UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
AMENDMENT 1
(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, 1996
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 1-9317
HEALTH AND RETIREMENT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 04-6558834
- --------------------------------- -------------------------------
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
400 Centre Street, Newton, Massachusetts 02158
(Address of principal executive offices) (Zip Code)
617-332-3990
(Registrant's telephone number, including area code)
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 [ ]
Number of Common Shares outstanding at August 12, 1996:
66,209,476 shares of beneficial interest, $.01 par value.
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HEALTH AND RETIREMENT PROPERTIES TRUST
FORM 10-Q
JUNE 30, 1996
THE AMENDED AND RESTATED DECLARATION OF TRUST OF THE COMPANY, DATED JULY 1,
1994, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"),
IS DULY FILED IN THE OFFICE OF THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE
STATE OF MARYLAND, PROVIDES THAT THE NAME "HEALTH AND RETIREMENT PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL
PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
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INDEX
Page
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PART I Financial Information
Item 1. Financial Statements (Unaudited)
Balance Sheets - June 30, 1996 and December 31, 1995 1
Statements of Income - Three and Six Months Ended June 30, 1996 2
and 1995
Statements of Cash Flows - Six Months Ended June 30, 1996 and 3
1995
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and 6
Results of Operations
PART II Other Information
Item 4. Submission of Matters to a Vote of Securities Holders 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
</TABLE>
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<TABLE>
<CAPTION>
HEALTH AND RETIREMENT PROPERTIES TRUST
BALANCE SHEETS
(dollars in thousands, except per share amounts)
(unaudited)
June 30, December 31,
1996 1995
----------------- -----------------
<S> <C> <C>
ASSETS
Real estate properties, at cost (including properties leased to
affiliates with a cost of $104,913 and $103,324, respectively):
Land .......................................................... $ 75,680 $ 72,124
Buildings and improvements .................................... 741,139 706,087
----------- -----------
816,819 778,211
Less accumulated depreciation ................................. 66,053 55,855
----------- -----------
750,766 722,356
Real estate mortgages and notes, net (including note to affiliate
of $1,365 and $1,565, respectively) ......................... 150,113 141,307
Investment in Hospitality Properties Trust ........................ 103,250 99,959
Cash and cash equivalents ......................................... 18,403 18,640
Interest and rents receivable ..................................... 9,486 7,895
Deferred interest and finance costs, net, and other assets ........ 11,286 9,520
----------- -----------
$ 1,043,304 $ 999,677
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank notes payable ................................................ $ 117,000 $ 53,000
Senior notes and bonds payable, net ............................... 199,262 216,759
Accounts payable and accrued expenses ............................. 10,964 11,597
Security deposits ................................................. 7,420 7,386
Due to affiliates ................................................. 596 2,351
Dividends payable ................................................. -- 22,992
Commitments and contingencies
Shareholders' equity:
Preferred shares of beneficial interest, $.01 par value:
50,000,000 shares authorized, none issued ................... -- --
Common shares of beneficial interest, $.01 par value:
100,000,000 shares authorized, 66,209,476 shares and
65,690,166 shares issued and outstanding, respectively ...... 662 657
Additional paid-in capital .................................... 783,258 775,688
Cumulative net income ......................................... 271,275 233,044
Dividends ..................................................... (347,133) (323,797)
----------- -----------
Total shareholders' equity ................................... 708,062 685,592
----------- -----------
$ 1,043,304 $ 999,677
=========== ===========
</TABLE>
See accompanying notes
1
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<TABLE>
<CAPTION>
HEALTH AND RETIREMENT PROPERTIES TRUST
STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
(unaudited)
Quarter Ended June 30, Six Months Ended June 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income ................................. $ 23,389 $ 24,966 $ 46,277 $ 44,796
Interest income ............................... 5,438 5,532 10,286 11,694
-------- -------- -------- --------
Total revenues .............................. 28,827 30,498 56,563 56,490
-------- -------- -------- --------
Expenses:
Interest ...................................... 5,285 7,013 10,246 11,144
Depreciation and amortization ................. 5,319 6,161 10,501 10,776
General and administrative .................... 1,600 1,656 3,073 3,070
-------- -------- -------- --------
Total expenses .............................. 12,204 14,830 23,820 24,990
-------- -------- -------- --------
Income before equity in earnings of Hospitality
Properties Trust, gain on sale of property
and extraordinary item ......................... 16,623 15,668 32,743 31,500
Equity in earnings of Hospitality Properties Trust 2,236 -- 4,328 --
Gain on equity transaction of Hospitality
Properties Trust ............................... 3,603 -- 3,603 --
-------- -------- -------- --------
Income before gain on sale of property and
extraordinary item ............................. 22,462 15,668 40,674 31,500
Gain on sale of property ......................... -- -- -- 2,476
-------- -------- -------- --------
Income before extraordinary item ................. 22,462 15,668 40,674 33,976
Extraordinary item - early extinguishment of debt -- -- (2,443) --
-------- -------- -------- --------
Net income ....................................... $ 22,462 $ 15,668 $ 38,231 $ 33,976
======== ======== ======== ========
Weighted average shares outstanding .............. 66,199 59,180 66,177 58,869
======== ======== ======== ========
Per share amounts:
Income before gain on sale of property and
extraordinary item
$0.34 $0.26 $0.61 $0.54
======== ======== ======== ========
Income before extraordinary item................. $0.34 $0.26 $0.61 $0.58
======== ======== ======== ========
Net income....................................... $0.34 $0.26 $0.58 $0.58
======== ======== ======== ========
</TABLE>
See accompanying notes
2
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<CAPTION>
HEALTH AND RETIREMENT PROPERTIES TRUST
STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
For the Six Months Ended June 30,
1996 1995
----------- ------------
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Cash flows from operating activities:
Net income ........................................................ $ 38,231 $ 33,976
Adjustments to reconcile net income to cash provided by operating
activities:
Gain on sale of property ...................................... -- (2,476)
Gain on sale of stock by Hospitality Properties Trust ......... (3,603) --
Equity in earnings of Hospitality Properties Trust ............ (4,328) --
Extraordinary item ............................................ 2,443 --
Depreciation and amortization ................................. 10,501 10,776
Amortization of deferred interest costs ....................... 856 673
Change in assets and liabilities:
Increase in in(6,346)and rents recei(6,965)nd other assets
Increase in security deposits ............................... 34 3,351
Decrease in accounts payable and accrued expenses ........... (633) (3,483)
Decrease in due to affiliate ................................ (1,175) (1,508)
--------- ---------
Cash provided by operating activities ........................... 35,980 34,344
--------- ---------
Cash flows from investing activities:
Real estate acquisitions .......................................... (38,608) (187,448)
Investments in mortgage loans ..................................... (15,782) (20,889)
Proceeds from repayment of notes and mortgage loans ............... 6,997 10,414
Proceeds from sale of real estate ................................. -- 5,000
Repayment and advance of loan to affiliate ........................ 200 (1,065)
Dividends from Hospitality Properties Trust ....................... 4,640 --
--------- ---------
Cash used for investing activities .............................. (42,553) (193,988)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common shares ........................... 6,995 --
Proceeds from borrowings .......................................... 64,000 168,000
Payments on borrowings ............................................ (17,620) --
Deferred finance costs ............................................ (711) (1,011)
Dividends paid .................................................... (46,328) (39,632)
--------- ---------
Cash provided by financing activities ........................... 6,336 127,357
--------- ---------
Decrease in cash ..................................................... (237) (32,287)
Cash and cash equivalents at beginning of period ..................... 18,640 59,766
--------- ---------
Cash and cash equivalents at end of period ........................... $ 18,403 $ 27,479
========= =========
Supplemental cash flow information:
Interest paid ..................................................... $ 10,176 $ 9,741
========= =========
Non-cash investing and financing activities:
Purchase of real estate ........................................... $ -- $ (42,384)
Issuance of shares ................................................ -- 24,684
Sale of real estate ............................................... -- 19,500
Investment in mortgage loan ....................................... -- (19,500)
Increase in security deposit ...................................... -- 17,940
</TABLE>
See accompanying notes
3
<PAGE>
HEALTH AND RETIREMENT PROPERTIES TRUST
NOTES TO FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
Note 1. Basis of Presentation
The financial statements of Health and Retirement Properties Trust (the
"Company") have been prepared in accordance with generally accepted accounting
principals 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. Operating results for interim periods are
not necessarily indicative of the results that may be expected for the full
year.
Note 2. Shareholders' Equity
On July 1, 1996, the Trustees declared a dividend on the Company's common
shares with respect to the quarter ended June 30, 1996, of $0.35 which will be
distributed on or about August 22, 1996 to shareholders of record as of July 25,
1996.
In January 1996, the Company issued 475,000 shares, resulting in net
proceeds of approximately $6,995, as a result of the underwriters exercise of
the over-allotment option pursuant to the December 1995 equity offering by the
Company. In April, 1996, the Company issued 35,560 restricted shares of common
stock to HRPT Advisors, Inc. (the "Advisor"), an affiliate, as compensation for
the incentive fee earned for the year ended December 31, 1995.
In June 1996, 7,250 shares were granted to officers of the Company and
certain employees of the Advisor under the 1992 Incentive Share Award Plan. The
three independent Trustees, as part of their annual fee, were also each granted
500 shares. The shares granted to the officers and certain employees of the
Advisor vest over a three year period. The shares granted to the Trustees vest
immediately.
Note 3. Real Estate Properties
During 1996, the Company purchased two medical clinics and five nursing
facilities for approximately $35,639 and simultaneously leased these properties
for periods up to 21 years. During the six months ended June 30, 1996, the
Company also provided $2,969 of improvement financing to existing
tenants.
At June 30, 1996, 31% of the Company's real estate properties, net, and
mortgage receivables were in properties leased to Marriott International, Inc.
("Marriott"). The financial statements of Marriott have been filed as a part of
Marriott's Quarterly Report on Form 10-Q, file number 1-12188, for the quarter
ended June 14, 1996.
At June 30, 1996, the Company had total commitments outstanding aggregating
$34,599 for improvements to certain properties leased or mortgaged by the
Company and to purchase a medical office building.
Note 4. Investment in Hospitality Properties Trust
At June 30, 1996, the Company owned 4,000,000 shares of the common stock of
Hospitality Properties Trust ("HPT") with a carrying value of $103,250 and
market value of $107,000. HPT is a real estate investment trust investing
principally in income producing hotel and lodging related real estate. The
Company's percentage of ownership of HPT as of June 30, 1996, was 14.9%. During
April 1996, HPT completed a public stock offering of 14,250,000 shares of common
stock at a per share price of $26.625 for total consideration of approximately
$379,406. As a result of this transaction, the company's ownership percentage
was reduced from 31.7% to 14.9%. Pursuant to the HPT offering, the Company
realized a gain of $3,603. The Company uses the income statement method to
account for issuances of common stock by HPT. Although the Company did not sell
any shares, under this method gains and losses on issuance of stock by a HPT are
recognized in the income statement.
4
<PAGE>
HEALTH AND RETIREMENT PROPERTIES TRUST
NOTES TO FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
Note 5. Real Estate Mortgages and Notes Receivable, net
During 1996, the Company provided debt financing totaling $15,782 secured
by a retirement community and by properties under existing mortgages with the
Company. These mortgage and notes receivable bear interest between 10.5% and 11%
and mature between 2006 and 2008. The Company also provided improvement
financing for existing facilities of $782. The Company received regularly
scheduled principal payments and prepayments of mortgages secured by four
nursing facilities totaling $6,997.
Note 6. Indebtedness
In March 1996, the Company entered into a new agreement and refinanced its
$250 million unsecured revolving bank credit facility. The restated credit
facility matures in 2000 and bears interest at LIBOR plus 0.875% per annum. In
connection with the refinancing, the Company recognized an extraordinary loss of
$2,443 from the early extinguishment of debt. At June 30, 1996, $117,000 was
outstanding under the credit facility.
In April, 1996, the Company prepaid the outstanding secured Revenue
Refunding Bonds totaling $17,620 by borrowing on the revolving bank credit
facility and from available cash.
5
<PAGE>
HEALTH AND RETIREMENT PROPERTIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Quarter Ended June 30, 1996 Versus 1995
Total revenues for the quarter ended June 30, 1996, decreased to
$28,827,000 from $30,498,000 for the quarter ended June 30, 1995. Rental income
decreased by $1,577,000 and interest income decreased by $94,000. Rental income
decreased because revenue for the 1996 period does not include revenues from the
Company's formerly wholly owned subsidiary, Hospitality Properties Trust
("HPT"). In March 1995, HPT acquired 21 Courtyard by Marriott(R) hotels. In
August 1995, HPT completed its initial public offering (the "IPO"). Prior to the
IPO, operating results of HPT were included in the Company's results of
operations. Since the IPO, the Company's investment in HPT has been accounted
for using the equity method. The Company's percentage of ownership of HPT as of
June 30, 1996, was 14.9%. This rental revenue decrease has been partially offset
by $118,630,000 of new real estate investments subsequent to June 30, 1995.
Interest income decreased as a result of mortgage loan payoffs subsequent to
June 30, 1995 and lower cash balances compared to the quarter ended June 30,
1995.
Total expenses for the quarter ended June 30, 1996, decreased to
$12,204,000 from $14,830,000 for the quarter ended June 30, 1995. Interest,
depreciation and amortization, and general and administrative expense decreased
by $1,728,000, $842,000 and $56,000 respectively. Interest decreased due to
lower interest rates and lower debt outstanding during the quarter ended June
30, 1996 as compared to the quarter ended June 30, 1995. Amortization expense
decreased as a result of the early extinguishment of debt during March 1996.
Depreciation and general and administrative expenses decreased primarily as the
result of the HPT transaction described above.
Net income for the quarter ended June 30, 1996, increased to $22,462,000 or
$.34 per share, from $15,668,000, or $.26 per share, for the same quarter in
1995. This increase is primarily a result of new investments since June 30,
1995, and the recognition of a gain resulting from the public stock offering by
HPT of its shares.
The Company bases its dividend primarily on Funds from Operations ("FFO").
The Company has adopted the National Association of Real Estate Investment
Trust's ("NAREIT") definition of FFO, as income before equity in earnings of
HPT, gain (loss) on sale of real estate and extraordinary items, plus
depreciation and the Company's proportionate share of HPT's FFO. FFO for the
1996 quarter was $24,838,000, or $.38 per share, as compared to $21,438,000, or
$.36 per share, for the 1995 quarter. Cash available for distribution may not
necessarily equal FFO as the cash flow of the Company is affected by other
factors not included in the FFO calculation. The dividends declared which relate
to these quarters were $23,170,000, or $.35 per share, in 1996 and $20,121,000,
or $.34 per share, in 1995.
Six Months Ended June 30, 1996 Versus 1995
Total revenues for the six months ended June 30, 1996 increased to
$56,563,000 from $56,490,000 for the six months ended June 30, 1995. Rental
income increased by $1,481,000 and interest income decreased by $1,408,000.
Rental income increased primarily as the net result of $118,630,000 of new
investments subsequent to June 30, 1995, offset by the HPT transaction described
above. Interest income decreased as a result of mortgage loan payoffs subsequent
to June 30, 1995 and lower cash balances compared to the six months ended June
30, 1995.
Total expenses for the six months ended June 30, 1996 decreased to
$23,820,000 from $24,990,000 for the six months ended June 30, 1995. Interest
expense and depreciation and amortization expense decreased by $898,000 and
$275,000, respectively, while general and administrative increased by $3,000.
Interest expense decreased due to lower interest rates and lower debt
outstanding during the six months ended June 30, 1996 as compared to the quarter
ended June 30, 1995. Depreciation and amortization expense decreased primarily
as a result of the depreciation expense associated with the HPT transaction and
amortization expense reduced by the early extinguishment of debt during March
1996. General and administrative remained relatively unchanged from the prior
year, with the increased expenses related to new investments being offset by
decreases associated with the HPT transaction.
6
<PAGE>
HEALTH AND RETIREMENT PROPERTIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Six Months Ended June 30, 1996 Versus 1995 - continued
Net income increased to $38,231,000, or $.58 per share, for the 1996 period
from $33,976,000, or $.58 per share, for the 1995 period. The increase in net
income is primarily a result of the new investments since June 30, 1995, and the
recognition of a gain resulting from the public stock offering by HPT of its
shares.
Funds from operations for the six months ended June 30, 1996, were
$49,000,000, or $.74 per share, and $41,497,000, or $.70 per share, for the 1995
period. The dividends declared which relate to the six months ended June 30,
1996 and 1995 were $46,328,000, or $.70 per share, and $40,246,000, or $.68 per
share, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Total assets of the Company increased to $1.043 billion at June 30, 1996,
from $999,667,000 million at December 31, 1995. The increase is primarily
attributable to new real estate acquisitions and the issuance of additional
mortgage loans.
During 1996, the Company purchased two medical clinics and five nursing for
approximately $35,639,000, which were simultaneously leased for periods up to 21
years. During the six months ended June 30, 1996, the Company also provided
$2,969,000 of improvement financing to existing tenants. These transactions were
funded with cash on hand and draws on the Company's revolving credit facility.
During 1996, the Company provided debt financing totaling $15,782,000
secured by a retirement community and cross-collateralized by properties under
existing mortgages with the Company. These mortgage and notes receivable bear
interest between 10.5% and 11% and mature between 2006 and 2008. During this
period, the Company also provided improvement financing for existing facilities
of $782,000. These transactions were funded with cash on hand and draws on the
Company's revolving credit facility.
In January 1996, the underwriters for the December 1995 share offering
exercised the over-allotment option for 475,000 shares resulting in net proceeds
of approximately $6,995,000.
At June 30, 1996, the Company had $18,403,000 of cash and cash equivalents,
and the ability to borrow up to an additional $133,000,000 under its revolving
credit facility. The facility matures in 2000 and bears interest at a spread
over LIBOR. The effective interest rates on the Company's senior notes are
capped by the use of interest rate cap agreements. The interest rate cap
agreements provide for maximum weighted average interest rates of approximately
6.24% on $200,000,000 of variable rate debt through 1997.
At June 30, 1996, the Company had outstanding commitments to provide
financing totaling approximately $34,599,000. The Company intends to fund these
commitments with a combination of cash on hand, amounts available under its
existing credit facilities and/or proceeds of mortgage prepayments, if any.
The Company continues to seek new investments to expand and diversify its
portfolio of leased and mortgaged health care related real estate. The Company
intends to balance the use of debt and equity in such a manner that the long
term cost of funds used to acquire or mortgage finance facilities is
appropriately matched, to the extent practicable, with the terms of the
investments made with such funding. As of June 30, 1996, the Company's debt as a
percentage of total market capitalization was approximately 22%.
7
<PAGE>
HEALTH AND RETIREMENT PROPERTIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
CERTAIN IMPORTANT FACTORS
The Company's Quarterly Report on Form 10-Q contains statements which
constitute forward looking statements. Those statements appear in a number of
places in this Form 10-Q and include statements regarding the intent, belief or
expectations of the Company, its Trustees or its officers with respect to the
consummation of additional acquisitions and financings, the funding of the
Company's commitments, policies and plans of the Company regarding investments,
financings or other matters. Readers are cautioned that any such forward looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
contained in the forward looking statements as a result of various factors. Such
factors include without limitation changes in financing terms, the Company's
ability or inability to complete acquisitions and financing transactions and
general changes in economic conditions not presently contemplated. The
information contained in this Form 10-Q and the Company's Annual Report on Form
10-K for the year ended December 31, 1995, including the information under the
heading "Management's Discussion and Analysis of Financial Condition and Results
of Operations", identifies other important factors that could cause such
differences.
Part II Other Information
Item 4. Submission of Matters to a Vote of Securities Holders.
The Company's Annual Shareholders Meeting commenced on May 14, 1996 and
adjourned in part until June 28, 1996. Barry M. Portnoy and Bruce M. Gans, M.D.,
were re-elected to serve as Trustees in Group I on the Board of Trustees. There
were 55,017,630 and 54,988,845 shares, respectively, voted in favor of, and
372,388 and 401,173 shares, respectively, withheld from voting for the
re-election of Barry M. Portnoy and Bruce M. Gans, M.D., and 150,250 shares not
voted with respect to each such Trustee. Trustees in Group II and III, Ralph J.
Watts, Rev. Justinian Manning, C.P. and Gerard M. Martin, continued in office as
Trustees after the meeting.
As previously reported, on June 28, 1996 the shareholders approved an
amendment to the Declaration of Trust to allow the Board of Trustees to increase
or decrease the authorized capital shares of the Company. There were 33,474,724
shares voted in favor of, 6,378,103 shares voted against, 1,409,607 votes
abstaining and 19,945,774 shares not voting with respect to the amendment to the
Company's Declaration of Trust.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed a current report on Form 8-K, dated July 9, 1996 relating
to the shareholders approval of the amendment to the Trust's Amended and
Restated Declaration of Trust described in Item 4 of this Part II.
8
<PAGE>
HEALTH AND RETIREMENT PROPERTIES TRUST
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.
HEALTH AND RETIREMENT PROPERTIES TRUST
By: /S/ David J. Hegarty
David J. Hegarty
President and Chief Operating Officer
Dated: August 15, 1996
By: /S/ Ajay Saini
Ajay Saini
Treasurer and Chief Financial Officer
Dated: August 15, 1996
9
