Southern Timber Partners I
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, 1996
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
Delaware 56-1303554
State or Other Jurisdiction
of Incorporation or Organization I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn.: Andre Anderson 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 ____
Balance Sheets At March 31, At December 31,
1996 1995
Assets
Timber and timberland, at cost: $6,987,505 $6,987,505
Less accumulated depreciation (2,806,428) (2,806,428)
4,181,077 4,181,077
Cash and cash equivalents 1,703,063 1,683,209
Prepaid insurance 1,375 4,813
Due from related parties _ 8,250
Investment in joint venture 1,433,588 1,435,654
Total Assets $7,319,103 $7,313,003
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $33,365 $23,854
Due to affiliates 215,145 201,624
Total liabilities 248,510 225,478
Partners' Capital (Deficit):
General Partner (45,432) (45,263)
Limited Partners (40,000 units outstanding) 7,116,025 7,132,788
Total Partners' Capital 7,070,593 7,087,525
Total Liabilities and Partners' Capital $7,319,103 $7,313,003
Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1996
Limited General
Partners Partner Total
Balance at December 31, 1995 $7,132,788 $(45,263) $7,087,525
Net loss (16,763) (169) (16,932)
Balance at March 31, 1996 $7,116,025 $(45,432) $7,070,593
Statements of Operations
For the three months ended March 31, 1996 1995
Income
Interest $22,671 $30,498
Other 240 650
Total income 22,911 31,148
Expenses
Property operating 19,459 22,291
General and administrative 18,318 9,708
Total expenses 37,777 31,999
Loss from operations (14,866) (851)
Other Income (Loss)
Income (loss) from joint venture (2,066) 5,036
Net Income (Loss) $(16,932) $4,185
Net Income (Loss) Allocated:
To the General Partner $(169) $42
To the Limited Partners (16,763) 4,143
$(16,932) $4,185
Per limited partnership unit
(40,000 outstanding) $(.42) $.10
Statements of Cash Flows
For the three months ended March 31, 1996 1995
Cash Flows From Operating Activities
Net income (loss) $(16,932) $4,185
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
(Income) loss from joint venture 2,066 (5,036)
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Accounts receivable - 514,447
Prepaid insurance 3,438 2,538
Due from related parties 8,250 (421)
Accounts payable and accrued expenses 9,511 (10,450)
Due to affiliates 13,521 14,775
Net cash provided by operating activities 19,854 520,038
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)
Net cash used for financing activities - (744)
Net increase in cash and cash equivalents 19,854 1,050,128
Cash and cash equivalents, beginning of period 1,683,209 1,428,986
Cash and cash equivalents, end of period $1,703,063 $2,479,114
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1995 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of March 31, 1996 and the results of operations and cash flows for
the three months ended March 31, 1996 and 1995 and the statement of partners'
capital (deficit) for the three months ended March 31, 1996. Results of
operations for the period are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to fiscal year 1995, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources
At March 31, 1996, the Partnership's cash balance totaled $1,703,063, compared
to $1,683,209 at December 31, 1995. The increase is primarily due to the
receipt of interest income. 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 Partner is currently evaluating the Partnership's cash needs and
will consider distributing a portion of the cash balance later in 1996.
Accounts payable and accrued expenses at March 31, 1996 was $33,365, compared
to $23,854 at December 31, 1995. The increase is primarily attributable to the
accrual of audit fees and real estate taxes.
The Partnership currently owns approximately 5,947 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 greater value would be realized if sold as a
development site due to its coastal location and close proximity to major
interstate highways. It is expected that the General Partner will begin
actively marketing the tract during 1996.
On February 6, 1996, the Partnership executed a purchase and sale agreement
with the State of Florida for a sale of 1,290 acres of the Estes Tract. The
sale is subject to a due diligence period expiring in June. 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 subject to
final approval of both parties as well as a due diligence period which expires
in July. Since the State of Florida can rescind either offer to purchase with
no further obligation at any time during the due diligence period, there can be
no assurance that either sale will occur.
Results of Operations
The Partnership's operations resulted in a net loss of $16,932 for the three
months ended March 31, 1996 and net income of $4,185 for the three months ended
March 31, 1995. The change from net income in 1995 to net loss in 1996 is
primarily attributable to the lack of timber sales income from the Joint
Venture, a reduction in interest income and higher legal and professional
expenses in 1996 as compared to 1995.
Interest income totaled $22,671 for the three months ended March 31, 1996,
compared to $30,498 for the corresponding period in 1995. The decrease is
primarily the result of a lower cash balance in 1996.
General and administrative expenses for the three months ended March 31, 1996
and 1995 were $18,318 and $9,708, respectively. The increase is primarily due
to higher legal and professional fees.
The Partnership recognized a loss from Joint Venture of $2,066 for the three
months ended March 31, 1996, compared with income of $5,036 for the three
months ended March 31, 1995. 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 1996 is 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 -
(27) Financial Data Schedule
(b) Reports on Form 8-K - The following report on
Form 8-K was filed during the quarter ended March 31, 1996:
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.
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 6, 1996 BY: /s/ Paul L. Abbott
Director, President and
Chief Financial Officer
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<PERIOD-END> Mar-31-1996
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