SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1994 Commission file number: 1-8859
IP TIMBERLANDS, Ltd.
(Exact name of registrant as specified in its charter)
Texas 13 3259241
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two Manhattanville Road, Purchase, NY 10577
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 914-397-1500
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
Class A Depositary Units outstanding on July 29, 1994: 46,445,729
IP TIMBERLANDS, Ltd.
INDEX
Page No.
PART I.
Financial Information
Item 1.
Financial Statements 3
Consolidated Statement of Earnings -
Three Months and Six Months Ended
June 30, 1994 and 1993. 4
Consolidated Balance Sheet -
June 30, 1994 and December 31, 1993. 5
Consolidated Statement of Cash Flows -
Six Months Ended June 30, 1994 and 1993. 6
Notes to Consolidated Financial Statements. 7 - 9
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 12
PART II.
Other Information
Item 1.
Legal Proceedings *
Item 2.
Changes in Securities *
Item 3.
Defaults upon Senior Securities *
Item 4.
Submission of Matters to a Vote of
Security Holders *
Item 5.
Other Information *
Item 6.
Exhibits and Reports on Form 8-K 13
Signatures 14
* Omitted since no answer is called for, answer is in the negative or
inapplicable.
PART I. Financial Information
ITEM 1. Financial Statements
The accompanying unaudited financial statements have been prepared in conformity
with current Securities and Exchange Commission regulations governing interim
financial reporting. In the opinion of the managing general partner of IP
Timberlands, Ltd. (the "Registrant"), a Texas limited partnership, the
accompanying unaudited financial statements contain all adjustments (consisting
of only normal recurring accruals) necessary to present fairly the financial
position of the Registrant as of June 30, 1994, and the results of operations
for the quarter and six months ended June 30, 1994. It is suggested that these
interim financial statements be read in conjunction with the financial
statements and notes thereto, incorporated by reference in the Registrant's Form
10-K for the year ended December 31, 1993, which has been previously filed with
the Commission.
The results for the interim period covered by this report are not necessarily
indicative of what the results will be for the remainder of the year.
IP TIMBERLANDS, Ltd.
CONSOLIDATED STATEMENT OF EARNINGS
(In thousands - except per unit data)
(Unaudited)
Three Months Six Months Ended
Ended June 30,
June 30,
1994 1993 1994 1993
Revenues
Stumpage Sales
International Paper $40,811 $41,408 $ 88,313 $ 84,621
Unaffiliated parties 23,101 12,815 57,497 43,656
Forestland sales 22,209 26,009 48,792 53,508
Other income, net 2,869 3,129 3,967 4,844
Total revenues 88,990 83,361 198,569 186,629
Operating Costs and Expenses
Depletion
International Paper 2,250 2,060 5,016 4,770
Unaffiliated parties 2,849 1,901 5,879 4,511
Cost of forestlands sold 1,313 3,266 5,821 9,850
Amortization of roads 519 540 1,058 1,085
Forest operations 9,729 8,690 18,961 17,712
General and administrative 5,026 5,388 10,213 10,813
Property and severance taxes 4,253 4,251 8,665 8,329
Total operating costs and
expenses 25,939 26,096 55,613 57,070
Operating Earnings 63,051 57,265 142,956 129,559
Interest Income 3,717 3,118 6,537 6,505
General Partners' Interest in
IPTO (668) (604) (1,495) (1,361)
Net Partnership Earnings $66,100 $59,779 $147,998 $134,703
Earnings per Class A Unit
(Note 5) $ 1.09 $ 1.05 $ 2.58 $ 2.46
The accompanying notes are an integral part of these financial statements.
IP TIMBERLANDS, Ltd.
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
June 30, December 31,
1994 1993
Assets
Current Assets
Cash and temporary investments $ 11,226 $ 6,782
Notes receivable - International Paper 354,702 276,146
Due from International Paper 9,620 -
Accounts and notes receivable 23,041 37,279
Total current assets 398,589 320,207
Notes receivable 2,310 1,872
Forestlands 738,428 736,685
Roads, net of accumulated amortization of
$46,450 (1994) and $46,747 (1993) 34,275 35,269
Total assets $1,173,602 $1,094,033
Liabilities and Partners' Capital
Current Liabilities
Accounts payable and accrued
liabilities $ 415 $ 431
Due to International Paper - 3,825
Accrued property and severance taxes 8,769 5,577
Customer advance payments 4,638 2,725
Total current liabilities 13,822 12,558
Lease Obligations 1,493 1,567
General Partners' Interest in IPTO 34,048 33,264
Partners' Capital
General partners 33,097 32,321
Limited partners 1,091,142 1,014,323
Total Liabilities and Partners' Capital $1,173,602 $1,094,033
The accompanying notes are an integral part of these financial statements.
IP TIMBERLANDS, Ltd.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
1994 1993
Operating Activities
Net Partnership earnings $147,998 $134,703
Noncash items
Depletion 10,895 9,281
Cost of forestland sold 5,821 9,850
Amortization of roads 1,058 1,085
Other, net 1,434 1,858
Changes in current assets and
liabilities
Accounts and notes receivable 13,800 29,035
Due from International Paper (13,445) (17,553)
Customer advance payments 1,913 880
Other, net 3,102 4,414
Cash provided by operations 172,576 173,553
Investment Activities
Investment in forestlands and roads (18,463) (32,080)
Loans to International Paper (172,396) (155,726)
Repayment of loans by International
Paper 93,840 87,314
Cash used for investment activities (97,019) (100,492)
Financing Activities
Distributions to partners of IPT
and IPTO (71,113) (71,114)
Change in Cash and Temporary
Investments 4,444 1,947
Cash and Temporary Investments
Beginning of the period 6,782 6,630
End of the period $11,226 $8,577
The accompanying notes are an integral part of these financial statements.
IP TIMBERLANDS, Ltd.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization
IP Timberlands, Ltd. (the "Registrant" or "IPT"), is a Texas limited
partnership. IP Forest Resources Company ("IPFR"), a wholly owned
subsidiary of International Paper, is the managing general partner of the
Registrant and International Paper is the special general partner.
The Registrant operates through IP Timberlands Operating Company, Ltd.
("IPTO"), a Texas limited partnership, in which the Registrant holds a 99%
limited partner's interest, and IPFR and International Paper together hold
a 1% general partners' interest. IPFR is also the managing general partner
of IPTO, and International Paper is the special general partner.
2. Transactions with International Paper
The Registrant reimburses IPFR and International Paper for both direct and
indirect costs and expenses associated with the management and operations
of the Partnerships. Charges from International Paper for indirect
expenses for the quarters ended June 30, 1994 and 1993 were $2.3 and $2.5
million, respectively, and for the six-month periods ended June 30, 1994
and 1993 were $4.6 and $5.1 million, respectively. The interim period
charges are based upon estimates of the total charges for the year.
Interest income from notes receivable from International Paper for the
quarters ended June 30, 1994 and 1993 was $3.5 and $2.9 million,
respectively, and for the six-month periods ended June 30, 1994 and 1993
was $5.9 and $5.4 million, respectively.
3. Temporary Investments
Temporary investments with a maturity of three months or less are treated
as cash equivalents and are stated at cost. Temporary investments at June
30, 1994 and December 31, 1993 were $7.8 and $6.5 million, respectively.
4. Receivables
The major classifications of current receivables are shown below. No
allowance for doubtful accounts was considered necessary.
June 30, December 31,
1994 1993
(In thousands)
Notes receivable - trade $22,529 $35,329
Accounts receivable - trade 272 1,268
Accrued interest and other
receivables 240 682
$23,041 $37,279
5. Computation of Earnings Per Class A Unit
The Partnership Agreement provides for the allocation of Partnership
earnings among the general and limited partners. The following table
presents the computation of earnings per Class A Unit (in thousands, except
per unit data):
Three Months Six Months Ended
Ended June 30,
June 30,
1994 1993 1994 1993
Allocation to Primary Account $52,783 $50,795 $125,254 $119,390
Allocation to Secondary Account 13,317 8,984 22,744 15,313
Net Partnership Earnings 66,100 59,779 147,998 134,703
95% of the Primary Account 50,143 48,255 118,991 113,421
4% of the Secondary Account 533 360 910 613
Earnings Allocated to
Class A Limited Partners $50,676 $48,615 $119,901 $114,034
Weighted Average Class A
Units Outstanding 46,446 46,446 46,446 46,446
Earnings Per Class A Unit $ 1.09 $ 1.05 $ 2.58 $ 2.46
6. Partners' Capital
The following tables present an analysis of the activity in Partners'
Capital (in thousands):
Partners' Capital
General Limited
Partners' Partners' Total
Six Months Ended June 30, 1994
Balance - January 1, 1994 $32,321 $1,014,323 $1,046,644
Net earnings for the period 1,480 146,518 147,998
Partner distributions (704) (69,699) (70,403)
Balance - June 30, 1994 $33,097 $1,091,142 $1,124,239
Six Months Ended June 30, 1993
Balance - January 1, 1993 $32,456 $1,027,703 $1,060,159
Net earnings for the period 1,347 133,356 134,703
Partner distributions (704) (69,698) (70,402)
Balance - June 30, 1993 $33,099 $1,091,361 $1,124,460
The authorized and outstanding Class A and B Depositary Units at June 30, 1994
and 1993, which represent the limited partnership interests of IPT, are
presented below. The Class B Units are 100% owned by International Paper and
affiliates.
Class A Depositary Units Outstanding Class B
International Unaffiliated Depositary
Paper and Third Units
Affiliates Parties Total Outstanding
Number of Units 39,146,229 7,299,500 46,445,729 50,976,480
Percentage of total 84% 16% 100% 100%
Under the terms of the Partnership Agreement, International Paper has the right
to purchase, at any time, all outstanding Class A Units at a price equal to 133%
of the market price at that time.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
For the second quarter of 1994, total Partnership revenues were $89.0 million,
or 7% higher than for the second quarter of 1993. Revenues from stumpage sales
were 18% above prior-year levels, primarily on the strength of higher average
prices. The second quarter harvest volume was 7% higher than that for the
comparable period of 1993. Net Partnership earnings of $66 million were 11%
higher than for the second quarter of 1993.
In the South, stumpage sales revenues were 52% greater than second quarter 1993
levels. A 16% increase in harvest volumes combined with higher average prices
led to the improved performance in this region. In the West, abundant log
supplies and high mill inventories resulted in lower demand for stumpage and
harvest volumes which were 16% below that of the comparable period of 1993.
Prices, however, were 6% above second quarter 1993 levels due to continued
harvest restrictions on public lands. Second quarter stumpage sales revenues in
the Northeast were 23% higher than for the same period of 1993. Although harvest
volumes were 16% lower due to an extended spring thaw which hampered logging
operations, good demand from Canadian mills and strong domestic lumber markets
continue to support higher average prices.
Forestland sales were $22.2 million, down slightly from $26.0 million for the
second quarter of 1993.
Amounts attributable to the Primary and Secondary Accounts for major categories
in the statement of earnings were (in thousands):
Three Months Six Months Ended
Ended June 30,
June 30,
1994 1993 1994 1993
Stumpage Sales
Primary Account $63,912 $54,223 $145,810 $126,267
Secondary Account - - - 2,010
$63,912 $54,223 $145,810 $128,277
Forestland Sales
Primary Account $ 1,147 $ 8,048 $ 13,243 $ 22,658
Secondary Account 21,062 17,961 35,549 30,850
$22,209 $26,009 $ 48,792 $ 53,508
Operating Costs and
Expenses
Primary Account $16,444 $15,704 $ 39,365 $ 36,666
Secondary Account 9,495 10,392 16,248 20,404
$25,939 $26,096 $ 55,613 $ 57,070
Operating costs and expenses by category are shown in the consolidated statement
of earnings on page 4.
Sales volumes attributable to timber sales were (in thousand cunits):
Three Months Six Months
Ended Ended
June 30, June 30,
1994 1993 1994 1993
Used by International
Paper facilities 212 196 435 482
Resold by International Paper 125 145 315 344
Sold to unaffiliated parties 303 256 744 616
640 597 1,494 1,442
Liquidity and Capital Resources
IPT had cash and temporary investments of $11.2 million, an intercompany account
receivable from International Paper of $9.6 million and notes receivable from
International Paper of $354.7 million at June 30, 1994, giving the Partnership
$375.5 million in liquid assets. Cash is either invested in temporary
investments or loaned to International Paper at market rates. The breakdown of
liquid assets between the Primary and Secondary Accounts was (in thousands):
June 30, December 31,
1994 1993
Cash, temporary investments
and current receivables from
International Paper
Primary Account $238,472 $158,556
Secondary Account 137,076 124,372
$375,548 $282,928
Total per Class A Unit $ 5.00 $ 3.35
In addition, current assets at June 30, 1994 and December 31, 1993, included $.5
million and $2.0 million of accounts receivable, respectively, and $22.5 million
and $35.3 million of notes receivable, respectively, from parties other than
International Paper due within the next 12 months.
The following table reflects cash flow from operations, after capital
expenditures, attributable to the Class A Units (in thousands).
Primary Secondary IPT
Account Account Total
Six Months Ended June 30, 1994
Cash provided by operations $148,730 $23,846 $172,576
Investment in forestlands and
roads (10,042) (8,421) (18,463)
IPTO general partners'
interest in above (1,387) (154) (1,541)
Cash flow after capital
expenditures 137,301 15,271 $152,572
Class A Unit allocation factor 95% 4%
Class A Unit cash flow
after capital expenditures $130,436 $ 611 $131,047
Distributions declared for Class A
Units $ 66,882 $ 66,882
Six Months Ended June 30, 1993
Cash provided by operations $116,197 $57,356 $173,553
Investment in forestlands and
roads (24,891) (7,189) (32,080)
IPTO general partners'
interest in above (913) (502) (1,415)
Cash flow after capital
expenditures 90,393 49,665 $140,058
Class A Unit allocation factor 95% 4%
Class A Unit cash flow
after capital expenditures $ 85,873 $ 1,987 $ 87,860
Distributions declared for Class A
Units $ 66,882 $ 66,882
In July, IPT declared a cash distribution of $.72 per Class A Unit for the
second calendar quarter of 1994. This distribution is payable on August 15,
1994 to holders of record as of July 29, 1994.
Capital expenditures, including expenditures for reforestation of harvested
forestland, acquisition of capitalized leases and road construction, are
expected to be approximately $50 million for 1994.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(13) 1994 Midyear Report to Unitholders
(b) No Current Reports on Form 8-K have been filed during the
quarter for which this report is filed.
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.
IP Timberlands, Ltd.
By: IP Forest Resources Company
Managing General Partner
(Registrant)
Date: August 11, 1994 By /s/ James W. Guedry
James W. Guedry
Vice President and Secretary
Date: August 11, 1994 By /s/ Frederick L. Bleier
Frederick L. Bleier
Treasurer and Controller
and Chief Financial and
Accounting Officer
EXHIBIT INDEX
(13) 1994 Midyear Report to Unitholders
[LOGO] IP Timberlands, Ltd.
[Illustration No. 1]
1994 Midyear Review
Front Cover Page
Consolidated Statement of Earnings (unaudited)
Six Months Ended Year Ended
June 30 December 31
In thousands, except per unit data 1994 1993 1993
Revenues
Stumpage sales
International Paper $ 88,313 $ 84,621 $ 185,372
Unaffiliated parties 57,497 43,656 119,934
Forestland sales 48,792 53,508 107,954
Other income, net 3,967 4,844 12,774
Total revenues 198,569 186,629 426,034
Operating Costs and Expenses
Depletion
International Paper 5,016 4,770 10,126
Unaffiliated parties 5,879 4,511 11,835
Cost of forestlands sold 5,821 9,850 12,780
Amortization of roads 1,058 1,085 2,180
Forest operations 18,961 17,712 38,190
General and administrative 10,213 10,813 20,359
Property and severance taxes 8,665 8,329 16,612
Total operating costs and expenses 55,613 57,070 112,082
Operating Earnings 142,956 129,559 313,952
Interest Income 6,537 6,505 12,159
General Partners' Interest in IPTO (1,495) (1,361) (3,261)
Net Partnership Earnings $147,998 $134,703 $322,850
Earnings per Class A Unit $ 2.58 $ 2.46 $ 5.94
-2-
Consolidated Balance Sheet (unaudited)
June 30 December 31
In thousands 1994 1993
Assets
Current Assets
Cash and temporary investments,
at cost, which approximates market $ 11,226 $ 6,782
Notes receivable--International Paper 354,702 276,146
Due from International Paper 9,620
Accounts and notes receivable 23,041 37,279
Total current assets 398,589 320,207
Notes Receivable 2,310 1,872
Forestlands 738,428 736,685
Roads, net of accumulated amortization
of $46,450 (1994) and $46,747 (1993) 34,275 35,269
Total Assets $1,173,602 $1,094,033
Liabilities and Partners' Capital
Current Liabilities
Accounts payable and accrued
liabilities $ 415 $ 431
Due to International Paper 3,825
Accrued property and severance taxes 8,769 5,577
Customer advance payments 4,638 2,725
Total current liabilities 13,822 12,558
Lease Obligations 1,493 1,567
General Partners' Interest in IPTO 34,048 33,264
Partners' Capital
General partners 33,097 32,321
Limited partners 1,091,142 1,014,323
Total Liabilities and Partners'
Capital $1,173,602 $1,094,033
-3-
Consolidated Statement of Cash Flows (unaudited)
Six Months Ended Year Ended
June 30 December 31
In thousands 1994 1993 1993
Operating Activities
Net Partnership earnings $ 147,998 $ 134,703 $ 322,850
Noncash items
Depletion 10,895 9,281 21,961
Cost of forestlands sold 5,821 9,850 12,780
Amortization of roads 1,058 1,085 2,180
Other, net 1,434 1,858 2,786
Changes in current assets
and liabilities
Accounts and notes receivable 13,800 29,035 18,875
Due to International Paper (13,445) (17,553) (7,567)
Customer advance payments 1,913 880 (1,601)
Other, net 3,102 4,414 1,174
Cash provided by operations 172,576 173,553 373,438
Investment Activities
Investment in forestlands and
roads (18,463) (32,080) (53,741)
Loans to International Paper (172,396) (155,726) (328,226)
Repayment of loans by
International Paper 93,840 87,314 348,444
Cash used for investment
activities (97,019) (100,492) (33,523)
Financing Activities
Distributions to partners of
IPT and IPTO (71,113) (71,114) (339,763)
Change in Cash and Temporary
Investments 4,444 1,947 152
Cash and Temporary Investments
Beginning of the period 6,782 6,630 6,630
End of the period $ 11,226 $ 8,577 $ 6,782
-4-
To Our Unitholders
Demand and pricing remained strong during the first half of 1994,
leading to continued favorable operating performance for IP
Timberlands, Ltd. (IPT). Revenues for the first six months were $199
million compared with $187 million for the same period last year.
Earnings for the period were $148 million or $2.58 per Class A Unit
compared with $135 million or $2.46 per Class A Unit in 1993.
A 10 percent increase in the Partnership's average stumpage prices
for the first half of 1994 was the principal reason for the increase
in sales revenues. Additionally, harvest volumes were four percent
higher than in the prior year. In our Southern region, revenues
remained high on the strength of record sawlog pricing early in the
year. In the West, sawlog prices averaged 13 percent higher than 1993
levels, reflecting the continued harvesting constraints on public land
in this region. Sharply higher spruce-fir sawlog prices in the
Northeast, reflecting strong lumber markets, more than offset a
decline in the harvest volume caused by wet spring weather.
Partnership forestland sales were $49 million for the first
half of the year, $5 million lower than 1993 levels. Approximately
one third of the revenue from these sales was allocable to the
Class A Units, representing the trees on this land that would have
been harvested during the remainder of the Initial Term.
Our outlook for the remainder of 1994 is favorable. While average
stumpage prices have softened slightly as we enter the third quarter,
we remain optimistic that prices will continue at favorable levels
for the remainder of the year. Harvest volumes should match
first-half levels.
/s/ John A. Georges
John A. Georges
Chairman and Chief Executive Officer
/s/ Edward J. Kobacker
Edward J. Kobacker
President
July 29, 1994
Financial Highlights (unaudited)
<TABLE>
<CAPTION>
1994 1993
Six Months Ended Quarter Six Months Ended Quarter
In millions, except per
unit data June 30 First Second June 30 First Second
<S> <C> <C> <C> <C> <C> <C>
Total Revenues $ 199 $ 110 $ 89 $ 187 $ 103 $ 84
Net Partnership Earnings 148 82 66 135 75 60
Earnings Allocated to Class A
Limited Partners 120 69 51 114 65 49
Per Class A Unit
Earnings 2.58 1.49 1.09 2.46 1.41 1.05
Distributions 1.44 .72 .72 1.44 .72 .72
Operating Cash Flow
Attributable to Class
A Units 131 74 57 88 32 56
Total Class A Unit
Distributions Declared $ 67 $ 33 $ 34 $ 67 $ 33 $ 34
Weighted Average Class A
Units Outstanding 46 46 46 46 46 46
</TABLE>
-5-
IP Timberlands, Ltd.
Two Manhattanville Road
Purchase, NY 10577
Bulk Rate
U.S. Postage
Paid
New York, NY
Permit No. 3164
Partnership Information
IPT Class A Units
Ownership of the Class A Unit generally entitles the holder to share
in 95 percent of the net cash flow and earnings generated from the
sale of trees harvested during the Initial Term of the Partnership
(1985-1999).
Thereafter, the majority of the benefit goes to the Class B
unitholders, with the Class A unitholders' share reduced to four
percent of total Partnership activities, which include reforestation
and land management costs as well as stumpage sales. The general
partners' share is one percent.
Less than six years remain in the Initial Term of the Partnership.
Because of this, and due to the decrease in the share of earnings
when the Initial Term of the Partnership expires, Class A unitholders
should expect the market price of Class A Units to begin to decrease
well before December 31, 1999. However, at that time, Class A
unitholders will be entitled to any cash remaining in the Primary
Account. Net liquid assets in that account totaled $5.00 per Class A
Unit at June 30, 1994. Any actual amount distributed will depend on
future cash flows and the Partnership's distribution policy.
Distributions
In July, IPT declared a $.72 per Class A Unit distribution, payable
on August 15, 1994, to unitholders of record on July 29, 1994. The
Board of Directors of IP Forest Resources Company reviews IPT's
distribution level on a quarterly basis, evaluating projected future
cash flows and operating and capital requirements. The distribution
is maintained at a conservative level to avoid undue volatility.
Investor Services
For change of address, lost certificates or distribution checks, or
change in registered ownership, write or call:
Chemical Bank
Shareholder Services Department
450 West 33rd Street
New York, N.Y. 10001
Within the U.S., call 1-800-851-9677.
Outside the U.S., call collect 0-212-613-7427.
For a copy of available financial information or to have your name
added to our mailing list, call 1-800-634-8050 or write to the
Investor Relations Department at Partnership headquarters.
To obtain a "Fax on Demand" of current financial data and basic
Partnership information, call 1-800-851-4FAX. This service is
available on a 24-hour basis.
Back Cover
APPENDIX FOR GRAPHIC AND IMAGE MATERIAL
Pursuant to Rule 304 of Regulation S-T, the following table presents
fair and accurate narrative descriptions of graphic and image material
omitted from this EDGAR filing due to ASCII-incompatibility and
cross-references this material to the location of each occurrence in the
text.
DESCRIPTION OF OMITTED LOCATION OF GRAPHIC
GRAPHIC OR IMAGE OR IMAGE IN TEXT
------------------------ ---------------------
Illustration of forester holding a Illustration No. 1 appears on
seedling tree with a forest background. the cover page of EX-13.
