UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
Commission File Number:
333-264
Exact name of Registrant as specified in its charter:
South Seas Properties Company Limited Partnership
State or other Jurisdiction of incorporation or organization:
Ohio
I.R.S. Employer Identification Number:
59-2541464
Address of Principal Executive Offices:
12800 University Drive, Suite 350
Fort Myers, FL 33907
Registrant's Telephone Number, including Area Code:
(941) 481-5600
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. X YES NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12,
13 or 15(d) of the Securities Exchange Act of 1934 subsequent
to the distribution of securities under a plan confirmed by a court.
YES NO
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
FORM 10-Q
MARCH 31, 1997
INDEX
PAGE NO.
COVER LETTER
PART I
ITEM 1
FINANCIAL INFORMATION
Consolidated Balance Sheets at
March 31, 1997 and 1996 and
December 31, 1996 1
Consolidated Statements of Operations
for the Three Months Ended
March 31, 1996 and 1997 2
Consolidated Statements of Cash Flows
for the Three Months Ended
March 31, 1996 and 1997 3-4
Notes to Consolidated Financial Statements 5-6
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-10
PART II
OTHER INFORMATION 11
SIGNATURES 12
EXHIBITS:
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
EXHIBIT 99 - CALCULATION OF WEIGHTED AVERAGE
UNITS OUTSTANDING
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31
Dec. 31
1997 1996 1996
(unaudited) (unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,656 $22,681 $6,459
Restricted cash 89 3,472 201
Accounts receivable, trade 7,470 7,532 6,743
Receivables from affiliates 267 - 543
Inventories 1,754 1,964 1,677
Prepaid expenses and other 1,617 1,898 1,637
Total current assets 16,853 37,547 17,260
PROPERTY, PLANT AND EQUIPMENT, net 86,179 77,194 79,904
LOAN COSTS, net 5,509 5,322 5,660
GOODWILL, net 7,238 6,714 6,440
OTHER ASSETS 1,643 1,897 1,778
Total assets $117,422 $128,674 $111,042
LIABILITIES AND PARTNERS' CAPITAL
DEFICIENCY
CURRENT LIABILITIES
Current maturities of notes
and mortgages payable $ 1,863 $ 8,675 $1,750
Current obligations under
capital leases 226 265 265
Accounts payable 4,992 4,633 4,410
Accrued expenses 6,486 7,619 4,940
Customer deposits 4,294 3,750 4,976
Deferred revenue 1,289 359 1,585
Total current liabilities 19,150 25,301 17,926
NOTES AND MORTGAGES PAYABLE, less
current maturities 63,805 64,232 65,357
BONDS PAYABLE 43,500 43,500 43,500
LONG-TERM OBLIGATIONS UNDER
CAPITAL LEASES, less current
obligations 602 838 631
OTHER LONG-TERM OBLIGATIONS 1,305 1,384 1,305
COMMITMENTS AND CONTINGENCIES - - -
PARTNERSHIP UNITS SUBJECT TO REDEMPTION 825 825 825
MINORITY INTERESTS 33 17 27
PARTNERS' CAPITAL DEFICIENCY (11,798) (7,423) (18,529)
Total liabilities and
partners' capital
deficiency $117,422 $128,674 $111,042
The accompanying unaudited notes are an integral part of these
unaudited consolidated financial statements.
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per unit data)
(unaudited)
Three Months
Ended March 31
1997 1996
Revenues
Rooms $24,881 $22,850
Food and beverage 5,971 5,728
Retail 2,217 2,100
Golf 1,124 1,018
Spa and fitness 697 770
Other 4,825 5,197
Total revenues 39,715 37,663
Expenses
Rooms 4,526 4,143
Food and beverage 4,323 4,021
Retail 1,460 1,380
Golf 333 238
Spa and fitness 367 402
Other 1,745 1,729
Condominium lease and rental expenses 6,102 6,102
Sales and marketing 1,872 2,037
Maintenance and grounds 1,385 1,328
General and administrative - resort properties 4,978 4,571
General and administrative - corporate overhead 912 856
Depreciation and amortization 2,005 1,879
Interest expense 2,625 2,553
Total expenses 32,633 31,239
Income before non-operating items 7,082 6,424
Net gain on disposal/sale of fixed assets - 4
Minority interests (22) (22)
Net income $ 7,060 $ 6,406
Net income per unit, primary $ 1.59 $ 1.49
Net income per unit, fully diluted $ .95 $ 1.44
Weighted average units outstanding 4,427 4,309
The accompanying unaudited notes are an integral part of these
unaudited consolidated financial statements.
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Page 1 of 2
(In Thousands)
(unaudited)
Three Months
Ended March 31
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others $ 37,930 $ 34,660
Cash paid to suppliers, employees and affiliates (26,071) (26,047)
Interest paid (2,541) (4,399)
Net cash provided by operating
activities 9,318 4,214
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures/purchase of assets (2,276) (1,905)
Proceeds from sale of assets - 4
Loans to affiliates, net of repayments (50) -
Purchase of resort property assets (3,411) -
Change in restricted cash 112 2,346
Net cash (used)/provided by investing
activities (5,625) 445
CASH FLOWS FROM FINANCING ACTIVITIES:
Draws under line of credit 500 -
Payments under line of credit (4,000) -
Proceeds from long-term debt - 43,500
Deferred loan costs (139) (2,844)
Principal payments, long-term debt (444) (16,250)
Principal payments, under capital
lease obligations (68) (407)
Principal payments, bonds payable - (12,998)
Distributions to partners (329) (302)
Distributions to minority unit holders (16) (17)
Net cash (used)/provided by
financing activities (4,496) 10,682
Net (decrease)/increase in cash (803) 15,341
Cash and cash equivalents, beginning of period 6,459 7,340
Cash and cash equivalents, end of period $ 5,656 $22,681
(continued)
The accompanying unaudited notes are an integral part of these
unaudited consolidated financial statements.
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Page 2 of 2
(In Thousands)
(unaudited)
Three Months
Ended March 31
1997 1996
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 7,060 $6,406
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation/amortization expense 2,005 1,879
Gain on sale of fixed assets - (4)
Minority interest 22 22
Changes in assets and liabilities
(Increase) decrease in:
Accounts receivable, net (710) (1,271)
Inventories (77) (117)
Prepaid expenses and other assets 46 (158)
Increase (decrease) in:
Accounts payable 539 1,420
Accrued expenses 1,508 (2,291)
Customer deposits (779) (958)
Deferred revenues (296) (714)
Total adjustments 2,258 (2,192)
Net cash provided by operating activities $ 9,318 $4,214
Supplemental schedule of noncash investing and financing activities:
In January, 1997 South Seas acquired the Seaside Inn on
Sanibel Island, Florida for $6.5 million. In connection with
the acquisition, South Seas assumed liabilities of $2.5 million.
The accompanying unaudited notes are an integral part of these
unaudited consolidated financial statements.
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments necessary
(consisting of only normal recurring adjustments) to present
fairly South Seas Properties Company Limited Partnership ("South Seas")
consolidated financial position as of March 31, 1996 and 1997, and
the consolidated results of its operations and its consolidated
cash flows for the three months ended March 31, 1996 and 1997.
The results of operations for the three month period ended
March 31, 1997 are not indicative of the results to be expected for
the full year due to the seasonality of the business operation. For
further information, refer to the audited consolidated financial
statements and notes thereto, included in South Seas' 10-K report.
Certain amounts in the financial statements have been reclassified
to conform with the current presentation. These reclassifications
had no effect on the results of operations previously reported.
The audited consolidated balance sheet at December 31, 1996 presented
on page one of this 10Q, does not include all disclosures required
by generally accepted accounting principles. Refer to South Seas
annual 10-K report for complete footnote disclosure.
Note 2. Computation of Earnings Per Unit
Primary earnings per unit of partnership interests are computed
based on the weighted average number of partnership unit
equivalents (unit options, if applicable) outstanding of
4.43 million and 4.31 million, for the years ended
March 31, 1997 and 1996, respectively. The computation of
fully diluted earnings per unit assumed conversion of the 10%
convertible subordinated notes due April 2003, accordingly,
net earnings were increased by interest expense on the
subordinated notes. For the 1997 and 1996 fully diluted
earnings unit computation, units were computed to be 8.57
million and 4.49 million, respectively.
Note 3. Impact of Recently Issued Accounting Standards
In February, 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("FAS 128"), which becomes effective
for South Seas for the year ended December 31, 1997.
FAS 128 replaces the presentation of primary earnings per
unit with a presentation of basic earnings per unit which
excludes dilution and is computed by dividing income available
to partnership unit holders by the weighted average number
of partnership units outstanding for the period.
Diluted earnings per unit reflect the potential
dilution that would occur if securities or other
contracts to issue units were exercised or converted
into units or resulted in the issuance of units that
then shared in the earnings of the entity. Diluted
earnings per unit is computed similarly to fully diluted
earnings per unit pursuant to Accounting Principles Board
Opinion No. 15, "Earnings Per Share." FAS 128 also
requires dual presentation of basic and diluted earnings
per unit on the face of the income statement for all
entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the
basic earnings per unit computation to the numerator
and denominator of the diluted earnings per unit
comparison. Had FAS 128 been applicable for the
three months ended March 31, 1997, basic and diluted
earnings per unit would have been $1.59 and $.95, respectively.
Note 4.
On January 6, 1997 South Seas purchased from an affiliated
limited partnership, real and personal property used in the
operation of a 32 unit motel (Seaside Inn) on Sanibel
Island, Florida for $6.5 million. In connection with the
acquisition, South Seas assumed liabilities of $2.5 million.
Unaudited revenues and net income for the Seaside Inn for
the year ended December 31, 1996 were $1.4 million and
$43,000, respectively.
The balance of the purchase price was made via a cash
payment of $3.4 million which was allocated as follows:
Cash payment $3,411,000
Allocated to:
Fixed assets $5,574,000
Goodwill 912,000
Current assets and liabilities, net (134,000)
Debt assumed (2,505,000)
Repayment of advance from South Seas (326,000)
Down payment (100,000)
Other (10,000)
$3,411,000
Note 5. Seaside Inn Revolving Credit Line
South Seas anticipates increasing and amending the $2.5
million loan held by Barnett Bank, N.A. secured by the
Seaside Inn to a $3.5 million revolving credit note and
to cause Barnett to assign the loan to Credit Lyonnais,
New York Branch, Barnett Bank, N.A. and Finova Capital
Corporation (collectively, the "Lender") and to pledge
the Seaside Inn to the Lender for security. The additional
funding would be available for capital expenditures.
Note 6. Revolving Credit Line
In connection with the $40 million revolving line of
credit with Credit Lyonnais, New York Branch, South Seas
had available $16.4 million at March 31, 1997. South Seas
applies surplus seasonal working capital or draws working
capital based on seasonal needs to reduce or increase the
outstanding revolving loan balance.
PART I - FINANCIAL INFORMATION
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction
with "Selected Historical Financial Data," "Selected
Consolidated Financial Data" and the audited consolidated
financial statements for South Seas and the notes
thereto appearing in the annual 10-K report for the year
ended December 31, 1996.
GENERAL
South Seas is one of the largest owners and operators of
upscale beachfront destination resorts and hotels in
Florida. South Seas owns, leases and/or manages 10
resort and recreational properties. Included are seven
owned resort and hotel properties, one 18 hole golf course,
and one managed resort property, all located on Sanibel,
Captiva, Estero and Marco Islands off Florida's gulf
coast (collectively referred to as the "Properties").
South Seas, through its 99% owned subsidiary, South Seas
Resorts Company Limited Partnership ("Management Company"),
also operates under a lease arrangement a resort and spa
located on Tampa Bay, Florida. The Properties are
designed to appeal to families, leisure and retired
travelers and business groups. The Properties range in
size and style from the 552-unit South Seas Plantation
resort on Captiva Island, to the 269 unit, 11 story
Marco Island Radisson, to the 30-unit Song of the Sea
Inn, a bed-and-breakfast located on Sanibel Island. By
offering a wide variety of price points and vacation
experiences, South Seas is able to appeal to a broad
section of the vacation market. The Properties offer
a combined total of approximately 1,700 condominium
and hotel units, consisting of approximately 2,300 guest rooms,
including luxurious beach homes, fully equipped condominiums,
suites, cottages and hotel rooms. South Seas also owns
and operates The Dunes Golf and Tennis Club on Sanibel
Island, which features an 18-hole, par 70 golf course,
seven soft surface tennis courts, full banquet and
restaurant facilities and other amenities. Guests staying
at any of the Properties have access to the amenities
and vacation activities offered at all of the Properties.
South Seas believes that this feature, combined with the
Properties' attractive locations, enhances customer
satisfaction and guests' perceptions of value.
SEASONALITY
Properties owned or operated by South Seas are
affected by normally recurring seasonal patterns. Room
rates are substantially higher and occupancy is somewhat
higher during the months of January, February, March and
April than during the remainder of the year. Approximately
45% of South Seas' revenues is earned in the first four
months of each year. Accordingly, South Seas' typically
reports lower revenue and net income in the second, third
and fourth calendar quarters.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH
31, 1997 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1996
Revenues. Revenues consist principally of room rentals,
food and beverage sales, retail sales, spa and fitness
revenues, and golf course operations. Other revenue
includes marina operations, long distance telephone
charges, fees for the use of recreation facilities,
commissions from realty sales, interest income and
other miscellaneous items. Revenues for the three
months ended March 31, 1997 increased by $2.1 million,
or 5.5% over the prior period.
Rooms revenues increased by approximately $2.0 million,
or 8.9% over the prior period. Approximately $575,000,
or 2.5% of the increase represents room revenues
attributable to the Seaside Inn (acquired January 6, 1997).
Room revenues at resorts owned throughout both periods
("Comparable Resorts") increased by approximately $1.5
million or 6.4%. The increase in room revenues at
Comparable Resorts resulted from an increase in the
average daily rate ("ADR") and an increase in the
percentage of occupancy. ADR at Comparable Resorts
was $249.09 for 1997, compared to $245.43 in 1996,
an increase of $3.66, or 1.5%. Occupancy percentage
at Comparable Resorts increased to 82.6% for the
first three months of 1997 from 77.2% for the
same period in 1996. The increase in ADR reflects
South Seas' efforts to maximize revenue per available
room ("REVPAR"), during peak demand periods. During
the first three months of 1997, REVPAR for Comparable
Resorts increased $16.47 or 8.7% over the same period
in 1996. The Seaside Inn had an occupancy percentage of
92.0%, ADR of $217.06 and REVPAR of $199.65 during the
three months ended March 31, 1997.
Food and beverage revenues for the three months ended
March 31, 1997 increased by $243,000, or 4.2% over
the same period in 1996. The increase was due
primarily to increased food and beverage sales at
Safety Harbor Resort and Spa ("Safety Harbor") of
$210,000 or 86.4% of the total increase. South Seas
entered into a lease arrangement on the Safety Harbor
in June 1995. Management believes it was a property
with significant "up-side" potential. After a
substantial investment in capital improvements
(over $2.3 million since lease inception), combined
with a highly motivated and experienced management team,
dramatic improvements in results of operations have been
realized at the resort over 1996.
Retail revenues for the three months ended
March 31, 1997 increased by $66,000, or 3.3% over
the same period in 1996. Approximately $22,000, or
33.3% of the increase was due to retail operations at
the Safety Harbor, again due to the higher occupancy levels.
Other revenues for the three months ended March 31, 1997
decreased by $372,000, or 7.2% over the prior period. Revenues
recognized at the renovated Dunes Golf & Tennis Club were
approximately $644,000 lower than the prior year. In 1996,
all annual membership and initiation fees were recognized in
full at the time of receipt. This policy was consistent with
the terms of the non-refundable fees. Although these fees are
still non-refundable, in 1997, management elected to defer
and recognize membership and initiation fees pro-rata over
the calendar year. Therefore, the variance in other revenues
will reverse over the next three quarters. Had management
elected a similar policy in 1996, the change in other
revenues from 1996 to 1997 would have been an increase of
$322,000 or 7.2%.
Expenses. Total expenses for the three months ended
March 31, 1997 increased by $1.4 million, or 4.5% over
the prior period. As a percentage of revenues, expenses
decreased from 82.9% to 82.2%. Analysis of major financial
line items follows:
Room expenses for the three months ended March 31, 1997
increased by $383,000 or 9.2% over the prior period. Rooms
expenses at Comparable Resorts increased $296,000 or 7.1%
for the same periods. As a percentage of rooms revenues,
rooms expenses remained constant at 18.2%.
Sales and marketing costs for the three months ended
March 31, 1997 decreased by $165,000 or 8.1% over the
prior period. This is primarily due to timing of expenditures
and is anticipated to reverse in future periods. As a
percentage of total revenues, sales and marketing decreased
from 5.4% in the three months ended March 31, 1996 to 4.7%
for the three months ended March 31, 1997.
General and administrative expense for the three months ended
March 31, 1997 increased by $463,000, or 8.5% over the prior
period. Approximately $93,000 or 20.1% of the total costs were
associated with the Seaside Inn. As a percentage of revenues,
general and administrative expense increased slightly to
14.8% in 1997 from 14.4% in 1996.
Depreciation and amortization expense for the three months
ended March 31, 1997 increased by $126,000 or 6.7% over
the prior period. As a percentage of revenues, depreciation
and amortization expense remained constant at 5.0%. The
increase in dollars is primarily a result of depreciation
on recent renovations and capital improvements.
Net Income. As a result of the foregoing factors,
net income for the three months ended March 31, 1997
increased by $654,000 or 10.2% compared to the prior period.
The Seaside Inn contributed $275,000 or 42.0% of the total increase.
LIQUIDITY AND CAPITAL RESOURCES
South Seas has historically financed its operations and
capital expenditures with cash generated from operations,
bank borrowings, borrowings from private investors, corporate
bonds and short-term credit facilities.
On March 28, 1996, South Seas completed the public offering of
$43,500,000 of its 10% subordinated notes as offered in the
Form S-1 Registration Statement ("Notes Offering"). The terms
of the Notes provided for the payment of interest monthly at 10%,
and with no principal reduction until maturity on April 15, 2003.
The Notes are non-callable during the first four years of the
term then become redeemable, in whole or in part, at the option
of South Seas at various redemption prices (108.24% to 112.62%
of principal) during or after the year 2000. Subsequent to the
occurrence of certain events, the holders of Notes will be offered
the opportunity to convert the Notes at an exchange rate of $12
per partnership unit (subject to adjustment in certain circumstances).
Upon the stated maturity of the Notes, holders of Notes will be
offered the opportunity to convert the Notes at an exchange rate of
$10.50 per unit (subject to adjustment in certain circumstances).
South Seas believes that cash generated by operations, together
with the proceeds from the Notes Offering will be adequate to meet
its working capital, debt service and capital expenditure requirements
for at least the next 12 months. South Seas' outstanding indebtedness,
together with the Notes, places certain debt service obligations on
the partnership. South Seas believes that it may be necessary to
obtain additional debt or equity capital in order to accommodate
its plan for growth and expansion in 1997 and future periods.
South Seas intends to pursue resort and/or hotel acquisitions and
to a lesser extent development opportunities in order to achieve
growth in its portfolio of properties. A portion of the expenditures
associated with this growth strategy will be funded with cash
generated from operations and proceeds from the Notes Offering.
South Seas anticipates that implementation of its growth strategy
referred to in the preceding paragraph will require it to obtain
additional debt or equity financing. The amount of additional
financing required by South Seas in order to implement its growth
strategy will depend on several factors, including the purchase
price and renovation costs associated with acquisitions and
South Seas' available cash resources at the time of a particular
transaction. Although there can be no assurance as to South
Seas' ability to obtain financing in the amounts it requires
on commercially reasonable terms, if at all, South Seas
believes that, based upon its current financial condition and
results of operations, such financing will be available to it.
South Seas' inability to obtain additional financing could have
a material adverse effect on its results of operations, financial
condition and future prospects. The indenture places restrictions
on the amount of additional Funded Indebtedness (as defined in
the prospectus delivered in connection with the Notes Offering)
that South Seas may incur.
In December, 1996, South Seas obtained an irrevocable, transferable
letter of credit in an amount not to exceed $3.26 million, for
use as a replacement for a reserve fund established in connection
with the 10% Subordinated Notes. No amounts had been drawn as
of March 31, 1997.
In March, 1997, South Seas retained an investment banking firm to
advise the partnership on various strategic financial alternatives,
to meet its' future capital needs. As of the filing of this report,
South Seas, together with their investment bankers, have completed
their initial evaluation of the company's operations. Several
alternatives have been outlined and are currently under review.
On March 31, 1997, South Seas had cash and cash equivalents of
approximately $5.7 million, and restricted cash of $89,000.
Cash and cash equivalents decreased by $803,000 during the
three months ended March 31, 1997.
Cash flow from operations was approximately $9.3 million for
the three months ended March 31, 1997 as compared to $4.2
million in the prior period. Cash flow from operations was
negatively impacted by a $1.9 million increase in interest paid
during 1996. This significant increase in interest paid was
attributed to the early retirement of numerous notes, bonds
and accrued interest thereon with the proceeds from the
public offering. South Seas' other major source of cash
in the 1996 period was proceeds of $43.5 million from the
Notes Offering. In addition to funding its operating
activities, South Seas' major uses of cash during the 1996
period were principal payments on outstanding debt of
approximately $29.7 million (primarily through proceeds of
the Notes Offering, capital expenditures and asset purchases
of approximately $1.9 million, and distributions to partners
of approximately $302,000. In 1997, South Seas' major uses
of cash included payments under the revolving line of credit
of $4.0 million and the purchase of the Seaside Inn (net of
liabilities assumed) of $3.4 million. At March 31, 1997,
South Seas had availability under their revolving line of
credit of $16.4 million.
South Seas is not currently a party to any legal proceeding
which, in Management's opinion, is likely to have a material
adverse effect on its operating results or financial position.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In February, 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("FAS 128"), which becomes effective
for South Seas for the year ended December 31, 1997. FAS
128 replaces the presentation of primary earnings per unit
with a presentation of basic earnings per unit which excludes
dilution and is computed by dividing income available to
partnership unit holders by the weighted average number of
partnership units outstanding for the period. Diluted
earnings per unit reflect the potential dilution that would
occur if securities or other contracts to issue units
were exercised or converted into units or resulted in
the issuance of units that then shared in the earnings
of the entity. Diluted earnings per unit is computed
similarly to fully diluted earnings per unit pursuant to
Accounting Principles Board Opinion No. 15, "Earnings
Per Share." FAS 128 also requires dual presentation of
basic and diluted earnings per unit on the face of the
income statement for all entities with complex capital
structures and requires a reconciliation of the numerator
and denominator of the basic earnings per unit computation
to the numerator and denominator of the diluted earnings
per unit comparison. Had FAS 128 been applicable for the
three months ended March 31, 1997, basic and diluted earnings
per unit would have been $1.59 and $.95, respectively.
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Change in Partnership Units
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit I - Weighted Average Units Outstanding
(b) Reports on Form 8-K
Not applicable
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
SIGNATURES
MARCH 31, 1997
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.
ROBERT M. TAYLOR RICHARD E. KRICHBAUM
CHAIRMAN OF T&T RESORTS, L.C. VICE PRESIDENT OF FINANCE
GENERAL PARTNER OF S.S. RESORT MANAGEMENT L.C.
SOUTH SEAS PROPERTIES GENERAL PARTNER OF
COMPANY LIMITED PARTNERSHIP SOUTH SEAS RESORTS
(SIGNATURE) COMPANY, L.P.
MAY 15, 1997 (SIGNATURE)
MAY 15,1997
TIMOTHY R. BOGOTT VIRGINIA S. BROOKS
PRESIDENT CORPORATE CONTROLLER
S.S. RESORT MANAGEMENT, L.C. S.S. RESORT MANAGEMENT,
GENERAL PARTNER OF SOUTH SEAS L.C.
RESORTS COMPANY, L.P. GENERAL PARTNER OF SOUTH
(SIGNATURE) SEAS RESORTS COMPANY, L.P.
MAY 15, 1997 (SIGNATURE)
MAY 15, 1997