UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended: December 31, 1995 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT [NO FEE REQUIRED]
Commission file number: 0-11027
SOUTHERN TIMBER PARTNERS I
(formerly Hutton Southern Timber Partners I)
Exact name of registrant as specified in its charter
Georgia 56-130554
State or other jurisdiction I.R.S. Employer Identification No.
of incorporation or organization
3 World Financial Center, 29th Floor
New York, NY ATTN: Andre Anderson
(Address of principal executive offices) 10285
(Zip Code)
Registrant's telephone number, including area code: (212) 526-3237
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
Title of Class
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
DOCUMENTS INCORPORATED BY REFERENCE:
The Registrant's Prospectus dated October 30, 1981, as supplemented on
January 5, 1982 and January 12, 1982, is incorporated by reference in Part I.
The Registrant's Annual Report to Unitholders for the year ended December 31,
1995 is incorporated by reference in Parts I, II, III and IV.
PART I
Item 1. Business
(a) General Development of Business
Southern Timber Partners I (the "Partnership" or "Registrant") (formerly known
as Hutton Southern Timber Partners I) was organized as a Georgia limited
partnership in 1981, and is engaged in the business of investing in timberland
and timber cutting rights in the southeastern United States. The Registrant
acquired properties, and currently manages the timber growth on its timberland
with a view toward increasing its value and selling the timber and timberlands.
Its general partner is Southern Timber Resources Corp. (the "General Partner"),
formerly known as Hutton Timber Resources Corp., a Delaware corporation which
is an affiliate of Lehman Brothers Inc. ("Lehman"), a Delaware corporation (see
Item 10.). The General Partner has responsibility for all aspects of the
Registrant's operations and provides executive, supervisory and certain
administrative services for the Registrant.
In 1982, the Registrant concluded a public offering (the "Offering") of 40,000
units of limited partnership interest (the "Units") through E.F. Hutton &
Company Inc. ("Hutton") as selling agent, at a price of $500 per Unit. The
Units were registered under the Securities Act of 1933 on Form S-11
(Registration No. 2-73838) which had been declared effective October 29, 1981.
Reference is made to the Prospectus of the Registrant dated October 30, 1981,
as supplemented on January 5, 1982 and January 12, 1982, filed pursuant to
Rules 424(b) and 424(c), under the Securities Act of 1933 and incorporated
herein by reference (said Prospectus, as so supplemented, is hereinafter called
the "Prospectus"). Upon the sale of 20,000 Units, the Registrant exercised its
option, described in the Prospectus, to offer 20,000 additional Units for sale,
and continued the Offering until February 22, 1982, at which time all 40,000
Units had been sold. The limited partners made aggregate capital contribution
s to the Registrant of $20,000,000. The Registrant admitted the subscribers in
two groups, the first group on January 11, 1982 and the remaining subscribers
on March 1, 1982. As of December 31, 1983, the Registrant had invested all of
the proceeds of the Offering available for investment in timber properties.
The Registrant may sell or exchange its properties for other properties at any
time. However, the Registrant may not reinvest the proceeds from sales in
other properties. The Registrant may also invest in timber through the
purchase of timber cutting rights but has not invested in such rights to date.
The Registrant may utilize borrowing to increase its invested assets if the
General Partner determines that the terms of such borrowing would be
advantageous to the Registrant. At this time, the General Partner does not
anticipate utilizing additional borrowing.
On October 13, 1987, the Registrant contributed the Finch and Dixon tracts,
which totalled 1,239 acres of timberland and had a fair market value of
$946,676 and a net book value of $1,432,655 at the time, to a newly formed
joint venture, Southern Timber Venture Partners 1, formerly Hutton Timber
Venture Partners 1 (the "Joint Venture"), in exchange for a 24% interest in the
Joint Venture. An affiliated partnership, Southern Timber Partners 2 (formerly
Hutton Southern Timber Partners 2), contributed $3,011,417 in cash in exchange
for the remaining 76% interest. On October 15, 1987 substantially all of these
contributions were applied to the acquisition of 1,709 acres of the Laurel View
tract located in Liberty County, Georgia. For a description of the Joint
Venture see Note 6 of the Notes to the Financial Statements of the
Partnership's Annual Report to Unitholders for the year ended
December 31, 1995, which is filed as an exhibit under Item 14 and incorporated
herein by reference.
The Partnership will continue until December 31, 1996, unless terminated sooner
in accordance with the terms of the Partnership Agreement. However, the
Partnership Agreement states that the General Partner can extend the life of
the Partnership beyond the termination date if it is determined that a sale of
the timberland at that time would cause undue loss to the partners. The
Partnership's termination will be accomplished through the liquidation of the
Partnership's assets which primarily consist of merchantable timber, clear-cut
timberland and fully-forested timberland. During 1995 the General Partner
executed a purchase and sale agreement to sell a portion of the Estes Tract
and entered into negotiations for a second sale from the Estes tract. In
1996, the Partnership will begin marketing the Laurel View tract for its
development potential. Reference is made to Item 7 of this Form 10-K and the
"Message to Investors" section of the Partnership's Annual Report to
Unitholders for the year ended December 31, 1995, which is filed as an exhibit
under Item 14 and incorporated herein by reference.
(b) Financial Information About Industry Segment
The Registrant operates in only one industry segment. The General Partner, in
conjunction with an independent forest consulting firm, develops a forest
management plan for each property acquired by the Registrant. Such plans
estimate the types and numbers of trees of varying diameter and age on each
tract and the costs and expenses of maintaining the tract, recommend thinning,
harvesting, reforestation and other forest management practices, analyze
maturity cycles, and generally assist the General Partner in maximizing the
Registrant's return on each investment property. Cutting schedules and
priorities for harvesting may change and are subject to changes in market
conditions or other future developments affecting the properties or the
Registrant.
In addition to income from harvesting or sale of timberlands, the General
Partner may and has in situations deemed appropriate, endeavored to produce
additional cash flow for the Registrant by ancillary land uses. These may
include cattle grazing, mineral operations, recreational and hunting leases,
and conversion or sale of sites for higher value uses. In the year ended
December 31, 1995, revenues from such uses were $9,150.
(c) Narrative Description of Business
The primary investment objectives of the Registrant are:
(1) long-term capital appreciation of its timber properties, and
(2) cash flow derived from periodic harvesting of timber.
The ownership and operation of timber properties involves a number of risks,
and there is no assurance that the Registrant will ultimately achieve its
investment objectives. Risks include, among others, changes in governmental
regulations, fire hazards, insect damage, diseases and timber theft, and risks
of market fluctuations. The General Partner believes the employment of good
forestry management practices helps to ameliorate the physical risks of timber
investments, however, these risks cannot be eliminated entirely. See the
caption entitled "Risk Factors" in the Prospectus which is incorporated herein
by reference.
The Registrant incurs costs in connection with the ownership and management of
its properties. These include costs of maintaining roads and boundary lines,
fire protection, annual property taxes, fees and expenses of independent forest
management firms, and other costs associated with the ownership and management
of timber properties. Timber harvesting is not performed directly by the
Registrant but by independent timber purchasers or harvesters.
Competition
The Registrant competes in the sale of timber and timberland with many other
persons and firms holding timberland investments, including large paper and
lumber companies and numerous private landowners. Many of such competitors
have greater financial resources and experience in the forest industry than the
Registrant.
Employees
The Registrant has no employees.
Item 2. Properties
Incorporated by reference to the Tract Profiles included in the Partnership's
Annual Report to Unitholders for the year ended December 31, 1995, which is
filed an exhibit under Item 14 and incorporated herein by reference. For
information on the Partnership's Joint Venture, see Note 6 of Notes to the
Financial Statements, which is also included in the Partnership's Annual Report
to Unitholders for the year ended December 31, 1995.
Item 3. Legal Proceedings
As of December 31, 1995, the Registrant was not a party to any material legal
proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of limited partners during the fourth quarter
of the year for which this report is filed.
PART II
Item 5. Market for the Registrant's Limited Partnership Interests and Related
Security Holder Matters
(a) Market Information
There is no established trading market for the Units of the Registrant.
(b) Holders
As of December 31, 1995 there were 2,730 holders of the Units of the
Registrant.
(c) Distributions
The Partnership made a cash distribution to the limited partners on June 30,
1995 in the amount of $38.00 per Unit. The Partnership made a cash
distribution to the limited partners on September 30, 1993, in the amount of
$35 per Unit. No cash distributions were paid to the limited partners for the
year ended December 31, 1994.
Item 6. Selected Financial Data
Incorporated by reference to the section entitled "Financial Highlights" of the
Partnership's Annual Report to Unitholders for the year ended December 31,
1995, which is filed an exhibit under Item 14 and incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
(a) Liquidity and Capital Resources
The Partnership currently owns approximately 5,947 acres of timberland 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, a
higher value would be realized if the tract was sold as a development site due
to its coastal location and close proximity to major interstate highways.
Further information is incorporated by reference to the "Message to Investors"
section of the Partnership's Annual Report to Unitholders for the year ended
December 31, 1995, which is filed as an exhibit under Item 14 and incorporated
herein by reference.
Late in the fourth quarter of 1995, the Partnership completed a sale of 156
acres and a second sale of 161 acres. Earlier in the year, the Partnership
completed four other sales of timberland totalling 1,751 acres. The proceeds
received from these sales, less selling costs and other related expenses, were
added to the Partnership's cash reserves. On February 6, 1996, the Partnership
entered into a signed purchase and sale agreement for 1,290 acres with the
State of Florida. The sale is subject to a due diligence period, which expires
in June 1996, during which the State may cancel the agreement with no further
obligation. On March 6, 1996, the Partnership entered into a second purchase
and sale agreement with the State of Florida for the remainder of the Estes
tract. The sale is subject to the approval of both parties and once approved,
is also subject to a due diligence period. If and when both sales close, the
Partnership's only remaining timber asset will be its 24% interest in the
Laurel View tract.
Timber and timberland, at cost, decreased from $9,174,377 at December 31, 1994,
to $6,987,505 at December 31, 1995. The decrease is due to the sale of
approximately 2,068 acres of timberland, including 8,850 cords of timber, from
the Estes tract during 1995. These sales generated net proceeds of $1,259,054
and resulted in a net gain of $79,758.
At December 31, 1995, the Partnership's cash balance totalled $1,683,209, an
increase from $1,428,986 at December 31, 1994. The increase is primarily the
result of the receipt of proceeds from 1995 sales of timberland and the
collection of 1994 accounts receivable in the first quarter of 1995 partially
offset by a cash distribution paid in 1995. 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.
At December 31, 1995, the Partnership's accounts receivable balance was zero,
as compared to $515,767 at December 31, 1994. The decrease is attributable to
the collection of proceeds in 1995 related to timberland sales completed in
1994.
Due to affiliates increased by $55,790 from $145,834 at December 31, 1994 to
$201,624 at December 31, 1995 primarily due to the addition of 1995 management
fees payable.
On February 16, 1996, based upon, among other things, the advice of Partnership
counsel, Skadden, Arps, Slate, Meagher & Flom, the General Partner adopted a
resolution that states, among other things, if a Change of Control (as defined
below) occurs, the General Partner may distribute the Partnership's cash
balances not required for its ordinary course day-to-day operations. "Change
of Control" means any purchase or offer to purchase more than 10% of the Units
that is not approved in advance by the General Partner. In determining the
amount of the distribution, the General Partner may take into account all
material factors. In addition, the Partnership will not be obligated to make
any distribution to any partner and no partner will be entitled to receive any
distribution until the General Partner has declared the distribution and
established a record date and distribution date for the distribution. The
Partnership filed a Form 8-K disclosing this resolution on February 26, 1996.
(b) Results of Operations
1995 versus 1994
The Partnership's operations resulted in net income of $51,663 and a net loss
of $370,171 for the years ended December 31, 1995 and 1994, respectively. The
change from net loss to net income was primarily the result of the recognition
in 1994 of a $570,000 write-down of the value of timberland of the Estes Tract.
The estimated value of the Estes Tract was approximately $346,000 less than its
carrying value and the remaining $224,000 was a provision for loss on sales of
timberland which closed during the first quarter of 1995. As a result,
management believed that approximately $570,000 of the decline in the Estes
Tract's value was other than temporary and in 1994 reduced the carrying value
of the tract accordingly.
The Partnership did not recognize any income from timber-only sales for the
year ended December 31, 1995, compared to $438,094 for the year ended December
31, 1994, as a result of no timber sales being recorded for the Estes tract
during 1995. Accordingly, no depletion expense was recorded for the year ended
December 31, 1995, compared to $193,259 for 1994.
The Partnership recognized a gain on sales of timberland of $79,758 for the
year ended December 31, 1995, compared to a gain on the sale of timberland of
$148,190 for the year ended December 31, 1994. The gain in 1995 was due to the
sale of approximately 2,068 acres from the Estes Tract.
Interest income increased to $107,205 for the year ended December 31, 1995, as
compared with $39,161 for the same period in 1994. The increase is the result
of higher cash balances invested resulting from timberland sales.
Property operating expenses declined to $75,666 for the year ended December 31,
1995, compared to $156,074 for the corresponding period in 1994, primarily due
to lower management fees and property maintenance fees.
The Partnership's interest in the joint venture is represented by its 24% share
of the Laurel View Tract. The Partnership recognized income of $2,444 from the
joint venture's operations for the year ended December 31, 1995, compared to a
loss of $14,119 for the year ended December 31, 1994. The 1995 income from the
joint venture is mainly attributable to the sale of timber and is offset by
ordinary operating expenses. The loss in 1994 is due primarily to the lack of
timber sales and to the joint venture meeting its normal operating expenses.
1994 versus 1993
The Partnership's operations resulted in a net loss of $370,171 and net income
of $446,616 for the years ended December 31, 1994 and 1993, respectively. The
difference was primarily attributable to a decrease in revenue from timber
sales and the loss on write-down of timberland, which was partially offset by a
decrease in depletion expense and an increase in gain on sales of timberland
in 1994.
The Partnership recognized income from timber sales of $438,094 for the year
ended December 31, 1994, compared to $1,571,888 for the year ended December 31,
1993. The decrease in income from timber sales in 1994 was attributable to the
decrease in timber sales from the Estes tract. Accordingly, the Partnership
recorded depletion expense of $193,259 for the year ended December 31, 1994,
compared to $869,997 for 1993 as a result of less timber being harvested
during 1994.
The Partnership recognized a gain on sales of timberland of $148,190 for the
year ended December 31, 1994, compared to a loss on the sale of timberland of
$38,102 for the year ended December 31, 1993. The gain in 1994 was due to the
sale of approximately 1,320 acres from of the Estes tract. The loss in 1993
was attributable to losses on the sale of the Thompson, Forth and McNeely
tracts.
Interest income increased for the year ended December 31, 1994, as compared
with the same period in 1993. The increase was the result of higher cash
balances invested resulting from an increase in timberland sales.
Property operating expenses decreased by $19,689 for the year ended December
31, 1994, compared to the corresponding period in 1993, primarily due to a
decline in timber sales supervisory fees.
General and administrative expenses were $70,519 for the year ended December
31, 1994, compared to $64,773 for the corresponding period in 1993. The
increase was primarily due to advertising fees incurred in connection with the
auctions of portions of the Estes tract, partially offset by decreases in the
annual audit fee and transfer agent fees.
The Partnership recognized a loss from Joint Venture operations of $14,119 for
the year ended December 31, 1994, compared with a loss of $8,743 for the year
ended December 31, 1993, reflecting the Partnership's 24% share in the Laurel
View tract. The losses were due primarily to the lack of timber sales and to
the Joint Venture's normal operating expenses and its costs associated with the
development of a land use plan for the Laurel View tract.
Item 8. Financial Statements and Supplementary Data
Incorporated by reference to the Partnership's Annual Report to Unitholders for
the year ended December 31, 1995.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Registrant has no officers or directors. The General Partner manages and
controls substantially all of the Partnership's affairs and has general
responsibility and ultimate authority in all matters affecting the
Partnership's business.
On July 31, 1993, Shearson Lehman Brothers, Inc. ("Shearson") sold certain of
its domestic retail brokerage and asset management businesses to Smith Barney,
Harris Upham & Co. Incorporated ("Smith Barney"). Subsequent to the sale,
Shearson changed its name to Lehman Brothers Inc. The transaction did not
affect ownership of the Partnership or the General Partner. However, the
assets acquired by Smith Barney included the name "Hutton." Consequently,
effective November 22, 1993, the General Partner changed its name to Southern
Timber Resources Corp. to delete any reference to "Hutton." In addition,
effective June 8, 1994, the Partnership changed its name to Southern Timber
Partners I.
Certain officers and directors of the General Partner are now serving (or in
the past have served) as officers or directors of entities which act as general
partners of a number of real estate limited partnerships which have sought
protection under provisions of the Federal Bankruptcy Code. The partnerships
which have filed bankruptcy petitions own real estate which has been adversely
affected by the economic conditions in the markets in which that real estate is
located and, consequently, the partnerships sought the protection of the
bankruptcy laws to protect the partnerships' assets from loss through
foreclosure.
The director and executive officers of the General Partner are as
follows:
Name Office
Paul L. Abbott Director, President and Chief Financial Officer
Kate D. Hobson Vice President
Paul L. Abbott, 50, is a Managing Director of Lehman Brothers. Mr. Abbott
joined Lehman Brothers in August 1988, and is responsible for investment
management of residential, commercial and retail real estate. Prior to joining
Lehman Brothers, Mr. Abbott was a real estate consultant and a senior officer
of a privately held company specializing in the syndication of private real
estate limited partnerships. From 1974 through 1983, Mr. Abbott was an officer
of two life insurance companies and a director of an insurance agency
subsidiary. Mr. Abbott received his formal education in the undergraduate and
graduate schools of Washington University in St. Louis.
Kate D. Hobson, 29, is an Assistant Vice President of Lehman Brothers and has
been a member of the Diversified Asset Group since 1992. Prior to joining
Lehman Brothers, Ms. Hobson was associated with Cushman & Wakefield serving as
a real estate accountant from 1990 to 1992. Prior to that, Ms. Hobson was
employed by Cambridge Systematics, Inc. as a junior land planner. Ms. Hobson
received a B.A. degree in sociology from Boston University in 1988.
Item 11. Executive Compensation
All of the directors and executive officers of the General Partner are
employees of Lehman. They do not receive any salaries or other compensation
from the Partnership. See Item 13 below with respect to a description of
certain transactions of the General Partners with the Partnership.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security ownership of certain beneficial owners*
Name and address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership of Class
Units of Limited Southern Timber 2,008 Units owned 5.02%
Partnership Interest Resources Corp. beneficially and of record
c/o First Data Investor
Services Group
P.O. Box 1527
Boston, MA 02104
*The Restated Agreement of Limited Partnership of the Registrant limits the
voting power of the limited partners to the following matters: (a) removal and
replacement of the General Partner, (b) dissolution of the Registrant before
December 31, 1996, (c) material amendments to the Agreement of Limited
Partnership and (d) the sale or other disposition at one time of all or
substantially all of the Registrant's assets. Such matters must be approved by
at least a majority interest of the limited partners.
(b) Security ownership of management
As of December 31, 1995 no director or officer of the General Partner owned
any of the Units of the Registrant.
(c) Changes in control
None.
Item 13. Certain Relationships and Related Transactions
Reference is made to Note 4 of the Financial Statements of the Partnership's
1995 Annual Report to Unitholders for information regarding fees paid to the
General Partner and its affiliates.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(1) Financial Statements
Page
Balance Sheets at December 31, 1995 and 1994 (1)
Statements of Operations for the years ended
December 31, 1995, 1994, and 1993 (1)
Statements of Partners' Capital (Deficit) for
the years ended December 31, 1995, 1994, and 1993 (1)
Statements of Cash Flows for the years ended
December 31, 1995, 1994, and 1993 (1)
Notes to the Financial Statements (1)
Report of Independent Auditors (1)
(1) Incorporated by reference to the Partnership's Annual Report to
Unitholders for the year ended December 31, 1995.
(2) Financial Statement Schedules
All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable, and therefore have
been omitted.
(3) Exhibits
The following exhibits are being filed as a part of this report.
Documents other than those designated as being filed herewith are
incorporated herein by reference.
3 Restated Agreement of Limited Partnership of the Registrant (filed
as Exhibit 3(b) to Registration Statement on Form S-11, No. 2-73838
and incorporated herein by reference).
4 Specimen Certificate for Unit of Limited Partnership (filed as
Exhibit 4 to Annual Report on Form 10-K for the fiscal year ended
December 31, 1981 (the "1981 Annual Report") and incorporated herein
by reference).
10.1 Mortgage and Security Agreement dated January 14, 1982 between
Timber Properties and John Hancock Mutual Life Insurance Company
(filed as Exhibit 10.5 to the 1981 Annual Report and incorporated
herein by reference).
10.2 Promissory Note dated January 14, 1982 between Timber Properties and
John Hancock Mutual Life Insurance Company (filed as Exhibit 10.6 to
the 1981 Annual Report and incorporated herein by reference).
10.3 Timber Cutting and Release Agreement dated January 14, 1982 between
Timber Properties and John Hancock Mutual Life Insurance Company
(filed as Exhibit 10.7 to the 1981 Annual Report and incorporated
herein by reference).
10.4 Assumption Agreement dated January 21, 1982 between Timber
Properties and the Registrant (filed as Exhibit 10.8 to the 1981
Annual Report and incorporated herein by reference).
10.5 Agreement for the Purchase and Sale of Timberlands, dated as of
May 17, 1983, among the Registrant, Franz Koerling and Ticor Title
Insurance Company (filed as Exhibit 10.8 to Annual Report on Form
10-K for the fiscal year ended December 31, 1983 (the "1983 Annual
Report") and incorporated herein by reference).
10.6 Mortgage Extension Agreement dated November 8, 1991 between Timber
Properties and John Hancock Mutual Life Insurance Company (filed as
Exhibit 10.6 to Annual Report on Form 10-K for the fiscal year ended
December 31, 1991 and incorporated herein by reference).
13.1 Annual Report to Unitholders for the year ended December 31, 1995.
27 Financial Data Schedule
28.1 Prospectus, dated October 30, 1981, as supplemented January 5, 1982
and January 12, 1982 (filed as Exhibit 28.1 to Annual Report on Form
10-K for the fiscal year ended December 31, 1982 (the "1982 Annual
Report") and incorporated herein by reference).
28.2 Current Report on Form 8-K, dated August 16, 1982 (filed as Exhibit
28.2 to the 1982 Annual Report and incorporated herein by
reference).
28.3 Current Report on Form 8-K, dated September 6, 1983 (filed as
Exhibit 28.3 to the 1983 Annual Report and incorporated herein by
reference).
(4) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of calendar
year 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: March 28, 1996
SOUTHERN TIMBER PARTNERS I
BY: Southern Timber Resources Corp.
General Partner
BY: /s/ Paul L. Abbott
Name: Paul L. Abbott
Title: Director, President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
SOUTHERN TIMBER RESOURCES CORP.
General Partner
Date: March 28, 1996
BY: /s/ Paul L. Abbott
Paul L. Abbott
Director, President and
Chief Financial Officer
Date: March 28, 1996
BY: /s/ Kate Hobson
Kate Hobson
Vice President
EXHIBIT 13.1
Southern Timber Partners I
1995 Annual Report
Southern Timber Partners I is a limited partnership formed in 1981 to invest in
timberland in the southeastern United States. At December 31, 1995, the
Partnership's properties consisted of approximately 5,947 acres of timberland
in Florida and a 24% share of a 1,709 acre tract in Georgia.
Administrative Inquiries Performance Inquiries/Form 10-Ks
Address Changes/Transfers First Data Investor Services Group
Service Data Corporation P.O. Box 1527
2424 South 130th Circle Boston, Massachusetts 02104-1527
Omaha, Nebraska 68144-2596 Attn: Financial Communications
800-223-3464 (select option 1) 800-223-3464 (select option 2)
Presented for your review is the 1995 Annual Report for Southern Timber
Partners I (the "Partnership"). This report includes an update on our efforts
to sell the Estes Tract which intensified during 1995. Also included is a
discussion regarding our future strategy for marketing the Laurel View Tract.
Following this letter is a profile of the Partnership's two remaining tracts.
Estes Tract
We are pleased to announce that the Partnership sold a total of 2,068 acres
during 1995 for aggregate net sales proceeds of $1,259,054. Early in the year,
the Partnership completed three sales of timberland totalling 1,751 acres. In
the fourth quarter of 1995, the Partnership completed a sale of 156 acres and a
second sale of 161 acres. The proceeds received from these sales, less selling
costs and other related expenses, were added to the Partnership's cash
reserves. Additionally, the Partnership announced it had negotiated and signed
a purchase and sale agreement for 1,290 acres with the State of Florida. The
sale is subject to a due diligence period expiring in June, during which time
the State of Florida can rescind the offer to purchase with no further
obligation. On March 6, 1996, the Partnership entered into a second purchase
and sale agreement with the State of Florida for the remainder of the Estes
tract. This sale is also subject to final approval of both parties as wel l as
a due diligence period. If and when these two sales close, the Partnership's
only remaining tract of land will be its 24% interest in the Laurel View Tract.
Laurel View Tract
The Laurel View tract is a 1,709 acre site located approximately 30 miles south
of Savannah, Georgia. The Partnership owns a 24% interest in the tract with
the remaining interest owned by Southern Timber Partners 2, an affiliated
partnership. After careful analysis, the General Partner has determined that
the highest and best use for the tract is as a development site rather than
timberland. This decision was reached after closely monitoring market
conditions and considering several of the property's features that make it
attractive to developers, such as the extension of sewer and water services
near the site by a local municipality, the tract's proximity to a major
interstate highway, its coastal location and its frontage along two rivers.
Accordingly, the General Partner intends to market the tract for its
development potential. Given that the Laurel View Tract is currently raw land
containing few developments or improvements and produces no income other than
from the sale of timber, the General Partner anticipates that it will take time
to secure an appropriate buyer for the property. The pool of prospective
buyers for real estate of this type and size is limited. Furthermore, the
value of the tract and the Partnership's ability to sell the tract will largely
depend upon the pace of development in the surrounding area. The General
Partner has created a comprehensive marketing plan for the tract and will begin
actively marketing the land during 1996. However, there is no assurance that a
sale will be consummated prior to the end of 1996.
Financial Highlights
For the years ended December 31,
1995 1994 1993 1992 1991
Total Assets $7,313,003 $8,746,730 $9,153,160 $10,122,749 $11,113,276
Total Income 198,138 633,800 1,565,892 1,412,029 164,862
Net Income (Loss) 51,663 (370,171) 446,616 586,732 (317,889)
Net Income (Loss)
per Unit .91 (9.16) 10.81 14.52 (8.71)
Long-term Obligations - - - - 1,568,519
Distributions
per Unit 38.00 - 35.00 - -
For the year ended December 31, 1995, total income declined due to the fact
that no timber was sold in 1995. The change from net loss in 1994 to net
income in 1995 is primarily the result of a $570,000 loss on the write-down of
timber that occurred in 1994 and the recognition of $193,259 of depletion
expense also in 1994.
Net Asset Value
As of December 31, 1995, based on the appraised value of the tracts and taking
into account the Partnership's other assets and liabilities, the General
Partner has determined the Net Asset Value to be $168.38 per $331 limited
partnership Unit. Limited Partners should note that appraisals are only
estimates of current value and actual values realizable upon sale may be
substantially different. Significant factors in establishing an appraised
value are the actual selling price for tracts which the appraiser believes are
comparable and the rates used by the appraiser to estimate timber growth.
Because of the nature of the Partnership's properties, there can be no
assurance that the other tracts reviewed by the appraiser are comparable.
Additionally, the appraised value does not reflect the actual costs which would
be incurred in selling the tracts. As a result of these factors and the
illiquid nature of an investment in Units of the Partnership, the variation
between the appraised va lue of the Partnership's tracts and the price at which
Units of the Partnership could be sold is likely to be significant.
Fiduciaries of Limited Partners which are subject to ERISA or other provisions
of law requiring valuation of Units should consider all relevant factors,
including, but not limited to the Net Asset Value, in determining the fair
market value of the investment in the Partnership for such purposes.
Summary
In the coming year, the General Partner will endeavor to close the sales of the
Estes Tract to the State of Florida and will begin actively marketing the
Laurel View Tract for its development potential. However, there is no
assurance that the Partnership will consummate a sale prior to December 31,
1996, the Partnership's termination date. If the General Partner is unable to
secure a buyer for the Laurel View tract before that time, or should the sale
of the Estes Tract to the State of Florida not be completed before the end of
the year, the General Partner may extend the life of the Partnership beyond the
termination date if it is determined that a sale of the Partnership's assets at
that time would cause undue loss to the partners. We will keep you apprised of
our progress in future reports.
Very truly yours,
Southern Timber Partners I
By: Southern Timber Resources Corp.
General Partner
/s/ Paul L. Abbott
By: Paul L. Abbott
President
March 27, 1996
TRACT PROFILES
Estes Tract
Acres: 5,947 at December 31, 1995
Location: Santa Rosa County, Florida (20 miles northeast of
Pensacola)
Purchase Price: $12,500,000 ($4,800,000 cash and $7,700,000 first
mortgage for which the final payment was made in
December 1992)
Purchase Date: January 14, 1982
1995 Appraised Value: $3,897,000 ($1,673,000 - timberland, $2,224,000 -
timber) (A)
Timber Stands: 63% merchantable and shelterwood stands, 23%
premerchantable, 4% clear cut and non-merchantable
Laurel View Tract
(This tract is owned as part of a joint venture between Southern Timber
Partners I and Southern Timber Partners 2. Southern Timber Partners I owns a
24% interest in the joint venture.)
Acres: 1,709
Location: Liberty County, Georgia bordering Laurel View River and
Jones Creek (approximately 30 miles south of Savannah)
Purchase Price: $5,721,261 (cash)
Purchase Date: September 30, 1987
1994 Appraised Value: $6,300,000 ($5,300,000 - timberland, $1,000,000 -
timber) (A)
Timber Stands: 68% merchantable, 10% premerchantable,
22% non-merchantable
Note A: Appraised value does not consider the revenue derived from previous
timber cuttings and timberland already sold from the tract.
merchantable - timber which is generally fifteen years and older and suitable
for current harvesting
premerchantable - timber which is less than fifteen years old and not suitable
for current harvesting
clear-cut - timberland on which all the timber has been harvested
Balance Sheets
December 31, 1995 and 1994
Assets 1995 1994
Timber and timberland, at cost $6,987,505 $9,174,377
Less-accumulated depletion (2,806,428) (3,814,004)
Net timber and timberland 4,181,077 5,360,373
Cash and cash equivalents 1,683,209 1,428,986
Accounts receivable - 515,767
Prepaid insurance 4,813 5,922
Due from related parties 8,250 2,472
Investment in joint venture 1,435,654 1,433,210
Total Assets $7,313,003 $8,746,730
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $23,854 $31,308
Due to affiliates 201,624 145,834
Total Liabilities 225,478 177,142
Partners' Capital (Deficit):
General Partner (45,263) (45,263)
Limited Partners (40,000 units outstanding) 7,132,788 8,614,851
Total Partners' Capital 7,087,525 8,569,588
Total Liabilities and Partners' Capital $7,313,003 $8,746,730
Statements of Partners' Capital (Deficit)
For the years ended December 31, 1995, 1994 and 1993
Limited General
Partners Partner Total
Balance at December 31, 1992 $9,950,472 $(41,561) $9,908,911
Net income 432,475 14,141 446,616
Cash distributions (1,400,000) (14,141) (1,414,141)
Balance at December 31, 1993 8,982,947 (41,561) 8,941,386
Net Loss (366,469) (3,702) (370,171)
Distributions to foreign limited partners (1,627) - (1,627)
Balance at December 31, 1994 8,614,851 (45,263) 8,569,588
Net Income 36,310 15,353 51,663
Cash distributions (1,518,373) (15,353) (1,533,726)
Balance at December 31, 1995 $7,132,788 $(45,263) $7,087,525
See accompanying notes to the financial statements.
Statements of Operations
For the years ended December 31, 1995, 1994 and 1993
Income 1995 1994 1993
Timber sales $- $438,094 $1,571,888
Gain (loss) on sales of timberland 79,758 148,190 (38,102)
Interest 107,205 39,161 26,451
Other 11,175 8,355 5,655
Total Income 198,138 633,800 1,565,892
Expenses
Depletion - 438,094 1,571,888
Property operating 75,666 156,074 175,763
General and administrative 73,253 70,519 64,773
Loss on write-down of timberland - 570,000 -
Total Expenses 148,919 989,852 1,110,533
Income (loss) from operations 49,219 (356,052) 455,359
Other Income (Loss)
Income (loss) from joint venture 2,444 (14,119) (8,743)
Net Income (Loss) $51,663 $(370,171) $446,616
Net Income (Loss) Allocated:
To the General Partner $15,353 $(3,702) $14,141
To the Limited Partners 36,310 (366,469) 432,475
$51,663 $(370,171) $446,616
Per limited partnership unit
(40,000 outstanding) $.91 $(9.16) $10.81
Statements of Cash Flows
For the years ended December 31, 1995, 1994 and 1993
Cash Flows from Operating Activities: 1995 1994 1993
Net income (loss) $51,663 $(370,171) $446,616
Adjustments to reconcile net income (loss) to net cash
provided by (used for) operating activities:
Loss on write-down of timberland - 570,000 -
Depletion - 193,259 869,997
(Gain) loss on sales of timberland (79,758) (148,190) 38,102
(Income) loss from joint venture (2,444) 14,119 8,743
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Accounts receivable 515,767 (515,767) -
Prepaid insurance 1,109 (5,922) -
Due from related parties (5,778) (2,472) -
Accounts payable and accrued expenses (7,454) (8,835) (3,445)
Due to affiliates 55,790 (25,797) 1,381
Net cash provided by (used for)
operating activities 528,895 (299,776) 1,361,394
Cash Flows from Investing Activities:
Proceeds from sales of timberland 1,259,054 1,080,461 282,794
Net cash provided by investing activities 1,259,054 1,080,461 282,794
Cash Flows from Financing Activities:
Distributions - income tax withholdings
for foreign partners - (1,627) -
Cash distributions paid (1,533,726) - (1,414,141)
Net cash used for financing activities (1,533,726) (1,627)(1,414,141)
Net increase in cash and cash equivalents 254,223 779,058 230,047
Cash and cash equivalents at beginning of period1,428,986 649,928 419,881
Cash and cash equivalents at end of period $1,683,209 $1,428,986 $649,928
Notes to the Financial Statements
December 31, 1995, 1994 and 1993
1. Organization
Southern Timber Partners I (the "Partnership"), formerly Hutton Southern Timber
Partners I, was organized as a limited partnership under the laws of the State
of Georgia pursuant to a Certificate and Agreement of Limited Partnership (the
"Partnership Agreement") dated and filed on June 15, 1981. The general partner
is Southern Timber Resources Corp. (the "General Partner"), formerly Hutton
Timber Resources Corp., a Delaware corporation. The Partnership was formed for
the purpose of making investments in timberland and timber cutting rights in
the Southeastern United States. The Partnership will continue until December
31, 1996, unless terminated sooner in accordance with the terms of the
Partnership Agreement. However, the Partnership Agreement states that the
General Partner can extend the life of the Partnership beyond the termination
date if it is determined that a sale of the timberland at that time would cause
undue loss to the partners.
On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of its domestic
retail brokerage and management businesses to Smith Barney, Harris Upham & Co.
Incorporated ("Smith Barney"). Subsequent to the sale, Shearson Lehman
Brothers Inc. changed its name to Lehman Brothers Inc. ("Lehman Brothers").
The transaction did not affect the ownership of the general partner. However,
the assets acquired by Smith Barney included the name "Shearson" and the name
"Hutton." Consequently, the names of the Partnership and the General Partner
were changed to Southern Timber Partners I and Southern Timber Resources Corp.,
respectively, to delete any reference to "Hutton."
On February 16, 1996, based upon, among other things, the advice of Partnership
counsel, Skadden, Arps, Slate, Meagher & Flom, the General Partner adopted a
resolution that states, among other things, if a Change of Control (as defined
below) occurs, the General Partner may distribute the Partnership's cash
balances not required for its ordinary course day-to-day operations. "Change
of Control" means any purchase or offer to purchase more than 10% of the Units
that is not approved in advance by the General Partner. In determining the
amount of the distribution, the General Partner may take into account all
material factors. In addition, the Partnership will not be obligated to make
any distribution to any partner and no partner will be entitled to receive any
distribution until the General Partner has declared the distribution and
established a record date and distribution date for the distribution. The
Partnership filed a Form 8-K disclosing this resolution on February 26, 1996.
2. Significant Accounting Policies
Basis of Accounting The accompanying financial statements have been prepared
on the accrual basis of accounting in accordance with generally accepted
accounting principles. Revenues are recognized as earned and expenses are
recorded as obligations are incurred.
Timberland Investments Timberland investments include the initial purchase
price of the property, closing costs, acquisition and legal fees, as well as
land improvements and reforestation costs.
Depletion of timberlands is provided by applying a cost per cord utilizing
estimates of total recoverable timber from each tract. Such estimates are
revised annually to account for additional growth.
During 1994 the Partnership wrote down the net book value of timberland by
$570,000 as management believed that approximately $570,000 of the decline in
the property's value was other than temporary. The carrying value of the
property was reduced accordingly.
Accounting for Impairment In March 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of " ("FAS 121"), which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. FAS 121 also addresses the accounting
for long-lived assets that are expected to be disposed of. The Partnership
adopted FAS 121 in the fourth quarter of 1995. Based on current
circumstances, the adoption of FAS 121 had no impact on the financial
statements.
Cash Equivalents Cash equivalents consist of short-term, highly liquid
investments with maturities of three months or less from the date of issuance.
The carrying amount approximates fair value because of the short maturity of
these investments.
Concentration of Credit Risk Financial instruments which potentially subject
the Partnership to a concentration of credit risk principally consist of cash
in excess of the financial institutions' insurance limits. The Partnership
invests available cash with high credit quality financial institutions.
Investment in Joint Venture The Partnership accounts for its investment in the
Joint Venture under the equity method of accounting.
Income Taxes No provision for income taxes has been made in the financial
statements since such taxes are the responsibility of the individual partners
rather than that of the Partnership.
Use 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.
During 1995 the General Partner executed a purchase and sale agreement to sell
a portion of the Estes Tract and entered into negotiations for a second sale
from the Estes Tract. The final determination as to whether the Partnership
will sell the Estes Tract pursuant to the purchase and sale agreements will be
resolved during 1996.
The ownership and operation of timber properties involves a number of risks,
among others, changes in governmental regulations, fire hazards, insect damage,
diseases and timber theft, and risks of market fluctuations. The General
Partner believes the employment of good forestry management practices helps to
ameliorate the physical risks of timber investments, however, these risks
cannot be eliminated entirely.
3. Partnership Allocations
Distribution of Partnership Funds Net cash from operations and net proceeds
from sales will be distributed from time to time at the discretion of the
General Partner, 99% to the Limited Partners and 1% to the General Partner
until each Limited Partner has received an amount equal to an 8% cumulative
annual return on his adjusted capital value, as defined, plus an amount equal
to 100% of his adjusted capital value. Thereafter, cash distributions will be
distributed 85% to the Limited Partners and 15% to the General Partner.
Allocation of Income and Loss All income shall be allocated each year to the
General Partner in an amount equal to the net cash from operations distributed
or distributable and net proceeds from sales distributed or distributable to
the General Partner for such year. The balance shall be allocated to the
Limited Partners, pro rata, in accordance with their ownership of units. If
for any year, no net cash from operations and net proceeds from sales are
distributed or distributable to the General Partner, any income for such year
shall be allocated 99% to the Limited Partners, and 1% to the General Partner.
All losses, including losses from the sale of properties, shall be allocated
99% to the Limited Partners and 1% to the General Partner.
Dissolution of Partnership If, upon dissolution of the Partnership, the
General Partner has a negative capital account, it shall contribute capital
equal to the amount of the deficit. In no event, however, shall the required
capital contribution exceed 1% of the total capital contributed by the Limited
Partners.
4. Transactions with Related Parties
Amounts earned by the General Partner and its affiliates for management and
supervisory fees totalled $56,769, $108,733 and $131,527 for the years ended
December 31, 1995, 1994 and 1993, respectively. Amounts earned by the General
Partner and its affiliates are included in property operating and general and
administrative expenses.<PAGE>
5. Sales of Timberland
During 1995, the Partnership made the following sales of timberland:
Net Gain
Acres Selling (Loss)
Date Tract Sold Price on Sale
February 27, 1995 Estes 882 $441,264 $ -
February 27, 1995 Estes 133 89,570 -
June 13, 1995 Estes 383 186,822 (8,648)
September 12, 1995 Estes 353 245,729 13,337
December 14, 1995 Estes 156 134,603 11,767
December 20, 1995 Estes 161 161,066 63,302
$1,259,054 $79,758
During 1994, the Partnership made the following sales of timberland:
Net Gain
Acres Selling on
Date Tract Sold Price Sale
June 13, 1994 Estes 603 $552,344 $49,463
December 29, 1994 Estes 720 528,117 98,727
$1,080,461 $148,190
During 1993, the Partnership made the following sales of timberland:
Net Loss
Acres Selling on
Date Tract Sold Price Sale
June 3, 1993 Thompson 200 $110,467 $(36,787)
June 10, 1993 Forth & McNeely 298 172,327 (1,315)
$282,794 $(38,102)
6. Investment in Joint Venture
On October 13, 1987, the Partnership contributed land with a fair market value
of $946,676 to a newly formed joint venture, Southern Timber Venture Partners 1
(the "Joint Venture"), formerly Hutton Timber Venture Partners 1, in exchange
for a 24% interest in the profits, losses and distributable cash from the Joint
Venture. An affiliated partnership, Southern Timber Partners 2, formerly
Hutton Southern Timber Partners 2, contributed $3,011,417 in cash in exchange
for the remaining 76% interest. The purpose of the Joint Venture is to manage,
maintain and commercially exploit the acquired property in a manner consistent
with each coventurer's objectives for investment. The Joint Venture Agreement
provides that all major decisions, as defined, must be approved by each of the
coventurers.
On October 15, 1987, the aforementioned contributions were substantially
applied to the acquisition of the Laurel View Tract, located in Liberty County,
Georgia, totalling 1,709 acres. In order to pay off a Joint Venture promissory
note in 1988, the Partnership contributed $469,559 or 24% of total principal
and interest due. The remainder was contributed by Southern Timber Partners 2.
For the year ended December 31, 1995, the Joint Venture recognized net income
of $10,186 due primarily to timber sales partially offset by the Joint
Venture's normal operating expenses. For the years ended December 31, 1994 and
December 31, 1993, the Joint Venture recognized net losses of $58,831 and
$36,429 respectively, due primarily to the lack of timber sales.
The General Partner has created a comprehensive marketing plan for the tract
and will begin actively marketing the land during 1996. However, there is no
assurance that a sale will be consummated prior to the end of 1996.
The Joint Venture's balance sheets at December 31, 1995 and 1994 and statements
of operations for the three years ended December 31, 1995, 1994 and 1993 are as
follows:
Balance Sheets
December 31, 1995 and 1994
Assets 1995 1994
Net timberland $5,949,788 $5,977,409
Cash 37,152 5,521
Total Assets $5,986,940 $5,982,930
Liabilities and Partners' Capital
Liabilities:
Accounts payable $- $250
Due to affiliates 5,040 10,966
Total Liabilities 5,040 11,216
Partners' Capital:
Southern Timber Partners I 1,435,654 1,433,210
Southern Timber Partners 2 4,546,246 4,538,504
Total Partners' Capital 5,981,900 5,971,714
Total Liabilities and Partners' Capital $5,986,940 $5,982,930
Statements of Operations
For the years ended December 31, 1995, 1994 and 1993
Income 1995 1994 1993
Timber sales $93,776 $- $-
Interest 3,410 1,785 2,602
Other 4,900 5,000 5,000
Total Income 102,086 6,785 7,602
Expenses
Depletion 27,621 - -
Property operating 62,523 37,553 42,408
General and administrative 1,756 28,063 1,623
Total Expenses 91,900 65,616 44,031
Net Income (Loss) $10,186 $(58,831) $(36,429)
7. Reconciliation of Net Income (Loss) to Taxable Income
For the years ended December 31, 1995, 1994 and 1993 taxable income of
approximately $51,000, $200,000 and $447,000 respectively, was reported to the
partners compared to net income (loss) of approximately $52,000, ($370,000) and
$447,000, respectively reported in the financial statements. The difference in
1994 of $570,000 resulted from the property write-down as discussed in Note 2.
The Partners Southern
Timber Partners I
We have audited the accompanying balance sheets of Southern Timber Partners I
as of December 31, 1995 and 1994 and the related statements of operations,
partners' capital (deficit) and cash flows for each of the three years in the
period ended December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Southern Timber Partners I at
December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts
January 22, 1996,
except for Note 1, as to which the date is
February 16, 1996
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,683,209
<SECURITIES> 0
<RECEIVABLES> 8,250
<ALLOWANCES> 0
<INVENTORY> 0
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<PP&E> 6,987,505
<DEPRECIATION> 2,806,428
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0
0
<OTHER-SE> 7,087,525
<TOTAL-LIABILITY-AND-EQUITY> 7,313,003
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<TOTAL-REVENUES> 200,582
<CGS> 0
<TOTAL-COSTS> 75,666
<OTHER-EXPENSES> 73,253
<LOSS-PROVISION> 0
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