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 March 31, 1996
--------------------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE CHANGE ACT OF 1934
For the transition period from to
--------------------------------------------------
Commission file number 1-12708
-----------------------------------------------------------
Franklin Select Real Estate Income Fund
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-3095938
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation
or organization)
P. O. Box 7777, San Mateo, California 94403-7777
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 312-2000
------------------------------
N/A
- --------------------------------------------------------------------------------
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 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
Common Stock Shares Outstanding as of March 31, 1996, Series A: 5,383,296
Common Stock Shares Outstanding as of March 31, 1996, Series B: 185,866
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FRANKLIN SELECT REAL ESTATE INCOME FUND
BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(Unaudited)
(Dollars in 000's except per share amounts)
1996 1995
ASSETS
Rental property:
Land $ 9,686 $ 9,686
Buildings and improvements 33,462 33,385
- -------------------------------------------------------------------------------
43,148 43,071
Less: accumulated depreciation 7,285 6,934
- -------------------------------------------------------------------------------
35,863 36,137
Cash and cash equivalents 3,375 3,251
Mortgage-backed securities, available for sale 4,954 5,202
Deferred rent receivable 968 978
Other assets 663 623
- -------------------------------------------------------------------------------
Total assets $45,823 $46,191
===============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Tenants' deposits and other liabilities $327 $272
Advance rents 9 11
Distributions payable 592 592
- -------------------------------------------------------------------------------
Total liabilities 928 875
- -------------------------------------------------------------------------------
Stockholders' equity:
Common stock, Series A, without par value.
Stated value $10 per share; 50,000,000 shares
authorized; 5,383,296 shares issued and
outstanding in 1996 and 1995 48,857 48,857
Common stock, Series B, without par value.
Stated value $10 per share; 1,000,000 shares
authorized; 185,866 shares issued and
outstanding in 1996 and 1995 1,859 1,859
Unrealized loss on mortgage-backed securities (146) (113)
Accumulated distributions in excess of net income (5,675) (5,287)
- -------------------------------------------------------------------------------
Total stockholders' equity 44,895 45,316
- -------------------------------------------------------------------------------
Total liabilities and stockholders' equity $45,823 $46,191
===============================================================================
See notes to financial statements.
Item 1. Financial Statements
(continued)
FRANKLIN SELECT REAL ESTATE INCOME FUND
STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
(Dollars in 000's except per share amounts)
1996 1995
Revenue:
Rent $1,154 $1,130
Interest 125 116
Dividends 2 1
- ---------------------------------------------------------------------------
Total revenue 1,281 1,247
- ---------------------------------------------------------------------------
Expenses:
Depreciation and amortization 378 372
Operating 312 292
Related party 115 110
Consolidation expense 176 -
General and administrative 96 52
- ---------------------------------------------------------------------------
Total expenses 1,077 826
- ---------------------------------------------------------------------------
Net income $204 $421
===========================================================================
Net income per share, based on shares
outstanding of Series A common stock of 5,383,296
and 5,383,439 at March 31, 1996 and 1995 $ .04 $ .08
===========================================================================
Distributions per share, based on shares
outstanding of Series A common stock of 5,383,296
and 5,383,439 at March 31, 1996 and 1995 $ .11 $ .11
===========================================================================
See notes to financial statements.
Item 1. Financial Statements
(continued)
FRANKLIN SELECT REAL ESTATE INCOME FUND
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1996
(Unaudited)
(Dollars in 000's)
<TABLE>
<CAPTION>
Common Stock
Series A Series B
Excess of
Unrealized Accumulated
Gain/Loss Distributions
on in Excess of
Shares Amount Shares Amount Securities Net Income Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
beginning of
period 5,383,296 $48,857 185,866 $1,859 $(113) $(5,287) $45,316
Unrealized
loss on
mortgage- backed
securities - - - - (33) - (33)
Net income - - - - - 204 204
Distributions
declared - - - - - (592) (592)
- ------------------------------------------------------------------------------------------------
Balance, end of
period 5,383,296 $48,857 185,866 $1,859 $(146) $(5,675) $44,895
================================================================================================
</TABLE>
See notes to financial statements.
Item 1. Financial Statements
(continued)
FRANKLIN SELECT REAL ESTATE INCOME FUND
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
(Dollars in 000's)
1996 1995
Cash flows from operating activities:
Net income $204 $421
- --------------------------------------------------------------------------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 378 372
Decrease in deferred rent receivable 10 11
Increase in other assets (67) (56)
Increase in tenants' deposits and other liabilities 55 63
Decrease in advance rents (2) (2)
- --------------------------------------------------------------------------------
374 388
- --------------------------------------------------------------------------------
Net cash provided by operating activities 578 809
- --------------------------------------------------------------------------------
Cash flow from investing activities:
Improvements to rental property (77) (10)
Disposition of mortgage-backed securities 215 97
- --------------------------------------------------------------------------------
Net cash provided by investing activities 138 87
- --------------------------------------------------------------------------------
Cash flow from financing activities:
Distributions paid (592) (592)
- --------------------------------------------------------------------------------
Net cash used in financing activities (592) (592)
- --------------------------------------------------------------------------------
Net increase in cash and cash equivalents 124 304
Cash and cash equivalents,
beginning of period 3,251 2,423
- --------------------------------------------------------------------------------
Cash and cash equivalents,
end of period $3,375 $2,727
================================================================================
See notes to financial statements.
FRANKLIN SELECT REAL ESTATE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
NOTE 1 - ORGANIZATION
Franklin Select Real Estate Income Fund (the "Company") is a California
corporation formed on January 5, 1989 for the purpose of investing in
income-producing real property. The Company is a real estate investment
trust ("REIT") having elected to qualify as a REIT under the applicable
provisions of the Internal Revenue Code since 1989. Under the Internal
Revenue Code and applicable state income tax law, a qualified REIT is not
subject to income tax if at least 95% of its taxable income is currently
distributed to its stockholders and other REIT tests are met. The Company
has distributed at least 95% of its taxable income and intends to distribute
substantially all of its taxable income in the future. Accordingly, no
provision is made for income taxes in these financial statements.
As of March 31, 1996, the Company's real estate portfolio consisted of a 60%
undivided interest in the Shores Office Complex, a three-building office
complex located in Redwood City, California, and a fee interest in the Data
General Building located in Manhattan Beach, California.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited financial statements contain all adjustments
(consisting of normal recurring accruals) which are necessary, in the opinion
of management, for a fair presentation. The statements, which do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements, should be read in
conjunction with the Company's financial statements for the year ended
December 31, 1995.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company has an agreement with Franklin Properties, Inc. (The "Advisor")
to administer the day-to-day operations of the Company. Under the terms of
the amended agreement, which is renewable annually, the Advisor will receive
quarterly an annualized fee equal to .5% of the Company's gross real estate
assets, defined generally as the book value of the assets before
depreciation. The fee will be reduced to .4% for gross real estate assets
exceeding $200 million.
At March 31, 1996, cash equivalents included $248,000 invested in Franklin
Money Fund, an investment company managed by an affiliate of the Advisor.
Distributions earned from the Franklin Money Fund totaled $2,000 for the
three month period ended March 31, 1996.
FRANKLIN SELECT REAL ESTATE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
NOTE 3 - RELATED PARTY TRANSACTIONS (Continued)
The agreements between the Company and the Advisor, or affiliates, provide
for certain types of compensation and payments including but not limited to
the following for those services rendered for the three month period ended
March 31, 1996:
Advisory fee expense, charged to related party expense $54,000
Reimbursement for data processing, accounting and certain
other expenses, charged to related party expense $4,000
Property management fee, charged to related party expense $57,000
Leasing commission, capitalized and amortized
over the term of the related lease $2,000
Construction supervision fee, capitalized and amortized
over the life of the related investment or the term
of the related lease $1,000
NOTE 4 - COMMON STOCK AND INCOME PER SHARE
In 1994 the Company issued to the Advisor an exchange right ("the Exchange
Right") to exchange its Series B common stock for Series A common stock on a
one-for-one basis. The Exchange Right is exercisable only when the Series A
shares achieve a trading price on the stock exchange equal to or greater than
$10.35 per share for at least 20 consecutive trading days. The rate of
exchange and the target price will be subject to change under certain
circumstances as provided in the Exchange Right Agreement. No distributions
may be paid on the Series B shares prior to exercise of the Exchange Right.
After exercise of the Exchange Right, the Advisor, like any other
shareholder, will receive distributions on its Series A shares.
Series A and Series B common stock have the same voting rights.
Distributions on Series A common stock are declared at the discretion of the
Board of Directors.
NOTE 5 - SUBSEQUENT EVENT
Effective May 7, 1996, Franklin Real Estate Income Fund ( "FREIF" ) and
Franklin Advantage Real Estate Income Fund ( "Advantage" ) merged into the
Company. In connection with the Merger, the Company issued approximately
7,937,000 shares of Series A common stock and 559,718 shares of Series B
common stock in exchange for 3,363,877 and 3,009,479 shares of Series A
common stock and 319,308 and 124,240 shares of Series B common stock of FREIF
and Advantage, respectively, in each case excluding dissenting shares.
Shareholders representing approximately 635,638 shares of FREIF Series A
common stock, 4,234 shares of Advantage Series A common stock and 1,077,667
shares of Company Series A common stock elected to exercise dissenter's
rights pursuant to Chapter 13 of the California General Corporation Law. The
Company, as the surviving corporation after the merger, is required to pay
the fair market value for such dissenting shares. The Company has offered
the dissenting shareholders approximately $8 million for their shares. The
shareholders have asserted approximately $12 million as the fair market
value. If the Company and any dissenting shareholder cannot agree on the
fair market value, either party may file a complaint in the superior court
within six months of mailing the notice of merger, asking the court to
determine the fair market value of the dissenting shares.
FRANKLIN SELECT REAL ESTATE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
NOTE 5 - SUBSEQUENT EVENT (Continued)
The following pro forma condensed balance sheet has been prepared as if the
merger and the exercise of dissenter's rights had occurred as of March 31,
1996. The pro forma statements of operations for the three months ended
March 31, 1996, and the year ended December 31, 1995, have been prepared as
if these transactions had occurred January 1, 1995. The pro forma financial
information (in 000's except per share amounts) has been presented as a
reorganization of entities under common control due to the common management
of the Company, FREIF and Advantage by the Advisor. Therefore, the accounts
of the Company, FREIF and Advantage have been reflected in the accompanying
pro forma financial statements at their historical bases, as adjusted to give
effect to the Merger.
Pro Forma Condensed Balance Sheet
As of March 31, 1996
Real estate assets, net of accumulated depreciation $99,012
Cash and cash equivalents 5,618
Mortgage-backed securities 6,809
Other assets 3,836
Total assets $115,275
Notes and bonds payable 6,647
Other liabilities 2,452
Total liabilities 9,099
Dissenting shareholders' interest 7,964
Stockholders' equity 98,212
Total liabilities and stockholders' equity $115,275
Pro Forma Condensed Statements of Operations
Three months ended Year ended
March 31,1996 December 31,
1995
Total revenue $3,474 $14,111
Total expenses 2,776 9,869
Net income $698 $4,242
Net income per share $.05 $.30
Pro forma weighted average shares of
Series A common stock outstanding 14,143 14,143
Pro forma weighted average number of Series A shares outstanding has been
calculated assuming that shares attributable to dissenting shareholders
(equivalent to 1,900,000 shares of the Company's common stock) were
outstanding for the periods indicated. If such shares had been retired
effective January 1, 1995, pro forma net income per share would have been
$.06 and $.35 for the three months ended March 31, 1996, and year ended
December 31, 1995, respectively. In addition, the final number of shares to
be issued and outstanding is subject to adjustment for rounding of fractional
shares.
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion
and Analysis of Financial Condition
and Results of Operations
Introduction
Management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the Financial Statements and
Notes thereto.
Results of Operations
Comparison of the three month periods ended March 31, 1996 and 1995
Net income for the three month period ended March 31, 1996 decreased
$217,000, or 52%, compared to 1995 primarily due to consolidation expenses
totaling $176,000, and to the following additional factors: an increase in
rental revenue of $24,000; an increase in interest and dividends of $10,000;
an increase in depreciation and amortization of $6,000; an increase in
operating expenses of $20,000; an increase in related party expenses of
$5,000; and an increase in general and administrative expense of $44,000.
See Item 4 "Submission of Matters to a Vote of Security Holders" for a
discussion of the proposed consolidation. Explanations of the other material
changes are as follows:
Rental revenue for the three month period ended March 31, 1996 increased
$24,000, or 2%, primarily due to increased rental revenue at the Shores
Office Complex, as a result of an increase in average occupancy and rental
rates. The average occupancy rate at the Shores Office Complex during the
three month periods ended March 31, 1996 and 1995 was 100% and 98%,
respectively. The occupancy rate at the Data General Building was 100% for
both periods.
Interest and dividend income for the three month period ended March 31, 1996
increased $10,000, or 9%, due to higher yields realized on investments in
mortgage-backed securities.
Total expenses for the three month period ended March 31, 1996, increased by
$251,000, or 30%, from $826,000 in 1995 to $1,077,000. The increase in total
expenses is attributable to the following factors: an increase in
consolidation expense of $176,000; an increase in depreciation and
amortization of $6,000, or 2%; an increase in operating expenses of $20,000,
or 7%; an increase in related party expenses of $5,000, or 5%; and an
increase in general and administrative expense of $44,000, or 85%.
Operating expenses for the three month period ended March 31, 1996 increased
$20,000, primarily due to an increase in utility expense at the Data General
Building.
Related party expense for the three month period ended March 31, 1996
increased $5,000 as a result of an increase in property management fees due
to the increases in rental revenue at the Company's properties.
General and administrative expense for the three month period ended March 31,
1996 increased $44,000 primarily due to increases in non-recurring legal fees
of $29,000, and directors' fees of $14,000.
Liquidity and Capital Resources
As described in Note 5 to the accompanying financial statements, effective
May 7, 1996, Franklin Real Estate Income Fund ( "FREIF" ) and Franklin
Advantage Real Estate Income Fund ( "Advantage" ) merged into the Company.
In connection with the Merger, the Company issued approximately 7,937,000
shares of Series A common stock and 559,718 shares of Series B common stock
in exchange for 3,363,877 and 3,009,479 shares of Series A common stock and
319,308 and 124,240 shares of Series B common stock of FREIF and Advantage,
respectively, in each case excluding dissenting shares.
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion
and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources (Continued)
Shareholders representing approximately 635,638 shares of FREIF Series A
common stock, 4,234 shares of Advantage Series A common stock and 1,077,667
shares of Company Series A common stock elected to exercise dissenter's
rights pursuant to Chapter 13 of the California General Corporation Law. The
Company, as the surviving corporation after the merger, is required to pay
the fair market value for such dissenting shares. The Company has offered
the dissenting shareholders approximately $8 million for their shares. The
shareholders have asserted approximately $12 million as the fair market
value. If the Company and any dissenting shareholder cannot agree on the
fair market value, either party may file a complaint in the superior court
within six months of mailing the notice of merger, asking the court to
determine the fair market value of the dissenting shares. The Company's
source of capital to purchase the dissenting shares will vary depending upon
the amount of funds required. The most likely sources are the Company's cash
reserves, the liquidation of its marketable securities, or debt financing.
At March 31, 1996, the cash reserves and marketable securities of the Company
after the merger totaled approximately $12.4 million, and the assets and
liabilities of the Company on a pro forma, post-merger basis are
approximately $115.3 million and $9 million, respectively. Therefore,
management believes that it has adequate sources of capital to purchase the
dissenting shares.
The Company's principal source of capital for the acquisition and major
renovation of properties has been the proceeds from the initial public
offering of its stock. The Company's cash flow has been its principal source
of capital for minor property improvements, leasing costs and the payment of
quarterly distributions. At March 31, 1996, the Company's cash reserves,
including mortgage-backed securities, aggregated $8,329,000. The Company's
investment in mortgage-backed securities consists of GNMA, FNMA and FMLMC
adjustable rate pass-through certificates in which payments of principal and
interest are guaranteed by the respective agencies. However, changes in
market interest rates cause the security's market value to fluctuate, which
could result in a gain or loss to the Company if the securities are sold
before maturity.
As of March 31, 1996, the Company had no formal borrowing arrangements with a
bank and has no long-term debt. Each of the Company's properties is owned
free and clear of mortgage indebtedness.
Management continues to evaluate other properties for acquisition by the
Company. In the short-term and in the long term, management believes that
the Company's current sources of capital will continue to be adequate to meet
both its operating requirements and the payment of dividends.
Net cash provided by operating activities for the three month period ended
March 31, 1996 was $578,000, or $231,000 less than the same period in 1995.
The decrease in cash flow is primarily attributable to the decrease in net
income as described under "Results of Operations".
Net cash provided by investing activities for the three month period ended
March 31, 1996, increased $51,000 when compared to the same period in 1995.
The increase was due to an increase in principal payments received from
mortgage-backed securities which was partially offset by an increase in
improvements to rental property.
Net cash used in financing activities remained unchanged.
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion
and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources (Continued)
Funds from Operations for the three month period ended March 31, 1996
decreased $211,000, or 27%, to $582,000 compared to the same period in 1995.
The decrease is primarily due to the decrease in net income as described
under "Results of Operations". The Company believes that Funds from
Operations is helpful in understanding a property portfolio in that such
calculation reflects income from operating activities and the properties'
ability to support general operating expenses and interest expense before the
impact of certain activities, such as gains and losses from property sales
and changes in the accounts receivable and accounts payable. However, it
does not measure whether income is sufficient to fund all of the Company's
cash needs including principal amortization, capital improvements and
distributions to shareholders. Funds from Operations should not be considered
an alternative to net income or any other GAAP measurement of performance or
as an alternative to cash flows from operating, investing, or financing
activities as a measure of liquidity. As defined by the National Association
of Real Estate Investment Trusts, Funds from Operations is net income (
computed in accordance with GAAP ), excluding gains or losses from debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustment for unconsolidated joint ventures. The Company reports
Funds from Operations in accordance with the NAREIT definition. For the
periods presented, Funds from Operations represents net income plus
depreciation and amortization. The measure of Funds from Operations as
reported by the Company may not be comparable to similarly titled measures of
other companies that follow different definitions.
Impact of Inflation
The Company's management believes that inflation may have a positive effect
on the Company's property portfolio, but this effect generally will not be
fully realized until such properties are sold or exchanged. The Company's
policy of negotiating leases which incorporate operating expense
"pass-through" provisions is intended to protect the Company against
increased operating costs resulting from inflation.
Distributions
Distributions are declared quarterly at the discretion of the Board of
Directors. The Company's present distribution policy is to at least annually
evaluate the current distribution rate in light of anticipated tenant
turnover over the next two or three years, the estimated level of associated
improvements and leasing commissions, planned capital expenditures, any debt
service requirements and the Company's other working capital requirements.
After balancing these considerations, and considering the Company's earnings
and cash flow, the level of its liquid reserves and other relevant factors,
the Company seeks to establish a distribution rate which:
i) provides a stable distribution which is sustainable
despite short term fluctuations in property cash
flows;
ii) maximizes the amount of cash flow paid out as
distributions consistent with the above listed
objective; and
iii) complies with the Internal Revenue Code requirement
that a REIT annually pay out as distributions not less
than 95% of its taxable income.
During the three-month period ended March 31, 1996, the Company declared
distributions totaling $592,000.
PART II - OTHER INFORMATION
Item 4. Submission of Matters
to Vote of Security Holders
On November 2, 1995, the Boards of Directors of the Company and of two other
real estate investment trusts that Franklin Properties, Inc. advises,
Franklin Advantage Real Estate Income Fund ("Advantage") and Franklin Real
Estate Income Fund ("FREIF"), authorized the execution of a Merger Agreement
and the filing of a Joint Proxy Statement/Prospectus with the Securities and
Exchange Commission. The Prospectus was filed on November 13, 1995, and
became effective on March 14, 1996.
At a Special Meeting of Shareholders held on May 7, 1996, the proposed merger
of the Company with Advantage and FREIF was approved. Among other
requirements, completion of the merger was subject to the approval of a
majority of the outstanding shares of each of the three companies. The
actual tabulation of the vote was as follows:
FOR AGAINST ABSTAIN
Franklin Real Estate Income Fund 54.34% 20.84% 3.12%
Franklin Select Real Estate Income Fund 52.30% 24.78% 2.66%
Franklin Advantage Real Estate Income Fund 73.79% 4.05% 2.43%
In the merger, the Advantage and FREIF were merged into the Company, which
will be renamed Franklin Select Realty Trust. Shares of the Company will be
issued in exchange for the shares of Advantage and FREIF on the basis
described in the Joint Proxy Statement/Prospectus.
There were no other matters submitted to a vote of security holders during
the quarter covered by this report.
Item 6. Exhibits and Reports on Form 8-K
(a) Not applicable
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
ended March 31, 1996.
SIGNATURE
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.
FRANKLIN SELECT REAL ESTATE INCOME FUND
By:/s/ David P. Goss
David P. Goss
Chief Executive Officer
Date: May 12, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
REGISTRANT'S FINANCIAL STATEMENTS FOR THE QUARTER ENDED MARCH 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,375
<SECURITIES> 4,954
<RECEIVABLES> 968
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 43,148
<DEPRECIATION> 7,285
<TOTAL-ASSETS> 45,823
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 50,716
<OTHER-SE> (5,821)
<TOTAL-LIABILITY-AND-EQUITY> 45,823
<SALES> 0
<TOTAL-REVENUES> 1,281
<CGS> 0
<TOTAL-COSTS> 1,077
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 204
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
