Item 1. BUSINESS - ------- --------
General - -------
Ekco Group, Inc. ("Ekco" or the "registrant" and, together with its subsidiaries, the "Company") is a leading U.S. manufacturer and marketer of multiple categories of branded houseware products for everyday home use. The Company believes it is the leading U.S. supplier of metal bakeware, kitchen tools and gadgets and non-toxic pest control products. In addition, the Company believes it is a leading U.S. supplier of plastic storage products (including crates, containers, baskets and office organizers), cleaning products (primarily brushes, brooms and mops) and small animal care and control products. The Company markets its products primarily in the U.S. through substantially all distribution channels that sell houseware products for everyday home use, including mass merchandisers, supermarkets, hardware, drug and specialty stores.
The Company was incorporated in Delaware in 1968. The current business of the Company was established in 1987 through the Company's purchase of Ekco Housewares, Inc. and through subsequent acquisitions and internal development. The Company has acquired or developed the following businesses and product lines (net of divestitures):
October 1987--acquisition of Ekco Housewares, Inc. ("Housewares"), a manufacturer and marketer of bakeware and kitchen tools and gadgets.
January 1989--acquisition of Woodstream Corporation ("Woodstream"), a manufacturer and marketer of non-toxic pest control products.
December 1989--acquisition of the non-toxic pest control product line of McGill Metal Products Company.
December 1991--acquisition of the small animal care product line of Beacon Industries, Inc.
January 1992--acquisition of Frem Corporation ("Frem"), a manufacturer and marketer of molded plastic products.
April 1993--acquisition of Kellogg Brush Manufacturing Co. and subsidiaries ("Kellogg"), a manufacturer and marketer of brushes, brooms and mops.
January 1995--introduction of an internally developed line of upscale bakeware and kitchen tools, gadgets and other houseware products by B. VIA International Housewares, Inc. ("VIA!"), a newly formed subsidiary of the Company.
The Company operates in one industry segment. See Note 14 of Notes to Consolidated Financial Statements appearing in Exhibit 13 hereto, incorporated herein by reference, for industry and geographic area information.
The Company's business strategy is to (i) leverage the Company's brand names to further increase brand recognition and reputation among retailers and consumers and expand sales to existing and future customers across multiple product categories, (ii) focus on customer sales and service, (iii) increase market and customer penetration by offering differentiated product lines and
new and proprietary products and by cross-marketing the full range of the Company's product lines, and (iv) pursue growth through acquisition of additional consumer product lines and businesses.
Since the fourth quarter of Fiscal 1993, Ekco has taken a series of actions to position the Company for long-term growth (the "Ekco Integration"). The Ekco Integration included (i) the combination of four of the Company's principal business units into a single operating division, and (ii) the introduction of a new branding strategy to capitalize on the strength of the Ekco(R) brand name. The Ekco Integration combined the management and operations of the Company's bakeware, kitchenware, cleaning products and molded plastic products businesses, which sell through common channels of distribution and accounted for over 75% of the Company's net revenues in Fiscal 1995. The newly created single organization combines and coordinates the sales, marketing, manufacturing, distribution, administrative and financial activities for the four product categories. The Company also consolidated a large portion of the distribution of bakeware and kitchenware products as well as certain cleaning products into its new distribution facility in Bolingbrook, Illinois from four separate warehousing and distribution locations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Notes to the Consolidated Financial Statements appearing in Exhibit 13 hereto, incorporated herein by reference.
As part of the Ekco Integration, in January 1996 the Company introduced its new branding strategy in which the Ekco(R) brand name is used to market most of the products in these four categories. The new strategy enables the Company to capitalize on the strength of the Ekco(R) brand name by improving the brand identification of these products by consumers and increasing promotional opportunities for retailers. In addition, management believes that the new branding strategy enhances the effectiveness of the Company's newly consolidated sales and marketing effort by facilitating cross-marketing of the Company's products to retail customers under Ekco(R), one of the strongest brand names in the housewares industry.
Recent Developments ------------------- OFFERING OF SENIOR NOTES. On March 25, 1996, the Company completed a private offering to institutional investors of an aggregate of $125 million principal amount of 9 1/4% Senior Notes due 2006 (the "Senior Notes") at a price of 99.291% of face value. The net proceeds of the offering were used by the Company to (i) repurchase all of the outstanding 12.70% Senior Subordinated Notes due 1998 of Housewares, (ii) repurchase the Company's outstanding 7.0% Subordinated Convertible Note due 2002, and (iii) repay amounts outstanding under the Company's existing $75 million revolving credit facility. The offering was effected without registration under the Securities Act of 1933, as amended, or any applicable state securities law. The Company, however, has agreed to file with the Securities and Exchange Commission (the "Commission") and use its best efforts to become effective, a registration statement with respect to a new issue of senior notes (the "Exchange Notes") with terms substantially identical to those of the Senior Notes and, upon becoming effective, to offer the holders of the Senior Notes the opportunity to exchange their Senior Notes for a like principal amount of Exchange Notes and, under certain circumstances, to file a shelf registration statement to cover resales of the Senior Notes by the holders thereof. Concurrently with the closing of the above-described private offering, the Company amended its $75 million revolving credit facility (as so amended, the "Revolving Credit Facility") by consolidating the outstanding debt and borrowing capacity of the Company and its subsidiaries and by revising certain financial covenants. See Note 19 to Notes to Consolidated Financial Statements appearing in Exhibit 13 hereto, incorporated herein by reference, for further information regarding the offering and the Revolving Credit Facility.
Products - --------
BAKEWARE. The Company manufactures and markets a broad line of metal bakeware for home use, including non-stick coated bakeware marketed under a group of Baker's Secret(R) trademarks and uncoated bakeware marketed under the Ekco(R) trademark. Through Housewares, the Company has over 100 years of experience in the metal bakeware market, and its bakeware products include cookie sheets, muffin tins, brownie pans, loaf pans and similar metal bakeware items. The Company emphasizes value, quality, functionality and, in the case of coated products, ease of cleaning and release. The Company believes it is the leading U.S. supplier of metal bakeware in the U.S.
The Company regularly develops new products to capitalize on its high consumer brand recognition and broad retail distribution. New product development efforts are conducted by the Company's internal staff and by third parties on a contract basis. In 1995, the Company introduced specialty muffin pans marketed under the Baker's Secret(R) trademark. In January 1996, the Company expanded its insulated, non-stick coated bakeware product line with the introduction of a variety of baking sheets and baking pans marketed under the Baker's Secret Air Insulated(TM) trademark. The Company also introduced its "Healthy Cooking Made Simple" non-stick coated ovenware, including broiling pans featuring porcelain-coated racks which double as grill tops, and non-stick roasters which hold poultry vertically during cooking for self-basting. The Company also introduced two new merchandising display systems for bakeware: a "cross bar" system which provides full-view product presentation, and its Air Pockets(TM) slanted-shelf peg-board system.
KITCHENWARE. The Company sells kitchen tools and gadgets under the Ekco(R) and Ekco Pro(TM) trademarks. The Company markets more than 1,000 products in its kitchen tools and gadgets line, including multiple colors of the same item and various packaging combinations. Kitchen tools include metal, plastic and wooden spoons, spatulas, serving forks, ladles and other cooking accessories. Gadgets include peelers, corkscrews, whisks, can openers, bottle openers and similar items. The Company also markets stainless steel and carbon steel cutlery and stainless steel flatware, mixing bowls and colanders. The Company believes that it is the leading U.S. supplier of kitchen tools and gadgets. The Company believes that it has obtained this position because of its broad product lines, brand name recognition, quality and service.
The Company believes that the sale of kitchenware is more dependent on impulse buying by the consumer than any other line of products the Company offers. The Company regularly updates its kitchenware line and introduces new items. For example, in January 1996 the Company introduced a line of upscale kitchen tool, gadget and cutlery products under the Ekco Pro(TM) trademark. The Company also introduced a line of boxed gadgets which include various kitchenware items and sets such as spice racks, gadget organizers and canisters and updated the colors of its Nova(TM) line of kitchen tools. In addition, the Company supplemented its merchandising display program by adding a movable vertical "power tower" which utilizes only one square foot of selling space.
CLEANING PRODUCTS. The Company manufactures and markets a broad line of cleaning products, including brushes, brooms and mops for home use, indoor and outdoor specialty cleaning and janitorial use. The Company believes that it is a leading manufacturer of cleaning brushes for household, kitchen and personal use.
In 1995, the Company introduced a line of indoor and outdoor push brooms and a line of professional-grade janitorial dust and wet mops. Consistent with its strategy of leveraging the Ekco(R) brand name, in January 1996 the Company reintroduced its cleaning products in new packaging utilizing the Ekco(R) trademark for distribution in the mass merchandise and supermarket distribution channels. The Company continues to market brooms and brushes under the Wright-Bernet(TM) trademark to specialty hardware retailers, and mops to janitorial supply and professional cleaning companies. In January 1996, the Company introduced its line of short-handle and long-handle cleaning products with comfortable non-slip grips marketed under the Clean Results(TM) trademark, and further expanded its long-handle product line to include "better" and "best" dust mops and a ceiling fan brush. The Company also expanded its cleaning product line to include lint traps, dust, glass and quick wipes and scrub and scour mitts.
PEST CONTROL AND SMALL ANIMAL CARE AND CONTROL PRODUCTS. The Company manufactures and markets non-toxic pest control and small animal care and control products under the Victor(R) and Havahart(R) trademarks, respectively. The Company's products include spring-action rodent traps and glue-based rodent and insect traps marketed under the Victor(R) trademark, pet cages marketed under the Havahart(R) trademark and live animal cage traps marketed under the Havahart(R) trademark, which are used to control garden pests and other nuisance animals such as raccoons. The Company believes it is the leading supplier of non-toxic pest control products, rodent traps and live animal cage traps in the U.S. In 1995, the Company introduced a no-see, no-touch, pre-set and pre-baited mouse trap, and the Roach Magnet(TM), a non-toxic roach trap containing a pheromone attractant.
MOLDED PLASTIC PRODUCTS. The Company manufactures and markets injection molded plastic housewares, office and juvenile products. The Company's houseware products include a variety of storage crates and bins, laundry and storage baskets, organizers, wastebaskets and utility caddies. Office products include file crates, desk-top organizers, file caddies and carts. Juvenile products include pocket trays, activity desks and organizing bins and baskets. The Company's molded plastic products emphasize functionality as well as fashion and color and currently consist of more than 60 products in a variety of distinctive colors.
The Company develops new products and works with retailers on design concepts. In January 1995, the Company introduced a storage locker with a lift out tray, a flip-top storage crate for files and a smaller carry-all box. Consistent with its strategy of leveraging the Ekco(R) brand name, in January 1996 the Company reintroduced its molded plastic products with new packaging that utilizes the Ekco(R) brand name. In January 1996, the Company expanded its plastic stacking bin product line to include big and jumbo-sized storage bins for garage, pantry, closet and children's use, and added a jumbo-sized cart to its line of plastic rolling carts. The Company introduced an expanded line of laundry products, including a divided laundry basket organizer, a three-handle "hip rider" laundry basket and a wheeled hamper with a built-in handle. The Company also introduced a multi-purpose bin with a folding handle marketed under the Tag Along(TM) trademark.
VIA! In January 1995, the Company introduced its VIA!(TM) line of houseware products designed for the upscale and specialty marketplace. Initial products included VIA!'s kitchen tools and gadgets such as "Tutto
Italiano" pasta, garlic and pizza cooking and storage items, multi-function items, such as a combination spoon rest/tea bag holder/utility dish, and bakeware products, including cookie sheets, loaf pans and muffin tins in heavy-gauge coated and uncoated steel, tin steel pans, and heavy-gauge coated steel roasting pans, racks, bakers and broilers. In January 1996, the VIA!(TM) product line was expanded to include tea kettles marketed under the "House Blend" brand, pantryware marketed under the "Classic Pantry" brand, a line of trivets and tool jugs and additional multi-function gadgets marketed under the "2 Tools in 1" brand.
Customers and Distribution - --------------------------
Management believes that the Company has one of the broadest distribution networks of any company in the housewares industry. The Company markets its products primarily in the U.S. through substantially all distribution channels that sell houseware products for everyday home use, including mass merchandisers, supermarkets, hardware stores, drug stores, specialty stores and other retail channels. The Company sells its products to each of the 30 largest mass merchandisers (as ranked by the July 3, 1995 Discount Industry Annual Report published by Discount Store News), including Wal-Mart, Kmart and Target. The Company estimates that it sells its products in over 90% of the approximately 38,000 U.S. supermarkets, including Winn-Dixie, Kroger and Albertson's. The Company sells its products to many of the largest hardware chains, including Ace Hardware, Home Depot, True Value, ServiStar and Lowe's Home Centers. Of its customers, Wal-Mart and Kmart accounted for 13.4% and 9.0%, respectively, of the Company's net revenues in Fiscal 1995. No other customer accounted for more than 5% of the Company's net revenues in Fiscal 1995.
The Company's products are distributed through the following retail channels: Bakeware is distributed primarily through mass merchandisers and supermarkets; kitchenware is distributed primarily through supermarkets and mass merchandisers, as well as hardware and drug stores; cleaning products are marketed under the Ekco(R) trademark primarily to mass merchandisers and supermarkets; broom and brush products are marketed under the Wright-Bernet(TM) trademark to hardware retailers and mops are marketed to janitorial supply and professional cleaning companies; pest control and small animal care and control products are marketed to mass merchandisers, supermarkets, hardware, drug and variety stores, agricultural centers and farm stores, home centers and professional pest control companies; molded plastic products are distributed through mass merchandisers, as well as large specialty retailers such as office supply stores and drug stores; and VIA!(TM) products are distributed through department stores and upscale and specialty stores, including Lechter's, Crate & Barrel, Linens 'N Things and Bed, Bath & Beyond.
Sales and Marketing - -------------------
The Ekco Integration has enabled the Company to shift the focus of its sales and marketing strategy from individual product categories to the broader needs of each of its customers. Each of the Company's customers now has one Ekco sales person responsible for selling and marketing most of the Company's products. As part of the Ekco Integration, the Company has created a new Ekco(R) logo and new "family" look packaging and marketing materials designed to present consumers with a uniform message of Ekco(R) quality, value, design and functionality.
The Company markets its product lines directly through its own sales and marketing organization and through a network of representatives and brokers. Outside the U.S., the Company's products are marketed through its Canadian and U.K. subsidiaries and distributors and agents who
provide marketing support to supermarkets, mass merchandising stores, specialty stores and department stores. The Company's agreements with its distributors and agents are generally terminable upon 30 days notice and are not deemed to be material by the Company.
Manufacturing and Sourcing - --------------------------
The Company manufactures most of its bakeware, cleaning, molded plastic and pest control and small animal care and control products. High volume kitchenware products (representing approximately 25% of kitchenware sales) are generally manufactured and assembled by the Company and the remainder are sourced from third parties. The Company utilizes a variety of standard manufacturing processes, including metal stamping, injection molding, mesh welding, wire forming, and automatic staple setting. The Company regularly evaluates its manufacturing and third party sourcing options to maintain an appropriate balance between quality and cost.
Raw Materials and Components - ----------------------------
The Company purchases primary raw materials, including plastic resin, tin-plated steel, wood and corrugated boxes and packaging, from a number of suppliers, including several major steel companies and a number of plastic resin suppliers. All of these materials are subject to price fluctuations which may adversely affect the Company's profitability. The Company purchases primarily on the spot market and does not maintain long-term contracts with suppliers. The Company also purchases components and complete products, primarily for kitchen tools and gadgets, from several domestic and foreign suppliers. The Company believes that raw materials, component items and complete products are available from other suppliers, and that the loss of any one of its suppliers would not have a material adverse effect on the Company.
Trademarks and Patents - ----------------------
The Company believes that its Ekco(R) trademark, as well as its Baker's Secret(R), Havahart(R), Victor(R), Wright-Bernet(TM) and VIA!(TM) trademarks are significant to its competitive position. The Company holds a number of patents, none of which is believed to be material to the Company's business.
Competition - -----------
The Company believes that the markets for all of its product lines are highly competitive and that competition for retail sales to consumers is based on several factors, including brand name recognition, value, quality, price and availability. Primary competitive factors with respect to selling such products to retailers are brand reputation, number of product categories offered, broad product coverage within each product category, support and service of the retailer and price.
The Company competes with established companies, several of which have substantially greater resources than those of the Company. There are no substantial regulatory or other barriers to entry of new competitors in the housewares industry. However, suppliers that are able to maintain, or increase, the amount of retail space allocated to a product may gain a competitive advantage in that product market. The Company believes that the allocation of space by retailers is influenced by many factors, including the brand name recognition by consumers, quality and price of the supplier's products, the level of service provided by the supplier and the supplier's ability to support promotions.
The Company believes that its ability to compete successfully is based on the wide recognition of its brand names, its multiple category product offerings, its ability to design, develop, acquire, manufacture and market competitively priced products, its broad product coverage within most product categories, its attention to retailer and consumer needs and its access to major channels of distribution. There can be no assurance that the Company will be able to compete successfully against current and future sources of competition or that the competitive pressures faced by the Company will not adversely affect its profitability or financial performance.
Seasonality - -----------
Many of the Company's product categories are affected by seasonal consumer purchasing patterns, including holiday cooking and baking, back-toschool shopping and spring cleaning. Historically, the Company's revenues in the last half of the fiscal year have been greater than in the first half. See Note 16 of Notes to Consolidated Financial Statements appearing in Exhibit 13 hereto, incorporated herein by reference, for information regarding quarterly results of operations.
Backlog - -------
Information as to backlog is not material to an understanding of the Company's business because most of the Company's net revenues result from short lead-time customer orders. The Company generally is able to fill orders from inventory, and has generally been able to adjust production levels to meet increases in customers' orders that cannot be filled from inventory.
Employees - ---------
As of December 31, 1995, the Company employed 1,255 persons in the U.S. of whom 671 were represented under collective bargaining agreements which expire on dates ranging from February 1997 to February 2000. As of such date, the Company also employed 33 persons in Canada, of whom 13 were represented under a collective bargaining agreement which expires in July 1997, and three persons in the U.K. The Company considers its employee relations to be satisfactory.
Business Outlook - ----------------
This annual report on Form 10-K, including "Business," "Properties," "Legal Proceedings" and "Management's Discussion and Analysis of Results of Operations and Financial Condition" in Exhibit 13 hereto, contains forward-looking statements within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. Such factors and uncertainties include, but are not limited to: the impact of the level of the Company's indebtedness; restrictive covenants contained in the Company's various debt documents; general economic conditions and conditions in the retail environment; the Company's dependence on a few large customers; price fluctuations in the raw materials used by the Company; competitive conditions in the Company's markets; the seasonal nature of the Company's business; and the impact of federal, state and local environmental requirements (including the impact of current or future environmental claims against the Company). As a result, the Company's operating results may fluctuate, especially when measured on a quarterly basis.
Item 2.

Item 2. PROPERTIES - ------- ----------
As of December 31, 1995, the Company owned or leased for use in its business the properties set forth in the table below:
Item 3.

Item 3. LEGAL PROCEEDINGS - ------- -----------------
Environmental Regulation and Claims - -----------------------------------
From time to time, the Company has had claims asserted against it by regulatory agencies or private parties for environmental matters relating to the generation or handling of hazardous substances by the Company or its predecessors and has incurred obligations for investigations or remedial actions with respect to certain of such matters. While the Company does not believe that any such claims asserted or obligations incurred to date will result in a material adverse effect upon the Company's financial position, results of operations or liquidity, the Company is aware that at its facilities at Massillon (more fully described below) and Hamilton, Ohio; Easthampton, Massachusetts (more fully described in Note 13 of Notes to Consolidated Financial Statements appearing in Exhibit 13 and incorporated herein by reference); Chicago, Illinois and Lititz, Pennsylvania, and at its previously owned facility in Hudson, New Hampshire hazardous substances and oil have been detected and that additional investigations will be, and remedial actions will or may be, required at such facilities. Operations at these and other facilities currently or previously owned or leased by the Company utilize, or in the past have utilized, hazardous substances. There can be no assurance that activities at these or any other facilities or future facilities may not result in additional environmental claims being asserted against the Company or additional investigations or remedial actions being required.
Prior to the Company's acquisition of Housewares in 1987, Housewares' Massillon, Ohio steel bakeware manufacturing facility was the subject of administrative proceedings before the United States Environmental Protection Agency by issuance of an administrative complaint alleging violations of the Resource Conservation and Recovery Act resulting from operation of a wastewater lagoon at the facility. American Home Products Corporation ("AHP"), a former owner of Housewares, pursuant to an indemnity agreement (the "Indemnity Agreement") with Housewares relating to acts occurring prior to September 7, 1984, assumed the costs of remediation measures in addition to the defense of the administrative proceedings with federal and state environmental protection agencies, as well as preparation of closure plans and other plans called for as a result of these proceedings. While AHP has acknowledged its full responsibility under the Indemnity Agreement with respect to the wastewater lagoon, it has asserted that Housewares should contribute to the cost of a remediation study and certain remediation measures to the extent that Housewares exacerbated contamination at the facility since September 7, 1984. Housewares has denied that it has exacerbated contamination at the facility since such date. AHP and Housewares have agreed to allocate such costs in proportion to their respective responsibilities based on the results of an engineering study but in no event will Housewares' share with respect to the wastewater lagoon exceed the lesser of 25% of the total cost or $750,000. The Company is unable to determine to what extent, if any, it will be responsible to contribute to such costs but the Company does not believe that any such contribution that it may be required to make will have a material adverse effect on its financial position, results of operations or liquidity.
In June 1992, the United States filed an action in the U.S. District Court for the Northern District of Ohio against Housewares seeking penalties and injunctive relief and alleging violations as a result of an alleged failure to provide certain closure and post-closure financial assurances with respect to the Massillon, Ohio site. Pursuant to the Indemnity Agreement and
a confirmatory letter from AHP to Housewares on December 19, 1988 (the "Indemnity Documents"), AHP conducted and controlled all matters relating to such financial assurances and the defense of the action filed in June 1992. In January 1994, the court entered judgment against Housewares in the amount of $4.6 million in the lawsuit. AHP filed a notice of appeal on behalf of Housewares. In March 1994, AHP informed Housewares that, should it be unsuccessful in its appeal, it would attempt to hold Housewares responsible for a portion of the penalties (approximately $600,000, exclusive of interest) arising from Housewares' alleged delay in furnishing certain information to the Ohio Environmental Protection Agency. In March 1994, Housewares notified AHP that Housewares denies all liability and that AHP is liable for all liabilities, losses, costs or damages arising from the lawsuit pursuant to the Indemnity Documents. In August 1995, the Appeals Court affirmed the Company's liability, reversed the imposition of civil penalties for certain periods of time and remanded the redetermination of such penalties to the District Court. The District Court has not yet completed its redetermination. The Company is unable to predict the result of the redetermination or AHP's attempts to obtain contribution from Housewares, but the Company does not believe that any such liability will have a material adverse effect on its financial position, results of operations or liquidity.
Litigation - ----------
In addition to the environmental claims discussed above, from time to time the Company is a party to litigation and other legal proceedings, including product liability claims. In many cases, claims are covered by insurance, subject to standard deductibles. Although the outcome of such proceedings cannot be determined with certainty, the Company believes that the final outcome of such proceedings will not have a material adverse effect on the Company.
Item 4.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------- ---------------------------------------------------
Not applicable.
The executive officers of the Company are elected annually by the Board of Directors and serve, subject to the provisions of any employment agreement between the executive and the Company, until their respective successors are chosen and qualified or until their earlier resignation or removal.
Part II -------
Item 5.

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - ------- ---------------------------------------------------------------------
The information set forth in the section entitled "Common Stock Price Range and Dividends" appearing in Exhibit 13 hereto is incorporated herein by reference.
Item 6.

Item 6. SELECTED FINANCIAL DATA - ------- -----------------------
The information set forth in the section entitled "Selected Consolidated Financial Data" appearing in Exhibit 13 hereto is incorporated herein by reference.
Item 7.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS ---------------------
The information set forth in the section entitled "Management's Discussion and Analysis of Results of Operations and Financial Condition" appearing in Exhibit 13 hereto is incorporated herein by reference.
Item 8.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ------- -------------------------------------------
The information set forth in the consolidated financial statements and notes thereto (including the note which sets forth certain supplementary information) and the Report of Independent Auditors appearing in Exhibit 13 hereto are incorporated herein by reference. Reference is also made to Item 14(a)2 with respect to Financial Statement Schedules filed herewith.
Item 9.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - -------- --------------------------------------------------
a) Directors - The information set forth in the section entitled "Election of Directors" appearing in the Company's definitive proxy statement with respect to the 1996 Annual Meeting of Stockholders is incorporated herein by reference.
b) Executive Officers - See "Executive Officers of the Registrant" appearing in Part I above.
Item 11.

Item 11. EXECUTIVE COMPENSATION - -------- ----------------------
The information set forth in the sections entitled "Compensation of Directors" and "Compensation of Executive Officers" (except for the information under the captions "Report of the Compensation Committee on Executive Compensation" and "Performance Graph") appearing in the Company's definitive proxy statement with respect to the 1996 Annual Meeting of Stockholders is incorporated herein by reference.
Item 12.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - -------- --------------------------------------------------------------
The information set forth in the section entitled "Security Ownership of Certain Beneficial Owners and Management" appearing in the Company's definitive proxy statement with respect to the 1996 Annual Meeting of Stockholders is incorporated herein by reference.
Item 13.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - -------- ----------------------------------------------
The information set forth in the section entitled "Certain Relationships and Related Transactions" appearing in the Company's definitive proxy statement with respect to the 1996 Annual Meeting of Stockholders is incorporated herein by reference.
Part IV -------
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.
EKCO GROUP, INC.
By: /s/ ROBERT STEIN ------------------------------------ Robert Stein, President and Chief Executive Officer (Principal Executive Officer) Date: March 29, 1996
By: /s/ DONATO A. DeNOVELLIS ------------------------------------ Donato A. DeNovellis, Executive Vice President, Finance and Administration, and Chief Financial Officer (Principal Financial Officer) Date: March 29, 1996
By: /s/ BRIAN R. McQUESTEN ------------------------------------ Brian R. McQuesten, Vice President and Controller (Principal Accounting Officer) Date: March 29, 1996
INDEPENDENT AUDITORS' REPORT ----------------------------
Board of Directors and Stockholders Ekco Group, Inc.
Under date of February 5, 1996, except as to note 19, which is as of March 25, 1996, we reported on the consolidated balance sheets of Ekco Group, Inc. and subsidiaries as of December 31, 1995 and January 1, 1995, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the fiscal years in the three-year period ended December 31, 1995, as contained in the 1995 annual report to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in this annual report on Form 10-K for the fiscal year 1995. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedules as listed in Item 14(a)2 of this report. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth herein.
In 1993, the Company changed its method of accounting for income taxes, post-retirement benefits other than pensions and post-employment benefits.
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts March 25, 1996
The accompanying notes are an integral part of the consolidated condensed financial statements.
The accompanying notes are an integral part of the consolidated condensed financial statements.
The accompanying notes are an integral part of the consolidated condensed financial statements.
EKCO GROUP, INC. AND SUBSIDIARIES SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT (CONTINUED) NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND OTHER MATTERS:
The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes included in this Form 10-K.
The consolidated condensed financial statements include the accounts of the Company and its subsidiaries all of which are reported under the equity method of accounting. The accompanying condensed financial statements include the fiscal years ended December 31, 1995 ("Fiscal 1995"), January 1, 1995 ("Fiscal 1994") and January 2, 1994 ("Fiscal 1993"). Certain amounts from prior periods have been reclassified to conform with the presentation for the current fiscal year.
Equity in earnings of the Company's subsidiaries is presented after elimination of management fees payable to the Company, for Fiscal 1995 $4.4 million, for Fiscal 1994 $4.3 million and for Fiscal 1993 $4.2 million and interest payable of $4.9 million for Fiscal 1995.
Under the terms of the Ekco Housewares' 12.70% Notes, the amount which may be paid to the Company by Ekco Housewares is limited in accordance with a formula, which is based primarily on the consolidated net revenues and net income of Ekco Housewares, plus reimbursement for expenses and amounts due pursuant to a tax sharing arrangement. At December 31, 1995, the amount payable to the Company by Ekco Housewares was approximately $800,000.
During Fiscal 1995, Fiscal 1994 and Fiscal 1993, no dividends were paid to the Company by its subsidiaries.
2. Income taxes:
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect, if any, on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
27 Financial Data Schedule.
- -------------------------------------------------------------------------------- Schedules to Exhibits 10,21, 10.22, 10.23(a) and 10.23(c) will be supplied upon request by the Commission.
THE FOREGOING EXHIBITS WILL NOT BE INCLUDED IN COPIES OF THIS ANNUAL REPORT ON FORM 10-K SUPPLIED TO STOCKHOLDERS. A COPY OF THESE EXHIBITS WILL BE FURNISHED TO STOCKHOLDERS UPON WRITTEN REQUEST ADDRESSED TO JOHN T. HARAN, VICE PRESIDENT AND TREASURER, EKCO GROUP, INC., 98 SPIT BROOK ROAD, NASHUA, NEW HAMPSHIRE 03062.


Item 1. Business - -----------------
Texland Drilling Program-1981 (a Limited Partnership) was formed on July 20, 1981 with $12,125,000 in aggregate Limited Partnership subscriptions for the purpose of engaging in the exploration for oil and gas. Such exploration has taken place principally in the geological area known as the Texas Permian Basin. The Partnership's drilling and exploration phase is complete. Development of the Partnership's properties is also substantially complete; however, development drilling will be undertaken on the Partnerships secondary recovery properties to the extent necessary to insure the maximum commercial recovery of reserves.
The Partnership has no plans to borrow funds or reinvest significant amounts of oil and gas revenues. To the extent that in-fill development is deemed necessary, however; such operations will be funded from available cash flow.
See Note 6 of Notes to the Financial Statements on page 17 for information about major purchasers. Sales to such purchasers are on a competitive basis on short- term contracts customarily used in the industry. Should sales to these refineries become interrupted, management believes alternative purchasers would be immediately available on similar terms.
The price of oil and gas is affected by world wide supply and demand beyond the Partnership's control. The average posted price during the past five years for West Texas Sour (before adjustment for gravity), the primary type of Partnership oil, is as follows:
1991 $18.66 1992 $17.87 1993 $15.60 1994 $14.28 1995 $15.42
From January 1, 1996 to April 30, 1996 oil prices have been particularily volatile with the posted price of such oil ranging from a low of $13.75 to a high of $21.50.
Item 2

Item 2 - Properties - -------------------
The Partnership currently has an interest in 287 active gross oil and gas wells, representing 20.33 net wells. Two of the gross wells and .6393 of the net wells are gas wells and the remainder are oil wells.
The Partnership currently has 279 oil wells included in 10 different enhanced recovery projects operated by Texland Petroleum, Inc. Such enhanced recovery projects are designed to repressure the oil bearing reservoirs and increase the producing rates, property life and overall ultimate recovery of oil.
Item 3

Item 5 - Market for Registrant's Common Equity and Related - ----------------------------------------------------------- Stockholder Matters - -------------------
Omitted. Not applicable.
Item 6

Item 6 - Selected Financial Data - --------------------------------
The following tables present selected financial data for each of the past five years ended December 31, 1995. The data has been derived from the audited financial statements:
TEXLAND DRILLING PROGRAM-1981 SELECTED FINANCIAL INFORMATION FOR THE YEAR ENDED DECEMBER 31 ------------------------------
Item 7

Item 7 - Management's Discussion and Analysis of Financial Condition and Results - -------------------------------------------------------------------------------- of Operations. - --------------
Oil and gas sales increased by approximately 14% in 1995 as compared to 1994. The average price of Partnership oil increased by approximately 8.0% in 1995. In addition, several additional in-fill development wells were drilled on a property in which the Partnership owns a 10% working interest. Increased production from this lease in 1995 accounted for an additional $67,000 in oil sales. Modest but normal declines in production were also experienced on most other Partnership properties in 1995. Oil and gas sales were down 18% in 1994 over that experienced in 1993 due primarily to a decline in the average price of oil and normal expected declines in production rates from Partnership properties. Gas sales are not a significant part of overall sales.
Depreciation, depletion and amortization are calculated on the units-of- production method. A decline in these expenses from 1994 to 1993 are due to upward revisions in future reserve estimates offset somewhat by production declines on properties with high capitalized costs. The decline in the price of oil had the effect of reducing the ultimate estimated recovery of oil and gas and the resulting units-of-production provisions for 1994.
Production expenses decreased by 14% in 1995. Partnership workover costs decreased by approximately $68,000 in 1995, primrily due to a decrease in the number of wells on which remedial work was performed. Production expenses were relatively stable in 1994 as compared to 1993.
Changes in oil prices substantially impact the net income and cash flow of the Partnership. All oil produced by the Partnership is sold under short term contracts which are immediately affected by changes in oil prices. Since 1981, world oil supply and demand conditions have caused prices to rise and decline in an essentially unpredictable manner. No changes in these circumstances is foreseen in the immediate future.
Texland Drilling Program-1981 has substantially completed all the exploration and development on the oil and gas properties in which it has an interest. No long-term debt will be incurred and no new properties will be acquired. Therefore, no future liquidity problems are anticipated by the Partnership.
Item 8

Item 8 - Financial Statements and Supplementary Data: - -----------------------------------------------------
See Index to Financial Statements on Page 9 of this report.
Item 9

Item 10. Directors and Executive Officers of the Registrant - ------------------------------------------------------------
The Partnership has no officers, employees or directors. The background of the General Partners is as follows:
R. J. Schumacher - Age 67, President and Director of Texland Petroleum, Inc. - ---------------- since May, 1967, has been an independent oil operator involved in drilling and producing operations and the financing of oil and gas prospects, principally in West Texas, Oklahoma and Arkansas. He has served as an executive officer with Texland since its incorporation. For more than ten years prior to becoming an independent oil operator, Mr. Schumacher was the chief financial officer, contract drilling manager and land supervisor for an independent oil and gas drilling contractor and operator. Mr. Schumacher is a Certified Public Accountant. He received a Bachelor of Science in Commerce degree from Texas Christian University in 1950 and a Master in Professional Accounting degree from the University of Texas in 1951.
W. E. Rector - Age 61 Chairman of the Board and Director of Texland Petroleum, - ------------ Inc., has been an independent petroleum geologist and oil operator since May, 1969. He has served as an executive officer with Texland since its incorporation. He has had experience as a consulting petroleum geologist and as an independent oil operator, has been involved in the origination and development of oil and gas prospects and in raising funds for their financing in the Mid-Continent area since 1969. For more than ten years prior to becoming an independent oil operator, Mr. Rector was associated with Pan American Petroleum as an exploration petroleum geologist. Mr. Rector received a Bachelor of Science degree in Geology from Ohio State University in 1957 and a Master of Science degree in Geology from the University of Michigan in 1958. He is a member of the American Association of Petroleum Geologists and is a Certified Petroleum Geologist.
J. N. Namy - Age 57 Vice-President and Director of Texland Petroleum, Inc., was - ---------- employed by Texland as a geologist in June, 1978. From 1967 to 1970 he was employed by Pan American Petroleum Corp. in the Fort Worth Division. From 1970 to 1978 he taught at Baylor University achieving the rank of Associate Professor. During this time, he served as a consultant for several independent petroleum companies working on exploration and development projects in the Eastern Shelf and the Permian Basin of West Texas and New Mexico, as well as the southern Rockies of New Mexico and Colorado. He received his Bachelor and Master degrees from Western Reserve University in Cleveland, Ohio and his Ph. D. degree from the University of Texas at Austin in 1969. Mr. Namy is a member of the American Association of Petroleum Geologists, Geological Society of America and the Society of Economic Paleontologists and Mineralogists.
J. H. Wilkes - Age 40, Senior Vice President of Production and Director of - ------------ Texland Petroleum, Inc. , was employed by Texland as a reservoir engineer in August 1984. From 1978 to 1984, he was employed by Sun Exploration and Production Company in Midland and Abilene, Texas. The first three years he served as a production engineer and for the remaining three years he served as a reservoir engineer. He received a Bachelor of Science degree in Petroleum Engineering from Texas A&M University in 1978. He is a member of the Society of Petroleum Engineers, A.I.M.E. and is a registered professional engineer in Texas.
Item 11.

Item 11. Executive Compensation - --------------------------------
See Note 5 of Notes to Financial Statements on page 17 of this report for information with respect to payments to the Managing General Partner.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management - ------------------------------------------------------------------------
Omitted. Not applicable to Registrant.
Texland Petroleum, Inc. and Texland Properties-1981 are General Partners of the Partnership. Texland Petroleum, Inc. is the managing General Partner. Texland Properties-1981 is a general partnership formed between W. E. Rector, R. J. Schumacher and Texland Petroleum, Inc.
Item 13.

Item 13. Certain Relationships and Related Transactions - --------------------------------------------------------
See Notes 4 and 5 of Notes to Financial Statement on page 17 of this report for information with respect to certain relationships and related transactions.
Item 14.

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K - -------------------------------------------------------------------------
(a)1 and (a)2 Financial Statement and Financial Statement Schedules See Index to Financial Statements on page 9 of this report. (a)3 Item 601 (Reg S-K) Exhibits: None (b) Reports on Form 8-K: None (c) Item 601 (Reg. S-K) Exhibits: None (d) Other Financial Statements and Financial Statement Schedules: Not applicable.
SIGNATURE
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.
TEXLAND DRILLING PROGRAM-1981 - ----------------------------- Registrant
By__________________________________. M.E.Chapman, Vice President Texland Petroleum, Inc., Managing General Partner Date May 21, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.
By__________________________________. W.E.Rector, Chairman of the Board, Texland Petroleum, Inc. Managing General Partner.
By__________________________________. R.J.Schumacher, President, Director, Texland Petroleum, Inc. Managing General Partner
By__________________________________. J.N.Namy, Executive Vice President, Director, Texland Petroleum, Inc. Managing General Partner
By__________________________________. J.H.Wilkes, Senior Vice President Director, Texland Petroleum, Inc. Managing General Partner
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TEXLAND DRILLING PROGRAM-1981, LTD.
FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
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TEXLAND DRILLING PROGRAM-1981, LTD.
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All other financial statement schedules not listed have been omitted since the required information is included in the financial statements or the notes thereto or is not applicable or not required.
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[LETTERHEAD OF SPROLES WOODARD L.L.P APPEARS HERE]
REPORT OF INDEPENDENT AUDITORS
The Partners Texland Drilling Program-1981, Ltd.
We have audited the balance sheets of Texland Drilling Program-1981, Ltd. as of December 31, 1995 and 1994, and the related statements of operations, partners' equity and cash flows for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Partnership'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 listed in the accompanying table of contents to the financial statements present fairly, in all material respects, the financial position of Texland Drilling Program-1981, Ltd. at December 31, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental information listed in the accompanying table of contents to the financial statements is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ Sproles Woodard L.L.P.
Fort Worth, Texas April 4, 1996
TEXLAND DRILLING PROGRAM-1981, LTD.(A LIMITED PARTNERSHIP) BALANCE SHEET DECEMBER 31, 1995 AND 1994
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See accompanying notes to financial statements
TEXLAND DRILLING PROGRAM-1981, LTD.(A LIMITED PARTNERSHIP) STATEMENT OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
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- -------------------------------------------------------------------------------- See accompanying notes to financial statements
TEXLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) STATEMENT OF PARTNERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
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See accompanying notes to financial statements.
TEXLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
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See accompanying notes to financial statements.
TEXLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1995
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Texland Drilling Program-1981, Ltd. (the "Partnership") was organized as a limited partnership on July 20, 1981, for the purpose of engaging in oil and gas exploration and production. Texland Properties-1981, a general partnership, and Texland Petroleum, Inc. are the general partners. The managing general partner is Texland Petroleum, Inc. Partnership operations are conducted predominately in West Texas.
The Partnership shall continue in existence, unless terminated sooner through the occurrence of a final terminating event as defined by the partnership agreement, until December 31, 2001, as extended through approval by the limited partners owning a majority of aggregate Partnership subscriptions.
The Partnership's accounting policies are summarized below:
BASIS OF ACCOUNTING The Partnership maintains its financial records on the income tax basis. The financial statements are presented in accordance with generally accepted accounting principles. The primary differences in accounting methods are identified in Note 7.
USE OF ESTIMATES The preparation of financial statements in accordance 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 reported revenues and expenses during the reported period. Actual results could differ from those estimates.
PROPERTY AND EQUIPMENT Costs incurred for the acquisition of producing and nonproducing leaseholds are capitalized. Costs of intangible development and lease and well equipment incurred to drill and equip successful exploratory and development wells are capitalized. Costs to drill and equip unsuccessful exploratory wells are charged to operations while costs of unsuccessful development wells remain capitalized. Costs associated with uncompleted wells are capitalized as wells- in-progress.
NONPRODUCING LEASEHOLDS Costs of nonproducing properties are charged to expense at such time as they are deemed to be impaired, based upon periodic assessments of such costs.
AMORTIZATION AND DEPLETION Leasehold costs of producing properties are amortized on the unit-of-production method based on estimated proved oil and gas reserves. Intangible development costs of producing properties are amortized on the unit-of-production method based on estimated proved developed oil and gas reserves.
DEPRECIATION Depreciation of equipment is provided by the unit-of-production method based on estimated proved developed oil and gas reserves.
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TEXLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1995
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FEDERAL INCOME TAX The Partnership (which pays no federal income tax) files its federal income tax return on the accrual basis maintained for income tax purposes.
STATEMENT OF CASH FLOWS For purposes of these statements, the Partnership considers cash on deposit and highly liquid money market funds as cash and cash equivalents.
NET INCOME ALLOCATION Revenues and costs of the Partnership are allocated between the general and limited partners in accordance with the Partnership agreement.
2. COSTS INCURRED IN OIL AND GAS PRODUCING ACTIVITIES
The following summarizes the Partnership's costs incurred in its oil and gas activities, all of which were domestic, for the years ended December 31:
3. ACQUISITION OF NONPRODUCING PROPERTIES
The Partnership acquired working interests in certain oil and gas properties through assignments from other Texland Drilling Program partnerships. These acquisitions involved no cost to the Partnership and are subject to retained nonworking interests by the assignor. Upon payout of these properties, the assignor has an option to convert the retained nonworking interest to a working interest.
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TEXLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1995
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4. CONTRIBUTIONS BY GENERAL PARTNERS
Under terms of the Partnership agreement, Texland Properties-1981 is charged for certain costs related to drilling and production operations, which are required to be capitalized for federal income tax purposes. These costs are treated as capital contributions. In addition, Texland Properties-1981 and Texland Petroleum, Inc. have invested in limited partnership units in the amount of $95,000 and $30,000, respectively. These investments as a limited partner are reported with other limited partners' equity in the accompanying financial statements.
5. FEES TO MANAGING GENERAL PARTNER
The Partnership was charged $138,998, $180,218, and $175,016 in 1995, 1994, and 1993, respectively, for technical and accounting services performed by employees of the managing general partner. These charges are included in intangible development costs, production expenses and fees to managing general partner.
Supervisory fees charged to the Partnership by the managing general partner for drilling and operating the partnership wells were $142,980, $131,054, and $141,629 in 1995, 1994, and 1993, respectively, and are included in intangible development costs and production expenses.
These charges are allocated between the general and limited partners based upon applicable revenue and expense sharing rates.
6. MAJOR PURCHASERS
Purchasers which accounted for 10 percent or more of the Partnership's sales were:
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TEXLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1995
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7. RECONCILIATION OF BOOK-TAX REPORTING DIFFERENCES
Although the Partnership financial statements are prepared in accordance with generally accepted accounting principles, its books and records are maintained on the basis of accounting used for federal income tax purposes.
The following summarizes book-tax reporting differences for the year ended December 31, 1995:
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TEXLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECE4MBER 31, 1995
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7. RECONCILIATION OF BOOK-TAX REPORTING DIFFERENCES (CONTINUED)
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TEXTLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1995
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8. ESTIMATED FUTURE NET REVENUES FROM PROVED RESERVES
At December 31, 1995, the estimated future net reserves from partnership proved reserves as determined by Texland Petroleum, Inc., using product prices and operating conditions existing as of that date were as follows:
Because of uncertainties inherent in the reserve estimation process, management's estimate of future net revenues and the timing of such revenues may change in the near term as the result new engineering or economic conditions. However, the amount of the change that is reasonably possible cannot be estimated.
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TEXLAND DRILLING PROGRAM-1981, LTD. (A LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENT FOR THE YEAR ENDED DECEMBER 31, 1995
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SCHEDULE V - PROPERTY AND EQUIPMENT
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY AND EQUIPMENT
Neither total additions nor total retirements during the years ended December 31, 1995, 1994, or 1993 amounted to more than 10 percent of the ending asset balance for these years. Accordingly, no detailed information is provided for schedules V and VI.
Total property and equipment additions and retirements for each of the three years ended December 31, 1995, are as follows:
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