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, 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: 0-11894
SOUTHERN TIMBER PARTNERS 2
Exact Name of Registrant as Specified in its Charter
Georgia 13-3139157
State or Other Jurisdiction of
Incorporation or Organization I.R.S. Employer IdentificationNo.
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,
1997 1996
Assets
Timber and timberland, at cost: $1,160,233 $1,160,233
Cash and cash equivalents 880,010 914,981
Prepaid insurance 981 2,450
Due from related party 31,850 31,850
Investment in joint venture 4,503,923 4,517,604
Total Assets $6,576,997 $6,627,118
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 26,734 $ 34,800
Due to affiliates 68,300 66,535
Total Liabilities 95,034 101,335
Partners' Capital (Deficit):
General Partner (42,434) (41,996)
Limited Partners (37,191 units outstanding) 6,524,397 6,567,779
Total Partners' Capital 6,481,963 6,525,783
Total Liabilities and Partners' Capital $6,576,997 $6,627,118
Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1997
General Limited
Partner Partners Total
Balance at December 31, 1996 $(41,996) $6,567,779 $6,525,783
Net loss (438) (43,382) (43,820)
Balance at March 31, 1997 $(42,434) $6,524,397 $6,481,963
Statements of Operations
For the three months ended March 31, 1997 1996
Income
Interest $ 11,806 $ 32,678
Other 1,040 715
Total Income 12,846 33,393
Expenses
Property operating 19,170 22,442
General and administrative 23,815 49,882
Total Expenses 42,985 72,324
Loss from operations (30,139) (38,931)
Other Loss
Loss from joint venture (13,681) (6,541)
Net Loss $(43,820) $(45,472)
Net Loss Allocated:
To the General Partner $ (438) $ (455)
To the Limited Partners (43,382) (45,017)
$(43,820) $(45,472)
Per limited partnership unit
(37,191 outstanding) $(1.17) $(1.21)
Statements of Cash Flows
For the three months ended March 31, 1997 1996
Cash Flows From Operating Activities
Net loss $(43,820) $(45,472)
Adjustments to reconcile net loss to net cash
Used for operating activities:
Loss from joint venture 13,681 6,541
Increase (decrease) in cash arising from changes in
operating assets and liabilities
Prepaid insurance 1,469 2,063
Accounts payable and accrued expenses (8,066) 19,995
Due to affiliates 1,765 (58,468)
Net cash used for operating activities (34,971) (75,341)
Net decrease in cash and cash equivalents (34,971) (75,341)
Cash and cash equivalents, beginning of period 914,981 2,332,145
Cash and cash equivalents, end of period $880,010 $2,256,804
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 normal and
reoccurring adjustments which are, in the opinion of management,
necessary to present a fair statement of financial position as of
March 31, 1997 and the results of operations and cash flows for
the three months ended March 31, 1997 and 1996 and the statement
of partners' capital (deficit) for the three months ended March
31, 1997. Results of operations for the period are not
necessarily indicative of the results to be expected for the full
year.
Reclassification. Certain prior year amounts have been
reclassified in order to confirm to the current year's
presentation.
The following significant event has occurred subsequent to fiscal
year 1996, which requires disclosure in this interim report per
Regulation S-X, Rule 10-01, Paragraph (a)(5).
On April 21, 1997 the Partnership completed a combined sale of
the entire Claxton and Southern Timberland Tracts for net
proceeds of $1,594,214 and a net gain of approximately $434,000.
Part I, Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources
The Partnership had cash and cash equivalents at March 31, 1997
of $880,010, compared to $914,981 at December 31, 1996. The
decrease is primarily due to the payment of property operating
and general administrative expenses in excess of interest and
other income in 1997. The Partnership's cash, along with funds
generated from future timber and timberland sales, are expected
to provide sufficient liquidity for operations.
Accounts payable and accrued expenses totaled $26,734 at
March 31, 1997, compared to $34,800 at December 31, 1996. The
decrease is primarily attributable to the payment of audit,
professional fees and postage expenses.
On April 21, 1997 the Partnership completed a combined sale of
the entire Claxton and Southern Timberland Tracts for net
proceeds of $1,594,214 and a net gain of approximately $434,000.
These proceeds were distributed to the partners on April 30,
1997. The Partnership's sole remaining timberland asset is a 76%
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 24% interest in the Joint Venture is
owned by an affiliated partnership, Southern Timber Partners I.
The partnerships have begun actively marketing the parcel for
sale, and during 1996 engaged the services of CB Commercial, a
national commercial real estate brokerage firm. Due to the
unique nature of the Laurel View Tract, the General Partner
anticipates it may require several months or longer to secure an
acceptable price for the property. Although the Partnership will
attempt to sell the tract during 1997, there can be no assurance
a sale will occur or that any particular price will be obtained.
Should a sale not be consummated, the Partnership will continue
to hold the property and search for a purchaser.
Results of Operations
The Partnership's operations resulted in net losses of $43,820
for the three months ended March 31, 1997, compared to $45,472,
for the corresponding period in 1996, as lower total expenses
were mostly offset by lower interest income and a higher net loss
from joint venture.
Interest income totaled $11,806 for the three months ended
March 31, 1997, compared to $32,678, for the corresponding period
in 1996. The decrease is due primarily to a lower cash balance
in 1997 compared to 1996 as a result of a cash distribution to
the partners in the amount of $1,615,367 in August 1996.
Property operating expenses were $19,170 for the three months
ended March 31, 1997, compared to $22,442 for 1997. General and
administrative expenses were $23,815 for the three months ended
March 31, 1997 compared to $49,882 for the same period in 1996.
During the 1997 period, 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 reimbursed to the General
Partner and its affiliates. The decrease is primarily due to
lower legal fees, professional fees and partnership servicing
fees.
The Partnership recognized losses from the Joint Venture of
$13,681 and $6,541 for the three months ended March 31, 1997 and
1996, respectively. The higher loss for the period ended
March 31, 1997 is mainly attributable to the first quarter 1997
payment of general and administrative expenses relating to the
Joint Venture, whereas no such expenses were paid in the first
quarter of 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 - No reports on Form 8-K were
filed during the quarter ended March 31, 1997.
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 2
BY: Timber Resources Corp. II
General Partner
Date: May 13, 1997 BY: /s/ Paul L. Abbott
Director, President and Chief Financial Officer
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<PERIOD-END> Mar-31-1997
<CASH> 880,010
<SECURITIES> 0
<RECEIVABLES> 31,850
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 912,841
<PP&E> 1,160,233
<DEPRECIATION> 0
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<CURRENT-LIABILITIES> 26,734
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<OTHER-SE> 6,481,963
<TOTAL-LIABILITY-AND-EQUITY> 6,576,997
<SALES> 0
<TOTAL-REVENUES> 12,846
<CGS> 0
<TOTAL-COSTS> 19,170
<OTHER-EXPENSES> 23,815
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (43,820)
<INCOME-TAX> 0
<INCOME-CONTINUING> (43,820)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (43,820)
<EPS-PRIMARY> (1.17)
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