-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EPASl9CeC6gbYfohiUrk9FdEkvQsqgLLUQqrVrOCHHyyqukzBz1DagccvbC9Xsqi KNU5AYTqnCM8ECzwTWsQVA== 0000912057-96-007487.txt : 19960501 0000912057-96-007487.hdr.sgml : 19960501 ACCESSION NUMBER: 0000912057-96-007487 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960430 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MESABI TRUST CENTRAL INDEX KEY: 0000065172 STANDARD INDUSTRIAL CLASSIFICATION: MINERAL ROYALTY TRADERS [6795] IRS NUMBER: 136022277 STATE OF INCORPORATION: NY FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-04488 FILM NUMBER: 96553642 BUSINESS ADDRESS: STREET 1: P O BOX 318 CHURCH ST STATION STREET 2: C/O BANKERS TRUST CO CORP TRUST CITY: NEW YORK STATE: NY ZIP: 10015 BUSINESS PHONE: 2122506696 MAIL ADDRESS: STREET 1: C/O BANKERS TRUST COMPANY, CORPORATE STREET 2: P.O. BOX 318 CHURCH STREET STATION CITY: NEW YORK STATE: NY ZIP: 10015 10-K405 1 10-K405 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-K (MARK ONE) /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR FISCAL YEAR ENDED JANUARY 31, 1996, OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 1-4488 ------------------------ MESABI TRUST (Exact name of registrant as specified in its charter) NEW YORK 13-6022277 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) C/O BANKERS TRUST COMPANY CORPORATE TRUST AND AGENCY GROUP P.O. BOX 318 CHURCH STREET STATION NEW YORK, NEW YORK 10015 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 250-6519 ------------------------ Securities registered pursuant to Section 12(b) of the Act: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED - ---------------------------------------------------- -------------------------- Units of Beneficial Interest in Mesabi Trust New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: NONE ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ____ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. _X_ ------------------------ As of April 25, 1996, the aggregate market value of the Units of Beneficial Interest held by non-affiliates of the registrant aggregated approximately $52,419,640*. As of April 25, 1996, 13,120,010 Units of Beneficial Interest were outstanding. - ------------------------ *Includes approximately $60,400 representing the market value as of April 25, 1996 of 15,100 Units the beneficial ownership of which is disclaimed by affiliates (see Item 12 herein). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Certain items in Parts I and II incorporate information by reference from the Annual Report of the Trustees of Mesabi Trust to the Holders of Certificates of Beneficial Interest for the fiscal year ended January 31, 1996, which is annexed hereto and filed herewith as Exhibit 13. PART I ITEM 1. BUSINESS. The information set forth on pages 6 through 9 of the Annual Report of the Trustees of Mesabi Trust for the fiscal year ended January 31, 1996 is incorporated herein by reference. Mesabi Trust ("Mesabi Trust" or the "Trust") is a trust organized pursuant to an Agreement of Trust under the laws of the State of New York in 1961. Mesabi Trust holds all of the interests formerly owned by Mesabi Iron Company, namely all of Mesabi Iron Company's right, title and interest in the Amended Assignment of Peters Lease, Assignment of Cloquet Lease, beneficial interest in the Mesabi Land Trust, and all other assets and property identified in the Agreement of Trust. Under the Agreement of Trust, the Trustees are specifically prohibited from entering into or engaging in any business. This prohibition applies irrespective of whether the conduct of any such business activities is deemed by the Trustees to be necessary or proper for the preservation and protection of the Trust Estate. Accordingly, the activities of the Trust in connection with the administration of Trust assets are limited to the collection of income, the payment of expenses and liabilities, the distribution of the net income and the protection and conservation of the assets held. Pursuant to a ruling from the Internal Revenue Service, which was based on the terms of the Agreement of Trust and based on the prohibition against entering into any business, the Trust is not taxable as a corporation for Federal income tax purposes. The holders of the Units of Beneficial Interest are considered as "owners" of the trust and the Trust's income is taxable directly to the Unitholders. The Trust has a term continuing twenty-one (21) years after the death of the survivor of twenty-five (25) persons named in an exhibit to the Agreement of Trust. The youngest person on such list is now 35 years of age. Leasehold royalty income constitutes the principal source of revenue to Mesabi Trust. Royalty rates are determined by the terms of Mesabi Trust's leases and assignments of leases. Prior to August 17, 1989, the overriding royalty was based on the quantity and iron content of pellets shipped by the then lessee, Reserve Mining Company ("Reserve"), from Mesabi Trust lands. Mesabi Trust did not receive any royalty income from May 1986 until July 1990 due to the filing of a Chapter 11 bankruptcy petition by Reserve and the resulting suspension of Reserve's operations. On August 17, 1989, Cyprus Northshore Mining Corporation ("Cyprus NMC") purchased substantially all of Reserve's assets, including Reserve's interest in the Mesabi Trust lands, and Mesabi Trust entered into agreements (the "Amended Assignment Agreements") with Reserve's Chapter 11 Trustee and Cyprus NMC, which modified the method of calculating overriding royalties payable to Mesabi Trust and transferred the interest of Reserve in the Mesabi Trust lands to Cyprus NMC. Pursuant to the Amended Assignment Agreements, overriding royalties are determined by both the volume and selling price of iron ore products shipped for sale. During 1994, Cyprus NMC was sold by its parent corporation to Cleveland-Cliffs Inc. as a wholly-owned subsidiary and renamed Northshore Mining Corporation ("Northshore"). The smaller fee royalty for Mesabi Land Trust is based on mine production of crude ore. Mesabi Trust has no employees. Certain of the administrative functions of Mesabi Trust are performed by Bankers Trust Company, the Corporate Trustee. Mesabi Trust engages independent consultants to assist the Trustees in monitoring, among other things, the amount and sales price of minerals shipped by Northshore from Silver Bay, Minnesota, which forms the basis for the computation of royalties payable to Mesabi Trust by Northshore. 1 ITEM 2. PROPERTIES. The information set forth on page 6 of the Annual Report of the Trustees of Mesabi Trust for the fiscal year ended January 31, 1996 is incorporated herein by reference. The Peters Lease provides that each leasehold estate will continue until the iron ore, taconite and other minerals or materials thereon are exhausted. The duration of the Mesabi Lease is coextensive with the term of the Peters Lease. The Cloquet Lease, which was executed in 1916, has a term of 124 years. In the event Northshore decides to terminate or surrender one or more of such leases, it must, before taking steps to effect any such termination or surrender, give Mesabi Trust at least six months' notice of its intention to do so and, at Mesabi Trust's request, reassign all of such leases to Mesabi Trust (free and clear of liens, except public highways), in consideration only of the assumption by Mesabi Trust of Northshore's future obligations as lessee under such leases. The Trustees have neither made nor caused to be made any surveys or test drillings to ascertain the iron ore reserves on the Peters Lease Lands and the Cloquet Lease Lands. However, initial surveys and test drillings made by Mesabi Iron Company (upon the liquidation of which in 1961 Mesabi Trust derived its interests) many years ago indicated accessible reserves of at least 1 1/2 billion tons of mineable raw material on these Lands capable of yielding approximately 500 million tons of concentrated product. Based on the amount of ore extracted, it is estimated that there currently remains more than one-half such indicated reserves of concentrated product. ITEM 3. LEGAL PROCEEDINGS. In connection with the 1986 filing of a Chapter 11 bankruptcy petition by Reserve, the Mesabi Trustees commenced various actions and filed proofs of claim against Reserve and various entities related to Reserve. All of such actions and proofs of claims have been finally resolved at this time. During 1995, the Mesabi Trustees were advised that Armco Steel Company L.P. had completed the purchase of sufficient tonnage of taconite pellets to complete its obligations under a pellet purchase agreement, effectively completing Armco's obligations under a Tolling Agreement which dismisses all claims Mesabi Trust might have had against Armco. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The information set forth in the section titled "Certificates of Beneficial Interest" on page 11 of the Annual Report of the Trustees of Mesabi Trust for the fiscal year ended January 31, 1996 is incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA. The information required by this item is incorporated by reference from the section titled "Selected Financial Data" on page 1 and from the section titled "Reserves and Distributions" on page 10 of the Annual Report of the Trustees of Mesabi Trust for the fiscal year ended January 31, 1996. ITEM 7. TRUSTEES' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION. The information required by this item is incorporated by reference from pages 2 through 5 and the sections titled "Income and Expense" and "Reserves and Distributions" on pages 9 and 10 of the Annual Report of the Trustees of Mesabi Trust for the fiscal year ended January 31, 1996. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements, including the independent auditor's report thereon, filed as a part of this report, are presented on pages F-1 through F-8. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. 2 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. There are no directors or executive officers of the registrant. The Trust provides for a Corporate Trustee and four Individual Trustees. The Trustees do not hold office for specific terms but continue in office until such time as a Trustee resigns or is removed or, in the case of an Individual Trustee, dies or becomes incapable of acting, or is adjudged to be bankrupt or insolvent. In the case of the Corporate Trustee, a successor is also appointed if a receiver of the Corporate Trustee or of its property is appointed, or if any public officer takes charge or control of the Corporate Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. A Trustee may be removed at any time, with or without cause, by the holders of two-thirds in interest of the Trust Certificates then outstanding. The present Trustees of Mesabi Trust and their ages, their terms in office as Trustees, and their business experience during the past five years are set forth in the following table:
TRUSTEE BUSINESS EXPERIENCE NAME AGE SINCE DURING PAST FIVE YEARS - -------------------------- --- ------- -------------------------------------- Bankers Trust Company -- 1961 -- David J. Hoffman 60 1977 Mining geologist; Until January 1988, President of Towne Mines Exploration Company, Inc., a privately-held mining corporation Richard G. Lareau 67 1990 Partner in the law firm of Oppenheimer Wolff & Donnelly (since 1960); Director of Ceridian Corporation (since 1971), Merrill Corporation (since 1981), Nash Finch Company (since 1984) and Northern Instruments Corporation (since 1980) Ira A. Marshall, Jr. 73 1976 Private investor and self-employed petroleum engineer; Until February 1986, Director and Vice President of New American Fund, Inc., a closed-end investment trust Norman F. Sprague III 48 1981 Private investor; Orthopedic surgeon
ITEM 11. TRUSTEES' COMPENSATION. Pursuant to an Amendment to the Agreement of Trust (the "Amendment") dated October 25, 1982, each Individual Trustee receives annual compensation for services as Trustee of $20,000, adjusted up or down (but not below $20,000) in accordance with changes from the November 1981 level of 295.5 (the "1981 Escalation Level") in the All Commodities Producer Price Index (with 1967 = 100 as a base), which is published by the U.S. Department of Labor. The adjustment is made at the end of each fiscal year and is calculated on the basis of the proportion between (a) the level of such index for the November preceding the end of such fiscal year and (b) the 1981 Escalation Level. As also provided in the Amendment, Bankers Trust Company, as the Corporate Trustee, receives annual compensation in an amount equal to the greater of (i) $20,000, adjusted as provided in the preceding paragraph, or (ii) one quarter of one percent (1/4 of 1%) of the Trust Moneys, exclusive of proceeds of sale of any part of the Trust Estate (as such terms are defined in the Trust Agreement), received by the Trustees and distributed to Trust Certificate Holders. Additionally, each year the Corporate Trustee receives $62,500 (or more, if unanimously approved by the Individual Trustees) to cover clerical and administrative services to Mesabi Trust other than services customarily performed by a registrar or transfer agent. 3 The following table sets forth the cash compensation paid to the Trustees through January 31, 1996, for services in all capacities as Trustees to Mesabi Trust during the fiscal year ended January 31, 1996. CASH COMPENSATION TABLE
(C) (A) (B) CASH NAME CAPACITY IN WHICH SERVED COMPENSATION - -------------------------- ------------------------------ -------------- Bankers Trust Company Corporate Trustee $ 88,882* David J. Hoffman Individual Trustee $ 26,381 Richard G. Lareau Individual Trustee $ 26,381 Ira A. Marshall, Jr. Individual Trustee $ 26,381 Norman F. Sprague III Individual Trustee $ 26,381
- ------------------------ *Does not include $30,228 of fees and disbursements paid to Bankers Trust Company as transfer agent of the Units. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND THE TRUSTEES. The following table sets forth information concerning each person known to Mesabi Trust to own beneficially more than 5% of the Trust's Units outstanding as of April 1, 1996. Such information has been obtained from Mesabi Trust's records and a review of statements filed with Mesabi Trust pursuant to Section 13(d) of the Securities Exchange Act of 1934 through April 1, 1996.
AMOUNT OF NAME AND ADDRESS OF BENEFICIAL PERCENT OF BENEFICIAL OWNER(S) OWNERSHIP OF UNITS CLASS - ------------------------------------------------------- ------------------- ------------- Norwest Corporation, 2,390,880(1) 18.2% Norwest Center Sixth and Marquette Minneapolis, MN 55479-1026 and Norwest Bank Colorado, National Association 1740 Broadway Denver, CO 80274-8620 and Norwest Colorado, Inc. 1740 Broadway Denver, CO 80274-8677 AT&T Master Pension Trust, 1,305,000(2) 9.95% The Northern Trust Company, as Trustee of the AT&T Master Pension Trust 50 LaSalle Street Chicago, IL 60675 Appaloosa Management L.P., 967,000(3) 7.37% a Delaware Limited Partnership and David A. Tepper 51 JFK Parkway Short Hills, New Jersey 07078
- ------------------------ (1) According to Amendment No. 15 to the Statement on Schedule 13G of Norwest Corporation, and Norwest Colorado, Inc. and Norwest Bank Colorado, National Association, each of which is a subsidiary of Norwest Corporation, dated February 6, 1996, Norwest Corporation, indirectly through its subsidiaries (i) has sole voting power with respect to 2,248,380 Units, (ii) shares voting power with respect to 1,000 Units, (iii) has sole dispositive power as to 2,386,880 Units, and 4 (iv) shares dispositive power with respect to 3,000 Units. Norwest Colorado, Inc. (indirectly through its subsidiaries) has sole voting power with respect to 2,140,000 units and shared voting power with respect to 1,000 units and sole dispositive power with respect to 2,281,500 of such units. Norwest Bank Colorado, National Association, has sole voting power with respect to 2,140,000 units, shared voting power with respect to 1,000 units and sole dispositive power with respect to 2,281,500 of such Units. Includes 1,305,000 units held for the AT&T Master Pension Plan Trust with respect to a portion of whose assets Norwest Bank Colorado, Inc. acts as investment advisor. See footnote (2) below. (2) According to a Schedule 13G dated February 8, 1996, filed on behalf of this person, such person has sole power to vote or to direct the vote, and sole power to dispose or to direct the disposition of, all such Units. As noted in footnote (1) above, these Units are also reflected in the amounts shown for Norwest Corporation and its subsidiaries. (3) According to a Schedule 13D dated February 2, 1994 and March 8, 1994, filed by such persons, which indicates that each of such persons has sole voting power and sole dispositive power with respect to such shares. Appaloosa Management L.P. is general partner of Appaloosa Investment Limited Partnership I. The general partner of Appaloosa Management L.P. is Appaloosa Partners, Inc., of which David Tepper is the sole shareholder and President. Appaloosa Management L.P. acts as an investment advisor to Appaloosa Investment Limited Partnership I, Chestnut Investors III Inc. ("Chestnut") and Reliance Standard Life Insurance Company ("Reliance"). Chestnut and Reliance are both beneficially owned by Delphi Financial Group ("Delphi"). Of the 967,000 Units reported, 751,608 are owned by Appaloosa Investment Limited Partnership I, 6,865 are owned by Chestnut, and 208,527 are owned by Reliance. The table below sets forth information as to the Units of Beneficial Interest in Mesabi Trust beneficially owned as of April 25, 1996 by the Trustees individually and as a group.
AMOUNT OF BENEFICIAL PERCENT OF NAME OWNERSHIP OF UNITS CLASS - -------------------------- ------------------- ---------------- Bankers Trust Company 0* 0 David J. Hoffman 38,100** Less than 1% Richard G. Lareau 5,000 Less than 1% Ira A. Marshall, Jr. 104,000*** Less than 1% Norman F. Sprague III 10,000 Less than 1% All Trustees as a group 157,100 1.1%
- ------------------------ *Bankers Trust Company holds, on behalf of various customers, Units in its Fiduciary Department in so-called "directed" accounts. Bankers Trust Company has no voting or investment power over, and thus no beneficial interest in, such Units. **These Units consist of (a) 23,000 Units owned by Mr. Hoffman and (b) 15,100 Units owned by Mr. Hoffman's wife, over which Mr. Hoffman does not have any investment or voting power and as to which Mr. Hoffman disclaims any beneficial ownership. ***Includes 104,000 Units owned indirectly by Mr. Marshall through a trust. Mr. Marshall is sole trustee of this trust. ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS. Mr. Richard G. Lareau, who became a Trustee on March 7, 1990, is a senior partner in the law firm of Oppenheimer Wolff & Donnelly of Minneapolis, Minnesota. That firm has been retained by Mesabi Trust since 1961 to act with respect to matters of Minnesota law, and was retained in 1991 by the Trustees other than Mr. Lareau to act as general corporate counsel. 5 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) The following documents are filed as part of this Report: PAGE NO. -------- Financial Statements filed herewith: Independent Auditor's Report.................................. F-1 Balance Sheets as of January 31, 1996 and 1995................ F-2 Statements of Income for the years ended January 31, 1996, 1995 and 1994................................................ F-3 Statements of Unallocated Reserve and Trust Corpus for the years ended January 31, 1996, 1995 and 1994.................. F-4 Statements of Cash Flows for the years ended January 31, 1996, 1995 and 1994................................................ F-5 Notes to Financial Statements................................. F-6 Financial Statement Schedules Included: None required. Schedules other than those listed above have been omitted because they are not applicable or the required information is included in the financial statements or notes thereto. Exhibits filed herewith or incorporated by reference: 3 Agreement of Trust dated as of July 18, 1961 (1) 3 (a) Amendment to the Agreement of Trust dated as of October 25, 1982 (2) 4 Instruments defining the rights of Trust Certificate Holders (3) 10(a) Peters Lease (4) 10(b) Amended Assignment of Peters Lease (4) 10(c) Cloquet Lease (4) 10(d) Assignment of Cloquet Lease (4) 10(e) Modification of Lease and Consent to Assignment dated as of October 22, 1982 (5) 10(f) Amendment of Assignment, Assumption and Further Assignment of Peters Lease (6) 10(g) Amendment of Assignment, Assumption and Further Assignments of Cloquet Lease (7) 13 Annual Report of the Trustees of Mesabi Trust for the fiscal year ended January 31, 1996 (b) Reports on Form 8-K: None.
- ------------------------ (1) Incorporated by reference from Exhibit 3 to Mesabi Trust's Annual Report on Form 10-K for the fiscal year ended January 31, 1987. (2) Incorporated by reference from Exhibit 3(a) to Mesabi Trust's Annual Report on Form 10-K for the fiscal year ended January 31, 1988. (3) Incorporated by reference from Exhibit 4 to Mesabi Trust's Annual Report on Form 10-K for the fiscal year ended January 31, 1987. (4) Incorporated by reference from Exhibits 10(a)-10(d) to Mesabi Trust's Annual Report on Form 10-K for the fiscal year ended January 31, 1987. (5) Incorporated by reference from Exhibit 10(e) to Mesabi Trust's Annual Report on Form 10-K for the fiscal year ended January 31, 1988. (6) Incorporated by reference from Exhibit A to Mesabi Trust's Report on Form 8-K dated August 17, 1989. (7) Incorporated by reference from Exhibit B to Mesabi Trust's Report on Form 8-K dated August 17, 1989. 6 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MESABI TRUST - ---------------------------------------- (REGISTRANT) By: Bankers Trust Company Corporate Trustee By: ----------------------------------- Matthew J. Seeley April 26, 1996 VICE PRESIDENT Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. - ---------------------------------------- Matthew J. Seeley April 26, 1996 VICE PRESIDENT BANKERS TRUST COMPANY - ---------------------------------------- David J. Hoffman April 26, 1996 INDIVIDUAL TRUSTEE - ---------------------------------------- Richard G. Lareau April 26, 1996 INDIVIDUAL TRUSTEE - ---------------------------------------- Ira A. Marshall, Jr. April 26, 1996 INDIVIDUAL TRUSTEE - ---------------------------------------- Norman F. Sprague III April 26, 1996 INDIVIDUAL TRUSTEE 7 INDEPENDENT AUDITOR'S REPORT To the Trustees Mesabi Trust New York, New York We have audited the accompanying balance sheets of Mesabi Trust as of January 31, 1996 and 1995, and the related statements of income, unallocated reserve and trust corpus and cash flows for each of the three years in the period ended January 31, 1996. These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mesabi Trust as of January 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 1996, in conformity with generally accepted accounting principles. McGLADREY & PULLEN, LLP New York, New York April 23, 1996 F-1 MESABI TRUST BALANCE SHEETS ASSETS
JANUARY 31, ---------------------------- 1996 1995 ------------- ------------- Cash.............................................. $ 9,183 $ 1,442,627 U.S. Government securities, at amortized cost (which approximates market)...................... 2,145,588 366,650 Accrued income.................................... 127,419 177,924 Prepaid insurance................................. 3,938 3,938 ------------- ------------- $ 2,286,128 $ 1,991,139 ------------- ------------- Fixed property, including intangibles, at nominal values: Assignments of leased property: Amended Assignment of Peters Lease............ $ 1 $ 1 ------------- ------------- Assignment of Cloquet Lease................... 1 1 ------------- ------------- Certificate of beneficial interest for 13,120,010 units of Land Trust................. 1 1 ------------- ------------- $ 3 $ 3 ------------- ------------- $ 2,286,131 $ 1,991,142 ------------- ------------- ------------- ------------- LIABILITIES, UNALLOCATED RESERVE AND TRUST CORPUS Liabilities: Distribution payable............................ $ 1,574,401 $ 1,312,001 Accrued expenses................................ 55,979 41,566 ------------- ------------- $ 1,630,380 $ 1,353,567 Deferred income................................... 114,345 162,214 Unallocated reserve............................... 541,403 475,358 Trust Corpus...................................... 3 3 ------------- ------------- $ 2,286,131 $ 1,991,142 ------------- ------------- ------------- -------------
See Notes to Financial Statements. F-2 MESABI TRUST STATEMENTS OF INCOME
YEARS ENDED JANUARY 31, ------------------------------------------- 1996 1995 1994 ------------- ------------- ------------- REVENUE Royalties under amended lease agreements............................. $ 3,742,921 $ 3,246,252 $ 3,410,244 Royalties under Peters Lease fee..................................... 276,908 219,726 219,208 Interest............................................................. 41,399 19,373 14,902 ------------- ------------- ------------- Total revenue.................................................... $ 4,061,228 $ 3,485,351 $ 3,644,354 ------------- ------------- ------------- ------------- ------------- ------------- EXPENSES Compensation of Trustees............................................. $ 131,906 $ 123,057 $ 120,424 Corporate Trustee's administrative fees.............................. 62,500 62,500 62,500 Professional fees and expenses: Legal and accounting............................................... 46,956 59,792 67,476 Mining consultant and field representatives........................ 12,558 11,768 11,270 Transfer agent's and registrar's fees................................ 33,178 53,039 44,026 Other Trust expenses................................................. 100,082 116,499 94,345 ------------- ------------- ------------- Total expenses................................................... $ 387,180 $ 426,655 $ 400,041 ------------- ------------- ------------- Net income........................................................... $ 3,674,048 $ 3,058,696 $ 3,244,313 ------------- ------------- ------------- ------------- ------------- ------------- Weighted average number of units outstanding......................... 13,120,010 13,120,010 13,120,010 ------------- ------------- ------------- ------------- ------------- ------------- Net income per unit.................................................. $ .28 $ .23 $ .25 ------------- ------------- ------------- ------------- ------------- -------------
See Notes to Financial Statements. F-3 MESABI TRUST STATEMENTS OF UNALLOCATED RESERVE AND TRUST CORPUS YEARS ENDED JANUARY 31, 1996, 1995 AND 1994
UNALLOCATED RESERVE ------------------------------- NUMBER OF TRUST UNITS AMOUNT CORPUS ---------- ----------- ------ Balance, January 31, 1993......................................... 13,120,010 $ 863,555 $3 Net income...................................................... -- 3,244,313 -- Distribution paid May 19, 1993, $.02 per unit................... -- (262,400) -- Distribution paid August 19, 1993, $.05 per unit................ -- (656,001) -- Distribution paid November 19, 1993, $.10 per unit.............. -- (1,312,001) -- Distribution declared January 20, 1994, paid February 18, 1994, $.10 per unit.................................................. -- (1,312,001) -- -- ---------- ----------- Balance, January 31, 1994......................................... 13,120,010 $ 565,465 $3 Net income...................................................... -- 3,058,696 -- Distribution paid August 19, 1994, $.06 per unit................ -- (787,201) -- Distribution paid November 18, 1994, $.08 per unit.............. -- (1,049,601) -- Distribution declared January 19, 1995, paid February 17, 1995, $.10 per unit.................................................. -- (1,312,001) -- -- ---------- ----------- Balance, January 31, 1995......................................... 13,120,010 $ 475,358 $3 Net income...................................................... -- 3,674,048 -- Distribution paid August 18, 1995, $.065 per unit............... -- (852,801) -- Distribution paid November 20, 1995, $.09 per unit.............. -- (1,180,801) -- Distribution declared January 17, 1996, paid February 20, 1996, $.12 per unit.................................................. -- (1,574,401) -- -- ---------- ----------- Balance, January 31, 1996......................................... 13,120,010 $ 541,403 $3 -- -- ---------- ----------- ---------- -----------
See Notes to Financial Statements. F-4 MESABI TRUST STATEMENTS OF CASH FLOWS
YEARS ENDED JANUARY 31, ---------------------------------------------- 1996 1995 1994 -------------- -------------- -------------- Cash flows from operating activities: Royalties received.............................................. $ 4,036,713 $ 3,402,234 $ 3,739,902 Interest received............................................... 27,151 19,373 15,437 Expenses paid................................................... (372,767) (422,544) (376,399) -------------- -------------- -------------- Net cash provided by operating activities..................... $ 3,691,097 $ 2,999,063 $ 3,378,940 -------------- -------------- -------------- Cash flows from investing activities: Sales and redemptions of U.S. Government securities............. $ 4,883,677 $ 6,579,629 $ 7,074,564 Purchases of U.S. Government securities......................... (6,662,615) (6,482,198) (6,770,142) -------------- -------------- -------------- Net cash (used in) provided by investing activities........... $ (1,778,938) $ 97,431 $ 304,422 -------------- -------------- -------------- Cash flows from financing activities: Net cash (used in) financing activities, distributions to unitholders.................................................. $ (3,345,603) $ (3,148,803) $ (2,886,403) -------------- -------------- -------------- Net increase (decrease) in cash................................... $ (1,433,444) $ (52,309) $ 796,959 Cash, beginning of year........................................... 1,442,627 1,494,936 697,977 -------------- -------------- -------------- Cash, end of year................................................. $ 9,183 $ 1,442,627 $ 1,494,936 -------------- -------------- -------------- -------------- -------------- -------------- Reconciliation of net income to net cash provided by operating activities: Net income...................................................... $ 3,674,048 $ 3,058,696 $ 3,244,313 Decrease (increase) in accrued income........................... 50,505 (108,484) (6,489) Increase in accrued expenses.................................... 14,413 4,111 23,642 (Decrease) increase in deferred income.......................... (47,869) 44,740 117,474 -------------- -------------- -------------- Net cash provided by operating activities..................... $ 3,691,097 $ 2,999,063 $ 3,378,940 -------------- -------------- -------------- -------------- -------------- --------------
See Notes to Financial Statements. F-5 MESABI TRUST NOTES TO FINANCIAL STATEMENTS YEARS ENDED JANUARY 31, 1996, 1995 AND 1994 NOTE 1. -- NATURE OF BUSINESS, ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS Mesabi Trust was created in 1961 upon the liquidation of Mesabi Iron Company. The sole purpose of the Trust, as set forth in the Agreement of Trust dated as of July 18, 1961, is to conserve and protect the Trust Estate and to collect and distribute the income and proceeds therefrom to the Trust's certificate holders after the payment of, or provision for, expenses and liabilities. The Agreement of Trust prohibits the Trust from engaging in any business. The lessee/operator of Mesabi Trust's mineral interests is Northshore Mining Corporation (NMC), a subsidiary of Cleveland-Cliffs Inc. (CCI). CCI is among the world's largest producers of iron ore products. Prior to September 30, 1994, the lessee/operator had been a subsidiary of Cyprus Amax Minerals Company and was named Cyprus Northshore Mining Corporation (Cyprus NMC). ORGANIZATION The beneficial interest in Mesabi Trust is represented by 13,120,010 transferable units distributed on July 27, 1961 to shareholders of Mesabi Iron Company. The Trust's status as a grantor trust was confirmed by letter ruling addressed to Mesabi Iron Company from the Internal Revenue Service in 1961. As a grantor trust, Mesabi is exempt from Federal income taxes and its income is taxable directly to the Unitholders. A summary of Mesabi Trust's significant accounting policies follows: CASH The Trust's cash is on deposit at one financial institution. Subsequent to January 31, 1995, a substantial portion of the cash balance was utilized for distributions to Unitholders. INVESTMENTS The Trust invests solely in U.S. Government securities. Management determines the appropriate classifications of the securities at the time they are acquired and evaluates the appropriateness of such classifications as of each balance sheet date. The U.S. government securities are classified as held-to-maturity securities as the Trust has the positive intent and ability to hold to maturity and are stated at amortized cost. REVENUE RECOGNITION Royalty income under the amended lease agreements with NMC (Cyprus NMC through September 30, 1994) is recognized as it is earned. Under such agreements, royalties are earned upon shipment, regardless of whether the actual sales proceeds for any shipment are received by NMC. Royalty income under the Peters Lease fee agreement also is recognized as it is earned. Under such agreement, however, royalties are earned (at the option of NMC (Cyprus NMC through September 30, 1994)) either upon mining of crude ore from Peters Lease lands or upon shipment of iron ore product produced from Peters Lease lands. FIXED PROPERTY, INCLUDING INTANGIBLES The Trust's fixed property, including intangibles, is recorded at nominal values and includes the following: (1) The entire beneficial interest as assignor in the Amended Peters Lease Assignment and the Amended Cloquet Lease Assignment covering taconite properties in Minnesota which are leased to NMC (Cyprus NMC through September 30, 1994). F-6 MESABI TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED JANUARY 31, 1996, 1995 AND 1994 NOTE 1. -- NATURE OF BUSINESS, ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (2) The entire beneficial interest in Mesabi Land Trust which owns a 20% fee interest in the lands subject to the Peters Lease and the entire fee interest in other properties in Minnesota. ACCOUNTING 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. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of financial instruments including cash, U.S. government securities, distributions payable and accrued expenses approximated fair value as of January 31, 1996 and 1995 because of the relative short maturity of these instruments. NOTE 2. -- U.S. GOVERNMENT SECURITIES The amortized cost approximates market value as of January 31, 1996 and 1995. The securities are classified as held-to-maturity and mature as follows:
JANUARY 31, JANUARY 31, 1996 1995 ------------- ----------- Due within one year.......................... $ 1,951,548 $ 366,650 Due after one year through three years....... 194,040 -- ------------- ----------- $ 2,145,588 $ 366,650 ------------- ----------- ------------- -----------
NOTE 3. -- UNALLOCATED RESERVE Leasehold royalty income constitutes the principal source of revenue to Mesabi Trust. Prior to August 17, 1989, royalties were based on the quantity and iron content of pellets shipped by the then lessee, Reserve Mining Company ("Reserve"), from Mesabi Trust properties. From May 1986 until July 1990, however, Mesabi Trust did not have any royalty income, due principally to the filing of a Chapter 11 bankruptcy petition by Reserve and the suspension of Reserve's operations in 1986. On August 17, 1989, Cyprus NMC purchased substantially all of Reserve's assets, including Reserve's interest in the Mesabi Trust lands, and Mesabi Trust entered into agreements with Reserve's Chapter 11 Trustee and Cyprus NMC, which modified the method of calculating royalties payable to Mesabi Trust and transferred the interest of Reserve in the Mesabi Trust lands to Cyprus NMC. Royalties are now determined by both the volume and selling price of iron ore pellets and other products sold. On September 30, 1994, Cyprus Amax Minerals Company sold its iron ore operations, including Cyprus NMC, to Cleveland-Cliffs Inc. (CCI). CCI renamed the operation Northshore Mining Corporation (NMC). CCI is among the world's largest producers of iron ore products. Pursuant to the amended assignment agreements, NMC (Cyprus NMC through September 30, 1994) is obligated to pay Mesabi Trust base overriding royalties, in varying amounts constituting a percentage of the gross proceeds of shipments, from Silver Bay, Minnesota, of iron ore product produced from Mesabi Trust lands or, to a limited extent, other lands. NMC (Cyprus NMC through September 30, 1994) is obligated to make payments of overriding royalties on product shipments F-7 MESABI TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEARS ENDED JANUARY 31, 1996, 1995 AND 1994 NOTE 3. -- UNALLOCATED RESERVE (CONTINUED) within 30 days following the calendar quarter in which such shipments occur. NMC (Cyprus NMC through September 30, 1994) resumed mining operations and shipping product from Silver Bay in the second calendar quarter of 1990, and the first payment of overriding royalties was made in July 1990. NMC (Cyprus NMC through September 30, 1994) also is obligated to pay to Mesabi Trust a minimum advance royalty of $500,000 per annum, subject to adjustment for inflation and deflation (but not below $500,000), which is credited against base overriding royalties and royalty bonuses. NMC (Cyprus NMC through September 30, 1994) is obligated to make quarterly payments of the minimum advance royalty in January, April, July and October of each year. For the calendar year ending December 31, 1996, the minimum advance royalty is $610,335. The minimum annual advance royalty was $596,246; $585,917; and $571,833 for the calendar years ended December 31, 1995; 1994; and 1993, respectively. The unallocated reserve aggregated $541,403 at January 31, 1996, as compared with an unallocated reserve of $475,358 and $565,465 at January 31, 1995 and 1994, respectively. During the fiscal years ended January 31, 1996, 1995 and 1994, the Trustees distributed cash payments totalling $3,345,603 (or $.255 per Unit); $3,148,803 (or $.24 per Unit) and $2,886,403 (or $.22 per unit), respectively, of beneficial interest in Mesabi Trust. In addition, in January 1996 the Trustees declared a distribution of $.12 per unit of beneficial interest which was paid in February 1996. NOTE 4. -- SUMMARY OF QUARTERLY EARNINGS (UNAUDITED) The quarterly results of operations for the two years ended January 31, 1996 are presented below:
YEAR ENDED JANUARY 31, 1996 --------------------------------------------------------- FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER ------------ ------------- ------------- ------------- Revenue..................................... $ 200,161 $ 1,206,455 $ 1,428,637 $ 1,225,975 Expenses.................................... 72,991 112,195 82,109 119,885 ------------ ------------- ------------- ------------- Net income.................................. $ 127,170 $ 1,094,260 $ 1,346,528 $ 1,106,090 ------------ ------------- ------------- ------------- ------------ ------------- ------------- ------------- Net income per unit......................... $ 0.009693 $ 0.083404 $ 0.102631 $ 0.084306 ------------ ------------- ------------- ------------- ------------ ------------- ------------- ------------- YEAR ENDED JANUARY 31, 1995 --------------------------------------------------------- FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER ------------ ------------- ------------- ------------- Revenue..................................... $ 213,755 $ 935,309 $ 1,341,896 $ 994,391 Expenses.................................... 94,319 94,609 102,228 135,499 ------------ ------------- ------------- ------------- Net income.................................. $ 119,436 $ 840,700 $ 1,239,668 $ 858,892 ------------ ------------- ------------- ------------- ------------ ------------- ------------- ------------- Net income per unit......................... $ 0.009103 $ 0.064078 $ 0.094487 $ 0.065464 ------------ ------------- ------------- ------------- ------------ ------------- ------------- -------------
F-8 EX-13 2 EXHIBIT 13 EXHIBIT 13 ANNUAL REPORT OF THE TRUSTEES OF MESABI TRUST FOR THE YEAR ENDED JANUARY 31, 1996 ADDRESS Mesabi Trust c/o Bankers Trust Company Corporate Trust and Agency Group P.O. Box 318 Church Street Station New York, NY 10015 Telephone - (212) 250-6519 COUNSEL Oppenheimer Wolff & Donnelly, General Counsel TRANSFER AGENT Bankers Trust Company REGISTRAR Chemical Bank Mesabi Trust will provide, upon the written request of any certificate holder addressed to the Trustees at the above address and without charge to such certificate holder, a copy of Mesabi Trust's Annual Report on Form 10-K for the fiscal year ended January 31, 1996 as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. FORWARD-LOOKING INFORMATION Certain statements contained in this document are forward-looking, including specifically those statements estimating 1996 production or shipments. All such forward-looking statements are based on input from the lessee/operator. The Trust has no control over the operations and activities of the lessee/operator except within the framework of current agreements. Actual results could differ materially from those indicated in such statements. For important factors that could cause actual results to differ materially, see "Important Factors Affecting Mesabi Trust," below. SELECTED FINANCIAL DATA
YEARS ENDED JANUARY 31 1996 1995 1994 1993 1992 - --------------------------------------------- ------------- ------------- ------------- ------------- ------------- Royalty and interest income.................. $ 4,061,228 $ 3,485,351 $ 3,644,354 $ 1,443,837 $ 1,850,411 Trust expenses............................... 387,180 426,655 400,041 384,773 304,115 ------------- ------------- ------------- ------------- ------------- Net income (a)............................... $ 3,674,048 $ 3,058,696 $ 3,244,313 $ 1,059,064 $ 1,546,296 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Net income per Unit (b)...................... $ .28 $ .23 $ .25 $ .08 $ .12 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Distributions declared per Unit (b)(c)....... $ .275 $ .24 $ .27 $ .10 $ .14 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- AT JANUARY 31, - --------------------------------------------- Total Assets................................. $ 2,286,131 $ 1,991,142 $ 2,032,398 $ 1,533,372 $ 1,523,818 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
- ------------------------ (a) The Trust, as a grantor trust, is exempt from federal and state income taxes. (b) Based on 13,120,010 Units of Beneficial Interest outstanding during all years. 1 (c) During the fiscal year ended January 31, 1996, the Trustees distributed $.255 per Unit (including $.10 per Unit declared in fiscal 1995 and distributed in February 1995) and declared an additional distribution of $.12 per Unit, payable in February 1996. During the fiscal year ended January 31, 1995, the Trustees distributed $.24 per Unit (including $.10 per Unit declared in fiscal 1994 and distributed in February 1994) and declared an additional distribution of $.10 per Unit, payable in February 1995. During the fiscal year ended January 31, 1994, the Trustees distributed $.22 per Unit (including $.05 per Unit declared in fiscal 1993 and distributed in February 1993) and declared an additional distribution of $.10 per Unit, payable in February 1994. During the fiscal year ended January 31, 1993, the Trustees distributed $.08 per Unit (including the $.03 per Unit declared in fiscal 1992 and distributed in February 1992) and declared an additional distribution of $.05 per Unit, payable in February 1993. During the fiscal year ended January 31, 1992, the Trustees distributed $.16 per Unit (including the $.05 per Unit declared in fiscal 1991 and distributed in February 1991) and declared an additional distribution of $.03 per Unit, payable in February 1992. See "Reserves and Distributions" on page 10 of this Annual Report. ------------------------ TRUSTEES' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS GENERAL Mesabi Trust ("Mesabi Trust" or the "Trust") is a trust organized pursuant to an Agreement of Trust under the laws of the State of New York in 1961. Mesabi Trust holds all of the interests formerly owned by Mesabi Iron Company, namely all of Mesabi Iron Company's right, title and interest in the Amended Assignment of Peters Lease, Assignment of Cloquet Lease, beneficial interest in the Mesabi Land Trust, and all other assets and property identified in the Agreement of Trust. Under the Agreement of Trust, the Trustees are specifically prohibited from entering into or engaging in any business. This prohibition applies irrespective of whether the conduct of any such business activities is deemed by the Trustees to be necessary or proper for the preservation and protection of the Trust Estate. Accordingly, the activities of the Trust in connection with the administration of Trust assets are limited to the collection of income, the payment of expenses and liabilities, the distribution of the net income and the protection and conservation of the assets held. Pursuant to a ruling from the Internal Revenue Service, which was based on the terms of the Agreement of Trust and based on the prohibition against entering into any business, the Trust is not taxable as a corporation for Federal income tax purposes. The holders of the Units of Beneficial Interest are considered as "owners" of the trust and the Trust's income is taxable directly to the Unitholders. The Trust has a term continuing twenty-one (21) years after the death of the survivor of twenty-five (25) persons named in an exhibit to the Agreement of Trust. The youngest person on such list is now 35 years of age. Leasehold royalty income constitutes the principal source of revenue to Mesabi Trust. Royalty rates are determined by the terms of Mesabi Trust's leases and assignments of leases. Prior to August 17, 1989, royalties were based on the quantity and iron content of pellets shipped by the then lessee, Reserve Mining Company ("Reserve"), from Mesabi Trust lands. Mesabi Trust did not receive any royalty income from May 1986 until July 1990 due to the filing of a Chapter 11 bankruptcy petition by Reserve and the resulting suspension of Reserve's operations. On August 17, 1989, Cyprus Northshore Mining Corporation ("Cyprus NMC") purchased substantially all of Reserve's assets, including Reserve's interest in the Mesabi Trust lands. In connection with such purchase, Mesabi Trust, Reserve's Chapter 11 Trustee and Cyprus NMC entered into the Amendment of Assignment, Assumption and Further Assignment of Peters Lease (the "Amended Peters Lease Assignment"), the Amendment of Assignment, Assumption and Further Assignment of Cloquet Lease (the "Amended Cloquet Lease Assignment") and the Assumption and Assignment of 2 Mesabi Lease (together with the Amended Peters Lease Assignment and the Amended Cloquet Lease Assignment, the "Amended Assignment Agreements"). The Amended Assignment Agreements modified the method of calculating overriding royalties payable to Mesabi Trust and transferred the interest of Reserve in the Mesabi Trust lands to Cyprus NMC. Under the Amended Assignment Agreements, overriding royalties are determined by both the volume and selling price of iron ore products sold. Fee royalties payable to Mesabi Land Trust, a Minnesota land trust of which Mesabi Trust is the sole beneficiary ("Mesabi Land Trust"), remain based on the amount of crude ore mined, which crude ore is used to produce iron ore pellets and other products. In 1994, Cyprus NMC was sold by its parent corporation to Cleveland-Cliffs, Inc. as a wholly-owned subsidiary and renamed Northshore Mining Corporation ("Northshore"). Pursuant to the Amended Assignment Agreements, Northshore is obligated to pay Mesabi Trust base overriding royalties, in varying amounts constituting a percentage of the gross proceeds of shipments from Silver Bay, Minnesota of iron ore products produced from Mesabi Trust lands, and to a limited extent other lands, ranging from 2 1/2% of the gross proceeds for the first one million tons of iron ore products so shipped annually to 6% of the gross proceeds for all iron ore products shipped in excess of 4 million tons annually. In addition, Northshore is obligated to pay to Mesabi Trust royalty bonuses constituting a percentage of the gross proceeds of product shipped from Silver Bay, Minnesota for sale at prices above a threshold price (which is adjusted on an annual basis for inflation and deflation (but not below $30) and was $35.77 for calendar year 1995 and is $36.62 for calendar year 1996), ranging from 1/2 of 1% of the gross proceeds on all tonnage shipped for sale at prices between the threshold price and $2.00 above the threshold price, to 3% of the gross proceeds on all tonnage shipped for sale at prices $10.00 or more above the threshold price. No royalty bonus has been paid under the Amended Assignment Agreements for several years. Generally, the obligation of Northshore to pay base overriding royalties and royalty bonuses with respect to the sale of iron ore products accrues upon the shipment of those products from Silver Bay. Northshore also is obligated to pay to Mesabi Trust a minimum advance royalty in equal quarterly installments, which are credited against certain base overriding royalties and royalty bonuses. The amount of advance royalties payable is subject to adjustment (but not below $500,000 per annum) for inflation and deflation and was $596,246 for calendar year 1995 and is $610,335 for calendar year 1996. Northshore is obligated to make quarterly royalty payments in January, April, July and October of each year. In the case of base overriding royalties and royalty bonuses, these quarterly payments are to be made whether or not the related proceeds of sale have been received by Northshore by the time such payments become due. Under the relevant documents, Northshore may mine and ship iron ore products from lands other than Mesabi Trust lands. To encourage the use of iron ore products from Mesabi Trust lands, Mesabi Trust receives royalties on stated percentages of iron ore shipped from Silver Bay, whether or not the iron ore products are from Mesabi Trust lands. Mesabi Trust receives royalties at the greater of (i) the aggregate quantity of iron ore products shipped that were from Mesabi Trust lands, and (ii) a portion of the aggregate quantity of all iron ore products shipped that were from any lands, such portion being 90% of the first four million tons shipped during such year, 85% of the next two million tons shipped during such year, and 25% of all tonnage shipped during such year in excess of six million tons. The Trustees have been advised by Northshore that Northshore currently estimates its calendar year 1996 shipments to be approximately 4.2 million tons, an increase from 1995 shipments of approximately 3.6 million tons. The increase, in large part, is due to the full year impact of an iron ore expansion project (the reactivation of a previously idle pelletizing line) which was completed in mid-June 1995. In addition, Northshore has advised that it currently anticipates that a higher percentage of its calendar year 1996 shipments will be of iron ore products from Mesabi Trust lands than during the past several years. During calendar years 1995, 1994 and 1993, the percentage of shipments of iron 3 ore products from Mesabi Trust lands have been approximately 90.6%, 88.3%, and 87.8 %, respectively, of total shipments. For calendar year 1996, Northshore has advised that it currently anticipates that the percentage of iron ore products it ships that will be from Mesabi Trust lands could be 98% or more. IMPORTANT FACTORS AFFECTING MESABI TRUST Under the Agreement of Trust, the activities of the Trust are limited to the collection of income, the payment of expenses and liabilities, the distribution of net income and the protection and conservation of the assets held. The Trustees are specifically prohibited from entering into or engaging in any business. This prohibition applies irrespective of whether the conduct of business activities is deemed by the Trustees to be necessary or proper for the preservation and protection of the Trust Estate. Accordingly, the income of the Trust is highly dependent upon the activities and operations of its assignee, Northshore, and the terms and conditions of the Amended Assignment Agreements. The Trust and the Trustees have no control over the operations and activities of Northshore except within the framework of current agreements. Due to winter weather, and the increasing royalty percentages based on tonnage shipped in a calendar year, results for a particular calendar quarter are typically not indicative of results for future quarters or the year as a whole. Factors which can impact the results of the Trust in any quarter or year include: 1. SHIPPING CONDITIONS IN THE GREAT LAKES. Shipping activity by Northshore is dependent upon when the Great Lakes shipping lanes freeze for the winter months (typically in January) and when they re-open in the spring (typically late-March or April). Base overriding royalties to Mesabi Trust are based on shipments made in a calendar quarter. If there is little or no shipping activity in the first calendar quarter, the Trust only receives the minimum royalty for that period. 2. OPERATIONS OF NORTHSHORE. Since the primary portion of the Trust's revenues are from the shipments of iron ore product by Northshore, Northshore's processing and shipping activities directly impact the Trust's revenues in any quarter or year. Shipments by Northshore are impacted by a myriad of factors, including economic conditions in the iron ore industry, pricing by competitors, long-term customer contracts or arrangements by Northshore or its competitors, availability of ore boats, production at Northshore's mining operations, and production at the pelletizing/processing facility. If any pelletizing line becomes idle for any reason, production (and shipments) could be adversely impacted. 3. INCREASING ROYALTIES. As described elsewhere, the royalty percentage paid to the Trust increases as the aggregate tonnage of iron ore products shipped in any calendar year increases. Assuming a consistent sales price per ton throughout a calendar year, shipments of iron ore product later in the year generate a higher royalty to the Trust. 4. PERCENTAGE OF MESABI TRUST ORE. As described elsewhere, Northshore has the ability to process and ship iron ore product from lands other than Mesabi Trust lands. In certain circumstances, the Trust may be entitled to royalties on those other shipments, but not in all cases. In general, the Trust will receive higher royalties (assuming all other factors are equal) if a higher percentage of shipments are from Mesabi Trust lands. For calendar year 1996, Northshore has advised the Trustees that 98% or more of shipments will come from Mesabi Trust lands. This compares to percentages of 90.6%, 88.3% and 87.8% in calendar years 1995, 1994, and 1993, respectively. COMPARISON OF FISCAL YEARS ENDED JANUARY 31, 1996 AND JANUARY 31, 1995 Mesabi Trust's gross income for the fiscal year ended January 31, 1996 was $4,061,228, an increase of $575,877 (or approximately 16.5%) from the gross income of $3,485,351 for the fiscal year ended January 31, 1995. The increase in gross income primarily was due to an increase in shipments 4 plus a higher average sales price per ton. Mesabi Trust's expenses of $387,180 for the fiscal year ended January 31, 1996 decreased $39,475 (or approximately 9.3%) from expenses of $426,655 for the fiscal year ended January 31, 1995. The decrease in expenses was primarily because of decreased costs for printing and postage, transfer agent fees and legal fees. Total expenses, by category, for each of the last three fiscal years is set forth under "Income and Expense" on pages 9 and 10 of this report. Increased income and decreased expenses resulted in net income of $3,674,048 for the fiscal year ended January 31, 1996, an increase of $615,352 from the net income of $3,058,696 for the fiscal year ended January 31, 1995. Mesabi Trust's Unallocated Reserve aggregated $541,403 at January 31, 1996, as compared with an Unallocated Reserve of $475,358 at January 31, 1995. During the fiscal year ended January 31, 1996, the Trustees distributed $.255 per Unit of Beneficial Interest in Mesabi Trust. These distributions to Unitholders totalled $3,345,603. COMPARISON OF FISCAL YEARS ENDED JANUARY 31, 1995 AND JANUARY 31, 1994 Mesabi Trust's gross income for the fiscal year ended January 31, 1995 was $3,485,351, a decrease of $159,003 (or approximately 4.4%) from the gross income of $3,644,354 for the fiscal year ended January 31, 1994. The decrease in gross income primarily was due to $144,973 of non-recurring income recognized in fiscal 1994 from the resolution of a proof of claim. Mesabi Trust's expenses of $426,655 for the fiscal year ended January 31, 1995 increased $26,614 (or approximately 6.7%) from expenses of $400,041 for the fiscal year ended January 31, 1994. The increase in expenses was primarily because of increased costs for inspection trips, printing and postage, transfer agent fees and legal fees. Total expenses, by category, for each of the last three fiscal years is set forth under "Income and Expense" on pages 9 and 10 of this report. Decreased income and increased expenses resulted in net income of $3,058,696 for the fiscal year ended January 31, 1995, a decrease of $185,617 from the net income of $3,244,313 for the fiscal year ended January 31, 1994. Mesabi Trust's Unallocated Reserve aggregated $475,358 at January 31, 1995, as compared with an Unallocated Reserve of $565,465 at January 31, 1994. During the fiscal year ended January 31, 1995, the Trustees distributed $.24 per Unit of Beneficial Interest. These distributions to Unitholders totalled $3,148,803. 5 TO THE HOLDERS OF CERTIFICATES OF BENEFICIAL INTEREST IN MESABI TRUST MESABI TRUST Mesabi Trust was created in 1961 upon the liquidation of Mesabi Iron Company. The sole purpose of the Trust, as set forth in the Agreement of Trust dated as of July 18, 1961, is to conserve and protect the Trust Estate and to collect and distribute the income and proceeds therefrom to the Trust's Certificate Holders after the payment of, or provision for, expenses and liabilities. The Agreement of Trust prohibits the Trust from engaging in any business. THE TRUST ESTATE The principal assets of Mesabi Trust consist of two different interests in certain properties in the Mesabi Iron Range: (1) Mesabi Trust's interest as assignor in the Amended Peters Lease Assignment and the Amended Cloquet Lease Assignment, which cover properties that aggregate approximately 9,750 contiguous acres in St. Louis County, Minnesota (the "Peters Lease Lands" and the "Cloquet Lease Lands," respectively), and (2) Mesabi Trust's ownership of the entire beneficial interest in Mesabi Land Trust which has a 20% interest as fee owner in the Peters Lease Lands and a 100% fee ownership in certain non-mineral-bearing lands adjacent to the Peters and Cloquet Lease Lands (the "Mesabi Lease Lands"). The Peters and Cloquet Lease Lands are located at the eastern end of the Mesabi Iron Range and contain low-grade iron ore known as taconite, approximately three tons of which must be beneficiated to produce one ton of high-grade pellets. The Trustees have not had any surveys or test drillings performed to ascertain the iron ore reserves on the Peters Lease and the Cloquet Lease Lands. However, initial surveys and test drillings made by Mesabi Iron Company many years ago indicated that these lands contained accessible taconite reserves capable of yielding approximately 500 million tons of high grade iron ore pellets. It is estimated (based on the amount of ore extracted) that more than one-half of the indicated ore reserves still remain in the Peters Lease and Cloquet Lease Lands. The Mesabi Lease Lands provide an area for location of service roads, supporting plants and equipment and dump sites for overburden. Under the Amended Assignment Agreements, Northshore produces iron ore from the Peters Lease Lands and the Cloquet Lease Lands for the manufacture of pellets to be sold to various users, and Mesabi Trust receives royalties on the crude ore extracted from such Lands and the pellets produced from such crude ore. LEASEHOLD ROYALTIES Northshore is obligated to pay to Mesabi Trust base overriding royalties and royalty bonuses on all pellets (and other iron ore products) produced from the Peters and Cloquet Lease Lands ("Mesabi Ore") and shipped from Silver Bay, Minnesota in each calendar year, based on prices and volumes. Base overriding royalties are calculated on the basis of an escalating scale of percentages of gross sales proceeds of iron ore shipped, with the applicable percentage determined by reference to the tonnage of pellets previously shipped in the then current calendar year, as follows:
APPLICABLE ROYALTY (EXPRESSED AS A PERCENTAGE OF GROSS SALES PROCEEDS TONS OF PELLETS SHIPPED IN CALENDAR YEAR WITHIN EACH TRANCHE) - ------------------------------------------------------------ ------------------------- one million or less......................................... 2 1/2% more than one but not more than two......................... 3 1/2% more than two but not more than three....................... 5% more than three but not more than four...................... 5 1/2% more than four million...................................... 6%
6 For example, assuming that no shipments of pellets were made during the first calendar quarter of 1996 and further assuming that pellets were shipped from Silver Bay, Minnesota in the second and third calendar quarters of 1996 in the following quantities, and the gross proceeds of such shipments are in the following amounts:
GROSS TONNAGE PROCEEDS ---------- ------------- 2nd Quarter: 500,000 $ 14,000,000 3rd Quarter: 500,000 $ 14,000,000 1,000,000 $ 27,000,000 1,000,000 $ 26,000,000 1,000,000 $ 25,000,000 1,500,000 $ 37,500,000
then the base overriding royalties payable in respect of the second and third calendar quarters of 1996 would be as follows: 2nd Quarter: $ 14,000,000 X 2 1/2% $ (350,000) 3rd Quarter: $ 14,000,000 X 2 1/2% $ (350,000) $ 27,000,000 X 3 1/2% $ (945,000) $ 26,000,000 X 5% $ (1,300,000) $ 25,000,000 X 5 1/2% $ (1,375,000) $ 37,500,000 X 6% $ (2,250,000)
and the percentage applicable for all pellets shipped in the fourth quarter of 1996 would be 6%. The above figures are provided only to illustrate the method for calculating base overriding royalties and do NOT indicate the amount of base overriding royalties the Trustees expect Mesabi Trust to earn in 1996 or any other year. Accordingly, the foregoing example illustrating the calculation of base overriding royalties should not be considered a prediction of the amount of base overriding royalties Mesabi Trust will receive. Royalty bonuses are payable on all pellets sold at prices above a threshold price (the "Adjusted Threshold Price"), which was $35.77 per ton for calendar year 1995 and will be $36.62 per ton for calendar year 1996. The Adjusted Threshold Price is subject to adjustment (but not below $30 per ton) for inflation and deflation and is determined each year on the basis of the change in a broad based index of inflation and deflation published quarterly by the U.S. Department of Commerce. The amount of royalty bonuses payable for any period is calculated on the basis of an escalating scale of percentages of the gross sales proceeds to Northshore of pellets sold at prices above the Adjusted Threshold Price. The applicable percentage is determined by reference to the amount by which the sales prices for a particular quantity of pellets exceeds the Adjusted Threshold Price, as follows:
AMOUNT BY WHICH SALES PRICE PER TON APPLICABLE EXCEEDS ADJUSTED THRESHOLD PRICE PERCENTAGE - ------------------------------------------------------------ -------------- $2 or less.................................................. 1/2 of 1% more than $2 but not more than $4........................... 1% more than $4 but not more than $6........................... 1 1/2% more than $6 but not more than $8........................... 2% more than $8 but not more than $10.......................... 2 1/2% more than $10............................................... 3%
7 For example, if an Adjusted Threshold Price of $36.62 is assumed for calendar year 1996 and assuming two million tons of pellets were shipped in the second quarter of 1996 at the following prices: 1,000,000 tons @ $29.00/ton 300,000 tons @ $31.00/ton 300,000 tons @ $34.00/ton 100,000 tons @ $36.00/ton 100,000 tons @ $38.00/ton 100,000 tons @ $40.00/ton 50,000 tons @ $42.00/ton 50,000 tons @ $45.00/ton then the following royalty bonuses would be payable on shipments of pellets on the second quarter of 1996 as follows: 1,000,000 tons @ $29.00/ton No bonus 300,000 tons @ $31.00/ton No bonus 300,000 tons @ $34.00/ton No bonus 100,000 tons @ $36.00/ton No bonus 100,000 tons @ $38.00/ton 1/2% 100,000 tons @ $40.00/ton 1% 50,000 tons @ $42.00/ton 1 1/2% 50,000 tons @ $45.00/ton 2 1/2% The above figures are provided only to illustrate the method for calculating royalty bonuses and do NOT indicate the amount of royalty bonuses, if any, the Trustees expect Mesabi Trust to earn in 1996 or any other year. Accordingly, the foregoing example illustrating the calculation of royalty bonuses should not be considered a prediction of the amount, if any, of royalty bonuses Mesabi Trust will receive. Under the Amended Assignment Agreements, no royalty bonus has been paid to the Trust for several years. Northshore also must pay base overriding royalties and royalty bonuses on pellets produced from other lands ("Other Ore") to the extent necessary to assure payment of base overriding royalties and royalty bonuses on at least 90% of the first four million tons of pellets shipped from Silver Bay, Minnesota in each calendar year, at least 85% of the next two million tons of pellets shipped therefrom in each calendar year, and at least 25% of all tonnage of pellets shipped therefrom in each calendar year in excess of six million tons. Base overriding royalties and royalty bonuses payable on Other Ore can be recouped by Northshore out of base overriding royalties and royalty bonuses paid on Mesabi Ore. The amount of Other Ore royalties and Other Ore royalty bonuses which can be recouped on any payment date cannot, however, exceed 20% of the amount of Mesabi Ore royalties and royalty bonuses which are otherwise payable on that payment date. Northshore is also obligated to pay to Mesabi Trust advance royalties in equal quarterly installments. The advance royalty was $596,246 per annum for the calendar year ended December 31, 1995 and is $610,335 for calendar year 1996. The amount of advance royalties payable is subject to adjustment (but not below $500,000 per annum) for inflation and deflation and is determined each year in the same manner as the Adjusted Threshold Price. All payments of advance royalties are credited against payments of base overriding royalties and royalty bonuses payable on Mesabi Ore until fully recouped. The amount of advance royalties payable in respect of each calendar quarter shall constitute the minimum overriding royalty amount payable by Northshore in respect of that calendar quarter. Base overriding royalties and royalty bonuses are payable quarterly and accrue upon shipment, whether or not the actual sales proceeds for any shipment are received by Northshore. The amount of base overriding royalties and royalty bonuses payable with respect to the first three quarters in any 8 calendar year are determined on the basis of tonnage shipped during each such calendar quarter and the actual sales proceeds of such shipments, with an adjustment made to the royalties payable with respect to the last quarter in any calendar year to account for errors, adjustments and returns. In addition, in the event that Northshore commences mining and production of quarry stone for shipment from Silver Bay, Minnesota, Northshore must pay base overriding royalties on all quarry stone so shipped on the basis of the same scale of percentages used in calculating base overriding royalties payable on pellets and other iron ore product. Northshore has not informed Mesabi Trust of any present intention to commence mining and production of quarry stone. LAND TRUST AND FEE ROYALTIES Mesabi Land Trust holds a 20% interest as fee owner in the Peters Lease Lands and a 100% interest as fee owner in the Mesabi Lease Lands as lessor of the Mesabi Lease. Mesabi Trust holds the entire beneficial interest in Mesabi Land Trust and is entitled to receive the net income of Mesabi Land Trust after payment of expenses. Northshore is not obligated to pay royalties or rental to Mesabi Land Trust as fee owner of the non-mineral bearing Mesabi Lease Lands, a consideration having been paid in that respect at the inception of the Mesabi Lease. Northshore is required to pay a base royalty to the fee owners in an amount which, at its option, is either (a) 11 2/3 CENTS per gross ton of crude ore it mines from the Peters Lease Lands or (b) $.0056 for each 1% of metallic iron ore natural contained in each gross ton of pellets it produces from the Peters Lease Lands and ships. The base fee royalty rate will be adjusted up or down each quarter (but not below the base royalty specified above) by addition or subtraction of an amount to be determined by reference to changes in Lower Lake Mesabi Range pellet prices and the All Commodities Producer Price Index. The adjustment factor is computed by multiplying the base fee royalty rate specified above by a percentage that is the sum of (a) one-half of the percentage change, if any, by which the then prevailing price per iron unit of Mesabi Range taconite pellets delivered by rail or vessel at Lower Lake Erie ports exceeds 80.5 CENTS (the price per iron unit in effect in January 1982) plus (b) one-half of the percentage change, if any, by which the All Commodities Producer Price Index exceeds 295.8 (the level of the Index for December 1981). Fee royalties aggregating $276,908 with respect to crude ore mined by Cyprus NMC were earned by Mesabi Land Trust during the fiscal year ended January 31, 1996. INCOME AND EXPENSE Total income for Mesabi Trust for the fiscal year ended January 31, 1996 was $4,061,228, consisting of $41,399 in interest earned on the investment of the Unallocated Reserve, $276,908 in fee income, $596,246 in minimum advance royalty income, and $3,146,675 in overriding royalty income compared with $3,485,351 in total income for the previous fiscal year. Total expenses for the fiscal year were $387,180, compared with $426,655 in total expenses for the previous fiscal year. There were distributions paid per Unit of Beneficial Interest totalling 25.5 CENTS for the fiscal year ended January 31, 1996, compared with distributions paid for the fiscal year ended January 31, 1995 of 24 CENTS per Unit. 9 Total expenses by categories were as follows:
FISCAL YEARS ENDED JANUARY 31, ------------------------------------- 1996 1995 1994 ----------- ----------- ----------- Compensation of Trustees......................................... $ 131,906 $ 123,057 $ 120,424 Fees and Disbursements: Administrative................................................. 62,500 62,500 62,500 Accounting..................................................... 29,326 30,997 47,668 Inspection trips, travel and other expenses of Trustees........ 36,352 38,564 26,368 Legal.......................................................... 17,630 28,795 19,808 Mining consultant and field representatives.................... 12,558 11,768 11,270 Printing of annual and quarterly reports, and letters to certificate holders........................................... 46,676 63,902 51,631 Registrar...................................................... 559 1,937 1,023 Securities and Exchange Commission............................. 250 250 250 Transfer Agent................................................. 32,619 51,102 43,003 Transfer Agent miscellaneous disbursements..................... 13,500 13,500 13,500 Other miscellaneous expenses................................... 3,304 283 2,596 ----------- ----------- ----------- $ 387,180 $ 426,655 $ 400,041 ----------- ----------- ----------- ----------- ----------- -----------
Pursuant to an Amendment to the Agreement of Trust (the "Amendment") dated October 25, 1982, each Individual Trustee receives annual compensation for services as Trustee of $20,000, adjusted up or down (but not below $20,000) in accordance with changes from the November 1981 level of 295.5 (the "1981 Escalation Level") in the All Commodities Producer Price Index (with 1967 = 100 as a base), which is published by the U.S. Department of Labor. The adjustment is made at the end of each fiscal year and is calculated on the basis of the proportion between (a) the level of such index for the November preceding the end of such fiscal year and (b) the 1981 Escalation Level. RESERVES AND DISTRIBUTIONS Mesabi Trust's Unallocated Reserve aggregated $541,403 at January 31, 1996, compared with an Unallocated Reserve of $475,358 at January 31, 1995. The Trustees have determined that the Unallocated Reserve should be maintained at a prudent level. Accordingly, although the actual amount of the Unallocated Reserve will fluctuate from time to time, and may increase or decrease from its current level, it is currently intended that future distributions will be highly dependent upon royalty income as it is received and the level of Trust expenses. The amount of future royalty income available for distribution will be subject to the volume of iron ore product shipments and the dollar level of sales by Northshore. Shipping activity is greatly reduced during the winter months and economic conditions, particularly those affecting the steel industry, may adversely affect the amount and timing of such future shipments and sales. The Trustees will continue to monitor the economic circumstances of the Trust to strike a responsible balance between distributions to Unitholders and the need to maintain adequate reserves at a prudent level, given the unpredictable nature of the iron ore industry, the Trust's dependence on the actions of the lessee/operator, and the fact the Trust essentially has no other liquid assets. Payments to Unitholders during the fiscal year ended January 31, 1995 totalled $3,148,803, and payments to Unitholders during the fiscal year ended January 31, 1996 totalled $3,345,603. 10 CERTIFICATES OF BENEFICIAL INTEREST The Certificates of Beneficial Interest are traded on the New York Stock Exchange. During the past two fiscal years, the market ranges of the certificates for each quarterly period and the distributions declared for such quarterly periods were as follows:
FISCAL QUARTER ENDED HIGH LOW AMOUNT DECLARED PER UNIT - ---------------------------------------- ------- ------- --------------- --------- April 30, 1994.......................... 3 1/4 2 5/8 $ -- $ -- July 31, 1994........................... 3 7/8 2 3/4 787,201 0.060 October 31, 1994........................ 3 3/8 2 7/8 1,049,601 0.080 January 31, 1995........................ 3 5/8 2 3/4 1,312,001 0.100 --------------- --------- $ 3,148,803 $ 0.240 --------------- --------- --------------- --------- FISCAL QUARTER ENDED HIGH LOW AMOUNT DECLARED PER UNIT - ---------------------------------------- ------- ------- --------------- --------- April 30, 1995.......................... 3 5/8 3 1/2 $ -- $ -- July 31, 1995........................... 3 7/8 3 1/4 852,801 0.065 October 31, 1995........................ 4 1/8 3 3/8 1,180,801 0.090 January 31, 1996........................ 4 3 1/2 1,574,401 0.120 --------------- --------- $ 3,608,003 $ 0.275 --------------- --------- --------------- ---------
As of the close of business on April 26, 1996, the beneficial interest in Mesabi Trust was represented by 13,120,010 Units registered in the names of approximately 3,073 individuals holding of record approximately 1,861,984 Units, and in the names of approximately 590 brokers, nominees, or fiduciaries holding of record approximately 11,258,026 Units. 11 THE TRUSTEES The name and address of each Trustee and the principal occupation of each individual Trustee are as follows:
NAME AND ADDRESS OF TRUSTEE PRINCIPAL OCCUPATION - ---------------------------------------- -------------------------------------- Bankers Trust Company -- Corporate Trustee Four Albany Street New York New York 10015 David J. Hoffman Mining geologist Individual Trustee 150 Forest View Drive Sedona, Arizona 86336 Richard G. Lareau Partner in the law firm of Individual Trustee Oppenheimer Wolff & Donnelly Oppenheimer Wolff & Donnelly 3400 Plaza VII 45 South Seventh Street Minneapolis, Minnesota 55402 Ira A. Marshall, Jr. Private investor; Self-employed Individual Trustee petroleum engineer 12 Fincher Way Rancho Mirage, California 92270 Norman F. Sprague III Private investor; Orthopedic surgeon Individual Trustee 11600 Wilshire Boulevard Los Angeles, California 90025
Respectfully submitted, BANKERS TRUST COMPANY DAVID J. HOFFMAN RICHARD G. LAREAU IRA A. MARSHALL, JR. NORMAN F. SPRAGUE III Trustees New York, NY April 27, 1996 12 EX-27 3 EXHIBIT 27
5 This schedule contains summary financial information extracted from the Consolidated Statements of Earnings and the Consolidated Balance Sheet and is qualified in its entirety by reference to such financial statements. 1,000 12-MOS JAN-31-1996 FEB-01-1995 JAN-31-1996 0 2,145 0 0 0 2,286 0 0 2,286 1,630 0 0 0 0 0 2,286 3,743 4,061 0 387 0 0 0 3,674 0 3,674 0 0 0 3,674 .28 .28
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