SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Fiscal Year Ended December 31, 1999 Commission File Number 0-9669 CALCASIEU REAL ESTATE AND OIL CO., INC. (Exact Name of registrant as specified in its charter) Louisiana 72-0144530 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Lakeside Plaza Lake Charles, Louisiana 70601 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (337) 494-4256 Securities registered pursuant to Section 12(b) of the Act: Title of each Class Name of each exchange on which registered None Not Applicable Securities registered pursuant to Section 12(g) of the Act: Common Stock, No Par Value (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 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[ ] State the aggregate market value of the voting stock held by non-affiliates of the registrant. Trading in the Company's common stock is limited and sporadic and its common stock has no readily established market value. Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date. Common Stock, No Par Value, 1,974,352 shares outstanding at February 29, 2000. Documents Incorporated by Reference Document Part of Form 10K --------- ---------------- Definitive Proxy Statement Parts I and III PART 1 ITEM 1. BUSINESS The registrant, Calcasieu Real Estate and Oil Co., Inc., (the "Company") was incorporated under Louisiana law in 1930 to hold real estate and royalty interests located in Southwest Louisiana. The principal office of the Company is One Lakeside Plaza, Lake Charles, Louisiana. The business of the Company is conducted primarily at the principal offices of its officers, who have other full-time employment. The principal business of the Company has been the ownership and preservation of the assets acquired at the Company's organization and subsequently. The Company's primary activities have consisted of leasing its properties and collecting rents and royalties derived therefrom. The mineral interests of the Company are located in the Parishes of Calcasieu, Allen, Acadia, Cameron, St. Landry, St. Mary, Vermilion and Jefferson Davis in Louisiana. The Company owns approximately 12,170 acres of land in fee in the Parishes of Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis, LaFourche, Sabine, St. Landry and Vermilion in Louisiana. Most of the Company's land and mineral interests are located within 100 miles of the City of Lake Charles, in southwestern and central Louisiana. Of this total, 5,701 represents a 1/6th interest in 34,189 acres, which is managed by Walker Louisiana Properties, a joint venture consisting of the land owners. The Company also owns a 40% interest in 1,577 of these acres. Of the Walker Louisiana acreage, the Company does not own minerals on 3,247 gross or 541 net acres. In April, 1992, the Company purchased a 100% interest in the surface rights and a 50% interest in the mineral rights to 952 acres, consisting of mainly timber lands located in Beauregard and Calcasieu Parishes. There is no production on this acreage. On October 29, 1997, Calcasieu Real Estate and Oil Co., Inc. purchased 3,496 acres of agricultural land in Cameron Parish, Louisiana, from Amoco Production for $1,663,000. No minerals were included in the purchase. OPERATIONS The Company's income is derived primarily from its oil and gas properties. Agriculture and timber income are the next largest sources of income. Additional oil and gas income in the future will come from discoveries on the Company's land. 1 Industry Segments The purchase of additional real estate in 1990, 1992, 1997, and 1999 has created "Agricultural Properties" and "Timber Properties" as additional industry segments because revenues from these properties exceed 10% of total revenues. The Company also receives mineral rentals and royalties from some of these properties. Note 7 to the Financial Statements on page 24 sets forth information on the business segments. EMPLOYEES The Company currently employs a total of five persons in a part-time capacity. The Company is subject to no union contracts nor does the Company have any pension, profit sharing or deferred compensation plans. CUSTOMERS The Company had two customers, the sales to which equal or exceed 10% of the Company's total revenues. In 1999, sales to Neumin Production accounted for 78% of revenues and sales to Mitchell Energy accounted for 12% of revenues. ITEM 2. PROPERTIES Until early 1990, the Company owned 2,022 acres in fee, a 50% undivided interest in 440 acres, and a 40% undivided interest in 1,748 acres of immovable (real) property located in the parishes of Allen, Beauregard, Calcasieu, Jefferson Davis, Sabine and St. Landry in Louisiana. The Company also owns a 20% interest in the minerals under approximately 3,330 surface acres, and a 40% interest in the minerals under approximately 160 surface acres, located in the parishes of Acadia, Allen, Cameron, Jefferson Davis, St. Landry, St. Mary and Vermilion in Louisiana. All of the foregoing property is located in southwestern and central Louisiana, within approximately 100 miles of the City of Lake Charles. Approximately half of the acreage in which mineral interests are held is in oil and gas production. In addition, the Company owns fractional royalty interest in 36 properties covering 6,040 gross acres in eight parishes in Louisiana. In February of 1990 the Company acquired a 12.5% undivided fee interest in 34,309 acres (4,289) net acres) located in the Louisiana parishes of Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis, Sabine and Vermilion, and in 1999 the Company acquired an additional 4.17% interest in the same acreage. A portion of these lands are the same as the 1,748 acres in which the company owned a 40% position described in the first paragraph above. This property consists of 17,088 gross acres of agriculture land, 7,572 acres of commercial timber, 4,196 acres in pasture, 4,253 acres of marsh land and 1,200 acres for future subdivision as it is contiguous to the city limits of Lake Charles. The company participates in oil and gas production in Southeast Lunita Field, Lake Arthur Field, Edgerly Field, Welsh Field and North Indian Village Field. Most of the oil and gas income in 1999 came from the company's 2 50% ownership in 443 acres that are located in the North Indian Village Field, Calcasieu Parish, developed and operated by Neumin Production Company. The Company has also participated for the 1/6th interest in the granting of oil and gas leases which are yet to be drilled. In April of 1992, the Company purchased 952 acres of timberland in Calcasieu and Beauregard Parishes for $475,000. On October 29, 1997, Calcasieu Real Estate and Oil Co., Inc. purchased 3,496 acres of land in Cameron Parish, Louisiana, from Amoco Production Company for $1,663,000. The table below shows, for the years ended December 31, 1999, December 31, 1998, and December 31, 1997, net gas produced in thousands of cubic feet (MCF) and net oil (including condensate and natural gas liquids) produced in barrels (Bbl), average sales prices and average production costs, relating to oil and gas attributable to the royalty interests and working interest held by the Company. Year Ended Year Ended Year Ended 12/31/97 12/31/98 12/31/99 Net gas produced (MCF) 107,403 169,595 364,883 Average gas sales price (Per MCF)(1) $ 2.85 $ 2.31 $ 2.28 Net Oil Produced (Bbl) 4,956 8,196 32,987 Average Oil Sales price (Per Bbl)(1) $ 19.60 $ 13.28 $ 16.58 Average sales price of oil and gas $ 2.87 $ 2.47 $ 3.63 per MCF equivalent (1)(2) Average production cost of oil and gas per MCF equivalent (2) Royalty Interests .14 .11 .13 Working Interests 2.90 3.06 1.48 (1) Before deduction of production and severance taxes. (2) Oil production is converted to MCF equivalents at the rate of 6 MCF's per barrel, representing the approximate relative energy content of oil and natural gas. ITEM 3. LEGAL PROCEEDINGS The Company is a co-defendant in a lawsuit filed by owners of eighty acres, which the defendants owned the minerals. The landowners are asserting that the mineral interest prescribed. Company's counsel has advised that he cannot offer an opinion on the outcome awaiting review of the facts. The defendants intend to defend the suit vigorously. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to security holders during the fourth quarter. 3 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS As of February 29, 2000, the common stock of Calcasieu Real Estate and Oil Co., Inc. was owned by 724 stockholders. During the three years preceding the date hereof, there has been only limited and sporadic trading in the Company's Common Stock, principally among its shareholders. In the year ended December 31, 1999, 103,500 shares were traded with a high of 4 1/2 and a low of 2 3/4. The last trade during this period was on December 14, 1999, for 8,000 shares at a price of 4 1/2. Below is the trading range. Volume High Low 01/01/99 - 03/31/99 15,400 4 2 3/4 04/01/99 - 06/30/99 58,800 4 2 3/4 07/01/99 - 09/30/99 6,800 4 3 10/01/99 - 12/31/99 22,500 4 1/2 3 Dividends were paid per share on Common Stock as follows by record date: March 28, 1997, $.03; June 27, 1997, $.03; September 26, 1997, $.03; December 30, 1997, $.03, March 27, 1998, $.03; June 26, 1998, $.03; September 30, 1998, $.03; September 30, 1999, $.03; December 28, 1999, $.05. There are no restrictions on the paying of dividends. ITEM 6. SELECTED FINANCIAL DATA Ended Ended Ended Ended Ended 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 Revenues $ 812,137 $ 672,294 $ 967,632 $ 897,027 $2,646,491 Income before income 518,093 1,244,583 776,445 585,182 2,279,814 taxes Earnings per common .17 .40 .26 .20 .78 share (1) Total assets $3,018,542 $3,445,721 $4,307,077 $4,759,327 $5,212,540 Cash Dividends declared .06 .09 .12 .09 .08 per common stock (1) Earnings per common share presented are based on the weighted average outstanding shares of about 1,979,000 in 1999, 1,995,000 in 1998, 1,997,000 in 1997, 1,997,000 in 1996, and 1,998,000 in 1995. 4 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Income after taxes was up 283% in 1999 from 1998. This was caused by several factors. First, the Company had an increase in revenues of 195% in 1999 from 1998. During 1999, gas production increased 115% while the average sale price decreased 1%. Oil production increased 302% and the average sales price increased 25%. Income from mineral leases and lease bonuses increased 9%. The total net income before taxes for all operations from the property purchased in 1990 was up from $334,552 to $463,155 or an increase of 38%. Information on the oil and gas properties is included in the notes to financial statements, specifically as to reserve quantities and standardized measure of discounted net cash flows. Both of those are unaudited. Management believes that the company's revenues will be sufficient to meet its existing capital needs and the needs of its anticipated future operations. Long-term trends will depend upon the ability of management to find new production to replace the depletion of the Company's present minerals. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA All Financial statements required by Regulation S-X are listed in the Table of Contents to Financial Statements and Supplemental Schedules appearing immediately after the signature page of this Form 10K and are included herein by reference. See Item 14. ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by Item 10 as to directors is included in the Registrant's definitive proxy statement to be filed pursuant to Section 14(a) of the Securities Exchange Act of 1934 and is included herein by reference. Executive officer of Registrant as of February, 2000, are as follows: NAME Age Position with Registrant - ------------------------------ --------------- ------------------------------------------------- Arthur Hollins, III 69 President & Director William D. Blake 67 Vice President, Treasurer and Director Charles D. Viccellio 66 Vice President, Secretary and Director 5 The occupations of such executive officers during the last five years and other principal affiliations are: Name - ------------------------------ Arthur Hollins, III Director of the Company since 1975; President of the Company since 1979; Chairman of the Board at the First National Bank of Lake Charles from 1968 to 1999; President of Bank One, Southwest Louisiana, from 1998 to April, 1999. William D. Blake Director of the Company since 1966; Secretary-Treasurer of the Company from 1966-1979; Vice-President and Treasurer of the Company since 1979; General Manager of J. A. Bel Estate (ownership and cultivation of timberland) and the Quatre Parish Company (rice farming); President of Lacassane Co., Inc. and Howell Industries, Inc.; Director of Sweetlake Land and Oil Co., Inc. Charles D. Viccellio Vice-President and Secretary of the Company since 1997 and Director of the Company since 1996. Partner in the law firm of Stockwell, Sievert, Viccellio, Clements & Shaddock, LLP. ITEM 11. EXECUTIVE COMPENSATION The information required by Item 11 is included in the Registrant's definitive proxy statement to be filed pursuant to Section 14(a) of the Securities and Exchange Act of 1934 and is included herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by Item 12 is included in the Registrant's definitive proxy statement to be filed pursuant to Section 14(a) of the Securities Exchange Act of 1934 and is included herein by reference. PART IV ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed as part of the report: 1. All Financial Statements. See Table of Contents to Financial Statements and schedule on page 8. 2. Financial Statement Schedules. See Table of Contents to Financial Statements and Schedules on page 8. 3. List of Exhibits - None (b) Reports on Form 8-K - None 6 SIGNATURES Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. CALCASIEU REAL ESTATE AND OIL CO., INC. BY: /s/ Arthur Hollins, III ---------------------------------- Arthur Hollins, III, President Dated March 13, 2000 Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities with regard to Calcasieu Real Estate and Oil Co., Inc. and on the date indicated: /s/ Arthur Hollins, III President - ------------------------------------------- (Chief Executive Officer and Director) Arthur Hollins, III /s/ William D. Blake Vice President & Treasurer - ------------------------------------------- (Principal Financial Officer and Director) William D. Blake /s/ Charles D. Viccellio Vice President & Secretary, (Director) - ------------------------------------------- Charles D. Viccellio /s/ Henry C. Alexander Director - ------------------------------------------- Henry C. Alexander /s/ Troy A. Freund Director - ------------------------------------------- Troy A. Freund /s/ Laura A. Leach Director - ------------------------------------------- Laura A. Leach /s/ Frank O. Pruitt Director - ------------------------------------------- Frank O. Pruitt /s/ B. James Reaves, III Director - ------------------------------------------- B. James Reaves, III /s/ Mary W. Savoy Director - ------------------------------------------- Mary W. Savoy Dated: March 13, 2000 7 CALCASIEU REAL ESTATE & OIL CO., INC. Lake Charles, Louisiana C O N T E N T S Page INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 9 FINANCIAL STATEMENTS Balance sheets 10 Statements of income 11 Statements of changes in stockholders' equity 12-13 Statements of cash flows 14-15 Notes to financial statements 16-30 SUPPLEMENTARY INFORMATION Property, plant and equipment 31 Accumulated depreciation, depletion and amortization 32 SCHEDULE OMITTED Schedules, other than those listed above, have been omitted because of the absence of the conditions under which they are required or because the required information is included in the financial statements or notes thereto. 8 INDEPENDENT AUDITORS' REPORT To the Board of Directors Calcasieu Real Estate & Oil Co., Inc. Lake Charles, Louisiana We have audited the accompanying balance sheets of Calcasieu Real Estate & Oil Co., Inc. as of December 31, 1999 and 1998, and the related statements of income, changes in stockholders' equity, and cash flows for the years ended December 31, 1999, 1998 and 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of the Co-owners' Undivided Two-Thirds Interest in Walker Louisiana Properties as of and for the year ending December 31, 1998, of which Calcasieu Real Estate & Oil Co., Inc. owns a twenty-five percent undivided interest. The twenty-five percent undivided interest consists of total assets of $1,781,597 as of December 31, 1998, and total revenues of $443,421 for the year then ended. Those statements were audited by other auditors whose report has been furnished to us, and in our opinion, insofar as it relates to the amounts included for the Co-Owners' Undivided Two-Thirds Interest in Walker Louisiana Properties, is based solely on the report of the other auditors. 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, based on our audits and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of Calcasieu Real Estate & Oil Co., Inc. as of December 31, 1999 and 1998, and the results of its operations and its cash flows for the years ended December 31, 1999, 1998 and 1997, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information on pages 31 and 32 is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Lake Charles, Louisiana March 1, 2000 9 CALCASIEU REAL ESTATE & OIL CO., INC. BALANCE SHEETS December 31, 1999 and 1998 ASSETS 1999 1998 ----------- ---------- CURRENT ASSETS Cash and cash equivalents $ 471,821 $ 113,177 Accounts receivable 452,955 151,666 Inventory-harvested crops 10,281 11,976 Prepaid income taxes - 71,882 Prepaid expense and other 674 773 ----------- ---------- Total current assets 935,731 349,474 ----------- ---------- SECURITIES AVAILABLE-FOR-SALE 76,267 62,597 ----------- ---------- PROPERTY AND EQUIPMENT (less accumulated depreciation, depletion and amortization of $450,507 in 1999 and $434,257 in 1998) 98,563 97,115 Timber (less accumulated depletion of $228,876 in 1999 and $213,423 in 1998) 486,188 589,663 Land 3,615,791 3,660,478 ----------- ---------- 4,200,542 4,347,256 ----------- ---------- $ 5,212,540 $4,759,327 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ - $ 158,840 Trade payables and accrued expenses 11,144 7,710 Dividends payable 98,938 - Income taxes payable: Current 151,282 - Deferred, net 20,173 12,573 ----------- ---------- Total current liabilities 281,537 179,123 ----------- ---------- LONG-TERM DEBT, less current maturities - 1,028,224 ----------- ---------- STOCKHOLDERS' EQUITY Common stock, no par value; 3,000,000 shares authorized; 2,100,000 shares issued 72,256 72,256 Retained earnings 5,059,618 3,669,193 Accumulated other comprehensive income 12,086 3,884 ----------- ---------- 5,143,960 3,745,333 Less cost of treasury stock (1999 125,648 and 1998 121,248 shares) 212,957 193,353 ----------- ---------- 4,931,003 3,551,980 ----------- ---------- $5,212,540 $4,759,327 =========== ========== See Notes to Financial Statements. 10 CALCASIEU REAL ESTATE & OIL CO., INC. STATEMENTS OF INCOME Years Ended December 31, 1999, 1998 and 1997 1999 1998 1997 ---------- --------- --------- Revenues $2,646,491 $ 897,027 $ 967,632 ---------- --------- --------- Costs and expenses: Oil and gas production 84,605 50,511 59,503 Agricultural 12,886 10,935 12,419 Timber 45,651 17,324 18,062 Depreciation, depletion and amortization 20,484 16,817 14,359 163,626 95,587 104,343 ---------- --------- --------- Income from operations 2,482,865 801,440 863,289 ---------- --------- --------- Other income (expense): Interest income 22,508 17,022 68,177 Dividends on stock 2,159 1,799 530 Realized gain on sale of investments in available-for-sale securities - 13,172 19,356 Gain on sale of assets 31,536 - - General and administrative (207,962) (180,381) (161,735) Interest expense (51,292) (67,870) (13,172) ---------- --------- --------- (203,051) (216,258) (86,844) ---------- --------- --------- Income before income taxes 2,279,814 585,182 776,445 ---------- --------- --------- Federal and state income taxes: Current 732,622 180,987 259,817 Deferred 2,132 264 3,710 ---------- --------- --------- 734,754 181,251 263,527 ---------- --------- --------- Net income (per common share): 1999 $.78; 1998 $.20; 1997 $.26 $1,545,060 $ 403,931 $ 512,918 ========== ========= ========= See Notes to Financial Statements. 11 CALCASIEU REAL ESTATE & OIL CO., INC. STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Years Ended December 31, 1999, 1998 and 1997 Accumulated Other Capital Comprehensive Retained Comprehensive Stock Treasury Income Earnings Income Issued Stock ------------- --------- ------------- -------- --------- Balance, January 1, 1997 $ - $3,164,703 $ 6,938 $ 72,256 $137,643 Comprehensive income: Net income 512,918 512,918 - - - Other comprehensive income: Unrealized gains on securities available for sale: Unrealized holding gains occurring during period net of taxes of $8,026 12,040 - - - - Less reclassification adjustment for gains included in net income, net of taxes of $7,742 (11,614) - - - - ----------- Other comprehensive income, net of tax 426 - 426 - - ---------- Total comprehensive income $ 513,344 ========== Purchase of treasury stock - - - 60 Dividends (232,615) - - - ----------- --------- -------- -------- Balance, December 31, 1997 3,445,006 7,364 72,256 137,703 Comprehensive income: Net income $ 403,931 403,931 - - - Other comprehensive income: Unrealized gains on securities available for sale: Unrealized holding gains occurring during period net of taxes of $2,949 4,423 - - - - Less reclassification adjustment for gains included in net income, net of taxes of $5,269 (7,903) - - - - ---------- Other comprehensive income, net of tax (3,480) - (3,480) - - ---------- Total comprehensive income $ 400,451 ========== (continued on next page) 12 CALCASIEU REAL ESTATE & OIL CO., INC. STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Years Ended December 31, 1999, 1998 and 1997 Accumulated Other Capital Comprehensive Retained Comprehensive Stock Treasury Income Earnings Income Issued Stock ------------ --------- -------------- ------ ---------- Purchase of treasury stock - - - 55,650 Dividends (179,744) - - - ---------- ---------- --------- --------- Balance, December 31, 1998 3,669,193 3,884 72,256 193,353 Comprehensive income: Net income $1,545,060 1,545,060 - - - Other comprehensive income: Unrealized gains on securities available for sale: Unrealized holding gains occurring during period net of taxes of $5,468 8,202 - - - - ----------- Other comprehensive income, net of tax 8,202 - 8,202 - - ----------- Total comprehensive income $1,553,262 =========== Purchase of treasury stock - - - 19,604 Dividends (158,300) - - - Refund of prior year unclaimed dividends and other 3,665 - - - ---------- ---------- --------- --------- Balance, December 31, 1999 $5,059,619 $ 12,086 $ 72,256 $ 212,957 ========== ========== ========= ========= See Notes to Financial Statements. 13 CALCASIEU REAL ESTATE & OIL CO., INC. STATEMENTS OF CASH FLOWS Years Ended December 31, 1999, 1998 and 1997 1999 1998 1997 ----------- --------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,545,060 $ 403,931 $ 512,918 Noncash (income) expenses included in net income: Depreciation, depletion and amortization 20,484 16,817 14,359 Realized (gains) on sale of available-for-sale securities - (13,172) (19,356) Gain on sale of assets (31,536) - - Loss on asset retirement 926 - - Change in assets and liabilities: (Increase) decrease in trade accounts and other receivables (301,289) (83,627) 5,516 (Increase) decrease in inventory 1,695 1,641 (10,767) (Increase) decrease in prepaid income taxes 71,882 (71,882) - Decrease in prepaid expenses 99 989 8,396 Increase (decrease) in trade payables 3,434 (15,082) 14,945 Increase (decrease) in other liabilities 252,353 (82,470) (238,996) ----------- --------- ---------- Net cash provided by operating activities 1,563,108 157,145 287,015 ----------- --------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from rights of way 43,846 - 7,826 Proceeds from sale of timber 123,142 - - Available-for-sale securities: Maturities - - 500,000 Purchases - - (250,951) Sales - 208,000 529,077 Purchase of land, property and equipment (10,149) (625,548) (1,731,845) ----------- --------- ---------- Net cash provided by (used in) investing activities 156,839 (417,548) (945,893) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings - 450,000 900,000 Principal payments on long-term borrowing (1,187,064) (62,936) (100,000) Dividends paid, net of refunds (154,635) (179,744) (232,615) Payments to acquire treasury stock (19,604) (55,650) (60) ----------- --------- ---------- Net cash provided by (used in) financing activities (1,361,303) 151,670 567,325 ----------- --------- ---------- Net increase (decrease) in cash and cash equivalents 358,644 (108,733) (91,553) Cash and cash equivalents: Beginning 113,177 221,910 313,463 ----------- --------- ---------- Ending $ 471,821 $ 113,177 $ 221,910 =========== ========= ========== (continued on next page) 14 CALCASIEU REAL ESTATE & OIL CO., INC. STATEMENTS OF CASH FLOWS Years Ended December 31, 1999, 1998 and 1997 (Continued) 1999 1998 1997 -------- -------- -------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash payments for: Interest $ 53,506 $ 66,573 $ 12,255 Income taxes 509,458 275,686 498,069 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Net change in unrealized and realized gains on available-for-sale securities 8,202 (3,480) 426 See Notes to Financial Statements. 15 CALCASIEU REAL ESTATE & OIL CO., INC. NOTES TO FINANCIAL STATEMENTS Note 1. Nature of Business and Significant Accounting Policies Nature of business: The Company's business is the ownership and preservation of the assets acquired at the Company's organization and subsequent thereto. The primary activities have consisted of leasing its properties and collecting rents and royalties derived therefrom. In February, 1990, the Company acquired a 12.5% interest in 34,189 acres of land in Southwest Louisiana. Among other uses, a portion of the land is devoted to agricultural purposes. In November, 1998, the Company purchased an additional 4.2% interest in this land, bringing its total interest to 16.7%. In April, 1992, the Company purchased a 100% interest in the surface rights and a 50% interest in the mineral rights to 952 acres, consisting of mainly timber land. In October, 1997, the Company purchased approximately 3,496 acres of agricultural property. Significant accounting policies: Cash and cash equivalents: For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. Inventory: Inventory consists of harvested crops valued at estimated selling price at the date of the balance sheet. 16 NOTES TO FINANCIAL STATEMENTS Pervasiveness of estimates: The preparation of financial statements in conformity 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Agricultural revenue: Most agricultural income is derived under U.S. Government subsidy programs. Under these programs, loans are made against crops as harvested. However, delivery of the crops fulfills any further obligation under the loan agreement, and thus revenues are recognized as the harvested crops are delivered. Differences in the price at ultimate sale of the products could result from quantity, grade, and price, and additional revenues are derived at that time. Investment securities: The Company complies with the provisions of Financial Accounting Standards Board Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities. Under the provisions of this statement, management must make a determination at the time of acquisition whether certain investments in debt and equity securities are to be held as investments to maturity, held as available for sale, or held for trading. Management, under a policy adopted by the board of directors of the Company, made a determination that all debt and equity securities owned at that date and subject to the provisions of the statement would be classified as held available-for-sale. Under the accounting policies provided for investments classified as held available-for-sale, all such debt securities and equity securities that have readily determinable fair value shall be measured at fair value in the balance sheet. Unrealized holding gains and losses for available-for-sale securities shall be excluded from earnings and reported as a net amount (net of income taxes) as a separate component of retained earnings until realized. Realized gains and losses and declines in value judged to be other than temporary on available-for-sale securities are included in income. The cost of securities sold is based on the specific identification method. Interest on debt securities is recognized in income as earned, and dividends on marketable equity securities are recognized in income when declared. 17 NOTES TO FINANCIAL STATEMENTS Property and equipment: Property and equipment is stated at cost. Major additions are capitalized; maintenance and repairs are charged to income currently. Depreciation is computed on the straight-line and accelerated methods over the estimated useful lives of the assets. Successful efforts accounting method: The Company uses the successful efforts method of accounting for its oil and gas operations. Under the successful efforts method, the costs of acquiring mineral interest, drilling and equipping successful exploratory wells, and all development wells and related facilities are capitalized. All other exploration costs, including geological and geophysical costs, lease rentals and the cost of drilling unsuccessful exploratory wells are charged to expense. Due to the Company's small percentage ownership (in relation to the total) of oil and gas properties, reserve information is not available to the Company for mineral interests acquired. Depletion of these interests is computed on the straight-line and accelerated methods over an estimated life of five to seven years. Acquisition costs of proved mineral interests for which reserve information is available are depleted using the unit-of-production method based on production and estimated proved reserves. Related tangible and intangible costs are depreciated and amortized using the unit-of- production method based on production and estimated proved developed reserves. Earnings per share: Earnings per share is based on the weighted average number of common shares outstanding during the years. Income taxes: The Company complies with the provisions of FASB Statement of Financial Accounting Standards 109, Accounting for Income Taxes relative to the reporting of income taxes. This statement requires an asset and liability approach for financial accounting and reporting for income taxes. The objectives are to recognize the amount of taxes payable or refundable for the current year, and to recognize deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company's financial statements or tax returns. The elements with different bases for financial and tax purposes are property and equipment, investments, accounts receivable, inventory and accounts payable. 18 NOTES TO FINANCIAL STATEMENTS The basic principles to be applied in accounting for income taxes at the date of the financial statements are: 1. A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current year. 2. A deferred tax liability or asset is recognized for the estimated future tax effects attributable to temporary differences and carryforwards. 3. The measurement of current and deferred tax liabilities and assets is based on provisions of the enacted tax law; the effects of future changes in tax laws or rates are not anticipated. 4. The measurement of deferred tax assets is reduced, if considered necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. Comprehensive income: Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income". This statement establishes standards for reporting and displaying comprehensive income and its components in the financial statements. Total comprehensive income and the components of accumulated other comprehensive income are presented in the Statements of Changes in Stockholders' Equity. Prior periods have been reclassified to conform to the requirements of SFAS 130. SFAS 130 had no impact on the Company's net income or stockholders' equity. Reclassifications: Certain prior year balances have been reclassified in order to conform to current year presentation. Note 2. Securities Available-for-Sale Debt and equity securities have been classified in the balance sheet according to management=s intent in the current and noncurrent asset sections under the headings securities available-for-sale. The carrying amount of securities and their approximate fair values at December 31, 1999 and 1998 follow: 19 NOTES TO FINANCIAL STATEMENTS Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value --------- ----------- ---------- ---------- Available-for-sale securities: December 31, 1999: Equity securities $ 56,123 $ 20,144 $ - $ 76,267 Municipal securities - - - - U.S. government securities - - - - --------- --------- ---------- ---------- $ 56,123 $ 20,144 $ - $ 76,267 ========= ========= ========== ========== Available-for-sale securities: December 31, 1998: Equity securities $ 56,123 $ 6,474 $ - $ 62,597 Municipal securities - - - - U.S. government securities - - - - --------- --------- ---------- ---------- $ 56,123 $ 6,474 $ - $ 62,597 ========= ========= ========== ========== Gross realized gains and gross realized losses on sales of available-for- sale securities were: 1999 1998 ---------- ---------- Gross realized gains: U.S. government and agency securities $ - $ - Municipal securities - 13,172 Equity securities - - ---------- ---------- $ - $ 13,172 ========== ========== Gross realized losses: U.S. government and agency securities $ - $ - Municipal securities - - Equity securities - - ---------- ---------- $ - $ - ========== ========== Note 3. Oil and Gas Properties Results of operations for oil and gas producing activities at December 31, 1999, 1998 and 1997 is as follows: 20 NOTES TO FINANCIAL STATEMENTS 1999 1998 1997 ---------- -------- -------- Gross revenues: Royalty interests $2,017,723 $563,033 $353,862 Working interests 24,095 19,115 39,894 2,041,818 582,148 393,756 Less: Production costs 84,605 50,511 59,503 Exploration expenses - - - Depreciation, depletion and amortization 318 580 1,515 ---------- -------- -------- Results before income tax expenses 1,956,895 531,057 332,738 Income tax expenses 630,682 164,487 112,932 ---------- -------- -------- Results of operations from producing activities (excluding corporate overhead) $1,326,213 $366,570 $219,806 ========== ======== ======== Costs incurred in oil and gas activities: The major costs incurred in connection with the Company's oil and gas operations (which are conducted entirely within the United States) at December 31, 1999, 1998 and 1997 are as follows: 1999 1998 1997 --------- --------- -------- Acquisition costs-working and royalty interests $ - $ - $ - ========= ========= ======== Exploration costs $ - $ - $ - ======== ========= ======== Development costs $ 932 $ 3,741 $ 862 ======== ======== ======== Reserve quantities (unaudited): Reserve information relating to estimated quantities of the Company's interest in proved reserves of natural gas and crude (including condensate and natural gas liquids) is not available. Such reserves are located entirely within the United States. A schedule indicating such reserve quantities is, therefore, not presented. 21 NOTES TO FINANCIAL STATEMENTS The wells remain in production at December 31, 1999, including royalty interests and working interests obtained through back-in provisions of royalty agreements. Production from such royalty interests and working interests comprises 100% of the Company's oil and gas revenues in 1999, 1998 and 1997. Actual production has exceeded original estimates of reserves, and remaining reserves have not been revised. Therefore, the Company is not able to complete the computations of discounted future cash flows and reconciliation thereof. Note 4. Income Taxes The Company files federal income tax returns on a calendar year basis. The net deferred tax liability in the accompanying balance sheet includes the following components at December 31, 1999 and 1998: 1999 1998 -------- --------- Deferred tax assets $ 3,203 $ 918 Valuation allowance - - Deferred tax liabilities (15,318) (10,902) Deferred tax liabilities on unrealized appreciation on securities available for sale (8,058) (2,589) -------- --------- Net deferred tax liability $(20,173) $ (12,573) ======== ========= A reconciliation between income taxes, computed by applying statutory tax rates to income before income taxes and income taxes provided at December 31, 1999, 1998 and 1997 is as follows: 1999 1998 1997 --------- -------- -------- Tax at statutory rates $ 775,137 $198,962 $263,991 Tax effect of the following: Statutory depletion (99,490) (27,084) (18,384) Dividend exclusion (514) (428) (126) State income tax 61,094 13,126 21,226 Investment tax credit (167) - (1,000) Other (1,306) (3,325) (2,180) --------- -------- -------- $ 734,754 $181,251 $263,527 ========= ======== ======== 22 NOTES TO FINANCIAL STATEMENTS Deferred income taxes result from timing differences in the recognition of revenue and expenses for tax and financial statement purposes. The Company was entitled to an investment tax credit related to reforestation expenditures totaling $167 for the year ended December 31, 1999. The effect of these timing differences at December 31, 1999 and 1998 is as follows: 1999 1998 --------- --------- Conversion of tax return from cash to accrual basis for financial reporting $ (14,344) $ (9,926) Excess of depreciation and depletion expensed for tax purposes (under) amount eyxpensed for financial statement purposes 2,229 (59) Unrealized gain on marketable securities (8,058) (2,588) --------- --------- $ (20,173) $ (12,573) ========= ========== Note 5. Long-Term Debt Following is a summary of long-term debt at December 31, 1999 and 1998: 1999 1998 --------- --------- Note payable to bank, due in equal monthly installments of $9,863, including interest at 8.25% with a final payment estimated at $492,062 plus accrued interest due on December 26,2002. Secured by real estate. $ - $ 745,888 Note payable to bank, due in equal monthly installments of $10,956, including interest at 7.75%. Secured by real estate. - 441,176 --------- ---------- - 1,187,064 Less current maturities of long-term debt - 158,840 --------- ---------- $ - $1,028,224 ========= ========== 23 NOTES TO FINANCIAL STATEMENTS Note 6. Line of Credit As of December 31, 1999, the Company had available an unsecured line of credit in the amount of $750,000. The balance on this line of credit was $-0- at December 31, 1999. Note 7. Company Operations Effective January 1, 1998, the Company adopted the Financial Accounting Standards Board Statement No. 131, "Disclosures About Segments of an Enterprise and Related Information". This statement replaces Statement No. 14, "Financial Reporting for Segments of a Business Enterprise", and establishes new standards for defining the Company's segments and disclosing information about them. It requires that the segments be based on the internal reporting of the Company's operations. The Company's operations are classified into three principal operating segments which are all located in the United States: oil and gas properties, agricultural properties, and timber properties. The Company's reportable business segments are strategic business units that offer income from different products. They are managed separately due to the unique aspects of each area. Following is a summary of segmented information for 1999, 1998 and 1997: 1999 1998 1997 ---------- --------- --------- REVENUES Oil and gas properties $ 2,102,773 $ 672,497 $ 691,934 Agricultural properties 197,719 127,832 82,329 Timber properties 308,411 64,178 179,543 All other segments 37,588 32,520 13,826 ----------- --------- --------- $ 2,646,491 $ 897,027 $ 967,632 =========== ========= ========= COSTS AND EXPENSES Oil and gas properties $ 84,923 $ 51,091 $ 61,018 Agricultural properties 16,667 13,509 14,699 Timber properties 61,104 29,723 27,764 All other segments 932 1,264 862 ----------- --------- --------- $ 163,626 $ 95,587 $ 104,343 =========== ========= ========= 24 NOTES TO FINANCIAL STATEMENTS 1999 1998 1997 ---------- ---------- ---------- INCOME FROM OPERATIONS Oil and gas properties $2,017,850 $ 621,406 $ 630,916 Agricultural properties 181,052 114,323 67,630 Timber properties 247,307 34,455 151,779 All other segments 36,656 31,256 12,964 ---------- ---------- ---------- 2,482,865 801,440 863,289 OTHER INCOME (EXPENSE) (203,051) (216,258) (86,844) ---------- ---------- ---------- INCOME BEFORE INCOME TAXES $2,279,814 $ 585,182 $ 776,445 ========== ========== ========== IDENTIFIABLE ASSETS Oil and gas properties $ 980,179 $ 694,203 $ 546,971 Agricultural properties 2,530,002 2,531,025 2,303,368 Timber properties 1,067,912 891,510 969,842 All other segments 85,685 85,685 - ---------- ---------- ---------- 4,663,778 4,202,423 3,820,181 GENERAL AND CORPORATE ASSETS 548,762 556,904 486,896 TOTAL ASSETS $5,212,540 $4,759,327 $4,307,077 ========== ========== ========== CAPITAL EXPENDITURES Oil and gas properties $ 2,947 $ 96,320 $ - Agricultural properties - 222,789 1,678,281 Timber properties 3,453 220,754 40,101 All other segments 3,749 85,685 - ---------- ---------- ---------- $ 10,149 $ 625,548 $1,718,382 ========== ========== ========== DEPRECIATION, DEPLETION AND AMORTIZATION Oil and gas properties $ 318 $ 580 $ 1,515 Agricultural properties 3,781 2,574 2,280 Timber properties 15,453 12,399 9,702 All other segments 932 1,264 862 ---------- ---------- ---------- $ 20,484 $ 16,817 $ 14,359 ========== ========== ========== 25 NOTES TO FINANCIAL STATEMENTS There are no intersegment sales reported in the accompanying income statements. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on profit or loss from operations before income taxes excluding nonrecurring gains and losses on securities held available for sale. Income before income tax represents net sales less operating expenses and other income and expenses of a general corporate nature. Identifiable assets by segment are those assets that are used in the Company's operations within that industry. General corporate assets consist principally of cash and cash items, accounts receivable, and marketable equity and debt securities. The following summarizes major customer information at December 31, 1999, 1998 and 1997 from oil and gas revenues: Sales to Purchaser as a Percentage of Total Revenues ---------------------------- Purchaser 1999 1998 1997 --------- -------- ------- -------- Riceland Petroleum Company 2% 10% 35% Coastal - 1% 12% Woodlawn 2% 6% 12% Mitchell Energy 12% 34% - Neumin Production 78% 34% - Note 8. Related Party Transactions As of April 1, 1999, the President of the Company is serving as Chairman of the advisory board of Bank One, Southwest Louisiana (the Bank). Formerly, he was the President of the Bank. At December 31, 1999 and 1998, the Company had $395,657 and $46,841, respectively, deposited in money-market and noninterest bearing checking accounts with the Bank. At December 31, 1999 and 1998, the Company also had notes payable to the Bank, described at Note 5 in the amount of $-0- and $1,187,064, respectively. During 1999 and 1998, some board members entered into leases with the Company for water fowl hunting on property acquired during the 1998. Lease income from these leases amounted to $4,800 for each of the years ended December 31, 1999 and 1998. 26 NOTES TO FINANCIAL STATEMENTS In 1990, the Company purchased interests in properties managed by Walker Louisiana Properties (WLP), such properties being subject to a management agreement described at Note 11. In 1998, the Company purchased an additional interest in this property. Note 9. Supplementary Income Statement Information Taxes other than income taxes of $117,129, $65,154 and $44,126, were charged to expense during 1999, 1998 and 1997, respectively. Note 10. Major Transactions In February, 1990, the Company acquired a 12.5% interest in 34,189 acres and other properties in Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis, Lafourche, Sabine, and Vermillion Parishes for $1,275,000. Of the total acreage, 30,581 acres were acquired in fee and 3,608 were acquired in surface rights only. The allocation of the purchase price, which was applied pro rata over the fair market values of the assets acquired is as follows: Cash and accounts receivable $ 1,607 Harvested crops 17,799 Buildings and equipment 14,610 Land: Agricultural 606,982 Other 233,445 Timber 380,792 Oil and gas properties 19,765 ----------- $ 1,275,000 =========== In November, 1998, the Company purchased its proportionate interest in the lands and minerals described above from a 25% owner. The additional 4.2% interest purchased (approximately 1,429 acres), brings its total interest to 16.7%. The purchase price was $607,458 and was allocated based on the relative fair market value of the assets acquired as follows: Land: Agricultural $ 222,789 Other 85,685 Timber 220,754 Oil and gas properties 78,230 --------- $ 607,458 ========= 27 NOTES TO FINANCIAL STATEMENTS The primary sources of income from the property are the leasing of mineral rights, timber sales, and agricultural rents. The President of this Company is President of a corporation that also purchased a 12.5% undivided interest in the same acreage at the same time and at the same price. The aforementioned corporation also purchased the additional percentage in November, 1998 for the same price. The Vice President of this Company is manager of a limited liability company that also purchased a 12.5% undivided interest in the same acreage at the same time and at the same price. The aforementioned corporation also purchased the additional percentage in November, 1998 for the same price. In February, 1992, the Company purchased 952 acres of timberland located in Calcasieu and Beauregard Parishes for $475,000. The down payment of $95,000 was paid at the closing date from the Company's cash reserves and the remaining $380,000 was financed with a mortgage note payable. This note was paid in full in April, 1997. The seller retained a 50% mineral interest in the property. In October, 1997, the Company purchased approximately 3,496 acres of agricultural properties located in Cameron Parish for $1,663,000 plus related expenses. The down payment of $813,000 was paid at the closing date from proceeds of the sale of securities and cash reserves. The remaining $850,000 was financed with a mortgage note payable described in Note 5. This note was paid in full during 1999. Note 11. Management Agreement During 1990, the Company purchased an undivided interest in numerous parcels of land and other properties as described at Note 10. The Company's interest, along with the interests of other co-owners, is managed by an entity under a management agreement whereby costs are shared based on the percent of ownership. 28 NOTES TO FINANCIAL STATEMENTS Note 12. Operating Leases The Company leases agricultural land to a third party under an agreement that expires September 30, 2002. The annual lease rental is $40,000. The lease requires payment of normal maintenance and insurance. The lease also requires the lessee to construct specific improvements to the property at an expenditure of at least $60,000 as additional consideration. In the event the lessee fails to spend $60,000 on the above improvements prior to September 30, 2002, the amounts unspent will be due and payable to the Company on September 30, 2002. Total future minimum rental income under operating leases as of December 31, 1999 for the next five years is as follows: Years Ending December 31, ------------------------- 2000 $ 40,000 2001 40,000 2002 40,000 2003 - 2004 - Note 13. Concentration of Credit Risk The Company maintains its cash balances in one financial institution. The amount on deposit in the financial institution is insured by the Federal Deposit Insurance Corporation up to $100,000. Note 14. Disclosures About Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it was practical to estimate that value: Cash and cash equivalents: For these short-term instruments, the carrying amount is a reasonable estimate of fair value. Securities available-for-sale: Debt and equity securities were valued at fair value, which equals quoted market price. 29 NOTES TO FINANCIAL STATEMENTS Long-term debt: The fair value of the Company's long-term debt is estimated based on the current rates offered to the Company for debt of the same remaining maturities. The estimated fair value of the Company's financial instruments at December 31, 1999 and 1998 are as follows. Amounts are presented in thousands. 1999 1998 --------------- ------------------ Carrying Fair Carrying Fair Financial Assets Value Value Value Value ------- ----- -------- -------- Cash and cash equivalents $ 472 $ 472 $ 113 $ 113 Securities available for sale 76 76 63 63 Long-term debt - - (1,187) (1,187) ------ ----- -------- -------- $ 548 $ 548 $ (1,011) $ (1,011) ====== ===== ======== ======== Note 15. Commitments and Contingencies The Company is a co-defendant in a lawsuit filed by previous owners of property that is now partially owned by the Company. In this suit, the Plaintiffs assert that the sale of a strip of property in 1914 created two servitudes, one of which, the co-defendants claim ownership, expired by liberative prescription in 1940. The Company has indicated that it will defend the suit vigorously, and it is anticipated that a motion for summary judgment in favor of the defendants will be filed in the near future. 30 CALCASIEU REAL ESTATE & OIL CO., INC. PROPERTY, PLANT AND EQUIPMENT Years Ended December 31, 1999, 1998 and 1997 Balance, Adjustments Balance, Beginning and End of 1999 of Period Additions Retirements Period ---- ---------- ----------- ----------- ----------- Oil and gas properties-proved $ 444,236 $ 2,947 $ (11,002) $ 458,185 Other property: Buildings and equipment 87,136 3,749 - 90,885 Timber 803,086 3,453 91,475 715,064 Land 3,660,478 - 44,687 3,615,791 ---------- ----------- --------- ----------- $4,994,936 $ 10,149 $ 125,160 $ 4,879,925 ========== =========== ========= ============ 1998 ---- Oil and gas properties-proved $ 377,666 $ 80,521 $ 13,951 $ 444,236 Other property: Buildings and equipment 90,941 9,251 13,056 87,136 Timber 575,785 227,301 - 803,086 Land 3,352,003 308,475 - 3,660,478 ---------- ----------- --------- ----------- $4,396,395 $ 625,548 $ 27,007 $ 4,994,936 ========== =========== ========= ============ 1997 ---- Oil and gas properties-proved $ 377,732 $ - $ 66 $ 377,666 Other property: Buildings and equipment 90,959 3,831 3,849 90,941 Timber 545,792 29,993 - 575,785 Land 1,661,742 1,698,021 7,760 3,352,003 ---------- ----------- --------- ----------- $2,676,225 $ 1,731,845 $ 11,675 $ 4,396,395 ========== =========== ========= =========== 31 CALCASIEU REAL ESTATE & OIL CO., INC. ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION Years Ended December 31, 1999, 1998 and 1997 Balance, Adjustments Balance, Beginning and End of 1999 of Period Additions Retirements Period ---- ---------- ---------- ----------- --------- Oil and gas properties-proved $ 362,770 $ 3,050 $ (11,219) $ 377,039 Other property: Buildings and equipment 71,487 1,981 - 73,468 Timber 213,423 15,453 - 228,876 ---------- -------- --------- --------- $ 647,680 $ 20,484 $ (11,219) $ 679,383 ========== ======== ========= ========= 1998 ---- Oil and gas properties-proved $ 376,141 $ 580 $ 13,951 $ 362,770 Other property: Buildings and equipment 80,706 3,837 13,056 71,487 Timber 201,023 12,400 - 213,423 ---------- -------- --------- --------- $ 657,870 $ 16,817 $ 27,007 $ 647,680 ========== ======== ========= ========= 1997 ---- Oil and gas properties-proved $ 374,626 $ 1,515 $ - $ 376,141 Other property: Buildings and equipment 81,413 3,142 3,849 80,706 Timber 191,321 9,702 - 201,023 ---------- -------- --------- --------- $ 647,360 $ 14,359 $ 3,849 $ 657,870 ========== ======== ========= ========= 32