<PAGE>
UNITED STATES
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 SEPTEMBER 30, 1997
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 33-43870
-----------
NYLIFE STRUCTURED ASSET MANAGEMENT COMPANY LTD.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
TEXAS 13-3641944
----- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
51 MADISON AVENUE, NEW YORK, NEW YORK 10010
- -------------------------------------- ----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 576-6456
--------------
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
------ -------
Yes X No
------ -------
<PAGE>
NYLIFE Structured Asset Management Company Ltd.
INDEX
Page No.
--------
Part I - Financial Information (Unaudited)
Item 1. Financial Statements
Statement of Financial Position as of
September 30, 1997, and December 31, 1996 3
Statement of Operations and Accumulated
Deficit for the Three and Nine Months Ended
September 30, 1997 and 1996 4
Statement of Changes in Members' Capital for
the Year Ended December 31, 1996 and the Nine
Months Ended September 30, 1997 5
Statement of Cash Flows for the Three and Nine
Months Ended September 30, 1997 and 1996 6
Notes to the Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 12
Exhibit Index 13-14
Signatures 15
2
<PAGE>
NYLIFE STRUCTURED ASSET MANAGEMENT COMPANY LTD.
STATEMENT OF FINANCIAL POSITION
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1997 1996
------------------- -------------------
<S> <C> <C>
CURRENT ASSETS (Unaudited)
Cash and cash equivalents $ 7,476,243 $ 7,162,877
Segregated cash and cash equivalents 3,667,583 4,279,050
Security alarm monitoring contracts held for sale (Note 2) 11,428,276 -
Monitoring revenue and interest receivables
(net of allowance of $1,146,130 and $1,066,458 respectively) 1,866,113 2,058,034
Due from WestSec 146,882 24,775
Other receivables 144,000 -
------------------- -------------------
Total current assets 24,729,097 13,524,736
------------------- -------------------
Security alarm monitoring contracts held for sale (Note 2) 23,244,122 38,454,921
Debt issuance costs paid to affiliates
(net of accumulated amortization of $5,496,224 and $4,731,684 respectively) 857,202 1,621,742
------------------- -------------------
Total assets $ 48,830,421 $ 53,601,399
------------------- -------------------
------------------- -------------------
LIABILITIES AND MEMBERS' CAPITAL
CURRENT LIABILITIES
Monitoring fees payable $ 585,139 $ 752,722
Accounts payable and accrued liabilities 299,996 332,369
Due to affiliates (Note 3) 174,263 187,460
Unearned revenue 2,555,352 2,772,608
Interest payable (Note 2) 489,144 552,942
Notes payable (Note 2) 18,999,205 3,970,891
------------------- -------------------
Total current liabilities 23,103,099 8,568,992
------------------- -------------------
Notes payable (Note 2) 23,208,292 43,741,609
------------------- -------------------
Total liabilities 46,311,391 52,310,601
------------------- -------------------
MEMBERS' CAPITAL
Contributed capital 6,000,000 6,000,000
Distributions to members (632,753) (632,753)
Accumulated deficit (2,848,217) (4,076,449)
------------------- -------------------
Total members' capital 2,519,030 1,290,798
------------------- -------------------
Total liabilities and members' capital $ 48,830,421 $ 53,601,399
------------------- -------------------
------------------- -------------------
</TABLE>
See accompanying notes to the financial statements.
3
<PAGE>
NYLIFE STRUCTURED ASSET MANAGEMENT COMPANY LTD.
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------------- ----------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCOME (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Monitoring revenue $ 4,872,229 $ 5,616,713 $ 15,184,159 $ 17,365,133
Interest 93,013 95,763 277,011 294,055
------------ ------------ ------------ ------------
Total income 4,965,242 5,712,476 15,461,170 17,659,188
EXPENSES
Monitoring fees 1,639,502 1,901,024 5,093,282 5,887,721
Interest expense 976,458 1,149,338 3,022,304 3,580,896
General and administrative 117,886 114,641 360,435 277,557
Consulting fees 71,354 71,354 214,062 214,062
Asset management fee to affiliate 119,916 136,905 374,583 422,857
Equity return fee to affiliate 54,346 54,346 163,039 163,039
Bad debt expense 214,809 185,212 658,797 543,074
Amortization of security alarm
monitoring contracts 899,505 2,387,708 3,581,896 7,590,189
Amortization of debt issuance costs 263,494 321,214 764,540 842,672
------------ ------------ ------------ ------------
Total expenses 4,357,270 6,321,742 14,232,938 19,522,067
------------ ------------ ------------ ------------
Net income (loss) 607,972 (609,266) 1,228,232 (1,862,879)
Accumulated deficit
at beginning of period (3,456,189) (2,870,099) (4,076,449) (1,616,486)
------------ ------------ ------------ ------------
Accumulated deficit at end of period $ (2,848,217) $ (3,479,365) $ (2,848,217) $ (3,479,365)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to the financial statements.
4
<PAGE>
NYLIFE STRUCTURED ASSET MANAGEMENT COMPANY LTD.
STATEMENT OF CHANGES IN MEMBERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1996,
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
NYLIFE NYLIFE Total
SFD Depositary Members'
Holding Inc. Corp. Capital
------------ ------------ ------------
<S> <C> <C> <C>
Balance at January 1, 1996 $ 3,125,709 $ 625,052 $ 3,750,761
Net loss (2,049,887) (410,076) (2,459,963)
------------ ------------ ------------
Balance at December 31, 1996 1,075,822 214,976 1,290,798
Net income 1,023,486 204,746 1,228,232
------------ ------------ ------------
Balance at September 30, 1997 $ 2,099,308 $ 419,722 $ 2,519,030
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
See accompanying notes to the financial statements.
5
<PAGE>
NYLIFE STRUCTURED ASSET MANAGEMENT COMPANY LTD.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
----------------------------------------
1997 1996
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities: (Unaudited) (Unaudited)
Net income (loss) $ 1,228,232 $ (1,862,879)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Amortization of security alarm monitoring contracts 3,581,896 7,590,189
Amortization of debt issuance costs 764,540 842,672
Bad debt expense 658,797 543,074
Changes in assets and liabilities:
(Increase) decrease in monitoring revenue and interest receivables (466,876) 205,984
Increase in due from WestSec (122,107) (37,919)
Increase in other receivables (144,000) --
Decrease in monitoring fees payable to WestSec (167,583) (208,769)
Decrease in accounts payable and accrued liabilities (32,373) (26,766)
Decrease in due to affiliates (13,197) (13,438)
Decrease in due to WestSec - (14,351)
Decrease in unearned revenue (217,256) (249,241)
Decrease in interest payable (63,798) (83,897)
---------------- ----------------
Net cash provided by operating activities 5,006,275 6,684,659
---------------- ----------------
Cash flows from investing activities:
Purchase price refunds - investment in security alarm
monitoring contracts 200,627 40,426
---------------- ----------------
Net cash provided by investing activities 200,627 40,426
---------------- ----------------
Cash flows from financing activities:
Principal payments on Notes (5,505,003) (7,219,353)
---------------- ----------------
Net cash used in financing activities (5,505,003) (7,219,353)
---------------- ----------------
Net decrease in cash and cash equivalents (298,101) (494,268)
Cash and cash equivalents (including segregated cash and
cash equivalents) at beginning of period 11,441,927 11,927,586
---------------- ----------------
Cash and cash equivalents (including segregated cash and
cash equivalents) at end of period $ 11,143,826 $ 11,433,318
---------------- ----------------
---------------- ----------------
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 3,086,101 $ 3,616,697
---------------- ----------------
---------------- ----------------
</TABLE>
See accompanying notes to the financial statements.
6
<PAGE>
NYLIFE STRUCTURED ASSET MANAGEMENT COMPANY LTD.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
NOTE 1 - ORGANIZATION
NYLIFE Structured Asset Management Company Ltd. (the "Company" or "SAMCO") is a
limited liability company formed under the laws of the State of Texas on October
18, 1991. The entity offers its equity investors limited liability protection
while providing them with flow through tax treatment.
SAMCO has two members. The principal member is NYLIFE SFD Holding Inc. ("SFD
Holding", formerly NAFCO Inc.). The other member is NYLIFE Depositary
Corporation ("NDC"). Both members are Delaware corporations and wholly owned
subsidiaries of NYLIFE Inc. (a direct wholly owned subsidiary of New York Life
Insurance Company, "New York Life"). Certain directors and officers of SFD
Holding have been designated as managers of SAMCO. A manager is similar to a
director of a corporation, and may designate one or more persons as officers of
the limited liability company.
SAMCO has issued a series of secured five year floating rate notes and
secured five year fixed rate notes (the "Notes"), in order to finance the
acquisition of security alarm monitoring contracts (the "Contracts"). Such
Contracts consist of the obligations and payment rights with respect to
monitoring services, and in certain instances repair and maintenance
services, for security alarm systems in residential homes and light
commercial businesses. Security alarm monitoring is the process of notifying
designated parties (either individuals or public authorities) if an
unauthorized entry, fire, medical or other emergency signal from a customer
alarm system is received at a central monitoring station.
These interim financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K.
NOTE 2 - SECURITY ALARM MONITORING CONTRACTS AND NOTES PAYABLE
The carrying amount of SECURITY ALARM MONITORING CONTRACTS HELD FOR SALE in the
Statement of Financial Position at September 30, 1997 includes Contracts
collateralizing Series A, B and C Notes as follows:
Series A Series B Series C Total(*)
---------- ---------- ----------- -----------
Carrying amount $8,000,110 $3,428,166 $21,425,751 $32,854,027
(*) Excludes 5,035 Contracts acquired from the June 30, 1993, November 30, 1993,
and February 28, 1994 acquisitions which are NOT collateral for any series of
Notes and therefore are not subject to the Indenture. The carrying amount of
these contracts at September 30, 1997 is $1,818,371.
7
<PAGE>
INTEREST PAYABLE and NOTES PAYABLE in the Statement of Financial Position at
September 30, 1997 include amounts relating to Series A, B, and C Notes as
follows:
<TABLE>
<CAPTION>
Series A Series B Series C Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest payable $ 139,464 $ 54,643 $ 295,037 $ 489,144
------------------------------------------------------------------
------------------------------------------------------------------
Notes payable - current $ 12,034,112 $ 4,715,093 $ 2,250,000 $ 18,999,205
Notes payable - non-current - - 23,208,292 23,208,292
------------------------------------------------------------------
Total $ 12,034,112 $ 4,715,093 $ 25,458,292 $ 42,207,497
------------------------------------------------------------------
------------------------------------------------------------------
Maturity date 2/15/98 8/15/98 8/15/99
----------------------------------------------
----------------------------------------------
</TABLE>
NOTE 3 - RELATED PARTIES
DUE TO AFFILIATES in the Statement of Financial Position at September 30, 1997
and December 31, 1996 includes (i) the asset management fee payable to SFD
Holding of $119,917 and $133,114, respectively, and (ii) the equity return fee
payable to SFD Holding of $54,346 and $54,346, respectively.
NOTE 4 - OTHER MATTERS
On May 22, 1997, SAMCO received a letter of credit ("LC") in the aggregate
amount of $85,000,000 from The Chase Manhattan Bank. As described in the
Company's Annual Report on Form 10-K, the LC was provided to SAMCO in
accordance with the provisions of the Consent, Assignment, Assumption,
Amendment and Modification Agreement dated December 30, 1996 (the "Consent
Agreement") by and among SAMCO, Westinghouse Electric Corporation, WestSec,
Inc. ("WestSec") and Westar Capital, Inc. ("Westar"). The LC secures certain
obligations owed to SAMCO under the Consent Agreement and under the Operational
Services Agreement between SAMCO and Westinghouse Electric Corporation dated
as of November 15, 1991 (the "OSA").
In addition, SAMCO and WestSec entered into a letter agreement dated May
21, 1997 memorializing certain collateral agreements and understandings related
to the LC.
On July 30, 1997, Western Resources, Inc., (the parent of WestSec and
Westar) and Protection One Inc. announced that they will
combine their security service businesses to form the second largest U.S.
burglar and fire alarm company. Western would own 80.1% of the combined
company. The transaction is expected to be completed this year.
NOTE 5 - SUBSEQUENT EVENTS
On October 3, 1997, the amount of the LC was reduced to $75,995,000 in
accordance with its terms.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash from operating activities for the three and nine months
ended September 30, 1997 decreased from the corresponding 1996 periods as
attrition reduced monitoring revenues from customers. During the third quarter
of 1997, the Company paid scheduled and additional principal of $463,000,
$177,149 and $1,070,550 to the Series A, Series B and Series C Noteholders,
respectively.
Attrition, which is the loss of customers, results in decreased cash flow. In
order to control the Company's exposure to attrition and the resulting loss of
revenue, the Company has received from the Servicer certain attrition
guarantees. These guarantees generally provide for the replacement of
Contracts, with either cash or Contracts, by the Servicer if attrition exceeds
certain levels. Pursuant to the Consent, Assignment, Assumption and
Modification Agreement (the "Consent Agreement") pursuant to which WestSec
assumed all of Westinghouse's obligations as the Servicer for the Company, as of
September 30, 1997, 100% of the Series A, Series B and Series C Contracts owned
by the Company are covered by attrition guarantees by the Servicer.
The Company's revenues from Contracts have been sufficient to pay the Servicer
Basic Monitoring Fee, scheduled principal and interest on the Notes, third party
operating expenses, taxes of the Company's Members (but only Member's taxes in
respect of any allocations of taxable income from the Company), subordinated
fees, to establish necessary reserves, if any, and to continue to make
additional principal payments. The Company expects this trend to continue.
Including the distribution to be paid on November 15, 1997, the Company has paid
additional principal of $7,054,634, $2,778,288 and $12,577,054 to the Series A,
Series B, and Series C Noteholders, respectively.
Series A and Series B Notes bear interest on the outstanding principal at a per
annum floating rate of 2.50 percentage points above the minimum denomination
five-year certificate of deposit average rate (the "Benchmark CD Rate"), as
reported by the Bank Rate Monitor in its last report of the immediately
preceding calendar quarter, but in no event less than 9% per annum or more than
11% per annum. At September 30, 1997, the Benchmark CD Rate was 5.54%.
Accordingly, the outstanding principal on the Series A and Series B Notes will
earn interest at 9% per annum through February 15, 1998.
The Series C Notes bear interest on the outstanding principal at a fixed per
annum rate of 9%.
Debt Service and Interest Coverage ratios are calculated based on the number of
"active" accounts at the end of the period. An active account is one where the
customer's alarm system is being monitored. Generally, accounts are monitored
until they become 70 days delinquent. The Debt Service and Interest Coverage
ratios for each Series of Notes at September 30, 1997 continue to be consistent
with prior periods:
9
<PAGE>
Series A Series B Series C
-------- -------- --------
Number of contracts collateralizing
Notes at issuance 33,029 11,463 52,840
-------- -------- --------
-------- -------- --------
Number of active accounts at 9/30/97 17,964 7,197 35,735
-------- -------- --------
-------- -------- --------
Debt Service Coverage (at 9%) 1.51 1.78 1.87
-------- -------- --------
-------- -------- --------
Debt Service Coverage (at 11%) N/A 1.37 N/A
-------- -------- --------
-------- -------- --------
Interest Coverage (at 9%) 3.29 3.83 3.61
-------- -------- --------
-------- -------- --------
Interest Coverage (at 11%) N/A 2.35 N/A
-------- -------- --------
-------- -------- --------
The Series A and Series B Notes mature on February 15, 1998 and August 15, 1998,
respectively. Therefore, these liabilities have been classified as current in
the Statement of Financial Position.
At maturity, the Company is obligated to repay the then outstanding principal
balance of the Notes. Pursuant to the Consent Agreement, as each series of
Notes mature, WestSec shall irrevocably purchase all of the Contracts securing
such series of Notes for a amount equal to the greater of (i) the fair market
value of such Contracts as determined by a nationally recognized independent
valuation firm jointly selected by WestSec and SAMCO; or (ii) thirty (30) times
the recurring monthly fees and charges payable by customers pursuant to such
Contracts. Westinghouse has agreed that if the purchase price payable by
WestSec for a particular Series of Notes is less than the amount of all
principal and accrued and unpaid interest on such series of Notes, upon notice
from SAMCO to Westinghouse, Westinghouse will remit to SAMCO, at the same time
the WestSec price is required to be paid, in immediately available funds, the
amount in excess of the WestSec price so that the total paid to SAMCO will equal
the amount of all principal and accrued and unpaid interest on such Series of
Notes. Such notice shall be given by SAMCO to Westinghouse at least five
business days prior to the stated maturity date of each Series of Notes.
To secure the obligations of Westar, WestSec and Westinghouse under the
Consent Agreement and OSA, SAMCO received on May 22, 1997, a letter of credit
("LC") in the aggregate amount of $85,000,000 from The Chase Manhattan Bank.
In addition, SAMCO and WestSec Inc. entered into a letter agreement dated May
21, 1997 memorializing certain collateral agreements and understandings related
to the LC. On July 18 and October 3, 1997 the amount of the LC was reduced in
accordance with its terms. As of October 3, 1997, the LC balance is
$75,995,000.
On May 14, 1997 SAMCO received an unsolicited offer from Western Resources,
Inc. (the parent of WestSec and Westar) to purchase all of SAMCO's
outstanding limited liability interests. The offer was insufficient in its
terms and was unable to be evaluated by SAMCO.
Should WestSec become unable to perform any of its contractual obligations to
the Company in the future, with respect to contract monitoring services there
can be no assurance that any third parties will be available or, even if
available, that agreements could be reached with such third parties for
comparable contract monitoring services and at comparable cost. Such a
situation could have a materially adverse impact on the Company.
10
<PAGE>
On July 30, 1997, Western and Protection One Inc. announced that they will
combine their security service businesses to form the second largest U.S.
burglar and fire alarm company. Western would own 80.1% of the combined
company. The transaction is expected to be completed this year.
The Company does not anticipate the purchase of additional Contracts. As of
September 30, 1997, the Company had no capital commitments.
RESULTS OF OPERATIONS
The Company had net income of $607,972 for the three months ended September 30,
1997 as compared to a net loss of $609,266 for the corresponding 1996 period.
Similarly, the Company had net income of $1,228,232 for the nine months ended
September 30, 1997 as compared to a net loss of $1,862,879 for the corresponding
1996 period. These results are due primarily to the discontinuance of
amortization of the investment in Contracts subsequent to December 30, 1996 as
described below.
For the three and nine months ended September 30, 1997 and 1996, SAMCO derived
98% of its income from monitoring revenues and the balance from interest income
on short term investments.
The decrease in the Company's monitoring revenues for the three and nine months
ending September 30, 1997 compared to the corresponding periods in 1996 is due
to attrition of contracts. Accordingly, the related monitoring fee expense has
decreased. On December 30, 1996, in accordance with Statement of Financial
Accounting Standard No. 121., the Company reclassified its investment in
Contracts as held for sale and has discontinued amortizing the cost of the
Contracts. This has resulted in lower amortization expense for the current
three and nine month periods as compared to the 1996 periods. Prior to the
reclassification, the Contracts were being amortized over an estimated life of
12 years, as adjusted for attrited Contracts.
Interest expense has decreased as the Company continues to pay down scheduled
and additional principal.
The increase in bad debt expense for the three and nine months ended September
30, 1997 over the corresponding periods in 1996, is due to an increase in the
rate of attrition.
The Company's operating expenses include monitoring fees, general and
administrative expenses, including (i) lockbox bank fees, (ii) audit and tax
fees, (iii) printing and mailing of quarterly and annual reports to investors,
(iv) trustee fees, (v) legal and consulting fees, and (vi) subordinated fees and
expenses. The Company's other expenses include bad debt expense, interest
expense and amortization of debt issuance costs.
Most of the Contracts owned by the Company have a three year term, provide for
automatic renewal and allow the Company to increase the customers' monitoring
fee at certain times after the initial term. Presently the Company has no
intention of increasing monitoring fees.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
A list of exhibits required by Item 601 of Regulation S-K and filed as part
of this report is set forth in the Index to Exhibits.
(b) REPORTS ON FORM 8-K:
None.
12
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
- ------- ------------
(3) ARTICLES OF INCORPORATION AND BY-LAWS
3.1 Articles of Organization of Company. *
3.2 Amended Regulations of Company. *
3.3 Amendment to Articles of Organization of Company. *
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES:
4.1 Indenture. *
4.2 Form of Global Note, included as Exhibit A to Exhibit 4.1. *
4.3 Form of Definitive Note, included as Exhibit B to Exhibit 4.1. *
4.4 Form of Security Agreement, included as Exhibit C to Exhibit 4.1. *
4.5 Form of First Supplemental Indenture. *
4.6 Form of Second Supplemental Indenture. *
(27) FINANCIAL DATA SCHEDULE**
- ----------------------------
* Previously filed.
** Filed herewith.
13
<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 on November 12, 1997.
NYLIFE Structured Asset Management
Company Ltd.
/s/ Kevin M. Micucci
--------------------------
By: Kevin M. Micucci
Manager and President
(Principal Executive, Financial
and Accounting Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 11,143,826
<SECURITIES> 0
<RECEIVABLES> 2,156,995
<ALLOWANCES> 0
<INVENTORY> 35,529,600
<CURRENT-ASSETS> 24,729,097
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 48,830,421
<CURRENT-LIABILITIES> 23,103,099
<BONDS> 23,208,292
0
0
<COMMON> 0
<OTHER-SE> 2,519,030
<TOTAL-LIABILITY-AND-EQUITY> 48,830,421
<SALES> 0
<TOTAL-REVENUES> 15,461,170
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 11,210,634
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,022,304
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,228,232
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
