<PAGE> 1
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, 1997
or
[ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from______________________to_____________________
Commission file number 0-19156
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED, A MARYLAND CORPORATION
(Exact name of registrant as specified in its charter)
MARYLAND 13-3559213
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
50 ROCKEFELLER PLAZA, NEW YORK, NEW YORK 10020
(Address of principal executive offices) (Zip Code)
(212) 492-1100
(Registrant's telephone number, including area code)
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
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. [X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. [ ] Yes [ ] No
7,206,642 shares of common stock; $.001 Par Value
outstanding at August 11, 1997
<PAGE> 2
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
INDEX
Page No.
PART I
Item 1. - Financial Information*
Consolidated Balance Sheets, December 31, 1996 and
June 30, 1997 2
Consolidated Statements of Income for the three and six
months ended June 30, 1996 and 1997 3
Consolidated Statements of Cash Flows for the six
months ended June 30, 1996 and 1997 4
Notes to Consolidated Financial Statements 5-7
Item 2. - Management's Discussion of Operations 8-9
PART II
Item 4. - Submission of Matters to a Vote of Security Holders 10
Item 6. - Exhibits and Reports on Form 8-K 10
Signatures 11
*The summarized financial information contained herein is unaudited; however in
the opinion of management, all adjustments necessary for a fair presentation of
such financial information have been included.
- 1 -
<PAGE> 3
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
PART I
Item 1. - FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
------------- -------------
(Note) (Unaudited)
<S> <C> <C>
ASSETS:
Land and buildings ,
net of accumulated depreciation of
$9,484,029 at December 31, 1996 and
$10,483,450 at June 30, 1997 $ 85,939,167 $ 91,550,344
Net investment in direct financing leases 23,563,052 16,886,553
Equity investment 11,016,708 11,329,975
Cash and cash equivalents 6,452,554 2,955,653
Other assets 783,245 580,888
------------- -------------
Total assets $ 127,754,726 $ 123,303,413
============= =============
LIABILITIES:
Limited recourse mortgage notes payable $ 68,586,254 $ 62,135,627
Note payable 1,600,000
Accrued interest payable 553,985 613,611
Accounts payable and accrued expenses 231,555 232,467
Accounts payable to affiliates 3,974,450 4,309,541
Deferred gain 3,423,043 3,423,043
Prepaid rental income 42,682 19,984
------------- -------------
Total liabilities 76,811,969 72,334,273
------------- -------------
Minority interest 4,048,527 3,948,282
------------- -------------
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value;
40,000,000 shares authorized;
7,217,294 shares, issued and outstanding 7,217 7,217
Additional paid-in capital 62,160,058 62,160,058
Dividends in excess of accumulated
earnings (15,184,953) (15,058,325)
------------- -------------
46,982,322 47,108,950
Less common stock in treasury at cost,
10,652 shares at December 31, 1996 and (88,092) (88,092)
------------- -------------
June 30, 1997
Total shareholders' equity 46,894,230 47,020,858
------------- -------------
Total liabilities and shareholders' equity $ 127,754,726 $ 123,303,413
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Note: The balance sheet at December 31, 1996 has been derived from the
audited consolidated financial statements at that date.
- 2 -
<PAGE> 4
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1996 June 30, 1997 June 30, 1996 June 30, 1997
------------- ------------- ------------- -------------
Revenues:
Rental income from
<S> <C> <C> <C> <C>
operating leases $ 2,939,935 $ 2,838,170 $ 6,129,087 $ 6,092,529
Interest from direct
financing leases 823,212 558,539 1,762,096 1,308,491
Other interest income 89,561 81,234 142,115 168,373
Other income 112,313 112,313
----------- ----------- ----------- -----------
3,852,708 3,590,256 8,033,298 7,681,706
----------- ----------- ----------- -----------
Expenses:
Interest 1,948,561 1,590,245 4,049,085 3,301,206
Depreciation 499,584 515,343 1,001,917 999,421
General and
administrative 296,232 285,389 515,853 614,990
Property expenses 457,850 544,690 872,742 949,752
Amortization 14,408 23,700 28,959 42,903
----------- ----------- ----------- -----------
3,216,635 2,959,367 6,468,556 5,908,272
----------- ----------- ----------- -----------
Income before minority
interest, income from
equity investments, net
gain on sales and extra-
ordinary item 636,073 630,889 1,564,742 1,773,434
Minority interest in income (87,941) (148,554) (176,068) (297,280)
----------- ----------- ----------- -----------
Income before income from
equity investments, net
gain on sales and extra-
ordinary item 548,132 482,335 1,388,674 1,476,154
Income from equity investment 381,121 391,905 903,213 983,170
----------- ----------- ----------- -----------
Income before net gain
on sales and extra-
ordinary item 929,253 874,240 2,291,887 2,459,324
Net gain on sales 456,107 1,112,486
----------- ----------- ----------- -----------
Income before
extraordinary item 1,385,360 874,240 3,404,373 2,459,324
Extraordinary gain on
extinguishment of debt 427,447 427,447
----------- ----------- ----------- -----------
Net income $ 1,385,360 $ 1,301,687 $ 3,404,373 $ 2,886,771
=========== =========== =========== ===========
Net income per share (7,206,642 shares outstanding):
Income before extraordinary
item $ .19 $ .12 $ .47 $ .34
Extraordinary item .06 .06
----------- ----------- ----------- -----------
$ .19 $ .18 $ .47 $ .40
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 3 -
<PAGE> 5
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1996 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,404,373 $ 2,886,771
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,030,876 1,042,324
Income from equity investment
in excess of dividends received (278,524) (313,267)
Other noncash items 22,519 68,894
Extraordinary gain on extinguishment of debt (427,447)
Net gain on sales of real estate (1,112,486)
Net change in operating assets and liabilities 316,024 418,642
------------ ------------
Net cash provided by operating activities 3,382,782 3,675,917
------------ ------------
Cash flows from investing activities:
Proceeds from repayment of note receivable 110,750
Purchases of real estate and other capitalized costs (241,156)
Proceeds from sale of real estate 13,734,572
------------ ------------
Net cash provided by investing activities 13,493,416 110,750
------------ ------------
Cash flows from financing activities:
Dividends paid (2,990,757) (2,760,143)
Proceeds from note payable 2,480,000 1,600,000
Repayment of note payable (2,480,000)
Prepayment of mortgages payable (8,382,243) (5,450,000)
Payments of mortgage principal (560,007) (573,180)
Distributions to minority interest in excess of
minority interest in income (221,140) (100,245)
------------ ------------
Net cash used in financing activities (12,154,147) (7,283,568)
------------ ------------
Net increase (decrease) in cash and cash equivalents 4,722,051 (3,496,901)
Cash and cash equivalents, beginning of period 2,249,315 6,452,554
------------ ------------
Cash and cash equivalents, end of period $ 6,971,366 $ 2,955,653
============ ============
Supplemental disclosure of cash flows information:
Interest paid $ 3,801,914 $ 3,241,580
============ ============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 4 -
<PAGE> 6
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 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
of normal recurring accruals) considered necessary for a fair presentation have
been included. For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
Note 2. Transactions with Related Parties:
For the three-month and six-month periods ended June 30, 1996, the Company
incurred asset management fees of $209,739 and $436,703, respectively, incentive
fees in like amount and general and administrative expense reimbursements of
$62,014 and $80,937, respectively, payable to an affiliate. For the three-month
and six-month periods ended June 30, 1997, the Company incurred asset management
fees of $206,949 and $393,899, respectively, incentive fees in like amount and
general and administrative expense reimbursements of $136,397 and $299,313,
respectively, payable to an affiliate.
The Company, in conjunction with certain affiliates, is a participant in a cost
sharing agreement for the purpose of renting and occupying office space. Under
the agreement, the Company pays its proportionate share of rent and other costs
of occupancy. Net expenses incurred for the six-month periods ended June 30,
1996 and 1997 were $62,014 and $55,543, respectively.
Note 3. Dividends:
Dividends declared and paid to shareholders during the six months ended June 30,
1997 are summarized as follows:
<TABLE>
<CAPTION>
Quarter Ended Paid Per Share
------------- ---- ---------
<S> <C> <C>
December 31, 1996 $1,495,378 $0.20750
========== ========
March 31, 1997 $1,264,765 $0.17550
========== ========
</TABLE>
A dividend of $0.1757 per share ($1,266,207) was declared and paid in July 1997
for the quarter ended June 30, 1997.
- 5 -
<PAGE> 7
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
Note 4. Industry Segment Information:
The Company's operations consist of the direct and indirect investment in and
leasing of industrial and commercial real estate. The financial reporting
sources of leasing revenues for the three and six-month periods ended June 30,
1996 and 1997 are as follows:
<TABLE>
<CAPTION>
1996 1997
----------- -----------
Per Statements of Income:
<S> <C> <C>
Rental income from operating leases $ 6,129,087 $ 6,092,529
Interest from direct financing leases 1,762,096 1,308,491
Adjustments:
Rental income attributable to
minority interests (958,656) (958,656)
Share of interest income from equity
investment's direct financing lease 2,242,951 2,293,886
----------- -----------
$ 9,175,478 $ 8,736,250
=========== ===========
</TABLE>
For the six-month periods ended June 30, 1996 and 1997, the Company earned its
proportionate net lease revenues from its investments from the following lease
obligors:
<TABLE>
<CAPTION>
1996 % 1997 %
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Marriott International, Inc. (a) $2,242,951 24% $2,293,886 26%
Information Resources Incorporated (b) 1,458,007 16 1,458,007 17
The Titan Corporation (b) 1,009,517 11 1,009,517 12
New WAI, L.P./Warehouse Associates 740,296 8 725,643 8
EnviroWorks, Inc. 693,878 8 693,878 8
Wal-Mart Stores, Inc. 597,341 7 591,505 7
Kmart Corporation 469,191 5 504,023 6
Childtime Childcare Inc. 371,229 4 397,477 5
Neodata Corporation 280,572 3 293,864 3
Harvest Foods, Inc. 619,485 7 286,966 3
CalComp Technology, Inc. 220,839 2
US West Communications, Inc. 111,300 1 111,300 1
Safeway Stores Incorporated 96,337 1 70,875 1
Kroger Co. 61,152 1
Affiliated Foods Southwest, Inc. 17,318
Summagraphics Corporation 179,633 2
Empire of America Realty Credit Corp. 188,322 2
Best Buy Co., Inc. 117,419 1
---------- ---------- ---------- ----------
$9,175,478 100% $8,736,250 100%
========== ========== ========== ==========
</TABLE>
(a) Represents the Company's proportionate share of lease revenues from an
equity investment.
(b) Net of Corporate Property Associates 9's minority interest.
- 6 -
<PAGE> 8
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
Note 5. Property Leased to Harvest Foods, Inc.:
In February 1992, the Company and Carey Institutional Properties Incorporated
(CIP(TM)), an affiliate, purchased, through wholly-owned subsidiaries, as
tenants-in-common, each with 50% ownership interests, 13 supermarkets and two
office buildings and entered into a master lease with Harvest Foods, Inc.
("Harvest"), as lessee.
In June 1996, Harvest filed a voluntary bankruptcy petition and, in March 1997,
the Bankruptcy Court approved Harvest's motion to disaffirm the master lease.
Under its ruling, the Bankruptcy Court allowed the Company and CIP(TM) to
establish its unsecured claim for lease rejection damages at $10,000,000 and
ordered Harvest to pay $150,000 in full satisfaction and settlement of any
post-petition obligation for real estate taxes. Harvest subsequently vacated the
properties.
On March 15, 1997, the Company and CIP(TM) entered into a net lease with The
Kroger Co. for two supermarkets in Conway and North Little Rock, Arkansas. The
Company and CIP(TM) also entered into net leases with Affiliated Foods
Southwest, Inc. for two stores in Hope and Little Rock, Arkansas. The Company
and CIP(TM) are currently evaluating various offers for the lease or purchase of
the vacated properties and are continuing their efforts to remarket the
properties.
On June 24, 1997, the Company and CIP(TM) entered into a transaction whereby
each purchased a 50% participation in the first priority mortgage loan
collateralized by the 15 properties formerly leased to Harvest. The mortgage
loan, which has an outstanding balance of $8,554,894, was purchased for
$7,700,000 (of which the Company's share was $4,277,447 and $3,850,000,
respectively). For financial reporting purposes, the purchase of the
participation has been recorded as a mortgage prepayment. In connection with
such prepayment, the Company has recognized an extraordinary gain on the
extinguishment of debt of $427,447 in the accompanying consolidated financial
statements. The Company and CIP(TM) have entered into negotiations with the
holder of a subordinated mortgage loan of $2,995,180 (of which the Company's
share is $1,497,590) in an attempt to reach a settlement for the payoff of the
loan. The holder of the subordinated mortgage loan is an affiliate of Harvest.
Note 6. Equity Investment:
The Company owns an approximate 23.7% interest in Marcourt Investments
Incorporated ("Marcourt") which net leases 13 Courtyard by Marriott hotels to a
wholly-owned subsidiary of Marriott International, Inc. Summarized financial
information of Marcourt is as follows:
(in thousands)
<TABLE>
<CAPTION>
December 31, 1996 June 30, 1997
----------------- -------------
<S> <C> <C>
Assets $ 149,694 $ 149,495
Liabilities 106,002 104,394
Shareholders' equity 43,692 45,101
<CAPTION>
Six Months Ended
June 30, 1996 June 30, 1997
----------------- -------------
<S> <C> <C>
Revenue $ 9,433 $ 9,696
Interest and other expense (5,734) (5,391)
Other expenses (64)
--------- ---------
Net income $ 3,699 $ 4,241
========= =========
</TABLE>
- 7 -
<PAGE> 9
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
Item 2. - MANAGEMENT'S DISCUSSION OF OPERATIONS
Results of Operations:
Net income decreased for the six-month period ended June 30, 1997 as
compared with the six-month period ended June 30, 1996; however, income before
gains reflected an increase of $167,000. Of such increase, $112,000 was due to
nonrecurring other income recognized in the second quarter of 1997 for amounts
received in connection with the bankruptcy of Harvest Foods, Inc. Income before
gains for the comparable three-month periods decreased by $55,000, even with the
nonrecurring other income of $112,000 reported in the current three-month
period.
The decrease in lease revenues was due to the sale of properties in 1996
which were leased to Empire of America Realty Credit Corp. and Best Buy Co.,
Inc. and the termination of the Harvest master lease for 15 properties pursuant
to Harvest's voluntary bankruptcy petition. The Company has entered into leases
at four of the former Harvest properties with The Kroger Co. and Affiliated
Foods Southwest, Inc. which will provide annual cash flow of $276,000 to the
Company. The Company is currently evaluating offers for the leasing or purchase
of several of the properties vacated by Harvest. Annual cash flow (rents less
mortgage debt service) from the Harvest properties was $607,000. The Company
does not expect to fully replace such cash flow from the properties; however,
after the remarketing effort is completed, Management believes that annual cash
flow will substantially increase from its current level. Interest expense
decreased due to the payoff of the mortgages on the Empire and Best Buy
properties in connection with the sale of such properties, the transfer of the
Company's interest in a vacant property in Stamford, Connecticut to an
affiliate, at which time the obligation for the limited recourse debt was
assigned to the affiliate, and the continuing amortization of the Company's
limited recourse mortgage loans. The increase in property expenses was primarily
due to carrying costs incurred for former Harvest properties. To the extent that
the Company is able to negotiate net lease provisions in any new leases at these
properties, such costs will be absorbed by the lessee.
Financial Condition:
There has been no material change in the Company's financial condition
since December 31, 1996. Cash flow from operations of $3,676,000 was sufficient
to pay dividends of $2,760,000 and scheduled mortgage principal payment
installments of $573,000. The Company's cash position has been favorably
affected by the Advisor's continuing its voluntary deferral of asset management
and performance fees. As of June 30, 1997, such deferrals amounted to
$4,165,000. As previously reported, the Company's Board of Directors reduced the
dividend rate based on uncertainties to cash flow resulting from the Harvest
bankruptcy and the related lease termination and the need to maintain cash to
take advantage of reinvestment opportunities.
Although, as previously reported, the Company was performing due diligence
on a proposed purchase transaction which would have required $3,000,000 of
equity, the Company used $3,850,000 to purchase a participation in the first
priority mortgage loan on the former Harvest properties at a substantial
discount. In connection with the purchase of the participation, an extraordinary
gain on extinguishment of debt of $427,000 was recognized for financial
reporting purposes. The Company is negotiating with the holder of a $1,497,500
subordinated mortgage loan on the former Harvest properties in an attempt to
reach a settlement. The holder of this debt is an affiliate of Harvest.
A mortgage loan of $1,600,000 on one of the Company's properties leased to
Kmart Corporation with an annual interest rate of 9.55% matured in January 1997.
The loan was paid by drawing an advance on the Company's revolving credit
facility. The annual interest rate on the credit facility advance is indexed to
the London Inter-Bank Offered Rate and is currently 8.3%. The credit facility
matures in August 1997 and it is anticipated that the Company will extend the
agreement. As the Company has been able to meet all of the financial covenants
under the agreement, the Company believes that the prospects for an extension
are favorable. The Company will also continue to monitor Kmart's credit rating.
If Kmart's credit prospects continue to improve, the Company could seek to place
new limited recourse mortgage debt on its three Kmart properties with the
objective of using a portion or all of any such funds received for new
investments or paying off the $1,600,000 advance from the credit facility.
- 8 -
<PAGE> 10
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
PART II
Item 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An annual Shareholders meeting was held on June 10, 1997, at which time
a vote was taken to elect the Company's directors through the
solicitation of proxies. The following directors were elected for a
one-year term:
<TABLE>
<CAPTION>
Total Shares Shares Shares
Name Of Director Shares Voting Voting Yes Voting No Abstaining
---------------- ------------- ---------- --------- ----------
<S> <C> <C> <C> <C>
William P. Carey 3,815,331 3,734,098 500 80,733
Ralph G. Coburn 3,815,331 3,699,741 34,857 80,733
George E. Stoddard 3,815,331 3,707,741 26,857 80,733
Warren G. Wintrub 3,815,331 3,734,598 80,733
Barclay G. Jones, III 3,815,331 3,733,398 1,200 80,733
Charles C. Townsend, Jr. 3,815,331 3,731,598 3,000 80,733
William Ruder 3,815,331 3,733,798 800 80,733
</TABLE>
No other matters were subject to a vote at this meeting.
Item 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K:
During the quarter ended June 30, 1997, the Company was not required to
file any reports on Form 8-K.
- 9 -
<PAGE> 11
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORPORATE PROPERTY ASSOCIATES 10 INCORPORATED
08/12/97 By: /s/ Steven M. Berzin
- -------- ---------------------------
Date Steven M. Berzin
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
08/12/97 By: /s/ Claude Fernandez
- -------- ---------------------------
Date Claude Fernandez
Executive Vice President and
Chief Administrative Officer
(Principal Accounting Officer)
08/12/97 By: /s/ Michael D. Roberts
- -------- ---------------------------
Date Michael D. Roberts
First Vice President and Controller
- 10 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q FOR
THE SIX MONTHS ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,955,653
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,955,653
<PP&E> 118,920,347
<DEPRECIATION> 10,983,450
<TOTAL-ASSETS> 123,303,413
<CURRENT-LIABILITIES> 6,175,603
<BONDS> 63,735,627
0
0
<COMMON> 7,212
<OTHER-SE> 47,013,641
<TOTAL-LIABILITY-AND-EQUITY> 123,303,413
<SALES> 0
<TOTAL-REVENUES> 2,681,706
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,606,066
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,301,206
<INCOME-PRETAX> 2,459,324
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,459,324
<DISCONTINUED> 0
<EXTRAORDINARY> 427,447
<CHANGES> 0
<NET-INCOME> 2,886,771
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
