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 September 30, 1997
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
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 September 30, At December31,
1997 1996
Assets
Timber and timberland, at cost: $ 0 $ 6,987,505
Less accumulated depletion 0 (2,806,428)
Net timber and timberland 0 4,181,077
Cash and cash equivalents 467,901 431,448
Prepaid insurance 4,045 2,450
Due from related parties 10,058 10,058
Investment in joint venture 1,416,611 1,426,609
----------- -----------
Total Assets $ 1,898,615 $ 6,051,642
=========== ===========
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 35,470 $ 14,400
Due to affiliates 126,440 136,129
----------- -----------
Total Liabilities 161,910 150,529
----------- -----------
Partners' Capital (Deficit):
General Partner (57,127) (57,127)
Limited Partners (40,000 units outstanding) 1,793,832 5,958,240
----------- -----------
Total Partners' Capital 1,736,705 5,901,113
----------- -----------
Total Liabilities and Partners' Capital $ 1,898,615 $ 6,051,642
=========== ===========
Statement of Partners' Capital (Deficit)
For the nine months ended September 30, 1997
General Limited
Partner Partners Total
Balance at December 31, 1996 $ (57,127) $ 5,958,240 $ 5,901,113
Cash distributions (40,404) (4,000,000) (4,040,404)
Net (Income) loss 40,404 (164,408) (124,004)
--------- ----------- -----------
Balance at September 30, 1997 $ (57,127) $ 1,793,832 $ 1,736,705
========= =========== ===========
Statements of Operations
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
Income
Loss on sales of timberland $ 0 $ 0 $ (23,777) $ 0
Interest 5,512 12,419 33,118 57,300
Other 745 170 2,405 2,980
---------- --------- ---------- ---------
Total Income 6,257 12,589 11,746 60,280
---------- --------- ---------- ---------
Expenses
Property operating 10,515 17,491 36,584 54,929
General and administrative 35,198 34,125 89,168 65,089
---------- --------- ---------- ----------
Total Expenses 45,713 51,616 125,752 120,018
---------- --------- ---------- ----------
Loss from operations (39,456) (39,027) (114,006) (59,738)
---------- --------- ---------- ----------
Other Loss
Loss from joint venture (2,801) (1,773) (9,998) (5,879)
---------- --------- ---------- ----------
Net Loss $ (42,257) $ (40,800) $ (124,004) $ (65,617)
========== ========= ========== ==========
Net Income (loss) Allocated:
To the General Partner $ 41,221 $ (408) $ 40,404 $ (656)
To the Limited Partners (83,478) (40,392) (164,408) (64,961)
---------- --------- ---------- ----------
$ (42,257) $ (40,800) $ (124,004) $ (65,617)
========== ========= ========== ==========
Per limited partnership unit
(40,000 outstanding) $(2.09) $(1.01) $(4.11) $(1.62)
Statements of Cash Flows
For the nine months ended September 30, 1997 1996
Cash Flows From Operating Activities
Net loss $ (124,004) $ (65,617)
Adjustments to reconcile net loss to net cash
used for operating activities:
Loss on sales of timberland 23,777 0
Loss from joint venture 9,998 5,879
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Prepaid insurance (1,595) 895
Due from related parties 0 8,250
Accounts payable and accrued expenses 21,070 8,201
Due to affiliates (9,689) (52,323)
----------- -----------
Net cash used for operating activities (80,443) (94,715)
----------- -----------
Cash Flows From Investing Activities
Proceeds from land sales 4,157,300 0
----------- -----------
Net cash provided by investing activities 4,157,300 0
----------- -----------
Cash Flows From Financing Activities
Distributions (4,040,404) (1,091,000)
----------- -----------
Net cash used for financing activities (4,040,404) (1,091,000)
----------- -----------
Net increase (decrease) in cash
and cash equivalents 36,453 (1,185,715)
Cash and cash equivalents, beginning of period 431,448 1,683,209
----------- -----------
Cash and cash equivalents, end of period $ 467,901 $ 497,494
=========== ===========
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1996 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 September 30, 1997 and the results of operations for the three
and nine months ended September 30, 1997 and 1996, cash flows for the nine
months ended September 30, 1997 and 1996 and the statement of partners' capital
(deficit) for the nine months ended September 30, 1997. 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 1996,
which require disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
On April 18, 1997, the Partnership completed a sale of approximately 1,290
acres of the Estes Tract to the State of Florida for net proceeds of $1,178,870
and a net gain of approximately $8,000.
On June 19, 1997, the Partnership completed a sale of approximately 4,657 acres
of the Estes Tract to the State of Florida for net proceeds of $2,978,430 and a
net loss of approximately $32,000.
On September 18, 1997, the Partnership entered into a contract with an
unaffiliated third party for the sale of the Laurel View Tract, a 1,709 acre
tract of land owned as part of a joint venture with Southern Timber Partners 2,
for a price of $6.3 million. Southern Timber Partners I owns a 24% interest in
the Laurel View Tract.
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources
On April 18, 1997, the Partnership completed a sale of approximately 1,290
acres of the Estes Tract to the State of Florida for net proceeds of $1,178,870
and a net gain of approximately $8,000. On June 19, 1997, the Partnership
completed a sale of approximately 4,657 acres of the Estes Tract to the State
of Florida for net proceeds of $2,978,430 and a net loss of approximately
$32,000. On June 30, 1997, the Partnership paid a cash distribution to the
limited partners in the amount of $4,000,000, or $100 per Unit, representing
proceeds from the sale of the Estes Tract.
The Partnership's sole remaining timberland asset is a 24% interest in a joint
venture (the "Joint Venture") which owns the Laurel View Tract, a 1,709 acre
tract located near Savannah, Georgia. The remaining 76% interest in the Joint
Venture is owned by an affiliated partnership, Southern Timber Partners 2. The
partnerships began actively marketing the parcel for sale during 1996 and
engaged the services of CB Commercial, a national commercial real estate
brokerage firm. Following discussions with several possible buyers, on
September 18, 1997 the Partnership entered into a contract with an unaffiliated
third party for the sale of the Laurel View Tract for a price of $6.3 million.
It is currently anticipated that the sale will be consummated prior to the end
of November 1997. Thereafter, the net proceeds from the sale and cash reserves
available after payment of any remaining Partnership liabilities will be
distributed to Limited Partners and the Partnership will be dissolved. While
it is the General Partner's objective to dissolve the Partnership and make
liquidating distributions prior to the end of 1997, there can be no assurance
that the sale will be consummated as contemplated, or that a sale will result
in any particular level of distributable cash.
At September 30, 1997, the Partnership's cash balance totaled $467,901,
compared to $431,448 at December 31, 1996. The increase is primarily due to
proceeds, after distributions to the limited partners, relating to the sale of
the 1,290 acre and 4,657 acre portions of the Estes Tract. The Partnership's
cash balance, along with funds generated from future sales of timberland from
the Joint Venture, are expected to provide sufficient liquidity to enable the
Partnership to meet its operating expenses.
Accounts payable and accrued expenses totaled $35,470 at September 30, 1997,
compared to $14,400 at December 31, 1996. The higher balance in 1997 is
primarily the result of higher general and administrative expenses as discussed
below in the section titled "Results of Operations."
Due to affiliates totaled $126,440 at September 30, 1997, compared to $136,129
at December 31, 1996. The decrease is primarily due to the timing of payments.
The decrease is also due to lower administrative fees as a result of the sale
of the Estes Tract.
Results of Operations
The Partnership's operations resulted in net losses of $42,257 and $124,004 for
the three and nine months ended September 30, 1997, respectively, compared to
net losses of $40,800 and $65,617 for the corresponding periods in 1996. The
increase for the three-month period is primarily attributable to an increase in
the loss from joint venture. The increase for the nine-month period is
primarily attributable to the loss on sales of timberland, higher general and
administrative expenses and a decrease in interest income, which was partially
offset by lower property operating expenses. The increase is also attributable
to an increase in the loss from joint venture.
The Partnership generated total income of $6,257 and $11,746 for the three and
nine months ended September 30, 1997, respectively, compared to total income of
$12,589 and $60,280 for the corresponding periods in 1996. The decrease in
total income for the three-month period is primarily attributable to a decrease
in interest income, which was partially offset by an increase in other income.
The decrease in total income for the nine-month period is primarily
attributable to the loss on sales of timberland and a decrease in interest
income. Interest income totaled $5,512 and $33,118 for the three and nine
months ended September 30, 1997, respectively, compared to $12,419 and $57,300
for the corresponding periods in 1996. The decreases are primarily the result
of lower average cash balances in 1997.
Property operating expenses were $10,515 and $36,584 for the three and nine
months ended September 30, 1997, respectively, compared to $17,491 and $54,929
for the corresponding periods in 1996. The decreases are due to the sale of
the Estes Tract.
Total expenses were $45,713 and $125,752 for the three and nine months ended
September 30, 1997, compared to $51,616 and $120,018 for the corresponding
periods in 1996. The decrease for the three-month period is primarily due to
lower property operating expenses. The increase for the nine-month period is
primarily the result of higher general and administrative expenses, which were
partially offset by lower property operating expenses. General and
administrative expenses for the three and nine months ended September 30, 1997
were $35,198 and $89,168, respectively, compared to $34,125 and $65,089 for the
same periods in 1996. During the 1997 periods, certain expenses incurred by an
unaffiliated third party service provider in servicing the Partnership, which
were voluntarily absorbed by affiliates of the General Partner in prior
periods, were reimbursable to the General Partner and its affiliates.
The Partnership recognized losses from joint venture of $2,801 and $9,998 for
the three and nine months ended September 30, 1997, respectively, compared with
losses from joint venture of $1,773 and $5,879 for the corresponding periods in
1996. The increased losses from joint venture are mainly attributable to the
payment of joint venture general and administrative expenses in 1997, whereas
no such costs were incurred during 1996.
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 -
On September 25, 1997 the Partnership filed a Form 8-K
reporting that on September 18, 1997 the Partnership
entered into a contract with an unaffiliated third party
for the sale of the Laurel View Tract, a 1,709 acre tract
of land owned as part of a joint venture with Southern
Timber Partners 2.
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: November 12, 1997
BY: /s/Robert J. Hellman
Robert J. Hellman
President, Director and Chief
Financial Officer
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<PERIOD-END> Sep-30-1997
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<RECEIVABLES> 10,058
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<INCOME-CONTINUING> (124,004)
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