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, 2001
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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
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(Exact name of registrant as specified in its charter)
NOT APPLICABLE 75-0279735
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
1700 Pacific Avenue, Suite 1670, Dallas, Texas 75201
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(Address of principal executive offices)
(Zip Code)
214/969-5530
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(Registrant's telephone number, including area code)
80 Broad Street, Suite 2700, New York, New York 10004
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(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
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Part I
FINANCIAL INFORMATION
TEXAS PACIFIC LAND TRUST
BALANCE SHEETS
MARCH 31, 2001 and DECEMBER 31, 2000
March 31, December 31,
ASSETS 2001 2000
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(Unaudited)
Cash $ 245,661 $ 263,834
Temporary cash investments at cost which approximates market 1,000,000 1,350,000
Accounts receivable 596,142 587,109
Accrued interest receivable 368,232 379,383
Prepaid expenses 30,654 43,792
Notes receivable for land sales 8,463,673 8,591,998
Real estate acquired through foreclosure:
(9,268.43 acres at March 31, 2001 and 9,669.46 acres at December 31, 2000) 3,976,482 3,992,302
Water wells, leasehold improvements, furniture and
equipment - at cost less accumulated depreciation 116,476 120,898
Property, no value assigned :
Land (surface rights) situated in twenty-one counties in
Texas - 1,025,892.21 acres in 2001 and 1,025,894.27 acres in 2000 -- --
Town lots in Iatan, Loraine and Morita - 628 lots in 2001 and 2000 -- --
1/16 nonparticipating perpetual royalty interest in 386,987.70 acres in 2001 and 2000 -- --
1/128 nonparticipating perpetual royalty interest in 85,413.60 acres in 2001 and 2000 -- --
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$14,797,320 $15,329,316
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LIABILITIES AND CAPITAL
Federal income taxes payable $ 343,629 $ 67,290
Other taxes 103,121 36,330
Other liabilities 15,765 51,071
Escrow deposits on land sales -- 640
Deferred taxes 3,862,005 3,905,678
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Total liabilities 4,324,520 4,061,009
Capital:
Certificates of Proprietary Interest, par value $100
each; outstanding one certificate in 2001 and 2000 -- --
Sub-share Certificates in Certificates of Proprietary Interest, par value
$.16 2/3 each; outstanding 2,488,505 sub-shares in 2001 and
2,504,205 sub-shares in 2000 -- --
Net proceeds from all sources 10,472,800 11,268,307
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Total capital 10,472,800 11,268,307
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$14,797,320 $15,329,316
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See accompanying notes to financial statements.
(1)
TEXAS PACIFIC LAND TRUST
STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31
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2001 2000
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Income:
Rentals, royalties and sundry income $1,415,568 $1,077,087
Land sales 18,540 782,726
Interest 213,621 214,712
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1,647,729 2,074,525
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Expenses:
Taxes, other than Federal income taxes 149,971 131,026
Basis in real estate sold 15,821 588,815
General and administrative expenses 395,377 361,030
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561,169 1,080,871
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Income before
Federal income taxes 1,086,560 993,654
Federal income taxes 299,829 296,980
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Net income $ 786,731 $ 696,674
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Average number of sub-share certificates
and equivalent sub-share certificates
outstanding 2,501,138 2,585,555
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Basic earnings per sub-share certificate $ .31 $ .27
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Cash dividend per sub-share certificate $ .40 $ .40
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See accompanying notes to financial statements.
(2)
TEXAS PACIFIC LAND TRUST
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31
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2001 2000
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Cash flows from operating activities:
Net income $ 786,731 $ 696,674
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation 11,700 10,800
Deferred taxes (43,673) (38,806)
(Increase) decrease in assets:
Accounts receivable (9,033) (5,785)
New notes receivable from land sales (13,900) (559,227)
Payments received on notes receivable 142,225 131,910
Accrued interest receivable 11,151 (9,402)
Prepaid Federal income taxes -- 41,523
Prepaid expenses 13,138 12,049
Real estate acquired through foreclosure 15,820 588,815
Increase (decrease) in liabilities:
Federal income taxes payable 276,339 294,263
Other taxes payable 66,791 71,542
Escrow deposits on land sales (640) --
Other liabilities payable (35,306) (40,470)
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Total adjustments 434,612 497,212
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Net cash provided by operating activities 1,221,343 1,193,886
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Cash flows from investing activities-
Additions to water wells, leasehold improvements,
furniture and equipment (7,278) (6,339)
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Cash flows from financing activities:
Sub-shares purchased for retirement (578,716) (578,940)
Dividends paid (1,003,522) (1,033,842)
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Net cash used by financing activities (1,582,238) (1,612,782)
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Net (decrease) in cash and cash equivalents (368,173) (425,235)
Cash and cash equivalents at beginning
of period 1,613,834 1,872,539
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Cash and cash equivalents at end
of period $ 1,245,661 $ 1,447,304
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See accompanying notes to financial statements.
(3)
TEXAS PACIFIC LAND TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001
(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, 2001 and the results of its
operations for the three months ended March 31, 2001 and 2000 and its
cash flows for the three months ended March 31, 2001 and 2000,
respectively. These financial statements and footnotes included herein
should be read in conjunction with the Trust's annual financial
statements as of December 31, 2000 and 1999 and for each of the years
in the three year period ended December 31, 2000 included in the
Trust's Form 10-K.
(2) No value is assigned to the land, unless acquired through foreclosure;
consequently, no allowance for depletion is computed, and no charge to
income is made therefore, 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, 2001 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,
2001 and 2000 is summarized as follows:
2001 2000
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Federal income taxes paid $ 67,163 $ --
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(4)
(7) The Trust has adopted SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information which 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. Trust management makes decisions about resource
allocation and performance assessment based on the same financial
information presented in these financial statements. Managing the land
includes sales and leases of such land, and the retention of oil and
gas royalties.
(5)
Management's Discussion and
Analysis of Financial Condition and
Results of Operations for the
Three Months Ended
March 31, 2001 and 2000
Results of Operations for Quarter Ended March 31, 2001 Compared to Quarter Ended
March 31, 2000
Earnings per sub-share were $.31 for the first quarter of 2001 compared to $.27
for the first quarter of 2000. Total revenues were $1,647,729 compared to
$2,074,525, a decrease of 20.6%. The main reason for earnings being increased
while total revenues were 20.6% less is that land sold in the first quarter of
2000 had a basis of $572,994 more than land sold in the first quarter of 2001.
The Trust sold 2.06 acres of land for $18,540, an average of $9,000 per acre for
the first quarter of 2001. This compares to 15,654.53 acres at $50 per acre for
a total of $782,726 in the first quarter of 2000.
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 were $1,415,568 in the first quarter of
2001 compared to $1,077,087 in the first quarter of 2000, an increase of 31.4%.
Oil and gas royalty revenue was $1,188,717, up 38.1% compared to the first
quarter of 2000. Oil royalty revenue was $658,259, up 10.2% compared to 2000.
Crude oil production subject to the Trust's royalty interest was down 3.0% for
the first quarter and the average price per royalty barrel was up 13.6% compared
to 2000. Gas royalty revenue was $530,458 in the first quarter, up 101.2% on a
volume decrease of 6.2% and price increase of 114.6%.
Easement and Sundry income was $139,017, up 6.9% from the first quarter of 2000.
Interest revenue decreased .5% in the first quarter of 2001 compared to 2000.
Interest from notes receivable was $192,086, up 1.1% from the first quarter of
2000. Notes receivable were $8,463,673 as of March 31, 2001 down 4.0% from March
31, 2000. Sundry interest was $21,535, down 12.8% from the first quarter of
2000.
Taxes, other than Federal income taxes were up 14.5% over the first quarter of
2000. This is due mainly to the increase in oil and gas production taxes.
General and administrative expenses increased 9.5% compared to the first quarter
of 2000.
(6)
Management's Discussion (cont'd)
Liquidity and Capital Resources
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.
Words or phrases when used in this Form 10-Q or other filings with the
Securities and Exchange Commission, such as "does not believe" and "believes",
or similar expressions are intended to identify "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Quantitative and Qualitative
Disclosures About Market Risk
There have been no material changes in the information related to market risk of
the Trust since December 31, 2000.
(7)
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.
(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
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(Registrant)
Date 5/09/01 By /s/ ROY THOMAS
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Roy Thomas, General Agent,
Authorized Signatory and Principal
Financial Officer
(8)