SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Year Ended Commission File Nos.
March 31, 1997 33-22548, 33-33686
- --------------------------- --------------------
THE GUARDIAN REAL ESTATE ACCOUNT
OF
THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
----------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-2656036
- -------------------------------- --------------------
(State of incorporation) (IRS Employer
Identification No.)
201 Park Avenue South, New York, New York 10003
-----------------------------------------------
(Address of principal executive offices)
(212) 598-8000
-------------------------------
(Registrant's Telephone Number)
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 |_| .
<PAGE>
THE GUARDIAN REAL ESTATE ACCOUNT
OF
THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
(Registrant)
INDEX TO
REPORT ON FORM 10-Q
-------------------
PART I - Financial Information Page
- ------------------------------- ----
Item 1. Financial Statements
Statements of Assets and Liabilities as of March 31, 1997
(Unaudited) and December 31, 1996 (Audited) .................. 3
Statements of Operations for the three months ended
March 31, 1997, 1996 and 1995 (Unaudited) .................... 4
Statement of Changes in Net Assets for the
three months ended March 31, 1997 (Unaudited)
and for the years ended December 31, 1996
and 1995 (Audited) ........................................... 5
Notes to Financial Statements (Unaudited) ...................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................ 12
PART II - Other Information
- - ---------------------------
Item 1. Legal Proceedings .............................................. 14
Item 2. Changes in Securities .......................................... 14
Item 3. Defaults Upon Senior Securities ................................ 14
Item 4. Submission of Matter to a Vote
of Security Holders .......................................... 14
Item 5. Other Information .............................................. 14
Item 6. Exhibits and Reports on Form 8-K ............................... 14
-2-
<PAGE>
THE GUARDIAN REAL ESTATE ACCOUNT
OF THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
ASSETS: (Unaudited) (Audited)
----------- ------------
<S> <C> <C>
Investment Properties at Fair Value
(Original cost: $22,212,615 and $22,246,864, respectively) $12,100,000 $10,950,000
Long-Term Investments at Fair Value
(Original cost: $2,460,629) 2,322,624 2,401,432
Cash 4,518 4,511
Short-Term Investments 1,737,000 1,433,000
Other Receivables 112,567 79,121
----------- -----------
TOTAL ASSETS $16,276,709 $14,868,064
=========== ===========
LIABILITIES:
Accrued Management Advisory Fees $ 40,484 $ 39,925
Accrued Expenses 53,020 65,812
Unearned Rent -- --
Annuitant Mortality Fluctuation Fund 91,668 89,826
Other Liabilities 143,314 92,678
----------- -----------
TOTAL LIABILITIES 328,486 288,241
----------- -----------
NET ASSETS REPRESENTING
CONTRACTOWNERS' EQUITY:
Value Guard 3,782,918 3,631,542
Guardian Investor 5,220,202 4,621,039
ValuePlus 581,734 523,903
Guardian Insurance & Annuity Co., Inc. 6,363,369 5,803,339
----------- -----------
TOTAL NET ASSETS 15,948,223 14,579,823
----------- -----------
TOTAL LIABILITIES AND NET ASSETS $16,276,709 $14,868,064
=========== ===========
Number of Units Outstanding:
Variable Annuity Contractowners
Value Guard 369,306 387,874
Guardian Investor 565,229 546,896
ValuePlus Contractowners 54,823 54,070
The Guardian Insurance & Annuity Co., Inc. 568,614 568,614
Unit Value:
Variable Annuity Contractowners
Value Guard $10.1864 $ 9.3127
Guardian Investor $ 9.1737 $ 8.3904
ValuePlus Contractowners $10.6111 $ 9.6894
The Guardian Insurance & Annuity Co., Inc. $11.1909 $10.2062
</TABLE>
See Notes to the Financial Statements
-3-
<PAGE>
THE GUARDIAN REAL ESTATE ACCOUNT
OF THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 1997, 1996, and 1995 (Unaudited)
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Investment Income:
Rental $ 550,917 $ 531,478 $ 522,397
Interest 60,432 52,276 53,261
Other Income -- -- --
----------- ----------- -----------
Total Income 611,349 583,754 575,658
----------- ----------- -----------
Expenses:
Real Estate Operating Expenses 179,798 159,461 135,970
Real Estate Taxes 51,393 67,274 66,068
Management Advisory Fees 32,448 30,922 34,934
Repairs and Maintenance 17,137 14,498 50,292
Administrative Expenses 57,455 25,233 29,507
----------- ----------- -----------
Total Expenses 338,231 297,388 316,771
----------- ----------- -----------
Net Investment Income Before Realized Gains
And Net Unrealized (Depreciation)/Appreciation $ 273,118 $ 286,366 $ 258,887
Realized Gains -- -- --
Net Unrealized (Depreciation)/Appreciation in
Value of Investments 1,101,037 (123,353) 224,967
----------- ----------- -----------
Net (Decrease)/Increase in Net Assets
Resulting from Operations $ 1,374,155 $ 163,013 $ 483,854
=========== =========== ===========
</TABLE>
-4-
<PAGE>
THE GUARDIAN REAL ESTATE ACCOUNT
OF THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Three Months Ended March 31, 1997 (Unaudited) and the
Years Ended December 31, 1996, and 1995 (Audited)
<TABLE>
<CAPTION>
Contractowners The Guardian Insurance
------------------------------------------------------------ &
Value Guard II Guardian Investor ValuePlus Annuity Company, Inc.
------------------------------------------------------------ ----------------------
Units Amount Units Amount Units Amount Units Amount Total
----- ------ ----- ------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance-- January 31, 1995 .... 542,296 4,623,454 624,615 4,812,744 49,518 433,899 568,614 5,195,851 15,065,948
Equity contributed/(withdrawn)
during 1995 ................. (77,960) (695,241) (36,141) (275,581) 2,609 24,940 -- -- (945,882)
Net (Decrease)/Increase in
Net Assets .................. -- 93,258 -- 69,138 -- 6,373 -- 122,602 291,371
-------- ---------- ------- ---------- ------ -------- ------- ---------- -----------
Balance -- December 31,1995 ... 464,336 $4,021,471 588,474 $4,606,301 52,127 $465,212 568,614 $5,318,453 $14,411,437
Equity contributed/(withdrawn)
during 1996 ................. (76,462) (673,906) (41,578) (331,674) 1,943 18,977 -- -- (986,603)
Net (Decrease)/Increase in
Net Assets .................. -- 283,977 -- 346,412 -- 39,714 -- 484,886 1,154,989
-------- ---------- ------- ---------- ------ -------- ------- ---------- -----------
Balance -- December 31, 1996 .. 387,874 $3,631,542 546,896 $4,621,039 54,070 $523,903 568,614 $5,803,339 $14,579,823
Equity contributed/(withdrawn)
during 1997 ................. (18,568) (180,107) 18,333 152,045 753 22,307 -- -- (5,755)
Net (Decrease)/Increase in
Net Assets .................. -- 331,483 -- 447,118 -- 35,524 -- 560,030 1,374,155
-------- ---------- ------- ---------- ------ -------- ------- ---------- -----------
Balance -- March 31, 1997 ..... 369,306 $3,782,918 565,229 $5,220,202 54,823 $581,734 568,614 $6,363,369 $15,948,223
======= ========== ======= ========== ====== ======== ======= ========== ===========
</TABLE>
See Notes to the Financial Statements
-5-
<PAGE>
THE GUARDIAN REAL ESTATE ACCOUNT
OF
THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
Note 1 - Organization
Organization
The Guardian Real Estate Account (the "Account") of The Guardian Insurance
& Annuity Company, Inc. (GIAC) was established in 1987 under Delaware Insurance
Law as an insurance company separate account. Participating interests in the
Account are registered under the Securities Act of 1933 and were offered by GIAC
as an investment option under certain variable life insurance policies and
variable deferred annuity contracts (the "Contracts"). GIAC is a wholly owned
subsidiary of The Guardian Life Insurance Company of America ("The Guardian").
The obligations to Contractowners and beneficiaries arising under the
Contracts are general corporate obligations of GIAC. GIAC is the legal owner of
the assets in the Account. GIAC will at all times, however, maintain assets in
the Account with a total market value at least equal to the amounts credited
under each Contract which participates in the Account. These assets may not be
charged with liabilities which arise from any other business conducted by GIAC.
At March 31, 1997 GIAC's net contribution totaled $6.4 million and
maintained 40% ownership of the Account.
On February 27, 1997, the Board of Directors of GIAC voted to cease
offering the Account as an investment option under contracts, effective
immediately. The GIAC Board of Directors also voted to liquidate the Account on
or before December 31, 1997. These actions and the reasons thereto are explained
in Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A").
As of March 31, 1997 the Account owned three properties. Two of the three
properties are office buildings located in Glastonbury, Connecticut which were
acquired for $7,921,854 and $7,644,386, respectively. The Board of Directors of
GIAC recently approved a letter of intent to sell the Glastonbury properties.
This is discussed more fully in the MD&A. The third property is an
office/distribution facility located in Kennesaw, Georgia which was acquired on
October 1, 1991 for $5,134,068, including acquisition fees.
-6-
<PAGE>
Note 2 - Summary of Significant Accounting Policies
Real Estate Investment Properties
Investments in real estate are stated at estimated fair value; accordingly
the Account does not record depreciation. Real estate assets owned by the
Account are initially valued at their respective purchase prices. Thereafter,
the values will ordinarily be based upon appraisal reports on the real estate-
related assets prepared by independent real estate appraisers. Independent
appraisals are typically performed on at least an annual basis. The Account
reserves the right, however, to prepare the annual appraisals internally. The
property valuations are also reviewed internally at least every three months and
adjusted if it is determined that there has been a change in the value of one or
more of the properties since the last valuation.
The purpose of an appraisal is to estimate the fair value of a property as
of a specific date. Fair value is defined as the most probable price for which
the appraised property will sell in a competitive market under all conditions
requisite to fair sale, with the buyer and seller each acting prudently,
knowledgeably, and for self interest, and assuming that neither is under undue
duress. This estimation of fair value through the appraisal process inherently
requires the exercise of subjective judgements. Capital improvements are
recognized only to the extent that the valuation process acknowledges a
corresponding increase in fair value.
Short-term Investments
The short-term investments held by the Account will consist of the types
and quality of investments authorized for purchase by the Account. These
instruments include: U.S. Government securities; securities issued or fully
guaranteed by U.S. Government agencies; repurchase agreements; certificates of
deposit; banker's acceptances; and commercial paper. Short-term investments are
valued at amortized cost which approximates market.
At March 31, 1997, the Account's short-term investments consisted of a
repurchase agreement with State Street Bank and Trust Co. which matures on April
1, 1997. The collateral under the repurchase agreement consists of a U.S.
Treasury Note, held in safekeeping in the name of the Account at State Street
Bank and Trust Co., the Account's custodian (Note 9). Repurchase agreements held
by the Account are fully collateralized (including the interest earned thereon)
and marked to market daily during the entire term of such agreements. If the
value of the underlying collateral falls below the value of the repurchase price
plus accrued interest, the Account will require the seller to deposit additional
collateral by the next business day. If the request for additional collateral is
not met, or the seller defaults, the Account maintains the right to sell the
collateral and may claim any resulting loss against the seller.
Long-term Investments
Long-term investments are carried at market value. Securities listed on
national securities exchanges are valued based upon closing prices on these
exchanges. Securities traded in the over-the-counter market and listed
securities for which there have been no trades for the day are valued at the
mean of the bid and asked prices.
Net realized gain or loss on sales of investments is determined on the
basis of identified cost. Interest income, including amortization of premium and
discount, is recorded when earned.
-7-
<PAGE>
Revenue Recognition
Income from properties and other investments, as well as expenses, are
recorded on the accrual basis.
Federal Income Taxes
The operations of the Account are part of the operations of GIAC and, as
such, are included in the combined tax return of GIAC. GIAC is taxed as a life
insurance company under the Internal Revenue Code of 1986, as amended.
Under tax law, no federal income taxes are payable by GIAC with respect to
the operations of the Account. However, GIAC reserves the right to charge taxes
attributable to the Account in the future.
Note 3 - Investment Advisory Agreements And Related Parties Transactions
The investment managers of the Account are O'Connor Realty Advisors
Incorporated ("O'Connor Realty") and Guardian Investor Services Corporation
("GISC"). O'Connor Realty, a wholly owned subsidiary of The O'Connor Group,
provides various management services with respect to the real estate-related
investments of the Account. GISC, a wholly owned subsidiary of GIAC, provides
services with respect to the assets maintained in cash and short-term and
intermediate-term marketable debt instruments.
The Account is charged a daily fee to compensate O'Connor Realty for its
investment management services. This fee amounts to 1.0% per year of the average
daily assets of the Account managed by O'Connor Realty. The Account is also
charged a daily fee to compensate GISC for its investment management services.
This fee amounts to 0.50% per year of the average daily net assets of the
Account managed by GISC.
For the three months ended March 31, 1997, investment management fees
earned by GISC totalled $5,448 and investment management fees earned by O'Connor
Realty totalled $27,000. For the year ended December 31, 1996, investment
management fees earned by GISC totalled $17,532 and investment management fees
earned by O'Connor Realty totalled $109,800. For the year ended December 31,
1995, investment management fees earned by GISC totalled $16,702 and investment
management fees earned by O'Connor Realty totalled $123,495. No portion of the
expenses directly related to the operations of the real estate-related
investments or O'Connor Realty's investment management fee are subsidized.
Note 4 - Real Estate-Related Expenses
In addition to investment management fees and expenses, certain other
expenses and charges attributable to the real estate-related operations of the
Account are also charged against the Account. All costs of acquisition,
administration and disposition of the real estate-related investments are
-8-
<PAGE>
charged to the account. These costs include brokerage fees, appraisal fees,
attorneys' fees, architects' fees, engineers' fees and accountants' fees
incurred in connection with the investment process. In addition, the Account
will incur recurring costs such as mortgage servicing fees, annual audit
charges, accounting and legal fees and various administrative expenses. Other
expenses, such as insurance costs, taxes, and property management fees, will
ordinarily be deducted from rental income, thereby reducing the gross income of
the Account.
Note 5 - Leases
The buildings in the Account are leased to corporate tenants under various
lease arrangements. The leases expire at various times through 2000 in the
Glastonbury, Connecticut buildings. Leases renewed during 1993 and 1994 provide
for rental payments which are generally lower than previous rental rates,
reflecting market declines. The lease for the Kennesaw, Georgia facility expires
in the third quarter of 2001. Aggregate minimum rentals for the three buildings
are as follows:
Fiscal Year Ending
December 31,
------------------
1997 2,132,086
1998 1,760,050
1999 1,357,896
2000 699,897
2001 470,250
-----------
Total $ 6,420,179
===========
Certain leases provide for additional rents based upon operating costs in
excess of given base amounts. For the three months ended March 31, 1997, rental
income included approximately $22,445 of such additional rental income. For the
years ended December 31, 1996 and 1995, rental income included approximately
$106,019 and $79,089, respectively, of such additional rental income.
Note 6 - Annuitant Mortality Fluctuation Fund
The Annuitant Mortality Fluctuation Fund is a special fund established in
response to various regulatory requirements and provides for any possible
adverse experience inherent in the transaction of annuity business.
Note 7 - Other Charges
Included in the Account's total expenses are mortality and expense risk
charges which are calculated on a daily basis and applied to the Contracts and
thus to each Contractowner's interest by GIAC.
-9-
<PAGE>
NOTE 8
THE GUARDIAN REAL ESTATE ACCOUNT
OF THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
REAL ESTATE
March 31, 1997
<TABLE>
<CAPTION>
Costs
capitalized
subsequent Gross cost
Initial cost to at close
to Account acquisitions of period
---------------- ------------ --------------
Buildings Improvements Buildings
Encum- and and Carrying and
Description brances Land Improvements Costs Improvements Total
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
45 Somerset Square
Office Building -
Glastonbury, CT. ..... $0 $ 871,668 $ 7,050,186 $ 955,724 $ 8,005,910 $ 8,877,578
115 Somerset Square
Office Building -
Glastonbury, CT. ..... 0 843,441 6,800,945 550,814 7,351,759 8,195,200
955 Cobb Place Blvd.
Office Building
Warehouse Facility -
Kennesaw, GA. ........ 0 751,187 4,382,881 5,769 4,388,650 5,139,837
-------------------------------------------------------------------------
Total .............. $0 $2,466,296 $18,234,012 $1,512,307 $19,746,319 $22,212,615
=========================================================================
<CAPTION>
Date of Date Fair
Description Construction Acquired Value
- -------------------------------------------------------------------
<S> <C> <C> <C>
45 Somerset Square Construction completed
Office Building -- in late 1988 and early
Glastonbury, CT. .... 1989 6/12/89 $3,450,000
115 Somerset Square Construction completed
Office Building-- in late 1988 and early
Glastonbury, CT. .... 1989 6/12/89 $3,450,000
955 Cobb Place Blvd.
Office Building
Warehouse Facility-- Construction completed
Kennesaw, GA. ....... in late 1991 10/01/91 5,200,000
- -------------------------------------------------------------------
Total ............. $12,100,000
===================================================================
</TABLE>
<TABLE>
<CAPTION>
A) Reconciliation of investment property March 31, December 31, December 31, December 31,
owned: 1997 1996 1995 1994
------------ ------------------------------------------
<S> <C> <C> <C> <C>
Real Estate at beginning of year ............. $22,240,600 $22,262,034 $22,405,832 $21,436,043
Net Acquisitions (dispositions) .............. -- -- -- --
Capital Improvements and Carrying Costs ...... (27,985) (21,434) (143,798) 969,789
----------- ------------------------------------------
Balance at the end of the current period ..... $22,212,615 $22,240,600 $22,262,034 $22,405,832
=========== ==========================================
B) Total tax basis for properties based on
historical cost:
45 Somerset Square Office Building -
Glastonbury, CT. ........................... $ 7,106,437
115 Somerset Square Office Building -
Glastonbury, CT. ........................... $ 6,556,564
955 Cobb Place Blvd. Office Building Warehouse
Facility -
Kennesaw, GA. .............................. $ 4,542,142
</TABLE>
-10-
<PAGE>
NOTE 9
THE GUARDIAN REAL ESTATE ACCOUNT
OF THE GUARDIAN INSURANCE & ANNUITY COMPANY, INC.
MARKETABLE SECURITIES
For Three Months Ended March 31, 1997
<TABLE>
<CAPTION>
Market Value Amount Carried
Description Par Value Cost 3/31/97 on Balance Sheet
----------- --------- ---- -------- ----------------
<S> <C> <C> <C> <C>
Marketable Securities:
Repurchase Agreement:
State Street Bank and Trust Company
repurchase agreement at 6.10% due
4/1/97, maturity value $1,737,294
(collateralized by $1,745,000 U.S. Treasury
Notes plus accrued interest, 6.000% due
5/31/98, market value at 3/31/97 was
$1,775,169) $1,737,000 $1,737,000 $1,737,000 $1,737,000
---------- ---------- ---------- ----------
Fixed Maturities:
Indianapolis Power & Light Company
7.375% due 8/01/07 1,000,000 1,059,374 998,910 998,910
GTE Southwest Inc.
6.54% due 12/01/05 1,400,000 1,401,255 1,323,714 1,323,714
---------- ---------- ---------- ----------
2,400,000 2,460,629 2,322,624 2,322,624
---------- ---------- ---------- ----------
Total Marketable Securities $4,137,000 $4,197,629 $4,059,624 $4,059,624
========== ========== ========== ==========
</TABLE>
See Notes to the Financial Statements
-11-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion and analysis should be considered in conjunction
with the Selected Financial Data appearing below and the Account's
financial statements and their related notes which also appear in this
Prospectus.
Liquidity and Capital Resources
As of March 31, 1997, the Account's net assets totalled $15,948,223. Of
this amount, $9,584,854 was attributable to Contractowner interests and
$6,363,369 was attributable to GIAC. At December 31, 1996, the Account's
net assets totalled $14,579,823. The Account's current source of funds is
primarily Contractowner contributions, although in December 1993, July
1994 and October 1994 GIAC contributed $1.8 million, $400,000, and
$550,000, respectively, to the Account to diversify its portfolio of
investments.
As of March 31, 1997, 74% of the Account's assets were invested in real
estate-related assets and the remainder was invested in permitted
fixed-income instruments. Through March 31, 1997, the Account remained
able to meet its obligations under GIAC's variable Contracts to pay
benefits and effect transfers.
At a meeting on February 27, 1997, the Board of Directors of the Guardian
Insurance & Annuity Company, Inc. ("GIAC") adopted a plan pursuant to
which the Account will be terminated on December 31, 1997 (or such earlier
date as may be determined by the Executive Committee of the GIAC Board of
Directors). GIAC has initiated a program to sell the Account's assets on
or prior to the termination date and expects to invest the proceeds of
such sales in short-term U.S. government securities and highly rated money
market instruments. Effective February 28, 1997, units of the Account are
no longer being offered, and are no longer available for allocations of
net premiums through the various variable insurance contracts and policies
issued by GIAC, or for transfers of contract or policy values.
The Executive Committee of the Board of Directors of GIAC voted to
increase the aggregate value of the Account's office buildings located at
45 and 115 Glastonbury Boulevard in Glastonbury, Connecticut to
$6,900,000, effective at the close of business on February 24, 1997. This
represents a net increase of $1,150,000 over the aggregate appraised value
of $5,750,000 at December 31, 1996. Concurrently, the GIAC Board of
Directors approved the execution and delivery of a letter of intent to
sell the Glastonbury properties. On April 16, 1997, the Glastonbury
properties were sold to MGI Glastonbury Corporation for the cash purchase
price of $7,196,000. In anticipation of the termination of the Account,
the proceeds of sale have been invested in short-term commercial paper.
The Account's real estate-related investment located in Kennesaw, Georgia
was appraised by an internal appraiser as of March 31, 1997. The appraised
value of $5,200,000 remains unchanged from its year-end 1996 value. Thus,
the current appraised value is slightly higher than its acquisition cost
of $5,134,068.
Cash and liquid securities held by the Account increased slightly during
the three months ended March 31, 1997.
Results of Operations
The Account's net assets increased by $1,368,400 mainly as a result of the
increase in the aggregate value of the Account's office buildings in
Glastonbury, Connecticut by $1,150,000, for the period ended March 31,
1997. For the three months ended March 31, 1996, net assets from
operations increased by $163,013. Total revenues for the same time periods
were $611,349, and $583,754, respectively. For the three months ended
March 31, 1995, total revenues were $575,658.
The Account's expenses for the three months ended March 31, 1997 totalled
$338,231 as compared to $297,388 for the three months ended March 31, 1996
and $316,771 for the three months ended March 31, 1995.
-12-
<PAGE>
Item 3. Financial Statements and Supplementary Data
The financial statements and supplementary data listed in the accompanying
Index to Financial Statements and Supplementary Data are incorporated
herein by reference and filed as a part of this report.
Item 4. Disagreements on Accounting and Financial Disclosure
None.
-13-
<PAGE>
PART II
-------
Item 1. Legal Proceedings
- - -------------------------
None.
Item 2. Changes in Securities
- - -----------------------------
None.
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
Contractowners participating in the Account have no voting rights with
respects to the Account.
Item 5. Other Information
- --------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits to the Report
----------------------
27. Financial Data Schedule
(b) Reports filed on Form 8-K
-------------------------
The Registrant did not file any reports on Form 8-K during the quarter
ended March 31, 1997.
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
The Guardian Real Estate Account
of
The Guardian Insurance & Annuity
Company, Inc.
(Registrant)
By /s/ Thomas R. Hickey May 14, 1997
---------------------------------
Thomas R. Hickey, Jr.
Vice President
By /s/ Frank L. Pepe May 14, 1997
---------------------------------
Frank L. Pepe
Vice President and Controller
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 4518
<SECURITIES> 4,059,624
<RECEIVABLES> 112,567
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,176,709
<PP&E> 12,100,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,276,709
<CURRENT-LIABILITIES> 328,486
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 15,948,223
<TOTAL-LIABILITY-AND-EQUITY> 16,276,709
<SALES> 611,349
<TOTAL-REVENUES> 611,349
<CGS> 288,646
<TOTAL-COSTS> 288,646
<OTHER-EXPENSES> 49,585
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,374,155
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,374,155
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,374,155
<EPS-PRIMARY> .88
<EPS-DILUTED> .88
</TABLE>
