<PAGE> 1
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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 MARCH 31, 1998
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 1-10934
LAKEHEAD PIPE LINE PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of 39-1715850
incorporation or organization) (I.R.S. Employer
Identification No.)
LAKE SUPERIOR PLACE
21 WEST SUPERIOR STREET
DULUTH, MN 55802-2067
(Address of principal executive offices and zip code)
(218) 725-0100
(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 Registrant had 22,290,000 Class A Common Units outstanding as at May 12,
1998.
==============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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PART I. FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. Financial Statements
Consolidated Statement of Income
for the three month periods ended March 31, 1998 and 1997............................. 1
Consolidated Statement of Cash Flows
for the three month periods ended March 31, 1998 and 1997............................. 2
Consolidated Statement of Financial Position
as at March 31, 1998 and December 31, 1997............................................ 3
Consolidated Statement of Partners' Capital
for the period ended March 31, 1998................................................... 4
Notes to Consolidated Financial Statements.............................................. 4
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............................................ 6
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.......................................................................... 8
ITEM 6. Exhibits and Reports on Form 8-K........................................................... 9
SIGNATURE ..... ....................................................................................... 10
</TABLE>
This Quarterly Report on Form 10-Q contains forward-looking statements and
information that are based on the General Partner's beliefs as well as
assumptions made by and information currently available to the General Partner.
When used in this document, the words "anticipate," "believe," "expect,"
"estimate," "forecast," "project," and similar expressions are intended to
identify forward-looking statements. Such statements reflect the General
Partner's current views with respect to future events and are subject to certain
risks, uncertainties and assumptions including the Partnership's ability to
complete expansion programs on time and within budget and to recover the costs
of such expansions in its tariffs. Should one or more risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, believed, expected, estimated,
forecasted, or projected. Except as required by applicable securities laws, the
Partnership does not intend to update these forward-looking statements and
information. For additional discussion of such risks, uncertainties and
assumptions, see the Partnership's 1997 Annual Report on Form 10-K.
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LAKEHEAD PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Three months ended
March 31,
(unaudited; dollars in millions, except per unit amounts) 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Revenue $ 72.9 $ 68.7
- -------------------------------------------------------------------------------------------------------------------
Expenses
Power 17.7 17.1
Operating and administrative 16.8 16.1
Depreciation 10.4 9.8
- -------------------------------------------------------------------------------------------------------------------
44.9 43.0
- -------------------------------------------------------------------------------------------------------------------
Operating Income 28.0 25.7
Interest and Other Income 2.9 2.3
Interest Expense (7.7) (10.1)
Minority Interest (0.3) (0.2)
- -------------------------------------------------------------------------------------------------------------------
Net Income $ 22.9 $ 17.7
===================================================================================================================
Net Income Per Unit (Note 3) $ 0.80 $ 0.71
===================================================================================================================
Cash Distributions Paid Per Unit (Note 4) $ 0.78 $ 0.68
===================================================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
1
<PAGE> 4
LAKEHEAD PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Three months ended
March 31,
(unaudited; dollars in millions) 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Activities
Net income $ 22.9 $17.7
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation 10.4 9.8
Accrued rate refunds and related interest (Note 5) 0.7 1.0
Other 0.4 (0.2)
Changes in operating assets and liabilities:
Accounts receivable and other 4.8 1.1
Materials and supplies (0.1) (0.2)
General Partner and affiliates (10.7) (0.9)
Accounts payable and other 0.4 (7.2)
Interest payable 7.2 8.6
Property and other taxes 3.0 1.9
Payment of rate refunds and related interest (Note 5) (7.2) (6.7)
- -------------------------------------------------------------------------------------------------------------------
31.8 24.9
- -------------------------------------------------------------------------------------------------------------------
Investing Activities
Additions to property, plant and equipment (81.8) (15.4)
Short-term investments, net 36.4 6.5
- -------------------------------------------------------------------------------------------------------------------
(45.4) (8.9)
- -------------------------------------------------------------------------------------------------------------------
Financing Activities
Distributions to partners (21.8) (16.8)
Minority interest (0.2) (0.2)
- -------------------------------------------------------------------------------------------------------------------
(22.0) (17.0)
- -------------------------------------------------------------------------------------------------------------------
Decrease in Cash and Cash Equivalents * (35.6) (1.0)
Cash and Cash Equivalents at Beginning of Period 118.6 89.6
- -------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period $ 83.0 $88.6
===================================================================================================================
</TABLE>
* Cash equivalents are defined as all highly marketable securities with a
maturity of three months or less when purchased. Short-term investments are
marketable securities with a maturity of more than three months when
purchased.
See accompanying notes to the consolidated financial statements.
2
<PAGE> 5
LAKEHEAD PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
March 31, December 31,
(unaudited, except for December 31, 1997; dollars in millions) 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 83.0 $ 118.6
Short-term investments 17.5 53.9
Due from General Partner and affiliates 13.3 2.6
Accounts receivable and other 17.6 22.4
Materials and supplies 7.2 7.1
- -------------------------------------------------------------------------------------------------------------------
138.6 204.6
- -------------------------------------------------------------------------------------------------------------------
Deferred Charges and Other 4.3 4.4
- -------------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment
At cost 1,090.3 1,008.5
Accumulated depreciation (168.6) (158.2)
- -------------------------------------------------------------------------------------------------------------------
921.7 850.3
- -------------------------------------------------------------------------------------------------------------------
$ 1,064.6 $ 1,059.3
===================================================================================================================
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Accounts payable and other $ 20.6 $ 20.2
Interest payable 12.5 5.3
Property and other taxes 14.4 11.4
Current portion of accrued rate refunds and related interest (Note 5) 29.0 29.0
- -------------------------------------------------------------------------------------------------------------------
76.5 65.9
Long-Term Debt 463.0 463.0
Accrued Rate Refunds and Related Interest (Note 5) 19.6 26.1
Minority Interest 2.6 2.5
Contingencies (Note 6)
- -------------------------------------------------------------------------------------------------------------------
561.7 557.5
- -------------------------------------------------------------------------------------------------------------------
Partners' Capital
Class A Common Unitholders (Units issued - 22,290,000) 461.5 461.6
Class B Common Unitholder (Units issued - 3,912,750) 37.2 36.7
General Partner 4.2 3.5
- -------------------------------------------------------------------------------------------------------------------
502.9 501.8
- -------------------------------------------------------------------------------------------------------------------
$ 1,064.6 $ 1,059.3
===================================================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE> 6
LAKEHEAD PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Class A Class B
(unaudited, except for December 31, 1997; Common Common General
dollars in millions) Unitholders Unitholder Partner Total
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Partners' Capital at December 31, 1997 $ 461.6 $ 36.7 $ 3.5 $501.8
Net Income Allocation 17.3 3.6 2.0 22.9
Distributions to Partners (17.4) (3.1) (1.3) (21.8)
- -------------------------------------------------------------------------------------------------------------------
Partners' Capital at March 31, 1998 $ 461.5 $ 37.2 $ 4.2 $502.9
===================================================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with United States generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, they contain all adjustments which management considers
necessary to present fairly the financial position as at March 31, 1998 and
December 31, 1997; the results of operations for the three month periods
ended March 31, 1998 and 1997; and cash flows for the three month periods
ended March 31, 1998 and 1997. The results of operations for the three
months ended March 31, 1998 should not be taken as indicative of the
results to be expected for the full year. The interim financial statements
should be read in conjunction with the Partnership's consolidated financial
statements and notes thereto presented in the Partnership's 1997 Annual
Report on Form 10-K.
2. Comprehensive Income
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" became effective for fiscal years beginning after
December 15, 1997. Comprehensive income is defined as "the change in equity
of a business enterprise during a period from transactions and other events
and circumstances from nonowner sources. It includes all changes in equity
during a period except those resulting from investments by owners and
distributions to owners."
"Comprehensive Income" encompasses "Net Income" and other revenues,
expenses, gains, and losses that under generally accepted accounting
principles are included in comprehensive income but excluded from net
income. These other components of comprehensive income include foreign
currency translation adjustments and unrealized holding gains and losses on
available for sale
4
<PAGE> 7
securities. For the three month periods ended March 31, 1998, and 1997, the
Partnership does not have any items of "other" comprehensive income. As
such, the Partnership is not required to report comprehensive income in a
separate financial statement.
3. Net Income Per Unit
Net income per unit is computed by dividing net income, after deduction of
the General Partner's allocation, by the weighted average number of Class A
and Class B Common Units outstanding. The General Partner's allocation is
equal to an amount based upon its 1% general partner interest, adjusted to
reflect an amount equal to incentive distributions and an amount required
to reflect depreciation on the General Partner's historical cost basis for
assets contributed on formation of the Partnership. Net income per unit was
determined as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Three months ended March 31, 1998 1997
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net income $ 22.9 $ 17.7
- -------------------------------------------------------------------------------------------------------------------
Net income allocated to General Partner (0.2) (0.2)
Incentive distributions and historical cost depreciation adjustments (1.8) (0.4)
- -------------------------------------------------------------------------------------------------------------------
(2.0) (0.6)
- -------------------------------------------------------------------------------------------------------------------
Net income allocable to Common Units $ 20.9 $ 17.1
===================================================================================================================
Common Units outstanding (millions) 26.2 24.0
===================================================================================================================
Net income per unit $ 0.80 $ 0.71
===================================================================================================================
</TABLE>
4. Cash Distribution
On April 16, 1998, the Board of Directors of the General Partner declared a
cash distribution for the quarter ended March 31, 1998, of $0.86 per unit.
The distribution will be made on May 15, 1998, to Unitholders of record on
April 30, 1998.
5. Accrued Rate Refunds and Related Interest
In 1996, the Federal Energy Regulatory Commission ("FERC") approved a
settlement agreement ("Settlement Agreement") between the Partnership and
customer representatives on all outstanding contested tariff rates. The
Settlement Agreement resulted in an approximate tariff rate reduction of 6%
and total rate refunds and related interest of $120.0 million through the
effective date of October 1, 1996. The $48.6 million total rate refund
balance remaining at March 31, 1998 is being repaid through a 10% reduction
in tariff rates. This reduction will continue until all refunds have been
made, which is expected to occur during the second half of 1999. Interest
will continue to accrue on the unpaid balance based on the 90-day Treasury
bill rate.
5
<PAGE> 8
6. Environmental Contingencies
The Partnership is subject to federal and state laws and regulations
relating to the protection of the environment. Environmental risk is
inherent to liquid pipeline operations and the Partnership could, at times,
be subject to environmental cleanup and enforcement actions. The General
Partner manages this environmental risk through appropriate environmental
policies and practices to minimize the impact to the Partnership. To the
extent that the Partnership is unable to recover environmental costs in its
rates or through insurance, the General Partner has agreed to indemnify the
Partnership from and against any costs relating to environmental
liabilities associated with the pipeline system prior to its transfer to
the Partnership in 1991. This excludes any liabilities resulting from a
change in laws after such transfer. The Partnership continues to
voluntarily investigate past leak sites for the purpose of assessing
whether any remediation is required in light of current regulations, and to
date no material environmental risks have been identified.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net income for the first quarter of 1998 was $22.9 million, or $0.80 per unit,
an increase of $5.2 million, or $0.09 per unit, over the net income for the
first quarter of 1997 largely due to higher operating revenue and lower interest
expense.
Operating revenue increased $4.2 million, primarily due to increased deliveries
and a greater proportion of heavy crude oil deliveries, up 18% to 663,000
barrels per day. Because heavy crude oil is more expensive to pump due to its
higher viscosity, the tariff rate for heavy crude oil is greater than that for
lighter crude oils. Deliveries averaged 1,588,000 barrels per day for the first
quarter of 1998, up 6% from the 1,502,000 averaged for the first quarter of last
year. Deliveries increased due to increased movement of crude oil from western
Canada into the Midwest U.S. and increased receipts of U.S. crude in the
Chicago, Illinois area for delivery to eastern Canada. System utilization,
measured in barrel miles, was 99 billion a slight increase from last year's
first quarter, reflecting the increased deliveries to the significant Midwest
and eastern Canadian markets served by the Partnership.
Total first quarter operating expenses were $1.9 million higher than the same
period of 1997 due to increased power, operating and administrative, and
depreciation costs. The increase in operating and administrative costs resulted
from the timing of costs associated with internal inspection of segments of the
Partnership's pipeline system. Depreciation expense increased $0.6 million due
to growth in property, plant and equipment.
Interest expense for the first quarter of 1998 was less than the first quarter
of 1997 primarily due to lower balances with respect to rate refunds payable and
increased capitalized interest due to the Partnership's System Expansion Program
II ("SEP II") capital expenditures.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, cash, cash equivalents and short-term investments totaled
$100.5 million, down $72.0 million since December 31, 1997, as cash required for
distributions and capital expenditures exceeded cash generated from operating
activities. Of this $100.5 million, $24.7 million ($0.86 per unit) will be used
for the cash distribution payable May 15, 1998, with the remaining $75.8 million
available for capital expenditures or other business needs.
6
<PAGE> 9
Cash flow from operating activities for the first quarter of 1998 increased $6.9
million from the corresponding period last year, primarily due to increased
earnings.
First quarter capital expenditures totaled $81.8 million, of which $80.0 million
was primarily for the construction of SEP II's new pipeline from Superior,
Wisconsin to the Chicago area. With $172.0 million incurred through March 31,
1998, the remaining $198.0 million of the estimated $370.0 million total cost of
SEP II is expected to be incurred in 1998. In addition to SEP II, the
Partnership anticipates spending approximately $110 million on the Terrace
expansion program (see "-General, -Terrace Project"), $11.0 million for pipeline
system enhancements and $10.0 million for core maintenance activities in 1998.
The General Partner believes that the Partnership will continue to have adequate
liquidity to fund future operating, investing and financing activities. The
Partnership intends to fund the remaining portion of SEP II, Terrace, and
ongoing capital expenditures with the proceeds from future equity and debt
offerings, bank borrowings, cash generated from operating activities, and
existing cash, cash equivalents and short-term investments. Cash distributions
are expected to be funded with internally generated cash. The Partnership's
ability to make future equity and debt offerings will depend on prevailing
market conditions, interest rates and the financial condition of the Partnership
at the time of any such offering.
GENERAL
Illinois Commerce Commission Decision Appeal
On April 7, 1998, the Appellate Court of Illinois, Third District, affirmed the
decision of the Illinois Commerce Commission ("ICC") to deny the Partnership's
Application for a Certificate of Public Convenience and Necessity
("Certificate"). Obtaining a Certificate is a first step in obtaining eminent
domain authority. However, a Certificate is not a prerequisite for construction
in Illinois and was sought only in the event the Partnership reached an impasse
during landowner negotiations in acquiring rights of way for SEP II. Without
condemnation authority, the cost to obtain rights of way in connection with SEP
II have increased. Nonetheless, the Partnership is continuing with its
construction of SEP II and the acquisition of right-of-way through negotiation
with landowners. A request for rehearing of the Appellate Court decision was
filed on April 29, 1998.
Terrace Project
On April 16, 1998, the Partnership in conjunction with IPL Energy, Inc., ("IPL
Energy") of Calgary, Alberta, and Interprovincial Pipe Line Inc. ("IPL") of
Edmonton, Alberta, announced the attainment of a tariff tolling agreement
("Terrace Agreement") with the Canadian Association of Petroleum Producers
("CAPP") for the proposed Terrace crude oil pipeline expansion project. CAPP is
a trade association that represents nearly all of the Partnership's customers.
Terrace is envisioned as a phased expansion program that will ultimately provide
an additional 520,000 barrels per day of heavy crude oil capacity for western
Canadian producers seeking greater access to Midwest U.S. markets. Subject to
completion of all phases of Terrace, and after allowing for anticipated declines
in light crude oil production, total system deliveries are expected to increase
by 350,000 barrels per day.
The Terrace Agreement provides for a fixed toll increase of Cdn. $0.05 per
barrel for transportation from Edmonton to Chicago. The $0.05 per barrel
increase will be allocated between IPL and the Partnership, with the
Partnership's portion added as an incremental charge to the Partnership's SEP II
tolls. The Terrace Agreement contains other provisions that may increase or
decrease the five cent toll increase and may alter the allocation of the five
cents between IPL and the Partnership. The Terrace Agreement has been filed with
the Canadian National Energy Board ("NEB") for approval and will also eventually
require the approval of the U.S. Federal Energy Regulatory Commission.
7
<PAGE> 10
Pending NEB approval, the first phase of Terrace will provide an initial 95,000
barrels per day increase in capacity as early as January 1999, rising to 170,000
barrels per day by the end of 1999. The first phase of Terrace is anticipated to
cost the Partnership $138 million in the U.S., and IPL Cdn. $610 million in
Canada. The General Partner expects that approximately $110 million will be
spent by the Partnership on its portion of Terrace in 1998 with the remaining
balance to be spent in 1999. Subsequent phases of Terrace are subject to
customer approval and are expected to provide the balance of 350,000 barrels per
day of added heavy crude oil capacity.
Other Developments
IPL Energy is also engaged in North American crude oil pipeline projects that
are related to the pipeline systems owned by IPL and the Partnership. The
General Partner believes that certain of these projects are complementary to the
Partnership's expansion programs, even though the projects are not owned by the
Partnership, since the IPL Energy projects may result in increased deliveries on
the Partnership's pipeline system.
- IPL Toledo Pipe Line (U.S.A.) Inc., is a proposed new pipeline that will
connect the Partnership's facilities at Stockbridge, Michigan to refineries
in Detroit, Michigan and Toledo, Ohio. In April 1997, an agreement was
reached with the principal customer regarding the level of minimum
utilization for the new pipeline. The Toledo pipeline is expected to begin
operations in the first half of 1999 and will have an approximate capacity
of 80,000 barrels per day in heavy crude oil service.
- Wild Rose - IPL Energy has received Alberta Energy Utilities Board
approval for the construction of a new 30-inch pipeline for the delivery of
heavy crude oil from the Athabasca oil sands region near Fort McMurray,
Alberta to Hardisty, Alberta. At Hardisty, the Wild Rose pipeline will
access other pipeline systems including IPL's system in western Canada.
This project will provide new pipeline capacity to accommodate anticipated
growth in crude oil production from the Athabasca oil sands region. When
complete in early 1999, the Wild Rose pipeline is anticipated to have a
capacity of approximately 570,000 barrels per day.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On January 5, 1998, the General Partner received from the Environmental
Protection Agency ("EPA") a Request for Information pursuant to the Federal
Clean Water Act relating to a supposed discharge of oil from the Partnership's
pipeline system near Marysville, Michigan on October 4, 1994. There was no
discharge of oil from the Partnership's facility on that date but there was a
rupture of the pipeline which was undergoing a hydrostatic test and resulted in
the release of the hydrostatic test water which contained trace amounts of oil.
This incident was addressed with the Michigan Department of Natural Resources.
Cleanup of the discharged test water was completed and no civil penalty was
issued by the State of Michigan. The General Partner cooperatively responded to
the EPA's Request for Information and has received no further indications from
the EPA regarding how it intends to proceed on this matter.
8
<PAGE> 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
27.1 Financial Data Schedule as of and for the three months ended
March 31, 1998.
b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31, 1998.
9
<PAGE> 12
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.
LAKEHEAD PIPE LINE PARTNERS, L.P.
(Registrant)
By: Lakehead Pipe Line Company, Inc.
as General Partner
/s/M.A. Maki
------------------------------------------------
M. A. Maki
Chief Accountant
(Principal Financial and
Accounting Officer)
May 12, 1998
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 83,000
<SECURITIES> 17,500
<RECEIVABLES> 17,600
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 138,600
<PP&E> 1,090,300
<DEPRECIATION> 168,600
<TOTAL-ASSETS> 1,064,600
<CURRENT-LIABILITIES> 76,500
<BONDS> 463,000
0
0
<COMMON> 0
<OTHER-SE> 502,900
<TOTAL-LIABILITY-AND-EQUITY> 1,064,600
<SALES> 0
<TOTAL-REVENUES> 72,900
<CGS> 0
<TOTAL-COSTS> 44,900
<OTHER-EXPENSES> 300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,700
<INCOME-PRETAX> 22,900
<INCOME-TAX> 0
<INCOME-CONTINUING> 22,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,900
<EPS-PRIMARY> .80
<EPS-DILUTED> .80
</TABLE>
