<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 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 1-737
TEXAS PACIFIC LAND TRUST
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NOT APPLICABLE 75-0279735
- -------------------------------------------------------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
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
MARCH 31, 1997 and DECEMBER 31, 1996
------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1997 1996
--------- ------------
<S> <C> <C>
Cash $ 268,018 $ 144,898
Temporary cash investments 1,900,000 1,650,000
Accounts receivable 435,252 436,142
Accrued interest receivable 259,288 203,107
Prepaid expenses 32,018 45,740
Notes receivable for land sales 6,082,475 5,067,778
Real estate acquired through foreclosure:
(27,830.19 acres at March 31, 1997 and December 31, 1996) 6,034,969 6,034,969
Water wells, leasehold improvements, furniture and
equipment - at cost less accumulated depreciation 138,119 127,600
Property, no value assigned (Note 2):
Land (surface rights) situated in twenty-one counties in
Texas - 1,069,845.64 acres in 1997 and 1,075,685.03
acres in 1996 -- --
Town lots in Iatan, Loraine and Morita - 628 lots in 1997
and 1996 -- --
1/16 nonparticipating perpetual royalty interest in
386,987.70 acres in 1997 and 1996 -- --
1/128 nonparticipating perpetual royalty interest in
85,413.60 acres in 1997 and 1996 -- --
----------- -----------
$15,150,139 $13,710,234
=========== ===========
LIABILITIES AND CAPITAL
Federal income taxes $ 663,251 $ 99,824
Other taxes 113,534 26,338
Other liabilities 38,651 15,034
Escrow deposits on land sales 82,000 55,000
Deferred taxes 3,736,180 3,388,382
----------- -----------
Total liabilities 4,633,616 3,584,578
Capital (Note 3)
Certificates of Proprietary Interest, par value $100
each; outstanding one certificate in 1997 and 1996 -- --
Sub-share Certificates in Certificates of Proprietary
Interest, par value $.16 2/3 each; outstanding
2,825,205 sub-shares in 1997 and 2,848,105 sub-shares
in 1996 -- --
Net proceeds from all sources 10,516,523 10,125,656
----------- -----------
Total capital 10,516,523 10,125,656
----------- -----------
$15,150,139 $13,710,234
=========== ===========
</TABLE>
See accompanying notes to financial statements.
(1)
<PAGE> 3
TEXAS PACIFIC LAND TRUST
STATEMENTS OF INCOME
------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------
1997 1996
---------- ----------
<S> <C> <C>
Income:
Rentals, royalties and sundry income $1,285,946 $ 938,129
Land sales 2,188,172 351,526
Interest 168,868 119,128
---------- ----------
3,642,986 1,408,783
---------- ----------
Expenses:
Taxes, other than Federal income taxes 152,435 147,114
General and administrative expenses 299,056 304,171
---------- ----------
451,491 451,285
---------- ----------
Income before provision for
Federal income taxes 3,191,495 957,498
Provision for Federal income taxes (Note 4) 1,014,168 276,714
---------- ----------
Net income $2,177,327 $ 680,784
========== ==========
Average number of sub-share certificates
and equivalent sub-share certificates
outstanding 2,842,905 2,956,738
========== ==========
Earnings per sub-share certificate 77(cents) 23(cents)
========== ==========
Cash dividend per sub-share certificate 40(cents) 40(cents)
========== ==========
</TABLE>
See accompanying notes to financial statements.
(2)
<PAGE> 4
TEXAS PACIFIC LAND TRUST
STATEMENTS OF CASH FLOWS
------------------------
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,177,327 $ 680,784
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 10,050 2,820
Deferred taxes 347,798 (138,529)
(Increase) decrease in assets:
Notes and accounts receivable (1,013,807) (77,750)
Accrued interest receivable (56,181) (21,753)
Prepaid expenses 13,722 14,510
Increase (decrease) in liabilities:
Federal income taxes 563,427 9,434
Other taxes 87,196 97,872
Escrow deposits on land sales 27,000 51,000
Other liabilities 23,617 59,998
----------- -----------
Total adjustments 2,822 (2,398)
----------- -----------
Net cash provided by operating activities 2,180,149 678,386
----------- -----------
Cash flows from investing activities:
Additions to water wells, leasehold improvements,
furniture and equipment (20,569) --
----------- -----------
Cash flows from financing activities:
Sub-shares purchased for retirement (651,578) (777,085)
Dividends paid (1,134,882) (1,178,802)
----------- -----------
Net cash used by financing activities (1,786,460) (1,955,887)
----------- -----------
Net (decrease) increase in cash and cash equivalents 373,120 (1,277,501)
Cash and cash equivalents at beginning
of year 1,794,898 3,022,985
----------- -----------
Cash and cash equivalents at end
of period $ 2,168,018 $ 1,745,484
=========== ===========
</TABLE>
See accompanying notes to financial statements.
(3)
<PAGE> 5
TEXAS PACIFIC LAND TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
-----------------------------
(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 Texas Pacific Land Trust (Trust) as of March 31, 1997 and December
31, 1996 and the results of its operations and its cash flows for the
three months ended March 31, 1997 and March 31, 1996, respectively.
These financial statements and foot notes included herein should be
read in conjunction with the Trust's annual financial statements as of
December 31, 1996 and 1995 and for each of the years in the three year
period ended December 31, 1996 included in the Trust's Form
10-K.
(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 three months ended March 31, 1997
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 three months ended March
31, 1997 and 1996 is summarized as follows:
1997 1996
---- ----
Federal income taxes paid $ 102,943 $ 405,809
========== ==========
There were no non-cash investing and financing activities during the
three months ended March 31, 1997 and 1996.
(4)
<PAGE> 6
Management's Discussion and
Analysis of Financial Condition and
Results of Operations for the
Three Months Ended
March 31, 1997 and 1996
-----------------------------------
Earnings per sub-share were $.77 for the first quarter of 1997 compared with
$.23 in the first quarter of 1996.
Total revenues for the first quarter of 1997 were $3,642,986 compared with
$1,408,783 in the first quarter of 1996, an increase of 158.6%.
The Trust sold 5,839.39 acres of land for a total of $2,188,172, an average of
$375 per acre, in the first quarter of 1997. In the comparable period of 1996 a
total of 50.22 acres were sold for $351,526, an average of $7,000 per acre.
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 $1,285,946 in the first
quarter of 1997, an increase of 37.1% compared with the first quarter of 1996.
Oil and gas royalty revenue was $1,055,592, up 46.7% compared with the first
quarter of 1996. Oil royalty revenue was $707,220, up 38.9% compared with 1996.
Crude oil production subject to the Trust's royalty interest was up 3.8% in the
first quarter, and the average price per barrel was up 33.8% compared with
1996. Gas royalty revenue was $348,372 in the first quarter, up 65.5% on a
volume decrease of 8.0% and a price increase of 80.0%.
(5)
<PAGE> 7
Management's Discussion (cont'd)
- --------------------------------
Interest revenue increased 41.8% in the first quarter of 1997, compared with
1996. Interest from notes receivable amounted to $139,125, an increase of
68.5%. Notes receivable were $6,082,475 as of March 31, 1997, an increase of
69.4% for the comparable period. Sundry interest was $29,743, down 18.6%
compared with 1996.
Taxes, other than Federal taxes on income, were up 3.6% in the first quarter of
1997 compared with last year.
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 has filed no reports on
Form 8-K 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.
TEXAS PACIFIC LAND TRUST
------------------------
(Registrant)
Date May 13, 1997 By /s/ ROY THOMAS
-------------- --------------------------------
Roy Thomas, General Agent,
Authorized Signatory and
Principal Financial Officer
(7)
<PAGE> 9
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
- ------- -------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,168,018
<SECURITIES> 0
<RECEIVABLES> 6,777,015
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,894,576
<PP&E> 6,173,088
<DEPRECIATION> 10,050
<TOTAL-ASSETS> 15,150,139
<CURRENT-LIABILITIES> 897,436
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,150,139
<SALES> 0
<TOTAL-REVENUES> 3,642,986
<CGS> 0
<TOTAL-COSTS> 451,491
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,191,495
<INCOME-TAX> 1,014,168
<INCOME-CONTINUING> 2,177,327
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,177,327
<EPS-PRIMARY> 0.77
<EPS-DILUTED> 0
</TABLE>
