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 quarterly period ended March 31, 1995
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: 0-11027
SOUTHERN TIMBER PARTNERS I
(Exact name of registrant as specified in its charter)
Georgia 56-1303554
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, 29th Floor, New York, NY 10285
(Address of principal executive offices) (Zip code)
(212) 526-3237
(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 the past 90 days. Yes X
No
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets at March 31, 1995 and
December 31, 1994 3
Statement of Partners' Capital (Deficit) for the
three months ended March 31, 1995 3
Statements of Operations for the three months ended
March 31, 1995 and 1994 4
Statements of Cash Flows for the three months ended
March 31, 1995 and 1994 5
Notes to the Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7
PART II OTHER INFORMATION
Items 1-6 8
Balance Sheets
March 31, December 31,
Assets 1995 1994
Timber and timberland, at cost $ 8,643,543 $ 9,174,377
Less-accumulated depletion (3,814,004) (3,814,004)
Net timber and timberland 4,829,539 5,360,373
Cash and cash equivalents 2,479,114 1,428,986
Accounts receivable 1,320 515,767
Prepaid insurance 3,384 5,922
Due from joint venture 2,893 2,472
Investment in joint venture 1,438,246 1,433,210
Total Assets $ 8,754,496 $ 8,746,730
Liabilities and Partners' Capital
Liabilities:
Accounts payable and
accrued expenses $ 29,739 $ 40,189
Due to affiliates 151,728 136,953
Total Liabilities 181,467 177,142
Partners' Capital (Deficit):
General Partner (45,221) (45,263)
Limited Partners
(40,000 units outstanding) 8,618,250 8,614,851
Total Partners' Capital 8,573,029 8,569,588
Total Liabilities and
Partners' Capital $ 8,754,496 $ 8,746,730
Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1995
Limited General
Partners Partner Total
Balance at December 31, 1994 $8,614,851 $ (45,263) $8,569,588
Distributions to foreign
limited partners (744) - (744)
Net income 4,143 42 4,185
Balance at March 31, 1995 $8,618,250 $ (45,221) $8,573,029
Statements of Operations
For the three months ended March 31, 1995 and 1994
Income 1995 1994
Interest $ 30,498 $ 3,980
Other 650 480
Total Income 31,148 4,460
Expenses
Property operating 22,291 54,022
General and administrative 9,708 15,448
Total Expenses 31,999 69,470
Loss from operations (851) (65,010)
Other Income (Loss)
Income (loss) from joint venture 5,036 (2,010)
Net Income (Loss) $ 4,185 $(67,020)
Net Income (Loss) Allocated:
To the General Partner $ 42 $ (670)
To the Limited Partners 4,143 (66,350)
$ 4,185 $(67,020)
Per limited partnership unit
(40,000 outstanding) $.10 $(1.66)
Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net income (loss) $ 4,185 $ (67,020)
Adjustments to reconcile
net income (loss) to net cash
provided by (used for) operating activities:
(Income) loss from joint venture (5,036) 2,010
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Accounts receivable 514,447 -
Prepaid insurance 2,538 -
Due from Joint Venture (421) -
Accounts payable and
accrued expenses (10,450) 11,753
Due to affiliates 14,775 (31,656)
Net cash provided by (used for)
operating activities 520,038 (84,913)
Cash Flows from Investing Activities:
Proceeds from land sales 530,834 -
Net cash provided by investing activities 530,834 -
Cash Flows from Financing Activities:
Distributions - income tax withholdings
for foreign partners (744) (1,627)
Net cash used for financing activities (744) (1,627)
Net increase (decrease) in cash and
cash equivalents 1,050,128 (86,540)
Cash and cash equivalents at
beginning of period 1,428,986 649,928
Cash and cash equivalents at end of period $2,479,114 $ 563,388
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments consisting of only
normal recurring accruals which are, in the opinion of management, necessary to
present a fair statement of financial position as of March 31, 1995 and the
results of operations and cash flows for the three months ended March 31, 1995
and 1994 and statement of changes in partners' capital (deficit) for the three
months ended March 31, 1995. Results of operations for the period are not
necessarily indicative of the results to be expected for the full year.
The following significant events have occurred, subsequent to fiscal year 1994,
or the following material contingencies exist, and require disclosure in this
interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
Reclassifications Certain prior year amounts have been reclassified to
conform with the financial statement presentation used in 1995.
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources
Timber and timberland, at cost, decreased by $530,834 from $9,174,377 at
December 31, 1994, to $8,643,543 at March 31, 1995. This decrease is due to
the sale of approximately 1,016 acres of timberland and 3,464 cords of timber
from the Estes tract during the first quarter of 1995.
At March 31, 1995, the Partnership's cash balance totalled $2,479,114,
representing an increase of $1,050,128 from $1,428,986 at December 31, 1994.
The increase is primarily the result of proceeds received from timberland sales
in the first quarter of 1995 and to the collection in 1995 of accounts
receivable related to timberland sales which occurred in 1994. The collection
of these accounts receivable is the primary reason for the $514,447 decrease in
the Partnership's accounts receivable balance at March 31, 1995, as compared to
the balance at December 31, 1994. The Partnership's cash balance, along with
funds generated from future sales of timber and timberland are expected to
provide sufficient liquidity to enable the Partnership to meet its operating
expenses. The General Partners are currently evaluating the Partnership's cash
needs and will consider distributing a portion of the cash balance later in
1995.
While the long-term trend for timber prices has been upward, prices will
continue to be subject to cyclical fluctuations. Even if timber prices improve
significantly, the Partnership intends to continue to sell timber selectively
since the Estes tract will be more valuable to a potential buyer if it contains
a sizable percentage of merchantable timber.
In addition to timber sales, the General Partner will also continue to pursue
timberland sales on the Estes tract. It should be noted, however, that the
market for raw land in the area of Florida where the tract is located remains
weak. Values may be further undermined in the future by the implementation of
the State Growth Management Act which discourages development of raw land and
tree harvesting. The General Partner will continue to monitor the market
closely in order to obtain maximum value.
The Partnership currently owns approximately 7,000 acres of timberland on the
Estes tract outright and a 24% share in the Laurel View tract, a 1,709 acre
tract located near Savannah, Georgia. While the Laurel View tract could be
sold as timberland, its primary value would be realized if sold as a
development site due to its coastal location and close proximity to major
interstate highways. The initial step in marketing the tract, the formulation
of a land use plan, was recently completed. The plan is currently being
incorporated into a more comprehensive marketing plan.
Results of Operations
The Partnership's operations resulted in net income of $4,185 and a net loss of
$67,020 for the three months ended March 31, 1995 and 1994, respectively. The
difference is primarily attributable to increased interest income and decreased
property operating and general and administrative expenses.
Interest income totalled $30,498 for the period ended March 31, 1995, compared
to $3,980 for the corresponding period in 1994. The increase is primarily the
result of a higher cash balance invested resulting from timberland sales in the
latter part of 1994.
Property operating expenses were $22,291 for the period ended March 31, 1995,
compared to $54,022 for the corresponding period in 1994. The decrease is
primarily due to a decline in management fees and property maintenance
expenses. In the first quarter of 1994, the Partnership incurred costs
associated with cruising and controlled burning on the Estes tract. No such
expenses were incurred during the first quarter of 1995.
General and administrative expenses for the periods ended March 31, 1995 and
1994 were $9,708 and $15,448, respectively. The decrease is primarily due to a
decline in the Partnership's audit fee.
The Partnership recognized income from Joint Venture operations of $5,036 for
the three months ended March 31, 1995, compared with a loss of $2,010 for the
three months ended March 31, 1994. The joint venture income in 1995 is
attributable to income from timber sales recognized in the first quarter of
1995 in excess of ordinary operating expenses. The joint venture loss in 1994
was attributable to a lack of timber sales and the recording of ordinary
operating expenses.
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended March 31, 1995
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.
SOUTHERN TIMBER PARTNERS I
BY: SOUTHERN TIMBER RESOURCES CORP.
General Partner
Date: May 12, 1995
BY: /s/ Paul L. Abbott
Paul L. Abbott
Director, President, and
Chief Financial Officer
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