<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
/x/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended April 30, 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 1 - 4488
MESABI TRUST
(Exact name of registrant as specified in its charter)
New York 13-6022277
_____________________________________ ___________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
In care of Bankers Trust Company,
Corporate Trust & Agency Group
P.O. Box 318
Church Street Station
New York, New York 10015
___________________________________________ ___________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 250-6696
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 __________
At June 10, 1995, there were 13,120,010 Units of Beneficial
Interest in Mesabi Trust outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 30
---------------------
1995 1994
---- ----
<S> <C> <C>
A. Condensed Statements of Income
Revenues:
Royalty income $190,157 $209,725
Interest income 10,004 4,030
-------- --------
$200,161 $213,755
Expenses 72,991 94,319
-------- --------
Net income $127,170 $119,436
-------- --------
-------- --------
Weighted average number
of units outstanding 13,120,010 13,120,010
Net income per unit $0.009693 $0.009103
Distributions declared
per unit $ -- $ --
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
B. Condensed Balance Sheets
<TABLE>
<CAPTION>
April 30, 1995 January 31, 1995
-------------- ----------------
<S> <S>
<C>
Assets:
Cash $ 8,165 $1,442,627
U.S. Government securities,
at cost (which approximates
market) 649,803 366,650
Accrued income 143,266 177,924
Prepaid insurance 563 3,938
-------- ----------
$801,797 $1,991,139
-------- ----------
Fixed property, including
intangibles, at nominal values:
Amended Assignment of
Peters Lease $ 1 $ 1
Assignment of Cloquet Lease 1 1
Certificate of beneficial
interest for 13,120,010
units of Land Trust 1 1
-------- ---------
$ 3 $ 3
-------- ----------
$801,800 $1,991,142
-------- ----------
-------- ----------
Liabilities, Unallocated
Reserve and Trust Corpus:
Liabilities:
Distribution payable $ -- $1,312,001
Accrued expenses 23,391 41,566
-------- ----------
$ 23,391 $1,353,567
Deferred income 175,878 162,214
Unallocated reserve 602,528 475,358
Trust Corpus 3 3
-------- ----------
$801,800 $1,991,142
-------- ----------
-------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
C. Condensed Statements of Cash Flows
<TABLE>
<CAPTION>
THREE MONTHS ENDED
APRIL 30,
---------------------
1995 1994
---- ----
<C> <C>
<S>
Cash flows from operating
activities:
Royalties received $243,443 $207,368
Interest received 5,040 4,030
Expenses paid (87,791) (100,775)
--------- ---------
Net cash provided by
operating activities $ 160,692 $ 110,623
--------- ---------
Cash flows from investing
activities:
Sales and redemptions of
U.S. Government
securities $1,754,571 $1,656,030
Purchases of U.S.
Government securities (2,037,724) (1,705,708)
---------- -----------
Net cash
(used in) investing
activities $ (283,153) $ (49,678)
----------- -----------
Cash flows from financing
activities:
Net cash (used in) financing
activities, distributions
to Unitholders $(1,312,001) $(1,312,001)
------------ ------------
Net (decrease)
in cash $(1,434,462) $(1,251,056)
Cash, beginning of quarter 1,442,627 1,494,936
Cash, end of quarter $ 8,165 $ 243,880
----------- ------------
----------- ------------
Reconciliation of net income
to net cash provided by
operating activities:
Net income $127,170 $ 119,436
Decrease in accrued
income 34,658 2,234
Decrease in prepaid insurance 3,375 3,375
(Decrease) in
accrued expenses (18,175) (9,831)
Increase (decrease) in
deferred income 13,664 (4,591)
-------- ---------
Net cash provided by
operating activities $160,692 $ 110,623
-------- ---------
-------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MESABI TRUST
NOTES TO FINANCIAL STATEMENTS
Note 1. The financial statements included herein have been
prepared without audit (except for the balance sheet at
January 31, 1995) in accordance with the instructions to
Form 10-Q pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of
the Trustees, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of
(a) the results of operations for the three months ended
April 30, 1995 and April 30, 1994, (b) the financial
position at April 30, 1995 and January 31, 1995, and (c)
the cash flows for the three months ended April 30, 1995
and April 30, 1994 have been made.
Note 2. Earnings per unit are based on weighted average number
of units outstanding during the period (13,120,010 units).
<PAGE>
Item 2. TRUSTEES' DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Leasehold royalty income constitutes the principal source of
revenue to Mesabi Trust. Royalty rates are determined by the
terms of Mesabi Trust's leases and assignments of leases.
Overriding royalties are determined by both the volume and
selling price of iron ore pellets sold. Fee royalties payable to
Mesabi Land Trust, a Minnesota land trust of which Mesabi Trust
is the sole beneficiary ("Mesabi Land Trust"), are based on the
amount of crude ore mined, which crude ore is used to produce
iron ore pellets.
Northshore Mining Corporation ("Northshore") is obligated as
lessee to pay Mesabi Trust base overriding royalties, in varying
amounts constituting a percentage of the gross proceeds of
shipments from Silver Bay, Minnesota of pellets produced from
Mesabi Trust lands or, to a limited extent, other lands, ranging
from 2-1/2% of the gross proceeds for the first one million tons
of pellets so shipped annually to 6% of the gross proceeds for
all pellets shipped in excess of 4 million tons annually. In
addition, Northshore is obligated to pay to Mesabi Trust royalty
bonuses constituting a percentage of the gross proceeds of
pellets shipped from Silver Bay, Minnesota for sale at prices
above a threshold price (which is adjusted on an annual basis for
inflation and deflation (but not below $30) and is approximately
$35.77 for calendar year 1995), ranging from 1/2 of 1% of the
gross proceeds on all tonnage shipped for sale at prices between
the threshold price and $2.00 above the threshold price, to 3% of
the gross proceeds on all tonnage shipped for sale at prices
$10.00 or more above the threshold price. Generally, the
obligation of Northshore to pay base overriding royalties and
royalty bonuses with respect to the sale of pellets accrues upon
the shipment of those pellets from Silver Bay. Northshore also
is obligated to pay to Mesabi Trust a minimum advance royalty in
equal quarterly installments, which is credited against certain
base overriding royalties and royalty bonuses. The amount of
advance royalties payable is subject to adjustment (but not below
$500,000 per annum) for inflation and deflation and is
approximately $596,246 for calendar year 1995. Northshore is
obligated to make quarterly royalty payments in January, April,
July and October of each year. In the case of base overriding
royalties and royalty bonuses, these quarterly payments are to be
made whether or not the related proceeds of sale have been
received by Northshore by the time such payments become due.
Due to a combination of factors, shipments from quarter to
quarter or from year to year fluctuate greatly. These factors
include the normal reduction of Great Lakes shipping activity
during the winter months, and reduced pellet sales resulting from
adverse economic conditions affecting the steel industry
generally.
COMPARISON OF THREE MONTHS ENDED APRIL 30, 1995 AND APRIL 30,
1994
Mesabi Trust's net income increased to $127,170 for the
fiscal quarter ended April 30, 1995, as compared to net income of
$119,436 for the fiscal quarter ended April 30, 1994. Mesabi
Trust's gross income for the fiscal quarter ended April 30, 1995
was $200,161, consisting of $110,343 in minimum advance royalty
income, $27,225 in overriding royalty income, $52,589 in fee
royalty income and $10,004 in interest income, as compared to
gross income of $213,755, consisting of $146,479 in minimum
advance royalty income, $5,448 in overriding royalty income,
$57,798 in fee royalty income and $4,030 in interest income, for
the fiscal quarter ended April 30, 1994. The decrease in royalty
income was primarily due to an increase in the deferred income
amount, as compared to a decrease in the comparable prior period.
Interest income increased primarily because of higher interest
rates (due partly to investing in some longer term government
securities in the quarter ended April 30, 1995). Mesabi Trust's
expenses for the fiscal quarter ended April 30, 1995 were
$72,991, compared to expenses of $94,319 for the fiscal quarter
ended April 30, 1994. The decrease in expenses was primarily
because of decreased costs for printing and postage, transfer
agent fees and legal fees.
<PAGE>
Mesabi Trust's Unallocated Reserve aggregated $602,528 at
April 30, 1995, as compared with an Unallocated Reserve of
$684,901 at April 30, 1994.
The Trustees have been advised by Northshore that in 1995
total shipments should be approximately 3,850,000 - 3,900,000
tons, an increase from 1994. Mesabi Trust's portion of the total
shipments is approximately 90% or 3,480,000 - 3,500,000 tons.
The increase, in large part, is due to an iron ore expansion
project (the reactivation of an idle pelletizing line) which is
expected to be completed in June 1995. This expansion project
could increase annual production capacity by about 500,000 tons
in 1995 and up to 900,000 tons in 1996 depending upon iron ore
market conditions. Production in 1995 will be lower than
originally estimated due to a fire which required shutdown of one
pelletizing line with a resulting loss of approximately 110,000
tons of production, and delay in reactivating the idle
pelletizing line. The Trustees will continue to monitor the
economic circumstances of the Trust in an effort to strike a
responsible balance between future distributions to the
Unitholders and the maintenance of adequate Trust reserves.
<PAGE>
Part II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES.
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Item 5. OTHER INFORMATION.
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
27.1 Financial Data Schedule......Filed herewith
<PAGE>
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.
MESABI TRUST
____________________________________
(Registrant)
By BANKERS TRUST COMPANY
Corporate Trustee
Principal Administrative Officer and duly
authorized signatory:*
Date: June 12, 1995 By: /s/ Mark Woodward
____________________________________
Name: Mark Woodward
Title: Assistant Vice President
* There are no directors
or executive officers of
the registrant.
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Item No. Description
- -------- -----------
<C> <S>
27.1 Financial Data Schedule....Filed herewith
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statements of Earnings and the Consolidated Balance Sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-START> FEB-01-1995
<PERIOD-END> APR-30-1995
<CASH> 8
<SECURITIES> 650
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 802
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 802
<CURRENT-LIABILITIES> 23
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 802
<SALES> 190
<TOTAL-REVENUES> 200
<CGS> 0
<TOTAL-COSTS> 73
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 127
<INCOME-TAX> 0
<INCOME-CONTINUING> 127
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 127
<EPS-PRIMARY> 0.010
<EPS-DILUTED> 0.010
</TABLE>