<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-9109 Commission file number 0-9110
SANTA ANITA REALTY ENTERPRISES, INC. SANTA ANITA OPERATING COMPANY
------------------------------------ --------------------------------
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
Delaware Delaware
------------------------------------ --------------------------------
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
95-3520818 95-3419438
------------------------------------ --------------------------------
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
301 West Huntington Drive, Suite 405 285 West Huntington Drive
Arcadia, California 91007 Arcadia, California 91007
------------------------------------ --------------------------------
(Address of principal executive (Address of principal executive
offices including zip code) offices including zip code)
(818) 574-5550 (818) 574-7223
------------------------------------ --------------------------------
(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of each of the issuers' classes of common
stock, as of the close of business on August 3, 1995 were:
Santa Anita Realty Enterprises, Inc. 11,383,000
Santa Anita Operating Company 11,270,500
<PAGE>
SANTA ANITA REALTY ENTERPRISES, INC. AND
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I. FINANCIAL INFORMATION 3
THE SANTA ANITA COMPANIES
Combined Balance Sheets as of June 30, 1995 and
December 31, 1994 4
Combined Statements of Operations for the three months and
six months ended June 30, 1995 and 1994 5
Combined Statements of Cash Flows for the six months ended
June 30, 1995 and 1994 6
SANTA ANITA REALTY ENTERPRISES, INC.
Consolidated Balance Sheets as of June 30, 1995 and
December 31, 1994 7
Consolidated Statements of Operations for the three months
and six months ended June 30, 1995 and 1994 8
Consolidated Statements of Cash Flows for the six months
ended June 30, 1995 and 1994 9
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets as of June 30, 1995 and
December 31, 1994 10
Consolidated Statements of Operations for the three months
and six months ended June 30, 1995 and 1994 11
Consolidated Statements of Cash Flows for the six months
ended June 30, 1995 and 1994 12
NOTES TO FINANCIAL STATEMENTS 13
MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 15
PART II. OTHER INFORMATION 20
SIGNATURES 21
</TABLE>
2
<PAGE>
SANTA ANITA REALTY ENTERPRISES, INC. AND
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
FORM 10-Q
FOR THE SIX MONTHS ENDED JUNE 30, 1995
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets as of June 30, 1995 and December 31, 1994 of
the Santa Anita Companies (the "Companies"), Santa Anita Realty Enterprises,
Inc. ("Realty") and Santa Anita Operating Company and Subsidiaries ("Operating
Company"), the statements of operations for the three months and six months
ended June 30, 1995 and 1994, and the related statements of cash flows for the
six months ended June 30, 1995 and 1994, were prepared by management and, except
for the balance sheets as of December 31, 1994, are unaudited. In the opinion of
management, the accompanying financial statements include all adjustments deemed
necessary for a fair presentation.
The following financial statements should be read in conjunction with the
accompanying notes and the Joint Annual Report on Form 10-K of Realty and
Operating Company for the year ended December 31, 1994.
3
<PAGE>
THE SANTA ANITA COMPANIES
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Real estate assets
Santa Anita Racetrack, less
accumulated depreciation
of $20,017,000 and $19,431,000 $ 7,718,000 $ 8,304,000
Commercial properties, less
accumulated depreciation
of $34,658,000 and $32,247,000 116,134,000 116,780,000
Investments in unconsolidated joint
ventures 5,438,000 6,299,000
Real estate loans and advances
receivable 18,102,000 17,990,000
------------ ------------
147,392,000 149,373,000
Cash 3,502,000 12,674,000
Short-term investments, at cost
(approximates market) 14,118,000 5,600,000
Accounts receivable 6,267,000 4,656,000
Prepaid expenses and other assets 8,578,000 6,054,000
Investment in Pacific Gulf Properties
Inc. 12,390,000 12,825,000
Property, plant and equipment, less
accumulated depreciation of
$25,748,000 and $23,093,000 18,776,000 19,466,000
------------ ------------
$211,023,000 $210,648,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Real estate loans payable $101,829,000 $102,472,000
Bank loans payable 13,741,000 9,829,000
Accounts payable 6,110,000 13,179,000
Other liabilities 15,098,000 12,750,000
Dividends payable 2,277,000 2,251,000
Deferred revenues 920,000 2,427,000
Deferred income taxes 3,565,000 3,565,000
------------ ------------
143,540,000 146,473,000
Minority interest in consolidated joint
ventures (3,336,000) (3,268,000)
Shareholders' equity
Preferred stock, $.10 par value;
authorized 6,000,000
shares; none issued - -
Common stock, $.10 par value;
authorized 19,000,000
shares; issued and outstanding
11,270,500 and 11,143,853 shares 2,253,000 2,227,000
Additional paid-in capital 136,552.000 134,615,000
Unearned compensation expense (1,586,000) -
Retained earnings (deficit) (66,400,000) (69,399,000)
------------ ------------
70,819,000 67,443,000
------------ ------------
$211,023,000 $210,648,000
============ ============
</TABLE>
See accompanying notes.
4
<PAGE>
THE SANTA ANITA COMPANIES
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
-------------------------------- ---------------------------
1995 1994 1995 1994
---------------- ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Horse racing $15,346,000 $15,042,000 $50,552,000 $49,380,000
Rental property 4,953,000 5,526,000 10,135,000 13,456,000
Interest and other 727,000 628,000 1,452,000 1,087,000
----------- ----------- ----------- -----------
21,026,000 21,196,000 62,139,000 63,923,000
----------- ----------- ----------- -----------
Costs and expenses
Horse racing operating costs 10,782,000 10,964,000 33,032,000 33,627,000
Rental property operating expenses 1,762,000 1,530,000 3,408,000 4,648,000
Depreciation and amortization 1,917,000 2,043,000 5,628,000 5,592,000
General and administrative 2,126,000 2,316,000 5,585,000 5,849,000
Interest and other 2,513,000 1,951,000 5,029,000 4,997,000
Costs of equity offering 750,000 - 750,000 -
Losses from unconsolidated
joint ventures 461,000 444,000 1,191,000 895,000
Minority interest in earnings of
consolidated joint ventures 13,000 499,000 34,000 759,000
----------- ----------- ----------- -----------
20,324,000 19,747,000 54,657,000 56,367,000
----------- ----------- ----------- -----------
Net income $ 702,000 $ 1,449,000 $ 7,482,000 $ 7,556,000
=========== =========== =========== ===========
Weighted average number of common
shares outstanding 11,168,904 11,143,853 11,156,448 11,142,428
=========== =========== =========== ===========
Net income per common share $ .06 $ .13 $ .67 $ .68
=========== =========== =========== ===========
Dividends declared per common share $ .20 $ .20 $ .40 $ .54
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
5
<PAGE>
THE SANTA ANITA COMPANIES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------- -------------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,482,000 $ 7,556,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 5,628,000 5,592,000
Minority interest in
earnings of consolidated
joint ventures 34,000 759,000
Equity in losses of unconsolidated
joint ventures 1,191,000 895,000
Equity in earnings from investment in
Pacific Gulf Properties Inc. (177,000) -
Amortization of unearned compensation
expense 377,000 -
Net (increase) decrease in certain
other assets (3,567,000) 3,915,000
Net decrease in certain other
liabilities (5,897,000) (4,667,000)
----------- ------------
Net cash provided by operating
activities 5,071,000 14,050,000
Cash flows from investing activities: ----------- ------------
Proceeds from disposition of
multifamily and industrial
operations - 44,425,000
Payments received on loans and
advances receivable 109,000 131,000
Origination of loans and advances
receivable (221,000) (167,000)
Additions and improvements to real
estate assets (1,765,000) (10,490,000)
Additions to property, plant and
equipment (1,965,000) (654,000)
Investments in unconsolidated joint
ventures (1,290,000) (765,000)
Capital distributions from
unconsolidated joint ventures 960,000 435,000
----------- ------------
Net cash (used in) provided by
investing activities (4,172,000) 32,915,000
----------- ------------
Cash flows from financing activities:
Proceeds from real estate loans
payable - 21,077,000
Proceeds from bank loans payable 4,300,000 -
Repayment of real estate loans
payable (643,000) (206,000)
Repayment of bank loans payable (388,000) (44,779,000)
Net decrease in certain other
liabilities (275,000) (3,620,000)
Dividends paid (4,458,000) (7,536,000)
Distributions to minority interest
in consolidated joint ventures,
net (102,000) (850,000)
Issuance of stock from restricted
stock awards and stock options 13,000 61,000
----------- ------------
Net cash used in financing activities (1,553,000) (35,853,000)
----------- ------------
Net (decrease) increase in cash and
cash equivalents (654,000) 11,112,000
Cash and cash equivalents at beginning
of year 18,274,000 22,021,000
----------- ------------
Cash and cash equivalents at June 30, $17,620,000 $ 33,133,000
=========== ============
</TABLE>
See accompanying notes.
6
<PAGE>
SANTA ANITA REALTY ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
-------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Real estate assets
Santa Anita Racetrack, less
accumulated depreciation
of $20,017,000 and $19,431,000 $ 7,718,000 $ 8,304,000
Commercial properties, less
accumulated depreciation
of $36,339,000 and $33,842,000 120,921,000 121,653,000
Investments in unconsolidated joint
ventures 5,438,000 6,299,000
Real estate loans and advances
receivable 18,102,000 17,990,000
------------ ------------
152,179,000 154,246,000
Cash 3,302,000 5,431,000
Short-term investments, at cost
(approximates market) 4,098,000 -
Accounts receivable 2,455,000 2,274,000
Prepaid expenses and other assets 6,127,000 3,357,000
Investment in Pacific Gulf Properties
Inc. 12,390,000 12,825,000
Due from (to) Operating Company 2,051,000 (1,056,000)
------------ ------------
$182,602,000 $177,077,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Real estate loans payable $101,829,000 $102,472,000
Bank loans payable 11,600,000 7,300,000
Accounts payable 1,851,000 2,379,000
Other liabilities 2,192,000 2,159,000
Dividends payable 2,277,000 2,251,000
------------ ------------
119,749,000 116,561,000
Minority interest in consolidated joint
ventures (3,336,000) (3,268,000)
Shareholders' equity
Preferred stock, $.10 par value;
authorized 6,000,000 shares
none issued - -
Common stock, $.10 par value;
authorized 19,000,000 shares; issued
and outstanding 11,383,000 and
11,256,353 shares 1,138,000 1,125,000
Additional paid-in capital 118,881,000 117,084,000
Retained earnings (deficit) (53,830,000) (54,425,000)
------------ ------------
66,189,000 63,784,000
------------ ------------
$182,602,000 $177,077,000
============ ============
</TABLE>
See accompanying notes.
7
<PAGE>
SANTA ANITA REALTY ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- --------------------------
1995 1994 1995 1994
------------ ------------ ----------- ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Rent from Racetrack $ 2,374,000 $ 3,060,000 $ 8,852,000 $10,852,000
Shopping centers 3,946,000 3,558,000 7,889,000 6,969,000
Office buildings 1,007,000 1,057,000 2,025,000 2,130,000
Apartments and industrial - 911,000 - 4,068,000
Interest and other 511,000 416,000 1,096,000 786,000
----------- ----------- ----------- -----------
7,838,000 9,002,000 19,862,000 24,805,000
----------- ----------- ----------- -----------
Costs and expenses
Shopping centers 1,388,000 1,048,000 2,683,000 2,320,000
Office buildings 374,000 424,000 725,000 838,000
Apartments and industrial - 58,000 - 1,490,000
Depreciation and amortization 1,407,000 1,534,000 3,059,000 3,480,000
General and Administrative 737,000 766,000 1,496,000 1,790,000
Interest and other 2,426,000 1,839,000 4,851,000 4,779,000
Costs of equity offering 700,000 - 700,000 -
Losses from unconsolidated joint
ventures 461,000 444,000 1,191,000 895,000
Minority interest in earnings of
consolidated joint ventures 13,000 499,000 34,000 759,000
----------- ----------- ----------- -----------
7,506,000 6,612,000 14,739,000 16,351,000
----------- ----------- ----------- -----------
Net income $ 332,000 $ 2,390,000 $ 5,123,000 $ 8,454,000
=========== =========== =========== ===========
Weighted average number of common
shares outstanding 11,281,404 11,256,353 11,268,948 11,256,353
=========== =========== =========== ===========
Net income per common share $ .03 $ .21 $ .45 $ .75
=========== =========== =========== ===========
Dividends declared per common share $ .20 $ .20 $ .40 $ .54
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
8
<PAGE>
SANTA ANITA REALTY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------ -------------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,123,000 $ 8,454,000
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 3,059,000 3,480,000
Minority interest in earnings of
consolidated joint ventures 34,000 759,000
Equity in losses of unconsolidated
joint ventures 1,191,000 895,000
Equity in earnings from investment in
Pacific Gulf Properties Inc. (177,000) -
Net (increase) decrease in certain
other assets (2,383,000) 2,389,000
Net decrease in certain other
liabilities (151,000) (1,288,000)
----------- ------------
Net cash provided by operating
activities 6,696,000 14,689,000
----------- ------------
Cash flows from investing activities:
Proceeds from disposition of
multifamily and industrial
operations - 44,425,000
Payments received on loans and
advances receivable 109,000 131,000
Origination of loans and advances
receivable (221,000) (167,000)
Additions and improvements to real
estate assets (1,765,000) (10,490,000)
Investments in unconsolidated joint
ventures (1,290,000) (765,000)
Capital distributions from
unconsolidated joint ventures 960,000 435,000
----------- ------------
Net cash (used in) provided by
investing activities (2,207,000) 33,569,000
----------- ------------
Cash flows from financing activities:
Proceeds from real estate loans
payable - 21,077,000
Proceeds from bank loans payable 4,300,000 -
Repayment of real estate loans payable (643,000) (206,000)
Repayment of bank loans payable - (44,425,000)
Increase in due from Operating Company (1,310,000) (4,261,000)
Net decrease in certain other
liabilities (275,000) (3,620,000)
Dividends paid (4,503,000) (7,615,000)
Issuance of common stock from
restricted stock awards 13,000 -
Distributions to minority interest in
consolidated joint ventures, net (102,000) (850,000)
----------- ------------
Net cash used in financing activities (2,520,000) (39,900,000)
----------- ------------
Net increase in cash and cash
equivalents 1,969,000 8,358,000
Cash at beginning of year 5,431,000 7,633,000
----------- ------------
Cash and cash equivalents at June 30, $ 7,400,000 $ 15,991,000
=========== ============
</TABLE>
See accompanying notes.
9
<PAGE>
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash $ 200,000 $ 7,243,000
Short-term investments, at cost
(approximates market) 10,020,000 5,600,000
Accounts receivable 3,812,000 2,382,000
Prepaid expenses and other assets 797,000 1,043,000
------------ ------------
Total current assets 14,829,000 16,268,000
Investment in common stock of Realty 2,122,000 2,122,000
Property, plant and equipment, less
accumulated depreciation of $25,748,000
and $23,093,000 18,776,000 19,466,000
------------ ------------
$ 35,727,000 $ 37,856,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 4,259,000 $ 10,800,000
Other liabilities 12,906,000 10,591,000
Bank loans payable 830,000 794,000
Due to (from) Realty 2,051,000 (1,056,000)
------------ ------------
Total current liabilities 20,046,000 21,129,000
Bank loans payable 1,311,000 1,735,000
Deferred revenues 920,000 2,427,000
Deferred income taxes 3,565,000 3,565,000
------------ ------------
25,842,000 28,856,000
------------ ------------
Shareholders' equity
Preferred stock, $.10 par value;
authorized 6,000,000 shares; none
issued - -
Common stock, $.10 par value;
authorized 19,000,000 shares; issued
and outstanding 11,270,500 and
11,143,853 shares 1,127,000 1,114,000
Additional paid-in capital 20,736,000 20,596,000
Unearned compensation expense (1,586,000) -
Retained earnings (deficit) (10,392,000) (12,710,000)
------------ ------------
9,885,000 9,000,000
------------ ------------
$ 35,727,000 $ 37,856,000
============ ============
</TABLE>
See accompanying notes.
10
<PAGE>
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------------- ----------------------------
1995 1994 1995 1994
------------ ------------- ------------ -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues
Wagering commissions $ 9,371,000 $ 8,929,000 $34,446,000 $32,686,000
Admission related 5,975,000 6,113,000 16,106,000 16,694,000
Interest and other 239,000 252,000 401,000 380,000
----------- ----------- ----------- -----------
15,585,000 15,294,000 50,953,000 49,760,000
----------- ----------- ----------- -----------
Costs and expenses
Horse racing operating costs 10,782,000 10,964,000 33,032,000 33,627,000
Depreciation and amortization 553,000 552,000 2,655,000 2,198,000
General and administrative 1,389,000 1,550,000 4,089,000 4,059,000
Interest 87,000 112,000 178,000 218,000
Costs of equity offering 50,000 - 50,000 -
----------- ----------- ----------- -----------
12,861,000 13,178,000 40,004,000 40,102,000
----------- ----------- ----------- -----------
Income before rent expense 2,724,000 2,116,000 10,949,000 9,658,000
Rental expense to Realty 2,374,000 3,060,000 8,631,000 10,563,000
----------- ----------- ----------- -----------
Net income (loss) $ 350,000 $ (944,000) $ 2,318,000 $ (905,000)
=========== =========== =========== ===========
Weighted average number of common 11,168,904 11,143,853 11,156,448 11,142,428
shares outstanding =========== =========== =========== ===========
Net income (loss) per common share $ .03 $ (.08) $ .21 $ (.08)
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
11
<PAGE>
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------- -------------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 2,318,000 $ (905,000)
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and amortization 2,655,000 2,198,000
Amortization of unearned
compensation expense 377,000 -
Net (increase) decrease in certain
other assets (1,184,000) 1,526,000
Net decrease in certain other
liabilities (5,746,000) (3,379,000)
----------- -----------
Net cash used in operating activities (1,580,000) (560,000)
----------- -----------
Cash flows from investing activities:
Additions to property, plant and
equipment (1,965,000) (654,000)
Decrease in investment in common
stock of Realty - 57,000
----------- -----------
Net cash used in investing activities (1,965,000) (597,000)
----------- -----------
Cash flows from financing activities:
Repayment of bank loans payable (388,000) (354,000)
Increase in due to Realty 1,310,000 4,261,000
Issuance of stock from stock options - 4,000
----------- -----------
Net cash provided by financing
activities 922,000 3,911,000
----------- -----------
Net (decrease) increase in cash and
cash equivalents (2,623,000) 2,754,000
Cash and cash equivalents at beginning
of year 12,843,000 14,388,000
----------- -----------
Cash and cash equivalents at June 30, $10,220,000 $17,142,000
=========== ===========
</TABLE>
See accompanying notes.
12
<PAGE>
SANTA ANITA REALTY ENTERPRISES, INC. AND
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - INTERIM PERIOD ACCOUNTING POLICY
Operating Company follows an accounting practice whereby the revenues
associated with thoroughbred horse racing at Santa Anita Racetrack are reported
as they are earned. Costs and expenses associated with thoroughbred horse racing
revenues are charged against income in those interim periods in which the
thoroughbred horse racing revenues are recognized. Other costs and expenses are
recognized as they actually occur throughout the year. Certain prior year
amounts have been reclassified to conform to current year presentation.
NOTE 2 - INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
Realty's investments in unconsolidated joint ventures include
investments in the following commercial real estate ventures at June 30, 1995:
<TABLE>
<CAPTION>
NAME OWNERSHIP PROJECT
------------------- ---------- -------------
<S> <C> <C>
Joppa Associates 33-1/3% Retail
H-T Associates 50% Regional Mall
</TABLE>
Unaudited combined condensed financial statement information for
unconsolidated joint ventures as of June 30, 1995 and December 31, 1994, and for
the six months ended June 30, 1995 and 1994, is as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
-------------- --------------
<S> <C> <C>
Real estate assets $203,745,000 $207,775,000
============ ============
Liabilities
Advances from Realty $ 4,576,000 $ 4,355,000
Secured real estate loans 181,136,000 181,136,000
Other 8,581,000 9,915,000
------------ ------------
$194,293,000 $195,406,000
============ ============
Partners' equity
Realty $ 5,438,000 $ 6,299,000
Others 4,014,000 6,070,000
------------ ------------
$ 9,452,000 $ 12,369,000
============ ============
<CAPTION>
SIX MONTHS ENDED JUNE 30,
1995 1994
-------------- --------------
<S> <C> <C>
Revenues $ 10,680,000 $ 10,557,000
============ ============
Net loss
Realty $ (1,191,000) $ (895,000)
Others (2,538,000) (644,000)
------------ ------------
$ (3,729,000) $ (1,539,000)
============ ============
</TABLE>
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 - INVESTMENT IN PACIFIC GULF PROPERTIES INC.
In November 1993, Realty entered into a Purchase and Sale Agreement to sell
its multifamily and industrial operations to Pacific Gulf Properties Inc.
("Pacific"), in conjunction with Pacific's public offering of common stock and
debentures.
In February 1994, Realty completed the first part of this transaction by
selling to Pacific ten multifamily properties, containing 2,654 apartment units,
located in Southern California, the Pacific Northwest and Texas and three
industrial properties, containing an aggregate of 185,000 leaseable square feet
of industrial space, located in the State of Washington (the "Transferred
Properties"). Realty's corporate headquarters building and related assets were
also acquired by Pacific.
In consideration of the sale of the Transferred Properties, Realty received
$44,425,00 in cash and 150,000 shares of the common stock of Pacific. In
addition, Realty was relieved of $44,290,000 of mortgage debt on the Transferred
Properties.
In October 1994, Realty completed the second part of the transaction, the sale
of its interest in Baldwin Industrial Park to Pacific and Pacific delivered to
Realty an additional 634,419 shares of Pacific common stock as consideration for
the second part of the transaction and the corporate headquarters and other net
assets. As a result of the sale, Baldwin Industrial Park ceased to be a
consolidated joint venture which resulted in a reduction in mortgage debt of
$9,415,000.
The above transactions resulted in a loss of $10,974,000, which was reflected
in the Realty and Combined Realty and Operating Company statements of operations
for the year ended December 31, 1993.
As of June 30, 1995, Realty owned 16.3% of Pacific's common stock and
accounted for its investment by the equity method of accounting. The closing
price of Pacific's common stock on the American Stock Exchange, on June 30, 1995
was $14.875 per share.
Financial information relating to Pacific, which is a separate public company,
is available from the Securities and Exchange Commission (Commission file number
1-12546).
NOTE 4 - SUBSEQUENT EVENT
On August 5, 1995, the management of Bell Jackpot Casino, which was not
affiliated with Realty, closed the Bell Jackpot Casino. As a result of this
action, Realty will write-off, in the 1995 third quarter, the $2.0 million it
paid for an option to acquire a 50% interest in the operation of the casino.
14
<PAGE>
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
THE SANTA ANITA COMPANIES
The Companies' results of operations for the three months and six months ended
June 30, 1995 reflect several non-recurring charges which make comparison of the
results of operations in these periods difficult. Management believes,
therefore, that net income before non-recurring items provides a more meaningful
measure of the results of operations of the Companies during these periods. Net
income before such non-recurring items reconciles to net income as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------------- --------------------------
1995 1994 1995 1994
------------- ------------ ------------ -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net income before non-recurring
items $1,452,000 $1,449,000 $8,664,000 $7,556,000
Non-recurring items:
Costs of equity offering (750,000) (750,000)
Write-down of turf course (432,000)
---------- ---------- ---------- ----------
Net income as reported $ 702,000 $1,449,000 $7,482,000 $7,556,000
========== ========== ========== ==========
Net income per common share
Before non-recurring items $ .13 $ .13 $ .78 $ .68
========== ========== ========== ==========
As reported $ .06 $ .13 $ .67 $ .68
========== ========== ========== ==========
</TABLE>
SANTA ANITA REALTY ENTERPRISES, INC.
Realty is principally engaged in investing and holding real property.
The following narrative discusses Realty's results of operations for the
second quarter and the six months ended June 30, 1995 and 1994, together with
liquidity and capital resources as of June 30, 1995.
RESULTS OF OPERATIONS - SECOND QUARTER 1995 COMPARED WITH SECOND QUARTER 1994
Realty's revenues are derived principally from the rental of real property.
Total revenues for the three months ended June 30, 1995 were $7,838,000 compared
with $9,002,000 for the three months ended June 30, 1994, a decrease of 12.9%.
The lower 1995 revenues were due primarily to Realty selling its multifamily and
industrial operations to Pacific Gulf Properties Inc. ("Pacific"), formerly a
wholly-owned subsidiary, in 1994 and to a decrease in racetrack rental
revenues.
The single most significant source of rental revenue is the lease of Santa
Anita Racetrack. Racetrack rental revenues for 1995 were $2,374,000, a decrease
of 22.4% from revenues of $3,060,000 in 1994. The decrease in rental revenues
resulted primarily from new lease terms with LATC. The lease with LATC for the
Santa Anita Racetrack, which expired in December 1994, was amended and extended
for an additional five years. Under the new lease terms, Realty receives 1.5%
of on-track wagering on live races at Santa Anita Racetrack and 26.5% of
wagering commissions from satellite wagering on races originating at Santa Anita
Racetrack and on races originating from certain other racetracks. Under the old
lease, Realty received the same 1.5% of on-track wagering on live races at Santa
Anita Racetrack and 40% of wagering commissions from satellite wagering only on
races originating at Santa Anita Racetrack.
15
<PAGE>
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (CONTINUED)
SANTA ANITA REALTY ENTERPRISES, INC. (Continued)
RESULTS OF OPERATIONS - SECOND QUARTER 1995 COMPARED WITH SECOND QUARTER 1994
(Continued)
Rental revenues from other real estate investments for the 1995 second quarter
were $4,953,000, a decrease of 10.4% from revenues of $5,526,000 in the 1994
second quarter. The decrease in 1995 was due to the 1994 sale of Realty's
multifamily and industrial operations, partially offset by a 7.3% increase in
rental revenues from other properties.
Costs and expenses for 1995, excluding the costs of an equity offering which
was withdrawn, were $6,806,000, an increase of 2.9% over costs and expenses of
$6,612,000 in 1994. The increase resulted primarily from an increase in
interest expense partially offset by a decrease in minority interest in earnings
of consolidated joint ventures. The increase in interest expense was due to
funding the expansion of Fashion Park Mall.
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1995 COMPARED WITH SIX
MONTHS ENDED JUNE 30, 1994
Total revenues for the six months ended June 30, 1995 were $19,862,000,
compared with $24,805,000 for the six months ended June 30, 1994, a decrease of
19.9%. The lower 1995 revenues were due primarily to Realty selling its
multifamily and industrial operations to Pacific Gulf Properties Inc., formerly
a wholly-owned subsidiary, in 1994 and to a decrease in racetrack rental
revenues.
Racetrack rental revenues for 1995 were $8,852,000, a decrease of 18.4% from
revenues of $10,852,000 in 1994. The decrease in rental revenues resulted
primarily from new lease terms with LATC and from fewer racing days in 1995,
partially offset by an increase in average daily wagering.
Rental revenues from other real estate investments for the 1995 six months
were $9,914,000 a decrease of 24.7% from revenues of $13,167,000 in the 1994
period. The decrease in 1995 was due to the 1994 sale of Realty's multifamily
and industrial operations, partially offset by a 9.0% increase in rental
revenues from other properties.
Costs and expenses for 1995, excluding the costs of an equity offering which
was withdrawn, were $14,039,000, a decrease of 14.1% from costs and expenses
$16,351,000 in 1994. The decrease resulted primarily from the sale of Realty's
multifamily and industrial operations and a decrease in minority interest in
earnings of consolidated joint ventures.
LIQUIDITY AND CAPITAL RESOURCES
Realty has funds available from a combination of short- and long-term sources.
Short-term sources included cash and short-term investments of $7,400,000 at
June 30, 1995.
At June 30, 1995, Realty's investment in Pacific common stock totaled 784,419
shares, was carried at $12,390,000 and had a current annual dividend rate of
$1.56 per share.
In November 1994, Realty entered into a new $30,000,000 one-year credit
facility with a commercial bank. At June 30, 1995, Realty had borrowed
$11,600,000 under this facility. Borrowings are due one year from the date of
funding but no later than November 30, 1995 and will bear interest, at Realty's
option, at the prime rate, at LIBOR plus 1%, or at the six-month certificate of
deposit rate plus 1%. Realty has held preliminary discussions with the
commercial bank and expects to extend the credit facility for an additional
year.
16
<PAGE>
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
Operating Company is engaged in thoroughbred horse racing through its wholly-
owned subsidiary, Los Angeles Turf Club, Incorporated ("LATC"), which leases the
Santa Anita Racetrack ("Santa Anita") from Realty.
The following narrative discusses Operating Company's results of operations
for the second quarter and six months ended June 30, 1995 and 1994 together with
liquidity and capital resources as of June 30, 1995.
RESULTS OF OPERATIONS - SECOND QUARTER 1995 COMPARED WITH SECOND QUARTER 1994
Horse racing revenues increased by 2.0% growing from $15,042,000 in the second
quarter of 1994 to $15,346,000 in the second quarter of 1995 due to an increase
in total wagering, partially offset by revenue declines from fewer race days and
lower on-track attendance. Total wagering from all sources during the second
quarter of 1995 increased 4.7% and average daily wagering increased 8.0%
Total wagering and average daily wagering from live racing events during the
second quarter of 1995 increased 5.8%. These increases were attributable to
increased wagering at Southern California satellite locations (up .6%), at
Northern California locations (up 130.1%) and at out-of-state locations (up
5.3%). However, on-track wagering decreased 6.1% and total on-track attendance
at live racing events decreased 8.4%. Management believes that these declines
resulted from the general trend toward satellite wagering. For the three months
ended June 30, live thoroughbred horse racing at Santa Anita Racetrack totaled
19 days in both 1995 and 1994
Also, in the second quarter ended June 30, Santa Anita Racetrack operated 46
days in 1995 and 48 days in 1994 as a satellite wagering facility for Hollywood
Park. Total and average daily attendance as a satellite wagering facility were
down 5.2% and 1.1%, in the second quarter of 1995 compared with the year ago
period. Total and average daily wagering were up 1.3% and 5.7%, for the second
quarter of 1995 compared with the year ago period.
Horse racing operating costs were $10,782,000 (or 70.3% of horse racing
revenues) in the second quarter of 1995 versus $10,964,000 (or 72.9% of horse
racing revenues) in the comparable period in 1994. The decrease in horse racing
operating costs, both on an absolute dollar basis and as a percentage of horse
racing revenues, resulted from fewer race days as a satellite for Hollywood Park
in 1995.
Depreciation expense in the second quarter of 1995 was $553,000 up .2% from
$552,000 in 1994. General and administrative expenses were $1,389,000 in the
second quarter of 1995, down 10.4% from $1,550,000 in the comparable year ago
period. Interest expense decreased to $87,000 in the second quarter of 1995
from $112,000 in 1994.
Rental expense to Realty was $2,374,000 for the second quarter of 1995
compared with $3,060,000 reported in 1994. The decrease in rental expense of
22.4% reflects the new lease terms with Realty. Under the new lease terms, LATC
pays to Realty 1.5% of the on-track wagering on live races at Santa Anita
Racetrack and 26.5% of its wagering commissions from all satellite wagering.
The old lease required LATC to pay Realty the same 1.5% of the on-track wagering
on live races at Santa Anita Racetrack but required 40% its wagering commissions
from satellite wagering during the live race meets.
Due to the revenue and expense items previously discussed, Operating Company
reported net income of $350,000 or $.03 per share for the three months ended
June 30, 1995, compared with a net loss of $944,000 or $.08 per share for the
comparable period in 1994.
17
<PAGE>
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES (Continued)
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1995 COMPARED WITH SIX
MONTHS ENDED JUNE 30, 1994
Horse racing revenues increased by 2.4%, growing from $49,380,000 in the first
half of 1994 to $50,552,000 in the first half of 1995 due to an increase in
total wagering, partially offset by revenue declines from fewer race days and
lower on-track attendance. Total wagering from all sources in the first six
months of 1995 increased 7.8% and average daily wagering increased 11.2%.
Total wagering and average daily wagering from live racing events during the
first half of 1995 increased 8.3% and 10.9% in the first six months of 1995
compared with the same period last year. These increases were attributable to
increased wagering at Southern California satellite locations (up 5.9%), at
Northern California locations (up 153.0%) and at out-of-state locations (up
8.3%). However, on-track wagering decreased 9.4%, total on-track attendance at
live racing events decreased 9.1% and average daily attendance decreased 6.9%
during the same period. Management believes that these declines resulted from
inclement weather during much of the first quarter, which caused the
cancellation of three full race days in January (although the races lost in two
of the canceled race days were "made up" by running an additional race on
certain other race days) as well as the general trend toward satellite wagering.
Live thoroughbred horse racing at Santa Anita Racetrack totaled 83 days in the
first six months of 1995 compared with 85 days in the first six months of 1994.
Also, for the six months ended June 30, Santa Anita Racetrack operated 46 days
in 1995 and 48 days in 1994 as a satellite wagering facility for Hollywood Park.
Total and average daily attendance as a satellite wagering facility were down
5.2% and 1.1% in the first half of 1995 compared with the year ago period.
Total and average daily wagering were up 1.3% and 5.7%, in the first half of
1995 compared with the year ago period.
Horse racing operating costs were $33,032,000 (or 65,3% of horse racing
revenues) in the first half of 1995 versus $33,627,000 (or 68.1% of horse racing
revenues) in the comparable period in 1994. The decrease in horse racing
operating costs, both on an absolute dollar basis and as a percentage of horse
racing revenues, resulted from fewer race days as a satellite for Hollywood Park
in 1995.
Depreciation expense in the first six months of 1995 was $2,655,000 in 1995,
up 20.8% from $2,198,000 in 1994. The $457,000 increase in depreciation expense
was due primarily to the accelerated depreciation charge on the Santa Anita
Racetrack turf course, which was replaced in the second quarter of 1995.
General and administrative expenses were $4,089,000 in the first six months of
1995, up .7% from $4,059,000 in the comparable year ago period. Interest
expense decreased to $178,000 in the first six months of 1995 from $218,000 in
1994.
Rental expense to Realty was $8,631,000 for the first six months of 1995
compared with $10,563,000 reported in 1994. The decrease in rental expense of
18.3% reflects the new lease terms with Realty. Under the new lease terms, LATC
pays to Realty 1.5% of the on-track wagering on live races at Santa Anita
Racetrack and 26.5% of its wagering commissions from all satellite wagering.
The old lease required LATC to pay Realty the same 1.5% of the on-track wagering
on live races at Santa Anita Racetrack but required 40% of its wagering
commissions from satellite wagering during the live race meets.
Due to the revenue and expense items previously discussed, Operating Company
reported net income of $2,318,000 or $.21 per share for the six months ended
June 30, 1995, compared with a net loss of $905,000 or $.08 per share for the
comparable period in 1994.
18
<PAGE>
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES (Continued)
SEASONALITY
Operating Company's operations are subject to seasonal fluctuations. Operating
Company recognizes the majority of its revenues in the first quarter due to live
racing activity at Santa Anita. Therefore, the results of operations for
interim periods are not necessarily indicative of the results that may be
expected for the full year.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, Operating Company's sources of liquidity included cash and
short-term investments of $10,220,000 and an unsecured line of credit with
Realty of $10,000,000, of which $2,141,000 was utilized in connection with a
guarantee of a capital lease. Operating Company's ability to utilize Realty's
line of credit is dependent upon Realty's liquidity and capital resources. (See
Item 2. "Managements' Discussion and Analysis of Financial Condition and Results
of Operations - Santa Anita Realty Enterprises, Inc. - Liquidity and Capital
Resources"). For the three and six months ended June 30, 1995, short-term
investments earned interest income of $239,000 and $401,000.
The cash balances and related interest income from short-term investments
reflect seasonal variations associated with the Santa Anita meet. During the
meet, large cash balances and short-term investments are maintained by LATC,
including amounts to be disbursed for payment of license fees payable to the
state, purses payable to horse owners and uncashed winning pari-mutuel tickets
payable to the public.
19
<PAGE>
SANTA ANITA REALTY ENTERPRISES, INC. AND
SANTA ANITA OPERATING COMPANY AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDING JUNE 30, 1995
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 2, 1995, the annual meetings of shareholders of Santa Anita Realty
Enterprises, Inc. and Santa Anita Operating Company were held. At the Realty
meeting, the shareholders elected the three nominees for director, Thomas P.
Mullaney, William D. Schulte and Sherwood C. Chillingworth and approved Realty's
1995 Share Award Plan. At the Operating Company meeting, the shareholders
elected the two nominees for director, Thomas P. Mullaney and William D. Schulte
and approved Operating Company's 1995 Share Award Plan. The votes were cast as
follows:
<TABLE>
<CAPTION>
Broker
REALTY For Against Nonvote Abstention
------------------------------ --------- --------- --------- ----------
<S> <C> <C> <C> <C>
Share Award Plan 4,878,802 1,915,601 2,291,093 226,237
OPERATING COMPANY
------------------------------
Share Award Plan 4,753,658 2,048,964 2,291,093 258,013
REALTY DIRECTORS For Against
------------------------------ --------- ---------
Thomas P. Mullaney 8,414,719 937,014
William D. Schulte 8,444,342 907,391
Sherwood C. Chillingworth 8,446,085 905,648
OPERATING COMPANY DIRECTORS
------------------------------
Thomas P. Mullaney 8,402,098 949,635
William D. Schulte 8,437,272 914,461
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
Exhibit
Number
-------
27(a) Financial Data Schedule for Santa Anita Realty
Enterprises, Inc.
27(b) Financial Data Schedule for Santa Anita Operating Company
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the
quarter ended June 30, 1995.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Realty and Operating Company have duly caused this report
to be signed on their behalf by the undersigned, thereunto duly authorized.
SANTA ANITA REALTY ENTERPRISES, INC. SANTA ANITA OPERATING COMPANY
By: SHERWOOD C. CHILLINGWORTH By: STEPHEN F. KELLER
------------------------------- ---------------------------------
Sherwood C. Chillingworth Stephen F. Keller
Vice Chairman of the Board Chairman of the Board, President
and Chief Executive Officer and Chief Executive Officer
(Principal Executive Officer) (Principal Executive Officer)
Date: August 9, 1995 Date: August 9, 1995
By: BRIAN L. FLEMING By: RICHARD D. BRUMBAUGH
------------------------------- ---------------------------------
Brian L. Fleming Richard D. Brumbaugh
Executive Vice President and Vice President-Finance and
Chief Financial Officer Chief Financial Officer
(Principal Financial and (Principal Financial and
Accounting Officer) Accounting Officer)
Date: August 9, 1995 Date: August 9, 1995
21
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SANTA ANITA
REALTY ENTERPRISES, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<NAME> SANTA ANITA REALTY ENTERPRISES, INC.
<CIK> 0000314661
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,302,000
<SECURITIES> 4,098,000
<RECEIVABLES> 2,149,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 184,995,000
<DEPRECIATION> (56,356,000)
<TOTAL-ASSETS> 182,602,000
<CURRENT-LIABILITIES> 0
<BONDS> 101,829,000
<COMMON> 0
0
1,138,000
<OTHER-SE> 65,051,000
<TOTAL-LIABILITY-AND-EQUITY> 182,602,000
<SALES> 0
<TOTAL-REVENUES> 19,862,000
<CGS> 0
<TOTAL-COSTS> 3,408,000
<OTHER-EXPENSES> 6,480,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,851,000
<INCOME-PRETAX> 5,123,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,123,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,123,000
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SANTA ANITA
OPERATING COMPANY AND IS QUALIFIED IN ITS ENTRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<NAME> SANTA ANITA OPERATING COMPANY
<CIK> 0000313749
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 200,000
<SECURITIES> 10,020,000
<RECEIVABLES> 3,812,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14,829,000
<PP&E> 44,524,000
<DEPRECIATION> (25,748,000)
<TOTAL-ASSETS> 35,727,000
<CURRENT-LIABILITIES> 20,046,000
<BONDS> 2,141,000
<COMMON> 0
0
1,127,000
<OTHER-SE> 8,758,000
<TOTAL-LIABILITY-AND-EQUITY> 35,727,000
<SALES> 0
<TOTAL-REVENUES> 50,953,000
<CGS> 0
<TOTAL-COSTS> 41,663,000
<OTHER-EXPENSES> 6,794,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 178,000
<INCOME-PRETAX> 2,318,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,318,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,318,000
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0
</TABLE>
