UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2005

OR

o 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: 001-32268

Kite Realty Group Trust

30 S. Meridian Street, Suite 1100
Indianapolis, Indiana 46204
Telephone: (317) 577-5600

(Address, including zip code and telephone number, including area code, of principal executive offices)

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 ý  No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No ý

The number of Common Shares outstanding as of August 5, 2005 was 19,148,267 ($.01 par value)

Cautionary Note About Forward-Looking Statements

This Quarterly Report on Form 10-Q, together with other statements and information publicly disseminated by Kite Realty Group Trust (the “Company”), contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated.  Future events and actual results, performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance, transactions or achievements expressed or implied by the forward-looking statements.  Risks, uncertainties and other factors that might cause such differences, some of which could be material, include, but are not limited to:

•                                          national and local economic, business, real estate and other market conditions;

•                                          the ability of tenants to pay rent;

•                                          the competitive environment in which the Company operates;

•                                          financing risks;

•                                          property management risks;

•                                          the level and volatility of interest rates;

•                                          the financial stability of tenants;

•                                          the Company’s ability to maintain its status as a real estate investment trust (“REIT”) for federal income tax purposes;

•                                          acquisition, disposition, development and joint venture risks;

•                                          potential environmental and other liabilities;

•                                          other factors affecting the real estate industry generally; and

•                                          other risks identified in this Quarterly Report on Form 10-Q and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate.

The Company undertakes no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

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Kite Realty Group Trust and

Kite Property Group (the Predecessor)

Notes to Consolidated and Combined Financial Statements
June 30, 2005
(Unaudited)

Note 1.  Organization

Kite Realty Group Trust (the “Company” or “REIT”) was organized in Maryland on March 29, 2004 to succeed to the development, acquisition, construction and real estate businesses of Kite Property Group (“the Predecessor”).  The Predecessor was owned by Al Kite, John Kite and Paul Kite (the “Principals”) and certain executives and family members and consisted of the properties, entities and interests contributed to the Company or its subsidiaries by the Principals.  The Company began operations on August 16, 2004 when it completed its initial public offering (“IPO”) and concurrently consummated certain other formation transactions.  The IPO consisted of the sale of 16,300,000 shares of common stock sold to the public at $13.00 per share, resulting in net proceeds to the Company of $191.3 million.  The net proceeds were contributed by the Company in exchange for a 67.4% controlling interest in Kite Realty Group, L.P. (the “Operating Partnership”).  A total of 833,267 shares were issued to the principals of the Predecessor in exchange for their interests in certain properties and service companies.  Also, a total of 15,000 restricted shares were awarded to the non-employee members of the Company’s Board of Trustees.  On September 14, 2004, the underwriters exercised their over-allotment option to purchase an additional 2,000,000 common shares at $13.00 per share, resulting in additional net proceeds of $24.2 million.  In total, 19,148,267 shares were issued in connection with the Company’s formation and IPO.  In addition, a total of 8,281,882 units of the Operating Partnership were issued to the Principals and third parties in exchange for their interests in certain properties.

As a result of the IPO and related formation transactions, the Company, through the Operating Partnership, is engaged in the ownership, operation, management, leasing, acquisition, expansion, construction and development of neighborhood and community shopping centers and certain commercial real estate properties.  As of June 30, 2005, 52 of the 54 entities which own properties in which the Company owns interests were consolidated.  The Company also provides real estate facilities management, construction, development and other advisory services to third parties through its taxable REIT subsidiaries.

Note 2.  Basis of Presentation

The accompanying financial statements of Kite Realty Group Trust are presented on a consolidated basis and include all of the accounts of the Company, the Operating Partnership and the subsidiaries of the Operating Partnership.  The exchange of entities or interests held by the Principals for common shares of the REIT and limited partnership interests in the Operating Partnership was accounted for as a reorganization of entities under common control and, accordingly, related assets and liabilities were reflected at their historical cost basis.  The acquisition of the joint venture and minority partners’ interests in the properties has been accounted for as a purchase.

The Company allocates net operating results of the Operating Partnership based on the partners’ respective weighted average ownership interest.  The Company’s weighted average interest in the Operating Partnership for the three months and six months ended June 30, 2005 was 69.3% and 69.5%, respectively.  The Company’s interest in the Operating Partnership as of June 30, 2005 was 69.3%.  The Company adjusts the limited partners’ interests in the Operating Partnership at the end of each period to reflect their interest in the Operating Partnership.  This adjustment is reflected in the Company’s shareholders’ equity.  For the three months and six months ended June 30, 2005, the limited partners’ weighted average interest in the Operating Partnership was 30.7% and 30.5%, respectively.  As of June 30, 2005, the limited partners’ interest was 30.7%.

The Company’s management has prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principals generally accepted in the United States (“GAAP”) may have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the presentation not misleading. The unaudited financial statements as of June 30, 2005 and for the three months and six months ended June 30, 2005 and 2004 include, in the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities and the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period.  Actual results could differ from these estimates.  The results of operations for the interim periods are not necessarily indicative of the results that may be expected on an annual basis.

Certain reclassifications of prior period amounts were made to conform to the 2005 presentation.  These reclassifications had no effect on net income previously reported.

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Note 3.  Earnings Per Share

Earnings per share is calculated based on the weighted average number of shares outstanding during the period.  For the three months and six months ended June 30, 2005, potentially dilutive securities include outstanding stock options and units of limited partnership in the Operating Partnership which may be exchanged for shares.  Stock options are accounted for based on their fair market value at the date of grant.  Expense related to stock options was approximately $98,000 and $148,000 for the three and six months ended June 30, 2005, respectively.

Note 4.  Comprehensive Income

The following sets forth comprehensive income for the three months and six months ended June 30, 2005 and 2004:

(1) Relates to the changes in the fair value of derivative instruments accounted for as cash flow hedges.

Note 5.  Purchase Accounting

The Company allocates the purchase price of properties to tangible and identified intangible assets acquired based on their fair values in accordance with the provisions of Statement of Financial Accounting Standards No 141, “Business Combinations” (“SFAS No. 141”).  The fair value of real estate acquired is allocated to land and buildings, while the fair value of in-place leases, consisting of above-market and below-market rents and other intangibles is allocated to intangible assets and liabilities.

Note 6.  Acquisition Activity

On May 16, 2005, the Company completed the acquisition of two shopping centers under previously announced purchase agreements for a total acquisition of approximately $52.4 million.  The Company purchased Plaza Volente, a 156,308 square foot neighborhood shopping center in Austin, TX, for approximately $35.9 million, and Indian River Square, a 144,246 square foot community shopping center in Vero Beach, FL, for approximately $16.5 million.

                To fund a portion of the purchase price of these properties, the Company borrowed approximately $42 million at a fixed interest rate of 5.42% for a term of ten years.  Approximately $10.4 million of the purchase price for these properties was funded under the Company’s existing revolving credit facility.  The purchase price allocation to assets and liabilities is preliminary and is subject to adjustment during the following year.

During 2004 and the first quarter of 2005, the Company acquired and placed in service the following operating retail properties:

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(1)          This property is owned through a joint venture with a third party.  The Company currently receives 85% of the cash flow from this property, which percentage may decrease under certain circumstances.

(2)          This property is owned through a joint venture with a third party.  The Company is the primary beneficiary and, therefore, this property is consolidated in the accompanying statement of operations.  The joint venture partner is entitled to an annual preferred payment of $96,000.  All remaining cash flow is distributed to the Company.

(3)          Inclusive of debt assumed of $1.4 million.

(4)          Inclusive of debt assumed of $27.4 million.

(5)          Inclusive of debt assumed of $17.8 million.

(6)          Inclusive of debt assumed of $4.5 million.

(7)          Part of the Fishers Station property.

(8)          Inclusive of debt assumed of $12.3 million.

(9)   This acquisition was initially financed with debt, which was repaid with proceeds from the Company’s IPO.

The following table summarizes, on an unaudited pro forma basis, the combined results of operations for the three months and six months ended June 30, 2005 and 2004 as if the Company’s IPO and its 2004 and 2005 property acquisitions occurred on January 1, 2004:

In connection with purchase and sale agreements for the acquisition of Indian River Square and Plaza Volente, the Company simultaneously entered into a purchase and sale agreement for the acquisition of Fountain Oaks, a 160,598 square foot shopping center in Atlanta, Georgia for an estimated cash purchase price of $26.0 million inclusive of $13.7 million of assumed indebtedness.  The acquisition of Fountain Oaks is subject to satisfactory completion of due diligence, satisfaction of other customary and closing conditions and to the lender’s consent to the assumption by the Company of existing indebtedness.  We are continuing our due diligence in connection with the Fountain Oaks property.  There can be no assurance that the conditions to completion of this acquisition will be met or that this acquisition will in fact be consummated.

Note 7.  Mortgage and Other Indebtedness

Mortgage and other indebtedness consisted of the following at June 30, 2005 and December 31, 2004:

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Station Parking Garage, Galleria Plaza, Cedar Hill Village, Shops at Eagle Creek, Burlington Coat, Eastgate Pavilion, Four Corner Square and Stoney Creek Commons.

As of June 30, 2005, the Company had entered into letters of credit totaling approximately $1.8 million.

Note 8.  Derivative Instruments and Hedging Activities

On April 21, 2005, a portion of the line of credit (LIBOR + 1.35%) was hedged by an instrument with a notional amount of $15 million and a fixed interest rate of 5.375% maturing August 1, 2007.  The Company designated this transaction as a hedge to effectively fix the interest rate on a portion of its revolving credit facility.

At June 30, 2005, derivatives with a fair value of $372,995 were included in other liabilities.  The change in net unrealized loss for the three months and six months ended June 30, 2005 of $207,572 and $372,995, respectively, for derivatives designated as cash flow hedges is recorded in shareholders’ equity as other comprehensive loss.  No hedge ineffectiveness on cash flow hedges was recognized during the second quarter of 2005.  Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to earnings over time as the hedged items are recognized in earnings.

The Company does not use derivatives for trading or speculative purposes nor does the Company currently have any derivatives that are not designated as hedges.

Note 9.  Shareholders’ Equity

On May 13, 2005, the Board of Trustees declared a distribution of $0.1875 per common share for second quarter of 2005.  Simultaneously, the Board of Trustees declared a distribution of $0.1875 per operating partnership unit for the same period.  Both distributions were paid on July 19, 2005.

On May 5, 2005, the Company’s Board of Trustees authorized the grant of options to purchase a total of 20,000 shares to an employee under the Company’s 2004 Equity Incentive Plan.  The options have a grant date of May 9, 2005 and an option price of $14.68 per share.  The options vest over a period of five years and expire 10 years from the grant date.

Note 10.  Segment Data

The operations of the Company and its Predecessor are aligned into two business segments: (i) real estate operation and development and (ii) construction and advisory services.  Combined segment data of the Company and its Predecessor for the six months ended June 30, 2005 and 2004 are as follows:

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United States. We also provide real estate facility management, construction, development and other advisory services to third parties.

As of June 30, 2005, we owned interests in a portfolio of 36 operating retail properties totaling approximately 5.4 million square feet of gross leasable area (including non-owned anchor space) and 12 retail properties under development that are expected to contain approximately 1.9 million square feet of gross leasable area (including non-owned anchor space) upon completion. As of June 30, 2005, we also owned interests in five operating commercial properties totaling approximately 663,000 square feet of net rentable area and a related parking garage. In addition, at that date we owned interests in land parcels comprising approximately 65 acres that may be used for expansion of existing properties or future development of new retail or commercial properties.

We derive revenues primarily from rents and reimbursement payments received from tenants under existing leases at each of our properties. We also derive revenues from providing management, leasing, real estate development, construction and real estate advisory services through subsidiaries of our taxable REIT subsidiaries. Our operating results therefore depend materially on the ability of our tenants to make required payments and overall real estate market conditions.

In the future, we intend to focus on internal growth and pursuing targeted development and acquisitions of neighborhood and community shopping centers. We expect to incur additional debt in connection with any future development or acquisitions of real estate.

Results of Operations

Acquisition and Development Activities

The comparability of results of operations is significantly affected by our development and acquisition activities in 2005 and 2004 and the effects of the formation transactions related to our IPO.  At June 30, 2005, we owned interests in 42 operating properties (consisting of 36 retail properties, 5 commercial operating properties and a related parking garage) and had 12 properties under development. Of the 54 total properties held at June 30, 2005, two operating properties (Spring Mill Medical and The Centre) were owned through joint ventures and accounted for under the equity method.

During 2004 and 2005, the Company acquired and placed in service the following operating retail properties:

(1)          This property is owned through a joint venture with a third party.  The Company currently receives 85% of the cash flow from this property, which percentage may decrease under certain circumstances.

(2)          This property is owned through a joint venture with a third party.  The Company is the primary beneficiary and, therefore, this property is consolidated in the accompanying statement of operations.  The joint venture partner is entitled to an annual preferred payment of $96,000.  All remaining cash flow is distributed to the Company.

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(3)          Inclusive of debt assumed of $1.4 million.

(4)          Inclusive of debt assumed of $27.4 million.

(5)          Inclusive of debt assumed of $17.8 million.

(6)          Inclusive of debt assumed of $4.5 million.

(7)          Part of the Fishers Station property.

(8)          This acquisition was initially financed with debt, which was repaid with proceeds from the Company’s IPO.

(9)          Inclusive of debt assumed of $12.3 million.

(10)    Inclusive of $13.3 million of new debt and $3.2 million of borrowings under the revolving credit facility incurred in connection with the acquisition.

(11)    Inclusive of $28.7 million of new debt and $7.2 million of borrowings under the revolving credit facility incurred in connection with the acquisition.

The following table summarizes, on an unaudited pro forma basis, the combined results of operations for the three months and six months ended June 30, 2005 and 2004 as if the Company’s IPO and its 2004 and 2005 property acquisitions occurred on January 1, 2004, This pro forma financial information does not purport to project the Company’s results of operations for any future period.:

The following development properties became operational or partially operational during 2004 and 2005:

Glendale Mall was consolidated on March 31, 2004 in accordance with the provisions of FASB Interpretation No. 46. Previously, it had been accounted for under the equity method.  In connection with our IPO, we acquired the remaining joint venture and outside partner interests in a total of nine properties, including Glendale Mall.  As a result, these properties are now consolidated in the accompanying financial statements.

At June 30, 2004, we owned interests in 22 operating properties (consisting of 17 retail properties, four commercial properties and a related parking garage) and had 13 properties under development. Of the 35 total properties held at June 30, 2004, six operating properties and two development properties were owned through joint ventures and were accounted for under the equity method.

Comparison of Operating Results for the Three Months Ended June 30, 2005 to the Three Months Ended June 30, 2004

Rental income (including tenant reimbursements) increased from $5.5 million in 2004 to $16.7 million in 2005, an increase of

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$11.2 million or 204%.  Approximately $7.5 million of this increase was attributable to properties acquired in 2004 or 2005, approximately $2.3 million was attributable to properties that became operational or partially operational in 2004 or 2005 and, therefore, had incremental rental income in 2005.  Approximately $1.2 million of the increase reflects the consolidation of properties following our acquisition of joint venture partners’ interests in connection with our IPO and related formation transactions.  Approximately $0.2 million of the increase is due to temporary ground lease payments under a license agreement.

Other property related revenue primarily consists of parking revenues, lease settlement income and gains on land sales. This category decreased from $0.6 million in 2004 to $0.4 million in 2005, a decrease of $0.2 million or 33%. The conversion of the contractual arrangement at the Union Station Parking Garage from a daily fee arrangement to a net lease resulted in a decrease of $0.3 million in this category.  This decrease was offset by a gain of $0.2 million from the sale of land development rights.

Construction revenue and service fees increased from $1.8 million in 2004 to $5.6 million in 2005, an increase of $3.8 million or 211%.  This increase is due to an increase of $3.4 million in construction contracts with third-party customers, and $0.8 million in third-party development-related fees, offset by declines in advisory revenue of approximately $0.4 million due to the expiration of several contracts.

Property operating expenses increased from $1.7 million in 2004 to $2.5 million in 2005, an increase of $0.8 million or 47%.  Approximately $0.9 million of this increase was attributable to properties acquired in 2004 and 2005, approximately $0.2 million was attributable to properties that became operational or partially operational in 2005 and 2004 and, therefore, had incremental property operating expense in 2005 and approximately $0.1 million was due to the consolidation of properties following our acquisition of joint venture partners’ interests in connection with our IPO and related formation transactions.  Offsetting these increases was a decrease of $0.3 million in expenses incurred at properties operating for all of the second quarter of 2005 and 2004 and a decrease of approximately $0.1 million due to the conversion of the contractual arrangement at the Union Station Parking Garage from a daily fee arrangement to a net lease.

Real estate taxes increased from $0.8 million in 2004 to $1.9 million in 2005, an increase of $1.1 million or 138%. Approximately $1.0 million of this increase was attributable to properties acquired in 2004 or 2005, approximately $0.2 million was attributable to properties that became operational or partially operational in 2005 and 2004 and, therefore, had incremental real estate tax expense in 2005 and approximately $0.1 million was due to the consolidation of properties following our acquisition of joint venture partners’ interests in connection with our IPO and related formation transactions.  Offsetting these increases was a $0.2 million decrease in property taxes at properties that were fully operational in both years.

Cost of construction and services increased from $1.2 million in 2004 to $4.4 million in 2005, an increase of $3.2 million or 267%.  This increase was primarily due to an increase in construction contracts with third-party customers.

General and administrative expenses increased from $0.7 million in 2004 to $1.3 million in 2005, an increase of $0.6 million or 86%.  This increase is due to incremental costs associated with operating as a public company.

Depreciation and amortization expense increased from $1.5 million in 2004 to $5.5 million in 2005, an increase of $4.0 million or 267%. Approximately $2.4 million of the increase was attributable to properties acquired in 2004 and 2005, approximately $0.6 million was attributable to properties that became operational or partially operational in 2005 or 2004 and, therefore, had incremental depreciation and amortization expense in 2005.  Approximately $0.4 million was attributable to properties that were fully operational in both years, primarily as a result of the write off of fixed assets as a result of tenant terminations.  Approximately $0.4 million of the increase was due to the consolidation of properties following our acquisition of joint venture and minority partners’ interests in connection with our IPO and related formation transactions.

Interest expense increased from $2.1 million in 2004 to $4.7 million in 2005, an increase of $2.6 million, or 124%. Approximately $1.2 million was attributable to properties that became operational or partially operational in 2005 or 2004 and, therefore, had incremental interest expense in 2005, approximately $0.7 million of the increase was attributable to properties acquired in 2004 and 2005, approximately $1.0 million was due to increased borrowings on our revolving credit facility used primarily to finance property acquisition and land development activities and for working capital requirements, approximately $0.7 million was attributable to properties that were fully operational during both years and approximately $0.4 million was due to the consolidation of properties following our acquisition of the joint venture partners’ interests in connection with our IPO and related formation transactions.  These increases were offset by a reduction in interest expense of $1.2 million due to debt prepayments made in connection with our IPO and related formation transactions.

Comparison of Operating Results for the Six Months Ended June 30, 2005 to the Six Months Ended June 30, 2004

Rental income (including tenant reimbursements) increased from $9.2 million in 2004 to $32.3 million in 2005, an increase of $23.1 million or 251%.  Approximately $14.7 million of this increase was attributable to properties acquired in 2004 or 2005,

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*                 2004 amounts represent the minority and joint venture partners’ interests acquired in connection with the Company’s initial public offering and related formation transactions.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Our future income, cash flows and fair values relevant to financial instruments depend upon prevailing interest rates.  Market risk refers to the risk of loss from adverse changes in interest rates of debt instruments of similar maturities and terms.

Market Risk Related to Fixed Rate Debt

We had approximately $409.7 million of outstanding consolidated indebtedness as of June 30, 2005 (inclusive of net premiums on acquired debt of $3.4 million).  During the first six months of 2005, we entered into interest rate swaps totaling $65 million to hedge variable cash flows associated with existing variable rate debt.  Including the effects of these swaps, our fixed and variable rate debt would have been approximately $271.5 million (67%) and $134.8 million (33%), respectively, of our total consolidated debt at June 30, 2005.  Reflecting our interest in unconsolidated debt, our fixed and variable rate debt would have been 68% and 32%, respectively, of our total debt at June 30, 2005.

Based on the amount of our fixed rate debt, a 100 basis point increase in market interest rates would result in a decrease in its fair value of approximately $10.1 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed rate debt of approximately $10.9 million. A 100 basis point increase or decrease in interest rates on our variable rate debt as of June 30, 2005 would increase or decrease our annual cash flow by approximately $1.3 million.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this

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report.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) identified in connection with the evaluation required by Rule 13a-15(b) under the Securities Exchange Act of 1934 of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of June 30, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  However, we completed our initial public offering in August 2004 and, in conjunction with being a public company, we have begun the process of reviewing our policies and procedures on internal control over financial reporting in anticipation of the requirement that we comply with Section 404 of the Sarbanes-Oxley Act of 2002 for the fiscal year ending December 31, 2005.

Part II.  Other Information

Item 1.    Legal Proceedings

The Company is party to various actions representing routine litigation and administrative proceedings arising out of the ordinary course of business.  None of these actions are expected to have a material adverse effect on our consolidated financial condition, results of operations or cash flows taken as a whole.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Not Applicable

Item 3.  Defaults Upon Senior Securities

Not Applicable

Item 4.  Submission of Matters to a Vote of Security Holders

The 2005 annual meeting of shareholders for Kite Realty Group Trust was held on May 13, 2005.  The sole matter acted on was the election of seven trustees to serve a one-year term expiring at the 2006 annual meeting of shareholders.  Each of the nominees as listed in the Company’s proxy statement was elected.  The number of shares voted for or withheld as to each nominee was as follows:

Item 5.  Other Information

Not Applicable

Item 6.  Exhibits

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