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
---------------
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 1-8594
-------
PRESIDENTIAL REALTY CORPORATION
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-1954619
--------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
180 South Broadway, White Plains, New York 10605
------------------------------------------ ------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, indicating area code 914-948-1300
------------
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
------ ------
The number of shares outstanding of each of the issuer's classes of common
stock as of the close of business on August 7, 1995 was 478,940 shares of
Class A common and 3,039,891 shares of Class B common.
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
Index to 10-Q
For the Six Months Ended
June 30, 1995
Part I - Financial Information (Unaudited)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
<CAPTION>
Assets June 30, December 31,
<S> 1995 1994
------------ ------------
Mortgage portfolio (Note 2): <C> <C>
Sold properties, accrual $34,938,937 $36,344,060
Related parties, accrual 1,185,439 1,204,499
Sold properties, impaired 16,145,376 14,879,200
Related parties, impaired 1,639,396 2,306,843
------------ ------------
Total mortgage portfolio 53,909,148 54,734,602
------------ ------------
Less discounts:
Sold properties, accrual 3,854,281 4,155,722
Related parties, accrual 186,325 193,851
Sold properties, impaired 7,864,250 7,882,168
------------ ------------
Total discounts 11,904,856 12,231,741
------------ ------------
Less deferred gains:
Sold properties, accrual 14,859,289 15,822,323
Sold properties, impaired 6,547,150 5,592,268
Related parties, impaired 1,639,396 2,306,843
------------ ------------
Total deferred gains 23,045,835 23,721,434
------------ ------------
Net mortgage portfolio (of which $1,909,106 in 1995
and $1,820,911 in 1994 are due within one year) 18,958,457 18,781,427
------------ ------------
Real estate (Note 3) 23,709,886 23,479,627
Less: accumulated depreciation 4,770,288 4,475,288
------------ ------------
Net real estate 18,939,598 19,004,339
------------ ------------
Foreclosed properties (Note 4) 598,842 726,927
Minority partners' interest (Note 5) 4,187,884 4,281,262
Prepaid expenses and deposits in escrow 1,372,891 1,629,218
Other receivables (net of valuation allowance of
$154,637 in 1995 and $117,096 in 1994) 774,838 872,169
Other receivables (related party) 12,022 12,224
Securities available for sale (Note 6) 2,081,479 1,766,851
Cash and cash equivalents 1,921,243 2,402,211
Other assets 1,254,650 1,522,248
------------ ------------
Total Assets $50,101,904 $50,998,876
============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
<CAPTION>
Liabilities and Stockholders' Equity
June 30, December 31,
1995 1994
<S> ------------ -------------
Liabilities: <C> <C>
Mortgage debt:
Properties owned $27,238,978 $27,489,824
Wrap mortgage debt on sold properties 6,278,344 6,492,285
------------- -------------
Total (of which $972,229 in 1995 and $943,800
in 1994 are due within one year) 33,517,322 33,982,109
Executive pension plan liability (Note 8) 1,901,682 1,964,379
Accrued liabilities 1,793,765 2,088,404
Accrued postretirement cost (Note 9) 630,547 646,122
Deferred income 708,389 735,552
Accounts payable 265,563 428,335
Other liabilities 560,422 579,522
------------- -------------
Total Liabilities 39,377,690 40,424,423
------------- -------------
Stockholders' Equity:
Common stock; par value $.10 a share (Note 1-C)
Class A, authorized 700,000 shares, issued and
outstanding 478,940 shares 47,894 47,894
Class B June 30, 1995 December 31, 1994 305,411 304,504
------- ----------------- -----------------
Authorized: 10,000,000 10,000,000
Issued: 3,054,112 3,045,037
Treasury: 14,221 14,221
Additional paid-in capital 1,686,135 1,628,492
Retained earnings 8,920,823 9,071,188
Net unrealized loss on securities available for sale (Note 6) (43,481) (285,057)
Class B, treasury stock (at cost) (192,568) (192,568)
------------- -------------
Total Stockholders' Equity 10,724,214 10,574,453
------------- -------------
Total Liabilities and Stockholders' Equity $50,101,904 $50,998,876
============= =============
<FN>
See notes to consolidated financial statements.
</TABLE>
<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------
1995 1994
Income: ------------ ------------
<S> <C> <C>
Rental $3,891,451 $3,146,549
Interest on mortgages - sold properties 1,011,719 977,639
Interest on wrap mortgages 710,060 719,678
Interest on mortgages - related parties 124,706 145,632
Investment income 163,349 103,031
Other 37,106 115,800
------------ ------------
Total 5,938,391 5,208,329
------------ ------------
Costs and Expenses:
General and administrative 987,583 1,094,245
Interest on notes payable and other 57,876 72,004
Interest on wrap mortgage debt 136,431 146,049
Depreciation on non-rental property 11,428 11,907
Rental property:
Operating expenses 1,696,903 1,096,689
Interest on mortgages 1,140,338 651,774
Real estate taxes 376,286 293,189
Depreciation on real estate 299,199 224,052
Amortization of mortgage and organization costs 69,713 57,819
Minority interest share of partnership income 322,635 405,505
Loss from operations of foreclosed properties (Note 4) 31,544 44,918
Net (gain) loss from sales of foreclosed properties (Note 4) (64,605) 22,429
------------ ------------
Total 5,065,331 4,120,580
------------ ------------
Income before net gain from sales of properties and securities
and cumulative effect of change in accounting principle 873,060 1,087,749
Net gain from sales of properties and securities 30,197 63,013
------------ ------------
Income before cumulative effect of change in accounting principle 903,257 1,150,762
Cumulative effect of change in accounting for securities 37,617
------------ ------------
Net Income $903,257 $1,188,379
============ ============
Earnings per Common Share (Note 1-C):
Income before net gain from sales of properties and securities
and cumulative effect of change in accounting principle $0.25 $0.31
Net gain from sales of properties and securities 0.01 0.02
------------ ------------
Income before cumulative effect of change in accounting principle 0.26 0.33
Cumulative effect of change in accounting for securities 0.01
------------ ------------
Net Income per Common Share $0.26 $0.34
============ ============
Cash Distributions per Common Share $0.30 $0.30
============ ============
Weighted Average Number of Shares Outstanding 3,512,787 3,495,194
============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------
1995 1994
Income: ------------ ------------
<S> <C> <C>
Rental $1,939,241 $1,611,735
Interest on mortgages - sold properties 517,357 475,721
Interest on wrap mortgages 354,418 359,249
Interest on mortgages - related parties 64,532 73,529
Investment income 77,273 57,683
Other 22,610 102,056
------------ ------------
Total 2,975,431 2,679,973
------------ ------------
Costs and Expenses:
General and administrative 471,007 622,483
Interest on notes payable and other 28,938 36,391
Interest on wrap mortgage debt 67,603 72,435
Depreciation on non-rental property 5,751 6,107
Rental property:
Operating expenses 816,334 442,736
Interest on mortgages 571,242 340,090
Real estate taxes 187,472 146,595
Depreciation on real estate 151,121 111,826
Amortization of mortgage and organization costs 34,432 41,420
Minority interest share of partnership income 165,282 204,075
Loss from operations of foreclosed properties (Note 4) 19,036 21,689
Net (gain) loss from sales of foreclosed properties (Note 4) (44,839) 55,959
------------ ------------
Total 2,473,379 2,101,806
------------ ------------
Income before net gain from sales of properties and securities
and cumulative effect of change in accounting principle 502,052 578,167
Net gain from sales of properties and securities 3,543 37,544
------------ ------------
Income before cumulative effect of change in accounting principle 505,595 615,711
Cumulative effect of change in accounting for securities
------------ ------------
Net Income $505,595 $615,711
============ ============
Earnings per Common Share (Note 1-C):
Income before net gain from sales of properties and securities
and cumulative effect of change in accounting principle $0.14 $0.16
Net gain from sales of properties and securities 0.01 0.02
------------ ------------
Income before cumulative effect of change in accounting principle 0.15 0.18
Cumulative effect of change in accounting for securities
------------ ------------
Net Income per Common Share $0.15 $0.18
============ ============
Cash Distributions per Common Share $0.15 $0.15
============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------------
1995 1994
Cash Flows from Operating Activities: ------------ ------------
<S> <C> <C>
Cash received from rental properties $4,054,490 $3,133,876
Interest received 1,653,131 1,620,681
Miscellaneous income (disbursements) (34,478) 181,362
Interest paid on rental property mortgages (1,136,492) (637,759)
Interest paid on wrap mortgage debt (136,431) (146,049)
Interest paid on loans (24,728)
Cash disbursed for rental and foreclosed property operations (1,985,959) (1,405,907)
Cash disbursed for general and administrative costs (1,457,462) (1,077,397)
------------ ------------
Net cash provided by operating activities 956,799 1,644,079
------------ ------------
Cash Flows from Investing Activities:
Payments received on notes receivable 453,062 419,352
Payments disbursed for investments in notes receivable (8,176) (5,500)
Net payments received on sales of foreclosed properties 151,306 323,614
Payments disbursed for additions and improvements (277,651) (230,839)
Proceeds from sales of securities 113,000 99,994
Purchases of securities (187,055) (100,000)
Net cash receipts from operations of foreclosed properties 6,863 8,205
------------ ------------
Net cash provided by investing activities 251,349 514,826
------------ ------------
Cash Flows from Financing Activities:
Principal payments on mortgage debt:
Properties owned (250,846) (171,397)
Wrap mortgage debt on sold properties (213,941) (206,417)
Mortgage proceeds 326,536
Mortgage costs (609,093)
Principal payments on note payable (125,247)
Cash distributions on common stock (1,053,622) (1,048,346)
Proceeds from dividend reinvestment and share purchase plan 58,550 65,272
Distributions to minority partners (229,257) (370,426)
------------ ------------
Net cash used in financing activities (1,689,116) (2,139,118)
------------ ------------
Net Increase (Decrease) in Cash and Cash Equivalents (480,968) 19,787
Cash and Cash Equivalents, Beginning of Period 2,402,211 1,349,755
------------ ------------
Cash and Cash Equivalents, End of Period $1,921,243 $1,369,542
============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
<TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-----------------------------
1995 1994
------------ ------------
<S> <C> <C>
Reconciliation of Net Income to Net Cash
Provided by Operating Activities
Net Income $903,257 $1,188,379
------------ ------------
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effect of accounting change for
securities (37,617)
Depreciation and amortization 380,340 293,778
Gain from sales of properties and securities (30,197) (63,013)
Net (gain) loss from sales of foreclosed properties (64,605) 22,429
Amortization of discounts on notes and fees (326,885) (306,733)
Decrease (increase) in accounts receivable 97,533 (168,344)
Increase (decrease) in accounts payable
and accrued liabilities (535,683) 40,977
Increase (decrease) in deferred income (27,163) 133,748
Decrease in prepaid expenses, deposits in escrow
and deferred charges 246,299 102,651
Increase (decrease) in security deposit liabilities (7,483) 21,468
Miscellaneous (1,249) 10,851
Minority share of partnership income 322,635 405,505
------------ ------------
Total adjustments 53,542 455,700
------------ ------------
Net cash provided by operating activities $956,799 $1,644,079
============ ============
Supplemental noncash disclosures:
Notes received from sales of foreclosed properties $80,200 $1,238,750
============ ============
Deferred loan modification fee added to
sold property note receivable $60,000
============ ============
<FN>
See notes to consolidated financial statements.
</TABLE>
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. General - Presidential Realty Corporation ("Presidential" or the "Company"),
a Real Estate Investment Trust ("REIT"), is engaged principally in the holding
of notes and mortgages secured by real estate and in the ownership of income
producing real estate.
B. Principles of Consolidation - The consolidated financial statements include
the accounts of Presidential Realty Corporation and its wholly owned
subsidiaries. Additionally, the accompanying consolidated financial statements
include 100% of the account balances of UTB Associates and PDL, Inc. and
Associates Limited Co-Partnership ("Metmor Plaza Associates"), partnerships in
which Presidential is the General Partner and owns a 66-2/3% interest and a 25%
interest, respectively (see Note 5).
All significant intercompany balances and transactions have been eliminated.
C. Earnings Per Common Share - Per share data is based on the weighted average
number of shares of Class A and Class B common stock outstanding and
equivalents during each period. No dilution in per share earnings for the
six months ended June 30, 1995 and 1994 would result from the exercise of
stock options issued under the Company's stock option plans.
D. Cash and Cash Equivalents - Cash and cash equivalents includes cash on hand,
cash in banks and money market funds.
E. Basis of Presentation - The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information. In the opinion of management,
all adjustments (consisting of only normal recurring accruals) considered
necessary for a fair presentation of the results for the respective periods
have been reflected. These financial statements and accompanying notes should
be read in conjunction with the Company's Form 10-K for the year ended December
31, 1994.
2. MORTGAGE PORTFOLIO
The Company's mortgage portfolio includes notes receivable - sold properties
and notes receivable - related parties and includes both accrual and impaired
loans.
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment
of a Loan" and, accordingly, have classified loans that are within the scope of
this statement as impaired loans.
Notes receivable - sold properties consist of:
(1) Long-term purchase money notes from sales of properties previously owned by
the Company. These purchase money notes have varying interest rates with
balloon payments due at maturity.
(2) Notes receivable from sales of cooperative apartment units. Substantially
all of these notes were either received from Ivy Properties, Ltd. or its
affiliates (collectively "Ivy") in connection with a settlement agreement
between the Company and Ivy executed in November, 1991 (the "Settlement
Agreement") or from sales of foreclosed cooperative apartments received from
Ivy pursuant to the Settlement Agreement (see Note 4). These notes have market
interest rates and the majority of these notes amortize monthly with balloon
payments due at maturity.
Notes receivable - related parties are all due from Ivy and consist of:
(1) Purchase money notes resulting from sales of property or partnership
interests to Ivy.
(2) Notes receivable relating to loans made by the Company to Ivy in connection
with Ivy's cooperative conversion business.
At June 30, 1995, all of the notes in the Company's mortgage portfolio are
current with the exception of those notes which are classified as impaired
loans in accordance with SFAS No. 114.
Two sold property loans, the Kent Terrace and the Fairfield Towers loans, and
one related party loan, the Ivy Overlook loan, have been classified as
impaired loans and at June 30, 1995, are in the aggregate amount of
$17,784,772. At June 30, 1995, the loans have a net carrying value of
$1,733,976 after deducting discounts of $7,864,250 and deferred gains of
$8,186,546. In accordance with SFAS No. 114, the Company has determined that
at this time no allowances for credit losses are required for these loans
because the net carrying value of these loans is less than the fair value of
the underlying collateral.
The Company recognizes income on these loans only to the extent that such
income is actually received. The average recorded investment in these loans
during the period ending June 30, 1995 was $18,182,047.
The $1,300,000 Kent Terrace note, which was due on October 31, 1994, was not
paid when due because the owner has been unable to obtain a new mortgage loan
on the property. As a result, Presidential commenced proceedings to foreclose
on its mortgage on the property and the owner of the property filed for
protection under Chapter 11 of the Bankruptcy Code. Pending the outcome of the
foreclosure and Bankruptcy proceedings, the loan was not classified as a
nonaccrual loan at December 31, 1994. Through December 31, 1994, substantially
all interest had been paid when due. As a result of the adoption of SFAS No.
114 by the Company on January 1, 1995, this loan has been classified as an
impaired loan. At June 30, 1995, the outstanding principal balance of this
loan was $1,300,000 and there was $338,190 of interest deferred in accordance
with the terms of the note. The net carrying value of the note was $329,212
after a deferred gain of $970,788.
The Fairfield Towers and Overlook loans which were classified as nonaccrual
loans at December 31, 1994 have been classified as impaired loans in
accordance with SFAS No. 114. There have been no significant changes in the
status of these loans since December 31, 1994 with the exception of the
modification of the Overlook loan discussed below. Condominium sales at the
Fairfield Towers property have continued and an additional fourteen units were
sold during the six months ended June 30, 1995.
Effective April 1, 1995, the Company and Ivy modified the terms of the Overlook
loan to extend the maturity date from November 21, 1994 to December 31, 2003.
From April 1, 1995 through December 31, 1995, the loan will bear interest at
the rate of 5-1/2% per annum and from January 1, 1996 until maturity, the loan
will bear interest at the rate of 6% per annum. The Overlook loan, which is a
nonrecourse loan, continues to be secured by three second mortgages (the
"Collateral Security") with face values totalling $1,639,396 at June 30, 1995.
Interest will be due and payable only to the extent of interest payments
received by Ivy on the Collateral Security. To the extent that Ivy receives
interest on the Collateral Security in excess of the interest due on the
Overlook loan, Ivy shall pay such amounts to Presidential to be applied by
Presidential (a) first in reduction of any Deferred Interest (past due interest
which has not been accrued for financial reporting purposes) and (b) then in
reduction of the outstanding principal balance.
At the time of the modification, the Overlook loan had an outstanding principal
balance of $2,306,843. Such amount exceeds the Collateral Security by $667,447
and, as a result, the Company reduced the gross carrying value of the loan and
its related deferred gain by the $667,447. The net carrying value of the
Overlook loan remains at zero at June 30, 1995.
The following table reflects the activity in impaired loans.
<TABLE>
IMPAIRED LOANS
----------------
<CAPTION>
Impaired Impaired
Loan Additions Loan
Balance (Payments) Balance
Loan Description 12/31/94 1995 6/30/95
----------------------------------- ------------- ------------ ------------
<S> <C> <C> <C>
Notes receivable-sold properties:
Properties previously owned-
Fairfield Towers $14,879,200 ($33,824) $14,845,376
Kent Terrace 1,300,000 1,300,000
Notes receivable-related parties:
Sold properties-
Overlook (1) 2,306,843 (667,447) 1,639,396
------------- ------------ ------------
Total $17,186,043 $598,729 $17,784,772
============= ============ ============
Discount Deferred Net
on Gain on Carrying
Loans Loans Value
Loan Description 6/30/95 6/30/95 6/30/95
----------------------------------- ------------- ------------ ------------
Notes receivable-sold properties:
Properties previously owned-
Fairfield Towers ($7,864,250) ($5,576,362) $1,404,764
Kent Terrace (970,788) 329,212
Notes receivable-related parties:
Sold properties-
Overlook (1) (1,639,396)
------------- ------------ ------------
Total ($7,864,250) ($8,186,546) $1,733,976
============= ============ ============
Six months ended June 30,
--------------------------------
1995 1994
------------ ------------
Reported Interest Income and
Amortization of Discount (Cash Basis)
-----------------------------------
Fairfield Towers - interest income $25,291 $
Fairfield Towers - amortization of discount 17,918
Kent Terrace - interest income (2) 48,723
Overlook - interest income 57,285 69,238
------------ ------------
Total $149,217 $69,238
============ ============
Recognized Gain from Sale of Property
-------------------------------------
Fairfield Towers $15,906 $
Kent Terrace (2)
Overlook 5,371
------------ ------------
Total $15,906 $5,371
============ ============
Nonreported Interest Income and Amortization of Discount
---------------------------------------------------------
The following additional amounts would have been reported
if these loans had been fully performing:
Fairfield Towers - interest income $471,583 $506,250
Fairfield Towers - additional interest income 53,422 37,003
Fairfield Towers - amortization of discount 393,743 349,547
Kent Terrace - interest income (2) 86,639
Overlook - interest income 41,671 144,642
------------ ------------
Total $1,047,058 $1,037,442
============ ============
<FN>
(1) The $667,447 reduction for Overlook is an adjustment of the carrying
value of the note so that it will not exceed the face value of the
Collateral Security. Deferred gain was reduced by the same amount.
(2) Kent Terrace was not impaired in 1994 and, as a result, no amounts
are listed for the six months ended June 30, 1994.
</TABLE>
3. REAL ESTATE
Real estate is comprised of the following:
June 30, December 31,
1995 1994
----------- ------------
Land $ 3,615,176 $ 3,615,176
Buildings and leaseholds 20,000,194 19,779,473
Furniture and equipment 94,516 84,978
----------- -----------
Total real estate $23,709,886 $23,479,627
=========== ===========
4. FORECLOSED PROPERTIES
At June 30, 1995, Presidential owns a number of cooperative apartment units
which it had received in satisfaction of certain loans due Presidential.
These cooperative apartment units are located at five properties.
Cooperative apartment units at four properties were received from Ivy in 1991
and 1992 in connection with the Settlement Agreement. In the fourth quarter of
1994, Presidential received five cooperative apartment units at Long Beach, New
York from Ivy in payment of the $57,592 outstanding loan on that property and
$44,204 of other amounts due to Presidential pursuant to the Settlement
Agreement. These cooperative apartment units are reported as foreclosed
properties on Presidential's consolidated balance sheets and are carried at the
lower of cost or estimated fair value (net of estimated costs to sell).
Net loss from operations of foreclosed properties is reported as a separate
line item on the statement of operations, while net cash receipts from
operations of foreclosed properties reduces the Company's carrying value of the
foreclosed property.
The following table presents the Company's foreclosed properties, loss from
operations of foreclosed properties, gain (loss) from sales of foreclosed
properties and number of units sold:
<TABLE>
Foreclosed properties:
---------------------------
<CAPTION>
Property Name and Location
---------------------------------------------------------------
Hastings 6300 Riverdale
330 W. 72nd St. Gardens Ave. Towne House
New York, Hastings, Bronx, New Rochelle,
New York New York New York New York
------------ --------- ----------- -------------
<S> <C> <C> <C> <C>
Balance January 1, 1995 $55,840 $119,106 $76,196 $373,264
Capitalized costs 11,500 18,646
Net carrying value of property sold (65,531) (42,562)
Net cash receipts from operations (2,378) (4,485)
------------ --------- ----------- -------------
Balance June 30, 1995 $53,462 $65,075 $76,196 $344,863
============ ========= =========== =============
Loss from operations of foreclosed properties:
-------------------------------------------------------
Six months ended June 30, 1995 $17,078 $6,828
============ ========= =========== =============
Six months ended June 30, 1994 $9,167 $5,902
============ ========= =========== =============
Gain (loss) from sales of foreclosed properties:
-------------------------------------------------------
Six months ended June 30, 1995 $31,184 $34,575
============ ========= =========== =============
Six months ended June 30, 1994 $33,530
============ ========= =========== =============
Number of units sold:
---------------------------
Six months ended June 30, 1995 12 3
============ ========= =========== =============
Six months ended June 30, 1994 1
============ ========= =========== =============
Property Name and Location
--------------------------------------------
Long Beach Hoboken Total
Long Beach, Hoboken, Foreclosed
New York New Jersey (1) Properties
------------ --------- -----------
Balance January 1, 1995 $102,521 $ $726,927
Capitalized costs 7,778 37,924
Net carrying value of property sold (51,053) (159,146)
Net cash receipts from operations (6,863)
------------ --------- -----------
Balance June 30, 1995 $59,246 $ $598,842
============ ========= ===========
Loss from operations of foreclosed properties:
------------------------------------------------------- Total Loss
-----------
Six months ended June 30, 1995 $7,638 N/A $31,544
============ ========= ===========
Six months ended June 30, 1994 N/A $29,849 $44,918
============ ========= ===========
Gain (loss) from sales of foreclosed properties:
------------------------------------------------------- Total
Gain (Loss)
-----------
Six months ended June 30, 1995 ($1,154) N/A $64,605
============ ========= ===========
Six months ended June 30, 1994 N/A ($55,959) ($22,429)
============ ========= ===========
Number of units sold:
--------------------------- Total
Units Sold
-----------
Six months ended June 30, 1995 2 N/A 17
============ ========= ===========
Six months ended June 30, 1994 N/A 40 41
============ ========= ===========
<FN>
(1) The remaining Hoboken apartment buildings were sold in June, 1994.
</TABLE>
5. MINORITY PARTNERS' INTEREST
Presidential is the General Partner of UTB Associates and Metmor Plaza
Associates, partnerships in which Presidential has a 66-2/3% interest and a 25%
interest, respectively. As the General Partner of these partnerships,
Presidential exercises effective control over the business of these
partnerships, and, accordingly, has included 100% of the account balances of
these partnerships in the accompanying financial statements (see Note 1-B).
The minority partners' interest reflects the minority partners' equity in the
partnerships.
Included in the Company's mortgage debt is a mortgage note payable by the
Metmor Plaza Associates partnership which is substantially in excess of the
historical cost of the property. This was due to a refinancing of the original
mortgage note on the building and subsequent distribution of these proceeds to
the partners. This event resulted in a negative partnership interest for each
partner and a negative minority partners' interest on the Company's books. The
estimated fair value of the building is significantly greater than the mortgage
debt and the minority partners' interest is expected to be recovered when the
building is sold and the partnership is liquidated.
Minority partners' interest is comprised of the following:
June 30, December 31,
1995 1994
---------- ------------
Metmor Plaza Associates $4,445,999 $4,537,001
UTB Associates (258,115) (255,739)
----------- -----------
Total minority partners' interest $4,187,884 $4,281,262
=========== ===========
6. SECURITIES AVAILABLE FOR SALE
The Company's investments are marketable equity securities consisting of stocks
of listed corporations. Effective January 1, 1994, the Company adopted SFAS
No. 115, "Accounting for Certain Investments in Debt and Equity Securities".
The Company does not acquire securities for purposes of engaging in trading
activities and, as a result, the Company's investments are classified as
securities available for sale in accordance with this pronouncement.
Disposition of such securities may be appropriate for either liquidity
management or in response to changing economic conditions.
The cost and fair value of securities available for sale are as follows:
June 30, December 31,
1995 1994
---------- ------------
Cost $2,124,960 $2,051,908
Gross unrealized gains 40,761 14,804
Gross unrealized losses (84,242) (299,861)
----------- -----------
Fair value $2,081,479 $1,766,851
========== ===========
Net unrealized loss on securities available for sale, which is a separate
component of stockholders' equity on the Company's consolidated balance sheets,
decreased by $241,576 from $285,057 at December 31, 1994 to $43,481 at June 30,
1995.
During the six months ended June 30, 1995, the Company sold securities available
for sale for gross proceeds of $113,000 and a gross (and net) loss of $1,002.
During the six months ended June 30, 1994, the Company sold securities available
for sale for gross proceeds of $100,000 and a gross (and net) loss of $6. Gains
and losses on sales of securities are determined using the specific
identification method.
7. INCOME TAXES
Presidential elected to qualify as a Real Estate Investment Trust effective
January 1, 1982 under Sections 856-860 of the Internal Revenue Code. Under
those sections, a REIT which distributes at least 95% of its real estate
investment trust taxable income to its shareholders each year by the end of
the following year and which meets certain other conditions will not be taxed
on that portion of its taxable income which is distributed to its shareholders.
For the year ended December 31, 1994, the Company had taxable income (before
distributions to stockholders) of approximately $2,203,000 ($.63 per share),
which included approximately $1,023,000 ($.29 per share) of capital gains.
This amount will be reduced by approximately $95,000 ($.03 per share) of the
1994 distributions that were not utilized in reducing the Company's 1993
taxable income and by any eligible 1995 distributions that the Company may
elect (under Section 858 of the Internal Revenue Code) to utilize as a
reduction of its 1994 taxable income.
As previously stated, in order to retain REIT status, Presidential is required
to distribute 95% of its REIT taxable income (exclusive of capital gains).
As of June 30, 1995, Presidential has distributed the required 95% of its 1994
REIT taxable income. In addition, although no assurances can be given, it is
the Company's present intention to distribute all of its 1994 taxable income
and, therefore, no provision for income taxes was made at December 31, 1994.
Furthermore, the Company had taxable income (before distributions to
stockholders) for the six months ended June 30, 1995 of approximately
$667,000 ($.19 per share), which included approximately $156,000 ($.04 per
share) of capital gains. This amount will be reduced by 1995 distributions
that were not utilized in reducing the Company's 1994 taxable income and by any
eligible 1996 distributions that the Company may elect to utilize as a reduction
of its 1995 taxable income.
Presidential has, for tax purposes, reported the gain from the sale of certain
of its properties using the installment method.
8. PENSION PLANS
Defined Benefit Plan
Effective January 1, 1994, the Company adopted a noncontributory defined
benefit pension plan, which covers substantially all of its employees. The
plan provides monthly retirement benefits commencing at age 65. The monthly
benefit is equal to the sum of (1) 6.5% of average monthly compensation
multiplied by the total number of plan years of service (up to a maximum of 10
years), plus (2) .62% of such average monthly compensation in excess of one-
twelfth of covered compensation multiplied by the total number of plan years of
service (up to a maximum of 10 years). The Company makes annual contributions
that meet the minimum funding requirements and the maximum contribution
limitations under the Internal Revenue Code.
Periodic pension costs are reflected in general and administrative expenses in
the Company's consolidated statement of operations.
Net periodic pension cost for the six months ended June 30, 1995 was $128,000.
The assumptions for the discount rate, expected long-term rate of return of
assets, and average increase in compensation used in determining net periodic
pension cost were 7%, 7% and 5%, respectively.
Executive Pension Plan
Presidential has employment contracts with several active and retired key
officers and employees. Such contracts are being accounted for as constituting
pension agreements. The contracts generally provide for annual benefits in
specified amounts commencing upon retirement for each participant for life,
with an annual adjustment for an increase in the consumer price index.
Presidential complies with the provisions of SFAS No. 87, "Employers'
Accounting for Pensions". The principal assumption used in the accounting was
a discount rate of 7-1/2%. Periodic pension costs are reflected in general and
administrative expenses in the Company's consolidated statement of operations.
Net periodic pension cost for the six months ended June 30, 1995, included
the following components:
Service cost-benefits earned during the period $ 5,456
Interest cost on projected benefit obligation 93,414
Net amortization 15,285
--------
Net periodic pension cost $114,155
========
Presidential has elected not to fund expenses accrued under these contracts.
9. POSTRETIREMENT BENEFITS
Presidential has employment contracts with several active and retired key
officers and employees which provide for postretirement benefits other than
pensions (such as health care benefits). The Company complies with the
provisions of SFAS No. 106,"Employers' Accounting for Postretirement Benefits
Other Than Pensions". SFAS No. 106 requires the Company to accrue the
estimated cost of retiree benefit payments during the years the employee
provides services. The components of postretirement benefit cost for the
six months ended June 30, 1995, were as follows:
Service cost - benefits earned $ 2,739
Interest cost on accumulated postretirement
benefit obligation 18,680
Net amortization (4,752)
-------
Postretirement benefit cost $16,667
=======
PRESIDENTIAL REALTY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 1995 AND 1994
Results of Operations
Financial Information for the six months ended June 30, 1995 and 1994:
----------------------------------------------------------------------
Income for 1995 increased by $730,062 from $5,208,329 in 1994 to $5,938,391 in
1995 primarily as a result of increases in rental income and investment income,
partially offset by a decrease in other income.
Rental income increased by $744,902 from $3,146,549 in 1994 to $3,891,451 in
1995 primarily as a result of the purchase of the Continental Gardens apartment
property in December, 1994.
Investment income increased by $60,318 from $103,031 in 1994 to $163,349 in
1995 primarily as a result of increased interest income on cash and cash
equivalent accounts and interest income received on mortgage deposits in
escrow.
Other income decreased by $78,694 from $115,800 in 1994 to $37,106 in 1995
because the 1994 period included $71,000 of modification and late fees received
on the Fairfield Towers note and a commitment fee of $15,503 on the Hoboken
purchase money note.
Costs and expenses increased by $944,751 from $4,120,580 in 1994 to $5,065,331
in 1995 primarily due to increases in all areas of rental property operations
resulting from the ownership of the Continental Gardens apartment property which
was purchased in December, 1994, as well as increases in operating expenses and
mortgage interest on other rental properties. These increases were offset by
a decrease in general and administrative expenses and a change in net (gain)
loss from sales of foreclosed properties.
General and administrative expenses decreased by $106,662 from $1,094,245 in
1994 to $987,583 in 1995 primarily due to decreases in salary expense of
$59,489, as a result of an accrual for contractual bonuses of $87,380 in 1994
which were not accrued in 1995, offset by increases in salary expense of
$27,891, decreases in professional services of $15,698 and decreases in
franchise tax expense of $36,062.
Rental property operating expenses increased by $600,214 from $1,096,689 in
1994 to $1,696,903 in 1995. The purchase of Continental Gardens referred to
above resulted in increases of $234,689. In addition, at the Palmer Mapletree
property there were increases in bad debts of $42,433, repairs and maintenance
of $51,288 and insurance costs of $66,058. Also, the 1994 period reflected the
receipt of net insurance proceeds of $210,991 pertaining to the flood at the
Cambridge Green Apartments.
Rental property mortgage interest increased by $488,564 from $651,774 in 1994
to $1,140,338 in 1995. This increase is primarily due to $353,658 of mortgage
interest for Continental Gardens and an increase of $126,498 for the Metmor
Plaza property. The Metmor Plaza mortgage has a variable rate of interest
based on the Libor rate and the "Section 936" rate (which is established by the
lender), but cannot exceed 8% per annum.
Real estate tax expense increased by $83,097 from $293,189 in 1994 to $376,286
in 1995 as a result of the purchase of Continental Gardens.
Rental property depreciation expense increased by $75,147 from $224,052 in 1994
to $299,199 in 1995 primarily as a result of the purchase of Continental
Gardens. Depreciation for Continental Gardens was $95,323, partially offset by
a decrease of $24,997 pertaining to the Palmer Mapletree property.
Amortization of mortgage and organization costs increased by $11,894 from
$57,819 in 1994 to $69,713 in 1995 as a result of the purchase of Continental
Gardens and increased mortgage amortization on Metmor Plaza due to six months
of expense in 1995 versus four months in 1994.
Minority interest share of partnership income decreased by $82,870 from
$405,505 in 1994 to $322,635 in 1995, as a result of a decrease in partnership
income on the Metmor Plaza property.
Loss from operations of foreclosed properties decreased by $13,374 from $44,918
in 1994 to $31,544 in 1995 due to the sale of the Hoboken, New Jersey property
in June of 1994, offset by a loss at the Long Beach, New York property and an
increased loss at the Hastings Gardens property.
Net (gain) loss from sales of foreclosed properties increased from a loss of
$22,429 in 1994 to a gain of $64,605 in 1995. The 1995 period includes a
$31,184 gain on the sale of 12 apartments at the Hastings Gardens property.
The 1994 period includes a $55,959 loss from the sale of the Hoboken, New Jersey
property.
Net gain from sales of properties and securities are sporadic (as they depend
on the timing of sales or the receipt of installments or prepayments on
purchase money notes). In 1995, the net gain from sales of properties and
securities was $30,197 compared with a net gain of $63,013 in 1994.
Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". As a result of the adoption of SFAS No. 115, the
cumulative effect of change in accounting for securities of $37,617 of income
was recognized in the first quarter of 1994.
Financial Information for the three months ended June 30, 1995 and 1994:
------------------------------------------------------------------------
Income for 1995 increased by $295,458 from $2,679,973 in 1994 to $2,975,431 in
1995 primarily as a result of increases in rental income and investment income,
partially offset by a decrease in other income.
Rental income increased by $327,506 from $1,611,735 in 1994 to $1,939,241 in
1995 primarily as a result of the purchase of the Continental Gardens apartment
property in December, 1994.
Investment income increased by $19,590 from $57,683 in 1994 to $77,273 in 1995
primarily as a result of increased interest income on cash and cash equivalent
accounts and interest income received on mortgage deposits in escrow.
Other income decreased by $79,446 from $102,056 in 1994 to $22,610 in 1995
because the 1994 period included $71,000 of modification and late fees received
on the Fairfield Towers note and a commitment fee of $15,503 on the Hoboken
purchase money note.
Costs and expenses increased by $371,573 from $2,101,806 in 1994 to $2,473,379
in 1995 primarily due to increases in all areas of rental property operations
resulting from the ownership of the Continental Gardens apartment property which
was purchased in December, 1994, as well as increases in operating expenses
and mortgage interest on other rental properties. These increases were offset
by a decrease in general and administrative expenses and a change in net (gain)
loss from sales of foreclosed properties.
General and administrative expenses decreased by $151,476 from $622,483 in 1994
to $471,007 in 1995 primarily as a result of decreases in salary expense of
$76,954 for contractual bonuses referred to above, decreases in professional
services of $23,820 and a decrease of $31,333 in employee pension expense.
Rental property operating expenses increased by $373,598 from $442,736 in 1994
to $816,334 in 1995. The purchase of Continental Gardens referred to above
resulted in increases of $119,751. In addition, insurance expenses increased
by $28,129 and at the Palmer Mapletree property bad debts increased by $27,656.
Also, operating expenses for the 1994 period reflected the receipt of net
insurance proceeds of $210,991 pertaining to the flood at the Cambridge Green
Apartments.
Rental property mortgage interest increased by $231,152 from $340,090 in 1994
to $571,242 in 1995. This increase is primarily due to $176,964 of mortgage
interest for Continental Gardens and an increase of $49,819 for the Metmor
Plaza property. The Metmor Plaza mortgage has a variable rate of interest
based on the Libor rate and the "Section 936" rate (which is established by the
lender), but cannot exceed 8% per annum.
Real estate tax expense increased by $40,877 from $146,595 in 1994 to $187,472
in 1995 as a result of the purchase of Continental Gardens.
Rental property depreciation expense increased by $39,295 from $111,826 in 1994
to $151,121 in 1995 primarily as a result of the purchase of Continental
Gardens. Depreciation for Continental Gardens was $48,541, partially offset by
a decrease of $12,414 pertaining to the Palmer Mapletree property.
Amortization of mortgage and organization costs decreased by $6,988 from
$41,420 in 1994 to $34,432 in 1995 as a result of lower mortgage cost
amortization on Metmor Plaza, offset by mortgage costs on Continental Gardens.
Minority interest share of partnership income decreased by $38,793 from
$204,075 in 1994 to $165,282 in 1995, as a result of a decrease in partnership
income on the Metmor Plaza property.
Net (gain) loss from sales of foreclosed properties increased from a loss of
$55,959 in 1994 to a gain of $44,839 in 1995. The 1995 period includes a
$31,184 gain on the sale of 12 apartments at the Hastings Gardens property.
The 1994 period reflects the $55,959 loss from the sale of the Hoboken, New
Jersey property.
Net gain from sales of properties and securities are sporadic (as they depend
on the timing of sales or the receipt of installments or prepayments on
purchase money notes). In 1995, the net gain from sales of properties and
securities was $3,543 compared with a net gain of $37,544 in 1994.
Balance Sheet
Effective January 1, 1995, the Company adopted SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan" and, accordingly, have classified loans
that are within the scope of this statement as impaired loans. The Fairfield
Towers and Ivy Overlook loans, which were previously classified as nonaccrual
loans, have been reclassified as impaired loans. The Kent Terrace loan, in the
outstanding principal amount of $1,300,000 and having a net carrying value of
$329,212 after a deferred gain of $970,788, which was classified as an accrual
loan has been reclassified as an impaired loan because the loan was not paid
when due and the borrower filed for protection under Chapter 11 of the
Bankruptcy Act. At June 30, 1995, these loans are in the aggregate amount
of $17,784,772, and have a net carrying value of $1,733,976 after deducting
discounts of $7,864,250 and deferred gains of $8,186,546.
Effective April 1, 1995, the Company and Ivy modified the terms of the Overlook
loan. At the time of the modification, the Overlook loan, which is a
nonrecourse loan, had an outstanding principal balance of $2,306,843 and was
secured by three second mortgages. Since the outstanding principal balance
exceeded the face value of the security for the loan by $667,447, the Company
reduced the gross carrying value of the loan and its related deferred gain by
the $667,447. The net carrying value of the Overlook loan remains at zero at
June 30, 1995.
Foreclosed properties decreased by $128,085 from $726,927 at December 31, 1994
to $598,842 at June 30, 1995. This decrease was primarily the result of the
sale of seventeen cooperative apartments during the first six months of 1995.
Securities available for sale increased by $314,628 from $1,766,851 at
December 31, 1994 to $2,081,479 at June 30, 1995. This increase was the
result of a $241,576 increase in the fair value of securities held at June 30,
1995 and $187,055 of additional securities purchased during the period, offset
by the sale of securities having a cost of $114,003.
Other assets decreased by $267,598 from $1,522,248 at December 31, 1994 to
$1,254,650 at June 30, 1995. This decrease was primarily the result of the
sale of the remaining five cooperative apartments at Rye Colony, Rye, New York
which had a basis of $191,386 and which were received from Ivy in 1994 as
partial payment on the Overlook loan. In addition, $69,713 of mortgage and
organization costs were amortized during the period.
Net unrealized loss on securities available for sale decreased by $241,576 from
$285,057 at December 31, 1994 to $43,481 at June 30, 1995. This decrease in
unrealized loss is a result of the increase in the fair value of the securities
available for sale for the period.
Liquidity and Capital Resources
Management believes that the Company has sufficient liquidity and capital
resources to carry on its existing business and, barring any unforeseen
circumstances, to pay the dividends required to maintain REIT status in the
foreseeable future. The Company is actively seeking to expand its portfolio of
real estate equities and plans to utilize for this purpose a portion of its
available funds and additional funds that the Company may receive from balloon
payments due on the Company's notes receivable as they mature, as well as funds
that may be available from external sources. However, the Company's plans to
expand its portfolio of real estate equities may be affected by limitations
on funds available to it on satisfactory terms from external sources.
Presidential does not maintain any line of credit or short term financing
arrangement. At the present time, Presidential obtains funds for working
capital and investment from its available cash and cash equivalents, from
operating activities and from repayments of its mortgage portfolio.
At June 30, 1995, Presidential had $1,921,243 in available cash and cash
equivalents and $2,081,479 in securities available for sale. The June 30,
1995 total of $4,002,722 represents a decrease of $166,340 from the $4,169,062
total at December 31, 1994. This decrease is primarily due to the payments of
$414,403 in accrued bonus and employee pension costs, partially offset by an
increase of $241,576 in the fair value of securities available for sale.
Operating Activities
Presidential's principal source of cash from operating activities is from
interest on its mortgage portfolio, which was $1,516,700 in 1995, net of
interest payments on wrap mortgage debt. Net cash received from rental
property operations in 1995 was $702,782, net of distributions to minority
partners.
Investing Activities
Presidential holds a portfolio of mortgage notes receivable which consist
primarily of notes arising from sales of real properties previously owned by
the Company. Some of these notes wrap around underlying mortgage debt (the
"Underlying Debt") which is paid by Presidential only out of funds received on
its mortgage portfolio relating to the Underlying Debt. During 1995, the
Company received principal payments of $239,121 on its mortgage portfolio (net
of any principal payments attributable to the Underlying Debt), of which
$199,983 represented prepayments, which are sporadic and cannot be relied upon
as a regular source of liquidity. In 1995, the Company also received $151,306
from sales of foreclosed properties, which are also sporadic.
During 1995, the Company invested $277,651 in additions and improvements to its
properties.
Financing Activities
The Company's indebtedness at June 30, 1995, consisted of $33,517,322 of
mortgages (including $6,278,344 of underlying indebtedness on properties not
owned by the Company but on which the Company holds wraparound mortgages).
The mortgage debt, which is secured by individual properties, is nonrecourse to
the Company and generally is serviced with cash flow from the operations of the
individual properties. During 1995, the Company made $250,846 of principal
payments on mortgage debt on properties which it owns. The mortgages on the
Company's properties are self-liquidating at fixed rates of interest with the
exception of the mortgages on Metmor Plaza and Continental Gardens.
During 1995, Presidential paid cash distributions of $1,053,622 to its
shareholders and received proceeds from dividend reinvestments of $58,550.
Fairfield Towers
The Company's financial performance and liquidity in 1995 and subsequent years
will be affected by the results of the condominium conversion of Fairfield
Towers Apartments in Brooklyn, New York by the owner of that property. The
Company holds a second mortgage having an outstanding principal balance of
$14,845,376 on this 1,152 unit apartment property, which mortgage was modified
in December, 1992 and is subordinate to a first mortgage having an outstanding
principal balance of $16,410,281. Until the first mortgage is repaid (when
approximately 50% of the units have been sold) Presidential will receive basic
interest on its note payable only out of net cash flow from operations of the
property and release payments upon the sale of each condominium unit averaging
$3,000 per unit. All unpaid basic interest and additional interest (which is
based on percentages of gross sales proceeds) will be deferred until after
repayment of the first mortgage. While the Company's return on the loan during
the initial years of the conversion will be limited, if the conversion is
successful and the first mortgage is repaid, the Company expects to ultimately
recover the outstanding principal balance of the note and substantial amounts
of basic and additional interest. In June of 1994, the owners of the Fairfield
Towers property closed the first sales of the condominium units pursuant to the
conversion of the property to condominium status. At June 30, 1995, a total
of 64 units were sold.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 27. Financial Data Schedule.
(b) No reports on form 8-K have been filed during the quarter ended
June 30, 1995.
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.
PRESIDENTIAL REALTY CORPORATION
(Registrant)
DATE: August 9, 1995 By: /s/ Jeffrey F. Joseph
---------------------
Jeffrey F. Joseph
President
DATE: August 9, 1995 By: /s/ Elizabeth Delgado
---------------------
Elizabeth Delgado
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,921,243
<SECURITIES> 2,081,479
<RECEIVABLES> 19,899,954
<ALLOWANCES> 154,637
<INVENTORY> 0
<CURRENT-ASSETS> 8,071,579
<PP&E> 23,709,886
<DEPRECIATION> 4,770,288
<TOTAL-ASSETS> 50,101,904
<CURRENT-LIABILITIES> 3,739,946
<BONDS> 32,545,093
<COMMON> 353,305
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0
<OTHER-SE> 10,370,909
<TOTAL-LIABILITY-AND-EQUITY> 50,101,904
<SALES> 0
<TOTAL-REVENUES> 5,938,391
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