ITEM 1. BUSINESS
GENERAL
Champion International Corporation was incorporated under the laws of the State of New York on April 28, 1937. References to the "Company" include Champion International Corporation and its subsidiaries at December 31, 1996, unless the context otherwise requires.
The Company is one of the leading domestic manufacturers of paper for business communications, commercial printing, publications and newspapers. In addition, the Company has significant market pulp, plywood and lumber manufacturing operations and owns or controls approximately 5,302,000 acres of timberlands in the United States. The Company's Canadian and Brazilian subsidiaries also own or control significant timber resources supporting their operations.
The Company's business segments are paper and wood products. See Note 14 of "Notes to Financial Statements" on pages 39 and 40 of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 1996 (the "Company's 1996 Annual Report"), which Note is incorporated by reference herein, for information concerning the Company's business segments and operations in different geographic areas for 1994, 1995 and 1996.
PAPER
See the "Paper Net Sales" table on page 18 of the Company's 1996 Annual Report, which table is incorporated by reference herein, for information concerning the net sales to unaffiliated customers of the various products of the paper business for 1994, 1995 and 1996.
FREE SHEET PAPERS
The free sheet papers business manufactures and sells coated and uncoated free sheet papers, bleached paperboard and pulp. The principal manufacturing properties of this operation consist of integrated pulp and paper mills at Courtland, Alabama; Canton, North Carolina; Pensacola, Florida; and Quinnesec, Michigan. As of December 31, 1996, these mills had an annual capacity of approximately 2,359,000 tons of pulp and 2,280,000 tons of free sheet papers and bleached paperboard.
A significant portion of the fiber requirements of the free sheet papers business is supplied by its own mills. In addition, a portion of the fiber requirements of this business is supplied by other Company pulp mills, and approximately 3% of its fiber requirements in 1996 was purchased from third- party suppliers.
The Company manufactures pulp for sale in the open market at the Quinnesec mill. In 1996, approximately 65% of the pulp production of this mill, or 251,000 tons, was sold in the open market. The balance was used in the production of paper at the Quinnesec mill and at other Company paper mills. In addition, approximately 8% of the pulp produced at the Courtland and Pensacola mills was sold in the open market in 1996.
Uncoated papers produced by the free sheet papers business are used for computer forms, desktop printers, copier paper and envelope papers. Coated papers are used in catalogs, magazines, textbooks, labels and annual reports.
In 1996, 62% of this operation's bleached paperboard production was used by the Company's DairyPak unit, which converts polyethylene-coated paperboard into milk and juice cartons and ovenable packaging. The balance either was sold to independent purchasers, primarily for conversion to cups, or was exported.
The Company leases substantial portions of the Courtland mill under 15 long- term net leases which expire between 2007 and 2029. Each of these leases provides for rental payments over its term sufficient to pay interest on and to retire the industrial development or pollution control revenue bonds issued in connection with the financing of the property subject to such lease. The Company is required to purchase, or has the option to purchase, the property subject to each such lease for a nominal sum at the time the related bonds are retired.
The Company leases a printing facility at the Athens, Georgia DairyPak plant until 2015. The lease provides for rental payments over its term sufficient to pay interest on and to retire the industrial development revenue bonds issued to finance the acquisition of that facility. The Company has the option to purchase the facility for a nominal sum at the time the bonds are retired.
GROUNDWOOD PAPERS
The groundwood papers business manufactures and sells coated and uncoated groundwood papers, newsprint and pulp. The manufacturing properties of this operation consist of integrated pulp and paper mills at Bucksport, Maine and Sartell, Minnesota, as well as integrated pulp and newsprint mills at Lufkin and Sheldon, Texas. As of December 31, 1996, these mills had an annual capacity of approximately 1,530,000 tons of pulp (which includes 166,000 tons of recycled pulp) and 1,763,000 tons of groundwood papers and newsprint.
Most of the pulp produced by the groundwood papers business is used in its own paper mills; approximately 3%, produced at the Sheldon mill, was sold in the open market in 1996. In addition, a portion of the fiber requirements of this business is supplied by other Company pulp mills, and approximately 20% of its fiber requirements in 1996 was purchased from third-party suppliers.
The Company's coated and uncoated groundwood grades are used primarily for consumer magazines, direct mail catalogs, directories, textbooks and coupons.
The Company leases the building which houses one of the paper machines at the Sartell mill until 2008. Thereafter, the Company has options to renew the lease for five terms of five years each. The Company also has the option to purchase the building at its then-current market value at the end of the initial term in 2008 or at the end of each five-year renewal term.
SPECIALTY PAPERS
The specialty papers business manufactures and sells premium free sheet papers, specialty groundwood papers, unbleached linerboard and kraft paper, and manufactures pulp. The manufacturing properties of this operation consist of integrated pulp and paper mills at Deferiet, New York and Roanoke Rapids, North Carolina; and a paper mill at Hamilton, Ohio. As of December 31, 1996, these mills had an annual capacity of approximately 607,000 tons of pulp, 364,000 tons of free sheet and groundwood papers, 374,000 tons of linerboard and 132,000 tons of kraft paper.
A significant portion of the fiber requirements of the specialty papers business is supplied by its own mills. In addition, a portion of the fiber requirements of this business is supplied by other Company pulp mills, and approximately 18% of its fiber requirements in 1996 was purchased from third- party suppliers.
Premium free sheet papers produced by the specialty papers business are used for brochures, catalogs and annual reports. Specialty groundwood papers are used for directories, labels and coupons. Unbleached linerboard is used for corrugated boxes, and kraft paper is used for multiwall and grocery bags.
PULP
For information concerning market pulp produced at the Courtland, Pensacola and Quinnesec mills, see the section captioned "Free Sheet Papers" above; and for information concerning market pulp produced at the Sheldon mill, see the section captioned "Groundwood Papers" above.
Weldwood of Canada Limited, a wholly owned Canadian subsidiary ("Weldwood"), manufactures bleached softwood kraft pulp at its mill in Hinton, Alberta, Canada. As of December 31, 1996, this mill had an annual capacity of approximately 463,000 tons. In 1996, approximately 28% of the mill's pulp production was used in the Company's own free sheet papers and groundwood papers mills. The balance was sold in the open market through the Company's headquarters in Stamford, Connecticut, a Company sales office in Appleton, Wisconsin and a Weldwood sales office in Bad Homburg, Germany.
Cariboo Pulp & Paper Company, a joint venture owned equally by Weldwood and Daishowa-Marubeni International Limited, operates a bleached softwood kraft pulp mill in Quesnel, British Columbia, Canada. As of December 31, 1996, this mill had an annual capacity of approximately 370,000 tons. In 1996, approximately 22% of Weldwood's 50% share of the mill's pulp production was used in the Company's own free sheet papers and groundwood papers mills. The balance of Weldwood's share was sold in the open market through the Company's headquarters in Stamford, Connecticut, a Company sales office in Appleton, Wisconsin and a Weldwood sales office in Bad Homburg, Germany.
While certain of the Company's mills purchase pulp in the open market, the Company and Weldwood overall are net sellers of pulp. In 1996, the Company and Weldwood in the aggregate produced approximately 871,000 tons of pulp for sale to unaffiliated purchasers, while the Company used approximately 283,000 tons of pulp purchased from third-party suppliers, resulting in net market pulp of approximately 588,000 tons.
BRAZIL
Champion Papel e Celulose Ltda., a 99.91%-owned subsidiary ("Champion Papel"), is a major integrated manufacturer of pulp and free sheet papers in Brazil. As of December 31, 1996, its mill had an annual capacity of approximately 344,000 tons of pulp and 388,000 tons of paper. In addition to being a leading supplier of free sheet papers in Brazil, Champion Papel exports a substantial portion of its paper production.
SALES
The Company's domestic sales organization is responsible for the sale of products produced by the Company's domestic free sheet papers business, groundwood papers business and specialty papers business.
The sales organization maintains 17 regional sales offices throughout the United States and an order services office in Hamilton, Ohio, serving the free sheet papers business (excluding pulp), groundwood papers business (excluding newsprint) and specialty papers business (excluding linerboard and kraft paper). Generally, sales are made to direct purchasers and through paper merchants and brokers.
Pulp produced at the Company's domestic mills for sale in the open market is sold through the Company's headquarters in Stamford, Connecticut, as well as a sales office in Appleton, Wisconsin.
Sales of newsprint are made by the sales organization through four sales offices, as well as an order services office located in Lufkin, Texas. In general, sales are made directly to publishers and printers.
Linerboard and kraft paper are sold to converters through three regional sales offices and an order services office located in Roanoke Rapids, North Carolina.
In addition, the Company's international sales organization handles the export sale of all of the Company's domestic pulp and paper products. This organization is located at the Stamford, Connecticut headquarters.
PAPER DISTRIBUTION OPERATION
Nationwide Papers, a unit of the Company, is a distributor of paper, paper products and industrial products. Its marketing operations are carried out through 44 sales offices and 30 distribution centers in 20 states. At two of the centers, Nationwide Papers converts rolls of bleached paperboard and coated and uncoated papers into sheets. In 1996, approximately 75% of its sales were attributable to merchandise purchased from numerous manufacturers other than the Company. However, Nationwide Papers is not dependent on any single supplier for such merchandise.
WOOD PRODUCTS
The Company is a major producer of plywood and lumber. The Company's wood products business is conducted through its domestic wood products operations and through the wood products operations of Weldwood.
The principal wood products manufacturing facilities operated by the Company and by Weldwood are summarized under Item 2

ITEM 2. PROPERTIES
In 1996, the Company's domestic and foreign manufacturing facilities operated in excess of 96% of capacity in the paper segment and at full capacity for lumber, studs and plywood. Production curtailments in the Company's paper segment were attributable primarily to scheduled maintenance.
Reference is made to Item 1 of this Report for information concerning the general character, adequacy and capacity of the principal plants, timber properties and other materially important physical properties of the Company. The following lists show the location, nature and ownership of the Company's principal plants. None of these plants is subject to a mortgage and, except as indicated, all are owned in fee.
PAPER
FREE SHEET PAPERS
(a) Integrated pulp and free sheet papers mills:
(i) Courtland, Alabama/1/; (ii) Canton, North Carolina; (iii) Pensacola, Florida; and (iv) Quinnesec, Michigan.
(b) The Company operates a plant in Waynesville, North Carolina which applies polyethylene coating to bleached paperboard and which also converts roll stock into cut-size paper.
(c) The Company operates five plants which convert polyethylene-coated paperboard into milk and juice cartons and one plant which converts polyethylene-coated paperboard into ovenable packaging. All of these plants are located in the United States/2/.
GROUNDWOOD PAPERS
(d) Integrated pulp and groundwood papers mills:
(i) Bucksport, Maine; and (ii) Sartell, Minnesota/3/.
_________________________ /1/For Courtland, Alabama mill lease information, see Item 1 - "Paper" of this Report. /2/For lease information regarding one of these plants, located in Athens, Georgia, see Item 1 - "Paper" of this Report. /3/For Sartell, Minnesota mill lease information, see Item 1 - "Paper" of this Report.
(e) Integrated pulp and newsprint mills:
(i) Lufkin, Texas; and (ii) Sheldon, Texas.
SPECIALTY PAPERS
(f) Integrated pulp and specialty papers mills:
(i) Deferiet, New York; and (ii) Roanoke Rapids, North Carolina.
(g) The Company operates a specialty papers mill in Hamilton, Ohio.
PULP
(h) The Company's free sheet papers mills in Pensacola, Florida, Courtland, Alabama and Quinnesec, Michigan and newsprint mill in Sheldon, Texas also produce market pulp.
(i) Weldwood operates a pulp mill in Hinton, Alberta, Canada and owns 50% of a joint venture which operates a pulp mill in Quesnel, British Columbia, Canada.
BRAZIL
(j) Champion Papel operates an integrated pulp and paper mill at Mogi Guacu, Brazil.
WOOD PRODUCTS
(a) The Company operates three softwood plywood plants in the United States.
(b) Weldwood operates two softwood plywood plants in Canada. One of these plants is located on leased land.
(c) The Company operates five softwood lumber mills in the United States.
(d) Weldwood operates three softwood lumber mills in Canada. One of these mills is located on leased land. (e) Decker Lake Forest Products Limited, a subsidiary in which Weldwood has an indirect 58% interest, operates a softwood lumber mill in Canada.
(f) Each of Babine Forest Products Company and Houston Forest Products Company, joint ventures in which Weldwood has an interest, operates a mill for the production of softwood lumber in Canada. One of these mills is located on leased land.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
The Company is involved in legal and administrative proceedings and claims of various types. While any litigation contains an element of uncertainty, management, based upon the opinion of the Company's General Counsel, presently believes that the outcome of each such proceeding or claim which is pending or known to be threatened, or all of them combined, 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.
EXECUTIVE OFFICERS OF THE REGISTRANT/1/
L. Scott Barnard (age 54) is an Executive Vice President of the Company, a position which he has held since August 1992. He has responsibility for the Company's pulp and paper sales. From February 1989 to September 1996, he had responsibility for sales and marketing for the printing and writing papers and publication papers businesses.
Stephen B. Brown (age 57) is Senior Vice President and General Counsel of the Company, a position which he has held since January 1, 1997. From April 1983 to December 1996, he was Vice President-Senior Counsel.
Mark V. Childers (age 44) is Senior Vice President-Organizational Development and Human Resources of the Company, a position which he has held since August 1992. From June 1991 to August 1992, he was Vice President-Organizational Development Project.
Michael P. Corey (age 53) is a Senior Vice President of the Company, a position which he has held since February 1997. He has responsibility for corporate analysis, acquisitions and divestitures, mineral resources and the Company's real estate subsidiaries. From December 1984 to February 1997, he was Vice President-Corporate Analysis.
Richard J. Diforio, Jr. (age 61) is a Senior Vice President of the Company, a position which he has held since November 1992. He has responsibility for environmental, health and safety affairs. From September 1990 to November 1992, he was Vice President-Environment, Health and Safety of the Company.
Joe K. Donald (age 54) is an Executive Vice President of the Company, a position which he has held since August 1989. He has responsibility for the Company's domestic pulp and paper manufacturing operations. From August 1989 to September 1996, he headed the publication papers business.
Frank Kneisel (age 59) is Senior Vice President-Finance of the Company, a position which he has held since January 1995. From November 1975 to December 1994, he was Treasurer of the Company. From May 1981 to December 1994, he was a Vice President.
Burton G. MacArthur, Jr. (age 50) is an Executive Vice President of the Company, a position which he has held since January 1990. He has responsibility for the Company's marketing program, as well as for order services, purchasing, transportation and logistics. From January 1990 to September 1996, he headed the newsprint and kraft business.
Kenwood C. Nichols (age 57) is Vice Chairman and Executive Officer and a director of the Company. He was elected Executive Officer in 1996. Since August 1989, he has served as Vice Chairman and a director.
Richard E. Olson (age 59) was elected Chairman of the Board of Directors and Chief Executive Officer of the Company in 1996. From December 1987 to 1996, he was an Executive Vice President of the Company, with responsibility for engineering, technology, manufacturing support and major projects.
Richard L. Porterfield (age 50) is an Executive Vice President of the Company, a position which he has held since August 1992. He heads the forest products unit, which consists of domestic timberlands operations and the domestic wood products business. From January 1990 to August 1992, he was Senior Vice President- Organizational Development and Human Resources of the Company.
_______________________________ /1/The term of office for each executive officer expires at the Annual Meeting of the Board of Directors of the Company scheduled to be held on May 15, 1997.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company had 19,272 record holders of its Common Stock as of February 28, 1997.
The Company's Common Stock is traded on the New York Stock Exchange.
Restrictions on the ability of the Company to pay cash dividends are included in several of the Company's debt instruments and the Company's Restated Certificate of Incorporation. At December 31, 1996, the most restrictive of these limitations required the Company to maintain tangible net worth (as defined below) of at least $2.61 billion. As a result of this requirement, such amount is unavailable for the payment of dividends. Approximately $1.1 billion of tangible net worth at December 31, 1996 was free of such restrictions. Tangible net worth is defined as shareholders' equity minus goodwill, unamortized debt discount and other like intangibles, all determined on a consolidated basis for the Company.
For information concerning the high and low sales prices of the Company's Common Stock for each quarterly period during the last two years and the amount of dividends paid on the Company's Common Stock in each quarterly period during the last two years, see the section on the inside back cover of the Company's 1996 Annual Report captioned "Common Stock Prices and Dividends Paid". Said section is incorporated by reference herein.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
There is incorporated by reference herein the table on pages 52 and 53 of the Company's 1996 Annual Report captioned "Eleven-Year Selected Financial Data".
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
There is incorporated by reference herein the section on pages 44 to 51 of the Company's 1996 Annual Report captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations".
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
There is incorporated by reference herein the sections of the Company's 1996 Annual Report captioned "Consolidated Income", "Consolidated Balance Sheet", "Consolidated Cash Flows", "Consolidated RetainedEarnings", "Notes to Financial Statements" and "Report of Independent Public Accountants", which sections are on pages 23, 24, 25, 26, 27 to 42 and 43, respectively, of the Company's 1996 Annual Report.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
See the section captioned "Executive Officers of the Registrant" under Part I of this Report for information concerning the Company's executive officers.
For information concerning the directors of the Company, see the sections captioned "The Board of Directors-The Nominees", "Information on the Nominees and Directors", and "Committees" in the Company's definitive Proxy Statement for the Annual Meeting of Shareholders scheduled to be held on May 15, 1997 (the "Company's 1997 Proxy Statement"). Said sections are incorporated by reference herein.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
There is incorporated by reference herein from the Company's 1997 Proxy Statement the sections therein captioned "The Board of Directors-Directors' Compensation"; and "Executive Compensation-Summary Compensation Table", "Option/SAR Grant Table", "Option/SAR Exercise and Year-End Values Table", "Pension Plan Table", and "Employment and Severance Agreements".
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is incorporated by reference herein from the Company's 1997 Proxy Statement the sections therein captioned "Principal Shareholders" and "Stock Ownership by Nominees, Directors and Named Executive Officers".
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is incorporated by reference herein from the Company's 1997 Proxy Statement the section therein captioned "Transactions".
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) FINANCIAL STATEMENTS. The following Consolidated Financial Statements of Champion International Corporation and Subsidiaries, Notes to Financial Statements and Report of Independent Public Accountants are incorporated by reference herein from the Company's 1996 Annual Report:
(b) FINANCIAL STATEMENT SCHEDULES. All Financial Statement Schedules have been omitted since the information is not applicable, is not required or is included in the Consolidated Financial Statements or Notes to Financial Statements listed under section (a) of this Item 14.
(c) EXHIBITS. Each Exhibit is listed according to the number assigned to it in the Exhibit Table of Item 601 of Regulation S-K. The Exhibit numbers preceded by an asterisk (*) indicate Exhibits physically filed with this Annual Report on Form 10-K. All other Exhibit numbers indicate Exhibits filed by incorporation by reference herein. Exhibit numbers 10.1 through 10.49, which are preceded by a plus sign (+), are management contracts or compensatory plans or arrangements.
EXHIBIT NUMBER DESCRIPTION - -------------- -----------
3.1 Restated Certificate of Incorporation of the Company, filed in the State of New York on October 20, 1986 (filed by incorporation by reference to Exhibit 3.1 to the Company's Form 10-K for the fiscal year ended December 31, 1986, Commission File No. 1-3053).
3.2 Certificate of Amendment of Restated Certificate of Incorporation of the Company, filed in the State of New York on July 18, 1988 (filed by incorporation by reference to Exhibit 4.1 to the Company's Form 10-Q for the quarter ended June 30, 1988, Commission File No. 1-3053).
3.3 Certificate of Amendment of Restated Certificate of Incorporation of the Company, filed in the State of New York on December 6, 1989 (filed by incorporation by reference to Exhibit 4.1 to the Company's Form 8-K dated December 14, 1989, Commission File No. 1-3053).
3.4 Certificate of Amendment of Restated Certificate of Incorporation of the Company, filed in the State of New York on December 21, 1989 (filed by incorporation by reference to Exhibit 3.4 to the Company's Form 10-K for the fiscal year ended December 31, 1989, Commission File No. 1-3053).
3.5 By-Laws of the Company (filed by incorporation by reference to Exhibit 3.1 to the Company's Form 10-Q for the quarter ended September 30, 1996, Commission File No. 1-3053).
4 Letter agreement dated March 29, 1991 of the Company to furnish to the Commission upon request copies of certain instruments with respect to long-term debt (filed by incorporation by reference to Exhibit 4 to the Company's Form 10-K for the fiscal year ended December 31, 1990, Commission File No. 1-3053).
+10.1 Champion International Corporation 1986 Management Incentive Program, consisting of the 1986 Stock Option Plan and the 1986 Contingent Compensation Plan (filed by incorporation by reference to Exhibit 19.1 to the Company's Form 10-Q for the quarter ended June 30, 1986, Commission File No. 1-3053).
+10.2 Amendment to Champion International Corporation 1986 Management Incentive Program (filed by incorporation by reference to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended March 31, 1993, Commission File No. 1-3053).
+10.3 Champion International Corporation Supplemental Retirement Income Plan (filed by incorporation by reference to Exhibit 10.7 to the Company's Form 10-K for the fiscal year ended December 31, 1989, Commission File No. 1-3053).
EXHIBIT NUMBER DESCRIPTION - -------------- -----------
+10.4 Amendment dated as of January 1, 1994 to Champion International Corporation Supplemental Retirement Income Plan (filed by incorporation by reference to Exhibit 10.6 to the Company's Form 10-K for the fiscal year ended December 31, 1994, Commission File No. 1-3053).
*+10.5 Champion International Corporation Nonqualified Supplemental Savings Plan.
+10.6 Supplemental Retirement and Death Payments Agreement dated as of August 1, 1964, as amended by letter agreement dated January 9, 1965, between the Company and Mr. Sigler (filed by incorporation by reference to Exhibit 10.8 to the Company's Form 10-K for the fiscal year ended December 31, 1990, Commission File No. 1-3053).
+10.7 Restated Agreement between the Company and Mr. Sigler, as amended as of February 19, 1987, providing certain employment, severance and retirement arrangements (filed by incorporation by reference to Exhibit 19.1 to the Company's Form 10-Q for the quarter ended June 30, 1987, Commission File No. 1-3053).
+10.8 Agreement Relating to Legal Expenses dated February 19, 1987 between the Company and Mr. Sigler providing reimbursement of certain legal expenses following a change in control of the Company (filed by incorporation by reference to Exhibit 19.2 to the Company's Form 10-Q for the quarter ended June 30, 1987, Commission File No. 1-3053).
+10.9 Amendment dated as of April 21, 1988 to Restated Agreement between the Company and Mr. Sigler, as amended as of February 19, 1987 (filed by incorporation by reference to Exhibit 19.1 to the Company's Form 10-Q for the quarter ended June 30, 1988, Commission File No. 1-3053).
+10.10 Amendment dated as of August 18, 1988 to Restated Agreement between the Company and Mr. Sigler, as amended as of February 19, 1987 (filed by incorporation by reference to Exhibit 10.10 to the Company's Form 10-K for the fiscal year ended December 31, 1988, Commission File No. 1-3053).
+10.11 Amendment dated as of August 18, 1988 to Agreement Relating to Legal Expenses dated February 19, 1987 between the Company and Mr. Sigler (filed by incorporation by reference to Exhibit 10.11 to the Company's Form 10-K for the fiscal year ended December 31, 1988, Commission File No. 1-3053).
+10.12 Amendment dated as of September 19, 1991 to Restated Agreement between the Company and Mr. Sigler, as amended as of February 19, 1987 (filed by incorporation by reference to Exhibit 10.12 to the Company's Form 10-K for the fiscal year ended December 31, 1991, Commission File No. 1-3053).
+10.13 Amendment dated as of November 17, 1994 to Restated Agreement between the Company and Mr. Sigler, as amended as of February 19, 1987 (filed by incorporation by reference to Exhibit 10.15 to the Company's Form 10-K for the fiscal year ended December 31, 1994, Commission File No. 1-3053).
+10.14 Agreement dated November 17, 1994 between the Company and Mr. Sigler relating to post-employment consulting services (filed by incorporation by reference to Exhibit 10.16 to the Company's Form 10-K for the fiscal year ended December 31, 1994, Commission File No. 1-3053).
EXHIBIT NUMBER DESCRIPTION - -------------- -----------
+10.15 Amendment dated as of August 15, 1996 to (i) Restated Agreement between the Company and Mr. Sigler, as amended as of February 19, 1987 and (ii) Agreement dated November 17, 1994 between the Company and Mr. Sigler (filed by incorporation by reference to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended September 30, 1996, Commission File No. 1-3053).
*+10.16 Amendment dated as of November 21, 1996 to Agreement dated November 17, 1994 between the Company and Mr. Sigler.
+10.17 Agreement dated as of August 18, 1988 between the Company and Mr. Heist providing certain employment, severance and retirement arrangements (filed by incorporation by reference to Exhibit 10.17 to the Company's Form 10-K for the fiscal year ended December 31, 1988, Commission File No. 1-3053).
+10.18 Agreement Relating to Legal Expenses dated August 18, 1988 between the Company and Mr. Heist providing reimbursement of certain legal expenses following a change in control of the Company (filed by incorporation by reference to Exhibit 10.18 to the Company's Form 10-K for the fiscal year ended December 31, 1988, Commission File No. 1-3053).
+10.19 Amendment dated as of September 19, 1991 to Agreement dated as of August 18, 1988 between the Company and Mr. Heist (filed by incorporation by reference to Exhibit 10.15 to the Company's Form 10-K for the fiscal year ended December 31, 1991, Commission File No. 1-3053).
+10.20 Amendment dated as of August 15, 1996 to Agreement dated August 18, 1988 between the Company and Mr. Heist (filed by incorporation by reference to Exhibit 10.2 to the Company's Form 10-Q for the quarter ended September 30, 1996, Commission File No. 1-3053).
+10.21 Agreement dated as of October 18, 1990 between the Company and Mr. Nichols providing certain employment, severance and retirement arrangements (filed by incorporation by reference to Exhibit 10.16 to the Company's Form 10-K for the fiscal year ended December 31, 1990, Commission File No. 1-3053).
+10.22 Agreement Relating to Legal Expenses dated October 18, 1990 between the Company and Mr. Nichols providing reimbursement of certain legal expenses following a change in control of the Company (filed by incorporation by reference to Exhibit 10.17 to the Company's Form 10-K for the fiscal year ended December 31, 1990, Commission File No. 1-3053).
+10.23 Amendment dated as of September 19, 1991 to Agreement dated as of October 18, 1990 between the Company and Mr. Nichols (filed by incorporation by reference to Exhibit 10.18 to the Company's Form 10-K for the fiscal year ended December 31, 1991, Commission File No. 1-3053).
+10.24 Agreement dated as of August 18, 1988 between the Company and Mr. Olson providing certain severance arrangements (filed by incorporation by reference to Exhibit 10.23 to the Company's Form 10-K for the fiscal year ended December 31, 1990, Commission File No. 1-3053).
EXHIBIT NUMBER DESCRIPTION - -------------- -----------
+10.25 Agreement Relating to Legal Expenses dated August 18, 1988 between the Company and Mr. Olson providing reimbursement of certain legal expenses following a change in control of the Company (filed by incorporation by reference to Exhibit 10.24 to the Company's Form 10-K for the fiscal year ended December 31, 1990, Commission File No. 1-3053).
+10.26 Amendment dated as of September 19, 1991 to Agreement dated as of August 18, 1988 between the Company and Mr. Olson (filed by incorporation by reference to Exhibit 10.28 to the Company's Form 10-K for the fiscal year ended December 31, 1991, Commission File No. 1-3053).
*+10.27 Agreement dated as of October 18, 1990 between the Company and Mr. Donald providing certain severance arrangements.
*+10.28 Agreement Relating to Legal Expenses dated October 18, 1990 between the Company and Mr. Donald providing reimbursement of certain legal expenses following a change in control of the Company.
*+10.29 Amendment dated as of September 19, 1991 to Agreement dated as of October 18, 1990 between the Company and Mr. Donald.
*+10.30 Amendment dated as of November 21, 1996 to Agreement dated as of October 18, 1990 between the Company and Mr. Donald.
*+10.31 Agreement dated as of October 18, 1990 between the Company and Mr. Barnard providing certain severance arrangements.
*+10.32 Agreement Relating to Legal Expenses dated October 18, 1990 between the Company and Mr. Barnard providing reimbursement of certain legal expenses following a change in control of the Company.
*+10.33 Amendment dated as of September 19, 1991 to Agreement dated as of October 18, 1990 between the Company and Mr. Barnard.
*+10.34 Agreement dated as of October 18, 1990 between the Company and Mr. Porterfield providing certain severance arrangements.
*+10.35 Agreement Relating to Legal Expenses dated October 18, 1990 between the Company and Mr. Porterfield providing reimbursement of certain legal expenses following a change in control of the Company.
*+10.36 Amendment dated as of September 19, 1991 to Agreement dated as of October 18, 1990 between the Company and Mr. Porterfield.
*+10.37 Agreement dated as of February 19, 1987 between the Company and Mr. Fuller providing certain severance arrangements.
*+10.38 Agreement Relating to Legal Expenses dated February 19, 1987 between the Company and Mr. Fuller providing reimbursement of certain legal expenses following a change in control of the Company.
*+10.39 Amendment dated as of April 21, 1988 to Agreement dated as of February 19, 1987 between the Company and Mr. Fuller.
EXHIBIT NUMBER DESCRIPTION - -------------- -----------
*+10.40 Amendment dated as of September 19, 1991 to Agreement dated as of February 19, 1987 between the Company and Mr. Fuller.
+10.41 Trust Agreement dated as of February 19, 1987 between the Company and Fleet National Bank of Connecticut securing certain payments under the contracts listed as Exhibit numbers 10.7 through 10.40, among others, following a change in control of the Company (filed by incorporation by reference to Exhibit 19.11 to the Company's Form 10-Q for the quarter ended June 30, 1987, Commission File No. 1-3053).
+10.42 Amendment dated as of August 18, 1988 to Trust Agreement dated as of February 19, 1987 between the Company and Fleet National Bank of Connecticut (filed by incorporation by reference to Exhibit 10.29 to the Company's Form 10-K for the fiscal year ended December 31, 1988, Commission File No. 1-3053).
+10.43 Champion International Corporation Executive Life Insurance Plan (filed by incorpor-ation by reference to Exhibit 10.27 to the Company's Form 10-K for the fiscal year ended December 31, 1990, Commission File No. 1-3053).
+10.44 Amendment dated as of January 1, 1994 to Champion International Corporation Executive Life Insurance Plan (filed by incorporation by reference to Exhibit 10.33 to the Company's Form 10-K for the fiscal year ended December 31, 1994, Commission File No. 1-3053).
+10.45 Second amendment dated as of July 17, 1996 to Champion International Corporation Executive Life Insurance Plan (filed by incorporation by reference to Exhibit 10.2 to the Company's Form 10-Q for the quarter ended June 30, 1996, Commission File No. 1- 3053).
+10.46 Extract from the minutes of the meeting of the Board of Directors of the Company held on October 18, 1979 relating to the $50,000 of group term life insurance provided by the Company for non-employee directors (filed by incorporation by reference to Exhibit 10.28 to the Company's Form 10-K for the fiscal year ended December 31, 1990, Commission File No. 1-3053).
+10.47 Resolutions of the Board of Directors of the Company adopted on September 19, 1991 relating to the compensation of directors (filed by incorporation by reference to Exhibit 19 to the Company's Form 10-Q for the quarter ended September 30, 1991, Commission File No. 1-3053).
+10.48 Resolutions of the Board of Directors of the Company adopted on August 18, 1994 relating to the compensation of directors (filed by incorporation by reference to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended September 30, 1994, Commission File No. 1-3053).
+10.49 Retirement Plan for Outside Directors, benefit accruals under which ceased on January 1, 1997 (filed by incorporation by reference to Exhibit 19 to the Company's Form 10-Q for the quarter ended September 30, 1992, Commission File No. 1-3053).
*11 Schedule showing calculation of primary earnings per common share and fully diluted earnings per common share.
*13 Portions of the Company's 1996 Annual Report which are specifically incorporated by reference herein.
EXHIBIT NUMBER DESCRIPTION - -------------- -----------
*21 List of significant subsidiaries of the Company.
*23.1 Opinion and Consent of the Senior Vice President and General Counsel of the Company.
*23.2 Consent of Arthur Andersen LLP.
*24 Power of Attorney relating to the execution and filing of this Annual Report on Form 10-K and all amendments hereto.
*27 Financial Data Schedule.
(d) REPORTS ON FORM 8-K. The Company filed a Current Report on Form 8-K dated November 1, 1996 reporting the sale of $200,000,000 principal amount of the Company's 7.20% Debentures due November 1, 2026, pursuant to the Company's shelf registration statement (No. 33-62819).
* * *
FORWARD-LOOKING STATEMENTS
Certain statements in this Report (including statements incorporated by reference herein) that are neither reported financial results nor other historical information are forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results and Company plans and objectives to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, changes in the United States and international economies; changes in worldwide demand for the Company's products; changes in worldwide production and production capacity in the forest products industry; competitive pricing pressures for the Company's products; and changes in raw material, energy and other costs.
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, ON THE 27TH DAY OF MARCH, 1997.
CHAMPION INTERNATIONAL CORPORATION (Registrant)
By /s/ Lawrence A. Fox ------------------------------ (LAWRENCE A. FOX) VICE PRESIDENT AND SECRETARY
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 date indicated.
A power of attorney authorizing Stephen B. Brown, Lawrence A. Fox and Richard E. Olson and each of them to sign this Report and all amendments hereto as attorneys-in-fact for officers and directors of the registrant is filed as Exhibit 24 hereto.


Item 1. Business -------- Not applicable.
Item 2.

Item 2. Properties ---------- Not applicable.
Item 3.

Item 3. Legal Proceedings ----------------- There are no material pending legal proceedings with respect to NationsBank Credit Card Master Trust (the "Trust") involving the Trust, The Bank of New York, as Trustee, or NationsBank of Delaware, N.A., as Servicer, other than ordinary or routine litigation incidental to the Trust assets or the Trustee's or the Servicer's duties under the applicable Pooling and Servicing Agreement.
Item 4.

Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters ------------------------------------------------------------------- (a) Market Information. There is no established public trading market for the Certificates.
(b) Holders. Since each of the Certificates was issued in book entry form only, there is only one holder of record of each Series of Certificates. See Item 12 below.
(c) Dividends. Not applicable.
Item 6.

Item 6. Selected Financial Data ----------------------- Not applicable.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ---------------------------------------------------------------- Not applicable.
Item 8.

Item 8. Financial Statements and Supplementary Data ------------------------------------------- Not applicable.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ----------------------------------------------------------------- None.
PART III - --------
Item 10.

Item 10. Directors and Executive Officers of the Registrant -------------------------------------------------- Not applicable.
Item 11.

Item 11. Executive Compensation ---------------------- Not applicable.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management --------------------------------------------------------------- The Certificates are represented by one or more certificates registered in the name of Cede & Co., the nominee of The Depository Trust Company ("DTC"). An investor holding an interest in the Trust is not entitled to receive a certificate representing such interest except in limited circumstances. Accordingly, Cede & Co. is the sole holder of record of the Certificates, which it holds on behalf of brokers, dealers, banks and other participants in the DTC system. Such participants may hold certificates for their own accounts or for the accounts of their customers. The address of Cede & Co. is: Cede & Co. c/o The Depository Trust Company Attention: Proxy Department Seven Hanover Square New York, New York 10004
Item 13.

Item 13. Certain Relationships and Related Transactions ---------------------------------------------- There has not been, and there is not currently proposed, any transaction or series of transactions, to which either the Trust or NationsBank of Delaware, N.A., as Servicer, is a party with any Certificateholder, or any member of the immediate family of any such Certificateholder, who, to the knowledge of the Servicer, owns of record or beneficially more than five percent of the Certificates.
PART IV - -------
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ----------------------------------------------------------------
(a) 1. Not applicable. 2. Not applicable. 3. Exhibits: 99.1 Annual Servicer's Certificate. 99.2 Report of Independent Accountants
(b) Reports on Form 8-K. As Servicer and on behalf of the NationsBank Credit Card Master Trust, NationsBank of Delaware, N.A. filed a Current Report on Form 8-K pursuant to Items 5 and 7 for the following monthly distribution dates during 1996, including the Certificateholder's Statements for each due period provided to The Bank of New York, as Trustee.
Dates of Reports on Form 8-K ---------------------------- January 16, 1996 February 15, 1996 March 15, 1996 April 15, 1996 May 15, 1996, as amended June 17, 1996, as amended July 15, 1996, as amended August 15, 1996 September 16, 1996 October 15, 1996 November 15, 1996 December 16, 1996
(c) The exhibits filed as part of this report are listed in the Index to Exhibits on page 5.
(d) Not applicable.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NationsBank of Delaware, N.A., as Servicer and on behalf of NationsBank Credit Card Master Trust
By: /s/ Leslie J. Fitzpatrick --------------------------- Leslie J. Fitzpatrick Senior Vice President (Duly Authorized Officer)
Date: March 25, 1997
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit ----------- ----------------------- 99.1 Annual Servicer's Certificate
99.2 Report of Independent Accountants


Item 1. Business
General Description of Partnership
Swift Energy Pension Partners 1994-A, Ltd., a Texas limited partnership (the "Partnership" or the "Registrant"), is a partnership formed under a public serial limited partnership offering denominated Swift Depositary Interests I (Registration Statement No. 33-37983 on Form S-1, originally declared effective March 19, 1991, and amended effective May 1, 1992, April 1, 1993, April 19, 1994 and May 9, 1995 [the "Registration Statement"]). The Partnership was formed effective April 20, 1994 under a Limited Partnership Agreement dated April 20, 1994. The initial 266 investors made capital contributions of $2,635,723. Investors in the Partnership hold Swift Depositary Interests ("SDIs") representing beneficial ownership interests in the Partnership.
The Partnership is principally engaged in the business of acquiring nonoperating interests (i.e., net profits interests, royalty interests and overriding royalty interests) in proven oil and gas properties within the continental United States. The Partnership does not acquire working interests in or operate oil and gas properties, and does not engage in drilling activities. At December 31, 1996, the Partnership had expended or committed to expend 100% of the Interest Holders' commitments in the acquisition and development of nonoperating interests in producing properties, which properties are described under Item 2, "Nonoperating Interests in Properties," below. The Partnership's income is derived almost entirely from its nonoperating interests and the disposition thereof.
The Partnership's business and affairs are conducted by its Managing General Partner, Swift Energy Company, a Texas corporation ("Swift"). The Partnership's Special General Partner, VJM Corporation, a California corporation ("VJM"), consults with and advises Swift as to certain financial matters.
The general manner in which the Partnership acquires nonoperating interests and otherwise conducts its business is described in detail in the Registration Statement under "Proposed Activities of the Partnerships," which is incorporated herein by reference. The following is intended only as a summary of the Partnership's manner of doing business and specific activities to date.
Manner of Acquiring Nonoperating Interests in Properties; Net Profits and Overriding Royalty Interest Agreement
The nonoperating interests owned by the Registrant have typically been acquired pursuant to a Net Profits and Overriding Royalty Interest Agreement dated April 20, 1994 (the "NP/OR Agreement") between the Registrant and Swift Energy Operating Partners 1994-A, Ltd. (the "Operating Partnership"). The Operating Partnership is a Texas limited partnership that is also managed by Swift and VJM. The Operating Partnership was formed to acquire and develop producing oil and gas properties.
Under the NP/OR Agreement, the Registrant and the Operating Partnership have, in effect, combined their funds to acquire producing properties. Using funds committed to the NP/OR Agreement by both partnerships, the Operating Partnership acquires producing properties, then promptly conveys nonoperating interests therein to the Registrant. The Operating Partnership retains a working interest in each such property, and is responsible for the production of oil and gas therefrom. For the sake of legal and administrative convenience, producing properties are usually acquired from the third party sellers by Swift, which then conveys a working interest in each such property to the Operating Partnership. The Registrant initially committed $2,635,723 and the Operating Partnership initially committed $4,487,431 for acquisitions under the NP/OR Agreement. The Operating Partnership is obligated under the NP/OR Agreement to convey to the Registrant a 37% fixed net profits interest and a variable overriding royalty interest in specified depths of all producing properties acquired under the NP/OR Agreement.
Under the NP/OR Agreement, the Operating Partnership is required to convey to the Registrant, and the Registrant is required to purchase, nonoperating interests in all producing properties acquired by the Operating Partnership, except that:
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
1. properties anticipated to require significant development operations and nonoperating interests offered to the Operating Partnership by third parties may be purchased by the Operating Partnership outside the NP/OR Agreement, without participation by the Registrant;
2. during a specified one-year period, the Registrant is entitled to reduce the amount originally committed by it to purchases under the NP/OR Agreement and to redirect such funds to the purchase of nonoperating interests from sources other than the Operating Partnership; and
3. the Registrant's funds will be released from the NP/OR Agreement if they are not completely spent by the Operating Partnership within a specified period, or if there is a prior withdrawal of funds by the Operating Partnership to purchase properties anticipated to require significant development.
Purchases of nonoperating interests by the Registrant using withdrawn or released funds may be made from the Managing General Partner and its affiliates, other partnerships affiliated with the Operating Partnership (possibly through the Registrant's entry into a new NP/OR Agreement), or from unaffiliated third parties.
In accordance with its obligations under the NP/OR Agreement, as of December 31, 1996 the Operating Partnership had conveyed to the Registrant a net profits interest burdening certain depths of all producing properties acquired by the Operating Partnership since the date of the NP/OR Agreement. Typically, a net profits interest in an oil and gas property entitles the owner to a specified percentage share of the gross proceeds generated by the burdened property, net of operating costs. The 37% net profits interest conveyed to the Registrant under the NP/OR Agreement differs from the typical net profits interest in that it is calculated over the entire group of producing properties conveyed under the NP/OR Agreement; i.e., all operating costs attributable to the burdened depths of such properties are aggregated, and the total is then subtracted from the total of all gross proceeds attributable to such depths in order to calculate the net profits to which the Registrant is entitled. The net profits interest conveyed to the Registrant burdens only those depths of each subject property which were evaluated to contain proved reserves at the date of acquisition, to the extent such depths underlie specified surface acreage.
The Operating Partnership has also conveyed to the Registrant under the NP/OR Agreement an overriding royalty interest in each property acquired thereunder. An overriding royalty interest is a fractional interest in the gross production (or the gross proceeds therefrom) of oil and gas from a property, free of any exploration, development, operation or maintenance expenses. Under the NP/OR Agreement, the overriding royalty interest burdens the portions of each producing property that were evaluated at the date of acquisition not to contain proved reserves.
Competition, Markets and Regulations
Competition
The oil and gas industry is highly competitive in all its phases. The Partnership encounters strong competition from many other oil and gas producers, many of which possess substantial financial resources, in acquiring economically desirable Producing Properties.
Markets
The amounts of and price obtainable for oil and gas production from Partnership Properties will be affected by market factors beyond the control of the Partnership. Such factors include the extent of domestic production, the level of imports of foreign oil and gas, the general level of market demand on a regional, national and worldwide basis, domestic and foreign economic conditions that determine levels of industrial production, political events in foreign oil-producing regions, and variations in governmental regulations and tax laws and the imposition of new governmental requirements upon the oil and gas industry. There can be no assurance that oil and gas prices will not decrease in the future, thereby decreasing net Revenues from Partnership Properties.
From time to time, there may exist a surplus of natural gas or oil supplies, the effect of which may be to reduce the amount of hydrocarbons that the Partnerships may produce and sell while such oversupply exists. In recent years, initial steps have been taken to provide additional gas transportation lines from Canada to the United States. If additional Canadian gas is brought to the United States market, it could create downward pressure on United States gas prices.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
Regulations
Environmental Regulation
The federal government and various state and local governments have adopted laws and regulations regarding the control of contamination of the environment. These laws and regulations may require the acquisition of a permit by Operators before drilling commences, prohibit drilling activities on certain lands lying within wilderness areas or where pollution arises and impose substantial liabilities for pollution resulting from operations, particularly operations near or in onshore and offshore waters or on submerged lands. These laws and regulations may also increase the costs of routine drilling and operation of wells. Because these laws and regulations change frequently, the costs to the Partnership of compliance with existing and future environmental regulations cannot be predicted. However, the Managing Partner does not believe that the Partnership is affected in a significantly different manner by these regulations than are its competitors in the oil and gas industry.
Federal Regulation of Natural Gas
The transportation and sale of natural gas in interstate commerce is heavily regulated by agencies of the federal government. The following discussion is intended only as a summary of the principal statutes, regulations and orders that may affect the production and sale of natural gas from Partnership Properties. This summary should not be relied upon as a complete review of applicable natural gas regulatory provisions.
FERC Orders
Several major regulatory changes have been implemented by the Federal Energy Regulatory Commission ("FERC") from 1985 to the present that affect the economics of natural gas production, transportation and sales. In addition, the FERC continues to promulgate revisions to various aspects of the rules and regulations affecting those segments of the natural gas industry that remain subject to the FERC's jurisdiction. In April 1992, the FERC issued Order No. 636 pertaining to pipeline restructuring. This rule requires interstate pipelines to unbundle transportation and sales services by separately stating the price of each service and by providing customers only the particular service desired, without regard to the source for purchase of the gas. The rule also requires pipelines to (i) provide nondiscriminatory "no-notice" service allowing firm commitment shippers to receive delivery of gas on demand up to certain limits without penalties, (ii) establish a basis for release and reallocation of firm upstream pipeline capacity and (iii) provide non-discriminatory access to capacity by firm transportation shippers on a downstream pipeline. The rule requires interstate pipelines to use a straight fixed variable rate design. The rule imposes these same requirements upon storage facilities.
FERC Order No. 500 affects the transportation and marketability of natural gas. Traditionally, natural gas has been sold by producers to pipeline companies, which then resold the gas to end-users. FERC Order No. 500 alters this market structure by requiring interstate pipelines that transport gas for others to provide transportation service to producers, distributors and all other shippers of natural gas on a nondiscriminatory, "first-come, first-served" basis ("open access transportation"), so that producers and other shippers can sell natural gas directly to end-users. FERC Order No. 500 contains additional provisions intended to promote greater competition in natural gas markets.
It is not anticipated that the marketability of and price obtainable for natural gas production from Partnership Properties will be significantly affected by FERC Order No. 500. Gas produced from Partnership Properties normally will be sold to intermediaries who have entered into transportation arrangements with pipeline companies. These intermediaries will accumulate gas purchased from a number of producers and sell the gas to end-users through open access pipeline transportation.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
State Regulations
Production of any oil and gas from Partnership Properties will be affected to some degree by state regulations. Many states in which the Partnership will operate have statutory provisions regulating the production and sale of oil and gas, including provisions regarding deliverability. Such statutes, and the regulations promulgated in connection therewith, are generally intended to prevent waste of oil and gas and to protect correlative rights to produce oil and gas between owners of a common reservoir. Certain state regulatory authorities also regulate the amount of oil and gas produced by assigning allowable rates of production to each well or proration unit.
Federal Leases
Some of the Partnership's properties are located on federal oil and gas leases administered by various federal agencies, including the Bureau of Land Management. Various regulations and orders affect the terms of leases, exploration and development plans, methods of operation and related matters.
Employees
The Partnership has no employees. Swift, however, has a staff of geologists, geophysicists, petroleum engineers, landmen, and accounting personnel who administer the operations of Swift and the Partnership. As of December 31, 1996, Swift had 191 employees. Swift's administrative and overhead expenses attributable to the Partnership's operations are borne by the Partnership.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
Item 2.

Item 2. Nonoperating Interests in Properties
As of December 31, 1996, the Partnership has acquired nonoperating interests in producing oil and gas properties which are generally described below.
Principal Oil and Gas Producing Properties
The most valuable fields in the Partnership, based upon year-end engineering estimates of discounted future net revenues using constant pricing and costs, are described below.
1. The Chunchula Unit is located in Mobile County, Alabama, (Parker and Parsley acquisition) and produces from the Smackover horizon. This unit represents 30% of this Partnership's value.
2. The Rancho Viejo Field is located in Webb County, Texas (Cox acquisition) and accounts for 20% of this Partnership's value. The wells in this field produce natural gas and condensate from the Lobo formation.
The remaining value in the Partnership is attributable to numerous properties none of which equals or exceeds 15 percent of the total Partnership value.
Title to Properties
Title to substantially all significant producing properties in which the Partnership owns nonoperating interests has been examined. In addition to the nonoperating interests owned by the Partnership, the properties are subject to royalty, overriding royalty and other interests customary in the industry. The Managing General Partner does not believe any of these burdens materially detract from the value of the properties or will materially detract from the value of the properties or materially interfere with their use in the operation of the business of the Partnership.
Production and Sales Price
The following table summarizes the sales volumes of the Partnership's net oil and gas production expressed in MCFs. Equivalent MCFs are obtained by converting oil to gas on the basis of their relative energy content; one barrel equals 6,000 cubic feet of gas.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
Net Proved Oil and Gas Reserves
Presented below are the estimates of the Partnership's proved reserves as of December 31, 1995 and 1994. All of the Partnership's proved reserves are located in the United States.
Revisions of previous quantity estimates are related to upward or downward variations based on current engineering information for production rates, volumetrics and reservoir pressure. Additionally, changes in quantity estimates are the result of the increase or decrease in crude oil and natural gas prices at each year end which have the effect of adding or reducing proved reserves on marginal properties due to economic limitations.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
The following table summarizes by acquisition the Registrant's reserves and gross and net interests in producing oil and gas wells as of December 31, 1996:
There are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting the future rates of production, timing and plan of development. Oil and gas reserve engineering must be recognized as a subjective process of estimating underground accumulations of oil and gas that cannot be measured in an exact way, and estimates of other engineers might differ from those above, audited by H. J. Gruy and Associates, Inc., an independent petroleum consulting firm. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of drilling, testing and production subsequent to the date of the estimate may justify revision of such estimate, and, as a general rule, reserve estimates based upon volumetric analysis are inherently less reliable than those based on lengthy production history. Accordingly, reserve estimates are often different from the quantities of oil and gas that are ultimately recovered.
In estimating the oil and natural gas reserves, the Registrant, in accordance with criteria prescribed by the Securities and Exchange Commission, has used prices received as of December 31, 1996 without escalation, except in those instances where fixed and determinable gas price escalations are covered by contracts, limited to the price the Partnership reasonably expects to receive. The Registrant does not believe that any favorable or adverse event causing a significant change in the estimated quantity of proved reserves has occurred between December 31, 1996 and the date of this report.
Future prices received for the sale of the Partnership's products may be higher or lower than the prices used in the evaluation described above; the operating costs relating to such production may also increase or decrease from existing levels. The estimates presented above are in accordance with rules adopted by the Securities and Exchange Commission.
Item 3.

Item 3. Legal Proceedings
The Partnership is not aware of any material pending legal proceedings to which it is a party or of which any of its property is the subject.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of Interest Holders during the fourth quarter of the fiscal year covered by this report.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
PART II
Item 5.

Item 5. Market Price of and Distributions on the Registrant's SDIs and Related Interest Holder Matters
Market Information
SDIs in the Partnership were initially sold at a price of $1 per SDI. SDIs are not traded on any exchange and there is no established public trading market for the SDIs. Swift is aware of negotiated transfers of SDIs between unrelated parties; however, these transfers have been limited and sporadic. Due to the nature of these transactions, Swift has no verifiable information regarding prices at which SDIs have been transferred.
Holders
As of December 31, 1996, there were 266 Interest Holders holding SDIs in the Partnership.
Distributions
The Partnership generally makes distributions to Interest Holders on a quarterly basis, subject to the restrictions set forth in the Limited Partnership Agreement. In the fiscal years ended December 31, 1995 and 1996, the Partnership distributed a total of $289,300 and $198,300, respectively, to the holders of its SDIs. Cash distributions constitute net proceeds from sale of oil and gas production after payment of lease operating expenses and other partnership expenses. Some or all of such amounts or any proceeds from the sale of partnership properties could be deemed to constitute a return of investors' capital.
Oil and gas investments involve a high risk of loss, and no assurance can be given that any particular level of distributions to holders of SDIs can be achieved or maintained. Although it is anticipated that quarterly distributions will continue to be made through 1997, the Partnership's ability to make distributions could be diminished by any event adversely affecting the oil and gas properties in which the Partnership owns interests or the amount of revenues received by the Partnership therefrom.
The Partnership's Limited Partnership Agreement contains various provisions which might serve to delay, defer or prevent a change in control of the Partnership, such as the requirement of a vote of Limited Partners in order to sell all or substantially all of the Partnership's properties or the requirement of consent by the Managing General Partner to transfers of limited partnership interests and provisions prohibiting the transfer of Limited Partnership Units in any fiscal year in excess of a limit which has been established in order to comply with certain federal income tax regulations.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
Item 6.

Item 6. Selected Financial Data
The following selected financial data, prepared in accordance with generally accepted accounting principles for the years ended December 31, 1996, 1995 and the period from inception (April 20, 1994) through December 31, 1994, should be read in conjunction with the financial statements included in Item 8:
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
The Partnership has expended all of the Interest Holders' commitments available for property acquisitions and development by acquiring nonoperating interests in producing oil and gas properties. The partnership invests primarily in proved producing properties with nominal levels of future costs of development for proven but undeveloped reserves. Significant purchases of additional reserves or extensive drilling activity are not anticipated. Oil and gas reserves are depleting assets and therefore often experience significant production declines each year from the date of acquisition through the end of the life of the property. The primary source of liquidity to the Partnership comes almost entirely from the income generated from nonoperating interests in oil and gas produced from oil and gas properties. This source of liquidity and the related results of operations will decline in future periods as the oil and gas produced from these properties also declines.
Results of Operations
Income from nonoperating interests increased 44 percent in 1996 over 1995. Oil and gas sales increased 5 percent in 1996 vs 1995. Increases in both 1996 gas and oil prices were major contributors to the increased revenues. The Partnership experienced an increase in gas prices of 60 percent or $.95/MCF and an increase in oil prices of 28 percent or $4.30/BBL. Production volumes decreased 25 percent due to a 38 percent oil production decrease and a 16 percent gas production decline. The production declines partially offset the effect of increased oil and gas prices impacting partnership performance.
Associated amortization expense decreased 14 percent in 1996 when compared to 1995.
Revenues and expenses from continuing operations in 1995 were higher than 1994 because 1995 was the first full year of production for the oil and gas properties acquired by the Partnership.
The Partnership recorded an additional provision in amortization in 1995 and 1994 when the present value, discounted at ten percent, of estimated future net revenues from oil and gas properties, using the guidelines of the Securities and Exchange Commission, was below the fair market value originally paid for oil and gas properties, resulting in a full cost ceiling impairment.
During 1997, Partnership revenues and costs are expected to be shared between the Interest Holders and general partners in an 85:15 ratio. Based on current oil and gas prices, anticipated levels of oil and gas production and expected cash distributions during 1997, the Managing General Partner anticipates that the Partnership sharing ratio will continue to be 85:15.
Item 8.

Item 8. Financial Statements and Supplementary Data
See Part IV, Item 14(a) for index to financial statements.
Item 9.

Item 9. Disagreements on Accounting and Financial Disclosure
None.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
PART III
Item 10.

Item 10. Directors and Executive Officers of the Registrant
As a limited partnership, the Registrant has no directors or executive officers. The business and affairs of the Registrant are managed by Swift as Managing General Partner. Set forth below is certain information as of March 17, 1997, regarding the directors and executive officers of Swift.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
From time to time, Swift as Managing General Partner of the Partnership purchases Units in the Partnership from investors who offer the Units pursuant to their right of presentment, which purchases are made pursuant to terms set out in the Partnership's original Limited Partnership Agreement. Due to the frequency and large number of these transactions, Swift reports these transactions under Section 16 of the Securities Exchange Act of 1934 on an annual rather than a monthly basis. In some cases such annual reporting may constitute a late filing of the required Section 16 reports under the applicable Section 16 rules.
Item 11.

Item 11. Executive Compensation
As noted in Item 10, "Directors and Executive Officers of the Registrant," above, the Partnership has no executive officers. The executive officers of Swift and VJM are not compensated by the Partnership.
Certain fees and allowances contemplated by the Limited Partnership Agreement were paid by the Partnership to Swift and VJM. See Note (4) in Notes To Financial Statements (Related-Party Transactions) for further discussion.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
No single Interest Holder is known to the Partnership to be the beneficial owner of more than five percent of the Partnership's SDIs.
Swift and VJM are not aware of any arrangement, the operation of which may at a subsequent date result in a change in control of the Partnership.
Item 13.

Item 13. Certain Relationships and Related Transactions
As noted in Item 10, "Directors and Executive Officers of the Registrant," above, the Partnership has no executive officers or directors, and thus has not engaged in any transactions in which any such person had an interest. The Partnership is permitted to engage in certain transactions with Swift as Managing General Partner and VJM as Special General Partner, subject to extensive guidelines and restrictions are described in the "Conflicts of Interest" section of the Prospectus contained in the Registration Statement, which is incorporated herein by reference.
Summarized below are the principal transactions that have occurred between the Partnership, on one hand, and Swift, VJM and their affiliates, on the other.
Certain Transactions with General Partners
1. As described in Item 1, "Business," above, during 1994 the Partnership entered into an NP/OR Agreement with the Operating Partnership, which is also managed by Swift and VJM. Pursuant to such NP/OR Agreement, the Operating Partnership acquired the oil and gas properties described under Item 2 above and conveyed nonoperating interests therein to the Partnership.
2. Swift acts as operator for many of the wells in which the Partnership has nonoperating interests and has received compensation for such activities in accordance with standard industry operating agreements.
3. The Partnership paid to Swift and VJM certain fees as contemplated by the Limited Partnership Agreement. See Note (4) in Notes To Financial Statements (Related-Party Transactions) for further discussion.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
PART IV
a(2) FINANCIAL STATEMENT SCHEDULES
All schedules required by the SEC are either inapplicable or the required information is included in the Financial Statements, the Notes thereto, or in other information included elsewhere in this report.
a(3) EXHIBITS
3.1 Limited Partnership Agreement of Swift Energy Pension Partners 1994-A, Ltd., dated April 20, 1994. (Form 10-K for year ended December 31, 1994, Exhibit 3.1).
3.2 Certificate of Limited Partnership of Swift Energy Pension Partners 1994-A, Ltd., as filed April 20, 1994, with the Texas Secretary of State. (Form 10-K for year ended December 31, 1994, Exhibit 3.2).
10.1 Net Profits and Overriding Royalty Interest Agreement between Swift Energy Pension Partners 1994-A, Ltd. and Swift Energy Operating Partners 1994-A, Ltd. dated April 20, 1994. (Form 10-K for year ended December 31, 1994, Exhibit 10.1).
10.2 Purchase and Sale Agreement dated January 26, 1994 between Swift Energy Company ("Swift") and Edwin L. Cox, et al., Acquisition Interests ("Cox Exploration") covering certain net profits interests in properties in Starr, Webb and Bowie Counties, Texas. (Form 10-K for year ended December 31, 1994, Exhibit 10.2).
10.3 Letter Agreement dated December 31, 1994 between Swift Energy Company ("Swift") and Swift Energy Pension Partners 1994-A Ltd. covering certain net profits interests in properties acquired from Cox Exploration in Starr, Webb and Bowie Counties, Texas. (Form 10-K for year ended December 31, 1994, Exhibit 10.3).
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD.
10.4 Purchase and Sale Agreement dated December 14, 1993 between Swift Energy Company ("Swift") and The Louisiana Land and Exploration Company ("L L & E") covering certain net profits interests in properties in various counties in Mississippi and Alabama. (Form 10-K for year ended December 31, 1994, Exhibit 10.4).
10.5 Letter Agreement dated December 31, 1994 between Swift Energy Company ("Swift") and Swift Energy Pension Partners 1994-A Ltd. covering certain net profits interests in properties acquired from L L & E in various counties in Mississippi and Alabama. (Form 10-K for year ended December 31, 1994, Exhibit 10.5).
10.6 Purchase and Sale Agreement dated May 31, 1994 between Swift Energy Company ("Swift") and Parker and Parsley Development Company and P&P Producing, Inc. ("Parker and Parsley") covering certain net profits interests in properties in Mobile County, Alabama and Cameron Parish, Louisiana. (Form 10-K for year ended December 31, 1994, Exhibit 10.6).
10.7 Letter Agreement dated December 31, 1994 between Swift Energy Company ("Swift") and Swift Energy Pension Partners 1994-A Ltd. covering certain net profits interests in properties acquired from Parker and Parsley in Mobile County, Alabama and Cameron Parish, Louisiana. (Form 10-K for year ended December 31, 1994, Exhibit 10.7).
99.1 A copy of the following section of the Prospectus dated April 19, 1994, contained in Post-Effective Amendment No. 4 to Registration Statement No. 33-37983 on Form S-1 for Swift Energy Depositary Interests I, as filed on April 19, 1994, which have been incorporated herein by reference: "Proposed Activities" (pp 25 - 35) and "Conflicts of Interests" (pp 92 - 96). (Form 10-K for year ended December 31, 1994, Exhibit 99.1).
b(1) REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the quarter ended December 31, 1996.
Supplemental Information to be Furnished with Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act.
No annual report to security holders covering the Partnership's 1996 fiscal year, or proxy statement, form of proxy or other proxy soliciting material has been sent to Interest Holders of the Partnership.
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Swift Energy Pension Partners 1994-A, Ltd.:
We have audited the accompanying balance sheets of Swift Energy Pension Partners 1994-A, Ltd., (a Texas limited partnership) as of December 31, 1996 and 1995, and the related statements of operations, partners' capital and cash flows for the year ended December 31, 1996, 1995 and the period from inception (April 20, 1994) through December 31, 1994. These financial statements are the responsibility of the general partner'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 Swift Energy Pension Partners 1994-A, Ltd., as of December 31, 1996 and 1995, and the results of its operations and its cash flows for the year ended December 31, 1996, 1995 and the period from inception (April 20, 1994) through December 31, 1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Houston, Texas February 10, 1996
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. BALANCE SHEETS DECEMBER 31, 1996 AND 1995
See accompanying notes to financial statements.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND THE PERIOD FROM INCEPTION (APRIL 20, 1994) THROUGH DECEMBER 31, 1994
See accompanying notes to financial statements.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. STATEMENT OF PARTNERS' CAPITAL FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND THE PERIOD FROM INCEPTION (APRIL 20, 1994) THROUGH DECEMBER 31, 1994
See accompanying notes to financial statements.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND THE PERIOD FROM INCEPTION (APRIL 20, 1994) THROUGH DECEMBER 31, 1994
See accompanying notes to financial statements.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. NOTES TO FINANCIAL STATEMENTS
(1) Organization and Terms of Partnership Agreement -
Swift Energy Pension Partners 1994-A, Ltd., a Texas limited partnership (the Partnership), was formed on April 20, 1994, for the purpose of purchasing net profits interest, overriding royalty interests and royalty interests (collectively, "nonoperating interests") in producing oil and gas properties within the continental United States and Canada. Swift Energy Company ("Swift"), a Texas corporation, and VJM Corporation ("VJM"), a California corporation, serve as Managing General Partner and Special General Partner of the Partnership, respectively. The sole limited partner of the Partnership is Swift Depositary Company, which has assigned all of its beneficial (but not of record) rights and interests as limited partner to the investors in the Partnership ("Interest Holders"), in the form of Swift Depositary Interests ("SDIs").
The Managing General Partner has paid or will pay out of its own corporate funds (as a capital contribution to the Partnership) $382,180, which includes all selling commissions, offering expenses, printing, legal and accounting fees and other formation costs incurred in connection with the offering of SDIs and the formation of the Partnership, for which the Managing General Partner will receive an interest in continuing costs and revenues of the Partnership. The 266 interest holders made total capital contributions of $2,635,723.
Generally, all continuing costs (including general and administrative reimbursements and direct expenses) and revenues are allocated 85 percent to the Interest Holders and 15 percent to the general partners. After partnership payout, as defined in the Partnership Agreement, continuing costs and revenues will be shared 75 percent by the Interest Holders, and 25 percent by the general partners. Payout had not occurred as of December 31, 1996.
(2) Significant Accounting Policies -
Use of Estimates --
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates. Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
Nonoperating Interests in Oil and Gas Properties --
For financial reporting purposes, the Partnership follows the "full-cost" method of accounting for nonoperating interests in oil and gas property costs. Under this method of accounting, all costs incurred in the acquisition of nonoperating interests in oil and gas properties are capitalized. The unamortized cost of nonoperating interests in oil and gas properties is limited to the "ceiling limitation", (calculated separately for the partnership, limited partner, and general partners). The "ceiling limitation" is calculated on a quarterly basis and represents the estimated future net revenues from nonoperating interests in proved properties using current prices, discounted at ten percent. Proceeds from the sale or disposition of nonoperating interests in oil and gas properties are treated as a reduction of the cost of the nonoperating interests with no gains or losses recognized except in significant transactions.
The Partnership computes the provision for amortization of nonoperating interests in oil and gas properties on the units-of-production method. Under this method, the provision is calculated by multiplying the total unamortized cost of nonoperating interests in oil and gas properties by an overall rate determined by dividing the physical units of oil and gas produced during the period by the total estimated units of proved oil and gas reserves attributable to the Partnership's nonoperating interests at the beginning of the period.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The calculation of the "ceiling limitation" and the provision for amortization is based on estimates of proved reserves. There are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting the future rates of production, timing and plan of development. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of drilling, testing and production subsequent to the date of the estimate may justify revision of such estimate. Accordingly, reserve estimates are often different from the quantities of oil and gas that are ultimately recovered.
Statement of Cash Flows --
Highly liquid debt instruments with an initial maturity of three months or less are considered to be cash equivalents.
(3) Acquisition of Nonoperating Interests in Oil and Gas Property Costs -
Effective April 20, 1994, the Partnership entered into a Net Profits and Overriding Royalty Interests Agreement (NP/OR Agreement) with Swift Energy Operating Partners 1994-A, Ltd. (Operating Partnership), managed by Swift, for the purpose of acquiring interests in producing oil and gas properties. Under the terms of the NP/OR Agreement, the Partnership has been conveyed a nonoperating interest in the aggregate net profits (i.e., oil and gas sales net of related operating costs) of the properties acquired equal to its proportionate share of the property acquisition costs, as defined. Property acquisition costs are amounts actually paid by the Operating Partnership for the properties plus costs incurred by the Operating Partnership in acquiring the properties and costs related to screening and evaluation of properties not acquired. In 1996, 1995 and 1994, the Partnership acquired nonoperating interests in producing oil and gas properties for $63,382, $101,269 and $2,659,092, respectively, of which $126,656 in 1994 related to costs charged by Swift to the Operating Partnership for the evaluation and acquisition effort, including costs related to interests not acquired.
During 1995 and 1994, the Partnership's unamortized oil and gas property costs exceeded the quarterly calculations of the "ceiling limitation" resulting in an additional provision for amortization of $39,115 and $333,045, respectively. In computing the Partnership's third quarter 1994 "ceiling limitation", the Partnership utilized the product prices in effect at the date of the filing of the Partnership's report on Form 10-Q. Utilizing these subsequent prices, the write down recorded by the Partnership was $44,594 less than the amount that would have been recorded using product prices in effect at September 30, 1994. No such write downs were required in 1996.
In addition, the limited partners' share of unamortized oil and gas property costs exceeded their "ceiling limitation" in 1995 and 1994, resulting in a valuation allowance of $37,138 and $628,341, respectively. This amount is included in the income (loss) attributable to the limited partners shown in the statement of partners' capital together with a "combining adjustment" for the difference between the limited partners' valuation allowance and the Partnership's valuation allowance. The "combining adjustment" changes quarterly as the Partnership's total amortization provision is more or less than combined amortization provision attributable to general and limited partners.
(4) Related Party Transactions -
During 1996, 1995 and 1994, the Partnership paid Swift $39,536, $46,125 and $32,310, respectively, as a general and administrative overhead allowance.
During 1996, 1995 and 1994, the Partnership also paid Swift an incentive amount, as defined in the Partnership Agreement, for services rendered to the Partnership. Such amounts totaled $4,680 in 1996, $2,851 in 1995 and $39,536 in 1994 and are included in general and administrative expenses.
(5) Federal Income Taxes -
The Partnership is not a tax-paying entity. No provision is made in the accounts of the Partnership for federal or state income taxes, since such taxes are liabilities of the individual partners, and the amounts thereof depend upon their respective tax situations.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The tax returns and the amount of distributable Partnership income are subject to examination by the federal and state taxing authorities. If the Partnership's royalty income for federal income tax purposes is ultimately changed by the taxing authorities, the tax liability of the Interest Holders could be changed accordingly. Royalty income reported on the Partnership's federal return of income for the years ended December 31, 1996, 1995 and the period from inception (April 20, 1994) through December 31, 1994 was $315,757, $190,774 and $310,028, respectively. The difference between royalty income for federal income tax purposes reported by the Partnership and income or loss from nonoperating interests reported herein primarily results from the exclusion of amortization (as described below) from ordinary income reported in the Partnership's federal return of income.
For federal income tax purposes, amortization with respect to nonoperating interests in oil and gas is computed separately by the partners and not by the Partnership. Since the amount of amortization on nonoperating interests in oil and gas is not computed at the Partnership level, amortization is not included in the Partnership's income for federal income tax purposes but is charged directly to the partners' capital accounts to the extent of the cost of the nonoperating interests in oil and gas properties, and thus is treated as a separate item on the partners' Schedule K-1. Amortization for federal income tax purposes may vary from that computed for financial reporting purposes in cases where a ceiling adjustment is recorded, as such amount is not recognized for tax purposes.
(6) Vulnerability Due to Certain Concentrations -
The Partnership's revenues are primarily the result of sales of its oil and natural gas production. Market prices of oil and natural gas may fluctuate and adversely affect operating results.
The Partnership extends credit to various companies in the oil and gas industry which results in a concentration of credit risk. This concentration of credit risk may be affected by changes in economic or other conditions and may accordingly impact the Partnership's overall credit risk. However, the Managing General Partner believes that the risk is mitigated by the size, reputation, and nature of the companies to which the Partnership extends credit. In addition, the Partnership generally does not require collateral or other security to support customer receivables.
(7) Fair Value of Financial Instruments -
The Partnership's financial instruments consist of cash and cash equivalents and short-term receivables and payables. The carrying amounts approximate fair value due to the highly liquid nature of the short-term instruments.
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD
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.
SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. (Registrant)
By: SWIFT ENERGY COMPANY General Partner
Date: March 17, 1997 By: s/b A. Earl Swift -------------- ---------------------------------- A. Earl Swift President
Date: March 17, 1997 By: s/b John R. Alden -------------- ---------------------------------- John R. Alden Principal Financial Officer
Date: March 17, 1997 By: s/b Alton D. Heckaman, Jr. -------------- ---------------------------------- Alton D. Heckaman, Jr. Principal Accounting Officer
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.
SWIFT ENERGY PENSION PARTNERS 1994-A, LTD. (Registrant)
By: SWIFT ENERGY COMPANY General Partner
Date: March 17, 1997 By: s/b A. Earl Swift -------------- ---------------------------------- A. Earl Swift Director and Principal Executive Officer
Date: March 17, 1997 By: s/b Virgil N. Swift -------------- ---------------------------------- Virgil N. Swift Director and Executive Vice President - Business Development
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SWIFT ENERGY PENSION PARTNERS 1994-A, LTD
Date: March 17, 1997 By: s/b G. Robert Evans -------------- ---------------------------------- G. Robert Evans Director
Date: March 17, 1997 By: s/b Raymond O. Loen -------------- ---------------------------------- Raymond O. Loen Director
Date: March 17, 1997 By: s/b Henry C. Montgomery -------------- ---------------------------------- Henry C. Montgomery Director
Date: March 17, 1997 By: s/b Clyde W. Smith, Jr. -------------- ---------------------------------- Clyde W. Smith, Jr. Director
Date: March 17, 1997 By: s/b Harold J. Withrow -------------- ---------------------------------- Harold J. Withrow Director
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