<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C, 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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 1-737
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TEXAS PACIFIC LAND TRUST
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NOT APPLICABLE 75-0279735
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
80 Broad Street, Suite 2700, New York, New York 10004
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
212/269-2266
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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
--- ---
<PAGE> 2
Part I
FINANCIAL INFORMATION
TEXAS PACIFIC LAND TRUST
BALANCE SHEETS
JUNE 30, 1995 & DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1995 1994
------------- --------------
<S> <C> <C>
Cash $ 535,272 $ 232,843
Temporary cash investments 1,950,000 2,000,000
Accounts receivable 225,252 227,067
Accrued interest receivable 272,313 225,470
Prepaid expenses 19,346 48,365
Notes receivable 5,318,751 $ 5,347,947
Real estate acquired through foreclosure:
28,140.75 acres. 6,844,336 6,844,336
Water wells, leasehold improvements, furniture and
equipment - at cost less accumulated depreciation 55,170 45,966
Property, no value assigned (Note 2):
Land (surface rights) situated in twenty-one counties
in Texas -- 1,082,141.36 acres in 1995 and
1,129,226.05 acres in 1994. -- --
Town lots in Iatan, Loraine and Morita -- 628 lots
in 1995 and 1994. -- --
1/16 nonparticipating perpetual royalty interest in
386,987.70 acres in 1995 and 1994. -- --
1/128 nonparticipating perpetual royalty interest
in 85,413.60 acres in 1995 and 1994. -- --
------------- --------------
$ 15,220,440 $ 14,971,994
============= ==============
LIABILITIES AND CAPITAL
Federal taxes on income $ 111,194 $ 218,708
Other taxes 194,939 13,084
Other liabilities 7,009 104,575
Escrow Deposits on land sales 1,000 --
Deferred taxes 3,746,019 3,766,446
------------- --------------
Total liabilities 4,060,161 4,102,813
Capital (Note 3)
Certificates of Proprietary Interest, par
value $100 each; outstanding one certificate
in 1995 and 1994 -- --
Sub-share Certificates in Certificates of Proprietary
Interest, par value $.16 2/3 each; outstanding
3,045,505 sub-shares in 1995 and 3,075,305
sub-shares in 1994 -- --
Net proceeds from all sources 11,160,279 10,869,181
------------- --------------
Total capital 11,160,279 10,869,181
------------- --------------
$ 15,220,440 $ 14,971,994
============= ==============
</TABLE>
See accompanying notes to financial statements.
(1)
<PAGE> 3
TEXAS PACIFIC LAND TRUST
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
----------------------------- ----------------------------
1995 1994 1995 1994
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Income:
Rentals, royalties and sundry income $ 974,940 $ 883,448 $ 1,770,102 $ 1,640,619
Land sales 1,053,258 940,520 1,777,118 2,281,918
Interest 153,464 125,023 310,230 251,469
----------- ----------- ----------- -------------
2,181,662 1,948,991 3,857,450 4,174,006
----------- ----------- ----------- -------------
Expenses:
Taxes, other than Federal taxes
on income 139,290 136,613 274,360 270,824
General and administrative expenses 316,598 305,887 648,588 685,029
----------- ----------- ----------- -------------
455,888 442,500 922,948 955,853
----------- ----------- ----------- -------------
Income before provision for
Federal taxes on income 1,725,774 1,506,491 2,934,502 3,218,153
Provision for Federal taxes on
income (Note 4) 524,839 469,802 882,059 1,029,492
----------- ----------- ----------- -------------
Net income $ 1,200,935 $ 1,036,689 $ 2,052,443 $ 2,188,661
=========== =========== =========== =============
Average number of sub-share certificates
and equivalent sub-share certificates
outstanding 3,050,105 3,158,388 3,058,964 3,167,330
=========== =========== =========== =============
Earnings per sub-share certificate $ .39 $ .33 $ .67 $ .69
=========== =========== =========== =============
Cash dividend per sub-share
certificate -- -- $ .40 $ .40
=========== =========== =========== =============
</TABLE>
See accompanying notes to financial statements.
(2)
<PAGE> 4
TEXAS PACIFIC LAND TRUST
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30
---------------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,052,443 $ 2,188,661
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 5,460 5,460
Deferred taxes (20,427) 387,580
(Increase) decrease in assets:
Notes and accounts receivable 31,011 (1,137,390)
Accrued interest receivable (46,843) (140,385)
Prepaid expenses 29,019 26,394
Increase (decrease) in liabilities:
Federal taxes on income (107,514) 3,739
Other taxes 181,855 197,734
Escrow deposits on land sales 1,000 --
Other liabilities (97,566) (111,931)
Deferred revenue on land sales -- 9,000
--------------- ---------------
Total adjustments (24,005) (759,799)
--------------- ---------------
Net cash provided by operating activities 2,028,438 1,428,862
--------------- ---------------
Cash flows from investing activities:
Water wells, leasehold improvements, furniture
and equipment - at cost (14,664) (11,975)
--------------- ---------------
Cash flows from financing activities:
Sub-shares purchased for retirement (538,543) (614,127)
Dividends paid (1,222,802) (1,267,282)
--------------- ---------------
Net cash used by financing activities (1,761,345) (1,881,409)
--------------- ---------------
Net (decrease) increase in cash and cash equivalents 252,429 (464,522)
Cash and cash equivalents at beginning
of period 2,232,843 1,997,007
--------------- ---------------
Cash and cash equivalents at end of
period $ 2,485,272 $ 1,532,485
=============== ===============
</TABLE>
(3)
<PAGE> 5
TEXAS PACIFIC LAND TRUST
JUNE 30, 1995
NOTES TO FINANCIAL STATEMENTS
(1) In the opinion of management the accompanying unaudited financial
statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position
of the Trust as of June 30, 1995 and the results of its operations and
its cash flows for the three and six months ended June 30, 1995 and
June 30, 1994, respectively.
(2) No value is assigned to the land; consequently, no allowance for
depletion is computed, and no charge to income is made therefor, and
no cost is deducted from the proceeds of the land sales in computing
gain or loss thereon.
(3) The Sub-shares and the Certificates of Proprietary Interest are freely
interchangeable in the ratio of one Certificate of Proprietary
Interest for 600 Sub-shares or 600 Sub-shares for one Certificate of
Proprietary Interest.
(4) The Trust's effective Federal income tax rate is less than the 34%
statutory rate because taxable income is reduced by statutory
percentage depletion allowed on mineral royalty income.
(5) The results of operations for the six months ended June 30, 1995 are
not necessarily indicative of the results to be expected for the full
year.
(6) Cash in excess of daily requirements is invested in money market
instruments with maturities of ninety days or less. Such investments
are deemed to be cash equivalents for purposes of the statements of
cash flows.
Supplemental cash flow information for the six months ended June 30,
1995 and 1994 is summarized as follows:
<TABLE>
<CAPTION>
1995 1994
----------- ---------
<S> <C> <C>
Federal income taxes paid $ 1,010,000 $ 638,173
=========== =========
</TABLE>
There were no non-cash investing and financing activities during the
six months ended June 30, 1995 and 1994,
(4)
<PAGE> 6
Management's Discussion and
Analysis of Financial Condition and
Results of Operations
Earnings per sub-share were $.39 for the second quarter of 1995 compared
with $.33 in the second quarter of 1994, an increase of 18.2%.
Total revenues for the second quarter of 1995 were $2,181,662 compared
with $1,948,991 in 1994.
A total of six land sales were closed in the second quarter covering 14,711
acres located in Hudspeth, Jeff Davis, Midland and Reeves counties. The total
consideration was $1,053,258. This compares to 7,221 acres for $940,520 in the
second quarter of 1994. The first six months land sales were $1,777,118
compared to $2,281,918 in the first six months of 1994. At quarters end the
Trust held one contract of sale of 640 acres for $41,600 on land located in
Ector and Winkler counties. This sale was closed during July.
Land sales may vary widely from year to year and quarter to quarter. The total
dollar amount, the average price per acre, and the number of acres sold in any
one year or quarter should not be assumed to be indicative of land sales in the
future. The Trust is a passive seller of land; it does not actively solicit
sales of land. The demand for and the sales price of any particular tract of
the Trust's land is influenced by many factors including the national and local
economies, the rate of residential and commercial development in nearby areas,
livestock carrying capacity, and the conditions of the local agricultural
industry which itself is influenced by range conditions and prices for
livestock and other agricultural products. Approximately 99% of the Trust's
land is classified as ranch land and intermingled with other ownerships to form
ranching units. Ranch land sales are, therefore, largely dependent on the
actions of the adjoining landowners.
Rentals, royalties and sundry income amounted to $974,940 in the second quarter
compared to $883,448 in the same period of 1994. For the first six months of
1995 rentals, royalties and sundry income were $1,770,102 compared to
$1,640,619 in the 1994 period.
Oil and gas royalty revenue was $632,104 in the second quarter of 1995, up
27.4% compared with the same period of 1994. Oil royalty revenue was $457,637
in the second quarter, up 32.5%. Crude oil production subject to the Trust's
royalty interest was up 7.3% in the second quarter, and the average price per
barrel was up 23.5% for the period. Gas royalty revenue was $174,467 in the
second quarter, up 15.8% on a volume increase of 44.3% and a price decrease
of 19.6%.
(5)
<PAGE> 7
Management's Discussion (cont'd)
Oil and gas royalty revenue for the first six months of 1995 was $1,197,747, up
25.5% from the 1994 period. Oil royalty revenue was $856,773 in the first six
months of 1995, up 29.3%. Crude oil production was up 4.9% and the average
price for crude oil increased 23,3% compared with the first six months of 1994.
Gas royalty revenue was $340,974 in the first six months of 1995, up 16.9% on a
volume increase of 35.9% and a price decrease of 14.3%.
Interest revenue increased 22.7% in the second quarter and 23.4% for the first
six months compared with last year. Interest from notes receivable amounted to
$126,394 in the second quarter and $249,318 in the first six months, up 10.0%
for each period over 1994. Notes receivable decreased from $5,957,975 to
$5,318,751, or 10.7% in the period since June 30, 1994.
Taxes, other than Federal taxes on income, were up 2.0% in the second quarter
and 1.3% in the first six months of 1995.
The Trust's oil and gas royalty revenues, lease rentals and receipts of
interest and principal on notes receivable has generated more than adequate
amounts of cash to meet the Trust's needs and should continue to do so in the
predictable future.
(6)
<PAGE> 8
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. Interim report furnished to shareholders upon
request per sub-part Item 601 (19) Regulation S-K.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K. The registrant filed a Form 8-K on May
23, 1995. Such report fell under the classification as an
"Item 5. Other Event" and disclosed a Shareholder Lawsuit to
obtain from the registrant a list of the holders of the
registrant's Sub-shares. The date of the report was April 26,
1995 and no financial statements were 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.
TEXAS PACIFIC LAND TRUST
(Registrant)
Date August 10, 1995 By /s/ ROY THOMAS
Roy Thomas, General Agent,
Authorized Signatory and Principal
Financial Officer
(7)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,485,272
<SECURITIES> 0
<RECEIVABLES> 5,816,316
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,002,183
<PP&E> 6,899,506
<DEPRECIATION> 5,460
<TOTAL-ASSETS> 15,220,440
<CURRENT-LIABILITIES> 314,142
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,220,440
<SALES> 0
<TOTAL-REVENUES> 3,857,450
<CGS> 0
<TOTAL-COSTS> 922,948
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,934,502
<INCOME-TAX> 882,059
<INCOME-CONTINUING> 2,052,443
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,052,443
<EPS-PRIMARY> .67
<EPS-DILUTED> 0
</TABLE>
