<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year Ended December 31, 1999 Commission File Number 0-9669
CALCASIEU REAL ESTATE AND OIL CO., INC.
(Exact Name of registrant as specified in its charter)
Louisiana 72-0144530
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Lakeside Plaza
Lake Charles, Louisiana 70601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (337) 494-4256
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange
on which registered
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 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 the past 90 days. Yes [x] No[ ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Trading in the Company's common stock is limited and sporadic
and its common stock has no readily established market value.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date. Common Stock, No Par Value,
1,974,352 shares outstanding at February 29, 2000.
Documents Incorporated by Reference
Document Part of Form 10K
--------- ----------------
Definitive Proxy Statement Parts I and III
<PAGE>
PART 1
ITEM 1. BUSINESS
The registrant, Calcasieu Real Estate and Oil Co., Inc., (the
"Company") was incorporated under Louisiana law in 1930 to hold real estate and
royalty interests located in Southwest Louisiana.
The principal office of the Company is One Lakeside Plaza, Lake
Charles, Louisiana. The business of the Company is conducted primarily at the
principal offices of its officers, who have other full-time employment.
The principal business of the Company has been the ownership and
preservation of the assets acquired at the Company's organization and
subsequently. The Company's primary activities have consisted of leasing its
properties and collecting rents and royalties derived therefrom. The mineral
interests of the Company are located in the Parishes of Calcasieu, Allen,
Acadia, Cameron, St. Landry, St. Mary, Vermilion and Jefferson Davis in
Louisiana. The Company owns approximately 12,170 acres of land in fee in the
Parishes of Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis, LaFourche,
Sabine, St. Landry and Vermilion in Louisiana. Most of the Company's land and
mineral interests are located within 100 miles of the City of Lake Charles, in
southwestern and central Louisiana.
Of this total, 5,701 represents a 1/6th interest in 34,189 acres, which
is managed by Walker Louisiana Properties, a joint venture consisting of the
land owners. The Company also owns a 40% interest in 1,577 of these acres. Of
the Walker Louisiana acreage, the Company does not own minerals on 3,247 gross
or 541 net acres.
In April, 1992, the Company purchased a 100% interest in the surface
rights and a 50% interest in the mineral rights to 952 acres, consisting of
mainly timber lands located in Beauregard and Calcasieu Parishes. There is no
production on this acreage.
On October 29, 1997, Calcasieu Real Estate and Oil Co., Inc. purchased
3,496 acres of agricultural land in Cameron Parish, Louisiana, from Amoco
Production for $1,663,000. No minerals were included in the purchase.
OPERATIONS
The Company's income is derived primarily from its oil and gas
properties. Agriculture and timber income are the next largest sources of
income. Additional oil and gas income in the future will come from discoveries
on the Company's land.
1
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Industry Segments
The purchase of additional real estate in 1990, 1992, 1997, and 1999
has created "Agricultural Properties" and "Timber Properties" as additional
industry segments because revenues from these properties exceed 10% of total
revenues. The Company also receives mineral rentals and royalties from some of
these properties. Note 7 to the Financial Statements on page 24 sets forth
information on the business segments.
EMPLOYEES
The Company currently employs a total of five persons in a part-time
capacity. The Company is subject to no union contracts nor does the Company have
any pension, profit sharing or deferred compensation plans.
CUSTOMERS
The Company had two customers, the sales to which equal or exceed 10%
of the Company's total revenues. In 1999, sales to Neumin Production accounted
for 78% of revenues and sales to Mitchell Energy accounted for 12% of revenues.
ITEM 2. PROPERTIES
Until early 1990, the Company owned 2,022 acres in fee, a 50% undivided
interest in 440 acres, and a 40% undivided interest in 1,748 acres of immovable
(real) property located in the parishes of Allen, Beauregard, Calcasieu,
Jefferson Davis, Sabine and St. Landry in Louisiana. The Company also owns a 20%
interest in the minerals under approximately 3,330 surface acres, and a 40%
interest in the minerals under approximately 160 surface acres, located in the
parishes of Acadia, Allen, Cameron, Jefferson Davis, St. Landry, St. Mary and
Vermilion in Louisiana. All of the foregoing property is located in southwestern
and central Louisiana, within approximately 100 miles of the City of Lake
Charles. Approximately half of the acreage in which mineral interests are held
is in oil and gas production. In addition, the Company owns fractional royalty
interest in 36 properties covering 6,040 gross acres in eight parishes in
Louisiana.
In February of 1990 the Company acquired a 12.5% undivided fee interest
in 34,309 acres (4,289) net acres) located in the Louisiana parishes of Allen,
Beauregard, Calcasieu, Cameron, Jefferson Davis, Sabine and Vermilion, and in
1999 the Company acquired an additional 4.17% interest in the same acreage. A
portion of these lands are the same as the 1,748 acres in which the company
owned a 40% position described in the first paragraph above. This property
consists of 17,088 gross acres of agriculture land, 7,572 acres of commercial
timber, 4,196 acres in pasture, 4,253 acres of marsh land and 1,200 acres for
future subdivision as it is contiguous to the city limits of Lake Charles. The
company participates in oil and gas production in Southeast Lunita Field, Lake
Arthur Field, Edgerly Field, Welsh Field and North Indian Village Field. Most of
the oil and gas income in 1999 came from the company's
2
<PAGE>
50% ownership in 443 acres that are located in the North Indian Village Field,
Calcasieu Parish, developed and operated by Neumin Production Company. The
Company has also participated for the 1/6th interest in the granting of oil and
gas leases which are yet to be drilled.
In April of 1992, the Company purchased 952 acres of timberland in
Calcasieu and Beauregard Parishes for $475,000.
On October 29, 1997, Calcasieu Real Estate and Oil Co., Inc. purchased
3,496 acres of land in Cameron Parish, Louisiana, from Amoco Production Company
for $1,663,000.
The table below shows, for the years ended December 31, 1999, December
31, 1998, and December 31, 1997, net gas produced in thousands of cubic feet
(MCF) and net oil (including condensate and natural gas liquids) produced in
barrels (Bbl), average sales prices and average production costs, relating to
oil and gas attributable to the royalty interests and working interest held by
the Company.
<TABLE>
<S> <C> <C> <C>
Year Ended Year Ended Year Ended
12/31/97 12/31/98 12/31/99
Net gas produced (MCF) 107,403 169,595 364,883
Average gas sales price (Per MCF)(1) $ 2.85 $ 2.31 $ 2.28
Net Oil Produced (Bbl) 4,956 8,196 32,987
Average Oil Sales price (Per Bbl)(1) $ 19.60 $ 13.28 $ 16.58
Average sales price of oil and gas $ 2.87 $ 2.47 $ 3.63
per MCF equivalent (1)(2)
Average production cost of oil and
gas per MCF equivalent (2)
Royalty Interests .14 .11 .13
Working Interests 2.90 3.06 1.48
(1) Before deduction of production
and severance taxes.
(2) Oil production is converted to
MCF equivalents at the rate of 6
MCF's per barrel, representing the
approximate relative energy content
of oil and natural gas.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Company is a co-defendant in a lawsuit filed by owners of eighty
acres, which the defendants owned the minerals. The landowners are asserting
that the mineral interest prescribed. Company's counsel has advised that he
cannot offer an opinion on the outcome awaiting review of the facts. The
defendants intend to defend the suit vigorously.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to security holders during the fourth
quarter.
3
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS
As of February 29, 2000, the common stock of Calcasieu Real Estate and
Oil Co., Inc. was owned by 724 stockholders. During the three years preceding
the date hereof, there has been only limited and sporadic trading in the
Company's Common Stock, principally among its shareholders.
In the year ended December 31, 1999, 103,500 shares were traded with a
high of 4 1/2 and a low of 2 3/4. The last trade during this period was on
December 14, 1999, for 8,000 shares at a price of 4 1/2. Below is the trading
range.
<TABLE>
<CAPTION>
Volume High Low
<S> <C> <C> <C>
01/01/99 - 03/31/99 15,400 4 2 3/4
04/01/99 - 06/30/99 58,800 4 2 3/4
07/01/99 - 09/30/99 6,800 4 3
10/01/99 - 12/31/99 22,500 4 1/2 3
</TABLE>
Dividends were paid per share on Common Stock as follows by record date: March
28, 1997, $.03; June 27, 1997, $.03; September 26, 1997, $.03; December 30,
1997, $.03, March 27, 1998, $.03; June 26, 1998, $.03; September 30, 1998, $.03;
September 30, 1999, $.03; December 28, 1999, $.05. There are no restrictions on
the paying of dividends.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<S> <C> <C> <C> <C> <C>
Ended Ended Ended Ended Ended
12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
Revenues $ 812,137 $ 672,294 $ 967,632 $ 897,027 $2,646,491
Income before income 518,093 1,244,583 776,445 585,182 2,279,814
taxes
Earnings per common .17 .40 .26 .20 .78
share (1)
Total assets $3,018,542 $3,445,721 $4,307,077 $4,759,327 $5,212,540
Cash Dividends declared .06 .09 .12 .09 .08
per common stock
</TABLE>
(1) Earnings per common share presented are based on the weighted average
outstanding shares of about 1,979,000 in 1999, 1,995,000 in 1998, 1,997,000
in 1997, 1,997,000 in 1996, and 1,998,000 in 1995.
4
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Income after taxes was up 283% in 1999 from 1998. This was caused by
several factors. First, the Company had an increase in revenues of 195% in 1999
from 1998. During 1999, gas production increased 115% while the average sale
price decreased 1%. Oil production increased 302% and the average sales price
increased 25%. Income from mineral leases and lease bonuses increased 9%. The
total net income before taxes for all operations from the property purchased in
1990 was up from $334,552 to $463,155 or an increase of 38%.
Information on the oil and gas properties is included in the notes to
financial statements, specifically as to reserve quantities and standardized
measure of discounted net cash flows. Both of those are unaudited.
Management believes that the company's revenues will be sufficient to
meet its existing capital needs and the needs of its anticipated future
operations. Long-term trends will depend upon the ability of management to find
new production to replace the depletion of the Company's present minerals.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
All Financial statements required by Regulation S-X are listed in the
Table of Contents to Financial Statements and Supplemental Schedules appearing
immediately after the signature page of this Form 10K and are included herein by
reference. See Item 14.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 as to directors is included in the
Registrant's definitive proxy statement to be filed pursuant to Section 14(a) of
the Securities Exchange Act of 1934 and is included herein by reference.
Executive officer of Registrant as of February, 2000, are as follows:
<TABLE>
<CAPTION>
NAME Age Position with Registrant
- ------------------------------ --------------- -------------------------------------------------
<S> <C> <C>
Arthur Hollins, III 69 President & Director
William D. Blake 67 Vice President, Treasurer and Director
Charles D. Viccellio 66 Vice President, Secretary and Director
</TABLE>
5
<PAGE>
The occupations of such executive officers during the last five years and other
principal affiliations are:
<TABLE>
<CAPTION>
Name
- ------------------------------
<S> <C>
Arthur Hollins, III Director of the Company since 1975; President of the Company
since 1979; Chairman of the Board at the First National Bank of
Lake Charles from 1968 to 1999; President of Bank One,
Southwest Louisiana, from 1998 to April, 1999.
William D. Blake Director of the Company since 1966; Secretary-Treasurer of the
Company from 1966-1979; Vice-President and Treasurer of the
Company since 1979; General Manager of J. A. Bel Estate
(ownership and cultivation of timberland) and the Quatre Parish
Company (rice farming); President of Lacassane Co., Inc. and
Howell Industries, Inc.; Director of Sweetlake Land and Oil
Co., Inc.
Charles D. Viccellio Vice-President and Secretary of the Company since 1997 and
Director of the Company since 1996. Partner in the law firm of
Stockwell, Sievert, Viccellio, Clements & Shaddock, LLP.
</TABLE>
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is included in the Registrant's
definitive proxy statement to be filed pursuant to Section 14(a) of the
Securities and Exchange Act of 1934 and is included herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by Item 12 is included in the Registrant's
definitive proxy statement to be filed pursuant to Section 14(a) of the
Securities Exchange Act of 1934 and is included herein by reference.
PART IV
ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON
FORM 8-K
(a) The following documents are filed as part of the report:
1. All Financial Statements. See Table of Contents to Financial
Statements and schedule on page 8.
2. Financial Statement Schedules. See Table of Contents to Financial
Statements and Schedules on page 8.
3. List of Exhibits - None
(b) Reports on Form 8-K - None
6
<PAGE>
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
CALCASIEU REAL ESTATE AND OIL CO., INC.
BY: /s/ Arthur Hollins, III
----------------------------------
Arthur Hollins, III, President
Dated March 13, 2000
Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons in the capacities with regard to
Calcasieu Real Estate and Oil Co., Inc. and on the date indicated:
<TABLE>
<CAPTION>
<S> <C>
/s/ Arthur Hollins, III President
- ------------------------------------------- (Chief Executive Officer and Director)
Arthur Hollins, III
/s/ William D. Blake Vice President & Treasurer
- ------------------------------------------- (Principal Financial Officer and Director)
William D. Blake
/s/ Charles D. Viccellio Vice President & Secretary, (Director)
- -------------------------------------------
Charles D. Viccellio
/s/ Henry C. Alexander Director
- -------------------------------------------
Henry C. Alexander
/s/ Troy A. Freund Director
- -------------------------------------------
Troy A. Freund
/s/ Laura A. Leach Director
- -------------------------------------------
Laura A. Leach
/s/ Frank O. Pruitt Director
- -------------------------------------------
Frank O. Pruitt
/s/ B. James Reaves, III Director
- -------------------------------------------
B. James Reaves, III
/s/ Mary W. Savoy Director
- -------------------------------------------
Mary W. Savoy
</TABLE>
Dated: March 13, 2000
7
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
Lake Charles, Louisiana
C O N T E N T S
Page
INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION 9
FINANCIAL STATEMENTS
Balance sheets 10
Statements of income 11
Statements of changes in stockholders' equity 12-13
Statements of cash flows 14-15
Notes to financial statements 16-30
SUPPLEMENTARY INFORMATION
Property, plant and equipment 31
Accumulated depreciation, depletion and amortization 32
SCHEDULE OMITTED
Schedules, other than those listed above, have been omitted because of the
absence of the conditions under which they are required or because the required
information is included in the financial statements or notes thereto.
8
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Calcasieu Real Estate & Oil Co., Inc.
Lake Charles, Louisiana
We have audited the accompanying balance sheets of Calcasieu Real Estate &
Oil Co., Inc. as of December 31, 1999 and 1998, and the related statements of
income, changes in stockholders' equity, and cash flows for the years ended
December 31, 1999, 1998 and 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
financial statements of the Co-owners' Undivided Two-Thirds Interest in Walker
Louisiana Properties as of and for the year ending December 31, 1998, of which
Calcasieu Real Estate & Oil Co., Inc. owns a twenty-five percent undivided
interest. The twenty-five percent undivided interest consists of total assets of
$1,781,597 as of December 31, 1998, and total revenues of $443,421 for the year
then ended. Those statements were audited by other auditors whose report has
been furnished to us, and in our opinion, insofar as it relates to the amounts
included for the Co-Owners' Undivided Two-Thirds Interest in Walker Louisiana
Properties, is based solely on the report of the other auditors.
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, based on our audits and the report of the other auditors,
the financial statements referred to above present fairly, in all material
respects, the financial position of Calcasieu Real Estate & Oil Co., Inc. as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years ended December 31, 1999, 1998 and 1997, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages 31
and 32 is presented for the purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
Lake Charles, Louisiana
March 1, 2000
9
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
<TABLE>
<CAPTION>
BALANCE SHEETS
December 31, 1999 and 1998
ASSETS 1999 1998
----------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 471,821 $ 113,177
Accounts receivable 452,955 151,666
Inventory-harvested crops 10,281 11,976
Prepaid income taxes - 71,882
Prepaid expense and other 674 773
----------- ----------
Total current assets 935,731 349,474
----------- ----------
SECURITIES AVAILABLE-FOR-SALE 76,267 62,597
----------- ----------
PROPERTY AND EQUIPMENT (less accumulated depreciation,
depletion and amortization of $450,507 in 1999 and
$434,257 in 1998) 98,563 97,115
Timber (less accumulated depletion of $228,876 in 1999
and $213,423 in 1998) 486,188 589,663
Land 3,615,791 3,660,478
----------- ----------
4,200,542 4,347,256
----------- ----------
$ 5,212,540 $4,759,327
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ - $ 158,840
Trade payables and accrued expenses 11,144 7,710
Dividends payable 98,938 -
Income taxes payable:
Current 151,282 -
Deferred, net 20,173 12,573
----------- ----------
Total current liabilities 281,537 179,123
----------- ----------
LONG-TERM DEBT, less current maturities - 1,028,224
----------- ----------
STOCKHOLDERS' EQUITY
Common stock, no par value; 3,000,000 shares authorized;
2,100,000 shares issued 72,256 72,256
Retained earnings 5,059,618 3,669,193
Accumulated other comprehensive income 12,086 3,884
----------- ----------
5,143,960 3,745,333
Less cost of treasury stock (1999 125,648 and
1998 121,248 shares) 212,957 193,353
----------- ----------
4,931,003 3,551,980
----------- ----------
$5,212,540 $4,759,327
=========== ==========
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
STATEMENTS OF INCOME
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
---------- --------- ---------
<S> <C> <C> <C>
Revenues $2,646,491 $ 897,027 $ 967,632
---------- --------- ---------
Costs and expenses:
Oil and gas production 84,605 50,511 59,503
Agricultural 12,886 10,935 12,419
Timber 45,651 17,324 18,062
Depreciation, depletion and amortization 20,484 16,817 14,359
163,626 95,587 104,343
---------- --------- ---------
Income from operations 2,482,865 801,440 863,289
---------- --------- ---------
Other income (expense):
Interest income 22,508 17,022 68,177
Dividends on stock 2,159 1,799 530
Realized gain on sale of investments in
available-for-sale securities - 13,172 19,356
Gain on sale of assets 31,536 - -
General and administrative (207,962) (180,381) (161,735)
Interest expense (51,292) (67,870) (13,172)
---------- --------- ---------
(203,051) (216,258) (86,844)
---------- --------- ---------
Income before income taxes 2,279,814 585,182 776,445
---------- --------- ---------
Federal and state income taxes:
Current 732,622 180,987 259,817
Deferred 2,132 264 3,710
---------- --------- ---------
734,754 181,251 263,527
---------- --------- ---------
Net income (per common share):
1999 $.78; 1998 $.20; 1997
$.26 $1,545,060 $ 403,931 $ 512,918
========== ========= =========
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Accumulated
Other Capital
Comprehensive Retained Comprehensive Stock Treasury
Income Earnings Income Issued Stock
------------- --------- ------------- -------- ---------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1997 $ - $3,164,703 $ 6,938 $ 72,256 $137,643
Comprehensive income:
Net income 512,918 512,918 - - -
Other comprehensive income:
Unrealized gains on securities
available for sale:
Unrealized holding gains
occurring during period net
of taxes of $8,026 12,040 - - - -
Less reclassification
adjustment for gains included
in net income, net of taxes
of $7,742 (11,614) - - - -
-----------
Other comprehensive income, net
of tax 426 - 426 - -
----------
Total comprehensive income $ 513,344
==========
Purchase of treasury stock - - - 60
Dividends (232,615) - - -
----------- --------- -------- --------
Balance, December 31, 1997 3,445,006 7,364 72,256 137,703
Comprehensive income:
Net income $ 403,931 403,931 - - -
Other comprehensive income:
Unrealized gains on securities
available for sale:
Unrealized holding gains
occurring during period net
of taxes of $2,949 4,423 - - - -
Less reclassification
adjustment for gains included
in net income, net of taxes
of $5,269 (7,903) - - - -
----------
Other comprehensive income, net
of tax (3,480) - (3,480) - -
----------
Total comprehensive income $ 400,451
==========
</TABLE>
(continued on next page)
12
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Accumulated
Other Capital
Comprehensive Retained Comprehensive Stock Treasury
Income Earnings Income Issued Stock
------------ --------- -------------- ------ ----------
<S> <C> <C> <C> <C> <C>
Purchase of treasury stock - - - 55,650
Dividends (179,744) - - -
---------- ---------- --------- ---------
Balance, December 31, 1998 3,669,193 3,884 72,256 193,353
Comprehensive income:
Net income $1,545,060 1,545,060 - - -
Other comprehensive income:
Unrealized gains on securities
available for sale:
Unrealized holding gains
occurring during period net
of taxes of $5,468 8,202 - - - -
-----------
Other comprehensive income, net
of tax 8,202 - 8,202 - -
-----------
Total comprehensive income $1,553,262
===========
Purchase of treasury stock - - - 19,604
Dividends (158,300) - - -
Refund of prior year unclaimed
dividends and other 3,665 - - -
---------- ---------- --------- ---------
Balance, December 31, 1999 $5,059,619 $ 12,086 $ 72,256 $ 212,957
========== ========== ========= =========
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
----------- --------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,545,060 $ 403,931 $ 512,918
Noncash (income) expenses included in net income:
Depreciation, depletion and amortization 20,484 16,817 14,359
Realized (gains) on sale of available-for-sale
securities - (13,172) (19,356)
Gain on sale of assets (31,536) - -
Loss on asset retirement 926 - -
Change in assets and liabilities:
(Increase) decrease in trade accounts and
other receivables (301,289) (83,627) 5,516
(Increase) decrease in inventory 1,695 1,641 (10,767)
(Increase) decrease in prepaid income taxes 71,882 (71,882) -
Decrease in prepaid expenses 99 989 8,396
Increase (decrease) in trade payables 3,434 (15,082) 14,945
Increase (decrease) in other liabilities 252,353 (82,470) (238,996)
----------- --------- ----------
Net cash provided by operating activities 1,563,108 157,145 287,015
----------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from rights of way 43,846 - 7,826
Proceeds from sale of timber 123,142 - -
Available-for-sale securities:
Maturities - - 500,000
Purchases - - (250,951)
Sales - 208,000 529,077
Purchase of land, property and equipment (10,149) (625,548) (1,731,845)
----------- --------- ----------
Net cash provided by (used in) investing
activities 156,839 (417,548) (945,893)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings - 450,000 900,000
Principal payments on long-term borrowing (1,187,064) (62,936) (100,000)
Dividends paid, net of refunds (154,635) (179,744) (232,615)
Payments to acquire treasury stock (19,604) (55,650) (60)
----------- --------- ----------
Net cash provided by (used in) financing
activities (1,361,303) 151,670 567,325
----------- --------- ----------
Net increase (decrease) in cash and
cash equivalents 358,644 (108,733) (91,553)
Cash and cash equivalents:
Beginning 113,177 221,910 313,463
----------- --------- ----------
Ending $ 471,821 $ 113,177 $ 221,910
=========== ========= ==========
</TABLE>
(continued on next page)
14
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1999, 1998 and 1997
(Continued)
1999 1998 1997
-------- -------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash payments for:
Interest $ 53,506 $ 66,573 $ 12,255
Income taxes 509,458 275,686 498,069
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Net change in unrealized and realized
gains on available-for-sale securities 8,202 (3,480) 426
See Notes to Financial Statements.
15
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
NOTES TO FINANCIAL STATEMENTS
Note 1. Nature of Business and Significant Accounting Policies
Nature of business:
The Company's business is the ownership and preservation of the
assets acquired at the Company's organization and subsequent thereto.
The primary activities have consisted of leasing its properties and
collecting rents and royalties derived therefrom.
In February, 1990, the Company acquired a 12.5% interest in 34,189
acres of land in Southwest Louisiana. Among other uses, a portion of
the land is devoted to agricultural purposes. In November, 1998, the
Company purchased an additional 4.2% interest in this land, bringing
its total interest to 16.7%.
In April, 1992, the Company purchased a 100% interest in the surface
rights and a 50% interest in the mineral rights to 952 acres,
consisting of mainly timber land.
In October, 1997, the Company purchased approximately 3,496 acres of
agricultural property.
Significant accounting policies:
Cash and cash equivalents:
For purposes of the statement of cash flows, cash equivalents
include time deposits, certificates of deposit, and all highly
liquid debt instruments with original maturities of three months or
less.
Inventory:
Inventory consists of harvested crops valued at estimated selling
price at the date of the balance sheet.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Pervasiveness of estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Agricultural revenue:
Most agricultural income is derived under U.S. Government subsidy
programs. Under these programs, loans are made against crops as
harvested. However, delivery of the crops fulfills any further
obligation under the loan agreement, and thus revenues are
recognized as the harvested crops are delivered. Differences in the
price at ultimate sale of the products could result from quantity,
grade, and price, and additional revenues are derived at that time.
Investment securities:
The Company complies with the provisions of Financial Accounting
Standards Board Statement No. 115, Accounting for Certain
Investments in Debt and Equity Securities. Under the provisions of
this statement, management must make a determination at the time of
acquisition whether certain investments in debt and equity
securities are to be held as investments to maturity, held as
available for sale, or held for trading. Management, under a policy
adopted by the board of directors of the Company, made a
determination that all debt and equity securities owned at that
date and subject to the provisions of the statement would be
classified as held available-for-sale.
Under the accounting policies provided for investments classified
as held available-for-sale, all such debt securities and equity
securities that have readily determinable fair value shall be
measured at fair value in the balance sheet. Unrealized holding
gains and losses for available-for-sale securities shall be
excluded from earnings and reported as a net amount (net of income
taxes) as a separate component of retained earnings until realized.
Realized gains and losses and declines in value judged to be other
than temporary on available-for-sale securities are included in
income. The cost of securities sold is based on the specific
identification method. Interest on debt securities is recognized in
income as earned, and dividends on marketable equity securities are
recognized in income when declared.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Property and equipment:
Property and equipment is stated at cost. Major additions are
capitalized; maintenance and repairs are charged to income
currently. Depreciation is computed on the straight-line and
accelerated methods over the estimated useful lives of the assets.
Successful efforts accounting method:
The Company uses the successful efforts method of accounting for
its oil and gas operations. Under the successful efforts method,
the costs of acquiring mineral interest, drilling and equipping
successful exploratory wells, and all development wells and related
facilities are capitalized. All other exploration costs, including
geological and geophysical costs, lease rentals and the cost of
drilling unsuccessful exploratory wells are charged to expense. Due
to the Company's small percentage ownership (in relation to the
total) of oil and gas properties, reserve information is not
available to the Company for mineral interests acquired. Depletion
of these interests is computed on the straight-line and accelerated
methods over an estimated life of five to seven years. Acquisition
costs of proved mineral interests for which reserve information is
available are depleted using the unit-of-production method based on
production and estimated proved reserves. Related tangible and
intangible costs are depreciated and amortized using the unit-of-
production method based on production and estimated proved
developed reserves.
Earnings per share:
Earnings per share is based on the weighted average number of
common shares outstanding during the years.
Income taxes:
The Company complies with the provisions of FASB Statement of
Financial Accounting Standards 109, Accounting for Income Taxes
relative to the reporting of income taxes. This statement requires
an asset and liability approach for financial accounting and
reporting for income taxes. The objectives are to recognize the
amount of taxes payable or refundable for the current year, and to
recognize deferred tax liabilities and assets for the future tax
consequences of events that have been recognized in the Company's
financial statements or tax returns. The elements with different
bases for financial and tax purposes are property and equipment,
investments, accounts receivable, inventory and accounts payable.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The basic principles to be applied in accounting for income taxes at
the date of the financial statements are:
1. A current tax liability or asset is recognized for the estimated
taxes payable or refundable on tax returns for the current year.
2. A deferred tax liability or asset is recognized for the estimated
future tax effects attributable to temporary differences and
carryforwards.
3. The measurement of current and deferred tax liabilities and assets
is based on provisions of the enacted tax law; the effects of
future changes in tax laws or rates are not anticipated.
4. The measurement of deferred tax assets is reduced, if considered
necessary, by the amount of any tax benefits that, based on
available evidence, are not expected to be realized.
Comprehensive income:
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income". This
statement establishes standards for reporting and displaying
comprehensive income and its components in the financial statements.
Total comprehensive income and the components of accumulated other
comprehensive income are presented in the Statements of Changes in
Stockholders' Equity. Prior periods have been reclassified to conform
to the requirements of SFAS 130. SFAS 130 had no impact on the
Company's net income or stockholders' equity.
Reclassifications:
Certain prior year balances have been reclassified in order to conform
to current year presentation.
Note 2. Securities Available-for-Sale
Debt and equity securities have been classified in the balance sheet
according to management=s intent in the current and noncurrent asset
sections under the headings securities available-for-sale. The carrying
amount of securities and their approximate fair values at December 31,
1999 and 1998 follow:
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized
Cost Gains Losses Fair Value
--------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Available-for-sale securities:
December 31, 1999:
Equity securities $ 56,123 $ 20,144 $ - $ 76,267
Municipal securities - - - -
U.S. government securities - - - -
--------- --------- ---------- ----------
$ 56,123 $ 20,144 $ - $ 76,267
========= ========= ========== ==========
Available-for-sale securities:
December 31, 1998:
Equity securities $ 56,123 $ 6,474 $ - $ 62,597
Municipal securities - - - -
U.S. government securities - - - -
--------- --------- ---------- ----------
$ 56,123 $ 6,474 $ - $ 62,597
========= ========= ========== ==========
Gross realized gains and gross realized losses on sales of available-for-
sale securities were:
1999 1998
---------- ----------
Gross realized gains:
U.S. government and agency securities $ - $ -
Municipal securities - 13,172
Equity securities - -
---------- ----------
$ - $ 13,172
========== ==========
Gross realized losses:
U.S. government and agency securities $ - $ -
Municipal securities - -
Equity securities - -
---------- ----------
$ - $ -
========== ==========
</TABLE>
Note 3. Oil and Gas Properties
Results of operations for oil and gas producing activities at December
31, 1999, 1998 and 1997 is as follows:
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1999 1998 1997
---------- -------- --------
Gross revenues:
Royalty interests $2,017,723 $563,033 $353,862
Working interests 24,095 19,115 39,894
2,041,818 582,148 393,756
Less:
Production costs 84,605 50,511 59,503
Exploration expenses - - -
Depreciation, depletion and
amortization 318 580 1,515
---------- -------- --------
Results before income tax
expenses 1,956,895 531,057 332,738
Income tax expenses 630,682 164,487 112,932
---------- -------- --------
Results of operations from
producing activities
(excluding corporate
overhead) $1,326,213 $366,570 $219,806
========== ======== ========
Costs incurred in oil and gas activities:
The major costs incurred in connection with the Company's oil and gas
operations (which are conducted entirely within the United States) at
December 31, 1999, 1998 and 1997 are as follows:
1999 1998 1997
--------- --------- --------
Acquisition costs-working and
royalty interests $ - $ - $ -
========= ========= ========
Exploration costs $ - $ - $ -
======== ========= ========
Development costs $ 932 $ 3,741 $ 862
======== ======== ========
Reserve quantities (unaudited):
Reserve information relating to estimated quantities of the Company's
interest in proved reserves of natural gas and crude (including
condensate and natural gas liquids) is not available. Such reserves
are located entirely within the United States. A schedule indicating
such reserve quantities is, therefore, not presented.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The wells remain in production at December 31, 1999, including royalty
interests and working interests obtained through back-in provisions of
royalty agreements. Production from such royalty interests and working
interests comprises 100% of the Company's oil and gas revenues in 1999,
1998 and 1997.
Actual production has exceeded original estimates of reserves, and
remaining reserves have not been revised. Therefore, the Company is
not able to complete the computations of discounted future cash flows
and reconciliation thereof.
Note 4. Income Taxes
The Company files federal income tax returns on a calendar year basis.
The net deferred tax liability in the accompanying balance sheet includes
the following components at December 31, 1999 and 1998:
1999 1998
-------- ---------
Deferred tax assets $ 3,203 $ 918
Valuation allowance - -
Deferred tax liabilities (15,318) (10,902)
Deferred tax liabilities on unrealized
appreciation on securities available
for sale (8,058) (2,589)
-------- ---------
Net deferred tax liability $(20,173) $ (12,573)
======== =========
A reconciliation between income taxes, computed by applying statutory tax
rates to income before income taxes and income taxes provided at December
31, 1999, 1998 and 1997 is as follows:
1999 1998 1997
--------- -------- --------
Tax at statutory rates $ 775,137 $198,962 $263,991
Tax effect of the following:
Statutory depletion (99,490) (27,084) (18,384)
Dividend exclusion (514) (428) (126)
State income tax 61,094 13,126 21,226
Investment tax credit (167) - (1,000)
Other (1,306) (3,325) (2,180)
--------- -------- --------
$ 734,754 $181,251 $263,527
========= ======== ========
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Deferred income taxes result from timing differences in the recognition
of revenue and expenses for tax and financial statement purposes. The
Company was entitled to an investment tax credit related to reforestation
expenditures totaling $167 for the year ended December 31, 1999. The
effect of these timing differences at December 31, 1999 and 1998 is as
follows:
1999 1998
--------- ---------
Conversion of tax return from cash
to accrual basis for financial
reporting $ (14,344) $ (9,926)
Excess of depreciation and depletion
expensed for tax purposes (under)
amount eyxpensed for financial
statement purposes 2,229 (59)
Unrealized gain on marketable securities (8,058) (2,588)
--------- ---------
$ (20,173) $ (12,573)
========= ==========
Note 5. Long-Term Debt
Following is a summary of long-term debt at December 31, 1999 and 1998:
1999 1998
--------- ---------
Note payable to bank, due in equal monthly
installments of $9,863, including interest
at 8.25% with a final payment estimated at
$492,062 plus accrued interest due on
December 26,2002. Secured by real estate. $ - $ 745,888
Note payable to bank, due in equal monthly
installments of $10,956, including interest
at 7.75%. Secured by real estate. - 441,176
--------- ----------
- 1,187,064
Less current maturities of long-term debt - 158,840
--------- ----------
$ - $1,028,224
========= ==========
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note 6. Line of Credit
As of December 31, 1999, the Company had available an unsecured line of
credit in the amount of $750,000. The balance on this line of credit was
$-0- at December 31, 1999.
Note 7. Company Operations
Effective January 1, 1998, the Company adopted the Financial Accounting
Standards Board Statement No. 131, "Disclosures About Segments of an
Enterprise and Related Information". This statement replaces Statement
No. 14, "Financial Reporting for Segments of a Business Enterprise", and
establishes new standards for defining the Company's segments and
disclosing information about them. It requires that the segments be
based on the internal reporting of the Company's operations.
The Company's operations are classified into three principal operating
segments which are all located in the United States: oil and gas
properties, agricultural properties, and timber properties. The
Company's reportable business segments are strategic business units that
offer income from different products. They are managed separately due to
the unique aspects of each area.
Following is a summary of segmented information for 1999, 1998 and 1997:
1999 1998 1997
---------- --------- ---------
REVENUES
Oil and gas properties $ 2,102,773 $ 672,497 $ 691,934
Agricultural properties 197,719 127,832 82,329
Timber properties 308,411 64,178 179,543
All other segments 37,588 32,520 13,826
----------- --------- ---------
$ 2,646,491 $ 897,027 $ 967,632
=========== ========= =========
COSTS AND EXPENSES
Oil and gas properties $ 84,923 $ 51,091 $ 61,018
Agricultural properties 16,667 13,509 14,699
Timber properties 61,104 29,723 27,764
All other segments 932 1,264 862
----------- --------- ---------
$ 163,626 $ 95,587 $ 104,343
=========== ========= =========
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1999 1998 1997
---------- ---------- ----------
INCOME FROM OPERATIONS
Oil and gas properties $2,017,850 $ 621,406 $ 630,916
Agricultural properties 181,052 114,323 67,630
Timber properties 247,307 34,455 151,779
All other segments 36,656 31,256 12,964
---------- ---------- ----------
2,482,865 801,440 863,289
OTHER INCOME (EXPENSE) (203,051) (216,258) (86,844)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES $2,279,814 $ 585,182 $ 776,445
========== ========== ==========
IDENTIFIABLE ASSETS
Oil and gas properties $ 980,179 $ 694,203 $ 546,971
Agricultural properties 2,530,002 2,531,025 2,303,368
Timber properties 1,067,912 891,510 969,842
All other segments 85,685 85,685 -
---------- ---------- ----------
4,663,778 4,202,423 3,820,181
GENERAL AND CORPORATE ASSETS 548,762 556,904 486,896
TOTAL ASSETS $5,212,540 $4,759,327 $4,307,077
========== ========== ==========
CAPITAL EXPENDITURES
Oil and gas properties $ 2,947 $ 96,320 $ -
Agricultural properties - 222,789 1,678,281
Timber properties 3,453 220,754 40,101
All other segments 3,749 85,685 -
---------- ---------- ----------
$ 10,149 $ 625,548 $1,718,382
========== ========== ==========
DEPRECIATION, DEPLETION AND
AMORTIZATION
Oil and gas properties $ 318 $ 580 $ 1,515
Agricultural properties 3,781 2,574 2,280
Timber properties 15,453 12,399 9,702
All other segments 932 1,264 862
---------- ---------- ----------
$ 20,484 $ 16,817 $ 14,359
========== ========== ==========
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS
There are no intersegment sales reported in the accompanying income
statements. The accounting policies of the segments are the same as
those described in the summary of significant accounting policies. The
Company evaluates performance based on profit or loss from operations
before income taxes excluding nonrecurring gains and losses on securities
held available for sale. Income before income tax represents net sales
less operating expenses and other income and expenses of a general
corporate nature. Identifiable assets by segment are those assets that
are used in the Company's operations within that industry. General
corporate assets consist principally of cash and cash items, accounts
receivable, and marketable equity and debt securities.
The following summarizes major customer information at December 31, 1999,
1998 and 1997 from oil and gas revenues:
Sales to Purchaser as a
Percentage of Total Revenues
----------------------------
Purchaser 1999 1998 1997
--------- -------- ------- --------
Riceland Petroleum Company 2% 10% 35%
Coastal - 1% 12%
Woodlawn 2% 6% 12%
Mitchell Energy 12% 34% -
Neumin Production 78% 34% -
Note 8. Related Party Transactions
As of April 1, 1999, the President of the Company is serving as Chairman
of the advisory board of Bank One, Southwest Louisiana (the Bank).
Formerly, he was the President of the Bank. At December 31, 1999 and
1998, the Company had $395,657 and $46,841, respectively, deposited in
money-market and noninterest bearing checking accounts with the Bank. At
December 31, 1999 and 1998, the Company also had notes payable to the
Bank, described at Note 5 in the amount of $-0- and $1,187,064,
respectively.
During 1999 and 1998, some board members entered into leases with the
Company for water fowl hunting on property acquired during the 1998.
Lease income from these leases amounted to $4,800 for each of the years
ended December 31, 1999 and 1998.
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS
In 1990, the Company purchased interests in properties managed by Walker
Louisiana Properties (WLP), such properties being subject to a management
agreement described at Note 11. In 1998, the Company purchased an
additional interest in this property.
Note 9. Supplementary Income Statement Information
Taxes other than income taxes of $117,129, $65,154 and $44,126, were
charged to expense during 1999, 1998 and 1997, respectively.
Note 10. Major Transactions
In February, 1990, the Company acquired a 12.5% interest in 34,189 acres
and other properties in Allen, Beauregard, Calcasieu, Cameron, Jefferson
Davis, Lafourche, Sabine, and Vermillion Parishes for $1,275,000. Of the
total acreage, 30,581 acres were acquired in fee and 3,608 were acquired
in surface rights only.
The allocation of the purchase price, which was applied pro rata over the
fair market values of the assets acquired is as follows:
Cash and accounts receivable $ 1,607
Harvested crops 17,799
Buildings and equipment 14,610
Land:
Agricultural 606,982
Other 233,445
Timber 380,792
Oil and gas properties 19,765
-----------
$ 1,275,000
===========
In November, 1998, the Company purchased its proportionate interest in
the lands and minerals described above from a 25% owner. The additional
4.2% interest purchased (approximately 1,429 acres), brings its total
interest to 16.7%. The purchase price was $607,458 and was allocated
based on the relative fair market value of the assets acquired as
follows:
Land:
Agricultural $ 222,789
Other 85,685
Timber 220,754
Oil and gas properties 78,230
---------
$ 607,458
=========
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The primary sources of income from the property are the leasing of
mineral rights, timber sales, and agricultural rents.
The President of this Company is President of a corporation that also
purchased a 12.5% undivided interest in the same acreage at the same time
and at the same price. The aforementioned corporation also purchased the
additional percentage in November, 1998 for the same price.
The Vice President of this Company is manager of a limited liability
company that also purchased a 12.5% undivided interest in the same
acreage at the same time and at the same price. The aforementioned
corporation also purchased the additional percentage in November, 1998
for the same price.
In February, 1992, the Company purchased 952 acres of timberland located
in Calcasieu and Beauregard Parishes for $475,000. The down payment of
$95,000 was paid at the closing date from the Company's cash reserves and
the remaining $380,000 was financed with a mortgage note payable. This
note was paid in full in April, 1997. The seller retained a 50% mineral
interest in the property.
In October, 1997, the Company purchased approximately 3,496 acres of
agricultural properties located in Cameron Parish for $1,663,000 plus
related expenses. The down payment of $813,000 was paid at the closing
date from proceeds of the sale of securities and cash reserves. The
remaining $850,000 was financed with a mortgage note payable described in
Note 5. This note was paid in full during 1999.
Note 11. Management Agreement
During 1990, the Company purchased an undivided interest in numerous
parcels of land and other properties as described at Note 10. The
Company's interest, along with the interests of other co-owners, is
managed by an entity under a management agreement whereby costs are
shared based on the percent of ownership.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note 12. Operating Leases
The Company leases agricultural land to a third party under an agreement
that expires September 30, 2002. The annual lease rental is $40,000.
The lease requires payment of normal maintenance and insurance. The
lease also requires the lessee to construct specific improvements to the
property at an expenditure of at least $60,000 as additional
consideration. In the event the lessee fails to spend $60,000 on the
above improvements prior to September 30, 2002, the amounts unspent will
be due and payable to the Company on September 30, 2002.
Total future minimum rental income under operating leases as of December
31, 1999 for the next five years is as follows:
Years Ending December 31,
-------------------------
2000 $ 40,000
2001 40,000
2002 40,000
2003 -
2004 -
Note 13. Concentration of Credit Risk
The Company maintains its cash balances in one financial institution.
The amount on deposit in the financial institution is insured by the
Federal Deposit Insurance Corporation up to $100,000.
Note 14. Disclosures About Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it was practical
to estimate that value:
Cash and cash equivalents:
For these short-term instruments, the carrying amount is a reasonable
estimate of fair value.
Securities available-for-sale:
Debt and equity securities were valued at fair value, which equals
quoted market price.
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Long-term debt:
The fair value of the Company's long-term debt is estimated based on
the current rates offered to the Company for debt of the same
remaining maturities.
The estimated fair value of the Company's financial instruments at
December 31, 1999 and 1998 are as follows. Amounts are presented in
thousands.
1999 1998
--------------- ------------------
Carrying Fair Carrying Fair
Financial Assets Value Value Value Value
------- ----- -------- --------
Cash and cash equivalents $ 472 $ 472 $ 113 $ 113
Securities available for sale 76 76 63 63
Long-term debt - - (1,187) (1,187)
------ ----- -------- --------
$ 548 $ 548 $ (1,011) $ (1,011)
====== ===== ======== ========
Note 15. Commitments and Contingencies
The Company is a co-defendant in a lawsuit filed by previous owners of
property that is now partially owned by the Company. In this suit, the
Plaintiffs assert that the sale of a strip of property in 1914 created
two servitudes, one of which, the co-defendants claim ownership, expired
by liberative prescription in 1940. The Company has indicated that it
will defend the suit vigorously, and it is anticipated that a motion for
summary judgment in favor of the defendants will be filed in the near
future.
30
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
PROPERTY, PLANT AND EQUIPMENT
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Balance, Adjustments Balance,
Beginning and End of
1999 of Period Additions Retirements Period
---- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Oil and gas properties-proved $ 444,236 $ 2,947 $ (11,002) $ 458,185
Other property:
Buildings and equipment 87,136 3,749 - 90,885
Timber 803,086 3,453 91,475 715,064
Land 3,660,478 - 44,687 3,615,791
---------- ----------- --------- -----------
$4,994,936 $ 10,149 $ 125,160 $ 4,879,925
========== =========== ========= ============
1998
----
Oil and gas properties-proved $ 377,666 $ 80,521 $ 13,951 $ 444,236
Other property:
Buildings and equipment 90,941 9,251 13,056 87,136
Timber 575,785 227,301 - 803,086
Land 3,352,003 308,475 - 3,660,478
---------- ----------- --------- -----------
$4,396,395 $ 625,548 $ 27,007 $ 4,994,936
========== =========== ========= ============
1997
----
Oil and gas properties-proved $ 377,732 $ - $ 66 $ 377,666
Other property:
Buildings and equipment 90,959 3,831 3,849 90,941
Timber 545,792 29,993 - 575,785
Land 1,661,742 1,698,021 7,760 3,352,003
---------- ----------- --------- -----------
$2,676,225 $ 1,731,845 $ 11,675 $ 4,396,395
========== =========== ========= ===========
</TABLE>
31
<PAGE>
CALCASIEU REAL ESTATE & OIL CO., INC.
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Balance, Adjustments Balance,
Beginning and End of
1999 of Period Additions Retirements Period
---- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Oil and gas properties-proved $ 362,770 $ 3,050 $ (11,219) $ 377,039
Other property:
Buildings and equipment 71,487 1,981 - 73,468
Timber 213,423 15,453 - 228,876
---------- -------- --------- ---------
$ 647,680 $ 20,484 $ (11,219) $ 679,383
========== ======== ========= =========
1998
----
Oil and gas properties-proved $ 376,141 $ 580 $ 13,951 $ 362,770
Other property:
Buildings and equipment 80,706 3,837 13,056 71,487
Timber 201,023 12,400 - 213,423
---------- -------- --------- ---------
$ 657,870 $ 16,817 $ 27,007 $ 647,680
========== ======== ========= =========
1997
----
Oil and gas properties-proved $ 374,626 $ 1,515 $ - $ 376,141
Other property:
Buildings and equipment 81,413 3,142 3,849 80,706
Timber 191,321 9,702 - 201,023
---------- -------- --------- ---------
$ 647,360 $ 14,359 $ 3,849 $ 657,870
========== ======== ========= =========
</TABLE>
32
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FORM
*DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
* audited financial statements
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
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72,256
0
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</TABLE>
