<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
---------
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1994
----------------
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: 1-8029
THE RYLAND GROUP, INC.
----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-0849948
- -------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
of incorporation or organization) Identification No.)
11000 Broken Land Parkway, Columbia, Maryland 21044
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(410) 715-7000
---------------------------------------------------------
(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
------ ------
The number of shares of common stock of The Ryland Group, Inc.,
outstanding on August 2, 1994 was 15,415,758.
<PAGE>
THE RYLAND GROUP, INC.
FORM 10-Q
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at
June 30, 1994 (unaudited) and
December 31, 1993 1-2
Consolidated Statements of Earnings
for the three and six months ended
June 30, 1994 and 1993 (unaudited) 3
Consolidated Statements of Cash Flows
for the six months ended June 30,
1994 and 1993 (unaudited) 4
Notes to Consolidated Financial
Statements (unaudited) 5-8
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition 9-16
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
INDEX OF EXHIBITS 20
<PAGE>
The Ryland Group, Inc. and subsidiaries
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
HOMEBUILDING:
Cash and cash equivalents $ 42,463 $ 44,251
Homebuilding inventories:
Homes under construction 409,797 318,266
Land under development and improved lots 143,594 163,459
Land held for development or resale 4,974 7,821
------------ ------------
Total inventories 558,365 489,546
Investment in/advances to unconsolidated
joint ventures 18,220 23,066
Property, plant and equipment 16,949 13,999
Purchase price in excess of net assets acquired 23,123 23,639
Other assets 37,495 43,976
------------ ------------
696,615 638,477
------------ ------------
FINANCIAL SERVICES:
Cash and cash equivalents 2,269 2,239
Mortgage loans held for sale, net 260,948 535,679
Mortgage-backed securities, net 239,202 192,417
Purchased servicing and administration
rights, net 13,557 14,446
Other assets 62,479 76,150
------------ ------------
578,455 820,931
------------ ------------
LIMITED-PURPOSE SUBSIDIARIES:
Collateral for bonds payable, net 521,196 798,074
Other assets 6,721 9,882
------------ ------------
527,917 807,956
------------ ------------
Other assets 50,276 48,329
------------ ------------
TOTAL ASSETS $ 1,853,263 $ 2,315,693
============ ============
See notes to consolidated financial statements.
</TABLE>
1
<PAGE>
The Ryland Group, Inc. and subsidiaries
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
------------ ------------
(unaudited)
<S> <C> <C>
LIABILITIES
HOMEBUILDING:
Accounts payable and other liabilities $ 92,066 $ 59,082
Long-term debt 397,832 381,040
------------ ------------
489,898 440,122
------------ ------------
FINANCIAL SERVICES:
Accounts payable and other liabilities 51,873 34,453
Short-term notes payable 450,014 716,933
------------ ------------
501,887 751,386
------------ ------------
LIMITED-PURPOSE SUBSIDIARIES:
Accounts payable and other liabilities 16,828 22,591
Bonds payable, net * 506,256 778,428
------------ ------------
523,084 801,019
------------ ------------
Other liabilities 31,130 29,919
------------ ------------
TOTAL LIABILITIES 1,545,999 2,022,446
------------ ------------
STOCKHOLDERS' EQUITY
Convertible preferred stock, $1 par value
Authorized - 1,400,000 shares
Issued - 1,115,128 shares
(1,153,652 for 1993) 1,115 1,154
Common stock, $1 par value
Authorized - 78,600,000 shares
Issued - 15,396,772 shares
(15,342,624 for 1993) 15,397 15,343
Paid-in capital 115,624 116,386
Retained earnings 188,537 180,351
Net unrealized gain on securities 4,230
Other (17,639) (19,987)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 307,264 293,247
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,853,263 $ 2,315,693
============ ============
See notes to consolidated financial statements.
* The 'bonds payable, net' shown in the financial statements represent
obligations solely of the limited-purpose subsidiaries, which are
secured by the assets of the limited-purpose subsidiaries.
The bonds are not guaranteed or insured by The Ryland Group, Inc.
or any of its subsidiaries.
</TABLE>
2
<PAGE>
The Ryland Group, Inc. and subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
(amounts in thousands, except share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1994 1993 1994 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Homebuilding:
Residential revenues $ 363,385 $ 301,832 $ 637,629 $ 518,554
Other revenues 786 1,857 1,556 3,329
----------- ----------- ----------- -----------
Total homebuilding revenues 364,171 303,689 639,185 521,883
Financial services 38,937 38,528 79,710 81,421
Limited-purpose subsidiaries 13,601 29,776 30,306 64,241
----------- ----------- ----------- -----------
Total revenues 416,709 371,993 749,201 667,545
EXPENSES:
Homebuilding:
Cost of sales 317,269 268,992 557,251 462,099
Interest expense 6,925 6,697 13,581 12,341
Selling, general and
administrative 35,328 27,945 64,377 51,938
----------- ----------- ----------- -----------
Total 359,522 303,634 635,209 526,378
Financial services:
Interest expense 6,594 7,397 14,457 14,418
General and administrative 20,002 17,157 41,045 33,857
----------- ---------- ----------- -----------
Total 26,596 24,554 55,502 48,275
Limited-purpose subsidiaries:
Interest expense 12,975 28,377 28,558 60,738
Other expenses 564 1,347 1,675 3,419
----------- ----------- ----------- -----------
Total 13,539 29,724 30,233 64,157
Corporate expenses 4,503 4,706 8,833 8,344
----------- ----------- ----------- -----------
Total expenses 404,160 362,618 729,777 647,154
Equity in earnings (losses) of
unconsolidated joint ventures 87 33 137 (240)
----------- ----------- ----------- -----------
EARNINGS BEFORE TAXES AND
CUMULATIVE EFFECT OF A CHANGE
IN ACCOUNTING PRINCIPLE 12,636 9,408 19,561 20,151
Tax expense 5,054 3,668 7,824 7,858
----------- ----------- ----------- -----------
NET EARNINGS BEFORE CUMULATIVE
EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE 7,582 5,740 11,737 12,293
Cumulative effect of a change in
accounting principle - (net of
taxes of $1,384) 0 0 2,076 0
----------- ----------- ----------- -----------
NET EARNINGS $ 7,582 $ 5,740 $ 13,813 $ 12,293
=========== =========== =========== ===========
Preferred dividends $ 616 $ 651 $ 1,245 $ 1,310
Net earnings available for
common shareholders $ 6,966 $ 5,089 $ 12,568 $ 10,983
NET EARNINGS PER COMMON SHARE:
Primary:
Net earnings before cumulative
effect of a change in
accounting principle $ 0.45 $ 0.33 $ 0.68 $ 0.71
Cumulative effect of a change
in accounting principle 0.13
----------- ----------- ----------- -----------
Net earnings per common
share $ 0.45 $ 0.33 $ 0.81 $ 0.71
=========== =========== =========== ===========
Fully diluted:
Net earnings before cumulative
effect of a change in
accounting principle $ 0.44 $ 0.33 $ 0.66 $ 0.70
Cumulative effect of a change
in accounting principle 0.13
----------- ----------- ----------- -----------
Net earnings per common
share $ 0.44 $ 0.33 $ 0.79 $ 0.70
=========== =========== =========== ===========
Dividends per common share $ 0.15 $ 0.15 $ 0.30 $ 0.30
Dividends per preferred share 0.55 0.55 1.10 1.10
See notes to consolidated financial statements.
</TABLE>
3
<PAGE>
The Ryland Group, Inc. and subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
(amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
1994 1993
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 13,813 $ 12,293
Adjustments to reconcile net earnings
to net cash provided by (used for)
operating activities:
Depreciation and amortization 9,084 9,831
Cumulative effect of a change
in accounting principle (3,460)
Gain on sale of investment (5,322)
Increase in inventories (68,819) (92,497)
Net change in other assets, payables
and other liabilities 60,305 (49,966)
Equity in (earnings) losses of
unconsolidated joint ventures (137) 240
Decrease in investment in/advances
to unconsolidated joint ventures 4,837 4,447
Decrease (increase)in mortgage loans
held for sale, net 274,731 (6,852)
Decrease in mortgage-backed securities, net 31,750
---------- ---------
Net cash provided by (used for)
operating activities 290,354 (96,076)
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net additions to property, plant and equipment (10,363) (4,509)
Principal reduction of mortgage collateral 392,618
Principal reduction of mortgage-backed
securities-available for sale 21,742
Principal reduction of mortgage-backed
securities-held to maturity 168,138
Decrease in funds held by trustee 54,327 58,118
Other investing activities, net (909) 7,154
---------- ---------
Net cash provided by investing activities 232,935 453,381
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in short-term notes payable (266,919) (18,287)
Cash proceeds of long-term debt 29,717 138,417
Reduction of long-term debt (12,925) (13,645)
Bond principal payments (274,884) (448,413)
Common and preferred stock dividends (5,915) (5,916)
Other financing activities, net 5,879 1,410
---------- ---------
Net cash used for financing activities (525,047) (346,434)
---------- ---------
Net (decrease) increase in cash (1,758) 10,871
Cash at beginning of year 46,490 10,413
---------- ---------
CASH AT END OF PERIOD $ 44,732 $ 21,284
========== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 62,232 $100,237
Cash paid for income taxes $ 18,906 $ 18,513
See notes to consolidated financial statements.
</TABLE>
4
<PAGE>
The Ryland Group, Inc. and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(amounts in thousands, except share data, in all notes)
Note 1. Segment Information
<TABLE>
<CAPTION>
Three months ended June 30,
1994 1993
---------- ---------
<S> <C> <C>
Pretax earnings (loss):
Homebuilding $ 4,736 $ 88
Financial Services 12,341 13,974
Limited-purpose subsidiaries 62 52
Corporate expenses (4,503) (4,706)
---------- ---------
Total $ 12,636 $ 9,408
========== =========
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30,
1994 1993
---------- ---------
<S> <C> <C>
Pretax earnings (loss):
Homebuilding $ 4,113 $ (4,735)
Financial Services 24,208 33,146
Limited-purpose subsidiaries 73 84
Corporate expenses (8,833) (8,344)
---------- ---------
Total $ 19,561 $ 20,151
========== =========
</TABLE>
5
<PAGE>
The Ryland Group, Inc. and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(unaudited)
Note 2. Consolidated Financial Statements
The consolidated financial statements include the accounts of The Ryland
Group, Inc. and its wholly owned subsidiaries (the Company). Intercompany
transactions have been eliminated in consolidation. Certain investments in
joint ventures are accounted for by the equity method.
The consolidated balance sheet as of June 30, 1994, the consolidated
statements of earnings for the three and six months ended June 30, 1994 and
1993, and the consolidated statements of cash flows for the six months ended
June 30, 1994 and 1993 have been prepared by the Company without audit. In
the opinion of management, all adjustments, which include normal recurring
adjustments necessary to present fairly the financial position, results of
operations and cash flows at June 30, 1994, and for all periods presented,
have been made. The consolidated balance sheet at December 31, 1993 is taken
from the audited financial statements as of that date. Certain amounts in the
consolidated statements have been reclassified to conform to the 1994
presentation.
Certain information and footnote disclosures normally included in the
financial statements have been condensed or omitted. It is suggested that
these financial statements be read in conjunction with the financial
statements and related notes included in the Company's December 31, 1993
annual report to shareholders.
The results of operations for the three and six months ended June 30, 1994 are
not necessarily indicative of the operating results for the full year.
Assets presented in the financial statements are net of any valuation
allowances.
In calculating primary earnings per common share, the dividend requirements of
the preferred shares held by the Ryland Retirement and Stock Ownership Plan
Trust (the RSOP Trust) have been deducted from net earnings. For the three
and six months ended June 30, 1994 and 1993, the average shares outstanding
have been increased by the common stock equivalents relating to the employee
stock option and employee incentive plans.
Net earnings used in calculating fully diluted earnings per common share, for
the three and six months ended June 30, 1994 and 1993, were decreased by the
amount of the additional RSOP contribution required to fund the difference
between the RSOP's earnings from preferred stock dividends and the RSOP's
potential earnings from common stock dividends after an assumed conversion.
6
<PAGE>
The Ryland Group, Inc. and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(unaudited)
Note 2. Consolidated Financial Statements - continued
Fully diluted earnings per common share for the three and six months ended
June 30, 1994, gives effect to the common stock equivalents and the assumed
conversion of the preferred stock into 1,127,250 shares and 1,136,816 shares,
respectively, of common stock, in accordance with the RSOP Trust Agreement.
Fully diluted earnings per share for the three and six months ended June 30,
1993, gives effect to the common stock equivalents and assumed conversion of
the preferred stock into 1,182,097 shares and 1,188,181 shares respectively,
of common stock, in accordance with the RSOP Trust Agreement.
Note 3. Accounting Changes
In May 1993 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115 ("FAS 115"), "Accounting for Certain
Investments in Debt and Equity Securities." The Company adopted the
provisions of the new standard for investments held as of or acquired after
January 1, 1994. In accordance with FAS 115, prior period financial
statements have not been restated to reflect the change in accounting
principle. In compliance with the new standard, the Company has classified
its investments into one of three categories: Held-to-maturity, available-
for-sale, or trading, based on management's intent and ability to hold such
securities. Management determines the appropriate classification of
investment securities at the time of purchase and reevaluates such
designations as of each balance sheet date. Investment securities are
classified as held-to-maturity when the Company has the positive intent and
ability to hold the securities to maturity. Securities which are classified
as held-to-maturity will continue to be stated at amortized cost. Securities
which are classified as available-for-sale are measured at fair value with the
unrealized gains and losses, net of tax, reflected as a component of
stockholders' equity. Lastly, securities classified as trading are measured
at fair value with gains and losses, both realized and unrealized, flowing
through the income statement. At June 30, 1994, there were no securities
designated as trading account assets.
The cumulative effect of adopting FAS 115 as of January 1, 1994 increased net
income by $2,076 (net of $1,384 in deferred income taxes), or $.13 per share.
This cumulative effect adjustment relates to unearned income or discount
points on investment securities, which can now be amortized into income during
7
<PAGE>
The Ryland Group, Inc. and subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(unaudited)
Note 3. Accounting Changes - continued
the period that the investment securities are held. Prior to adopting FAS 115,
discount points were recognized into income only when the related investment
security was sold. The January 1, 1994 balance of stockholders' equity was
increased by $7,594 (net of $5,063 in deferred income taxes) to reflect the
net unrealized holding gains on securities classified as available-for-sale,
which were previously carried at the lower of amortized cost or market.
Subsequent to January 1, 1994, the fair value of the mortgage-backed
securities in the available-for-sale portfolio declined, resulting in a net
unrealized gain adjustment to stockholders' equity as of June 30, 1994 of
$4,230.
8
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
RESULTS OF OPERATIONS
CONSOLIDATED
In the second quarter of 1994, the Company reported consolidated net earnings
of $7.6 million, or $.45 per share. This compares with consolidated net
earnings of $5.7 million, or $.33 per share, for the same period in 1993. The
improvement in the Company's second quarter results was attributable to
improved performance in the homebuilding segment which reported pretax
earnings of $4.7 million for the second quarter of 1994, compared with pretax
earnings of $88 thousand in the second quarter of 1993. The financial services
segment reported pretax earnings for the second quarter of 1994 of $12.3
million, compared with $14.0 million for the same period of 1993.
The Company reported year-to-date consolidated net earnings of $13.8 million,
or $.81 per share, which included the cumulative impact of a first quarter
accounting change of $.13 per share. This compares with consolidated net
earnings of $12.3 million, or $.71 per share, for the same period in 1993,
which included a non-recurring first quarter gain of $.21 per share.
Excluding these non-recurring items, year-to-date consolidated net earnings
for 1994 amounted to $11.7 million, or $.68 per share, compared with $9.1
million, or $.50 per share, for the same period of 1993. The homebuilding
segment's year-to-date pretax earnings of $4.1 million compared with a pretax
loss of $4.7 million for the same period in 1993. The financial services
segment reported year-to-date pretax earnings of $24.2 million for 1994
compared with $33.1 million for the same period in 1993, when a non-recurring
pretax gain of $5.3 million was realized from the sale of the Company's
remaining interest in a real estate investment trust.
The Company's first half results for 1994 include the cumulative impact of an
accounting change to adopt Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities," as
of January 1, 1994. The impact of this accounting rule change, which
increased year-to-date net earnings by $2.1 million, or $.13 per share,
relates to the financial services segment's investment portfolio.
The limited-purpose subsidiaries, whose operations continue to decline as the
related mortgage collateral and bonds payable decrease, reported pretax
earnings of $62 thousand for the second quarter of 1994, compared with pretax
earnings of $52 thousand for the same period in 1993. Year-to-date pretax
earnings were $73 thousand compared with $84 thousand for the same period in
1993.
9
<PAGE>
HOMEBUILDING
Operations of the Company's homebuilding segment are summarized as follows
($ amounts in thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $364,171 $303,689 $639,185 $521,883
Gross profit 46,902 34,697 81,934 59,784
Selling, general and
administrative expenses 35,328 27,945 64,377 51,938
Interest expense 6,925 6,697 13,581 12,341
Equity in earnings
(losses) of
unconsolidated
joint ventures 87 33 137 (240)
-------- --------- ------- ---------
Pretax earnings (loss) $ 4,736 $ 88 $ 4,113 $ (4,735)
======== ========= ======= =========
Operational Unit Data:
(includes joint ventures)
New orders 2,316 2,158 5,164 4,405
Settlements 2,303 2,159 4,132 3,767
Outstanding contracts at
June 30,
Units 3,751 3,243
Dollar Value $621,239 $508,508
Average Settlement Price
(excludes unconsolidated
joint ventures) $161 $145 $158 $143
</TABLE>
For the three and six months ended June 30, 1994 revenues increased 19.9
percent and 22.5 percent, respectively, compared with the same periods in
1993, due to an overall increase in settlements and higher average settlement
prices. For the three and six months ended June 30, 1994, settlements
increased 6.7 percent and 9.7 percent, respectively, and the average
settlement price increased 11.0 percent and 10.5 percent from the same
respective periods a year ago.
10
<PAGE>
The gross margin for the second quarter of 1994 was 12.9 percent, compared
with 11.4 percent for the second quarter of 1993. The year-to-date gross
margin increased to 12.8 percent from 11.5 percent for the same period of
1993. The improvement in overall gross margins during the second quarter
and first six months of 1994 was primarily attributable to increased sales
prices, higher volume and a better mix of sales from higher margin
communities. Despite the improvement, the Company's gross margins continue to
be negatively impacted by the build out of low margin inventory in California.
Total homebuilding new orders increased 7.3 percent to 2,316 units during the
second quarter of 1994 and 17.2 percent to 5,164 units for the year-to-date
compared with the same respective periods in 1993. The year-to-date growth in
new orders is primarily attributable to significant gains in the California
and Southwest regions more than compensating for lower sales in the
Mid-Atlantic and Southeast regions. The California region showed substantial
improvement in sales compared to last year, due in large part to the changes
in strategy implemented in the latter part of 1993. The increase in new orders
in the Southwest region is attributable to improved sales in the Houston and
Dallas divisions, as well as the sales increase resulting from the acquisition
of Scott Felder Homes. The decline in the Southeast region was primarily due
to the Company's withdrawals from the Jacksonville, Florida and Charleston,
South Carolina markets, while the decline in new orders in the Mid-Atlantic
region was partially weather-related and partially due to economic conditions
in the region.
The Company acquired a majority interest in Scott Felder Homes in March 1993
through a limited partnership. On July 1, 1994 the Company completed the full
acquisition of this enterprise strengthening its position in the Austin, San
Antonio and Dallas markets.
For the homebuilding segment, outstanding contracts as of June 30, 1994 were
up 15.7 percent from June 30, 1993. The $621.2 million value of outstanding
contracts, which increased 22.2 percent over the same period of 1993, is the
highest June 30th backlog in the Company's history.
Selling, general and administrative expenses as a percentage of revenues, were
9.7 percent for the first quarter and 10.1 percent for the first six months of
1994 compared with 9.2 percent and 10.0 percent for the same respective
periods of 1993. These increases were primarily attributable to the costs
associated with the Company's expansion into new markets.
Interest expense for the second quarter and first six months of 1994 increased
somewhat compared with the same periods of 1993, due to an increase in the
overall borrowing costs of the Company, partially offset by a higher amount of
interest capitalization in 1994.
11
<PAGE>
FINANCIAL SERVICES
The financial services segment reported pretax earnings of $12.3 million for
the second quarter of 1994, compared with $14.0 million in the second quarter
of 1993. Year-to-date pretax earnings were $24.2 million compared with $33.1
million for the same period of 1993. The decrease in year-to-date earnings
was primarily due to a non-recurring first quarter pretax gain of $5.3 million
from the sale of the Company's remaining interest in a real estate investment
trust, as well as $6.4 million in pretax gains from sales of called
collateral, $2.4 million of which occurred in the second quarter. Expenses
increased from the prior year due to expansion of operations during 1993.
Retail Operations:
- -----------------
Pretax earnings for retail operations were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Interest and
net origination fees $ 4,229 $6,557 $11,183 $12,456
Gains on sales of mortgages
and servicing rights 12,923 6,591 22,380 12,749
------- ------- ------- ------
Mortgage production revenue 17,152 13,148 33,563 25,205
Loan servicing 8,425 10,526 19,678 21,043
Title/escrow 1,087 886 1,977 1,481
------- ------- ------- ------
Total retail revenues 26,664 24,560 55,218 47,729
Expenses 19,740 19,571 41,996 37,655
------- ------- ------- ------
Pretax earnings $ 6,924 $ 4,989 $13,222 $10,074
======= ======= ======= =======
</TABLE>
Interest and net origination fees have decreased as a result of the industry-
wide decline in mortgage origination activity resulting from the current
higher interest rate environment, while loan servicing revenues have declined
due to reductions in the loan servicing portfolio. These trends are likely to
continue. The increases in total revenues for the three months ended June 30,
1994 and the six months ended June 30, 1994 compared with the same periods in
1993, were the result of higher gains on the sales of mortgages and servicing
rights. Expenses increased between periods due to the overall expansion of
the Company's operations in 1993. The Company has recently reduced staffing
levels in anticipation of continued lower origination volumes.
12
<PAGE>
Mortgage origination activities were as follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Dollar volume of mortgages
originated (in millions) $ 525 $ 975 $1,200 $ 1,516
Number of mortgages originated 4,224 7,595 9,579 11,861
Percentage Ryland Homes settlements 28% 19% 23% 22%
Percentage other settlements 72% 81% 77% 78%
---- ---- ---- ----
Total settlements 100% 100% 100% 100%
</TABLE>
The Company earns interest on mortgages held for sale and pays interest on
borrowings secured by the mortgages. Significant data from these operations
were as follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest spread (in thousands) $2,126 $3,079 $5,475 $6,128
Average balance of mortgages
held for sale (in millions) $ 273 $ 413 $ 362 $ 386
Interest spread rate 3.1% 3.0% 3.1% 3.2%
The interest spread decreased in the current six months as compared to 1993
due to a lower average balance of mortgages held for sale.
The loan servicing portfolio balances were as follows at June 30, (in
billions):
</TABLE>
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Originated $3.1 $3.7
Acquired 4.3 5.2
Subserviced for others 0.1 .8
---- ----
Total portfolio $7.5 $9.7
==== ====
</TABLE>
The decrease in the portfolio balance is primarily attributable to the decline
in origination volume combined with higher sales of servicing in the current
year.
13
<PAGE>
Institutional Operations:
The institutional operations encompass securities issuance and securities
administration services. Pretax earnings for the three months ended June 30,
1994 decreased 11.6 percent as compared to the same period in 1993 due to an
increase in expenses. Year-to-date pretax earnings increased 2.7 percent as
compared to the same period in 1993, despite a decline in the overall
portfolio balance, due to improved margins per series.
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $6,060 $5,960 $11,760 $10,883
Expenses 3,450 3,008 6,841 6,091
------ ------ ------- -------
Pretax earnings $2,610 $2,952 $ 4,919 $ 4,792
====== ====== ======= =======
</TABLE>
Significant data on the securities administration portfolio as of June 30,
were as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Total securities administration
portfolio (in billions) $48.2 $64.3
Number of series in the
administration portfolio 542 505
</TABLE>
Investment Operations:
The Company's investment operations hold certain assets, primarily mortgage-
backed securities, which were obtained as a result of the redemption of
mortgage-backed bonds issued by the Company's limited-purpose subsidiaries.
As shown in the table below, pretax earnings for the three and six months
ended June 30, 1994 decreased substantially as compared to the same period of
1993. The $5.3 million gain in the first quarter of 1993 was the result of
the sale of the Company's remaining interest in a real estate investment trust
(REIT) and is a non-recurring item. The Company also realized net revenues of
$2.4 million and $6.4 million from the sale of mortgage-backed securities in
the three and six months ended June 30, 1993, respectively.
14
<PAGE>
Pretax earnings were comprised of the following:
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sale of REIT stock $ 0 $ 0 $ 0 $ 5,322
Sale of mortgage-backed securities 0 2,356 0 6,396
Interest spread and other 2,807 3,677 6,067 6,562
------ ------- ------ -------
Pretax earnings $2,807 $ 6,033 $6,067 $18,280
====== ======= ====== =======
</TABLE>
The Company earns a net interest spread on the investment portfolio from the
difference between the interest rates on the mortgage-backed securities and
the related borrowing rates. The slight decrease in the interest spread rate
in the second quarter of 1994 as compared to 1993, is primarily due to an
increase in borrowing rates. The increase in the interest spread rate between
the year-to-date periods is due to a higher yield earned on the mortgage-
backed securities, partially as a result of the adoption of FAS 115 as of
January 1, 1994. Prior to FAS 115, unearned income (discount points) was
deferred and recognized upon the sale of the related investment security.
Under FAS 115, this unearned income is amortized into income as an adjustment
to the interest yield over the remaining term of the investment security.
Significant data from the investment operations was as follows:
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest spread earned
(in thousands) $3,781 $3,646 $8,179 $6,653
Average balance outstanding
at June 30 (in millions) $ 228 $ 215 $ 226 $ 217
Interest spread rate 6.6% 6.8% 7.3% 6.1%
</TABLE>
15
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
The Company generally provides for the cash requirements of the homebuilding
segment and financial services segment from internally generated funds and
outside borrowings. The Company believes that its sources of cash are
sufficient to finance its expected requirements.
Housing inventories increased to $558.4 million as of June 30, 1994, from
$489.5 million as of December 31, 1993, primarily due to normal seasonal
increases in homes under construction and expansion into new and existing
markets.
The Company primarily uses its unsecured revolving credit agreement to finance
its homes under construction. This agreement, which was renewed in July 1993,
allows the Company to borrow up to $215 million for a three-year period. As
of June 30, 1994, the Company had borrowed $118 million under this agreement,
compared with $90 million as of December 31, 1993. The increase is primarily
attributable to the aforementioned increases in homebuilding inventories.
The financial services segment uses cash generated from operations and
borrowing arrangements to finance operations. Borrowing arrangements include
a $400 million combined mortgage warehouse and working capital funding
agreement, repurchase agreement facilities aggregating $800 million and a
secured $35 million credit agreement to be used for the short-term financing
of optional bond redemptions. At June 30, 1994 and December 31, 1993, the
combined borrowings under the mortgage warehouse funding agreement, the
repurchase agreements, and the revolving credit agreement were $450.0 million
and $716.9 million, respectively. As of June 30, 1994 and December 31, 1993,
the balance of mortgage loans and mortgage-backed securities, net were $500.2
million and $728.1 million, respectively.
16
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the Company was held on April 20, 1994.
Proxies were solicited by the company pursuant to Regulation 14 under the
Securities Exchange Act of 1934 to elect directors of the company for the
ensuing year, to approve the amendment of the 1992 non-employee director
equity plan and to approve the appointment of Ernst & Young as independent
public accountants of the Company for 1994.
The ten incumbent directors proposed by the Company were elected. Proxies
representing 14,222,809 shares of stock eligible to vote at this meeting, or
92.6 percent of the outstanding shares, were voted for the election of
directors. The following is a separate tabulation with respect to the vote
for each director:
<TABLE>
<CAPTION>
Name Total Vote For Total Vote Withheld
- ---- -------------- -------------------
<S> <C> <C>
Andre P. Brewster 14,151,235 71,574
Robert J. Gaw 14,137,531 85,278
Alan P. Hoblitzell, Jr. 14,136,700 86,109
John H. Mullin III 14,151,335 71,474
Leonard M. Harlan 14,149,990 72,819
William G. Kagler 14,151,435 71,374
John O. Wilson 14,151,435 71,374
L.C. Heist 14,151,535 71,274
James A. Flick, Jr. 14,151,435 71,374
R. Chad Dreier 14,151,535 71,274
</TABLE>
The amendment to the 1992 non-employee director equity plan was approved by
91 percent of the shares voting. The following is a breakdown of the vote on
such matter:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <S> <S>
12,939,569 1,025,065 258,175
</TABLE>
Ernst & Young was approved as the independent public accountants for the
Company for 1994 by 99.3 percent of the shares voting. The following is a
breakdown of the vote on such matter:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
14,129,410 39,185 54,213
</TABLE>
17
<PAGE>
PART II. OTHER INFORMATION (continued)
Page Number
-----------
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
10 1992 Non-Employee Director Equity Plan (as amended) 21-27
11 Statement Re computation of earnings
per share 28
B. Reports on Form 8-K
No reports on Form 8-K were filed with the
Securities and Exchange Commission during
the three months ended June 30, 1994.
18
<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 RYLAND GROUP, INC.
----------------------
Registrant
August 12, 1994 By: /s/ Alan P. Hoblitzell, Jr.
- --------------- ------------------------------------------
Date Alan P. Hoblitzell, Jr.,
Director, Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
August 12, 1994 By: /s/ Stephen B. Cook
- --------------- ------------------------------------------
Date Stephen B. Cook,
Vice President and Corporate Controller
(Principal Accounting Officer)
19
<PAGE>
INDEX OF EXHIBITS
A. Exhibits Page of
Sequentially
Numbered Pages
--------------
10 1992 Non-Employee Director Equity Plan (as amended) 21-27
11 Statement Re computation of earnings
per share 28
20
<PAGE>
EXHIBIT 10
THE RYLAND GROUP, INC.
1992 NON-EMPLOYEE DIRECTOR EQUITY PLAN (as amended)
Section 1. PURPOSE
The purpose of The Ryland Group, Inc. 1992 Non-Employee Director Equity Plan
(the "plan") is to advance the interests of the corporation and its
stockholders by encouraging increased common stock ownership by members of the
board of directors who are not significant stockholders of the corporation or
employees of the corporation, in order to promote long-term stockholder value
through directors' continuing ownership of the common stock.
Section 2. DEFINITIONS
"Annual retainer" means the amount payable annually to each non-employee
director for service on the board (exclusive of any per meeting fees or
expense reimbursements).
"Board" means the board of directors of the corporation.
"Committee" means a committee of the board of directors elected or designated
from time to time to administer the plan, which initially shall be the
compensation committee of the board of directors.
"Common stock" means the common stock, $1.00 par value, of the corporation.
"Corporation" means The Ryland Group, Inc.
"Employee" means any officer or employee of the corporation or of its
subsidiaries.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Last trading day" means the last day of a calendar year in which the common
stock trades on the New York Stock Exchange; or, if the common stock is not
listed on the New York Stock Exchange, such other exchange on which the common
stock is traded; or, the NASDAQ National Market System or other over-the-
counter market on which the common stock is traded or quoted.
21
<PAGE>
"Market price" means the last reported sale price of the common stock on the
New York Stock Exchange; or, if the common stock is not listed on the New York
Stock Exchange, the closing price on such other exchange on which the common
stock is traded; or, if quoted on the NASDAQ National Market System or other
over-the-counter market, the last reported sales price on the NASDAQ National
Market System or other over-the-counter market; or, if the common stock is not
publicly traded, such price as shall be determined by the committee to be the
fair market value.
"Meeting fee" means the amount payable to a non-employee director for a
meeting of the board.
"Non-employee director" or "participant" means any person who is elected or
appointed to the board.
"Stock options" means stock options granted under the plan which shall be
nonstatutory stock options not intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended.
Section 3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
(a) Subject to adjustment as provided in Section 3(b) below, the maximum
aggregate number of shares of common stock that may be issued under the plan
is 100,000 shares. The common stock to be issued under the plan will be made
available from authorized but unissued shares of common stock, and the
corporation shall set aside and reserve for issuance under the plan said
number of shares.
(b) In the event of any stock dividend, extraordinary cash dividend, creation
of a class of equity securities, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares, warrants
or rights offering to purchase common stock at a price substantially below
fair market value or similar change affecting the common stock, appropriate
adjustment shall be made in the maximum number and kind of shares subject to
the plan, outstanding stock options and subsequent grants of stock options and
in the exercise price of outstanding stock options.
22
<PAGE>
Section 4. ADMINISTRATION OF THE PLAN
Stock options under the plan shall be automatic as provided in Section 6. The
plan shall be administered by the committee. The committee shall have the
powers vested in it by the terms of the plan. The committee shall, subject to
the provisions of the plan, have the power to construe the plan, to determine
all questions arising thereunder and to adopt and amend rules and regulations
for the administration of the plan. Notwithstanding the foregoing, the
committee shall have no discretion with respect to the eligibility or
selection of participants, the timing or exercise price of stock options, or
the number of shares of common stock subject to stock option grants. Any
decision of the committee on the administration of the plan shall be final and
conclusive.
Section 5. PARTICIPATION IN THE PLAN
All non-employee directors shall participate in the plan.
Section 6. DETERMINATION OF STOCK OPTIONS
Each stock option granted under the plan shall be evidenced by a written
instrument in such form as the committee may approve and shall be subject to
the following terms and conditions:
(a) Each current non-employee director shall receive, effective as of Dec.
31, 1991, a stock option to purchase 1,100 shares of common stock at an
exercise price of $23.25 per share.
(b) On Dec. 31 of each year before 1994 in which a non-employee director is
first elected to the board, such newly elected non-employee director shall
receive a stock option to purchase the number of shares of common stock
calculated by dividing the aggregate cash value of the annual retainer for
that year plus an amount equal to six meeting fees for that year by the market
price of the common stock on the last trading day of the year in which such
non-employee director was elected to the board. The stock options granted to a
newly elected non-employee director pursuant to this Section 6(b) shall be in
lieu of any stock options to which such non-employee director otherwise would
be entitled in such year under Section 6(c).
23
<PAGE>
(c) On Dec. 31 of each year before 1994, each non-employee director (except
for non-employee directors first elected during such year) shall receive a
stock option to purchase the number of shares of common stock determined by
dividing one-half of the cash value of the annual retainer for the calendar
year during which the grant is being made by the market price of the common
stock on the last trading day of the year in which such grant is being made.
(d) On Dec. 31, 1994, and on each Dec. 31 thereafter during the term of the
plan, each non-employee director first elected to the board during the
calendar year that includes such date shall receive an option to purchase
2,000 shares of common stock and each other non-employee director on such date
shall receive an option to purchase 1,000 shares of common stock.
(e) The purchase price for the common stock subject to stock options shall be
the market price of the common stock on the date of grant.
(f) Stock options shall fully vest and become exercisable six months from the
date of grant. Stock options shall be exercisable in whole or in part with
respect to a whole number of vested shares (rounded to the next highest whole
number in the case of fractional shares) at any time prior to the expiration
of 10 years from the date of grant, subject to Section 6(g) of the plan.
(g) In the event service on the board by a participant terminates for any
reason, all of the participant's stock options shall fully vest and become
immediately exercisable and will expire three years after termination
regardless of their stated expiration dates. Stock options shall not be
transferable by the participant otherwise than by will or the laws of descent
and distribution. The rights of a participant in a stock option may be
exercised by the participant's guardian or legal representative in the case of
disability and by the participant's estate or a beneficiary designated by the
participant in the case of death.
(h) The purchase price for the common stock subject to a stock option may be
paid in cash, by check, in shares of common stock of the corporation or in a
combination of cash and common stock. The value of shares of common stock
delivered in payment of the purchase price shall be their market price as of
the date of exercise.
(i) Each participant shall pay to the corporation, or make arrangements
satisfactory to the committee for the payment of, any federal, state or local
taxes of any kind required by law to be withheld with respect to the receipt
of shares of common stock pursuant to the exercise of a stock option. Such
tax obligations may be paid in whole or in part in shares of common stock,
24
<PAGE>
including shares issued upon exercise of the stock option, valued at market
price on the date of delivery.
Section 7. STOCKHOLDER RIGHTS
(a) Non-employee directors shall not be deemed for any purpose to be or have
rights as stockholders of the corporation with respect to any shares of common
stock except as and when such shares are issued and then only from the date of
the certificate thereof. No adjustment shall be made for dividends,
distributions or other rights for which the record date precedes the date of
such stock certificate.
(b) Subject to the provisions of Section 7(a) above, a participant will have
all rights of a stockholder with respect to common stock issued to the
participant, including the right to vote the shares and receive all dividends
and other distributions paid or made with respect thereto.
Section 8. CONTINUATION OF DIRECTOR OR OTHER STATUS
Nothing in the plan or in any instrument executed pursuant to the plan or any
action taken pursuant to the plan shall be construed as creating or
constituting evidence of any agreement or understanding, express or implied,
that the corporation will retain a non-employee director as a director or in
any other capacity for any period of time or at a particular retainer or other
rate of compensation, as conferring upon any participant any legal or other
right to continue as a director or in any other capacity, or as limiting,
interfering with or otherwise affecting the provisions of the corporation's
charter, bylaws or the Maryland General Corporation Law relating to the
removal of directors.
25
<PAGE>
Section 9. COMPLIANCE WITH GOVERNMENT REGULATIONS
Neither the plan nor the corporation shall be obligated to issue any shares of
common stock pursuant to the plan at any time unless and until all applicable
requirements imposed by any federal and state securities and other laws,
rules, and regulations, by any regulatory agencies, or by any stock exchanges
upon which the common stock may be listed have been fully met. As a condition
precedent to any issuance of shares of common stock and delivery of
certificates evidencing such shares pursuant to the plan, the committee may
require a participant to take any such action and to make any such covenants,
agreements and representations as the committee, as the case may be, in its
discretion deems necessary or advisable to ensure compliance with such
requirements. The corporation shall in no event be obligated to register the
shares of common stock issued or issuable under the plan pursuant to the
Securities Act of 1933, as now or hereafter amended, or to qualify or register
such shares under any securities laws of any state upon their issuance under
the plan or at any time thereafter, or to take any other action in order to
cause the issuance and delivery of such shares under the plan or any
subsequent offer, sale or other transfer of such shares to comply with any
such law, regulation or requirement. Participants are responsible for
complying with all applicable federal and state securities and other laws,
rules and regulations in connection with any offer, sale or other transfer of
the shares of common stock issued under the plan or any interest therein
including, without limitation, compliance with the registration requirements
of the Securities Act of 1933 (unless an exemption therefrom is available), or
with the provisions of Rule 144 promulgated thereunder, if available, or any
successor provisions.
Section 10. NON-TRANSFERABILITY OF RIGHTS
No participant shall have the right to assign any stock option or any other
right or interest under the plan, contingent or otherwise, or to cause or
permit any encumbrance, pledge or charge of any nature to be imposed on any
such stock option or any such right or interest, other than by will or the
laws of descent and distribution. Stock options shall be exercisable during
the participant's lifetime only by the participant or the participant's
guardian or legal representative.
26
<PAGE>
Section 11. TERM OF PLAN
The plan as amended shall become effective immediately upon approval by the
affirmative vote of a majority of the shares of common stock present or
represented and entitled to vote at the 1994 annual meeting of the
corporation's stockholders. When so approved, the plan as amended shall be
deemed to have been in effect as of Dec. 18, 1991. The plan shall terminate
on Dec. 18, 2001.
Section 12. AMENDMENT OF THE PLAN
The committee may amend, suspend or terminate the plan or any portion thereof
at any time, provided that to the extent required to qualify transactions
under the plan for exemption under Rule 16b-3 under the Exchange Act and any
successor provision, no amendment may be made to change the eligibility or
selection of participants in the plan, the timing of stock option grants, or
the number of shares of common stock subject to the plan or stock options
granted thereunder, other than as permitted by such rule or successor
provision. Notwithstanding the foregoing, the plan may not be amended more
than once in any six-month period except to comply with changes in the
Internal Revenue Code (the "code"), the Employment Retirement Income
Securities Act ("ERISA") or any rules or regulations promulgated under either
the code or ERISA.
Section 13. GOVERNING LAW
The plan shall be governed by and interpreted in accordance with the laws of
the state of Maryland.
27
<PAGE>
EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1994 1993 1994 1993
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Primary:
Net earnings before cumulative
effect of a change in
accounting principle $ 7,582 $ 5,740 $ 11,737 $ 12,293
Cumulative effect of a change in
accounting principle 2,076
----------- ----------- ----------- -----------
Net earnings 7,582 5,740 13,813 12,293
Adjustment for dividends on
convertible preferred shares (616) (651) (1,245) (1,310)
----------- ----------- ----------- -----------
Adjusted net earnings $ 6,966 $ 5,089 $ 12,568 $ 10,983
=========== =========== =========== ===========
Weighted average common shares
outstanding 15,385,297 15,350,408 15,371,672 15,342,773
Common stock equivalents:
Stock options 44,606 44,940 86,194 54,960
Employee incentive plans 123,135 150,309 126,011 150,578
Restricted stock 0 9,504 0 9,948
----------- ----------- ----------- -----------
Total 15,553,038 15,555,161 15,583,877 15,558,259
============ =========== =========== ===========
Primary earnings per common share
before cumulative effect of a
change in accounting principle $ 0.45 $ 0.33 $ 0.68 $ 0.71
Cumulative effect of a change
in accounting principle 0.13
----------- ----------- ----------- -----------
Primary earnings per common share$ 0.45 $ 0.33 $ 0.81 $ 0.71
=========== =========== =========== ===========
Fully-Diluted:
Net earnings before cumulative
effect of a change in
accounting principle $ 7,582 $ 5,740 $ 11,737 $ 12,293
Cumulative effect of a change in
accounting principle 2,076
----------- ----------- ----------- -----------
Net earnings 7,582 5,740 13,813 12,293
Adjustment for incremental
expense from conversion of
convertible preferred shares (272) (290) (549) (585)
----------- ----------- ----------- -----------
Adjusted net earnings $ 7,310 $ 5,450 $ 13,264 $ 11,708
=========== =========== =========== ===========
Weighted average common shares
outstanding 15,385,297 15,350,408 15,371,672 15,342,773
Common stock equivalents:
Stock options 44,606 44,940 86,194 54,960
Employee incentive plans 123,135 150,309 126,011 150,578
Restricted stock 18,815 16,080
Convertible preferred stock 1,127,250 1,182,097 1,136,816 1,188,181
----------- ----------- ----------- -----------
Total 16,680,288 16,746,569 16,720,693 16,752,572
============ =========== =========== ===========
Fully diluted earnings per common share
before cumulative effect of a
change in accounting principle $ 0.44 $ 0.33 $ 0.66 $ 0.70
Cumulative effect of a change
in accounting principle 0.13
----------- ----------- ----------- -----------
Fully diluted earnings per
common share $ 0.44 $ 0.33 $ 0.79 $ 0.70
=========== =========== =========== ===========
</TABLE>
28
