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WARM SPRINGS, OREGON
May 4, 2000 9
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Warm Springs Forest Products
1999 Annual Report
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Larry Potts
WSFPI General Manager
Mike Clements
WSFPI Board Chairman
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Gene Keane
WSFPI Board Member
John Katchia
WSFPI Board Vice-Chairman
Jim Manion
WSFPI Board Secretary-Treasurer
Randy Smith
WSFPI Board Member
Bob Macy
WSFPI Board Member
Enos Herkshan
WSFPI Board Member
Balance sheet and Profit & Loss statement
The condensed financial information presented below has been derived from the
Enterprise's audited financial statements for the years ended December 31, 1999 and
1998. A copy of the audited financial statements and independent auditor's report, which
expressed an opinion that those statements were presented, in all material respects, in
conformity with generally accepted accounting principles, is available upon request at
the Enterprise's office or by mail at P.O. Box 810, Warm Springs, OR 97761.
Assets
Financial statements-
DECEMBER 31,
Measurement focus and basis
of accounting-The Enterprise is a
propriety fund of the Tribe. The
Enterprise utilizes the flow of
economic resources measurement
focus whereby all assets and
liabilities associated with the
operation of the Enterprise are
included in the balance sheet. The
Enterprise is accounted for
utilizing the accrual basis of
accounting. Under the accrual
basis of accounting, revenues are
recorded at the time they are
earned. Expenses are recorded at
the time liabilities are incurred.
The Enterprise has applied all
Financial Accounting Standards
Board Statements and
Interpretations, Accounting
Principles Board Opinions and
Accounting Research Bulletins of
the Committee on Accounting
Procedure issued on or before
November 30, 1989, unless those
pronouncements conflict with or
contradict Governmental
Accounting Standards Board
pronouncements.
Method of doing business with
the Tribe-Enterprise plan facilities
are primarily located on Tribal
lana for which no rent is currently
charged. Under a timber cutting
contract with the Tribe, the
Enterprise has the exclusive right
to purchase timber on the Warm
Springs Reservation (see Note 2).
Retained earnings from
Enterprise operations are
maintained by the Enterprise to
the extent they are required for
operating capital or for the
payment of indebtedness,
maintainance, repair and
replacement or expansion of
property, plant and equipment.
Any excess funds are required by
the approved Plan of Operations
to be available to the Tribe for
such uses and purposes as the
Tribe shall consider appropriate.
Distributions are made to the
Tribe in the form of dividends.
Dividends cannot be paid directly
to Tribal members.
Note 2-Stumpage
Substantially afl of the
Enterprise's stumpage is to be
purchased from the Tribe
pursuant to a cutting contract that
was signed on March 17, 1992.
This contract requires a cut of
between 44.7 ana 57.0 million
board feet for the years 1998
through 2001, with an allowable
annual variance of ten percent
and an allowable five percent
variance from definea volumes
for the five-year period 1997-2001.
Prices for stumpage are to be
based on negotiated log market
values less defined deductions.
Stumpage purchased from the
Tribe totaled 56.533 million board
feet and $13,478,678 in 1999, and
57.835 million board feet and
$10,929,999 in 1998. Of stumpage
purchased, approximately 53.411
million board feet in 1999 and
53.762 million board feet in 1998,
was chargeable to the annual cut
under the cutting contract.
At December 31, 1999 and
1998, the Enterprise had accrued
stumpage payable to the Tribe of
$9,928 and $1,177,295,
respectively.
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CURRENT ASSETS
Cash and cash equivalents
Investments
Accounts receivable
Current portion of notes receivable
Inventories
Prepaid expenses
Total current assets
PROPERTY, PLANT AND EQUIPMENT, at cost,
less accumulated depreciation
NOTES RECEIVABLE, less current portion, net
1999 1998
$ 497,990 $ 933,477
2,185,733 2,088,206
1,312,555 1,861,161
354,000
11,715,311 9,155,785
163,313 91,757
16,228,902 14,130,386
18,985,187 20,430,586
1,658,717 -
$ 36,872,806 $ 34,560,972
Liabilities and Retained Earnings
CURRENT LIABILITIES
Notes payable
Accounts payable
Stumpage and logging costs payable
Accrued expenses
Total current liabilities
COMMITMENTS (Note 14)
RETAINED EARNINGS
$ 1,084,966
1,762,105
659,887
949,508
4,456,466
32,416,340
$ 36,872,806
$ 1,504,188
790,168
1,659,530
931,769
4,885,655
29,675,317
$ 34,560,972
Statement of Income
YEAR ENDED DECEMBER 31,
NET SALES
COST OF GOODS SOLD
Raw material costs
Manufacturing costs
Gross profit
Selling, general and
administrative expenses
OPERATING INCOME (LOSS)
OTHER INCOME (EXPENSE)
Interest and dividend income
Other investment earnings (losses), net
Interest expense
Other income (expense), net
NET INCOME (LOSS)
1999 1998
$53,304,329 $41,437,490
(36,930,180) (29,758,897)
(12,453,783) (11,022,348)
3,920,366 656,245
(1,482,899) (1,454,847)
2,437,467 (798,602)
335,012 132,479
(30,121) 124,045
(32,947) (51,428)
31,612 (287,366)
303,556 (82,270)
2,741,023 (880,872)