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shareholders’ tax obligations on their distributive shares of
taxable income.
Belle Fourche stock has never been traded in public markets.
III. Eighty-Eight Oil
On brief, respondent adopted Mr. Kimball’s marketable
minority value for Eighty-Eight Oil of $25,174,683 as of
January 1, 1993; Mr. Lax’s marketable minority value was $40
million as of June 3, 1994.
During the period 1988 through 1993, Eighty-Eight Oil’s
revenues increased from $191.7 million in 1988 to $558.6 million
in 1992, then decreased to $466.7 million in 1993. Operating
margins varied over the analyzed period from 2 percent of
revenues in 1988 to .8 percent in 1993.
Eighty-Eight Oil generally was profitable from 1988 to 1993,
generating the highest ordinary income of $4.1 million in 1992
and the lowest of $623,000 in 1988; however, the company
sustained a $7 million loss in 1991. During the period, Eighty-
Eight Oil annually deducted, in arriving at ordinary income, an
average of $1.2 million in total guaranteed payments to partners.
For the 6 months ending June 30, 1994, Eighty-Eight Oil’s
revenues declined from $242 million (for 6 months ending June 30,
1993) to $161 million. However, Eighty-Eight Oil so managed its
expenses that ordinary income increased as compared with the same
6-month period in 1993.
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