<PAGE>
                               UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549-1004


                                 FORM 10-K 

Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act
of 1934

For the Year Ended December 31, 1996    
                                        
Commission File Number 0-7205

                            HOLIDAY-GULF HOMES, INC.                        
  
             (Exact name of registrant as specified in its charter)

           Minnesota                                      41-0916277        
  
(State or other jurisdiction of                     (I.R.S. Employer 
 incorporation or organization)                      Identification No.)

4804 Mile Stretch Drive, Holiday, Florida                     34690     
 (Address of principal executive office)                    (Zip Code)

Registrant's telephone number, including area code      (813)  937-3293


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                  YES          X                    NO                      
           
The number of shares outstanding of each of the issuer's classes of common
stock as of December 31, 1996.


Common Stock, $.01 Par Value - 1,903,853 shares


The aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1996.

Common Stock, $.01 Par Value - $256,220.





<PAGE>
                                    PART I
ITEM 1. BUSINESS

(a)  General Business

     The majority of revenues for the 1996, 1995, and 1994 years were derived
from the water and garbage operations of two subsidiaries.  Presently the
management of Holiday-Gulf Homes, Inc. believes these subsidiaries will
continue to provide a majority of the revenue.         

(b)  Narrative Description of Business

     The Company has two utility company subsidiaries and a land development
subsidiary.  The utility subsidiaries represent the operating source of
revenue.  These companies bill customers on a monthly basis for water and
garbage charges.  The utility companies are operated by an outside contractor. 
The rates charged by the utility companies are set by the Florida Public
Service Commission.

Patents, etc.

     There are no patents, licenses, franchises or concessions held by the
Company which it deems important and material for an understanding of its
business.

Research and Development

     No money was spent by the Company during the years ended December 31,
1996, 1995, and 1994 on research activities.

Federal, State, and Local Regulations

     The utility subsidiaries are subject to the Florida Public Service
Commission regulations.  There are no material estimated capital expenditures
for the current or succeeding years.  All reports required by the Florida
Public Service Commission have been filed.

Personnel

     The Company as of December 31, 1996, employed one person full time.  The
Company's employee is not represented by a union.

Seasonal Factors

     The Company's operations as a whole are not significantly affected by
seasonal factors.

Competitive Conditions

     The utility subsidiaries are regulated by a public authority, therefore
there are no competitive conditions.

<PAGE>
ITEM 2. PROPERTIES

     The Company's activities are presently conducted primarily in Pasco
County, Florida.  All of the Company's facilities are well maintained and
believed to be in good condition.

     The following is a description of the location and general character of
property owned by the Company and its subsidiaries.

     (a)  The land development subsidiary owns a warehouse and office complex 
          located in New Port Richey, Florida for which they receive rent on 
          a monthly basis.  The annual rents totaled $36,213 for 1996 and   
          $34,990 for 1995.

     (b)  The Company owns five well lots where Crestridge Utility Corporation 
          is located.  These lots house the pumping station and wells.

     (c)  The Company owns two well lots where Holiday Gardens Utilities, Inc. 
          is located.  These lots house the pumping station and wells.


ITEM 3. LEGAL PROCEEDINGS

     None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     (a)   Annual meeting of stockholders was held June 29, 1996 for the    
           December 31, 1995 year.

     (b)   Elected directors and executive officers for the upcoming 1997 year 
           were:

                Linda Emerick     - Director and President
                Thomas L. Burkett - Director and Vice President
                Ronnie L. Mohr    - Director and Secretary
                Eileen M. Falla   - Treasurer

     (c)   Other matters voted upon and the number of affirmative votes and 
           negative votes cast with respect to each such matter.

                 None.









<PAGE>
                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS

     Holiday-Gulf Homes, Inc.'s Common stock is traded on the over the counter
market.  Generally, excluding limited or sporadic quotations, there is no
market for such stock.  The number of record holders of Holiday-Gulf Homes,
Inc. Common Stock at December 31, 1996 was 471.

     The Company distributed dividends of $95,193 in April, 1995, $95,192 in
April, 1993, $95,192 in October, 1990, $95,192 in December, 1989 and $95,192
in March, 1988.  For the ten years prior to the 1988 dividend the Company had
not made any distributions.


ITEM 6. SELECTED FINANCIAL DATA

                                               YEARS ENDED DECEMBER 31,

                                        1996          1995           1994  

Utility Revenues                     $ 277,670     $ 270,772      $ 265,500
   
Net Income                           $  58,110     $  54,661      $  51,308 
 
Net Income Per Common Share          $    .030     $    .029      $    .027 

Total Assets                         $ 275,789     $ 214,183      $ 256,155 
 
Long-Term Debt                       $   -0-       $   -0-        $   -0-   

Cash Dividends Declared Per Share    $   -0-       $    .05       $   -0-   

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND     
        RESULTS OF OPERATIONS

     (a)   Liquidity and Capital Resources

                The Company maintains 66% of its assets in cash and other   
           current assets.  At present there are no plans for expansion and 
           no material repairs are anticipated for the utility companies.  The 
           Company has been maintaining the water lines and meters on a     
           regular basis.

     (b)   Results of Operations
                
                The  majority of the  revenues are  generated  by  the utility 
           companies.  These completed a rate  increase  audit with the Public 
           Service Commission in 1992. The new rates became effective in 1993.

                The rates increased again in 1996 and 1995 due to indexing.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND     
        RESULTS OF OPERATIONS (CONTINUED)
     
     Utility operating revenues increased 2.55% in 1996 to $277,670, up $6,898
over 1995 and increased 4.58% in 1996, up $12,170 over 1994.  The increase in
revenues is due primarily to rate increases in water revenues.

     The gross profit percentages for the years 1996, 1995 and 1994 of 50.55%,
50.16% and 49.18%, respectively, were maintained due to the stability in the
number of customers.

     General and administrative expenses have increased as a percentage of
utility revenues compared to 1995 and 1994 as a result of increased
expenditures for insurance, stock agent fees, wages and related taxes and
office supplies.  General and administrative expenses as a percentage of
utility revenues were approximately 29.20% in 1996 as compared to 28.83% and
28.95% for 1995 and 1994.

     Income from other operations increased 6.48% in 1996 to $40,467, up
$2,463 over 1995 and increased 10.53% in 1996, up $3,855 over 1994.  The
increase in revenues is due primarily to increases in rental income.

     General and administrative expenses from other operations have decreased
as a percentage of income from other operations compared to 1995, and 1994 as
a result of management controlling operating costs.  General and
administrative expenses from other operations as a percentage of income from
other operations were approximately 75.51 % in 1996 as compared to 80.11% and
80.38% for 1995 and 1994.

     Net income increased 6.31% in 1996 to $58,110, up $3,449 over 1995 and
increased 13.26% in 1996, up $6,802 over 1994.  The improvements to net income
are the result of improved water revenues, rental income and management
controlling costs.
   
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The following financial statements of Holiday-Gulf Homes, Inc., included
in the annual report to shareholders are incorporated herein by reference:

          Consolidated Balance Sheets - December 31, 1996 and 1995

          Consolidated Statements of Operations - Years ended December 31,  
          1996, 1995, and 1994

          Consolidated Statements of Shareholders' Equity - Years  ended    
          December 31, 1996, 1995, and 1994

          Consolidated Statements of Cash Flows - Years ended December 31,  
          1996, 1995, and 1994

          Notes to Consolidated Financial Statements - December 31, 1996

<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND     
        FINANCIAL DISCLOSURE

        None.















































<PAGE>
                                      PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

            NAME            AGE    BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS 


      Linda Emerick         51     Director and  President of  Holiday-Gulf 
                                     Homes, Inc. since June 23, 1987.  Mrs. 
                                     Emerick  was the Secretary - Treasurer 
                                     of Hillrow,  Inc.  July, 1966  through 
                                     June, 1989. She is currently operating 
                                     a bookkeeping and management service.

      Thomas L. Burkett     59     Director and Vice  President of Holiday- 
                                     Gulf  Homes, Inc. since June 23, 1987. 
                                     Mr.  Burkett  is  the  District  Sales 
                                     Manager  of  the  Gehl  Company  which 
                                     manufactures  Agricultural  Equipment. 
                                     Mr. Burkett has  been  their  employee 
                                     for the past 30 years.

      Ronnie L. Mohr        48     Director and  Secretary of  Holiday-Gulf 
                                     Homes,  Inc.  since December 30, 1992. 
                                     He has been  engaged in farming for 32 
                                     years.He has been a Director and Board 
                                     Chairman of R & S Mohr  Family  Farms,
                                     Inc. since 1981; he is Director of Ag- 
                                     One  Coop, Inc.  and  Central  Indiana 
                                     Power.

      Eileen M. Falla       50     Treasurer  of  Holiday-Gulf Homes,  Inc. 
                                     since June  23, 1987.  Mrs. Falla  has
                                     been employed by  Holiday-Gulf  Homes, 
                                     Inc. since  October, 1983.

















<PAGE>
ITEM 11. EXECUTIVE COMPENSATION

     No executive officer of the Company received cash compensation in excess
of $20,000.

     The Company has no annuity, pension or retirement plans.  There are no
life, health, hospitalization or medical reimbursement plans other than group
plans which are available generally to all salaried employees.

     There are no remuneration payments proposed to the officers or directors
to be made in the future directly or indirectly by the Company or any of its
subsidiaries pursuant to any existing plan or agreement.

     Each director is reimbursed for travel and other expenses related to
attendance at directors' meetings.  The directors receive a fee ranging from
$3,600 to $20,000 per year.

     There were no stock appreciation rights or options to purchase securities
from the Company granted to, exercised by, or realized by an officer or
director of the Company during the fiscal years ended December 31, 1996 and
1995.

     There were no loans from directors as of December 31, 1996 and 1995.





























<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information, as of December 31, 1996, with
respect to the ownership of Common Stock by all shareholders known by the
Company to be the beneficial owners of more than 5% of its outstanding Common
Stock, all directors, and all directors and officers of the Company as a
group.  The percentages stated are based upon 1,903,853 issued shares of
Common Stock.

                                       AMOUNT OF BENEFICIAL         PERCENTAGE
                                            OWNERSHIP                OF TOTAL 
         NAME AND ADDRESS               (NUMBER OF SHARES)            SHARES 
 

Anita Jane Duckworth                        260,000                    13.66%
3242 W Old Franklin Rd
Shelbyville, Indiana

Fred W. Garver                              154,000                     8.09%
3831 N London Rd
Fairland, Indiana

Linda & Wray Emerick                         40,450                     2.12%
8318 W 600 South
Edinburgh, Indiana
(Linda - Director & Officer)

Donald R. Pence                             220,500                    11.58%
6598 W 1150 S
Edinburgh, Indiana

E.J. Terpstra                               110,000                     5.78%
4681 N State Rd 9
Shelbyville, Indiana

Ronnie & Sarah Mohr                         202,000                    10.61%
5200 E 600 N
Greenfield, Indiana
(Ronnie - Director & Officer)

Thomas L. Burkett                            50,000                     2.63%
1609 N Fort Wayne Rd
Rushville, Indiana
(Director & Officer)

All Directors and Officers as a group (3)   292,450                    15.36%


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      None.

<PAGE>
                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)  Exhibits and financial statement schedules

     1.   Financial Statements

     Among responses to this ITEM 14 are the following financial statements
which are incorporated herein by reference in ITEM 8 above:

            (  i)  Consolidated Balance Sheets - December 31, 1996 and 1995.

            ( ii)  Consolidated Statements of Operations - Years ended      
                   December 31, 1996, 1995, and 1994.

            (iii)  Consolidated Statements of Shareholders' Equity - Years  
                   ended December 31, 1996, 1995, and 1994.

            ( iv)  Consolidated Statements of Cash Flows - Years ended      
                   December 31, 1996, 1995, and 1994.

            (  v)  Notes to Consolidated Financial Statements - December 31, 
                   1996.

     2.  Supplementary Data and Financial Statement Schedules

            (  i)  Schedule I - Holiday-Gulf Builders, Inc., Detail Statement 
                   of Non-Utility Operations as of and for the years ended  
                   December 31, 1996 and 1995.

     3.  Exhibits required by Item 601 of Regulation S-K.

            ( 22)  Subsidiaries of the Company.

                                                           PERCENTAGE OF    
                                                             SECURITIES
                                   JURISDICTION OF     DIRECTLY OR INDIRECTLY
           NAME                     INCORPORATION       OWNED BY THE COMPANY 
 
Holiday-Gulf Builders, Inc.            Florida                   100%

Crestridge Utility Corporation         Florida                   100%

Holiday Gardens Utilities, Inc.        Florida                   100%


     (b) Reports on Form 8-K

         No reports on Form 8-K have been filed during the last quarter of the
period covered by this report.

<PAGE>
                                    SIGNATURES

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


                           HOLIDAY-GULF HOMES, INC.                  
                                (Registrant)


By: (Signature and Title)                                                   
   

Date: March 11, 1997                


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


(Signature and Title)                                                       
                        Linda Emerick, President and Director


Date:                 



(Signature and Title)                                                       
                        Thomas L. Burkett, Vice President and Director


Date:                 



(Signature and Title)                                                       
                        Ronnie L. Mohr, Secretary and Director


Date:                 



(Signature and Title)                                                       
                        Eileen M. Falla, Treasurer


Date:                 

<PAGE>
<AUDIT-REPORT>







INDEPENDENT AUDITORS' REPORT

To the Shareholders and Board of Directors
Holiday-Gulf Homes, Inc. and Subsidiaries
Holiday, Florida

     We have audited the accompanying consolidated balance sheets of HOLIDAY-
GULF HOMES, INC. (a Minnesota corporation) AND SUBSIDIARIES as of December 31, 
1996 and 1995, and the related consolidated statements of income,
shareholders' equity, and cash flows for the years ended December 31, 1996,
1995 and 1994.  These consolidated financial statements are the responsibility
of the Company's management.  Our responsibility is to express an opinion on
these consolidated financial statements 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 consolidated financial
statements are free of material misstatement.  An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Holiday-Gulf Homes, Inc. and Subsidiaries, as of December 31, 1996 and
1995, and the consolidated results of their operations and their cash flows
for the years ended December 31, 1996, 1995 and 1994 in conformity with
generally accepted accounting principles.

     Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole.  The supplemental information on page
23 is presented for the purposes of additional analysis and is not a required
part of the basic financial statements.  Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.

                                          ARNOLD AND CO., P.A.

January 8, 1997
</AUDIT-REPORT>

<TABLE>
                          HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS
                                 DECEMBER 31, 1996 AND 1995
<CAPTION>
ASSETS

                                                                1996              1995    
<S>                                                         <C>               <C>
WATER, PLANT AND EQUIPMENT

  Water Plant & Equipment, at Original Costs                $    292,991      $    290,742   
  Less:  Accumulated Depreciation                               (226,837)         (219,278)  
                                                            ------------      ------------

Net Water Plant & Equipment                                 $     66,154      $     71,464   
                                                            ------------      ------------

OTHER PROPERTY AND INVESTMENTS

  Non-Utility Property less Accumulated
    Depreciation of $45,999 in 1996 and
    $42,395 in 1995                                         $     26,884      $     23,916   
                                                            ------------      ------------

Net Other Property & Investments                            $     26,884      $     23,916   
                                                            ------------      ------------

CURRENT ASSETS
                                                                                             
  Cash and Certificates of Deposits                         $    168,031      $    110,669   
  Accounts Receivable                                              5,932             2,778   
  Prepaids                                                         3,038             2,801   
  Other Receivables                                                3,715               520   
                                                            ------------      ------------

Total Current Assets                                        $    180,716      $    116,768   
                                                            ------------      ------------

OTHER ASSETS

  Deposits                                                  $      2,035      $      2,035   
                                                            ------------      ------------

Total Other Assets                                          $      2,035      $      2,035   
                                                            ------------      ------------
TOTAL ASSETS                                                $    275,789      $    214,183   
                                                            ============      ============
<FN>
                   See accompanying notes and independent auditors' report.
</FN>
</TABLE>
<TABLE>
                          HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS
                                 DECEMBER 31, 1996 AND 1995
<CAPTION>
SHAREHOLDERS' EQUITY AND LIABILITIES


                                                                1996              1995    
<S>                                                         <C>               <C>
SHAREHOLDERS' EQUITY

  Capital Stock, 5,000,000 shares authorized
    and 1,903,853  shares issued  and                       
    outstanding in 1996 and 1995                            $     19,039      $     19,039
  Paid-In-Capital                                                225,774           225,774
  Retained Earnings (of which $10,102 as of
    December 31, 1996 was appropriated for 
    unclaimed 1995, 1993, 1990, 1989 and 1988 dividends,
    as of December 31, 1995 $7,882 was appropriated
    for unclaimed 1993, 1990, 1989 and 1988 dividends)            10,206           (50,124)
                                                            ------------      ------------

Total Capital Stock and Retained Earnings                   $    255,019      $    194,689
                                                            ------------      ------------

  CIAC, less accumulated amortization of
    $124 in 1996 and $ 41 in 1995                           $      1,201      $      1,284
                                                            ------------      ------------

Total Capitalization                                        $    256,220      $    195,973
                                                            ------------      ------------

CURRENT LIABILITIES

  Accounts Payable                                          $     16,770      $     15,994
  Accrued Liabilities                                              1,250             1,250
  Deferred Income                                                  1,549               966
                                                            ------------      ------------

Total Current Liabilities                                   $     19,569      $     18,210
                                                            ------------      ------------
TOTAL CAPITAL AND LIABILITIES                               $    275,789      $    214,183 
                                                            ============      ============

<FN>
                   See accompanying notes and independent auditors' report.
</FN>
</TABLE>




<TABLE>
                          HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<CAPTION>



                                          1996                  1995                1994   
<S>                                   <C>                    <C>                 <C>
OPERATING REVENUES
  Water                               $   133,874            $  126,801          $  121,302  
  Garbage                                 107,345               107,164             107,450  
  Streetlights                             34,816                34,797              34,918  
  Transfer & Reconnect Fees                 1,635                 2,010               1,830  
                                      -----------            ----------          ----------  
Total Operating Revenues              $   277,670            $  270,772          $  265,500  
                                      -----------            ----------          ----------

COST OF SALES
  Garbage                             $    83,680            $   82,092          $   82,092  
  Electric                                  5,876                 5,275               5,298  
  Streetlights                             14,409                14,345              14,314  
  Other Costs                              33,349                33,235              33,224
                                      -----------            ----------          ----------  
Total Cost of Sales                   $   137,314            $  134,947          $  134,928  
                                      -----------            ----------          ----------  

Gross Profit                          $   140,356            $  135,825          $  130,572


OPERATING EXPENSES
  Depreciation & Amortization         $     7,842            $    7,616          $    6,768
  General & Administration                 81,077                78,052              76,870
                                      -----------            ----------          ----------
Total Operating Expenses              $    88,919            $   85,668          $   83,638
                                      -----------            ----------          ----------  

Operating Income                      $    51,437            $   50,157          $   46,934


OTHER INCOME
  Rental and Late Fees                $    36,213            $   34,990          $   33,714
  Interest                                  4,254                 3,014               2,898
                                      -----------            ----------          ----------
Total Other Income                    $    40,467            $   38,004          $   36,612
                                      -----------            ----------          ----------


<FN>
                   See accompanying notes and independent auditors' report.
</FN>

                          HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                            CONSOLIATED STATEMENTS OF OPERATIONS
                    FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994


                                          1996                  1995                1994   

OTHER OPERATING EXPENSES
  General and Administrative          $    30,555            $   30,445          $   29,430
  Depreciation                              3,239                 3,055               2,808
                                      -----------            ----------          ----------
Total Other Operating Expenses        $    33,794            $   33,500          $   32,238
                                      -----------            ----------          ----------

Other Net Income, on Non-Utility      $     6,673            $    4,504          $    4,374
                                      -----------            ----------          ----------

Net Income Before Income Taxes
    and Extraordinary Items           $    58,110            $   54,661          $   51,308

PROVISION FOR INCOME TAXES
   Current                            $    12,018            $   11,422          $   10,243
                                      -----------            ----------          ----------  
Total Provision for Income Taxes      $    12,018            $   11,422          $   10,243
                                      -----------            ----------          ----------  

Net Income before Extraordinary
   Items                              $    46,092            $   43,239          $   41,065

Extraordinary Items from
   Utilization of Operating
   Loss Carryforward                  $    12,018            $   11,422          $   10,243 
                                      -----------            ----------          ----------
NET INCOME                            $    58,110            $   54,661          $   51,308  
                                      ===========            ==========          ==========


EARNINGS PER SHARE

Net Income before Extraordinary
   Items                              $      .024            $     .023          $     .022
Extraordinary Items-Utilization
   of Operating Loss Carryforward     $      .006            $     .006          $     .005  
                                      -----------            ----------          ----------
NET EARNINGS PER SHARE                $      .030            $     .029          $     .027  
                                      ===========            ==========          ==========


<FN>
                   See accompanying notes and independent auditors' report.
</FN>
</TABLE>
<TABLE>
                          HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                    FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<CAPTION>



                                                   APPROPRIATED UNAPPROPRIATED   TOTAL       
                    COMMON STOCK        CAPITAL     RETAINED      RETAINED     SHAREHOLDERS'
                  SHARES      AMOUNT    SURPLUS     EARNINGS      EARNINGS       EQUITY     

<S>               <C>        <C>        <C>        <C>            <C>           <C>
December 31, 1994 1,903,853  $  19,039  $ 266,306  $    8,007     $  (58,006)   $ 235,346
                  ---------  ---------  ---------  ----------     ----------    ---------

Payment of 1995
  Dividends            -          -       (40,532)       -           (54,661)     (95,193)

Payment of Unclaimed
  Prior Dividends      -          -          -           (125)          -            (125)


Net Income             -          -          -           -            54,661       54,661

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

December 31, 1995 1,903,853  $  19,039  $ 225,774  $    7,882     $  (58,006)   $ 194,689    
                  ---------  ---------  ---------  ----------     ----------    ---------

Return of unclaimed
  1995 Dividends       -          -          -          2,220           -           2,220

Net Income             -          -          -           -            58,110       58,110

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

December 31, 1996 1,903,853  $  19,039  $ 225,774  $   10,102     $      104    $ 255,019
                  =========  =========  =========  ==========     ==========    =========









<FN>
                   See accompanying notes and independent auditors' report.
</FN>
</TABLE>

<TABLE>
                          HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<CAPTION>

                                                    1996            1995            1994     
<S>                                              <C>             <C>             <C>         
Cash flows from operating activities
  Net Income                                     $   58,110      $   54,661      $   51,308
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and Amortization                    11,080          10,673           9,576
Change in assets and liabilities
  (Increase) decrease in
     Receivables                                     (6,349)          2,221          (3,399)
     Other Assets                                     -0-             1,015          (1,015)
     Prepaid Assets                                    (237)            554            (184)
   Increase (decrease) in
     Accounts Payable                                   776          (2,860)          3,234
     Accrued Expenses & Deferred Income                 583             261             125  
                                                 ----------      ----------      ----------
Net cash provided by operating activities        $   63,963      $   66,525      $   59,645
                                                 ----------      ----------      ----------
Cash flows from investing activities
    Improvements to Utility Company Equipment    $   (2,249)     $   (7,820)     $   (7,136)
    Office Complex Improvements                      (6,572)         (3,080)         (3,905) 
    CIAC                                              -0-             1,325           -0-
                                                 ----------      ----------      ----------
Net cash used in investing activities            $   (8,821)     $   (9,575)     $  (11,041)
                                                 ----------      ----------      ----------
Cash flows from financing activities
    Payment of Dividends                         $    -0-        $  (95,318)     $     (794)
    Return of Unpaid Dividends                        2,220           -0-             2,335
                                                 ----------      ----------      ----------
Net cash provided by (used in) financing
  activities                                     $    2,220      $  (95,318)     $    1,541 
                                                 ----------      ----------      ----------
Net increase (decrease) in cash                  $   57,362      $  (38,368)     $   50,145 
Cash at beginning of year                        $  110,669      $  149,037      $   98,892
                                                 ----------      ----------      ----------
Cash at end of year                              $  168,031      $  110,669      $  149,037  
                                                 ==========      ==========      ==========
Supplementary Disclosures of Cash Flow 
  Information
    Interest Paid                                $    -0-        $    -0-        $    -0-
    Income Tax Paid                              $    -0-        $    -0-        $    -0-

<FN>
               See accompanying notes and independent auditors' report.
</FN>
</TABLE>

<PAGE>
                   HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1) - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation--
                                      
     The accompanying consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries.  All significant
intercompany balances and transactions have been eliminated in consolidation.

Recognition of Income from Utility Operations--

     The majority of the Company's revenues are generated by two Utility
Companies.  These Companies recognize revenues on a monthly basis. The use is
based on actual meter readings by an outside independent contractor.  The
independent contractor also provides services for other utility companys in
the area.  The independent contractors fees are based on a set amount per
customer plus any additional repairs.

Depreciation--

     Depreciation included in the accompanying financial statements has been
provided by the straight-line method at rates calculated to amortize the cost
of the assets over their estimated useful lives as follows:

                                                               YEARS 
         Utility Plant and Equipment                           5 - 40
         Building and Improvements                             5 - 30

     Maintenance and repairs of property and equipment are charged to expense
as incurred,  whereas renewals and betterments are capitalized.  When
properties are replaced, retired, or otherwise disposed of, the cost and
related accumulated depreciation are removed from the accounts.  Any gain or
loss, is credited or charged to operations in the year of disposal.

Amortization--

     The Contribution in Aide of Construction (CIAC) costs are being amortized
over a period of sixteen years using the straight-line method.

     CIAC represents $1,325 received in 1995 from a utility customer to help
pay for the cost of the new asset.

Cash--

     For the purpose of the statement of cash flows, cash includes cash on
hand, cash in checking and money market accounts, and Certificates of Deposit.


<PAGE>
                   HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income Taxes--

     The Company and its subsidiaries file consolidated Federal and State
Income Tax Returns.
  
      Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" (FAS 109).  Under
the provisions of FAS 109, an entity recognizes deferred tax assets and
liabilities for future tax consequences of events that have been previously
recognized in the Company's financial statements or tax returns.  The
measurement of deferred tax assets and liabilities is based on provisions of
the enacted tax law; the effect of the future changes in tax laws or rates are
not considered.

Earnings Per Share--

     Earnings per share of Common Stock is computed based upon weighted
average number of shares outstanding for the year (1,903,853 shares in 1996
and 1995).

(2) - LONG-TERM DEBT:

     There was no debt at the end of 1996 or 1995.

(3) - STOCK OPTION PLAN:

     The Company has adopted a qualified stock option plan whereby options may
be granted  to key employees to purchase a maximum 50,000 shares of the
Company's common stock at not less than 10% of the fair market value of the
shares at date of grant.  The options are exercisable in installments of not
more than 20%  of the shares covered thereby during any one-year period,
subject to the right of cumulation.  The options expire five years from the
date of grant.  No options have been granted under this plan.

(4) - PROPERTY AND EQUIPMENT:

     The property and equipment accounts consisted of the following at
December  31, 1996 and December 31, 1995:
                                                1996               1995    
        Land, Buildings, Office
          Equipment and Furniture           $     72,883       $     66,311
        Water, Plant and Equipment               292,991            290,742
                                            ------------       ------------
            Total Property and Equipment    $    365,874       $    357,053
        Less: Accumulated Depreciation          (272,836)          (261,673)
                                            ------------       -------------
            Net Property and Equipment      $     93,038       $     95,380
                                            ============       =============

<PAGE>
                   HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(5) - RELATED PARTY TRANSACTIONS:

     There were no related party transactions during the 1996 and 1995 years.

(6) - LEASE:

      The Company is leasing office space in Knollwood Plaza under a three-
year lease expiring in October, 1999. The lease is $450 per month.

     The following is a schedule of future minimum lease payments:

          December 31, 1997         $  5,400
          December 31, 1998            5,400
          December 31, 1999            4,500
                                    --------
            Total                   $ 15,300
                                    ========


(7) - INCOME TAXES:

     Pretax income from continuing operations for the years ended December 31,
was as follows:

                           1996                1995               1994    

                       $     58,110        $     54,661        $    51,308
      
      Significant components of the provision for income taxes attributable
to continuing operations are as follows:

                           1996                1995                1994    

     Current:
       Federal         $      9,040        $      8,557        $      7,589
       State                  2,978               2,865               2,654
                       ------------        ------------        ------------
     Total Current           12,018              11,422              10,243

     Deferred:
       Federal                 -                   -                   -
       State                   -                   -                   -
                       ------------        ------------        ------------
     Total Provision   $     12,018        $     11,422        $     10,243
                       ============        ============        ============


<PAGE>
                   HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(7) - INCOME TAXES: (CONTINUED)

     There are no deferred tax assets and liabilities as of December 31, 1996,
1995 and 1994, due to management not expecting to realize any reduction of
taxes when the operating losses originated in 1983 and 1984.

     The reconciliation of income tax computed at the U.S. federal statutory
tax rates (34%) to income tax expense is:

                               1996              1995              1994     
                          AMOUNT  PERCENT   AMOUNT  PERCENT   AMOUNT  PERCENT

     Tax at U.S.
       Statutory rates $ 19,757    34.00  $ 18,585   34.00  $ 17,445   34.00
     Surtax exemption   (10,055)  (17.30)   (9,881) (18.07)   (9,613) (18.73)
     State income tax-
       net of federal
       tax benefits       1,966     3.38     1,891    3.46     1,752    3.41
     Non-deductible
       expenses             350      .60       827    1.51       659    1.28
                       --------    -----  --------   -----  --------   -----
                       $ 12,018    20.68  $ 11,422   20.90  $ 10,243   19.96
                       ========    =====  ========   =====  ========   =====
                                                   
                                        
Operating Loss Carryforwards--

     The Company has loss carryforwards totaling $302,152 that may be offset
against future taxable income.  If not used, the carryforward will expire as
follows:

                        Year                    Year
                     Originated               Expired

                        1983                    1998        $ 102,843
                        1984                    1999          171,592
                        1991                    2006           27,717
                                                            ---------
                                                            $ 302,152
                                                            =========








<TABLE>
                                  SUPPLEMENTAL SCHEDULE I

                                HOLIDAY-GULF BUILDERS, INC.
                        DETAIL STATEMENT OF NON-UTILITY OPERATIONS
                      FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
                                                               1996               1995
<S>                                                       <C>                <C>
INCOME
  Rental Income                                           $      36,163      $     34,950
  Interest Income                                                 4,254             3,014
  Late Fees                                                          50                40
                                                          -------------      ------------
Total Income                                              $      40,467      $     38,004
                                                          -------------      ------------
EXPENSES
  Salary                                                  $       1,974      $      1,872
  Payroll Taxes                                                     157               150
  Group Insurance                                                   295               295
  General Insurance                                                 198                62
  Office Rent                                                       572               572
  Office Utilities                                                   55                55
  Telephone                                                         200               193
  Travel and Entertainment                                          869               804
  Taxes - Tangible                                                   12                11
  Auto                                                              120               120
  Office Expense                                                    186               183
  Accounting, Legal and Consulting Fees                           1,995             2,024
  Bank Service Charges                                               13               375
  Directors Fees                                                  9,076             9,067
  Postage and Freight                                                98               100
  Stock, Licenses and Fees                                        1,162               971
  Office Complex/Warehouse - Paper Supplies                         414               298
  Office Complex/Warehouse - Repairs and Maintenance              1,660             1,337
  Office Complex/Warehouse - Depreciation                         3,198             3,050
  Office Complex/Warehouse - Real Estate Taxes                    2,800             2,646
  Office Complex/Warehouse - Lawn Services                        2,700             2,878
  Office Complex/Warehouse - Water and Sewer                        461               401
  Office Complex/Warehouse - Electric                             4,420             4,394
  Office Complex/Warehouse - Insurance                              993             1,512
  Warehouse - Other                                                 125               125
  Depreciation - Other                                               41                 5
                                                          -------------      ------------
Total Expenses                                            $      33,794      $     33,500
                                                          -------------      ------------
NET INCOME                                                $       6,673      $      4,504
                                                          =============      ============
<FN>
                 See accompanying notes and independent auditors' report.
</FN>
</TABLE>