long-lived asset that will be disposed of other than by sale. Statement 144 retains the basic provisions of Opinion 30 on how to present discontinued operations in the income statement but broadens that presentation to include a component of an entity (rather than a segment of a business). Unlike Statement 121, an impairment assessment under Statement 144 will never result in a write-down of goodwill. Rather, goodwill is evaluated for impairment under Statement No. 142,Goodwill and Other Intangible Assets.
The Company is required to adopt Statement 144 no later than the year beginning after December 15, 2001, and plans to adopt its provisions for the quarter ending March 31, 2002. Management does not expect the adoption of Statement 144 for long-lived assets held for use to have a material impact on the Company's financial statements because the impairment assessment under Statement 144 is largely unchanged from Statement 121. The provisions of the Statement for assets held for sale or other disposal generally are required to be applied prospectively after the adoption date to newly initiated disposal activities. Therefore, management cannot determine the potential effects that adoption of Statement 144 will have on the Company's financial statements.
<PAGE> 8
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - none
(b) No 8-K's have been filed during this quarter.
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | HICKORY LENDERS, LTD. |
| | By: 222 HICKORY, LTD. |
| | General Partner |
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| | By: 222 PARTNERS, INC. |
| | General Partner |
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Date: November 14, 2001 | By:/s/ Steven D. Ezell |
| | President |
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Date: November 14, 2001 | By:/s/Michael A. Hartley |
| | Secretary/Treasurer |
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