<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITY EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1998
-------------------------------
Commission File Number 0-18261
TOWER PROPERTIES COMPANY
------------------------
(Exact name of registrant as specified in its charter)
Missouri (43-1529759)
- ------------------------ ----------------
(State of incorporation) (IRS tax number)
Suite 100, 911 Main Street, Kansas City, Missouri 64105
- ------------------------------------------------------------------------------
(Address of principal executive offices) Zip Code
(816) 421-8255
----------------------------------------------------
(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
the filing requirements for the past 90 days.
Yes X . No .
- --------------------------------- ---------------------------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, at the close of the period covered by this report.
181,094 shares of common stock
------------------------------
$1.00 par value per share, at July 15, 1998
<PAGE> 2
<TABLE>
<CAPTION>
TOWER PROPERTIES COMPANY - CONSOLIDATED BALANCE SHEETS
June 30, 1998 and December 31, 1997
(UNAUDITED)
ASSETS 1998 1997
------------ ------------
<S> <C> <C>
Cash $ 42,965 $ 21,137
Short Term Investment 63,198 63,118
Related Party Investment, At Market 4,979,314 4,607,407
Accounts Receivable 1,048,467 907,012
Notes Receivable 152,510 210,865
Tenant Leasehold Improvements, Net 3,793,320 3,732,907
Construction in Progress 2,755,854 4,986,958
Prepaid Expenses and Other Assets 696,934 763,718
Rental Income Property, Net 55,921,704 51,055,746
Real Estate Held for Sale 930,991 912,081
Equipment and Furniture, Net 4,086,082 3,514,670
------------ ------------
Total Assets $ 74,471,339 $ 70,775,619
============ ============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Liabilities:
Accounts Payable and Other Liabilities $ 1,795,541 $ 1,092,359
Related Party Line of Credit 1,825,000 1,395,000
Income Taxes Payable 301,525 66,091
Deferred Income Taxes 1,574,308 1,354,387
Mortgage Notes Payable 41,757,478 41,634,615
------------ ------------
Total Liabilities 47,253,852 45,542,452
Minority Interest 167,685 159,667
Commitments and Contingencies
Stockholders' Investment:
Preferred Stock, No Par Value
Authorized 60,000 Shares, None Issued -- --
Common Stock, Par Value $1.00
Authorized 1,000,000 Shares, Issued
183,430 and 178,430 shares in 1998
and 1997, respectively 183,430 178,430
Paid-In Capital 18,180,313 17,355,872
Retained Earnings 6,325,838 5,656,677
Unrealized Holding Gain for Securities 2,510,624 2,358,637
------------ ------------
27,200,205 25,549,616
Less Treasury Stock, At Cost (2,336 and
7,396 shares in 1998 and 1997, respectively) (150,403) (476,116)
------------ ------------
Total Stockholders' Investment 27,049,802 25,073,500
------------ ------------
Total Liabilities and Stockholders' Investment $ 74,471,339 $ 70,775,619
============ ============
The accompanying notes are an integral part of these consolidated balance sheets.
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
TOWER PROPERTIES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997
(UNAUDITED)
1998 1997
------------ ------------
<S> <C> <C>
REVENUES:
Rent $ 7,672,223 $ 7,976,074
Rent, Related Party 449,475 322,480
Management and Service Fees 65,261 27,699
Management and Services Fees, Related Party 203,716 40,437
Proceeds from Easement 242,589 --
Interest and Other Income 137,705 139,558
------------ ------------
Total Revenues 8,770,969 8,506,248
------------ ------------
COSTS & EXPENSES:
Salaries and Employee Benefits 880,857 753,291
Depreciation 1,281,581 1,162,737
Maintenance and Repairs 1,423,991 1,456,265
Taxes Other than Income 704,062 651,078
Utilities 650,558 618,025
Interest 1,684,693 1,185,989
Interest, Related Party (45,993) 279,975
Amortization of Leasehold Improvements 601,516 620,812
Leasing and Advertising 59,814 60,286
Professional Fees 100,204 51,455
Insurance 106,755 106,062
Other 212,773 197,470
------------ ------------
Total Costs and Expenses 7,660,811 7,143,445
Income Before Minority Interest and
Provision for Income Taxes 1,110,158 1,362,803
Minority Interest In Income of Subsidiary (8,017) (11,895)
------------ ------------
Income Before Income Taxes 1,102,141 1,350,908
PROVISION FOR INCOME TAXES 432,980 503,986
------------ ------------
NET INCOME $ 669,161 $ 846,922
============ ============
Earnings Per Share:
Basic $ 3.75 $ 4.96
============ ============
Diluted $ 3.75 $ 4.95
============ ============
Weighted Average Common Shares Outstanding:
Basic 178,271 170,888
============ ============
Diluted 178,490 171,074
============ ============
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
TOWER PROPERTIES COMPANY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
1998 1997
----------- -----------
<S> <C> <C>
REVENUES:
Rent $ 3,929,630 $ 4,057,325
Rent, Related Party 229,301 161,263
Management and Service Fees 8,738 4,467
Management and Services Fees, Related Party 77,416 23,953
Interest and Other Income 68,290 85,790
----------- -----------
Total Revenues 4,313,375 4,332,798
----------- -----------
COSTS & EXPENSES:
Salaries and Employee Benefits 415,189 384,090
Depreciation 667,376 586,327
Maintenance and Repairs 758,157 755,278
Taxes Other than Income 352,031 325,539
Utilities 326,853 288,907
Interest 845,051 610,336
Interest, Related Party (1,873) 121,772
Amortization of Leasehold Improvements 300,294 229,470
Leasing and Advertising 29,572 34,211
Professional Fees 72,450 19,777
Insurance 52,167 53,613
Other 115,722 102,227
----------- -----------
Total Costs and Expenses 3,932,989 3,511,547
Income Before Minority Interest and
Provision for Income Taxes 380,386 821,251
Minority Interest In Income of Subsidiary (2,848) (5,817)
----------- -----------
Income Before Provision for Income Taxes 377,538 815,434
PROVISION FOR INCOME TAXES:
Currently Payable 162,780 306,016
----------- -----------
NET INCOME $ 214,758 $ 509,418
=========== ===========
Earnings Per Share:
Basic $ 1.19 $ 2.98
=========== ===========
Diluted $ 1.19 $ 2.97
=========== ===========
Weighted Average Common Shares Outstanding:
Basic 181,032 170,884
=========== ===========
Diluted 181,032 171,627
=========== ===========
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
TOWER PROPERTIES COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
FOR THE SIX MONTHS ENDING JUNE 30, 1998 AND JUNE 30, 1997
(UNAUDITED)
1998 1997
----------- -----------
<S> <C> <C>
Retained Earnings, Beginning
of Period $ 5,656,677 $ 4,118,935
Net Income 669,161 846,922
----------- -----------
Retained Earnings, End of Period $ 6,325,838 $ 4,965,857
=========== ===========
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
TOWER PROPERTIES COMPANY - CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDING JUNE 30, 1998 AND JUNE 30, 1997
(UNAUDITED)
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 669,161 $ 846,922
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 1,281,581 1,162,737
Amortization of Leasehold Improvements 601,516 620,812
Change in Assets and Liabilities, Net:
Accounts Receivable (141,455) (210,316)
Notes Receivable 58,355 15,120
Prepaid Expenses and Other Assets 66,784 (29,319)
Accounts Payable and Other Liabilities 703,182 1,006,341
Income Taxes Payable 235,434 122,670
----------- -----------
Net Cash Provided by Operating Activities 3,474,558 3,534,967
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Construction of New Mark Phase III (6,418,351) --
Decrease (Increase) in Construction in Progress 2,231,104 (2,795,950)
Additions to Real Estate Held for Sale, Net (18,910) (17,998)
Additions to Equipment & Furniture, Net (291,880) (296,544)
Additions to Rental Income Property, Net (8,800) (36,578)
Additions to Leasehold Improvements, Net (661,928) (321,724)
----------- -----------
Net Cash Used in Investing Activities (5,168,765) (3,468,794)
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Principal Payments on Mortgages (652,137) (427,199)
Proceeds from Long Term Borrowings 775,000 3,920,000
Net Change in Short Term Borrowings 430,000 (3,617,313)
Issuance of Common Stock 676,250 --
Sale of Treasury Stock 470,000 --
Purchase of Treasury Stock (1,160) (1,071)
Treasury Shares to Directors 10,064 --
Increase in Minority Interest 8,018 11,895
----------- -----------
Net Cash Provided by (Used In) Financing Activities 1,716,035 (113,688)
----------- -----------
NET INCREASE (DECREASE) IN CASH 21,828 (47,515)
CASH, Beginning of Period 21,137 52,772
----------- -----------
CASH, End of Period $ 42,965 $ 5,257
=========== ===========
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE> 7
TOWER PROPERTIES COMPANY AND SUBSIDIARIES
FOOTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The consolidated financial statements included herein have been
prepared by the Company and reflect all adjustments (consisting only of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of the results for the interim periods.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted, although the Company believes that
the disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed financial statements be
read in conjunction with the consolidated financial statements and the notes
thereto included in the company's latest annual report on Form 10-K as of and
for the year ended December 31, 1997.
The Company is primarily engaged in owning, developing, leasing and
managing real property located in Johnson County, Kansas and Clay and Jackson
County, Missouri. Substantially all of the improved real estate owned by the
Company and its subsidiaries consists of office buildings, apartment
complexes, a warehouse and a warehouse/office facility and automobile parking
lots and garages.
2. Rental revenue is recognized on a straight-line basis over the term of
individual leases.
3. Interest of $94,122 and $30,152 was capitalized during the first six
months of 1998 and 1997, respectively.
4. Interest paid during the first six months of 1998 and 1997 for
long-term mortgages amounted to $1,684,693 and $1,187,075, respectively.
Interest paid to related party was $48,129 and $279,975 for the first six
months of 1998 and 1997, respectively. Income taxes paid during the first six
months of 1998 and 1997 amounted to $197,546 and $381,316, respectively.
5. Certain prior quarter amounts have been reclassified to conform to the
1998 presentation.
6. Under SFAS No. 115, the investment in Commerce common stock is classified
as "available for sale", and is recorded at fair market value. The
unrealized gain of $4,115,777 net of tax effects of $2,510,624 is reflected
as a separate component of equity. There was an increase in the net
unrealized holding gain for the six months from December 31, 1997 to June 30,
1998 of $151,987, net of deferred taxes, and a decrease of $14,033 for the
three months from March 31, 1998 to June 30, 1998, net of deferred taxes.
<PAGE> 8
7. COMMITMENTS AND CONTINGENCIES:
Congress passed the Americans With Disabilities Act of 1990 (the Act)
which became effective January 26, 1992. The Act contains provisions for
building owners to provide persons with disabilities with accommodations and
access equal to, or similar to, that available to the general public.
Management cannot estimate the eventual impact of the Act on the financial
condition of the Company since certain provisions of the Act are open to
interpretation. The Company is implementing the requirements of the Act that
are readily achievable and will not constitute an undue burden on the
Company.
Due to governmental regulations regarding asbestos and the uncertainty
surrounding the advantages and disadvantages of asbestos removal, Tower
Properties Company will continue to monitor the status of asbestos in its
commercial office buildings and will take appropriate action when required.
The cost to remove all asbestos from properties owned by Tower
Properties Company cannot be determined; however, these removal costs could
have a significant adverse impact on the future operations and liquidity of
Tower Properties Company.
The Company has outstanding construction commitments of $8,755,000 as
of June 30, 1998.
8. PENDING LAND SALE:
The Company has agreements to sell land held for approximately
$4,000,000. It is the Company's intent to enter into a tax free exchange for
this land with the purchase of the Lincoln Oaks apartment complex in the
amount of $4,950,000. The 98 unit apartment complex is located in Overland
Park, Kansas.
9. STOCK BASED COMPENSATION:
In January, 1998, the Company's Chairman exercised 5,000 nonqualified
stock options granted in 1997 with an exercise price of $94.00 per share.
Treasury shares were used to satisfy the options.
Also in January, 1998, an additional 5,000 nonqualified stock options
were granted to the Chairman with an exercise price of $135.25. The options,
exercisable for five years from the date of grant were exercised in March,
1998. Additional shares were issued to satisfy the options.
The Company accounts for the options under APB No. 25, under which no
compensation cost has been recognized.
10. COMPREHENSIVE INCOME:
In June, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income", effective for periods beginning after December 15,
1997. SFAS No. 130 requires the display of comprehensive income and its
components in the financial statements. The Company has adopted SFAS No. 130
for the six months ending June 30, 1998. Comprehensive income for the
Company includes net income and unrealized appreciation on available for sale
securities. The following table presents comprehensive income for the six
months and three months ending June 30, 1998 and 1997:
<PAGE> 9
<TABLE>
<CAPTION>
Six Months Six Months
1998 1997
---- ----
<S> <C> <C>
Net Income $669,161 $846,922
Unrealized appreciation 151,987 (83,444)
(depreciation) on available for
sale securities (net of deferred
tax (expense) benefit of $(219,920) and
$18,676 for 1998 and 1997,
respectively) -------- --------
Total Comprehensive Income $821,148 $763,478
======== ========
<CAPTION>
Three Months Three Months
1998 1997
---- ----
<S> <C> <C>
Net Income $214,758 $509,418
Unrealized appreciation (14,033) (15,302)
(depreciation) on available for
sale securities (net of deferred
tax (expense) benefit of $(122,417) and
$8,986 for 1998 and 1997,
respectively) -------- --------
Total Comprehensive Income $200,725 $494,116
======== ========
</TABLE>
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES:
The Company's principal assets consist of real estate holdings which
are not liquid assets. Real estate holdings include office buildings,
apartment complexes, a warehouse and a warehouse/office facility, parking
facilities and land held for future sale. The principal source of funds
generated internally is income from operations. The principal source of
external funds is long-term debt and line of credit with Commerce Bank, N.A.
The Company has not experienced liquidity problems during the six months
ended June 30, 1998. On December 18, 1996, the Company acquired the 9909
Lakeview Avenue warehouse located in Lenexa, Kansas, for $3,675,000. The
Company used the line of credit with Commerce Bank, N.A. to acquire this
property. In February, 1997, a $2,720,000 twenty-year term mortgage loan was
secured for this property from Prudential Insurance of America. The proceeds
of this loan were used to reduce the line of credit. On December 27, 1996,
the Company acquired the 9221 Quivera commercial office building and an
adjoining 70,000 square foot vacant parcel of land, located in Overland Park,
Kansas for $1,750,000. The Company used the line of credit with Commerce
Bank, N.A. to make this purchase. In March, 1997, a $1,200,000 loan with a
twenty-year amortization and a five-year balloon payment was secured for this
property with Mark Twain Kansas City Bank. The proceeds from this loan were
used to reduce the line of credit. During 1997, the Company began
construction of an additional 140 units at the New Mark apartment complex.
The Company used the line of credit with Commerce Bank, N.A. to fund the
construction. In October, 1997, a $5,000,000 twenty-year term mortgage loan
was secured for this property from Ohio National. The proceeds of this loan
were used to reduce the line of credit. Also in October, 1997, the Company
secured a $6,750,000 fifteen-year mortgage loan on the 811 Main office
building. The proceeds from this loan were used to pay off the line of
credit and the remainder was invested in short term investments until it was
necessary to borrow additional funds to finance the low rise elevator
modernization and the replacement of the chiller and cooling towers in the
Commerce Tower office building. In March, 1998, the Company secured a
$775,000 eighteen-year mortgage loan on the expansion of the 9200 Cody
warehouse/office facility. The proceeds from this loan were used to reduce
the line of credit.
SIX MONTHS ENDED JUNE 30, 1998
COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 1997
RESULT OF OPERATIONS:
Overall total revenue increased $264,721. The following is an
explanation of the significant changes. Parking income increased 11% due to
the opening of the 601 Main surface parking lot in March, 1997, the increased
parking spaces due to the demolition of the Texaco station at 600 Main
parking lot and the increase in rental rates for all surface parking with
Commerce Bank for their employee parking. The expansion of the 9200
<PAGE> 11
Cody warehouse/office facility in October, 1997 created a 45% increase in
rental income for that facility, offset by the decrease in occupancy in the
811 Main commercial office building and the vacancy of the 9909 Lakeview
warehouse in October, 1997 are primarily responsible for the $176,856
decrease in rental income. The increase in management fees income and salary
expense is comprised of the fee earned for management of, lease commission
and construction fees earned for the Commerce Trust, Commerce Bank and the
Executive Plaza office buildings. The management fee income earned from
payroll due to the increase in management personnel and the payment of the
1997 buyout accrual for the union construction employees paid in January,
1998. The Company granted and received $242,589 for a Kansas City Power and
Light easement on its 6601 College Boulevard commercial office building
location.
The increase in depreciation is the expense for the modernization of
the low rise elevators in the Commerce Tower and the expansion of the 9200
Cody warehouse/office facility. The decrease of $32,274 in maintenance and
repairs is primarily due to special repairs made to Barkley Place and 811
Main commercial office buildings, the 711 and 6th & Walnut parking facility,
an increase in cleaning, security and engineering expenses at the 811 Main
commercial office building, offset by 1997 special repairs at the 811 and 710
parking garages and elevator and escalator repairs in the Commerce Tower
commercial office building. The increase in taxes other than income is the
increase in the real estate assessment of the Commerce Tower and the Stanley
warehouse real estate taxes previously paid by the tenant in a triple net
lease.
Utilities increased primarily due to the Stanley warehouse vacancy and
the Phase III New Mark apartment complex. The increase in interest is
primarily the interest payments on the Phase III New Mark apartments and the
811 Main building/garage mortgage loans offset by the reduction of the line
of credit interest expense and the capitalized interest during construction
of the Phase III New Mark construction project. The decrease in amortization
expense of leasehold improvements is comprised of 1998 tenant improvements in
the Commerce Tower and Barkley Place commercial office buildings and 9200
Cody warehouse expansion, offset by the write off of the vacancy of the 5th,
8th, 12th, 18th and 22ndfloor UtiliCorp space in the Commerce Tower
commercial office building.
Professional fees have increased due to management's decision to review
its current software and computer system to further enhance its overall
performance and to address the issues related to the year 2000.
THREE MONTHS ENDED JUNE 30, 1998
COMPARED WITH THE THREE MONTHS ENDED JUNE 30, 1997
RESULT OF OPERATIONS:
Increased parking spaces due to the demolition of the Texaco station at
601 Main parking lot and the increase in rental rates for all surface parking
with Commerce Bank for their employee parking, the completion of Phase III of
the New Mark apartment complex, the expansion of the 9200 Cody
warehouse/office facility, offset by the decrease in occupancy in the 811
Main commercial office building, the partial vacancy of the 908/10 Walnut
commercial office building and the vacancy of the 9909 Lakeview warehouse are
<PAGE> 12
responsible for the $59,657 decrease in rental income. The increase in
management fees income and salary expense is comprised of the fee earned for
management of, lease commission and construction fees earned for the Commerce
Trust, Commerce Bank and the Executive Plaza office buildings.
The increase in depreciation is the depreciation expense for the
modernization of the low rise elevators in the Commerce Tower and the
expansion of the 9200 Cody warehouse/office facility. The increase in taxes
other than income is the increase in the real estate assessment of the
Commerce Tower and the Stanley warehouse real estate taxes previously paid by
the tenant in a triple net lease.
Utilities increased primarily due to the Stanley warehouse vacancy and
the Phase III New Mark apartment complex. The increase in interest is
primarily the interest payments on the Phase III New Mark apartments and the
811 Main building/garage mortgage loans offset by the reduction of the line
of credit interest expense and the capitalized interest during construction
of the Phase III New Mark construction project. The increase in amortization
expense of leasehold improvements is primarily due to the large expenditures
for tenant improvements in the Commerce Tower commercial office building
being amortized over the life of the respective leases for the three months
ending June 30, 1998 compared to the same period in 1997.
Professional fees have increased due to management's decision to review
its current software and computer system to further enhance its overall
performance and to address the issues related to the year 2000.
ENVIRONMENTAL ISSUES:
In accordance with Federal, State and local laws regarding asbestos,
Tower Properties Company is not required to remove, but will continue to
monitor the status of asbestos in its commercial office buildings.
The cost to remove all asbestos from properties owned by Tower
Properties Company can not been determined; however, these removal costs
could have a significant adverse impact on the future operations and
liquidity of Tower Properties Company.
AMERICANS WITH DISABILITIES ACT:
Congress passed the Americans With Disabilities Act (the Act) of 1990
which became effective January 26, 1992. The Act contains provisions for
building owners to provide persons with disabilities with accommodations and
access equal to, or similar to, that available to the general public.
Management cannot estimate the eventual impact of the Act on the financial
condition of the Company since certain provisions of the Act are open to
interpretation. The Company is implementing the requirements of the Act that
are readily achievable and will not constitute an undue burden on the
Company. There have been no costs incurred during the first six months of
1998.
YEAR 2000
The Company has assessed the key financial, information and operational
systems. Management does not anticipate that the Company will encounter
significant operational issues related to the year 2000. Furthermore, the
financial impact of making required
<PAGE> 13
systems changes is not expected to be material to the Company's consolidated
financial position, results of operations or cash flows.
PART II
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
For the quarter ended March 31, 1998, 5,000 shares of common stock were
sold at a price of $94.00 per share and 5,000 shares of common stock were
sold at a price of $135.25 per share in private offerings exempt from
registration under section 4(2) of the Securities Act of 1933. The
securities were offered and sold to one person who is an Executive Officer
and Director of the issuer and an "accredited investor". The purchase price
was paid in cash and no discounts or commissions were paid in connection with
the sale. The stock was acquired pursuant to the exercise of non-qualified
stock options.
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOWER PROPERTIES COMPANY
/s/ Thomas R. Willard
- ---------------------
Thomas R. Willard
President
/s/ Chester A. Wittwer, Jr.
- ---------------------------
Chester A. Wittwer, Jr.
Vice President
Date: August 15, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 42,965
<SECURITIES> 5,042,512
<RECEIVABLES> 1,200,977
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,739,242
<PP&E> 90,778,491
<DEPRECIATION> 30,770,705
<TOTAL-ASSETS> 74,471,339
<CURRENT-LIABILITIES> 3,922,066
<BONDS> 41,757,478
<COMMON> 183,430
0
0
<OTHER-SE> 26,866,372
<TOTAL-LIABILITY-AND-EQUITY> 74,471,339
<SALES> 0
<TOTAL-REVENUES> 8,770,969
<CGS> 0
<TOTAL-COSTS> 6,022,111
<OTHER-EXPENSES> 8,017
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,638,700
<INCOME-PRETAX> 1,102,141
<INCOME-TAX> 432,980
<INCOME-CONTINUING> 669,161
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 669,161
<EPS-PRIMARY> 3.75
<EPS-DILUTED> 3.75
</TABLE>
