SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549

                                FORM 10-K
[ X ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                               ACT OF 1934

For the fiscal year ended April 30, 1999      Commission File Number 1-4702
                          --------------                             ------
                                   OR
      [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934

               For the transition period from _______  to __________

                              AMREP CORPORATION
               -----------------------------------------------------
               (Exact name of registrant as specified in its Charter)

    Oklahoma                                                  59-0936128
------------------------------                              ---------------
(State or other jurisdiction of                             (IRS Employer
incorporation or organization)                              Identification No.)

   641 Lexington Ave., 6th Floor
   New York, New York                                          10022
----------------------------------------                    -----------
(Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code:         (212) 705-4700
                                                            --------------

Securities registered pursuant to Section 12(b) of the Act:

                                                       Name of Each Exchange
Title of Each Class                                    on Which Registered
-------------------                                    ---------------------

Common Stock $.10 par value                                  New York Stock
Exchange



Securities registered pursuant to Section 12(g) of the Act:  None

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
                                                      ---           ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]

Aggregate market value of voting stock held by non-affiliates of Registrant,
computed by reference to the last sales price of such Common Stock on July
23, 1999, on the New York Stock Exchange Composite  Tape  -   $23,869,332.

Number of shares of Common Stock, par value $.10 per share, outstanding at
July 23, 1999 - 7,357,250.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents of Registrant are incorporated by
reference into the indicated parts of this report:  Definitive Proxy
Statement for 1999 Annual Meeting -  Part III
----------
<PAGE>

                                 PART I
                                 ------

Item 1.     Business
------      --------
                               GENERAL

The Company* is primarily engaged in two unrelated  businesses,  each operated
by a  wholly-owned  subsidiary:  the Real  Estate  business  operated by AMREP
Southwest  Inc.,  and  the  Fulfillment  Services  and  Magazine  Distribution
business  operated by Kable News  Company,  Inc. The  Company's  foreign sales
and activities are not significant.

                       REAL ESTATE OPERATIONS

Recent Developments

For the last two  decades,  the Company has been both a real estate  developer
and a builder of  single-family  homes,  originally in Rio Rancho,  New Mexico
and  more  recently  in the  Denver,  Colorado  metro  area,  the  Sacramento,
California  metro area and Portland,  Oregon.  In the early 1960s, the Company
established the community that now is the City of Rio Rancho,  New Mexico, and
it has been the  predominant  builder  of housing  there.  Rio  Rancho,  which
adjoins  Albuquerque,  now  has a  population  of  over  50,000.  The  Company
entered the Denver  market in 1993,  and in 1997 it purchased  the assets of a
homebuilder  and land developer with operations in the Sacramento and Portland
markets.

During the second  half of fiscal  1999,  the  Company  implemented  a plan to
restructure  its real estate  operations  and to  wind-down  its  homebuilding
operations  everywhere  except in Oregon.  The reason  for this  decision  was
that  over the past  several  years  these  homebuilding  operations  have not
provided  acceptable  returns.  This  restructuring will enable the Company to
significantly  reduce its debt and to concentrate  its efforts on more rapidly
developing its land in Rio Rancho.

In  furtherance  of this  plan,  during  the  second  half of fiscal  1999 the
Company  contracted  to  sell  to two  national  builders  and  several  local
builders a total of  approximately  2,100 lots in Rio  Rancho.  During  fiscal
1999,  a total of 646 lots were sold  pursuant to such  contracts  for a total
sale price of $15.8 million.  The contracts  provide that the remaining  1,452
lots are to be sold over the next two  fiscal  years at a total  sale price of
approximately  $28.6  million.  The  contracts  with the  builders  are in the
nature of  options  since  each of the  contracts  permits  the  purchaser  to
terminate its obligations by forfeiture of a relatively  modest  deposit.  The
Company believes that the extent to which the builders  purchase the lots will
be determined by the number of houses they are able to sell which,  to a large
extent,  will depend on the strength of the housing  markets in Rio Rancho and
Albuquerque.  There  are,  therefore,  no  assurances  that  all,  or  even  a
substantial  portion,  of the  lots  subject  to the  contracts  will  be sold
pursuant  to the  contracts.  Over the  next two  fiscal  years,  the  Company
expects  to incur  substantial  additional  development  costs to enable it to
deliver the above lots pursuant to these contracts.

As  discussed  in more  detail  below,  in  Colorado,  the Company has sold or
offered for sale all of its land holdings and housing projects.  To wind-down
its  California  operations,  the Company has decided to  discontinue  certain
projects and to build-out others.

_________________
*  As used herein, "Company" includes the Registrant and its subsidiaries
unless the context requires or indicates otherwise.


                              2

<PAGE>



Home Building Operations

In fiscal 1999, the Company sold  single-family houses as follows:

                       Homes    Average Selling
         Market         Sold         Price
       ----------      -----     -------------
       Rio Rancho       428        $111,350
        Colorado        208        $145,270
       Sacramento*      130        $153,500
        Portland*        33        $315,500

At April 30, 1999, the Company had  single-family  houses completed and unsold
or under construction as follows:

                     Number of  Average Estimated
         Market        Houses    Selling Price
      -----------     -------   ----------------
      Rio Rancho        82        $118,000
       Colorado         69        $138,800
      Sacramento*      128        $172,700
       Portland*        57        $275,900

At June 30,  1999,  64 of those  houses at Rio Rancho were under  contract for
sale. The Company  anticipates  that all  construction  and sales of houses in
Rio Rancho will be completed by September  1999.  As of June 30, 1999,  all of
the Company's completed or under-construction  houses in the Denver market had
been sold or were under  contract  to sell either to  consumers  or to another
developer.  At June 30, 1999, 100 of the houses in the  Sacramento  market had
been sold or were under contract of sale. The Company  anticipates  completion
of  construction  of all of  those  houses  and an  additional  28  houses  in
Sacramento  during  fiscal  2000.  Subject to market  conditions,  the Company
expects all its  Sacramento  area houses to be sold in that fiscal  year.  The
Company  has no  present  plans  to do any  further  homebuilding  in the  Rio
Rancho, Colorado or Sacramento markets.

In the Sacramento area, the Company has completed,  in a joint venture,  a 164
unit   multi-family   housing   project   which  it  sold  in  July  1999  for
approximately  $15,700,000.  During  fiscal 1999,  the Company  purchased  for
approximately  $4,500,000 land with entitlements (i.e., appropriate zoning and
subdivision  approvals)  for another  multi-family  housing  project  which it
plans to resell.

The Company  presently intends to continue  building  single-family  houses in
Portland,  Oregon.  At April 30, 1999, in addition to the 57 houses  completed
or  under  construction,  the  Company  owned  56 lots on  which  the  Company
presently  intends to build  houses.  The houses  will be  designed to sell in
the $220,000 to $400,000  range.  The Company may also acquire  developed lots
for further home sales to builders and others in Portland.

The  construction  and sale of homes is a  highly  competitive  business.  The
Company's  housing  projects in Portland compete with other builders who offer
similarly  priced  housing.  The Company  sells  housing in Portland  directly
from on-site models and through  brokers.  Buyers at Portland  utilize various
conventional  mortgage  lenders.  The ability of the Company to sell houses is
dependent  upon the  availability  of  adequate  mortgage  financing  on terms
prospective customers can afford.

______________
*  Some of the houses in the Sacramento and Portland areas are being built
through joint ventures which are accounted for under the equity method.


                                   3
<PAGE>

Commercial And Residential Land Development Operations

In previous  years and through  fiscal year 1999,  the Company  developed both
residential  and  commercial  sites at Rio Rancho and from time to time bought
acreage in Colorado,  California and Oregon for  home-building  and to develop
as residential  lots to be sold to builders.  The Company plans to concentrate
its  current  land  development  activities  at Rio  Rancho.  While  it has no
immediate plans to acquire additional property in Colorado or California,  the
Company may in the future explore business  opportunities for land acquisition
and development in locales inside and outside New Mexico.

Rio  Rancho  (including  the  City)  consists  of 91,049  contiguous  acres in
Sandoval  County,  New Mexico,  near  Albuquerque,  of which some 72,500 acres
have been platted into approximately  111,000 homesite and commercial lots and
16,300 acres are  dedicated to community  facilities,  roads and drainage with
the  remainder  consisting  of unplatted  land.  At April 30, 1999, a total of
approximately  80,500 of the lots had been sold.  The Company  currently  owns
approximately  23,300 acres at Rio Rancho, of which  approximately 7,800 acres
are  in  contiguous  blocks  suitable  for  development.  The  balance  is  in
scattered  lots which may  require  the  purchase  of a  sufficient  number of
adjoining lots to create tracts suitable for development.

At Rio Rancho,  the Company plans to concentrate on securing  entitlements and
selling  large  development  tracts  to  homebuilders.  In  fiscal  1999,  the
Company  sold  1,065  lots to  builders  at Rio  Rancho  for a total  of $19.6
million (including those described under "Recent Developments") .

In addition,  the Company  presently plans to develop  building lots and sites
for commercial and  industrial use at Rio Rancho as the demand  warrants.  The
commercial areas at Rio Rancho  presently  include in excess of 500 businesses
and  professional  offices,  15 shopping centers with over 1.25 million square
feet of store and office space, and a 55,000 square foot office  building.  In
addition,  a number of  individual  office  buildings  and stores are  located
throughout the community.  Eleven financial  institutions  have offices in Rio
Rancho.  The industrial  areas presently have  approximately 77 buildings with
over 3.2 million square feet,  including a manufacturing  facility  containing
approximately  2.1 million  square  feet which is owned and  occupied by Intel
Corporation.  In fiscal 1999,  the Company sold five tracts of commercial  and
industrial property of varying size for a total of $7.3 million.

The development activity includes the obtaining of entitlements,  installation
of utilities  and  necessary  storm  drains,  and  building or  improving  the
roads.  The  engineering  work at Rio  Rancho  is  performed  by both  Company
employees  and outside  firms,  but  development  work is performed by outside
contractors.  Land at Rio  Rancho  is  marketed  by  Company  personnel,  both
directly and through brokers.

Since early 1977,  no  individual  lots without  homes at Rio Rancho have been
sold by the  Company to  consumers.  Over 50,000 lots were sold prior to 1977,
and most of these are in areas where  utilities  have not yet been  installed.
However,  under certain of the contracts pursuant to which the lots were sold,
if utilities  have not reached the  respective lot when the purchaser is ready
to build a home,  the Company is  obligated to exchange a lot in the area then
serviced  by  water,  telephone  and  electric  utilities  for  the lot of the
purchaser,  without  cost to the  purchaser.  The  Company  has  not  incurred
significant costs related to such exchanges.

In fiscal  1999,  the Company  sold  approximately  250 lots in Colorado for a
total of $3.7 million,  and one multi-family  tract in the Sacramento area for
a total of $3.0 million.

At June 30, 1999, the Company owned in Colorado 57 residential building lots
on which no construction had begun and 488 unplatted acres which are
presently being offered for sale.  The Company also owned, in the Portland
area, 201 developed lots held for sale, in addition to the lots it held for
use as its

                                   4
<PAGE>


own homebuilding inventory.  Some of the lots are owned through joint ventures
which are accounted for under the equity method.


Other Real Estate Projects

The Company  developed the Eldorado at Santa Fe, New Mexico  subdivision which
now has  approximately  2,200 homes.  The Company sold 23 lots there in fiscal
1999,  and 20 lots remain to be sold.  The Company  owns and  operates a water
utility company which serves the  subdivision.  The Company also  participates
in a joint  venture  which  develops  lots for sale in this  subdivision.;  at
April 30, 1999, 76 lots remain in the joint venture.

The  Company  is  a   fifty-percent   (50%)  limited   partner  in  a  limited
partnership  which  owns 247  units of  moderately-priced  rental  housing  in
Orlando,  Florida.  The Company's  management  subsidiary  manages the project
under a year-to-year  contract.  Substantially  all of the units currently are
leased  for  terms  of  from 6 to 12  months.  The  Company  also  owns  other
properties in Florida,  consisting of  approximately 22 acres in the Ocala and
Orlando area.  All of these properties are presently being offered for sale.

               MAGAZINE DISTRIBUTION AND FULFILLMENT OPERATIONS

Through its wholly-owned  subsidiary,  Kable News Company, Inc. ("Kable"), the
Company (i)  performs  fulfillment  and related  services for  publishers  and
other  customers and (ii)  distributes  periodicals  nationally  and in Canada
and,  to a small  degree,  in other  foreign  countries.  As of July 1,  1999,
Kable employed  approximately  1,080 persons,  approximately  860 of whom were
involved in its fulfillment activities and 220 in distribution activities.

Fulfillment Services

Kable's  Fulfillment  Services  division  performs a number of fulfillment and
fulfillment related activities,  principally magazine subscription fulfillment
services,  list  services  and  product  fulfillment  services.  The  division
accounted for 64% of Kable's total revenues in  1999 and 68% in 1998.

In the magazine  subscription  fulfillment service operation,  Kable processes
new orders,  receives and accounts  for  payments,  prepares and sends to each
publisher's  printer  labels or tapes  containing  the names and  addresses of
subscribers for mailing each issue,  handles  subscriber  telephone  inquiries
and  correspondence,  prepares and mails renewal and statement  notifications,
maintains subscriber lists and databases,  generates marketing and statistical
reports,   processes   Internet   orders  and  prints  forms  and  promotional
materials.  Kable  performs all of these  services for many clients,  but some
clients  utilize only certain of them.  Although by far the largest  number of
magazine  titles for which Kable  performs  fulfillment  services are consumer
publications,  Kable also performs  services for a number of trade  (business)
publications,  membership  organizations and government agencies which utilize
the broad capabilities of Kable's extensive database system.

List  services  clients are  primarily  publishers.  In this  activity,  Kable
maintains  clients'  customer lists,  selects names for clients who rent their
lists,  merges rented lists with the clients'  lists to eliminate  duplication
for clients' promotional  mailings,  and sorts and sequences mailing labels to
provide optimum postal discounts for clients.

Product  fulfillment  services are provided  primarily  for Kable's  publisher
clients. In this activity,  the division receives,  warehouses,  processes and
ships merchandise.

Kable plans to expand these services to other non-publisher clients.


                                        5
<PAGE>

In August 1996, Kable commenced the processing of "sweepstakes"  entries for a
major   publisher,   which  includes   opening  the  envelopes  mailed  in  by
contestants,  furnishing  the pertinent data  electronically  to the publisher
and  performing  certain  incidental  functions.  Revenues  from this activity
represented  over 14% of the division's  total revenues for fiscal 1999. Kable
has been informed that this publisher has changed its  operational  strategies
and will  discontinue its use of Kable's  services  during fiscal 2000;  Kable
does not expect a significant impact on earnings as a result of this change.

Kable now  performs  fulfillment  services  for  approximately  490  different
magazine titles for some 210 clients and maintains  approximately 13.4 million
active subscriber names for its client  publishers.  In a typical month, Kable
produces almost 14 million  mailing labels for its client  publishers and also
produces and mails approximately 4.2 million billing and renewal statements.

There are a large number of companies  that perform  fulfillment  services for
publishers  and with which Kable  competes,  two of which are much larger than
Kable.  Since  publishers  utilize  only a single  fulfillment  service  for a
particular  publication,  there is intense  competition to obtain  fulfillment
contracts  with  publishers.  Competition  for  non-publisher  clients is also
intense.  Kable  has a staff  whose  primary  duty is to  solicit  fulfillment
business.

Distribution Services

In its distribution  operation,  Kable annually distributes magazines for over
210  publishers.  Among  the  titles  are  many  special  interest  magazines,
including automotive, crossword puzzles, men's sophisticates,  comics, romance
and sports.  In a typical month,  Kable  distributes to wholesalers  over 36.1
million copies of various titles.  Kable purchases the  publications  from its
publishers  and  sells  them  to   approximately   60  independent   wholesale
distributors  who own and  operate  160  individual  companies  in the  United
States and Canada.  The wholesale  distributors in turn sell the  publications
to individual  retail outlets.  All parties  generally have full return rights
for unsold  copies.  In 1999,  distribution  activities  accounted  for 36% of
Kable's revenues, and 32% in fiscal 1998.

While the Kable Distribution  division does not handle all publications of all
of its  publisher  clients,  it usually is the exclusive  distributor  for the
publications  it distributes.  Kable generally does not physically  handle any
product.  It determines,  in consultation with the wholesalers and publishers,
the  number of copies  of each  issue to be  distributed,  and  generates  and
delivers to each publisher's printer shipping  instructions with the addresses
of the  wholesalers  and the  number of copies of  product  to be  shipped  to
each.  All magazines  have an "off sale" date  (generally  the on-sale date of
the next issue)  following  which the  retailers  return  unsold copies to the
wholesalers,  who destroy them after accounting for returned  merchandise in a
manner satisfactory to Kable.

A  realignment  of industry  relationships  in the  distribution  of magazines
started  during  fiscal 1996 and  rapidly  grew to major  proportions.  It was
triggered by the decision of certain major retailers with multiple  outlets to
sharply reduce the number of wholesalers  with whom the retailers  would deal.
This  action has led to the  erosion of  wholesaler  profit  margins  and to a
substantial  continuing  reduction  in the number of  wholesalers  through the
merger of certain  wholesalers,  the formation by certain other wholesalers of
cooperatives  to bid for the  business  of such  retailers,  and the  complete
retirement  from the business by a number of  wholesalers.  The  consolidation
has reduced the number of Kable's  wholesale  customers by  approximately  55%
since 1995,  which has increased the  concentration  of its revenue source and
trade  accounts  receivable.  These  changes  contributed  to  demands by most
remaining  wholesalers  to  purchase  magazines  at lower  prices  which  many
publishers, including some of Kable's, have accepted.


                                        6
<PAGE>


Financial  pressures on  wholesalers  continued in fiscal 1999.  Consequently,
Kable has  increased  its  accounts  receivable  reserves in  anticipation  of
possible  uncollectible  balances from certain newsstand wholesaler customers.
Management  believes  that  industry  changes will continue with the potential
for  further   adverse   consequences   for   publishers  and  their  national
distributors, including Kable.

Kable  has  a  distribution   sales  and  marketing   force  that  works  with
wholesalers  and retailers to promote  product sales and assist in determining
the number of copies of product to be delivered to each retailer.

Kable generally makes  substantial cash advances to publishers  against future
sales,  which  publishers  may  use  to  help  pay  for  printing,  paper  and
production  costs  prior to the  product  going on sale.  Kable is usually not
paid by wholesalers  for product until some time after the product has gone on
sale,  and is  therefore  exposed  to  potential  credit  risks  with both the
publishers and the  wholesalers.  Its ability to make a profit is dependent in
part on its skill in estimating  the number of copies of an issue which should
be printed and  distributed  and on  limiting  its  advances to the  publisher
accordingly.

There  are  five  national  distributors  with  whom  Kable  competes.   Since
publishers  utilize only a single distributor to distribute a particular line,
there is intense  competition among distributors to obtain distribution rights
from  publishers.  Each of these large  competitors  is owned by or affiliated
with a magazine  publishing  company.  Such  companies  publish a  substantial
portion of all magazines  published in the United States,  and the competition
for the distribution rights to the remaining publications is intense.

                             COMPANY OFFICES

The Company's  principal  executive  offices are in New York City.  Kable News
has an executive  and sales office in New York City,  and its  operations  are
centered  in both owned and leased  facilities  in Mt.  Morris,  Illinois  and
Marion,  Ohio. Real estate  operations are  headquartered  in Rio Rancho,  New
Mexico in a modern office building owned by the Company

                                EMPLOYEES

The Company has  approximately  1,190  employees  as of July 1, 1999,  none of
whom is represented by a union.  The Company provides  retirement,  health and
other  benefits to its employees  and  considers its employee  relations to be
good.

Item 2.      Properties
-------      ----------

The information  contained in Item 1 of this report with respect to properties
owned by the Company is hereby incorporated herein by reference.

Item 3.      Legal Proceedings
-------      -----------------

The  Registrant  and/or its  subsidiaries  are involved in various  claims and
legal  actions  incident  to  their  operations,   which  in  the  opinion  of
management,  based in part upon advice of counsel,  will not materially affect
the  consolidated   financial   position  or  results  of  operations  of  the
Registrant and its subsidiaries.



                                   7
<PAGE>

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

Not Applicable.

Executive Officers of Registrant
--------------------------------

Set forth  below is certain  information  concerning  persons who are
executive officers of Registrant.

Name               Office Held/Principal occupation for Past Five Years     Age
----               ----------------------------------------------------     ---

Daniel Friedman    Senior Vice President of Registrant since 1980;           64
                   Chief Executive Officer of Kable News Company, Inc.,
                   a wholly-owned subsidiary of the Registrant since 1978.

James Wall         Senior Vice President of Registrant since 1991;           62
                   Chief Executive Officer of AMREP Southwest Inc.,
                   a wholly-owned subsidiary of Registrant, since 1991.

Mohan Vachani      Senior Vice President-Chief Financial Officer of          57
                   Registrant since 1993.

Valerie Asciutto   Senior Vice President-General Counsel of Registrant       46
                   since 1997; Vice President-General Counsel of
                   Registrant from 1992 to 1997.

David P. Maniatis  President of various entities not affiliated              43
                   with the Company engaged in the real estate business
                   since prior to 1994 and continuing to the present;
                   Vice Chairman and Chief Operating Officer of AMREP
                   Southwest Inc. since April 1999*

The  executive  officers are elected or appointed by the Board of Directors of
the Company or its  appropriate  subsidiary to serve until the  appointment or
election  and  qualification  of  their  successors  or their  earlier  death,
resignation or removal.


________________________
 * Mr. Maniatis is a part time consultant to the Company, and not an employee.


                                   8
<PAGE>

                               PART II


Item 5.      Market for Registrant's Common Equity and
-------      -----------------------------------------
             Related Stockholder Matters
             ---------------------------

The  Registrant's  common stock is traded on the New York Stock Exchange under
the symbol AXR. On July 23, 1999,  there were  approximately  2,400 holders of
record of the common stock.  The  Registrant  has  historically  not paid cash
dividends.  The range of high and low  closing  prices  for the last two years
by fiscal quarter is presented below:

              FIRST             SECOND             THIRD            FOURTH
         --------------    --------------     --------------    --------------
          HIGH     LOW      HIGH     LOW       HIGH     LOW      HIGH     LOW

  1999  $9 15/16  $6 1/2  $8 1/16   $5 1/2   $7 13/16  $5 7/8   $8      $4 5/8
  1998  $4 5/8    $3 1/2  $7 1/4    $4 5/8   $6 7/8    $5 1/4  $10 1/2  $6 1/4



Item 6.     Selected Financial Data
-------     -----------------------

The  following  selected  consolidated  financial  data  of  the  Company  are
qualified  by  reference  to and  should  be  read  in  conjunction  with  the
consolidated  financial statements,  related notes thereto and other financial
data  elsewhere   herein.   These  historical   results  are  not  necessarily
indicative of the results to be expected in the future.

                     (In thousands of dollars except per share amounts)
                                    Year Ended April 30,
                   -------------------------------------------------------
                    1999 (a)     1998     1997 (b)     1996       1995
                   -------------------------------------------------------
Revenues           $ 190,291  $ 171,368  $ 146,389  $ 161,802   $ 152,525
Net Income         $   7,537  $   8,206  $   7,282  $   2,785   $   4,015
Earnings Per
Share -
 Basic and Diluted $    1.02  $    1.11  $    0.99  $    0.38   $    0.55


Total Assets       $ 217,777  $ 229,768  $ 205,311  $ 181,796   $ 186,142
Notes Payable      $  74,665  $  84,248  $  79,824  $  54,391   $  61,653
Shareholders'      $  91,577  $  84,040  $  75,834  $  68,552   $  65,921
Equity
Cash Dividends     $       -  $       -  $       -  $       -   $       -

(a)   Includes a tax benefit in the amount of  $2,400,000  (the  equivalent of
      $.33 per share) to  reflect  the  settlement  of 1990  through  1992 tax
      examinations.

(b)   Includes a tax benefit in the amount of  $6,250,000  (the  equivalent of
      $.85 per share) to  reflect  the  settlement  of 1984  through  1989 tax
      examinations.



                                        9
<PAGE>

Item 7.     Management's Discussion and Analysis of Financial
-------     -------------------------------------------------
            Condition and Results of Operations
            -----------------------------------

FORWARD-LOOKING STATEMENTS
--------------------------

The Private  Securities  Litigation  Reform Act of 1995 (the "Act") provides a
safe  harbor  for  forward-looking  statements  made  by or on  behalf  of the
Company.  The  Company  and its  representatives  may from  time to time  make
written or oral statements that are  "forward-looking",  including  statements
contained in this report and other  filings with the  Securities  and Exchange
Commission,  any reports to the Company's  shareholders and news releases. All
statements  that express  expectations,  estimates,  forecasts and projections
are  forward-looking  statements  within the meaning of the Act. In  addition,
other written or oral statements which constitute  forward-looking  statements
may be  made  by or on  behalf  of  the  Company.  Words  such  as  "expects",
"anticipates",   "intends",   "plans",   "believes",   "seeks",   "estimates",
"projects",  "forecasts",  "may",  "should",  variations  of  such  words  and
similar   expressions   are   intended   to  identify   such   forward-looking
statements.  These  statements  are not guarantees of future  performance  and
involve certain risks,  uncertainties  and assumptions  which are difficult to
predict.  Therefore,  actual  outcomes and results may differ  materially from
what is  expressed  or  forecasted  in or  suggested  by such  forward-looking
statements.  The Company  undertakes  no  obligation  to update  publicly  any
forward-looking  statements,  whether as a result of new  information,  future
events or otherwise.

A wide  range of factors  could  materially  affect  future  developments  and
performance of the Company,  including the following:  (i) the level of demand
for land in the markets in which the Company sells land;  (ii) the possibility
of further  changes in the magazine  distribution  system for magazines  which
the  Company  distributes;  (iii) the  outcome  and impact of year 2000;  (iv)
possible future litigation and governmental proceedings;  (v) the availability
of financing and financial  resources in the amounts,  at the times and on the
terms required to support the Company's  future business,  including  possible
acquisitions;  (vi) the failure to carry out marketing and sales plans;  (vii)
the failure  successfully  to integrate  acquired  business,  if any, into the
Company  without  substantial  costs,  delays other  operational  or financial
problems;  and (viii)  economic,  business  conditions  and changes  including
general  economic  and  business  conditions  that  are  less  favorable  than
expected.

This list of factors that may effect  future  performance  and the accuracy of
forward  looking  statements  is  illustrative,  but by no  means  exhaustive.
Accordingly,  all  forward-looking  statements  should be  evaluated  with the
understanding of their inherent uncertainty.

RESULTS OF OPERATIONS
---------------------

Year Ended April 30, 1999 Compared to Year Ended April 30, 1998
---------------------------------------------------------------

Revenues
--------

Total  revenues  for the year ended April 30,  1999  increased  $18.9  million
(11%) from 1998,  principally reflecting an increase in revenues from the real
estate operations.

Revenues from real estate  operations  increased $22.1 million (21%) resulting
from  increases  in both  housing and land  sales.  This  increase  reflects a
decision  made  by  the  Company  to  wind-down   most  of  its   homebuilding
operations,  to sell its land  holdings in  Colorado  and  California,  and to
concentrate on more rapidly  developing its very  substantial land holdings in
Rio  Rancho,  New  Mexico.  As part of this  process,  the Company has entered
into conditional  contracts to sell  homebuilding lots to several national and
local builders in Rio Rancho.


                                   10
<PAGE>

Revenues  from housing sales  increased  $11.2  million  (14%),  reflecting an
increase in total  housing  deliveries  from 677 to 711 as well as an increase
in the average  selling price of homes from  $117,800 to $127,900.  The number
of homes closed  increased  as a result of various  sales  incentive  programs
developed  during the fourth  quarter to accelerate  the sale of the Company's
remaining  housing  inventory.  The change in average selling price was due in
large  part to a change in the mix of  projects  from  which  homes were sold.
The gross  margin on  housing  sales  increased  by $1.9  million in 1999 over
1998,  as a result of the  increase  in the number of homes sold as well as an
increase in the average  gross  margin  percentage  to 13% in 1999 from 12% in
1998.

Revenues and related gross profit from land sales  increased by  approximately
$10.9 million (44%) and $1.6 million (12%),  respectively,  in 1999 from 1998,
primarily  due to the increase in land sales to  homebuilders  resulting  from
the change in the  Company's  business  focus  discussed  above.  The  average
gross profit  percentage  on land sales  decreased  from 50% in 1998 to 39% in
1999 because the sales of  residential  land to builders have  generally  been
at lower gross profit  percentages than the sales of commercial and industrial
land,  which have  represented  a much  larger  percentage  of total land sale
revenues in prior  years.  Land sale  revenues and related  gross  profits can
vary from  period to period as a result of the nature  and timing of  specific
transactions,  and thus prior  results are not an  indication  of amounts that
may be expected to occur in future periods.

Revenues from  magazine  circulation  operations,  consisting of both magazine
distribution  and fulfillment  operations,  increased  approximately  $400,000
(1%) from 1998.  Revenues from the  Fulfillment  Services  division  decreased
approximately  $1.6 million  (4%) due  primarily to a lower volume of business
in  sweepstakes   processing  for  one  large  customer.   Revenues  from  the
Newsstand Distribution Services division increased  approximately $2.1 million
(11%)  this  year,  due to new  business  and a  moderately  higher  volume of
magazine  sales.  A  major  realignment  of  industry   relationships  in  the
distribution  of  magazines  which  started  in 1996 has led to a  substantial
reduction in the number of Kable's  wholesaler  customers  and, in many cases,
has  adversely  impacted  wholesaler  profits and liquidity and caused them to
delay  payments  to Kable.  During  the third and  fourth  quarters  of fiscal
1999, Kable increased its reserve for uncollectible  accounts by approximately
$5.0 million due to concerns  about certain  newsstand  wholesaler  customers.
As a result,  magazine  circulation  operating expenses increased $4.3 million
(10%)  compared to the prior  year.  As a result of these  factors,  operating
income from magazine  circulation  operations  decreased by approximately $3.9
million  this year.  Excluding  the effects of the increase in the reserve for
uncollectible  accounts,  Kable's operating  earnings would have been modestly
higher than in fiscal 1998.

Revenues from  "Interest  and other  operations"  decreased  from 1998 to 1999
principally  because 1998 included a non-recurring  gain of approximately $4.2
million on the sale of the Rio Rancho Golf and Country Club and the  Company's
50%  limited  partnership  interest  in "The  Classic at West Palm  Beach",  a
congregate care facility in Florida.

Expenses
--------

Real estate commissions and selling expenses were generally  comparable to the
prior year amounts,  and approximated 8% of related revenues in 1999 and 9% in
1998.  Real  estate  and  corporate   general  and   administrative   expenses
increased  approximately  2% in 1999 over 1998, due to additional costs of the
Company's  California  operation  which had commenced  activities in September
1997,  and which were  offset in part by the effect of a benefit  for  pension
expense  resulting  from the effect of an amendment to the  Company's  pension
plan during 1998.  General and  administrative  costs of magazine  circulation
operations  decreased by approximately  4% over the comparable  amounts of the
prior year.


                                   11
<PAGE>

Interest  expense  increased  from  approximately  $4.4  million  in  1998  to
approximately $4.7 million in 1999;  interest related to magazine  circulation
operations  decreased  slightly due to lower  interest  rates,  while interest
related to real estate  operations  increased  moderately due to lower amounts
of capitalized interest.

As discussed in Note 2 to the consolidated  financial statements,  the Company
has incurred  restructuring-related  charges of  approximately  $2.1  million,
including  severance and lease  termination  payments ($1.1 million),  and the
write-off  of  unamortized   goodwill  and  acquisition  related  costs  ($1.0
million)  incurred in connection  with its  acquisition of certain real estate
assets in California.  In addition,  the Company wrote-off  approximately $1.2
million related to deposits and other project-related  inventory costs related
to projects which have been  abandoned or otherwise  disposed of in connection
with the business restructuring,  which amount has been charged to real estate
cost of sales.  The  Company's  decision  to change its real  estate  focus by
emphasizing  its land  development  activities  at Rio Rancho,  New Mexico and
winding-down  certain  homebuilding  activities  is  not  considered  to  be a
permanent  change in  strategy.  Accordingly,  because  of these  factors  and
because the Company intends to continue  homebuilding  activities in Portland,
Oregon,  the Company has presented  the results of operations of  homebuilding
in continuing operations.

In 1999, the Company's  effective tax rate of  approximately 8% reflects a net
benefit of  approximately  $2.4  million to the  provision  from income  taxes
following  the  conclusion of certain  federal tax audits.  See Note 10 to the
consolidated financial statements.

Segment Information
-------------------

Information  by industry  segment is presented in Note 14 to the  consolidated
financial  statements.  The Company adopted Statement of Financial  Accounting
Standards ("SFAS") No. 131,  "Disclosures  about  Segments of an Enterprise and
Related  Disclosures"  during  1999,  which  requires  that  industry  segment
information  be  prepared  in a manner  consistent  with the  manner  in which
financial  information  is prepared  and  evaluated by  management  for making
operating  decisions.  A number of assumptions and estimations are required to
be made in the  determination  of  segment  data,  including  the need to make
certain  allocations  of  common  costs and  expenses  among  segments.  On an
annual  basis,  management  has  evaluated  the  basis  upon  which  costs are
allocated,   and  has   periodically   made  revisions  to  these  methods  of
allocation.   Accordingly,   the   determination   of  "pretax  income  (loss)
contribution"  of each segment as  summarized  in Note 14 to the  consolidated
financial  statements  is presented  for  informational  purposes,  and is not
necessarily  the  amount  that  would  be  reported  if the  segment  were  an
independent company.

Year Ended April 30, 1998 Compared to Year Ended April 30, 1997
---------------------------------------------------------------

Revenues
--------

Total revenues for the year ended April 30, 1998 increased  approximately  17%
from  1997,  reflecting  increases  in  revenues  from  both real  estate  and
magazine circulation operations.

Revenues from real estate  operations  increased by 23% in 1998 resulting from
increases  in both  housing  and  land  sales.  Revenues  from  housing  sales
increased 16% as a result of an increase in total housing  deliveries from 599
to 677.  This  increase  was due to  increased  home  deliveries  in  Colorado
resulting from additional  projects from which homes were  delivered,  as well
as  from  deliveries   contributed  by  the  Company's   northern   California
operations,  which were acquired in September  1997, and was offset in part by
fewer home closings in Rio Rancho,  which  reflects an increase in competition
throughout the surrounding  market region.  The average selling price of homes
sold  increased  slightly,  from  $114,600 to  $117,800.  The gross  margin on
housing sales increased by  approximately  $.5 million  principally due


                                   12
<PAGE>


to the increase in the number of homes closed.  The average  gross margin
percentage was 13% in 1997 and 12% in 1998.

Revenues and related gross profit from land sales  increased by  approximately
$8.2 million and $5.5 million,  respectively, in 1998 from 1997, primarily due
to an increase  in the level of  commercial  and  industrial  land sales.  The
average gross profit  percentage on land sales  increased  from 42% in 1997 to
50% in 1998  because of the mix of land sales  between  Colorado,  Florida and
New Mexico.  Land sale  revenues and related  gross profits can vary from year
to year as a result of the  nature and timing of  specific  transactions,  and
are not an  indication  of  amounts  that may be  expected  to occur in future
periods.

Revenues from magazine  circulation  operations  increased by approximately 5%
in  1998,  due  to  increases  in  both  Fulfillment  Services  and  Newsstand
Distribution   Services   divisions.   Revenues  from   Fulfillment   Services
increased  approximately  5%, due  primarily to  increased  volumes in product
fulfillment and sweepstakes  processing  services.  Revenues from Distribution
Services  increased  approximately  6%, due to a modest increase in the volume
of magazine sales.

The  major   realignment  and   consolidation   of   relationships  in  the
distribution chain for magazines which developed during 1996 continues to affect
the  industry,  and the Company  continues  to address the  situation.  Magazine
circulation  operating expenses have decreased from approximately 81% of related
revenues in 1997 to approximately  77% of related  revenues in 1998,  reflecting
the completed  integration of the acquisition of Kable's Ohio operations and the
favorable  impact of cost reduction  initiatives.  As a result of these factors,
operating income from magazine circulation operations increased by approximately
$2.9 million in 1998, as compared to 1997.

During  1998,  the Company  sold the Rio Rancho Golf and Country  Club and its
50%  limited  partnership  interest  in The  Classic  at West  Palm  Beach,  a
congregate   care   facility  in  Florida,   and   recognized   an   aggregate
non-recurring gain of approximately $4.2 million,  which amount is included in
"Interest and other operations".

Expenses
--------

Real estate  commissions  and selling  expenses  increased  approximately  8%,
primarily as a result of the increased  volume, as well as from an increase in
the number of projects open for sale.  Real estate and  corporate  general and
administrative  expenses  increased  10%,  principally  as  a  result  of  the
Company's  expansion into northern  California  commencing in September  1997.
General  and  administrative  costs  of the  magazine  circulation  operations
increased by approximately 4%, moderately lower than the revenue increase.

Interest  expense  increased by  approximately  9% in 1998,  primarily  due to
higher  average  borrowings  related to increased  levels of  receivables  and
inventories,  partially  offset by an  increase  in the amount of  capitalized
real estate interest.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

During the past several years,  the Company has financed its  operations  from
internally  generated funds from home and land sales and magazine  circulation
operations,  and  from  borrowings  under  its  various  lines-of  credit  and
construction loan agreements.


                                   13
<PAGE>

Cash Flows From Financing Activities
------------------------------------

At April 30, 1999, the Company had  line-of-credit  arrangements  with several
financial  institutions  collateralized  by various  assets which,  subject to
collateral  availability,  amounted to an aggregate borrowing  availability of
approximately  $66.7 million.  One of these lines (under which $40 million was
available and against which  approximately $35.9 million was outstanding as of
April 30, 1999) is available  for Kable News  Company  operations.  Borrowings
under  this   line-of-credit,   which  expires   August  31,  2000,   must  be
collateralized  125%  or  more  by  certain  Kable  accounts  receivable.  The
line-of-credit  agreement  limits the payment of dividends by, and loans from,
Kable to the Company.

The other  line-of-credit  borrowings  have been used  principally  to support
real estate construction in New Mexico,  California and Colorado.  These loans
are  collateralized by certain real estate assets and are subject to available
collateral and various  financial  performance and other  covenants.  At April
30, 1999,  the maximum  available  under real estate  lines-of-credit  totaled
$27.2  million  of which  borrowings  of $20.5  million  were  outstanding.  A
subsidiary of the Company has also guaranteed  approximately  $14.5 million of
mortgages and notes payable of joint ventures in which it is a participant.

Notes payable  outstanding,  including  lines-of-credit  discussed above, were
$74.7  million at April 30, 1999  compared to $84.2 million at April 30, 1998.
The decrease at April 30, 1999  compared to the prior year was  primarily  the
result of the change in focus of real estate  operations  and the wind-down of
homebuilding  operations.   The  Company  anticipates  that  as  it  completes
homebuilding operations,  its real estate borrowing requirements will continue
to decline.

Cash Flows From Operating Activities
------------------------------------

Inventories  amounted  to $89.7  million at April 30,  1999  compared to $99.9
million at April 30,  1998.  This  decrease  was related to the  restructuring
of real estate  operations,  and also  contributed to the decrease in accounts
payable,  deposits  and accrued  expenses  at April 30,  1999  compared to the
prior period.

Receivables from magazine  circulation  operations  decreased by approximately
$3.6  million  compared  to the  prior  year,  which is  primarily  due to the
increase in the  reserve for  uncollectible  accounts  of  approximately  $5.0
million resulting from concerns about certain newsstand wholesaler customers.

Cash Flows From Investing Activities
------------------------------------

Capital expenditures  increased in 1999 from 1998, due in part to requirements
of the Company's utility  subsidiary.  The Company believes that its available
funds will be adequate to provide for anticipated capital expenditures.

As a result of the  restructuring of its real estate  operations,  the Company
anticipates  that its  borrowing  requirements  will be reduced,  commensurate
with the reduction in construction  activity.  The Company  believes that cash
provided  from   operations   together  with  existing  cash   balances,   its
lines-of-credit  and land  development  loans will be  sufficient  to maintain
liquidity at a satisfactory level.

As discussed in Note 10 to the consolidated  financial  statements,  the Company
reached an agreement with the Internal  Revenue  Service  ("IRS") during 1999 to
resolve  all  issues  resulting  from the IRS's  examination  of tax years  1990
through 1992, and paid all federal tax due for those years.  In previous  years,
the Company had established a liability for Taxes  Payable-amounts  subsequently
due  (including  anticipated  interest  thereon  through  the  expected  date of
payment)  to  cover  the  expected  amounts  due,   including  amounts  due  for
outstanding  IRS  examinaitons  for tax years 1993 through 1996.  Based upon the
result of the 1999  settlement,  which resulted in an amount of tax payable less
than the Company had  believed  would be  required,  the Company has reduced the
amount of Taxes Payable - amounts subsequently due by approximately $2.4 million
in 1999. The examinations for the years 1993 through 1996

                                   14
<PAGE>


are in various stages of completion,  and the exact amount of taxes and interest
attributable  to any given tax year will only be known and payable after the IRS
completes  its review and computes the amount of the  adjustment  for each year.
The balance of the Taxes Payable - amounts subsequently due at April 30, 1999 is
approximately  $11.8  million;  the  Company  believes  that  with cash on hand,
anticipated earnings and credit available under lines of credit, it will be able
to pay the amounts  classified as Taxes Payable - amounts  subsequently due when
they become due. For tax years beginning in 1996, the Company believes its taxes
have been  calculated in a manner  consistent  with IRS  regulations  and in the
manner in which tax  examinations  for all the years 1984 through 1992 have been
completed.

Recent Accounting Pronouncements
--------------------------------

In June 1998, the Financial  Accounting  Standards  Board issued  Statement of
Financial   Accounting   Standards  No.  133,   "Accounting   for   Derivative
Instruments  and  Hedging   Activities" ("SFAS No. 133"), which  establishes
accounting  and reporting  standards  for  derivative  instruments,  including
certain  derivative  instruments  embedded  in other  contracts  (collectively
referred to as  derivatives)  and for hedging  activities.  The  Statement  is
effective  for fiscal years  beginning  after June 15, 2000.  The Company will
adopt SFAS No. 133 in fiscal year 2001.  The Company  expects the  adoption of
SFAS No. 133 will not have a  material  impact on the  consolidated  financial
statements.

Impact of Inflation
-------------------

Operations  of  the  Company  can  be  impacted  by   inflation.   Within  the
industries in which the Company  operates,  inflation  can cause  increases in
the cost of materials,  construction  and other services,  interest and labor.
Unless such  increased  costs are  recovered  through  increased  sale prices,
operating  margins will decrease.  Within the land development  industry,  the
Company  encounters  particular risks. A large part of the Company's sales are
to homebuilders who face their own  inflationary  concerns that rising housing
costs,  including  interest costs, may substantially  outpace increases in the
income of potential  purchasers  and make it difficult for them to finance the
purchase of a new home or sell their  existing  home. If this  situation  were
to exist,  the demand for the Company's  land by these  homebuilder  customers
might  decrease.  In general,  in prior years,  interest  and price  increases
have been  commensurate  with the general rate of  inflation in the  Company's
markets,  and the Company has not found the inflation risk to be a significant
problem either in its land development or homebuilding operations.

Year 2000 Readiness Disclosure (Y2K)
------------------------------------

Historically,  most  computer  programs  were written  using two digits rather
than four to define the applicable  year.  This could cause a problem  whereby
computer  applications would fail to recognize the year 2000 and beyond.  Such
computer  failures  could have a material  adverse  effect on an  enterprise's
business operations,  its transaction recording and, ultimately, its financial
condition.

Since 1996, the Company has been addressing these Y2K compliance  issues.  The
Company's program consists of four phases; (1.) Identify and rank material Y2K
sensitive equipment and software,  (2.) Assess the identified  components, (3.)
Remediate  (including  repair,  upgrade,  replacement),  and (4.)  Test  system
components.  This  program has  involved  all levels of  management  under the
overall  direction of the Senior Vice President and General Counsel ("GC") who
has further  directed the  Director of Internal  Audit  ("DIA") to  coordinate
tasks and report progress.

For organizational  purposes, Y2K committees were established at the Company's
three operating  centers - one for real estate operations and two for magazine
circulation  operations.  Each  committee  has  a  chairman  and  the  members
include  information  technology,  operating  and  financial  management
personnel.  The  committees  report  the  status  of  compliance  tasks  on  a
quarterly  basis which is then


                                   15
<PAGE>


communicated  to the Board of Directors by the GC and DIA.  As the year  2000
approaches,  it is  anticipated  that the task updates will be prepared on a
more frequent basis.

Program  Progress -- The  identification  and  assessment  phases (1 & 2) have
been completed.  The remediation  phase (3) is substantially  complete for all
major  systems.  The systems  addressed can be summarized  under the following
broad  categories; (i.) operating,  (ii.)  accounting and financial  reporting,
(iii.)  facility  (fire  protection,  security and utility  supply)  and, (iv.)
communications.  The Company  estimates the overall  completion  percentage of
the   remediation   phase  to  exceed  90%  at  April  30,  1999.  With  minor
exceptions,  it is  estimated  that  this  phase  will be fully  completed  by
October 31, 1999.

The testing phase (4) consists of component testing and  comprehensive  system
testing.  Component  testing has been  undertaken as specific  remediation  is
completed.  To date,  the  component  test  results have been  favorable.  The
comprehensive  testing of all systems is scheduled  for  completion by October
31, 1999.

Cost -- The Company has not  specifically  budgeted the costs  related to Y2K.
A  substantial   portion  of  the  program  has  been  completed  by  in-house
personnel.  Most system  application  software  acquired  from others has been
upgraded in accordance with applicable  maintenance  contracts.  In situations
where entire  systems were replaced,  there were business  reasons to do so in
addition to Y2K compliance.  Examples would include: (i.) the  installation in
1997 of an integrated  builder/accounting  and financial  reporting system for
real estate  operations and, (ii.) a new  accounting  and  financial  reporting
system for magazine  circulation  operations  (due for  completion  in August,
1999).  Both new  systems  replaced  inefficient  and  non-compliant  in-house
systems.

Vendor  compliance -- As part of the  remediation  phase,  the Company has had
direct and continuous  contact with critical  vendors who supply  software and
hardware  products for major  systems.  These  products  have been upgraded or
replaced where  necessary and have been  considered in the Company's  estimate
of  remediation  completion  indicated  above.  In  addition,  the Company has
mailed inquiries to other significant  vendors (critical  computer products as
well as other  goods  and  services)  as to  their  Y2K  compliance.  The vast
majority  of the  responses  received  to date have been  positive in that the
vendor has  indicated  that it is  compliant or expects to be so by the end of
the year.  The  Company  will  follow up with the  non-responders  and  assess
potential exposure on an individual basis.

Customer/client  compliance  -- The Company is in the process of querying  its
critical customers and clients in regards to their Y2K compliance.

Worst Case  Scenario -- It is very  difficult  to assess "the most  reasonably
likely worst case scenario".  The exposure  related to real estate  operations
is widely  distributed.  The vendor  universe is  composed  of numerous  small
local businesses and consequently,  the Company can quickly select alternative
vendors.  Customers  tend  to be  one  time  home  and/or  land  buyers.  This
division's  systems are primarily  centered on a vendor  supplied,  integrated
builder/financial reporting software package which is Y2K certified.

For magazine  circulation  operations,  the risk  potential  is greater.  This
division's  systems are complex and involve many in-house and vendor  supplied
software packages.  In addition,  the computer hardware and software inventory
is  substantial.  The most likely  "worst case" would be a general  failure in
comprehensive  systems  testing.  However,  because the Company is  conducting
full testing  well in advance of December  31,  1999,  there is expected to be
time to amend  programs  in the event of this  unlikely  occurrence.  There is
also some "worst case" potential  should major magazine clients and wholesaler
customers  fail to be Y2K  compliant.  The Company  has begun to contact  this
segment in order to better evaluate risk.


                                   16
<PAGE>

In  general,  the  Company  considers  third  parties  to  have  the  greatest
potential for "worst case"  scenarios  because of the  Company's  inability to
test and/or inquire beyond second  parties.  For example;  the utility company
which  supplies one of the Company's  facilities  cannot provide power because
its fuel  distributor  is not Y2K  compliant or the  publisher  can't  produce
magazines because its printer is unable to get ink or paper.

Contingency Plans -- The Company has begun to develop contingency plans as a
consequence of testing and/or direct inquiries.  These plans have and will be
formulated on a risk by risk basis.  However, no contingency plans are being
developed which will compensate for the loss of key public services such as
utilities, mail delivery, governmental authority, transportation and other
commercial infrastructure services.  Although the Company does not anticipate
any material business interruptions due to Y2K, in cannot be ruled out that
some unforeseen second or third party disruption might occur.  The Company is
heavily dependent upon the continued normal operations of  clients,
customers, key vendors, lenders and the aforementioned public services.

Item 7(A). Quantitative and Qualitative Disclosures About Market Risk
---------- ----------------------------------------------------------

The primary  market risk facing the Company is interest  rate risk on its long
term debt.  The  Company  does not hedge  interest  rate risk using  financial
instruments.  The Company is also subject to foreign  currency  risk, but this
risk is not  material.  The  following  table sets forth as of April 30,  1999
the Company's  long term debt  obligations,  principal cash flows by scheduled
maturity,  weighted  interest  rate and  estimated  Fair Market Value  ("FMV")
(amounts in thousands):

                              Year ended April 30,
                                                          There-          FMV @
                   2000     2001    2002   2003    2004   after  Total   4/30/99



Fixed rate debt  $10,389   $1,452   $918    $353    $135  $1,789 $15,036 $15,100


Weighted average
   interest rate    8.2%     8.1%   8.7%     8.1%    8.0%   7.1%    8.1%     -

Variable rate
   debt          $16,380  $38,351 $4,898   $  -     $ -    $ -   $59,629 $59,629

Weighted average
   interest rate    8.6%     8.6%   8.7%      -       -      -      8.6%     -



                                   17

<PAGE>

Item 8.      Financial Statements and Supplementary Data
-------      -------------------------------------------



                    Report of Independent Public Accountants
                    ----------------------------------------

To the
 Shareholders and
 Board of
 Directors of
 AMREP Corporation:


We  have  audited  the  accompanying  consolidated  balance  sheets  of  AMREP
Corporation (an Oklahoma  corporation)  and  subsidiaries as of April 30, 1999
and 1998,  and the related  consolidated  statements of income,  shareholders'
equity and cash flows for each of the three  years in the period  ended  April
30, 1999.  These financial  statements and the schedule  referred to below are
the  responsibility  of the Company's  management.  Our  responsibility  is to
express an opinion on these  financial  statements  and schedule  based on our
audits.

We  conducted  our  audits in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that we plan and  perform  the audit to
obtain  reasonable  assurance about whether the financial  statements are free
of  material  misstatement.  An audit  includes  examining,  on a test  basis,
evidence  supporting the amounts and disclosures in the financial  statements.
An  audit  also  includes   assessing  the  accounting   principles  used  and
significant  estimates made by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  financial  position  of AMREP  Corporation  and
subsidiaries  as of  April  30,  1999  and  1998,  and the  results  of  their
operations  and their  cash  flows for each of the three  years in the  period
ended  April  30,  1999  in  conformity  with  generally  accepted  accounting
principles.

Our  audits  were made for the  purpose  of  forming  an  opinion on the basic
financial   statements  taken  as  a  whole.   Schedule  II  accompanying  the
financial  statements  is  presented  for the  purpose of  complying  with the
Securities  and  Exchange  Commission's  rules  and is not  part of the  basic
financial  statements.  This  schedule  has  been  subjected  to the  auditing
procedures  applied in our audits of the basic  financial  statements  and, in
our  opinion,  fairly  states in all  material  respects  the  financial  data
required  to  be  set  forth  therein  in  relation  to  the  basic  financial
statements taken as a whole.



                                                            ARTHUR ANDERSEN LLP


Albuquerque, New Mexico
July 1, 1999

                                   18
<PAGE>





                      AMREP CORPORATION AND SUBSIDIARIES
                      ----------------------------------

                  CONSOLIDATED BALANCE SHEETS (Page 1 of 2)
                  -----------------------------------------

                           APRIL 30, 1999 AND 1998
                           -----------------------

                        (Dollar amounts in thousands)



                        ASSETS                            1999          1998
                        ------                         ----------    ----------

CASH AND CASH EQUIVALENTS                              $   23,553    $   20,517

RECEIVABLES, net:
  Real estate operations                                   10,846        11,107
  Magazine circulation operations                          53,822        57,408

REAL ESTATE INVENTORY                                      89,723        99,904

OTHER REAL ESTATE INVESTMENTS                               2,401         2,251

PROPERTY, PLANT AND EQUIPMENT,
  at cost, net of accumulated
  depreciation and amortization                            18,360        17,658

OTHER ASSETS                                               13,881        14,719

EXCESS OF COST OF SUBSIDIARIES
  OVER NET ASSETS ACQUIRED, net                             5,191         6,204
                                                       ----------    ----------
   TOTAL ASSETS                                        $  217,777    $  229,768
                                                       ==========    ==========


The accompanying notes to consolidated financial statements are an
             integral part of these consolidated balance sheets.
                                      19
<PAGE>



                     AMREP CORPORATION AND SUBSIDIARIES
                     ----------------------------------

                  CONSOLIDATED BALANCE SHEETS (Page 2 of 2)
                  -----------------------------------------

                           APRIL 30, 1999 AND 1998
                           -----------------------

               (Dollar amounts in thousands, except par value)


         LIABILITIES AND SHAREHOLDERS' EQUITY             1999          1998
         ------------------------------------          ----------    ----------

ACCOUNTS PAYABLE, DEPOSITS AND
  ACCRUED EXPENSES                                     $   36,182    $   39,201

NOTES PAYABLE:
  Amounts due within one year                              26,769        28,511
  Amounts subsequently due                                 47,896        55,737

TAXES PAYABLE:
  Amounts due within one year                               2,513         4,616
  Amounts subsequently due (including interest)            11,825        15,074

DEFERRED INCOME TAXES                                       1,015         2,589
                                                       ----------    ----------
   TOTAL LIABILITIES                                      126,200       145,728
                                                       ----------    ----------
COMMITMENTS AND CONTINGENCIES  (Notes 11 and 12)

SHAREHOLDERS' EQUITY:
  Common stock, $.10 par value;
   shares authorized--20,000,000;
   shares issued -- 7,398,677 in 1999 and 1998                740           740
  Capital contributed in excess of par value               44,928        44,928
  Retained earnings                                        46,089        38,552
  Treasury stock, at cost; 30,027 shares                     (180)         (180)
                                                       ----------    ----------
   TOTAL SHAREHOLDERS' EQUITY                              91,577        84,040
                                                       ----------    ----------
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $  217,777    $  229,768
                                                       ==========    ==========


The accompanying notes to consolidated financial statements are an
            integral part of these consolidated balance sheets.
                                    20



<PAGE>

                      AMREP CORPORATION AND SUBSIDIARIES
                      ----------------------------------

                      CONSOLIDATED STATEMENTS OF INCOME
                      ---------------------------------

               (Amounts in thousands, except per share amounts)

                                                    Year Ended April 30,
                                           -------------------------------------
                                              1999         1998          1997
                                           -----------  -----------   ----------
   REVENUES:
     Real estate operations-
      Home and condominium sales           $  90,947    $  79,730     $  68,647
      Land sales                              36,033       25,102        16,891
                                           ---------    ---------     ---------
                                             126,980      104,832        85,538

     Magazine circulation operations          57,354       56,939        54,152
     Interest and other operations             5,957        9,597         6,699
                                           ---------    ---------     ---------
                                             190,291      171,368       146,389
                                           ---------    ---------     ---------
   COSTS AND EXPENSES:
     Real estate cost of sales-
      Home and condominium sales              79,494       70,167        59,620
      Land sales                              21,869       12,493         9,798
     Operating expenses-
      Magazine circulation operations         48,181       43,835        43,966
      Real estate commissions and selling      7,689        7,424         6,850
      Other operations                         3,412        4,680         6,635
     General and administrative-
      Real estate operations and corporate     8,191        8,031         7,322
      Magazine circulation operations          6,408        6,657         6,428
     Interest, net                             4,743        4,404         4,050
     Restructuring costs                       2,108            -             -
                                           ---------    ---------     ---------
                                             182,095      157,691       144,669
                                           ---------    ---------     ---------
   INCOME BEFORE INCOME TAXES                  8,196       13,677         1,720

   PROVISION  (BENEFIT) FOR INCOME TAXES         659        5,471        (5,562)
                                           ---------    ---------     ---------
   NET INCOME                              $   7,537    $   8,206     $   7,282
                                           =========    =========     =========
   EARNINGS PER SHARE - BASIC AND DILUTED  $    1.02    $    1.11     $    0.99
                                           =========    =========     =========
   WEIGHTED AVERAGE NUMBER OF COMMON
      SHARES OUTSTANDING                       7,369        7,369         7,369
                                           =========    =========     =========

 The accompanying notes to consolidated financial statements are an
               integral part of these consolidated statements.
                                      21
<PAGE>






                      AMREP CORPORATION AND SUBSIDIARIES
                      ----------------------------------

               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
               -----------------------------------------------

                               (Amounts in thousands)



                                        Capital
                                       Contributed
                        Common Stock    In Excess             Treasury
                        ------------       of       Retained   Stock at
                      Shares  Amount    Par Value   Earnings     Cost     Total
                      ------ --------  ------------ -------- --------- --------


BALANCE, April 30,
   1996               7,399 $     740 $  44,928  $  23,064  $   (180)  $ 68,552

  Net income              -         -         -      7,282         -      7,282
                      ----- --------- ---------  ---------  --------   --------
BALANCE, April 30,
   1997               7,399       740    44,928     30,346      (180)    75,834

  Net income              -         -         -      8,206         -      8,206
                      ----- --------- ---------  ---------  ---------  --------
BALANCE, April 30,
   1998               7,399       740    44,928     38,552      (180)    84,040

  Net income              -         -         -      7,537         -      7,537
                      ----- --------- ---------  ---------  --------   --------
BALANCE, April 30,
   1999               7,399 $     740 $  44,928  $  46,089  $   (180)  $ 91,577
                      ===== ========= =========  =========  ========   ========



The accompanying notes to consolidated financial statements are an
               integral part of these consolidated statements.
                                      22


<PAGE>

                      AMREP CORPORATION AND SUBSIDIARIES
                      ----------------------------------

                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                    -------------------------------------

                             (Amounts in thousands)
                                                        Year Ended April 30,
                                                --------------------------------
                                                   1999         1998       1997
                                                ---------   ---------  --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                    $   7,537   $   8,206  $  7,282
  Adjustments to reconcile net income
   to net cash provided (used) by operating
   activities-
   Depreciation and amortization                    4,830       3,259     2,743
   Loss (gain) on disposition of property,            218      (1,298)        -
   plant and equipment
   Gain from exchange of real estate inventory          -           -      (579)
       for accounts payable
   Changes in assets and liabilities,
   excluding the effect of acquisition-
     Receivables - net                              3,847     (14,753)   (3,896)
     Real estate inventory                         10,181      (7,389)  (12,673)
     Other real estate investments                   (150)      3,396     3,318
     Other assets                                    (871)     (1,777)     (757)
    Accounts payable, deposits and accrued
      expenses                                     (3,019)     10,224       168
     Taxes payable                                 (5,352)      4,104    12,135
     Deferred income taxes                         (1,574)     (2,548)  (20,703)
                                                ---------   ---------  --------
      Net cash provided (used) by operating
        activities                                 15,647       1,424   (12,962)
                                                ---------   ---------  --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                             (3,305)     (1,998)   (3,900)
  Proceeds from disposition of property, plant
   and equipment                                      277       2,691         -
  Amount paid for acquisition                           -      (2,202)        -
                                                ---------   ---------  --------
      Net cash used by investing activities        (3,028)     (1,509)   (3,900)
                                                ---------   ---------  --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from debt financing                     61,647      55,212    66,225
  Principal debt payments                         (71,230)    (50,788)  (40,792)
      Net cash provided (used) by financing
        activities                                 (9,583)      4,424    25,433
                                                ---------   ---------  --------
INCREASE IN CASH AND CASH EQUIVALENTS               3,036       4,339     8,571

CASH AND CASH EQUIVALENTS, beginning of year       20,517      16,178     7,607
                                                ---------   ---------  --------
CASH AND CASH EQUIVALENTS, end of year          $  23,553   $  20,517  $ 16,178
                                                =========   =========  ========
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid - net of amounts capitalized    $   4,802   $   4,093  $  3,903
                                                =========   =========  ========
  Income taxes paid                             $   7,656   $   3,952  $  2,673
                                                =========   =========  ========

  Acquisition of real estate assets:
   Identifiable assets acquired                 $       -   $   1,168  $      -
   Excess of cost over net assets acquired              -       1,081         -
   Liabilities assumed                                  -         (47)        -
                                                ---------   ---------  --------
      Amount paid for acquisition               $       -   $   2,202  $      -
                                                =========   =========  ========


 The accompanying notes to consolidated financial statements are an
              integral part of these consolidated statements.
                                    23
<PAGE>



                      AMREP CORPORATION AND SUBSIDIARIES
                      ----------------------------------

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES:
      -------------------------------------------------------------------

      Principles of consolidation
      ---------------------------

The  consolidated   financial   statements   include  the  accounts  of  AMREP
Corporation ("Company"),  an Oklahoma corporation,  and its subsidiaries.  The
Company,  through  its  principal  subsidiaries,  is engaged in two  unrelated
businesses.  Kable News  Company,  Inc.  ("Kable")  operates  in the  magazine
distribution  and fulfillment  services  industries,  and AMREP Southwest Inc.
operates  predominately  in  the  real  estate  industry,  principally  in New
Mexico.  As more fully  discussed  in Note 2, the Company  implemented  a plan
during  fiscal 1999 to  wind-down a  significant  portion of its  homebuilding
operations  and close its real estate  operations in Colorado and  California,
and to  concentrate  its future  real  estate  activities  on  developing  and
marketing its land holdings at Rio Rancho, New Mexico.

The Company's  investments in partnerships  (and similar  entities),  in which
the  Company's  interest  is 50% or less,  or in which  the  Company  does not
effectively  control  the  joint  venture,  are  accounted  for by the  equity
method.  All  significant  intercompany  accounts and  transactions  have been
eliminated in consolidation.

The  consolidated  balance  sheets are  presented in an  unclassified  format,
since the Company has  substantial  operations in the real estate industry and
its operating cycle is greater than one year.

      Land sales
      ----------

Land  sales  are  recognized  when the  parties  are bound by the terms of the
contract,  all consideration  (including adequate cash) has been exchanged and
title and other  attributes  of ownership  have been  conveyed to the buyer by
means of a  closing.  Profit  is  recorded  either in its  entirety  or on the
installment  method  depending  upon,  among  other  things,  the  ability  to
estimate  the  collectibility  of the  unpaid  sales  price.  In the event the
buyer defaults on the  obligation,  the property is taken back and recorded as
inventory at the unpaid receivable  balance,  net of any deferred profit,  but
not in excess of fair market value less estimated costs to sell.

      Home and condominium sales
      --------------------------

Sales of homes and  condominiums and related costs and expenses are recognized
when title and other  attributes of ownership  have been conveyed to the buyer
by means of a closing.

      Magazine circulation operations
      -------------------------------

Revenues  from  magazine  circulation  operations  include  revenues  from the
distribution  of  periodicals   and   subscription   fulfillment   activities.
Distribution  revenues  represent  commissions earned from the distribution of
publications  for  client  publishers  which  are  recorded  at the  time  the
publications  go on  sale.  The  publications  generally  are  sold on a fully
returnable  basis,  which is in accordance  with  prevailing  trade  practice,
accordingly,  the Company provides for estimated  returns by charges to income
which  are  based  on  experience.   Revenues  from  subscription  fulfillment
activities  represent  fees earned from the  maintenance of computer files for
customers,  which  are  billed  and  earned  monthly,  and  other  fulfillment
activities including sweepstakes mail processing,  customer telephone support,
product fulfillment,  and graphic arts and lettershop  services,  all of which
are billed and earned as the services are provided.



                                   24

<PAGE>


      Cash and cash equivalents
      -------------------------

Cash equivalents  consist of short term, highly liquid  investments which have
an original maturity of ninety days or less, and that are readily  convertible
into cash.

      Real estate inventory
      ---------------------

Land and  improvements  for completed real estate  projects,  as well as those
held for future  development  or sale,  are stated at the lower of accumulated
cost (except in certain  instances  where property is repossessed as discussed
above under  "Land  sales")  which  includes  the  development  cost,  certain
amenities,  capitalized  interest and  capitalized  real estate taxes, or fair
market value less estimated costs to sell.

Homes and  condominiums  completed  or under  construction  are  stated at the
lower  of  accumulated  cost,  including  interest  costs  capitalized  during
construction, or fair market value less estimated costs to sell.

      Property, plant and equipment
      -----------------------------

Items  capitalized  as part of property,  plant and  equipment are recorded at
cost.  Expenditures  for maintenance and repair and minor renewals are charged
to expense as incurred,  while those  expenditures which improve or extend the
useful  life  of  existing  assets  are   capitalized.   Upon  sale  or  other
disposition of assets, their cost and the related accumulated  depreciation or
amortization  are removed from the accounts and the resulting gain or loss, if
any, is reflected in operations.

Depreciation  and  amortization of property,  plant and equipment are provided
principally  by the  straight-line  method  at  various  rates  calculated  to
amortize the book values of the respective  assets over their estimated useful
lives which range from 5 to 50 years for utility  plant and equipment and 3 to
40 years for all other property, plant and equipment.

      Excess of cost of subsidiaries over net assets acquired
      -------------------------------------------------------

The excess of amounts paid for business  acquisitions  over the net fair value
of the assets acquired and liabilities  assumed  ("goodwill") is carried as an
asset.  Goodwill of $5,191,000  arose in connection  with the  acquisition  of
Kable  during  1969 and is not  being  amortized  to  operations,  since  this
acquisition  was made prior to the  effective  date of APB  Opinion No. 17 and
management is of the opinion that there has been no  diminution  of value.  An
additional  $1,149,000 of goodwill arose in connection with the acquisition of
certain real estate  assets  during  1998,  and was being  amortized  over ten
years.  Amortization  expense  was  $86,000 in 1999 and  $68,000  in 1998.  As
discussed in Note 2, during the fourth  quarter of 1999 the Company  wrote-off
the remaining  balance of this portion of the goodwill in connection  with the
restructuring of its real estate operations.

      Income taxes
      ------------

Income taxes are accounted for in  accordance  with SFAS No. 109,  "Accounting
for Income  Taxes".  Under SFAS No. 109,  deferred tax assets and  liabilities
are determined based on differences  between financial reporting and tax bases
of  assets  and  liabilities,  and are  measured  by using  enacted  tax rates
expected to apply to taxable  income in the years in which  those  differences
are expected to reverse.

      Earnings per share
      ------------------

Basic  earnings  per share is based on the weighted  average  number of common
shares  outstanding  during each year.  Diluted earnings per share is computed
assuming  the  issuance  of  common  shares  for all  dilutive  stock  options
outstanding (using the treasury stock method) during the reporting period.

                                   25
<PAGE>



      Stock options
      -------------

The Company  accounts for stock option  grants in accordance  with  Accounting
Principles  Board Opinion No. 25,  "Accounting for Stock Issued to Employees".
The  Company  has  adopted  the  disclosure-only  provisions  of SFAS No.  123
"Accounting for Stock-Based Compensation" (see Note 9).

      Management's estimates and assumptions
      --------------------------------------

The  preparation  of  consolidated  financial  statements in  conformity  with
generally  accepted   accounting   principles   requires  management  to  make
estimates and  assumptions  that affect the amounts  reported in the financial
statements  and  accompanying  notes.  Actual  results could differ from those
estimates.

      Accounting pronouncements adopted
      ---------------------------------

In June  1997,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  of Financial  Accounting  Standards  ("SFAS")  No. 130,  "Reporting
Comprehensive  Income"  ("SFAS No.  130"),  which  establishes  standards  for
reporting  and  presentation  of  comprehensive   income  and  its  components
(revenues,  expenses,  gains  and  losses)  in a full  set of  general-purpose
financial  statements.  The Company  adopted SFAS No. 130 in fiscal year 1999.
The only component of  comprehensive in income that applies to the Company for
1999,  1998, and 1997 is earnings as reported in the  consolidated  statements
of income.

In February 1998, the FASB issued SFAS No. 132, "Employers'  Disclosures about
Pensions and Other  Post-Retirement  Benefits" ("SFAS No. 132"), which revises
employers'  disclosures  about  pension  and  other  post-retirement   benefit
plans.  The Statement is effective for fiscal years  beginning  after December
15,  1997.  The Company  adopted  SFAS No. 132 in fiscal  1999.  Prior  period
disclosures have been presented in accordance with SFAS No. 132 (see Note 9).

In June 1997, the FASB issued SFAS No. 131,  "Disclosure  about Segments of an
Enterprise  and Related  Information"  ("SFAS No 131"),  which changes the way
public companies report  information about operating  segments.  SFAS No. 131,
which is based on the management  approach to segment  reporting,  establishes
requirements to report selected segment information  quarterly,  and to report
entity-wide disclosures about products and services,  major customers, and the
material  countries  in which the entity  holds  assets and reports  revenues.
The Company  adopted  SFAS No. 131 in fiscal  1999.  Prior  periods  have been
restated and presented in accordance with SFAS No. 131 (see Note 14).

      New accounting pronouncements
      -----------------------------

In June  1998,  the FASB  issued  SFAS No.  133,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities"  ("SFAS No.  133"),  which  establishes
accounting  and reporting  standards  for  derivative  instruments,  including
certain  derivative  instruments  embedded in other  contracts,  (collectively
referred to as  derivatives)  and for hedging  activities.  The  Statement  is
effective  for fiscal years  beginning  after June 15, 2000.  The Company will
adopt SFAS No. 133 in fiscal  2001.  The Company  expects the adoption of SFAS
No.  133  will  not  have a  material  impact  on its  consolidated  financial
statements.

      Financial statement presentation
      --------------------------------

Certain prior year amounts in the consolidated  financial statements have been
reclassified to conform with the 1999 presentation.



                                   26
<PAGE>

(2)   RESTRUCTURING COSTS:
      --------------------

During the fourth  quarter of fiscal 1999,  the Company  implemented a plan to
wind-down a significant  portion of its homebuilding  operations,  to sell all
of its land holdings in Colorado and  California,  and to concentrate its real
estate  activities  on  developing  and  marketing  its land  holdings  at Rio
Rancho,    New   Mexico.    As   a   result,    the   Company   has   incurred
restructuring-related   charges  of  approximately  $1.1  million,   including
severance and lease  termination  payments,  and has  written-off  unamortized
goodwill and acquisition-related  costs of approximately $1.0 million incurred
in  connection   with  its  acquisition  of  certain  real  estate  assets  in
California,  since, as a result of this decision,  the Company's operations in
California will be substantially  curtailed.  The restructuring  plan includes
the termination of  approximately  130 employees with related  severence costs
of  $800,000;  as of April 30,  1999,  44 employees  had been  terminated  and
severence  costs of  $240,000  had been paid.  In  addition,  the  Company has
written-off   approximately   $1.2  million  related  to  deposits  and  other
project-related  inventory  costs  which  have  been  abandoned  or  otherwise
disposed of in  connection  with this business  restructuring,  which has been
charged to cost of sales.  The  Company's  decision  to change its real estate
focus to emphasize  land  development  operations  in New Mexico and wind-down
homebuilding  operations  is  not  considered  to  be a  permanent  change  of
strategy.  Accordingly,  because of these  factors  and  because  the  Company
intends to continue homebuilding  operations in Portland,  Oregon, the Company
has  presented  the  results of  operations  for  homebuilding  in  continuing
operations.

(3)   RECEIVABLES:
      -----------

Receivables consist of:                         April 30,
                                        -----------------------
                                           1999          1998
                                        ---------     ---------
                                               (Thousands)
Real estate operations-
  Mortgage and other receivables        $  11,101     $  11,398
  Allowance for doubtful accounts            (255)         (291)
                                        ---------     ---------
                                        $  10,846     $  11,107
                                        =========     =========
Magazine circulation operations-
  Accounts receivable (maturing within
   one year)                            $  98,179     $ 109,303
  Allowances for-
   Estimated returns                      (37,958)      (50,392)
   Doubtful accounts                       (6,399)       (1,503)
                                        ---------     ---------
                                        $  53,822     $  57,408
                                        =========     =========

Mortgage and other  receivables  bear  interest at rates  ranging from 8.0% to
12.0% and result primarily from land sales.  Magazine  circulation  operations
receivables  collateralize a general purpose  line-of-credit  utilized for the
magazine circulation operations (see Note 8).

The  Company  extends  credit to  various  companies  in the real  estate  and
magazine  circulation  industries which may be affected by changes in economic
or other  external  conditions.  Financial  instruments  that may  potentially
subject the Company to a significant  concentration of risk primarily  consist
of trade accounts  receivable  from  wholesalers in the magazine  distribution
industry.  As industry  practices allow, the Company's policy is to manage its
exposure  to credit  risk  through  credit  approvals  and limits  and,  where
appropriate,  to be secured by  collateral,  and to provide an  allowance  for
doubtful  accounts for  potential  losses based upon factors  surrounding  the
credit  risk of  specific  customers,  historical  trends and other  financial
information.  During 1999, Kable determined that certain wholesaler  customers
had  been  impacted  by  an  industry   consolidation  and  were  encountering
financial difficulties and, accordingly,  provided an additional allowance for
doubtful accounts of approximately $5.0 million.

Maturities of principal on real estate  receivables,  at April 30, 1999 are as
follows  (in  thousands):  2000 - $7,294;  2001 - $2,241;  2002 - $71;  2003 -
$103; 2004 - $480; 2005 and thereafter - $912.



                                   27
<PAGE>


(4)  REAL ESTATE INVENTORY:
     ----------------------

Real estate inventory consists of:
                                                        April 30,
                                                  ----------------------
                                                     1999        1998
                                                  ---------    ---------
                                                       (Thousands)
Land and improvements held for sale or
 development                                      $  58,571    $  61,416

Homes and condominiums-
 Land and improvements                               15,678       17,460
 Construction costs                                  15,474       21,028
                                                  ---------    ---------
                                                  $  89,723    $  99,904
                                                  =========    =========

Accumulated  capitalized  interest costs included in real estate  inventory at
April  30,  1999  and  1998  were  $4,553,000  and  $5,732,000,  respectively.
Interest  costs  capitalized  during  1999,  1998  and 1997  were  $3,348,000,
$3,226,000 and $2,543,000,  respectively.  Accumulated capitalized real estate
taxes  included in the  inventory of land and  improvements  at April 30, 1999
and 1998 were  $5,467,000  and  $5,635,000,  respectively.  Real estate  taxes
capitalized  during 1999, 1998 and 1997 were $217,000,  $165,000 and $157,000,
respectively.  Previously  capitalized  interest  costs and real estate  taxes
charged  to  real  estate  cost  of  sales  were  $4,903,000,  $2,726,000  and
$1,741,000 in 1999, 1998 and 1997, respectively.

As a result  of the  restructuring  discussed  in Note 2, the  Company's  real
estate   assets   will  be   substantially   all   located   in  New   Mexico.
Accordingly,  as a result of this geographic concentration,  the Company could
be affected by the economic conditions of this region.

(5)   OTHER REAL ESTATE INVESTMENTS:
      -----------------------------

Investments in other real estate projects principally consist of the
following:

                                                         April 30,
                                                   ---------------------
                                                     1999         1998
                                                   ---------   ---------
                                                        (Thousands)

Unconsolidated joint ventures                      $   2,401   $   1,520
Consolidated joint venture                                 -         731
                                                   ---------   ---------
                                                   $   2,401   $   2,251
                                                   =========   =========


                                   28
<PAGE>


      Unconsolidated Joint Ventures
      -----------------------------

The Company  participates  in a number of joint  ventures in which it does not
have  management  control.  These joint ventures are primarily  engaged in the
development,   construction   and  sale  of   single-family   or  multi-family
residential  properties.  Combined condensed financial information  concerning
the Company's unconsolidated joint venture activities follows (in thousands):

                                                         April 30,
                                                   ---------------------
                                                     1999         1998
                                                   ---------   ---------
                                                        (Thousands)

Cash                                               $     612   $      83
Receivables and other assets                             700       1,090
Inventories                                           21,892       9,260
                                                   ---------   ---------
        Total Assets                               $  23,204   $  10,433
                                                   =========   =========

Mortgages and notes payable                        $  13,859   $   3,789
Other liabilities                                      3,122         755
Equity of:
   The Company                                         2,401       1,520
   Others                                              3,822       4,369
                                                   ---------   ---------
        Total Liabilities and Equity               $  23,204   $  10,433
                                                   =========   =========

The joint ventures finance land and inventory  investments primarily through a
variety  of  borrowing   arrangements.   A  subsidiary   of  the  Company  has
guaranteed  these  mortgages  payable,  as well as an  additional  $600,000 of
mortgage debt on a project where it is a non-equity participant.

                                                   Year Ended April 30,
                                                  ----------------------
                                                     1999        1998
                                                  ---------    ---------
                                                       (Thousands)

Revenues                                          $  12,346    $   5,729
Cost of sales                                        12,532        5,680
Other expenses - net                                  1,120          472
                                                  ---------    ---------
      Total pretax loss                           $  (1,306)   $    (423)
                                                  =========    =========
       The Company's share of pretax loss         $    (220)   $    (100)
                                                  =========    =========

The  Company's  share of pretax  loss  includes  management  fees  earned from
unconsolidated  joint  ventures.  Also,  as  discussed  in Note 2, the Company
wrote-off  approximately  $1.0 million of goodwill  related to these and other
real estate projects in California.

                                    29

<PAGE>



(6)   PROPERTY, PLANT AND EQUIPMENT:
      ------------------------------

Property, plant and equipment consists of:
                                               April 30,
                                        ----------------------
                                           1999         1998
                                        ---------    ---------
                                              (Thousands)

Land, buildings and improvements        $  10,753    $   9,705
Furniture and fixtures                     12,309       11,594
Utility plant and equipment                 9,061        8,645
Other                                         680          974
                                        ---------    ---------
                                           32,803       30,918
Accumulated depreciation and
  amortization                            (14,443)     (13,260)
                                        ---------    ---------
                                        $  18,360    $  17,658
                                        =========    =========

Depreciation  charged to operations  amounted to  $2,109,000,  $1,940,000  and
$1,816,000 in 1999, 1998 and 1997, respectively.

(7)   OTHER ASSETS:
      -------------

Other assets are comprised of:
                                               April 30,
                                        ----------------------
                                           1999         1998
                                        ---------    ---------
                                              (Thousands)

Prepaid expenses and other deferred     $   7,230    $   7,053
charges, net
Purchased magazine distribution
contracts,
  net of accumulated amortization of        1,818        2,246
  $2,461 and $2,033 in 1999 and 1998,
  respectively
Security and other deposits                 2,445        3,795
Prepaid pension                             1,459          949
Other                                         929          676
                                        ---------    ---------
                                        $  13,881    $  14,719
                                        =========    =========

Amortization  related to  deferred  charges  and  distribution  contracts  was
$1,622,000,  $1,251,000 and $913,000 for the years ended April 30, 1999,  1998
and 1997, respectively.

(8)   DEBT FINANCING:
      ---------------

Debt financing consists of:
                                                April 30,
                                          ---------------------
                                            1999         1998
                                          ---------    --------
                                               (Thousands)
Notes payable -
  Line-of-credit borrowings -
   Real estate operations and other       $  20,490    $  24,659
   Magazine circulation operations           35,873       35,552
  Mortgages and other notes payable          17,560       22,923
  Other                                         742        1,114
                                          ---------    ---------
                                          $  74,665    $  84,248
                                          =========    =========

Maturities of principal on notes payable at April 30, 1999 are as follows (in
thousands):  2000 - $26,769; 2001 - $39,803; 2002 - $5,816; 2003 - $353; 2004
-  $135; 2005  and thereafter - $1,789.



                                   30
<PAGE>


      Line-of-credit borrowings
      -------------------------

The Company has several loan arrangements with various financial  institutions
to support real estate  operations.  These loans have a total  maximum  amount
available of approximately  $27.2 million of which borrowings of approximately
$20.5 million were outstanding as of April 30, 1999. These  borrowings,  which
have  maturities  ranging from fiscal 2000 through fiscal 2002,  bear interest
ranging  from the prime  rate  (7.75% at April  30,  1999)  plus .75% to 1.75%
(with a weighted average  effective rate of interest of approximately  8.6% at
April 30,  1999),  are  collateralized  by certain real estate  assets and are
subject to certain  financial  performance and other covenants.  The president
of one of the  Company's  subsidiaries,  who is also a member  of the Board of
Directors of the Company,  serves as a member of the board of directors of the
financial  institution  from which $18 million of these  lines-of-credit  were
obtained.

At April 30, 1999, the Company had drawn  approximately  $35.9 million against
an additional  $40.0  million  line-of-credit  arrangement  which is generally
restricted  to  magazine   circulation   operations.   Borrowings  under  this
line-of-credit  agreement  bear interest at the prime rate plus .5% or, at the
Company's  option,  at LIBOR  (5.0% at April 30,  1999)  plus  2.75%,  and are
collateralized  by  accounts  receivable  arising  from  magazine  circulation
operations.  This agreement also contains  various  financial  performance and
other restrictive  covenants which,  among other things,  limit the payment of
dividends,   annual   capital   expenditures   and  loans  from  the  magazine
circulation  subsidiary to the Company. The Company was not in compliance with
a  performance  covenant  on one  loan at April  30,  1999,  for  which it has
obtained a waiver.  Borrowings pursuant to this  line-of-credit  agreement are
due August 31, 2000.

As a result of the restructuring of real estate  operations  discussed in Note
2, the Company anticipates that its real estate borrowing requirements,  which
had been used principally to support  construction  activities,  will decline.
The Company  anticipates the ability to renew,  extend or replace any of these
loan agreements as needed.

      Mortgages and other notes payable
      ---------------------------------

Mortgages  and other notes  payable had  interest  rates  ranging from 6.4% to
11.5% at April 30, 1999, and are primarily  collateralized by property,  plant
and equipment and certain land  inventory.  These  borrowings  mature  through
fiscal 2013.

(9)   BENEFIT PLANS:
      --------------

      Stock option plans
      ------------------

Under the Company's  1992 Stock Option Plan,  311,750  shares are reserved for
issuance to officers and other key  employees.  Options may be granted in such
amounts,  at such times,  and with such  exercise  prices as the stock  option
committee may determine.  The  Non-Employee  Directors  Option Plan has 40,500
shares  reserved  for  issuance  and  provides  for an  automatic  issuance of
options to purchase 500 shares of common stock to each  non-employee  director
annually  at the fair  market  value at the date of  grant.  The  options  are
exercisable  in one year and  expire  five  years  after the date of grant.  A
summary of activity in the Company's stock option plans is as follows:


                                   31
<PAGE>


                                          Year Ended April 30,
                      ---------------------------------------------------------
                              1999                  1998                 1997
                      ---------------------------------------------------------
                                 Weighted          Weighted           Weighted
                        Number    Average  Number   Average   Number   Average
                         of      Exercise   of     Exercise    of     Exercise
                        Shares     Price   Shares    Price    Shares    Price
                       -------   -------- --------  ------   -------  -------
Options outstanding
 at beginning of year   50,500   $  6.18   85,500   $ 7.40   121,000  $ 7.13

Granted                  2,500   $  7.75   42,500   $ 6.09     3,500  $ 5.19

Expired or canceled     (9,500)  $  6.50  (77,500)  $ 7.48   (39,000) $ 6.38
                       -------            -------            -------
Options outstanding
 at end of year         43,500   $  6.20   50,500   $ 6.18    85,500  $7.40
                       =======            =======            =======
Available for grant
 at end of year        308,750            303,250            272,250
                       =======            =======            =======

Options exercisable
 at end of year         18,417              8,000             80,500
                       =======            =======            =======

Range of exercise
 prices for options
 exercisable at end
 of year            $5.19 to $7.50      $5.19 to $8.88     $5.12 to $8.88
                    ==============      ==============     ===============

Options  outstanding  at April 30, 1999 are  exercisable  over a three to four
year period  beginning one year from date of grant.  The weighted average fair
value of options  granted during the year was $2.32 in 1999,  $.79 in 1998 and
$.24 in 1997.  The  weighted  average  remaining  contractual  life of options
outstanding  at  April  30,  1999,  1998 and  1997 is 2.4,  3.2 and .4  years,
respectively.

Stock  options  granted  have  been  issued  at the fair  market  value of the
Company's stock at the date of grant.  Accordingly,  no  compensation  expense
has been  recognized  with respect to the stock  option  plans.  Further,  the
amount  of  additional  compensation  disclosable  under  the  disclosure-only
provisions of SFAS No. 123 is immaterial for all periods presented.

      Savings plans
      -------------

The Company has two savings  plans to which the Company  makes  contributions.
The plans were amended  during 1998 to provide for standard  contributions  of
33.3% of eligible  employees' defined  contributions up to a maximum of 2% of
such employees'  compensation.  Additional amounts may be contributed with the
approval of the Company' Board of Directors.  The Company's  contributions to
the plans amounted to approximately $216,000,  $268,000 and $129,000, in 1999,
1998 and 1997, respectively.

      Retirement plans
      ----------------

The Company has two retirement plans which cover  substantially  all full-time
employees.  In 1999, 1998 and 1997, the Company contributed $12,000,  $231,000
and  $1,190,000,   respectively,   to  the  plans.  During  fiscal  1998,  the
Company's  pension  plans were  amended to revise the form of benefit  payment
determination  from that of a defined  benefit plan formula  based upon length
of service and a percentage  of  qualifying  compensation  to one based upon a
percentage of the employee's annual salary.  Assets are invested  primarily in
United  States  Treasury  obligations,  equity and debt  securities  and money
market  funds.  Net  periodic  pension  cost  for  1999,  1998  and  1997  was
comprised of the following components:


                                   32
<PAGE>



                                        Year Ended April 30,
                               ------------------------------------
                                  1999          1998         1997
                               ---------     ---------    ---------
                                             (Thousands)
Service cost - benefits
  earned during the period     $     645     $     994    $   1,156
Interest cost on projected
  benefit obligation               1,617         1,717        1,722
Expected return on assets         (2,385)       (2,006)      (1,885)
Amortization of prior service
  cost                              (352)         (121)        (121)
Recognized net actuarial gain
  (loss)                             (12)            -            -
                               ---------     ---------    ---------
Net periodic pension cost
 (income)                      $    (487)    $     584    $     872
                               =========     =========    =========

Assumptions used in determining net periodic pension cost were:

                                         Year Ended April 30,
                               ------------------------------------------
                                   1999          1998           1997
                               -------------  ------------  -------------

Discount rates                     7.25%          7.25%         8.00%
Rates of increase in
  compensation levels               N/A            N/A       4.50-5.00%
Expected long-term rate of
  return on assets              8.00-9.00%     8.00-9.00%    8.00-9.00%


The following  table sets forth changes in the plans' benefit  obligations and
assets,  and  summarizes  components  of amounts  recognized  in the Company's
consolidated balance sheets:

                                                     April 30,
                                               --------------------
                                                 1999        1998
                                               -------     --------
                                                    (Thousands)
Change in benefit obligations:
   Benefit obligation at beginning of year     $ 22,471    $ 23,729
   Service cost                                     495         887
   Interest cost                                  1,617       1,716
   Amendments                                         -      (3,852)
   Actuarial gain                                   310       1,147
   Benefits paid                                 (1,252)     (1,156)
                                               --------    --------
Benefit obligation at end of year              $ 23,641    $ 22,471
                                               ========    ========
Change in plan assets:
   Fair value of plan assets at
     beginning of year                         $ 27,133    $ 23,283
   Actual return on plan assets                   2,416       5,094
   Employer contribution                             12         231
   Benefits paid                                 (1,252)     (1,156)
   Expenses                                        (241)       (319)
                                               --------    --------
Fair value of plan assets at end of year       $ 28,068    $ 27,133
                                               ========    ========

Funded status                                  $  4,427    $  4,662
Unrecognized net actuarial loss                     407          14
Unrecognized prior service cost                  (3,375)     (3,727)
                                               --------    --------
Prepaid pension cost                           $  1,459    $    949
                                               ========    ========




                                   33
<PAGE>

(10)    INCOME TAXES:

The provision (benefit) for income taxes consists of the following:
                                               Year Ended April 30,
                                       -----------------------------------
                                         1999          1998         1997
                                       --------     ---------    ---------
                                                    (Thousands)
Current:
  Federal                              $   1,946    $   6,925    $  13,187
  State and local                            286        1,094        1,954
                                       ---------    ---------    ---------
                                           2,232        8,019       15,141
                                       ---------    ---------    ---------
Deferred:
  Federal                                 (1,397)      (2,177)     (18,753)
  State and local                           (176)        (371)      (1,950)
                                       ---------    ---------    ---------
                                          (1,573)      (2,548)     (20,703)
                                       ---------    ---------    ---------
Total provision (benefit) for income
taxes                                  $     659    $   5,471    $  (5,562)
                                       =========    =========    =========

The components of the net deferred income tax liability are as follows:
                                                       April 30,
                                               ------------------------
                                                  1999           1998
                                               ---------      ---------
                                                      (Thousands)
Deferred income tax assets-
   State tax loss carryforwards                $   4,433      $   4,716
   Real estate inventory valuation                   964          1,127
   Interest payable on tax settlements             2,229          2,229
   Real estate basis differences                   1,528            508
   Reserve for periodicals and paperbacks              -            596
   Differences related to timing of                1,120            871
 partnership income
                                               ---------      ---------
   Total deferred income tax assets               10,274         10,047
                                               ---------      ---------

Deferred income tax liabilities-
   Reserve for periodicals and paperbacks         (1,329)             -
   Gain on partnership restructuring                (473)          (473)
   Depreciable assets                             (2,684)        (2,563)
   Expenses capitalized for financial
     reporting purposes, expensed for tax         (2,399)        (2,518)
   Other                                            (519)        (2,976)
                                               ---------      ---------
   Total deferred income tax liabilities          (7,404)        (8,530)
                                               ---------      ---------
   Valuation allowance for realization of
     state tax loss carryforwards                 (3,885)        (4,106)
                                               ---------      ---------
 Net deferred income tax liability             $  (1,015)     $  (2,589)
                                               =========      =========


                                   34
<PAGE>


The following table reconciles  taxes computed at the U.S.  federal  statutory
income tax rate to the Company's actual tax provision (benefit):

                                              Year Ended April 30,
                                     ------------------------------------
                                        1999          1998          1997
                                     ---------     ---------    ---------
                                                   (Thousands)
Computed tax provision at
 statutory rate                      $   2,787     $   4,787    $     585
Increase (reduction) in tax
 resulting from:
   State income taxes, net of federal
     income tax effect                     491           809          117
   Net reduction in tax liability
     as a result of IRS settlement      (2,401)            -       (6,250)
   Other                                  (218)         (125)         (14)
                                     ---------     ---------    ---------
Actual tax provision (benefit)       $     659     $   5,471    $  (5,562)
                                     =========     =========    =========

During  1997,  the Company  reached an  agreement  with the  Internal  Revenue
Service  ("IRS")  to  resolve  all  outstanding  issues  related  to the IRS's
examination  of the  Company's tax returns for the years 1984 through 1989. As
a result,  the Company recorded a net reduction in its previously  established
tax  liability  in the amount of $6.25  million to reflect a reduction  in the
amount  ultimately  expected to be payable in order to achieve a tax treatment
consistent  with  the  1997  agreement  for all  subsequent  tax  years  under
examination  (1990 through 1996) and to reflect a reduction in federal  income
tax rates for  deferred  taxes  established  at rates in effect prior to 1987.
During  1999,  the Company  reached an  agreement  with the IRS to resolve all
outstanding  issues  resulting from the  examination of tax years 1990 through
1992,  and paid all  federal tax due for those  years.  Based upon the results
of this  agreement,  which  resulted in an amount of tax payable less than the
Company had  believed  would be  required,  the Company  reduced the amount of
Taxes Payable - Amounts  subsequently  due by an additional $2.4 million.  The
examinations  for the  years  1993  through  1996  are in  various  stages  of
completion,  and the exact  amount of taxes and interest  attributable  to any
given  tax year will only be known and  payable  after the IRS  completes  its
review and computes the amount of the adjustment  (including interest due) for
each year.  For tax years  beginning in 1996,  the Company  believes  that its
taxes have been calculated in a manner  consistent with IRS regulations and in
the  manner in which tax  examinations  for all years 1984  through  1992 have
been  completed,  and  accordingly,  the Company  believes that the balance of
Taxes  Payable  - amounts  subsequently  due at April 30,  1999  reflects  all
amounts that will be due to the IRS upon settlement all open tax examinations.


(11)  COMMITMENTS AND CONTINGENCIES:
      ------------------------------

      Revenue agent review
      --------------------

The IRS is in the  process of  reviewing  the  Company's  tax  returns for the
years 1993 through 1996.  While the Company  cannot be totally  certain of the
results of these audits,  in 1997 it adjusted  Deferred Income Taxes and Taxes
Payable,  as  discussed  in Note 10, to reflect  adjustments  similar to those
agreed upon with the IRS in reaching  agreement  on the 1984  through 1989 tax
returns with regard to the reserve for periodicals and paperbacks.



                                   35
<PAGE>


      Land sale contracts
      -------------------

During 1999, the Company entered into  conditional  sales contracts to sell to
several  builders  a total of  approximately  2,100  lots in Rio  Rancho,  New
Mexico at an aggregate cost of  approximately  $44.4  million.  A total of 646
of these lots were sold  pursuant to such  contracts at a total sales price of
$15.8  million  during  1999.  The  remainder of the lots are  anticipated  to
close over the next two years,  during which time the Company expects to incur
substantial   additional  development  costs.  Since  each  of  the  contracts
permits  the  purchaser  to  terminate  its  obligations  by  forfeiture  of a
relatively  modest  deposit,  there  are no  assurances  that  all,  or even a
substantial  portion,  of the  lots  subject  to the  contracts  will  be sold
pursuant to the contracts.

      Noncancellable leases
      ---------------------

The Company is obligated under long-term  noncancellable  leases for equipment
and various real estate  properties.  Certain real estate leases  provide that
the Company will pay for taxes,  maintenance  and insurance  costs and include
renewal  options.  Rental  expense for 1999,  1998 and 1997 was  approximately
$5,477,000, $5,195,000 and $5,215,000, respectively.

The approximate  minimum rental  commitments for years subsequent to April 30,
1999,  are as follows (in  thousands):  2000 - $3,145;  2001 - $2,838;  2002 -
$2,197; 2003 - $1,696; 2004 - $1,004;  thereafter - $463; and the total future
minimum rental payments - $11,343.

      Rio Rancho lot exchanges
      ------------------------

In connection  with homesite  sales at Rio Rancho,  New Mexico,  made prior to
1977,  if water,  electric and  telephone  utilities  have not reached the lot
site when a purchaser  is ready to build a home,  the Company is  obligated to
exchange a lot in an area then  serviced  by such  utilities  for a lot of the
purchaser,  without  cost  to  the  purchaser.  The  Company  does  not  incur
significant costs related to the exchange of lots.

(12)  LITIGATION:
      -----------

The Company and/or its  subsidiaries  are involved in various claims and legal
actions  incident to their  operations,  which in the  opinion of  management,
based upon  advice of counsel,  will not  materially  affect the  consolidated
financial   position  or  results  of   operations  of  the  Company  and  its
subsidiaries.

(13)  FAIR VALUE OF FINANCIAL INSTRUMENTS:
      ------------------------------------

The estimated  fair value of financial  instruments is determined by reference
to various  market data and other  valuation  techniques as  appropriate.  The
carrying amounts of cash and cash  equivalents and trade payables  approximate
fair  value  because of the short  maturity  of these  financial  instruments.
Debt  that  bears  variable  interest  rates  indexed  to prime or LIBOR  also
approximates  fair value as it reprices when market  interest  rates  changes.
The  estimated  fair value of the  Company's  long-term,  fixed-rate  mortgage
receivables  is $8.8 million,  versus a carrying  amount of $8.7 million,  and
$7.4 million  versus $7.5 million,  respectively,  at April 30, 1999 and April
30, 1998.  The  estimated  fair value of the Company's  long-term,  fixed-rate
notes  payable is $15.0 million  versus a carrying  amount of $15.1 million as
of April 30, 1999 and $15.8  million,  which equals the carrying  amount as of
April 30, 1998.



                                   36
<PAGE>

(14)  INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT
      -------------------------------------------------------
      INDUSTRY SEGMENTS:
      ------------------

The Company  adopted SFAS No. 131 during 1999,  which  requires  that industry
segment  information  be  prepared on a manner  consistent  with the manner in
which  financial  information  is prepared  and  evaluated by  management  for
making operating  decisions in place of the "industry  segment"  approach used
previously.  As a result,  the Company has  identified  four segments in which
it operates under the definition  established by this standard.  The Company's
real estate subsidiary has two identified  segments,  Land Sale operations and
Homebuilding  operations.  Land  Sale  operations  involve  the  obtaining  of
approvals,  and  development  of large  tracts  of land for sale to  builders,
commercial  users  and  others,   and  Homebuilding   operations  involve  the
construction  and sale of  single-family  homes and other  projects.  Magazine
circulation  operations  also has two identified  segments,  Distribution  and
Fulfillment  operations.  Distribution  operations  involve the  national  and
international   distribution   and  sale  of  periodicals  and  paperbacks  to
wholesalers,   and   Fulfillment   operations   involve  the   performance  of
subscription  and product  fulfillment and other related  activities on behalf
of various  publishers  and other clients.  Corporate and other  miscellaneous
revenues  and expenses not  identifiable  with a specific  segment are grouped
together in this  presentation.  Certain expenses are allocated among industry
segments based upon management's estimate of each segment's absorption.

Identifiable  assets  by  industry  are  those  assets  that  are  used in the
Company's  operations  in each  industry  segment,  which  also is based  upon
certain estimates and allocations among segments.

Segment  information  from prior years prepared in conformity with SFAS No. 14
has been restated to conform to the provisions of SFAS no. 131.



                                   37
<PAGE>

The following schedules set forth summarized data relative to the industry
segments:

<TABLE>
                        Land         Home                                   Corporate
                        Sales        Building    Distribution  Fulfillment  and Other   Consolidated
                        ---------    ---------   ------------  -----------  ---------  -------------

1999 (Thousands):
<S>                     <C>          <C>         <C>           <C>          <C>         <C>
  Revenues              $  37,182    $  92,637   $  20,377     $ 36,977     $  3,118    $ 190,291
  Operating expenses       25,292       91,151      19,103       35,486        4,212      175,244
  Restructuring costs           -        2,108           -            -            -        2,108
  Interest expense, net       619        1,394       1,954          731           45        4,743
                        ---------    ---------   ---------     --------     --------    ---------
  Pretax income(loss)
    contribution        $  11,271    $  (2,016)  $    (680)    $    760     $ (1,139)   $   8,196
                        =========    =========   =========     ========     ========    =========
  Depreciation and
    amortization        $     362    $   1,857   $     891     $  1,512     $    208    $   4,830
  Identifiable assets   $  64,814    $  55,310   $  61,791     $ 18,528     $ 17,334    $ 217,777
  Capital expenditures  $   1,043    $     679   $     168     $    970     $    445    $   3,305

-----------------------------------------------------------------------------------------------------

1998 (Thousands):
  Revenues              $  25,821    $  80,461   $  18,322     $ 38,617     $  8,147    $ 171,368
  Operating expenses       15,656       80,200      14,358       36,134        6,939      153,287
  Interest expense, net       433        1,121       1,907          827          116        4,404
                        ---------    ---------   ---------     --------     --------    ---------
  Pretax income (loss)
    contribution        $   9,732    $    (860)  $   2,057     $  1,656     $  1,092    $  13,677
                        =========    =========   =========     ========     ========    =========
  Depreciation and
   amortization         $     261    $     610   $     996     $  1,051     $    341    $   3,259
  Identifiable assets   $  75,373    $  56,941   $  62,478     $ 19,843     $ 15,133    $ 229,768
  Capital expenditures  $     102    $     396   $     204     $    540     $    756    $   1,998

-----------------------------------------------------------------------------------------------------

1997 (Thousands):
  Revenues              $  17,761    $  68,793   $  17,213     $ 36,939     $  5,683    $ 146,389
  Operating expenses       12,133       69,478      14,239       36,155        8,614      140,619
  Interest expense, net       272        1,268       1,548          810          152        4,050
                        ---------    ---------   ---------     --------     --------    ---------
  Pretax income (loss)
   contribution         $   5,356    $  (1,953)  $   1,426     $    (26)    $ (3,083)   $   1,720
                        =========    =========   =========     ========     ========    =========
  Depreciation and
   amortization         $     246    $     333   $   1,360     $    313     $    491    $   2,743
  Identifiable assets   $  81,990    $  42,506   $  58,300     $ 13,084     $  9,431    $ 205,311
  Capital expenditures  $     152    $     511   $     292     $  1,878     $  1,067    $   3,900

-----------------------------------------------------------------------------------------------------

</TABLE>

                                   38
<PAGE>



Selected Quarterly Financial Data (Unaudited)

                            (In thousands of dollars, except per share
                                             amounts)
                                          Quarter Ended
                           -------------------------------------------------
                            July 31,   October 31,   January 31,   April 30,
                              1998        1998         1999          1999
                           -------------------------------------------------
Revenues                   $  46,223    $  35,930    $  41,787    $  66,351

Gross Profit                  11,374        7,508        6,374       12,079

Net Income (a)             $   2,882    $     341    $     693    $   3,621
                           =========    =========    =========    =========
Earnings Per Share -
  Basic and Diluted (a)    $    0.39    $    0.05    $    0.09    $    0.49
                           =========    =========    =========    =========

                                          Quarter Ended
                           --------------------------------------------------
                            July 31,   October 31,   January 31,    April 30,
                              1997        1997         1998           1998
                           --------------------------------------------------

Revenues                   $  37,795    $  43,540    $  46,849    $  43,184

Gross Profit                   7,086       10,845       13,591        8,671

Net Income                 $     505    $   2,539    $   4,142    $   1,020
                           =========    =========    =========    =========
Earnings Per Share -
  Basic and Diluted        $    0.07    $    0.34    $    0.56    $    0.14
                           =========    =========    =========    =========


 a) The  quarters  ended  January  31,  1999 and April  30,  1999  reflect  an
 adjustment  to Taxes  Payable  - amounts  subsequently  due of  $900,000  and
 $1,500,000  respectively,  for the  settlement  of the 1990  through 1992 tax
 examinations (see Note 10).

 Item 9.  Changes in and Disagreements with Accountants on Accounting
--------  -----------------------------------------------------------
            and Financial Disclosure.
            -------------------------

Not Applicable.


                                PART III
                                --------

The  information  called for by Part III is hereby  incorporated  by reference
from the information set forth and under the headings  "Common Stock Ownership
of Certain  Beneficial  Owners and Management",  "Election of Directors",  and
"Executive  Compensation"  in Registrant's  definitive proxy statement for the
1999 Annual Meeting of  Shareholders,  which meeting  involves the election of
directors,  such  definitive  proxy  statement to be filed with the Securities
and Exchange  Commission  pursuant to Regulation 14A within 120 days after the
end of the  fiscal  year  covered  by this  Annual  Report  on Form  10-K.  In
addition,  information on Registrant's executive officers has been included in
Part I above under the caption "Executive Officers of the Registrant".



                                   39
<PAGE>


                               PART IV
                               -------

Item 14.           Exhibits, Financial Statement Schedules, and
--------           --------------------------------------------
                             Reports on Form 8-K
                             --------------------

(a)          1.  The  following   financial   statements   and   supplementary
financial information are filed as part of this report:

             AMREP Corporation and Subsidiaries:

                    Report of Independent Public Accountants -
                         Arthur Andersen LLP

                    Consolidated Balance Sheets - April 30, 1999 and 1998

                    Consolidated Statements of Operations for the Three Years
                         Ended April 30, 1999

                    Consolidated Statements of Shareholders' Equity for the
                         Three Years Ended April 30, 1999

                    Consolidated Statements of Cash Flows for the Three Years
                         Ended April 30, 1999

                    Notes to Consolidated Financial Statements

                    Selected Quarterly Financial Data

             2.  The following financial statement schedules are filed as
part of this report:

             AMREP Corporation and Subsidiaries:

                    Schedule II - Valuation and Qualifying Accounts


             Financial  statement schedules not included in this Annual Report
on Form  10-K  have  been  omitted  because  they  are not  applicable  or the
required information is shown in the financial statements or notes thereto.

             3.  Exhibits:

             The exhibits filed in this report are listed in the
Exhibit Index.

             The  Registrant  agrees,  upon  request  of  the  Securities  and
Exchange  Commission,  to file as an  exhibit  each  instrument  defining  the
rights of holders of long-term  debt of the  Registrant  and its  consolidated
subsidiaries  which has not been filed for the reason that the total amount of
securities  authorized  thereunder  does not exceed 10% of the total assets of
the Registrant and its subsidiaries on a consolidated basis.

(b)          During the quarter  ended  April 30,  1999,  Registrant  filed no
Current Report on Form 8-K.



                                   40
<PAGE>


                             SIGNATURES

                 Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, Registrant has duly
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
                                               AMREP CORPORATION
                                                  (Registrant)

Dated:  July 27, 1999                          By /s/Mohan Vachani
                                                  ----------------
                                                 Mohan Vachani
                                                 Senior Vice President

          Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of Registrant and in the capacities and on the
dates indicated.

/s/Mohan Vachani                               /s/Nicholas G. Karabots
-----------------------------------            ------------------------
Mohan Vachani                                  Nicholas G. Karabots
  Director, Senior Vice President,               Director
  Principal Financial Officer and              Dated:  July 27, 1999
  Principal Accounting Officer *
Dated:  July 27, 1999

/s/Jerome Belson                               /s/Albert V.  Russo
------------------------------------           -------------------------
Jerome Belson                                  Albert V. Russo
  Director                                       Director
Dated:  July 27, 1999                          Dated:  July 27, 1999

/s/Edward B. Cloues, II                        /s/Samuel N. Seidman
------------------------------------           --------------------------
Edward B. Cloues, II                           Samuel N. Seidman
  Director                                        Director
Dated:  July 27, 1999                          Dated:  July 27, 1999

/s/Daniel Friedman                             /s/James Wall
------------------------------------           ---------------------------
Daniel Friedman                                James Wall
  Director                                        Director
Dated:  July 27, 1999                          Dated:  July 27, 1999




*Also acting as Principal Executive Officer in the absence of a Chief
Executive Officer, solely for the purpose of signing this Annual Report.



                                   41
<PAGE>


                      AMREP CORPORATION AND SUBSIDIARIES
                      ----------------------------------

        SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 1 of 2)
        -------------------------------------------------------------
                                 (Thousands)

                                       Additions
                                -----------------------
                                  Charges
                                 (Credits)    Charged
                     Balance at  to Costs    (Credited)                Balance
                     Beginning      and       to Other                  at End
                     of Period   Expenses     Accounts    Deductions  of Period
                     ---------   ---------   ---------    ----------  ---------

FOR THE YEAR ENDED
  APRIL 30, 1999:
   Allowance for
     doubtful
     accounts
     (included in
     receivables -
     real estate
     operations on
     the
     consolidated
     balance sheet)  $    291     $     74   $      -      $   110(A)   $    255
                     --------     --------   --------      ----------   --------
   Allowance for
     estimated
     returns and
     doubtful
     accounts
     (included in
     receivables -
     magazine
     circulation
     operations on
     the
     consolidated
     balance sheet)  $ 51,895     $ (3,528)  $      -      $ 4,010(A)  $  44,357
                     --------     --------   --------      ----------   --------


FOR THE YEAR ENDED
  APRIL 30, 1998:
   Allowance for
     doubtful
     accounts
     (included in
     receivables -
     real estate
     operations on
     the
     consolidated
     balance sheet)
                     $    690     $    143   $      -      $   542(A)   $    291
                     --------     --------   --------      ----------   --------
   Allowance for
     estimated
     returns and
     doubtful
     accounts
     (included in
     receivables -
     magazine
     circulation
     operations on
     the
     consolidated
     balance sheet)  $ 48,976     $  3,044   $      -      $   125(A)   $ 51,895
                     --------     --------   --------      ----------   --------
   Real estate
   valuation
   allowance         $  2,459     $      -   $ (1,880)     $   579(B)   $      -
                     --------     --------   --------      ----------   --------




                                        42
<PAGE>



                      AMREP CORPORATION AND SUBSIDIARIES
                      ----------------------------------

        SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Page 2 of 2)
        -------------------------------------------------------------
                                 (Thousands)

                                       Additions
                                -----------------------
                                  Charges
                                 (Credits)    Charged
                     Balance at  to Costs    (Credited)                Balance
                     Beginning      and       to Other                  at End
                     of Period   Expenses     Accounts    Deductions  of Period
                     ---------   ---------   ---------    ----------  ---------
FOR THE YEAR ENDED
  APRIL 30, 1997:
   Allowance for
     doubtful
     accounts
     (included in
     receivables -
     real estate
     operations on
     the
     consolidated
     balance sheet)
                     $    598    $    135   $      -      $     43(A)   $    690
                     --------     --------   --------      ----------   --------
   Allowance for
     estimated
     returns and
     doubtful
     accounts
     (included in
     receivables -
     magazine
     circulation
     operations on
     the
     consolidated
     balance sheet)  $ 49,394     $    706   $      -      $ 1,124(A)   $ 48,976
                     --------     --------   --------      ----------   --------
   Real estate
   valuation
   allowance         $  2,580     $      -   $      -    $      121(B)  $  2,459
                     --------     --------   --------      ----------   --------





       NOTE:(A) Uncollectible accounts written off.
            (B) Allowances utilized to reduce inventory valuation.


                                   43
<PAGE>



                                        EXHIBIT INDEX

                      (3)(a)(i)  Articles of Incorporation, as
                                 amended - Incorporated by
                                 reference to Exhibit (3) (a) (i)
                                 to Registrant's Annual Report on
                                 Form 10-K for the year ended April
                                 30, 1998.

                      (3)(a)(ii) Certificate of Merger -
                                 Incorporated by  reference to
                                 Exhibit (3) (a) (ii) to
                                 Registrant's Annual Report on Form
                                 10-K for the year ended April 30,
                                 1998.

                      (3) (b)    By-Laws as restated September 24,
                                 1997 - Incorporated by reference
                                 to Exhibit 3 (c) to Registrant's
                                 Quarterly Report on Form 10-Q for
                                 the quarter ended October 31, 1997.

                      (4) (a)    Loan Agreement  dated as of
                                 September 15, 1998 between Kable
                                 News Company, Inc., and  American
                                 National Bank and Trust Company of
                                 Chicago as Agent and all the
                                 lenders as defined therein -
                                 Incorporated by reference to
                                 Exhibit 4 (a) to Registrant's
                                 Quarterly Report on Form 10-Q for
                                 the quarter ended October 31, 1998.

                      (4) (b)    Commitment Agreement dated as of
                                 February 20, 1998 between AMREP
                                 Southwest, Inc., and Residential
                                 Funding Corporation - Incorporated
                                 by reference to Exhibit 4 (b) to
                                 Registrant's Quarterly Report on
                                 Form 10-Q for the quarter ended
                                 October 31, 1998.

                      (10) (a)   1992 Stock Option Plan -
                                 Incorporated by reference to
                                 Exhibit 10 (h) to Registrant's
                                 Annual Report on Form 10-K for the
                                 year ended April 30, 1997.*

                     (10) (b)    Non-Employee Directors Option
                                 Plan, as amended - Incorporated by
                                 reference to Exhibit 10 (i) to
                                 Registrant's Annual Report on Form
                                 10-K for the year ended April 30,
                                 1997.*

                      (21)       Subsidiaries of Registrant, filed
                                 herewith.

                      (23)       Consent of Arthur Andersen LLP,
                                 filed herewith.

                      (27)       Financial Data Schedule

      _________________________________
      * Management contract or compensatory plan or arrangement in
      which directors or officers participate.



                                   44