<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 1998 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 (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)
Registrant's telephone number,
including area code: (212) 269-2266
Securities registered pursuant to Section 12(b) of the Act:
Name of Each
Title of Each Class Exchange on Which Registered
- ------------------- ----------------------------
Sub-shares in Certificate of
Proprietary Interest New York Stock Exchange
(par value $.16-2/3 per share)
Securities Registered Pursuant to Section 12(g) of the Act: None.
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 [ ].
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (ss.229,405 of this chapter)
is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
As of January 31, 1999, the aggregate market value of the voting stock
held by non-affiliates of the registrant is approximately $142,575,517.
Documents Incorporated by Reference: None.
ITEM 1: BUSINESS.
(a) General Development of Business. The registrant (hereinafter
called "Texas Pacific" or the "Trust") was organized under a Declaration of
Trust dated February 1, 1888, to receive and hold title to extensive tracts of
land in the State of Texas, previously the property of the Texas and Pacific
Railway Company, and to issue transferrable Certificates of Proprietary
Interest pro rata to the holders of certain debt securities of the Texas and
Pacific Railway Company. The Trustees are empowered under the Declaration of
Trust to manage the lands with all the powers of an absolute owner, and to use
the lands and the proceeds of sale of the lands, either to pay dividends to the
Certificate holders or to buy in and cancel outstanding Certificates. The
Trust's income is derived primarily from land sales, oil and gas royalties,
grazing leases, and interest. This method of operation has continued through
the present. During the last five years there has not been any reorganization,
disposition of any material amount of assets not in the ordinary course of
business (although in the ordinary course of business Texas Pacific does sell
or lease large tracts of land owned by it), or any material change in the mode
of conducting business.
Texas Pacific's income from oil and gas royalties has been limited in
the past by the level of production authorized for prorated wells each year by
the regulations of the Railroad Commission of Texas. The monthly percentage of
allowable production has averaged 100% in recent years but because of the
limited capacity of older wells and other operating problems, the percentage
permitted by the Commission could not be produced by most operators.
(b) Financial Information about Industry Segments. Texas Pacific does
not have identifiable industry segments, although as shown in the Statements of
Income included in the financial statements, land sales, oil and gas royalties
and interest income are the major contributors to the income of Texas Pacific.
The Trust's management views its operations as one segment and believes the
only significant activity is managing the land which was conveyed to the Trust
in 1888. Managing the land includes sales
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and leases of such land, and the retention of oil and gas royalties. See
Statements of Income for additional sources of income for the last three (3)
years of Texas Pacific.
(c) Narrative Description of Business. As previously indicated the
business done and intended to be done by Texas Pacific consists of sales and
leases of land owned by it, retaining oil and gas royalties, temporary cash
investments and the overall management of the land owned by it.
(i) During the last three fiscal years the following items have
accounted for more than fifteen percent (15%) of income.
1998 1997 1996
---- ---- ----
Land Sales 68% 55% 37%
Oil and Gas Royalties 26% 26% 40%
(ii) Texas Pacific is not in the business of development of new
products.
(iii) Raw materials are not necessary to the business of Texas
Pacific.
(iv) Patents, trademarks, licenses, franchises or concessions
held are not material to any business of Texas Pacific.
(v) The business of Texas Pacific is not seasonal in nature.
(vi) The business of Texas Pacific does not require Texas
Pacific to maintain any particular amount or item of
working capital.
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(vii) Texas Pacific Land Trust received $696,073 or 28 percent
of its oil and gas royalty income from 88 leases operated
by Texaco Inc.
(viii) Backlogs are not relevant to an understanding of Texas
Pacific's business.
(ix) No material portion of Texas Pacific business is subject
to renegotiation or termination at the election of the
Government.
(x) The Trust does not have competitors as such in that it
sells, leases and generally manages land owned by it and
to that extent any owner of property located in areas
comparable to the Trust is a potential competitor.
(xi) Research activities relating to the development of new
products or services or to the improvement of existing
products or services are not material to the Trust's
business.
(xii) Compliance with Federal, State and local provisions that
have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to
the protection of the environment, have had no material
effect upon the capital expenditures, earnings and
competitive position of Texas Pacific. To date Texas
Pacific has not been called upon to expend any funds for
these purposes.
(xiii) Texas Pacific has nine (9) full-time employees.
(d) Financial Information about Foreign and Domestic Operations and
Export Sales. Texas Pacific does not and has not during the preceding three (3)
fiscal years had any export sales or foreign operations and the only geographic
area in the United States in which land is sold or income derived is Texas.
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ITEM 2: PROPERTIES.
Texas Pacific Land Trust owns the surface estate in approximately
1,060,837 acres of land located in 21 counties in the western part of Texas.
Also, the Trust owns a 1/128 nonparticipating perpetual oil and gas royalty
interest under 85,413 acres of land and a 1/16 nonparticipating perpetual oil
and gas royalty interest under 386,988 acres of land in the western part of
Texas. At December 31, 1998, grazing leases were in effect on 97.5 percent or
approximately 1,034,834 acres of the Trust's land. Approximately 31,962 acres
of land were sold in 1998. The Trust leases office space in Dallas and El Paso,
Texas and New York, New York.
ITEM 3: LEGAL PROCEEDINGS.
Texas Pacific is not involved in any material pending legal
proceedings.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
This item is not applicable to Texas Pacific.
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ITEM 5: MARKET FOR SUB-SHARE CERTIFICATES AND RELATED SECURITY
HOLDER MATTERS.
The range of reported sales for sub-shares on the New York Stock
Exchange for the past two years has been as follows:
<TABLE>
<CAPTION>
1998 1997
--------------------- ----------------------
HIGH LOW HIGH LOW
------- ------- ------- -------
<S> <C> <C> <C> <C>
1st Quarter $48 $38 15/16 $29 3/4 $26 1/2
2nd Quarter 47 1/8 39 1/8 36 29 3/8
3rd Quarter 43 7/16 35 3/4 58 3/8 34 7/8
4th Quarter 54 5/8 39 1/4 56 34 1/2
</TABLE>
Certificates of Proprietary Interest and sub-shares are
interchangeable in the ratio of one certificate for 600 sub-shares or 600
sub-shares for one Certificate of Proprietary Interest. Texas Pacific has paid
a dividend once a year for the preceding 43 years. The dividend was $.40 per
sub-share in 1998 and 1997. Texas Pacific is not a party to any agreement that
would limit its ability to pay dividends in the future, although any future
dividends are subject to sufficient earnings of the Trust being accomplished.
The approximate number of holders of Certificates of Proprietary
Interest and sub-shares as of January 31, 1999 were:
Certificates of Proprietary Interest 1
Sub-shares in Certificates of Proprietary Interest 940
---
TOTAL 941
===
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ITEM 6: SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
SUMMARY OF SELECTED FINANCIAL DATA
----------------------------------
1998 1997 1996 1995 1994
----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Gross revenue $10,479,670 $13,075,037 $ 8,581,087 $ 6,440,285 $ 9,102,833
Expenses 1,638,132 3,243,920 2,442,527 1,688,567 1,792,839
----------- ----------- ----------- ----------- -----------
Income before
provision for
Federal income
taxes 8,841,538 9,831,117 6,138,560 4,751,718 7,309,994
Provision for
Federal income
taxes 2,808,277 3,124,376 1,874,287 1,422,817 2,336,325
----------- ----------- ----------- ----------- -----------
Net income $ 6,033,261 $ 6,706,741 $ 4,264,273 $ 3,328,901 $ 4,973,669
=========== =========== =========== =========== ===========
Net income per
Sub-share $ 2.22 $ 2.39 $ 1.46 $ 1.09 $ 1.58
Dividends per
Sub-share $ .40 $ .40 $ .40 $ .40 $ .40
Average number
of Sub-shares
outstanding 2,717,872 2,809,313 2,913,913 3,038,847 3,149,609
=========== =========== =========== =========== ===========
Total assets,
exclusive of
property with
no assigned
value $18,856,414 $16,673,289 $13,710,234 $13,901,804 $14,971,994
=========== =========== =========== =========== ===========
</TABLE>
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ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Earnings per sub-share certificate for 1998 were $2.22 compared to
$2.39 in 1997 and $1.46 in 1996. Total revenues in 1998 were $10,479,670, and
in 1997 $13,075,037, and in 1996 $8,581,087.
Land sales in 1998 were $5,020,462 compared to $7,152,032 in 1997, and
$3,164,000 in 1996. A total of 31,962 acres were sold in 1998 at an average
price of $157 per acre, compared to 10,468 acres in 1997 and 3,546 acres in
1996 at an average price per acre of $683 and $892, respectively.
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 other income were $5,459,208 in 1998 compared
to $5,923,005 in 1997 and $5,417,087 in 1996.
Oil and gas royalty revenue was $2,488,439 in 1998 compared to
$3,440,800 in 1997 and $3,416,574 in 1996. Oil royalty revenue was $1,625,336
and gas royalty revenue was $863,103 in 1998. Crude oil production from Trust
royalty wells decreased 9/10 of one percent and the average price received for
crude oil decreased 32.0%. Total gas production decreased 3.2% and the average
price for gas decreased 13.3%. The average price per royalty barrel of crude
oil for 1998, 1997, and 1996 was $13.51, $19.86 and $20.16 respectively. The
Trust's oil and gas royalty income is from perpetual non participating royalty
interests. The Trust has no control over changes in production or prices of oil
and gas. Increased activity in oil and gas via seismic and drilling began in
1997 and carried into 1998. There were 120 well completions with Trust Royalty
interest in 1998, the highest number since 1959; however, the 1998 decreased
oil prices has brought the increased drilling activity to a virtual stand still
by years end.
Interest revenue was $1,004,124 in 1998 compared to $802,296 in 1997
and $486,318 in 1996. Interest on notes receivable amounted to $905,451 in
1998, $693,569 in 1997 and $379,454 in 1996. At 1998 year end, notes receivable
from land sales was $11,006,307 compared to $9,307,218 in 1997 and $5,067,778
in 1996. Sundry interest amounted to $98,673 in 1998, $108,727 in 1997 and
$106,864 in 1996.
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<PAGE> 9
Sundry income revenue in 1998 was $1,436,316 compared to $1,154,350
in 1997 and $978,945 in 1996. The sundry income has been increased
significantly each of the past three years from seismic revenue and pipeline
easement revenue which are not predictable as future sources of income.
Taxes, other than Federal income taxes, were $459,168 in 1998 compared
to $522,861 in 1997 and $588,369 in 1996. Oil and gas production taxes were
$140,588 in 1998 compared to $189,912 in 1997 and $187,484 in 1996. Ad valorem
taxes were $281,264 in 1998 compared to $298,406 in 1997 and $368,541 in 1996.
Basis in real estate sold was $44,817 in 1998, $1,568,074 in 1997 and $809,367
in 1996. All other expenses were $1,134,147 in 1998, $1,152,985 in 1997, and
$1,044,791 in 1996.
The Trust's oil and gas royalty revenue, lease rentals, and receipts
of interests and principal payments on notes receivable have generated more
than adequate amounts of cash to meet the Trust's needs and should continue to
do so in the foreseeable future.
Year 2000 Issue
The Trust recognizes that the arrival of the Year 2000 poses a unique
challenge to the ability of an entity's information technology system and
non-information technology systems to recognize the date change from December
31, 1999, to January 1, 2000. The Trust has assessed and made certain changes
to provide for continued functionality of its systems. An assessment of the
readiness of the Trust's external entities, such as vendors, customers, payment
systems and others is ongoing. Due to the nature and extent of the Trust's
operations that are effected by Year 2000 issues, the Trust does not believe
that Year 2000 issues will have a material adverse effect on the business
operation or the financial performance of the Trust. There can be no assurance,
however, that Year 2000 issues will not adversely effect the Trust or its
business.
The Trust believes that the cost to make appropriate changes to its
internal and external systems will not be significant and that such costs will
be funded completely through operations.
Words or phrases when used in this Form 10-K or other filings with the
Securities and Exchange Commission, such as "does not believe" and "believes",
or similar expressions are intended to identify "forwardlooking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
ITEM 7.a: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Trust's primary market risk exposure relates to changes in
interest rates related to its notes receivable. To limit the impact of interest
rate changes, the Trust enters into fixed rate notes receivable that
approximate the current interest rate for land sales at the time. As a result,
the Trust's only interest rate risk is the opportunity loss should interest
rates increase. The following table summarizes expected maturities of the
Trust's notes receivable. As the interest rates represent rates which
management believes are current rates on similar land sales, the Trust believes
the fair value of its notes receivable
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approximate the carrying amounts.
<TABLE>
<CAPTION>
Year ending December 31 Maturity
----------------------- --------
<S> <C>
1999 $ 906,101
2000 1,303,490
2001 990,227
2002 577,011
2003 630,328
Thereafter 6,599,150
-----------
$11,006,307
</TABLE>
The Trust's remaining financial instruments consist of cash, temporary cash
investments and accounts payable and other liabilities and the carrying amount
of these instruments approximate fair value due to the short-term nature of
these instruments.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See Index to Financial Statements attached hereto.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL
DISCLOSURES.
This item is not applicable to Texas Pacific.
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ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
<TABLE>
<CAPTION>
(a) Directors:
POSITION AND PERIOD DURING
OFFICES HELD WHICH PERSON
NAME AGE WITH REGISTRANT HAS SERVED IN OFFICE
---- --- --------------- --------------------
<S> <C> <C> <C>
George C. Fraser III 76 Trustee and Chairman Trustee since 10/01/61
of the Trustees
Maurice Meyer III 63 Trustee and Member Trustee since 02/28/91
of Audit Committee
Joe R. Clark 71 Trustee and Member Trustee since 02/20/87
of Audit Committee
(b) Executive Officers:
POSITION AND PERIOD DURING
OFFICES HELD WHICH PERSON
NAME AGE WITH REGISTRANT HAS SERVED IN OFFICE
---- --- --------------- --------------------
George C. Fraser III 76 Trustee and Chairman Chairman of Trustees
of the Trustees since 02/28/91
Roy Thomas 52 General Agent and General Agent of Texas
Secretary Pacific Land Trust
commencing 01/01/95
and Secretary
commencing 01/01/95;
Assistant General
Agent from 12/01/92
through 12/31/94
</TABLE>
The Chairman of the Trustees holds office until his death, resignation
or disqualification. General Agent and Secretary holds office until his death,
resignation, discharge or retirement pursuant to Texas Pacific Land Trust
Employees' Pension Plan. No executive officer was selected to be an officer
pursuant to any arrangement or understanding between him and any other person
or persons other than the Trustees acting solely in their capacity as such.
(c) Certain Significant Employees. The Trust does not employ any
person who is not an executive officer who makes or is expected to make
significant contributions to the business of the Trust.
(d) Family Relations. There is no family relationship between any
Trustee and any other Trustee or any executive officer of the registrant.
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(e) Business Experience.
NAME OF TRUSTEE OR PRINCIPAL OCCUPATION OR EMPLOYMENT
EXECUTIVE OFFICER DURING THE PAST FIVE YEARS
- ----------------- --------------------------
George C. Fraser III Chairman of the Trustees of Texas
Pacific Land Trust; geologist -
Self-employed as independent oil &
gas producer and operator, Abilene,
Texas
Maurice Meyer III Former Vice Chairman of Henderson
Brothers
Joe R. Clark Personal investments. Former
President of Texas Pacific Oil
Company, Inc.
Roy Thomas Assistant General Agent of Texas
Pacific Land Trust and General Agent
of Texas Pacific Land Trust
(f) Involvement in Certain Legal Proceedings. During the past five
years, no Director or Executive Officer is or has been involved in any event
reportable under this caption.
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ITEM 11: EXECUTIVE COMPENSATION.
REMUNERATION TABLE
<TABLE>
<CAPTION>
(A) (B) (C) (D)
CASH & CASH EQUIVALENT AGGREGATE OF
NAME OF CAPACITIES FORMS OF REMUNERATION CONTINGENT FORMS
INDIVIDUALS IN WHICH SERVED SERVED OF REMUNERATION
- ----------- --------------- ---------------------- ---------------
<S> <C> <C> <C>
(C1) (C2)
Securities of
Salaries, Fees, Property, In-
Director's Fees, surance Benefits
Commissions and or Reimbursements;
Bonuses Personal Benefits
---------------- ------------------
Roy Thomas Secretary & $121,125 (1) (2)
General Agent
All Officers Trustees in- $129,125 (1) (2)
& Directors cluding Chairman;
as a Group General Agent
(four in
number)
</TABLE>
(1) During the year ending December 31, 1998, no Trustee or executive
officer of the registrant received any compensation for services to the
registrant in the form of securities or property, life or health
insurance, medical reimbursement, personal benefits or other unreported
compensation except for certain personal benefits such that the extent to
which they were personal rather than business cannot be specifically or
precisely ascertained without unreasonable effort or expenses and which
did not in any event exceed the minimum reportable amount under this
caption.
(2) The registrant maintains Texas Pacific Land Trust Employees' Pension
Plan, a non-contributory defined benefit pension plan qualified under
Section 401 of the Internal Revenue Code in which the employees, excluding
the Trustees, participate. The amount of the registrant's contribution,
payment or accrual in respect to Mr. Thomas is not and cannot readily be
separately or individually calculated by the regular actuaries for the
Plan. Based upon the Plan formula of 1-1/2% of each covered year times the
average salary of the last five years, Mr. Thomas is estimated to have
retirement benefits of $49,055 per year upon retirement at age 65. Total
compensation paid during 1998 to the nine (9) employees covered by the
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Employees' Pension Plan was $527,734. No contribution was
made to the plan in 1998. The remuneration covered by the
plan is salary.
Effective January 1, 1998, the Trust implemented a
defined contribution plan available to all regular employees
having one or more years of continuous service. Contributions
are at the discretion of the Trustees of the Trust. During
1998, the Trust contributed $28,409.
(3) The Chairman of the Trustees receives the sum of four thousand
dollars per year as compensation for his services, and the other two
trustees receive the sum of two thousand dollars per year for their
services.
(4) There is no compensation plan or arrangement with respect to
any individual named in the remuneration table that results, or will
result, from the resignation, retirement or any other termination of such
individual's employment or from a change in control of Texas Pacific or in
a change in the individual's responsibilities following a change in
control of Texas Pacific.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) Security Ownership of Certain Beneficial Owners. No person or group
owns of record, or is known by Texas Pacific to own beneficially, more than 5%
of any class of voting certificates of Texas Pacific, treating the
interchangeable Certificates of Proprietary Interest and Sub-Share Certificates
as a single class for this purpose.
(b) Security Ownership of Management: The following table gives the
information indicated as to equity securities (Certificates of Proprietary
Interest and Sub-Share Certificates) of Texas Pacific beneficially owned
directly or indirectly by all trustees, naming them, and by all trustees and
officers of the registrant, as a group:
AMOUNT AND NATURE
NAME OF OF OWNERSHIP PERCENT
TITLE AND CLASS (1) BENEFICIAL OWNER ON JANUARY 31, 1998 OF CLASS
- ------------------- ---------------- ------------------- ----------
Sub-share certificates: George C. Fraser III 28,420 (2) 1.06%
Sub-share certificates: Maurice Meyer III 14,950 (3) .56%
Sub-share certificates: Joe R. Clark 500 .02%
Sub-share certificates: All Trustees and
Officers as a Group 43,870 1.64%
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<PAGE> 15
(1) The sub-shares and the Certificates of Proprietary
Interest are freely interchangeable in the ratio of one
Certificate of Proprietary Interest for six hundred sub-shares
or six hundred sub-shares for one Certificate of Proprietary
Interest, and are deemed to constitute a single class. On
December 31, 1998, no trustee or officer was the beneficial
owner, directly or indirectly, of any Certificates of Proprietary
Interest.
(2) Does include 600 sub-shares owned by a trust of which Mr. Fraser
is a trustee and beneficiary.
(3) Does not include 2,300 sub-shares owned by the wife of Mr.
Maurice Meyer III in which Mr. Meyer disclaims any beneficial
ownership.
(c) Changes in Control. Texas Pacific has no knowledge of any arrangement
that may result in any change of the control of the Trust.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) Transaction with management and others. There are no reportable
transactions or currently proposed transactions between Texas Pacific and any
Trustee or executive officer of Texas Pacific or any nominee for election as
Trustee or any security holder of Texas Pacific or any member of the immediate
family of the foregoing persons.
(b) Certain business relationships. There are no relationships existing or
have ever existed concerning Trustees or nominees for Trustee that are required
to be disclosed under this paragraph.
(c) Indebtedness of Management. There are no persons indebted to Texas
Pacific in an amount in excess of $60,000 that are required to be disclosed
under this paragraph.
(d) Transactions with Promoters. Texas Pacific has not been organized
within the last five years and disclosure under this paragraph is not
applicable to Texas Pacific.
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<PAGE> 16
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORT ON
FORM 8-K.
(a) Financial Statements.
1. All schedules have been omitted because the required
information is contained in the financial statements or
related notes, or is not applicable or immaterial.
2. Exhibits required by Item 7 Regulation S-K
a. Annual Report to Security Holders
b. Copy of Trust Indenture
c. Exhibit No. 27 Financial Data Schedule
(b) No reports on Form 8-K have been filed for the last quarter of the
period covered by this report.
(c) See (a)(2) above.
(d) See (a)(1) above.
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<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
(Registrant) TEXAS PACIFIC LAND TRUST
By: /s/ GEORGE C. FRASER III
----------------------------------
George C. Fraser III
Chief Executive Officer
Date: March 24, 1999
--------------------------------
By: /s/ ROY THOMAS
----------------------------------
ROY THOMAS
Chief Financial and Chief
Accounting Officer
Date: March 29, 1999
--------------------------------
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<PAGE> 18
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ GEORGE C. FRASER III
----------------------------------
George C. Fraser III, Trustee
Date: March 24, 1999
--------------------------------
By: /s/ JOE R. CLARK
----------------------------------
Joe R. Clark, Trustee
Date: March 29, 1999
--------------------------------
By: /s/ MAURICE MEYER III
----------------------------------
Maurice Meyer III, Trustee
Date: March 26, 1999
--------------------------------
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<PAGE> 19
TEXAS PACIFIC LAND TRUST
Index to Financial Statements
Independent Auditors' Report
Balance Sheets - December 31, 1998, and 1997
Statements of Income - Years ended December 31, 1998, 1997 and 1996
Statements of Net Proceeds from All Sources - Years ended December 31, 1998,
1997, and 1996
Statements of Cash Flows - Years ended December 31, 1998, 1997, and 1996
Notes to Financial Statements
Schedules- All schedules have been omitted because the required information is
contained in the financial statements of related notes, or is not
applicable.
<PAGE> 20
[LOGO]
TEXAS PACIFIC LAND TRUST
Financial Statements
December 31, 1998, 1997 and 1996
(With Independent Auditors' Report Thereon)
<PAGE> 21
[KPMG LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Trustees and Certificate Holders
Texas Pacific Land Trust:
We have audited the accompanying balance sheets of Texas Pacific Land Trust as
of December 31, 1998 and 1997, and the related statements of income, net
proceeds from all sources, and cash flows for each of the years in the
three-year period ended December 31, 1998. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Texas Pacific Land Trust as of
December 31, 1998 and 1997, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 1998,
in conformity with generally accepted accounting principles.
/s/ KPMG LLP
Dallas, Texas
January 29, 1999
<PAGE> 22
TEXAS PACIFIC LAND TRUST
Balance Sheets
December 31, 1998 and 1997
<TABLE>
<CAPTION>
Assets 1998 1997
----------- -----------
<S> <C> <C>
Cash $ 147,375 112,591
Temporary cash investments - at cost which approximates market 2,450,000 1,800,000
Notes receivable for land sales ($906,101 due in 1998 and
$799,166 due in 1997) (note 1) 11,006,307 9,307,218
Prepaid Insurance 41,059 45,500
Other assets 664,030 798,455
Real estate acquired through foreclosure (note 3) 4,422,078 4,466,895
Water wells, leasehold improvements, furniture and equipment -
at cost less accumulated depreciation 125,565 142,630
Property, no value assigned (note 1):
Land (surface rights) situated in twenty-one counties in Texas -
1,034,386.64 acres in 1998 and 1,065,481.33 acres in 1997 -- --
Town lots in Iatan, Loraine, and Morita, Texas - 628 lots -- --
1/16 nonparticipating perpetual royalty interest in
386,987.70 acres -- --
1/128 nonparticipating perpetual royalty interest in
85,413.60 acres -- --
----------- -----------
$18,856,414 16,673,289
=========== ===========
Liabilities and Capital
Accounts payable and other liabilities $ 9,064 93,072
Federal income taxes 348,311 42,783
Other taxes 16,854 24,372
Deferred taxes (note 5) 4,840,479 4,291,856
----------- -----------
Total liabilities 5,214,708 4,452,083
----------- -----------
Capital (notes 1 and 6):
Certificates of Proprietary Interest, par value $100 each;
outstanding 1 certificate -- --
Sub-share Certificates in Certificates of Proprietary Interest,
par value $.16-2/3 each; outstanding 2,669,805 Sub-shares
in 1998 and 2,753,205 Sub-shares in 1997 -- --
Net proceeds from all sources 13,641,706 12,221,206
----------- -----------
Total capital 13,641,706 12,221,206
----------- -----------
$18,856,414 16,673,289
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 23
TEXAS PACIFIC LAND TRUST
Statements of Income
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Oil and gas royalties $ 2,488,439 3,440,800 3,416,574
Grazing lease rentals 530,329 525,559 535,250
Land sales 5,020,462 7,152,032 3,164,000
Interest 1,004,124 802,296 486,318
Easements and sundry income 1,436,316 1,154,350 978,945
----------- ----------- -----------
10,479,670 13,075,037 8,581,087
----------- ----------- -----------
Expenses:
Taxes, other than Federal income taxes 459,168 522,861 588,369
Salaries and related employee benefits 556,143 484,779 446,637
General expense, supplies and travel 398,692 491,395 430,583
Basis in real estate sold 44,817 1,568,074 809,367
Legal and professional fees 109,615 103,120 103,870
Commissions to local agents 1,376 16,490 39,975
Depreciation 60,321 49,201 15,726
Trustees' compensation 8,000 8,000 8,000
----------- ----------- -----------
1,638,132 3,243,920 2,442,527
----------- ----------- -----------
Income before provision for
Federal income taxes 8,841,538 9,831,117 6,138,560
----------- ----------- -----------
Provision for Federal income taxes (note 5):
Current 2,259,654 2,220,902 1,780,222
Deferred 548,623 903,474 94,065
----------- ----------- -----------
2,808,277 3,124,376 1,874,287
----------- ----------- -----------
Net income $ 6,033,261 6,706,741 4,264,273
=========== =========== ===========
Net income per Sub-share Certificate $ 2.22 2.39 1.46
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 24
TEXAS PACIFIC LAND TRUST
Statements of Net Proceeds from All Sources
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year $12,221,206 10,125,656 10,294,628
Add: Net income for year 6,033,261 6,706,741 4,264,273
----------- ----------- -----------
18,254,467 16,832,397 14,558,901
----------- ----------- -----------
Deduct:
Cost of Sub-share Certificates in Certificates
of Proprietary Interest purchased and
cancelled - 83,400 Sub-shares in 1998,
94,900 Sub-shares in 1997 and
114,300 Sub-shares in 1996 3,509,959 3,476,309 3,254,443
Dividends paid - per Certificate of
Proprietary Interest - $240 in 1998,
1997 and 1996; per Sub-share
Certificate - $0.40 in 1998, 1997 and 1996 1,102,802 1,134,882 1,178,802
----------- ----------- -----------
4,612,761 4,611,191 4,433,245
----------- ----------- -----------
Balance at end of year $13,641,706 12,221,206 10,125,656
=========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 25
TEXAS PACIFIC LAND TRUST
Statements of Cash Flows
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 6,033,261 6,706,741 4,264,273
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 60,321 49,201 15,726
Deferred taxes 548,623 903,474 94,065
Change in assets and liabilities:
New notes receivable from land sales (3,053,978) (4,905,315) (2,217,546)
Payments received on notes receivable 1,354,889 665,875 658,776
Real estate acquired through foreclosure 44,817 1,568,074 809,367
Prepaid insurance and other assets 138,866 (158,966) (213,560)
Accounts payable and other liabilities (84,008) 23,038 14,988
Federal income and other taxes payable 298,010 (59,007) (131,651)
----------- ----------- -----------
Net cash provided by operating activities 5,340,801 4,793,115 3,294,438
----------- ----------- -----------
Cash flows from investing activities:
Additions to water wells, leasehold improvements,
furniture and equipment (56,243) (78,731) (108,653)
Retirements of water wells, leasehold improvements,
furniture and equipment 12,987 14,500 19,373
----------- ----------- -----------
Net cash used in investing activities (43,256) (64,231) (89,280)
----------- ----------- -----------
Cash flows from financing activities:
Purchase of Sub-share Certificates in
Certificates of Proprietary Interest (3,509,959) (3,476,309) (3,254,443)
Dividends (1,102,802) (1,134,882) (1,178,802)
----------- ----------- -----------
Net cash used in financing activities (4,612,761) (4,611,191) (4,433,245)
----------- ----------- -----------
Net increase (decrease) in cash and temporary
cash investments 684,784 117,693 (1,228,087)
Cash and temporary cash investments
at beginning of year 1,912,591 1,794,898 3,022,985
----------- ----------- -----------
Cash and temporary cash investments at end of year $ 2,597,375 1,912,591 1,794,898
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 26
TEXAS PACIFIC LAND TRUST
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) GENERAL
The fair market value of the Texas Pacific Land Trust's (Trust)
land and royalty interests was not determined in 1888 when the
Trust was formed; therefore, no value is assigned to the land,
town lots, royalty interests, Certificates of Proprietary
Interest and Sub-share Certificates in Certificates of
Proprietary Interest in the accompanying balance sheets.
Consequently, in the statements of income, no allowance is made
for depletion and no cost is deducted from the proceeds of
original land sales. Even though the 1888 value of the real
properties cannot be precisely determined, the Trustees have
concluded that the effect of this matter can no longer be
significant to the Trust's financial position or results of
operations. For Federal income tax purposes, however, deductions
are made for depletion, computed on the statutory percentage
basis of income received from royalties.
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
(b) REVENUE RECOGNITION AND NOTES RECEIVABLE
The Trust generally receives cash payments on land sales of 25%
or more within the first year of such sales. Thereafter, annual
principal and interest payments are required by the Trust.
Accordingly, income is recognized on land sales during the
periods in which such sales are closed and sufficient amounts of
cash down payments are received. For Federal income tax purposes,
such sales are recognized on the installment method. The
installment method is also used for sales not meeting the minimum
down payment requirements.
Notes receivable related to land sales bear interest rates
ranging from 8.75% to 11% as of December 31, 1998 and are secured
by first lien deeds of trust on the properties sold. The weighted
average interest rate is 9.12% as of December 31, 1998. The
annual installments on notes are generally payable over terms of
3 to 15 years. There is no penalty for prepayment of principal,
and prepayments in 1998, 1997 and 1996 were $575,428, $105,854
and $146,230, respectively. The interest rates on notes
receivable are considered comparable with current rates on
similar land sales and, accordingly, the carrying value of such
notes receivable approximates fair value. There was no allowance
for uncollectible accounts at December 31, 1998, 1997 or 1996.
One customer represented approximately 15% and 19% and another
represented approximately 14% and 17% of the Trust's notes
receivable balance at December 31, 1998 and 1997, respectively.
6
<PAGE> 27
TEXAS PACIFIC LAND TRUST
Notes to Financial Statements
December 31, 1998, 1997 and 1996
The maturities of notes receivable for each of the five years
subsequent to December 31, 1998 are:
Years ending December 31:
1999 $ 906,101
2000 1,303,490
2001 990,227
2002 577,011
2003 630,328
As of December 31, 1998, there were no significant delinquencies
in the Trust's notes receivable. The Trust reviews its aging,
financial operations information on its debtors and estimated
fair value of collateral held as security to determine an
appropriate allowance for delinquencies, if any.
The Trust's oil and gas royalty interest, grazing and lease
rentals and easement and sundry income are recorded on a cash
basis, which approximates the accrual method.
(c) NET INCOME PER SUB-SHARE
The cost of Sub-share Certificates purchased and retired is
charged to net proceeds from all sources. Net income per
Sub-share Certificate is based on the weighted average number of
Sub-share Certificates in Certificates of Proprietary Interest
and equivalent Sub-share Certificates of Proprietary Interest
outstanding during each period (2,717,872 in 1998, 2,809,313 in
1997 and 2,913,913 in 1996).
(d) CASH FLOWS
Temporary cash investments at December 31, 1998 and 1997 consist
primarily of commercial paper. For purposes of the statements of
cash flows, the Trust considers all highly liquid debt
instruments with original maturities of three months or less to
be temporary cash investments. Cash disbursed for income taxes in
1998, 1997 and 1996 was $1,954,126, $2,277,943 and $1,920,810,
respectively.
(e) DEPRECIATION
Provision for depreciation of depreciable assets is made by
charges to income at straight-line and accelerated rates
considered to be adequate to amortize the cost of such assets
over their useful lives.
(f) INCOME TAXES
Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and
tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
7
<PAGE> 28
TEXAS PACIFIC LAND TRUST
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(2) SEGMENT INFORMATION
In June 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information. SFAS No. 131 establishes standards for the way public
business enterprises are to report information about operating segments.
SFAS No. 131 utilizes the management approach as a basis for identifying
reportable segments. The management approach is based on the way that
management organizes the segments within the enterprise for making
operating decisions and assessing performance. The Trust's management
views its operations as one segment and believes the only significant
activity is managing the land which was conveyed to the Trust in 1888.
Managing the land includes sales and leases of such land, and the
retention of oil and gas royalties.
(3) REAL ESTATE ACQUIRED THROUGH FORECLOSURE
Real estate acquired through foreclosure is carried at the lower of cost
or fair value less disposition costs at the date of foreclosure. Cost is
considered to be the aggregate of the outstanding principal balance,
accrued interest, past due ad valorem taxes and other fees incurred
relating to the foreclosure. Valuations are periodically performed or
obtained by management whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable, and any
further losses are recorded by a charge to operations and a valuation
allowance (none at December 31, 1998, 1997 or 1996) if the carrying
value of the property exceeds its estimated fair value.
Real estate acquired through foreclosure included the following activity
for the years ended December 31, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
-------------------------- -------------------------
ACRES BOOK VALUE ACRES BOOK VALUE
<S> <C> <C> <C> <C>
Balance at January 1 27,585.95 $4,466,895 27,830.19 $6,034,969
Sales 1,135.32 44,817 244.24 1,568,074
---------- ---------- ---------- ----------
Balance at December 31 26,450.63 $4,422,078 27,585.95 $4,466,895
========== ========== ========== ==========
</TABLE>
8
<PAGE> 29
TEXAS PACIFIC LAND TRUST
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(4) EMPLOYEE BENEFIT PLANS
The Trust has a noncontributory pension plan (Plan) available to all
regular employees having one or more years of continuous service. The
Plan provides for normal retirement at age 65. Contributions to the Plan
reflect benefits attributed to employees' services to date, as well as
services expected in the future. Plan assets consist primarily of
investments in NationsBank Texas, N.A. Common Trust Fund.
The following table sets forth the Plan's changes in benefit obligation,
fair value of plan assets, funded status and weighted average
assumptions as of December 31, 1998 and 1997:
1998 1997
----------- -----------
Change in benefits obligation:
Benefit obligation at beginning of year $ 1,336,308 1,234,252
Service cost 47,470 40,717
Interest cost 88,021 90,989
Amendments -- 71,800
Actuarial (gain) loss 8,221 (13,993)
Benefits paid (71,789) (87,457)
----------- -----------
Benefit obligation at end of year $ 1,408,231 1,336,308
=========== ===========
Change in plan assets:
Fair value of plan assets at
beginning of year: $ 1,703,767 1,546,566
Actual return on plan assets 181,257 244,658
Benefits paid (71,789) (87,457)
----------- -----------
Fair value of plan assets at
end of year $ 1,813,235 1,703,767
=========== ===========
Funded status $ 405,004 367,459
Unrecognized net actuarial gain (194,021) (141,716)
Unrecognized prior service cost 89,509 99,949
Unrecognized portion of net asset existing
at January 1, 1987 (92,865) (116,083)
----------- -----------
Prepaid benefit cost $ 207,627 209,609
=========== ===========
9
<PAGE> 30
TEXAS PACIFIC LAND TRUST
Notes to Financial Statements
December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Weighted average assumptions as
of December 31:
Discount rate 7.25% 7.50%
Expected return on plan assets 7.00 7.00
Rate of compensation increase 7.79 7.79
Net periodic benefit costs for the year ended December 31, 1998, 1997 and 1996 include the following
components:
1998 1997 1996
--------- --------- ---------
Components of net periodic benefit costs:
Service cost $ 47,470 40,717 36,641
Interest cost 88,021 90,989 87,167
Expected return on plan assets (116,751) (104,778) (100,524)
Amortization of the unrecognized
transition asset (23,218) (23,218) (23,218)
Amortization of unrecognized gains (3,980) -- --
Amortization of prior service cost 10,440 10,440 4,980
--------------- --------------- ----------------
Net periodic benefit costs $ 1,982 14,150 5,046
=============== =============== ================
</TABLE>
Effective January 1, 1998, the Trust implemented a defined contribution
plan available to all regular employees having one or more years of
continuous service. Contributions are at the discretion of the Trustees
of the Trust. During 1998, the Trust contributed approximately $28,000.
(5) FEDERAL TAXES ON INCOME
The Trust is taxed as if it were a corporation. Total income tax expense
differed from the amounts computed by applying the U.S. federal income
tax rate of 34% to pretax income before provision for federal income
taxes as a result of the following:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ------------
<S> <C> <C> <C>
Computed tax expense at the statutory rate $ 3,006,123 3,342,580 2,087,110
Reduction in income taxes resulting from:
Statutory depletion (150,526) (207,043) (203,688)
Other, net (47,320) (11,161) (9,135)
----------- ----------- -----------
$ 2,808,277 3,124,376 1,874,287
=========== =========== ===========
</TABLE>
10
<PAGE> 31
TEXAS PACIFIC LAND TRUST
Notes to Financial Statements
December 31, 1998, 1997 and 1996
The tax effects of temporary differences that give rise to significant
portions of the deferred tax liabilities at December 31, 1998 and 1997
are as follows:
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Basis differences in real estate acquired
through foreclosure $1,269,097 1,280,535
Deferred installment revenue on land sales
for tax purposes 3,571,383 3,011,321
---------- ----------
Total deferred tax liability $4,840,480 4,291,856
========== ==========
</TABLE>
(6) CAPITAL
Certificates of Proprietary Interest (Certificates) and Sub-share
Certificates in Certificates of Proprietary Interest (Sub-shares) are
exchangeable in the ratio of one Certificate to 600 Sub-shares. No
Certificates were exchanged for Sub-shares in 1998, 1997 or 1996.
The number of Certificates authorized for issuance at a given date is
the number then outstanding plus one/six-hundredth of the number of
Sub-shares then outstanding. The number of Sub-shares authorized for
issuance at a given date is the number then outstanding plus six hundred
times the number of Certificates then outstanding.
The Declaration of Trust was executed and delivered in New York. In the
opinion of counsel for the Trust, under the laws of the State of New
York, the Certificate and Sub-share Certificate holders are not subject
to any personal liability for the acts or obligations of the Trust.
The assets of the Trust are located in Texas. In the opinion of Texas
counsel, under the laws of the State of Texas, the Certificate and
Sub-share Certificate holders may be held personally liable with respect
to claims against the Trust, but only after the assets of the Trust
first have been exhausted.
(7) OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED)
The Trust's share of oil and gas produced, all of which is from royalty
interests, was as follows for the years ended December 31, 1998, 1997
and 1996, respectively: oil (in barrels) - 120,334, 121,415 and 120,432,
and gas (in thousands of cubic feet) - 389,698, 402,447 and 444,353.
Reserves related to the Trust's royalty interests are not presented
because the information is unavailable.
11
<PAGE> 32
TEXAS PACIFIC LAND TRUST
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(8) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following tables present unaudited financial data of the Trust for
each quarter of 1998 and 1997:
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------
DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31,
1998 1998 1998 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income $ 3,699,273 1,408,955 1,781,692 3,589,750
=========== =========== =========== ===========
Income before provision
for Federal income taxes $ 3,378,559 979,590 1,365,700 3,117,689
=========== =========== =========== ===========
Net income $ 2,262,495 683,278 945,835 2,141,653
=========== =========== =========== ===========
Net income per
Sub-share Certificate $ .84 .25 .35 .78
=========== =========== =========== ===========
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------
DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31,
1997 1997 1997 1997
---------- ---------- ---------- ----------
Income $ 1,692,622 4,068,850 3,670,579 3,642,986
=========== =========== =========== ===========
Income before provision
for Federal income taxes $ 1,340,681 3,683,717 1,615,224 3,191,495
=========== =========== =========== ===========
Net income $ 934,123 2,482,476 1,112,815 2,177,327
=========== =========== =========== ===========
Net income per
Sub-share Certificate $ .34 .89 .39 .77
=========== =========== =========== ===========
</TABLE>
12
<PAGE> 33
INDEX TO EXHIBITS
Exhibit
No. Item
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER>1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,597,375
<SECURITIES> 0
<RECEIVABLES> 11,670,337
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,302,464
<PP&E> 4,422,078
<DEPRECIATION> 60,321
<TOTAL-ASSETS> 18,856,414
<CURRENT-LIABILITIES> 374,229
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 18,856,414
<SALES> 0
<TOTAL-REVENUES> 10,479,670
<CGS> 0
<TOTAL-COSTS> 1,638,132
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,841,538
<INCOME-TAX> 2,808,277
<INCOME-CONTINUING> 6,033,261
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,033,261
<EPS-PRIMARY> 2.22
<EPS-DILUTED> 2.22
</TABLE>
