<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended............June 30, 1998......
OR
[ ] 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 ....... 0-11350
INTERNATIONAL LEASE FINANCE CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA 22-3059110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1999 AVENUE OF THE STARS LOS ANGELES, CALIFORNIA 90067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(310) 788-1999
Indicate by check mark whether the registrant (1) has 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
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes ___X___ No____________
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 30, 1998
----- ----------------------------
COMMON STOCK, NO PAR VALUE 35,818,122
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C>
Part I. Financial Information: Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
June 30, 1998 and December 31, 1997 . . . . . . . . . . . . .3
Condensed Consolidated Statements of Income
Three Months Ended June 30, 1998 and 1997. . . . . . . . . .4
Condensed Consolidated Statements of Income
Six Months Ended June 30, 1998 and 1997 . . . . . . . . . . .5
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 1998 and 1997 . . . . . . . . . . .6
Notes to Condensed Consolidated Financial Statements. . . . . . . .8
Item 2. Management's Discussion and Analysis of the
Financial Condition and Results of Operations . . . . . . .9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 12
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Index to Exhibits . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<S> <C> <C>
June 30, December 31,
1998 1997
------------ ------------
(Unaudited)
ASSETS
Cash, including interest bearing accounts
of $41,702 (1998) and $35,113 (1997) $ 65,116 $ 63,754
Notes receivable 461,362 467,688
Net investment in finance and sales-
type leases 94,263 98,026
Flight equipment under operating leases 16,429,084 14,425,091
Less accumulated depreciation 1,818,208 1,632,560
---------- ----------
14,610,876 12,792,531
---------- ----------
Deposits on flight equipment purchases 842,071 1,017,628
Accrued interest, other receivables
and other assets 74,621 60,416
Investments 18,739 18,731
Deferred debt issue costs-less
accumulated amortization of $56,890
(1998) and $52,444 (1997) 32,579 33,180
---------- ----------
$16,199,627 $14,551,954
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued interest and other payables $ 248,902 $ 214,106
Current income taxes 3,498 64,891
Debt financing, net of deferred debt
discount of $29,416 (1998) and $8,424
(1997) 10,501,241 9,051,042
Capital lease obligations 857,044 903,320
Security & other deposits on flight
equipment 788,904 744,800
Rentals received in advance 130,059 129,586
Deferred income taxes 998,683 927,021
SHAREHOLDERS' EQUITY
Preferred stock--no par value; 20,000,000
authorized shares
Market Auction Preferred Stock, $100,000 per
share liquidation value; Series A,B,C,D,E
F,G and H (1998 and 1997) each having 500
shares issued and outstanding 400,000 400,000
Common stock--no par value; 100,000,000
authorized shares, 35,818,122 (1998
and 1997) issued and outstanding 3,582 3,582
Additional paid-in capital 579,955 579,955
Retained earnings 1,687,759 1,533,651
---------- ----------
2,671,296 2,517,188
---------- ----------
$16,199,627 $14,551,954
========== ==========
</TABLE>
SEE NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C>
1998 1997
-------- --------
(Unaudited)
REVENUES:
Rentals of flight equipment $452,884 $436,342
Flight equipment marketing 27,308 32,414
Interest and other 28,446 11,074
------- -------
508,638 479,830
------- -------
EXPENSES:
Interest 161,418 166,650
Depreciation 137,589 138,115
Rent expense 34,659 22,016
Provision for overhaul 25,123 25,177
Selling, general & administrative 10,704 9,771
------- -------
369,493 361,729
------- -------
INCOME BEFORE INCOME TAXES 139,145 118,101
Provision for income taxes 49,505 42,196
------- -------
NET INCOME $ 89,640 $ 75,905
======= =======
</TABLE>
SEE NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C>
1998 1997
-------- --------
(Unaudited)
REVENUES:
Rentals of flight equipment $884,336 $834,800
Flight equipment marketing 64,805 38,170
Interest and other 42,551 22,684
------- -------
991,692 895,654
------- -------
EXPENSES:
Interest 312,051 314,086
Depreciation 267,647 266,151
Rent expense 69,468 43,386
Provision for overhaul 50,478 47,033
Selling, general & administrative 20,984 20,926
------- -------
720,628 691,582
------- -------
INCOME BEFORE INCOME TAXES 271,064 204,072
Provision for income taxes 96,263 72,739
------- -------
NET INCOME $174,801 $131,333
======= =======
</TABLE>
SEE NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C>
1998 1997
----------- -----------
(Unaudited)
OPERATING ACTIVITIES:
Net Income $ 174,801 $ 131,333
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation of flight equipment 267,647 266,151
Deferred income taxes 71,662 88,896
Amortization of deferred debt
issue costs 5,201 4,354
Gain on sale of flight equipment
included in amount financed (1,939) (5,428)
Increase in notes receivable (4,788) (712)
Equity in net income of affiliates (8) (617)
Change in unamortized debt discount (20,992) (1,531)
Changes in operating assets and liabilities:
(Increase) decrease in accrued interest,
other receivables and other assets (14,205) (9,468)
Decrease in current income taxes payable (61,393) (21,958)
Increase in accrued interest and
other payables 34,796 75
Increase in rentals received in advance 473 67,322
------------ ------------
Net cash provided by operating activities 451,255 518,417
------------ ------------
INVESTING ACTIVITIES:
Acquisition of flight equipment
for operating leases (2,435,094) (2,534,866)
Decrease in deposits and
progress payments 175,557 140,361
Proceeds from disposal of flight
equipment-net of gain 335,718 242,637
Advances on notes receivable (7,000)
Collections on notes receivable 33,438 38,109
Collections on finance and sales-type leases 3,763 3,865
------------ ------------
Net cash used in investing activities (1,893,619) (2,109,894)
------------ ------------
FINANCING ACTIVITIES:
Proceeds from debt financing 3,808,469 4,170,657
Payments in reduction of debt financing (2,383,554) (2,601,874)
Debt issue costs (4,600) (4,789)
Increase in customer deposits 44,104 54,553
Payment of common and preferred dividends (20,693) (16,697)
------------ ------------
Net cash provided by financing activities 1,443,726 1,601,850
------------ ------------
(Decrease) increase in cash 1,362 10,373
Cash at beginning of period 63,754 36,558
------------ -----------
Cash at end of period $ 65,116 $ 46,931
============ ===========
</TABLE>
<PAGE>
<PAGE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<TABLE>
<S> <C> <C>
1998 1997
----------- -----------
(Dollars in thousands)
(Unaudited)
Cash paid during the period for:
Interest (net of amount capitalized
$28,418 (1998) and 23,455 (1997)) $ 301,006 $ 296,868
Income taxes 85,994 5,801
</TABLE>
1998:
Notes in the amount of $15,324 were received as partial payment in
exchange for flight equipment sold with a book value of $13,385.
1997:
Notes and finance and sales-type leases in the amount of $28,495 were
received as partial payment in exchange for flight equipment sold with a
book value of $23,069.
SEE NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
A. The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair
presentation have been included. Certain reclassifications have been
made to the 1997 condensed consolidated financial statements to conform
to the 1998 presentation. Operating results for the three and six month
periods ended June 30, 1998 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1998. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 1997.
B. On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities (FAS 133). FAS 133 is
effective for all fiscal quarters of all fiscal years beginning after
June 15, 1999 (January 1, 2000 for the Company). FAS 133 requires that
all derivative instruments be recorded on the balance sheet at their fair
value. Changes in the fair value of derivatives are recorded each period
in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is,
the type of hedge transaction. The Company has not yet determined the
impact that the adoption of FAS 133 will have on its earnings or
statement of financial position.
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company borrows funds for the purchase of flight equipment,
including funds for progress payments during the construction phase,
principally on an unsecured basis from various sources. The Company's
debt financing was comprised of the following at the following dates:
<TABLE>
<S> <C> <C>
June 30, December 31,
1998 1997
-------- ------------
(Dollars in thousands)
Public term debt with single
maturities $ 4,125,000 $ 3,950,000
Public medium-term notes with
varying maturities 3,049,330 2,896,865
Capital lease obligations 857,044 903,320
--------- ---------
Total term debt and capital lease
obligations 8,031,374 7,750,185
Commercial paper 3,356,327 2,212,601
Less: Deferred debt discount (29,416) (8,424)
--------- ---------
Total debt financing and capital lease
obligations $11,358,285 $ 9,954,362
========== =========
Composite interest rate 6.22% 6.44%
Percentage of total debt at fixed rates 68.55% 76.49%
Composite interest rate on fixed rate
debt 6.53% 6.63%
Bank prime rate 8.50% 8.50%
</TABLE>
The interest on substantially all the public debt (exclusive of the
commercial paper) is fixed for the term of the note. The Company has
committed revolving loans and lines of credit with 52 banks aggregating
$2.65 billion and uncommitted lines of credit with two banks for varying
amounts mutually agreed to by the Company and the banks. Bank debt
principally provides for interest rates that vary according to the pricing
option in effect at the time of borrowing and range from prime to .20% over
LIBOR to a rate determined by a competitive bid process with the banks. Bank
financings are subject to facility fees of up to .08% of amounts available.
Bank financing is used primarily as backup for the Company's commercial
paper program.
The Company has an effective shelf registration with respect to $2.13
billion of debt securities, under which $525 million of notes were sold
through June 30, 1998. Additionally, a $750 million Medium Term Note
Program has been implemented under the shelf registration, under which $325
million has been sold through June 30, 1998.
The Company believes that the combination of internally generated funds
and debt financing currently available to the Company will allow the
Company to meet its capital requirements for at least the next 12 months.
Certain of the statements in this discussion, as well as other forward-
looking statements within this document, contain estimates and projections
of cash flows and debt financing to support future capital requirements.
While these forward-looking statements are made in good faith, future
operating, market competitive, economic and other conditions and events
could cause actual results to differ materially from those in the forward-
looking statements.<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS-Three months ended June 30, 1998 versus 1997.
The increase in revenues from the rentals of flight equipment from $436.3
million in 1997 to $452.9 million in 1998, a 4% increase, is attributable,
in part, to the increase in the relative cost of the leased fleet, which
includes aircraft subject to sale-leaseback transactions, from $16.7 billion
in 1997 to $17.7 billion in 1998, a 6% increase. Additionally, due to
improved market conditions, the Company has negotiated more favorable lease
rates on aircraft that have been delivered in the past twelve months. While
the number of aircraft available for operating lease has decreased from 346
at June 30, 1997 to 343 at June 30, 1998, the percentage of widebodies, for
which higher lease payments are typically received, has increased from 27%
to 29% of the fleet.
In addition to its leasing operations, the Company engages in the
marketing of flight equipment at the end of, or during, the lease term, as
well as the sales of flight equipment on a principal and commission basis.
Revenue from such flight equipment marketing decreased from $32.4 million in
1997 to $27.3 million in 1998 as a result of the type and the number of the
flight equipment marketed in each period which decreased from 11 aircraft in
the second quarter of 1997 to 5 aircraft in the second quarter of 1998. In
addition, the Company sold 2 engines in the second quarter of 1997 and 4
engines in the second quarter of 1998.
Interest expense decreased from $166.7 million in 1997 to $161.4 million
in 1998. While the gross debt outstanding at quarter end and the average
composite borrowing rate during the quarter were consistent with the prior
year at $11,361.5 million and 6.26% in 1997 as compared to $11,358.3 million
and 6.26% in 1998, late deliveries at Boeing caused additional interest to
be capitalized on progress payments on undelivered aircraft resulting in a
decrease in current period interest expense. The composite borrowing rate
fluctuated as follows:
<TABLE>
<S> <C> <C> <C>
Increase/
1998 1997 (Decrease)
---- ---- --------
Beginning of Quarter 6.29% 6.20% .09%
End of Quarter 6.22% 6.32% (.10%)
----- -----
Average 6.26% 6.26% .00%
</TABLE>
Depreciation of flight equipment remained consistent at $138.1 million in
1997 and $137.6 million in 1998. The cost of flight equipment during the
same periods increased from $15.9 billion at June 30, 1997 to $16.4 billion
at June 30, 1998. The increase in depreciation expense due to increased
flight equipment cost was offset by accelerated depreciation taken in the
second quarter of 1997 on older aircraft, which were acquired used, that
were either sold or fully depreciated prior to the second quarter of 1998.
Rent expense increased from $22.0 million in 1997 to $34.7 million in
1998 due to the increase in the number of sale leaseback transactions from
14 aircraft in the second quarter of 1997 to 20 in the second quarter of
1998.
Provision for overhauls for the second quarter was consistent from year
to year, as were the number of aircraft on which the Company collects
overhaul reserves.
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS-Six months ended June 30, 1998 versus 1997.
The increase in revenues from the rentals of flight equipment from $834.8
million in 1997 to $884.3 million in 1998, a 6% increase, is attributable,
in part, to the increase in the relative cost of the leased fleet, which
includes aircraft subject to sale-leaseback transactions, from $16.7 billion
in 1997 to $17.7 billion in 1998, a 6% increase. Additionally, due to
improved market conditions, the Company has negotiated more favorable lease
rates on aircraft that have been delivered in the past twelve months. While
the number of aircraft available for operating lease has decreased from 346
at June 30, 1997 to 343 at June 30, 1998, the percentage of widebodies, for
which higher lease payments are typically received, has increased from 27%
to 29% of the fleet.
In addition to its leasing operations, the Company engages in the
marketing of flight equipment at the end of, or during, the lease term, as
well as the sales of flight equipment on a principal and commission basis.
Revenue from such flight equipment marketing increased from $38.2 million in
1997 to $64.8 million in 1998 as a result of the type and the number of the
flight equipment marketed in each period which increased from 14 aircraft in
1997 to 17 aircraft in 1998. In addition, the Company sold 3 engines in
1997 and 6 engines in 1998.
Interest expense decreased from $314.1 million in 1997 to $312.1 million
in 1998 primarily as a result of a decrease in the average debt outstanding
during the six month period. Late deliveries at Boeing caused additional
interest to be capitalized on progress payments on undelivered aircraft,
contributing to the decrease in current period interest expense. The
composite borrowing rate fluctuated as follows:
<TABLE>
<S> <C> <C> <C>
Increase/
1998 1997 (Decrease)
---- ---- --------
Beginning of six months 6.44% 6.23% .21%
End of six months 6.22% 6.32% (.10%)
----- -----
Average 6.33% 6.28% .05%
</TABLE>
Depreciation of flight equipment increased from $266.2 million in 1997 to
$267.6 million in 1998. The cost of flight equipment during the same
periods increased from $15.9 billion at June 30, 1997 to $16.4 billion at
June 30, 1998. The increase in depreciation expense due to increased flight
equipment cost was offset by accelerated depreciation taken in the first six
months of 1997 on older aircraft, which were acquired used, that were either
sold or fully depreciated prior to the first six months of 1998.
Rent expense increased from $43.4 million in 1997 to $69.5 million in
1998 due to the increase in the number of sale leaseback transactions from
14 aircraft in the first six months of 1997 to 20 in the first six months of
1998.
Provision for overhauls increased in from $47.0 million in 1997 to $50.5
million in 1998 due to an increase in the number of aircraft on which the
Company collects overhaul reserves resulting in an increase in the aggregate
number of hours flown for which overhaul reserves are provided.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
12. Computation of Ratios of Earnings to Fixed Charges and
Preferred Stock Dividends
27. Financial Data Schedule
b) Reports on Form 8-K:
1. Form 8-K, event date April 3, 1998 (Item 7)
2. Form 8-K, event date May 6, 1998 (Item 7)
3. Form 8-K, event date May 26, 1998 (Item 7)
4. Form 8-K, event date June 10, 1998 (Item 7)
5. Form 8-K, event date June 16, 1998 (Item 7)
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL LEASE FINANCE CORPORATION
August 7, 1998 /S/ Leslie L. Gonda
-------------------
LESLIE L. GONDA
Chairman of the Board
August 7, 1998 /S/ Pamela S. Hendry
--------------------
PAMELA S. HENDRY
Vice President
and Treasurer
<PAGE>
<PAGE>
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit No.
12 Computation of Ratios of Earnings to Fixed Charges and
Preferred Stock Dividends
27 Financial Data Schedule
INTERNATIONAL LEASE FINANCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<S> <C> <C>
1998 1997
-------- --------
(Unaudited)
Earnings:
Net Income. . . . . . . . . . . . . . . . . . . .$ 174,801 $ 131,333
Add:
Provision for income taxes. . . . . . . . . . . 96,263 72,739
Fixed charges . . . . . . . . . . . . . . . . .383,272 364,296
Less:
Capitalized interest. . . . . . . . . . . . . . 28,418 23,455
------- -------
Earnings as adjusted (A). . . . . . . . . . . .$ 625,918 $ 544,913
======= =======
Preferred dividend requirements . . . . . . . . .$ 8,494 $ 8,197
Ratio of income before provision
for income taxes to net income. . . . . . . . 155% 155%
-------- ---------
Preferred dividend factor on pretax
basis . . . . . . . . . . . . . . . . . . . . 13,166 12,705
-------- ---------
Fixed Charges:
Interest expense. . . . . . . . . . . . . . . . 312,051 314,086
Capitalized interest. . . . . . . . . . . . . . 28,418 23,455
Interest factor of rents. . . . . . . . . . . . 42,803 26,755
------- -------
Fixed charges as adjusted (B) . . . . . . . . . 383,272 364,296
------- -------
Fixed charges and preferred stock
dividends (C) . . . . . . . . . . . . . . . .$ 396,438 $ 377,001
======= =======
Ratio of earnings to fixed charges
(A) divided by (B). . . . . . . . . . . . . . 1.63x 1.50x
==== ====
Ratio of earnings to fixed charges
and preferred stock dividends
(A) divided by (C). . . . . . . . . . . . . . 1.58x 1.45x
==== ====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE FINANCIAL STATEMENTS INCLUDED IN
THE REGISTRANT'S QUARTERLY REPORT ON FORM 10Q FOR THE
QUARTER ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 65,116
<SECURITIES> 0
<RECEIVABLES> 461,362
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 16,429,084
<DEPRECIATION> 1,818,208
<TOTAL-ASSETS> 14,610,876
<CURRENT-LIABILITIES> 0
<BONDS> 10,501,241
<COMMON> 3,582
0
400,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,199,627
<SALES> 884,336
<TOTAL-REVENUES> 991,692
<CGS> 0
<TOTAL-COSTS> 408,577
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 312,051
<INCOME-PRETAX> 271,064
<INCOME-TAX> 96,263
<INCOME-CONTINUING> 174,801
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 174,801
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
