SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-K


                      Annual Report Pursuant to Section 13
                     of the Securities Exchange Act of 1934

                   For the Fiscal Year Ended December 31, 1996

                                 SLH CORPORATION
                (name of registrant as specified in its charter)
                           Commission File No. 0-21911

                 Kansas                                 43-1764632
 (State of incorporation or organization) (IRS Employer Identification No.)

                              2600 Grand Boulevard
                                    Suite 500
                           Kansas City, Missouri 64108
          (Address, including zip code, of principal executive offices)

                                  816-842-7000
              (Registrant's telephone number, including area code)

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

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

        Common Stock, $0.01 par value and Preferred Share Purchase Rights

     Number of shares outstanding of the only class of Registrant's  common
stock as of February 24, 1997: Common Stock, $0.01 par value - 1,622,276.

     The  aggregate  market  value of the Common  Stock of the  Company
held by non-affiliates,  based  upon the last  sales  price of such  stock
at $29.25 per share on March 27, 1996, was $35,862,000.

     Indicate  by check mark  whether the  Registrant  (1) has filed all
reports required 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 __ No X

     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]




                                    CONTENTS

PART I                                                                PAGE
  Item 1.     Business..............................................
              Overview..............................................
              Strategy..............................................
              Management and Disposition of Real Estate Assets......
              Business and Management of Energy Assets..............
              Miscellaneous Assets and Liabilities..................
              Company Employees.....................................
              Regulation-Possible Application of the Investment
               Company Act of 1940..................................
  Item 2.     Properties............................................
  Item 3.     Legal Proceedings.....................................
  Item 4.     Submission of Matters to a Vote of Security Holders...

PART II
  Item 5.     Market for the Registrant's Common Equity and Related
                 Stockholder Matters................................
  Item 6.     Selected Financial Data...............................
  Item 7.     Management's Discussion and Analysis of Financial
                 Condition and Results of Operations................
  Item 8.     Financial Statements and Supplementary Data...........
  Item 9.     Changes in and Disagreements with Accountants
                 on Accounting and Financial Disclosure.............

PART III
  Item 10.    Directors and Executive Officers of the Registrant....
  Item 11.    Executive Compensation................................
  Item 12.    Security Ownership of Certain Beneficial
                 Owners and Management..............................
  Item 13.    Certain Relationships and Related Transactions........

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

SIGNATURES..........................................................

INDEPENDENT AUDITORS' REPORT........................................

FINANCIAL STATEMENT SCHEDULE
  Schedule III.  Real Estate and Accumulated Depreciation............

         The  calculation  of the aggregate  market value of the Common
Stock of the  Company  held  by   non-affiliates   is  based  on  the
assumption   that non-affiliates do not include directors.  Such assumption
does not constitute an admission  by the Company or any  director  that any
director is an affiliate of the Company.




                                   PART I

ITEM 1.  BUSINESS.

Overview

         SLH  Corporation  (the  "Company")   was  incorporated  in  Kansas
on December 5, 1996.  The Company is primarily engaged in the business of
managing, developing and disposing of Real Estate and Energy  businesses
and Miscellaneous assets  (the "Transfer  Assets")  acquired  from
Seafield  Capital  Corporation ("Seafield")  on February 28, 1997  in
connection  with a Distribution of all of the outstanding shares of the
Company's Common Stock and certain Preferred Share Purchase Rights to
Seafield Shareholders on March 3, 1997 (the  "Distribution"). The
Distribution  was  effected  pursuant  to  a  Distribution  Agreement  (the
"Distribution Agreement"), a Blanket  Bill  of  Sale  and  Assumption
Agreement (" the Assignment  Agreement"),  a Facilities  Management  and
Interim  Services Agreement   ("Interim  Services Agreement")  and a Tax
Sharing  Agreement  ("Tax Sharing Agreement"),  copies of which are
appended to this report  as  exhibits. The Distribution is more
particularly  described  in the  Information  Statement that was furnished
to all stockholders on February 13,  1997  (the  "Information Statement"),
and the Company's related Registration  Statement on Form 10 ("Form 10").
See also Item 13 for a description of the Agreements.

     The following list shows the  Company  and  each subsidiary
corporation of which Registrant owned  a  majority  interest  at  March 3,
1997,  together  with  the ownership percentage and state or country of
incorporation. See Item 7 and Notes to Consolidated Financial Statements
for additional information.

SLH CORPORATION  (Kansas)
     BMA Resources, Inc.  (Missouri)                                   100%
     Scout Development Corporation  (Missouri)                         100%
         Scout Development Corporation of New Mexico  (Missouri)       100%
         Carousel Apartment Homes, Inc.  (Georgia) (inactive)          100%

         The  Company's  real estate assets  reflect the  remaining  assets
of a discontinued real estate development  business that was conducted by
Seafield in association  with a  previously  owned life  insurance  company
that was sold in 1990.  The energy and  miscellaneous  assets also reflect
a variety of insurance company  assets  that  were  retained  by  Seafield
following  the sale of that insurance  business.  The Company is engaged in
the sale of all of its assets in an orderly manner other than its interest
in Syntroleum Corporation.

         Real  estate  assets,  as of  December  31,  1996,  consist  of
(a) the remaining  inventory  from three high end  condominium
developments  located in Santa Fe, New Mexico  (comprising  25 completed
homes that have been priced for sale  between  $225,000  and  $750,000;
"Quail  Run") and Juno  Beach,  Florida (primarily  comprising  three
homes  that have  been  priced  for sale  between $800,000 and $3.0
million,  the "Juno Beach  Homes");  (b) a seven story parking garage in
Reno,  Nevada (the "Reno Parking  Garage");  (c) a 49.9% interest in a
community shopping center in Gillette, Wyoming (the "Shopping Center
Interest"); and (d)  approximately  1,147  acres of  undeveloped  land,
with  370  acres in Houston, Texas,  approximately 547 acres in the
vicinity of the Alliance Airport in  Ft. Worth,  Texas,  205 acres in  West
Ft. Worth,  Texas,   9 other acres in Corinth,  Texas   and  16  acres  at
the  intersection  of  119th  Street   and Interstate 35 in the southern
portion of the Kansas City  metropolitan area (the "Undeveloped  Land").
The Total Real Estate Inventory had an aggregate carrying value at December
31, 1996, of approximately $ 25.2 million.

         Energy assets  consist of a 32.5%  interest in  Syntroleum
Corporation ("Syntroleum") and minority  interests in four oil and gas
general  partnerships which have working  interests in producing wells in
the Gulf of Mexico (the "Oil & Gas Properties").

          Syntroleum  is the  developer  and  owner of a  patented  process
and several  related  proprietary  technologies  ("Syntroleum(R)  Process")
for the conversion  of  natural  gas into  synthetic  liquid  hydrocarbons
which can be further processed into fuels such as diesel, kerosene (used by
jet aircraft) and naphtha and related non fuel chemical  feedstocks and
lubricants.  Syntroleum is currently engaged in negotiations for the
licensing of  the  Syntroleum  Process with  major  oil  companies.
Because   Syntroleum   continues  to  be  in  the developmental  phase of
its operations,  no assurances can be given that it will be able to
successfully  conclude any license or agreement on a favorable basis or
that a commercially  viable  Syntroleum  Process  plant  will be
constructed and successfully operated.

         The Company also owned other assets consisting primarily of   (a)
three investments in privately held venture  capital  limited  partnerships
having an aggregate book value at December 31, 1996, of $1.2 million,  (b)
184,878  shares (of which  100,000  were  sold on  February 28, 1997)  of
common stock of Watson Pharmaceuticals,  a publicly traded  company  which
closed  on  March 27, 1997, at  $38.38 per share and  (c)  a preferred
stock interest in Norian Corporation, a privately owned developer  of
proprietary bone  substitute  technology  which had  a  carrying  value  of
approximately $1.0 million at December 31, 1996, ("Miscellaneous Assets").

         The Company  assumed  liabilities relating  to  the  Transfer
Assets as well  as  certain  contingent  Seafield  liabilities  ("Transfer
Liabilities"), including  Seafield's  liability  for  disputed  income
taxes which the Internal Revenue Service claims to be owed by Seafield for
its 1986, 1987, 1988, 1989 and 1990 tax years and which the State of
California claims to be owed for the 1987, 1988 and 1989 years (the "Tax
Claims").  The Tax Claims amount to  approximately $14.6 million,  plus
interest.  Although the Company believes that a combination of defenses
against the claims and  contested  offsetting  tax losses  generated by a
real estate project sold at a loss  in 1990,  could  result in  a  positive
outcome,  the Company  can not provide  any  assurance  that its defense of
such claims will be successful.  See "Item 3 - Legal Proceedings."

         The  Company  is engaged in the sale of all of its assets in an
orderly manner  other than  Syntroleum.  Following  the  liquidation  of
non  Syntroleum assets,  the Company  plans to continue  to promote the
management,  growth and development of Syntroleum or it may engage in a
merger or some other transaction that would effectively dispose of all of
its assets.

         As a result of the  Distribution,  Seafield  owns no shares of
Company Common Stock and the Company is now operating as an independent
publicly traded company.  The Company's  principal  executive  offices are
located at 2600 Grand Boulevard,  Suite 500, PO Box 410949,  Kansas City,
Missouri  64141,  and its telephone number is (816) 842-7000.

Strategy

         The Company plans to sell all of its assets, other than
Syntroleum,  in an orderly manner and under  circumstances that would
enable the Company to take advantage of  opportunities  to maximize the net
amounts to be derived from each asset.  Although  the Company  does not
expect to engage in further  Real Estate development  activities,  it may
utilize  available  cash  to  further  improve undeveloped real estate on
hand if the improvement  would be expected to enhance its  ultimate
marketability  on  a  profitable  basis.   Concurrent with  these
activities  the Company will continue to assist  Syntroleum  with its
efforts to license the Syntroleum Process,  market its catalyst and to
ultimately construct and  operate  plants for the  conversion  of natural
gas into  synthetic  liquid hydrocarbons.  These activities will include
assistance with strategic planning and the acquisition of debt and or
equity  financing for the construction of one or more Syntroleum  plants.
That assistance may also include further investment by the  Company in
Syntroleum  or directly  in one or more  Syntroleum  plants. Following the
liquidation  of non  Syntroleum  assets,  the Company  expects to continue
to promote the  management,  growth and development of Syntroleum or it may
engage in a merger or some other transaction that would effectively
dispose of all of its assets.

         The Company's  primary source of revenue to support  operations
will be derived from the operation and sale of non Syntroleum assets and
available cash. In addition to the support of current operations, those
proceeds are expected to be used to prepare  assets for ultimate sale, as
is possible with respect to the Company's undeveloped real estate.
Depending on the progress made by Syntroleum it is  expected  that  such
proceeds  may  also be used  for  possible  further investment in
Syntroleum or in one or more Syntroleum plants,  none of which are
presently  under  development.  Pending any such use,  the  proceeds of
sale and available  cash will be invested in  government  securities or
possibly in other marketable debt or equity  securities or money market
instruments to the extent that any such  investments  would not cause the
Company to become an  investment company under the Investment Company Act
of 1940.

Management and Disposition of Real Estate Assets

         Real Estate assets are owned and operated by the Company's wholly
owned subsidiary Scout  Development  Corporation and its wholly-owned
subsidiary Scout Development  Corporation  of  New  Mexico  (collectively,
"Scout").  Scout  was initially formed in 1990 to acquire,  develop and
manage improved and unimproved real estate as a means of investing  assets
of  Seafield's  insurance  business, which was then Seafield's primary
business.  However, in 1992 following the 1990 disposition by Seafield of
the insurance  business,  the real estate development operations were
discontinued.  Since then Scout has concentrated on bringing to completion
all of its development  projects and on the disposition of all of its real
estate  assets in an orderly  manner that would  maximize the value of each
asset. By the end of 1995 substantially all real estate  development
activities had been  concluded and Scout was engaged  primarily in the
disposition  of its assets.

         The  following  table shows the carrying  value of the inventory
of the
Company's Real Estate Assets as of December 31, 1996:

REAL ESTATE INVENTORY

                                                      Carrying value as of
           Asset                    Location            December 31, 1996
           -----                    --------            -----------------
The 28 Residential Condominiums   Santa Fe New Mexico
                                  and Juno Beach, Fla.        $ 14,536,000
The Reno Parking Garage           Reno, Nevada                   3,056,000
The Houston Tract                 Houston, Texas                 2,218,000
The Fort Worth Tracts             Ft Worth, Texas                2,956,000
The Kansas City Tract             Olathe, Kansas                 2,659,000
                                                                ----------
                                                                25,425,000
The Shopping Center Interest      Gillette, Wyoming               (263,000)
                                                                ----------
         Total                                                $ 25,162,000
                                                                ==========

     The Quail Run and Juno Beach residential  condominium  developments
consist of inventory remaining from real estate development projects
commenced by Scout. The Juno Beach homes consist of two exclusive  ocean
front homes,  each of which are listed for sale at $3.0 million,  a third
home within another project in the same area listed for sale at $800,000
and three marina boat slips. The Quail Run properties  consist of 25 homes
ranging  in listing  prices  from  $225,000  to $750,000.  The Company is
actively involved in the marketing of these properties and anticipates
that  approximately  two years will be required to complete all home sales.
Following the  disposition of these newly  constructed  homes,  the Company
will continue to have warranty obligations.  None of the home properties
are subject to any mortgage or material encumbrance.

     The Reno Parking Garage is a seven story  850-space  parking garage
located in downtown  Reno,  Nevada.  Scout owns the building  unencumbered
except for a ground lease which expires on February 28, 2023 and which
calls for annual lease payments in the amount of  $294,000.  The  building
contains a total of 144,500 square feet of leasable  parking space.
Parking revenue  totaled  approximately $595,000 or $700 per space or $4.12
per square foot in 1996.  In addition, 8,258 square  feet  located  on the
ground  floor of the garage is leased to a retail tenant  under a 15-year
lease.  Revenue  from the retail  lease during 1996 was $133,800 or $16.20
per square foot. In addition to basic rent, the retail tenant is
responsible for its pro rata share of real estate taxes and insurance.
During 1996, $5,400 was collected from the retail tenant for taxes and
insurance. Scout is presently actively marketing the property for sale.

     The Shopping Center Interest  consists of a 49.9% joint venture
interest in a retail shopping  center  containing  approximately  163,000
square feet of net leasable area and 14 acres of undeveloped land in
Gillette, Wyoming.  At the end of 1996, the center was 88% occupied.
Rental revenue totaled $733,000 for 1996. The average annual gross rental
per occupied square foot was $5.62.  In addition to rental  revenue,
tenants  are  responsible  for their  share of common  area maintenance
(CAM).  During 1996, CAM collections  from tenants totaled $83,000. The
property is subject to  industrial  revenue  refunding  bonds  pursuant to
a refinancing  in 1996 in the amount of $6.17  million  that are secured by
a bank letter of credit and  guaranteed by Scout.  The letter of credit is
secured by a $3.15 million  Treasury Note that is pledged by the Company to
the issuer of the letter of credit.

     The Undeveloped Land consists of an aggregate of approximately  1,147
acres of undeveloped land, with 370 acres in Houston,  Texas,
approximately 547 acres in the vicinity of the Alliance Airport in  Ft.
Worth, Texas,  205 acres in West Ft. Worth,  Texas,  9 other  acres  in
Corinth,  Texas,   and  16 acres  at the intersection  of 119th Street and
Interstate 35 in the southern  portion of the Kansas City  metropolitan
area. The zoning for the tracts other than the Kansas City Tract varies
from  residential  to light  commercial,  with the Kansas City Tract being
zoned for commercial use. None of the property is developed, none is
encumbered with any mortgages,  except for a $1.2 million non recourse
mortgage on the Kansas City Tract, and all is being actively marketed as
is.

     The Company  does not plan to engage in further  development  of any
of the Real Estate Assets  except to the extent  necessary to maximize the
value of the properties on hand.  Following the  disposition  of all
properties it intends to terminate its real estate operations.

     The Company also owns an interest in certain contingent accounts
receivable of Tenenbaum & Associates,  Inc. ("TAI"), a real estate tax
consulting firm, the business of which was sold  in  1995.  The Company
also  has  and  is  actively marketing a leasehold interest in
approximately  14,985 square  feet  of  space located on the second floor
of an office building in Kansas City, Missouri, that  was formerly occupied
by TAI and that was vacant as of  December 31, 1996.   The lease,  which
expires on May 31, 2000,  calls for rents of approximately $19,318 per
month, subject to yearly increases of approximately $850.

     Environmental.   Scout  is  subject   to  the   following   United
States environmental  laws:  Clean  Air  Act,  Comprehensive
Environmental  Response, Compensation,  and Liability Act, Emergency
Planning and Community Right-to-Know Act,  Federal Water Pollution  Control
Act, Oil Pollution Act of 1990,  Resource Conservation  and Recovery  Act,
Safe  Drinking  Water Act and Toxic  Substances Control  Act,  all as
amended.  Scout  is also  subject  to the  United  States environmental
regulations  promulgated under these acts, and also is subject to state and
local  environmental  regulations  which have their  foundation in the
foregoing United States environmental laws.

     As is the case with  many  companies,  Scout  faces  exposure  to
actual or potential claims and lawsuits involving environmental matters.
However, no such claims are presently pending and Scout has not suffered,
and does not anticipate that it will suffer, a material adverse effect as a
result of any past action by any  governmental  agency or other party, or
as a result of compliance with such environmental laws and regulations.

Business and Management of Energy Assets

     General

     The Company's Energy Assets consist of Syntroleum and interests in
four oil and gas partnerships  that have working interests in producing
wells in the Gulf of  Mexico.   These  assets  are owned  by  BMA
Resources, Inc.,  a wholly-owned subsidiary  of the  Company  ("BMA
Resources").  BMA  Resources  was  formed by Seafield  to  acquire,  hold
and  develop  properties  in  connection  with its insurance  business
that was sold in 1990.  Since that sale,  BMA Resources has disposed  of
all of its  assets  other  than  Syntroleum  and  the  Oil  and Gas
Interests.   The  Company  intends  to  promote  the  continued
development  of Syntroleum.  The  Company  does not  intend to  acquire
additional  oil and gas interests  with the exception of  additional
capital  expenditures  in existing partnerships for the purpose of further
developing proven reserves.

     Syntroleum

     Syntroleum  Background.  The Company owns  5,950,000  shares of
Syntroleum Common Stock, which constitutes  approximately  32.5% of all
outstanding shares. The shares were  acquired by the Company over a number
of years for an aggregate of  approximately  $2.1  million.  Syntroleum  is
the  developer  and owner of a patented  process  and  several related
proprietary  technologies  ("Syntroleum Process") for the conversion of
natural gas into synthetic  liquid  hydrocarbons which can be further
processed into fuels such as diesel,  kerosene (used by jet aircraft) and
naphtha and related non fuel chemical feedstocks and lubricants.

     Syntroleum  is a privately  owned  corporation  that was founded in
1984 by Kenneth  Agee.  Mr. Agee is a chemical  engineer  who is the
inventor of most of Syntroleum's  proprietary  technology,  the Chairman
and Chief Executive Officer and a  principal  stockholder  of  Syntroleum.
Syntroleum  built an initial two barrel per day pilot plant in 1990-1991
with the proceeds of the Company's first significant  investment in 1988.
In 1995 Syntroleum  substantially up graded the pilot plant to conduct
additional  tests.  In 1996,  Syntroleum  entered into a joint development
agreement and master license agreement with Texaco. Under the joint
development  agreement with Texaco,  Syntroleum and Texaco have agreed to
pool  resources for the refinement of certain aspects of the Syntroleum
Process. Under the master license agreement, Syntroleum has granted Texaco
a nonexclusive license to use the  Syntroleum  Process  outside  North
America (United  States, Canada and Mexico),  China and India for the
construction  of processing  plants and the production of liquid fuels.  In
early 1997, Syntroleum also entered into a  nonexclusive  master  license
agreement  with Marathon Oil Company.

     Syntroleum's  strategy  is  to  license  the  Syntroleum Process  on a
non-exclusive  basis to  producers  of  natural  gas and oil and gas
processors  in exchange for license fees and royalties,  to market the
principal  catalyst used in  the  Syntroleum  Process  to  plant  operators
(the "  Catalyst")   and  to construct and operate its own plants in the
United States and other parts of the world for the production of chemical
feedstocks and lubricants.

     The Syntroleum Process.      Syntroleum's  Syntroleum  Process
essentially involves two catalytic  reactions - the first reaction converts
natural gas into synthesis  gas  ("syngas").  In the  syngas  reaction,
natural  gas  consisting primarily  of  methane,  is combined at high
temperature  with air,  consisting primarily  of  oxygen  and  nitrogen,
in  a  proprietary  reactor  utilizing  a commercially  available  catalyst
to form syngas.  The resulting syngas consists primarily of carbon monoxide
and hydrogen  that is "diluted"  with  nitrogen.  The second  reaction
converts the syngas into hydrocarbons which are primarily liquid at room
temperature  through a catalytic reaction commonly referred to as the
Fischer-Tropsch reaction.  In the Fischer-Tropsch reaction, the syngas
flows into a reactor  containing  a  proprietary  catalyst  developed  by
Syntroleum. As the syngas  passes  over the  catalyst,  it is converted
into hydrocarbons of various molecular weights,  with by-product  water and
carbon dioxide also being produced.   The  hydrocarbons  and  water  drain
from the  reactor  vessel  and are  subsequently  separated.  Both
reactions generate  considerable amounts of heat. The nitrogen helps to
remove a portion  of the heat  from the  reactor and is  ultimately  vented
into the atmosphere.  The Syntroleum Process contemplates that a portion of
the excess heat energy will be used in the compression  energy necessary
for the syngas  and  Fischer-Tropsch  reactions,  with  any  remaining
surplus  heat  energy  being  converted  for  commercial sale  if
circumstances permit.   Energy integration is a key component of the
capital efficiency of the Syntroleum Process  and  is the subject  of
several  patent  applications  that Syntroleum has in process.

     The Syntroleum Process  involves  a  number of unique  characteristics
that differentiate it from competing  processes  developed or under
development by a number of large companies.  The  Syntroleum  Process
utilizes  oxygen  directly from the atmosphere for the syngas  reaction
while others utilize pure oxygen to create a syngas that is free of
nitrogen. This difference  significantly reduces costs  and  equipment  to
produce  syngas  in  the  Syntroleum  Process.    The Syntroleum  Process
also  utilizes  a  unique  catalyst  under  development  by Syntroleum for
use in the Fischer-Tropsch  conversion  reaction.    The Catalyst produces
hydrocarbon  molecules  that  are primarily in the liquid fuels range. This
reduces  subsequent  processing where the desired product is a liquid fuel.
Syntroleum has also developed a catalyst which produces a very waxy
synthetic  crude oil which  requires  further  processing  in order to
produce a liquid  fuel.  A third  major  difference  relates to the use of
nitrogen in the Syntroleum  Process  rather than  eliminating  it prior to
the initial syngas reaction  as with  competing  processes.  The
combination  of these  and  other features  have led  Syntroleum  to
believe  that  plants  using its  proprietary Syntroleum  Process may be
constructed at a capital cost  significantly  less than those  based on
competing  processes  of  comparable  size.  In  addition, Syntroleum
believes that the Syntroleum  Process will permit the construction of
relatively small cost effective  processing  plants  that  may be used on
ships, barges and offshore  platforms for the conversion of gas  production
from small fields in remote locations.

     Patents and Properties.  Syntroleum holds the following patents
relating to the  Syntroleum  Process:   United States  Patent  No.
4,833,170 issued May 23, 1989 and No.  4,973,453 issued November 27, 1990.
These patents were granted for a term of seventeen years from the date of
issuance.  Patent  applications  were subsequently filed in Argentina,
Australia,  Canada,  China,  India,  Malaysia, Mexico,  Netherlands,
Nigeria, Norway, Pakistan,  United Kingdom and Venezuela. Subsequent
patents  have been  granted  in  Australia,  Canada,  China,  India,
Malaysia,  Mexico,  Nigeria,  Norway,  Pakistan  and  the  United  Kingdom.
The applications  in  Argentina,   Netherlands  and  Venezuela  are  still
pending. Syntroleum also has several  additional patent  applications filed
and others in progress.

     Syntroleum  owns a prototype  two barrel per day pilot  plant  located
on 2 acres in Tulsa,  Oklahoma and leases 2,500 square feet of laboratory
and office pace and 4,500 square feet of executive office space in Tulsa.

     Available Natural Gas and Demand for the  Syntroleum  Process.
Syntroleum believes  that a  significant  demand  exists for cost
effective gas to liquids plants due to the  availability  of large
quantities  of natural  gas in remote regions of the world that are not
currently marketable because the distance to a market makes them
uneconomical  to transport as natural gas.  When crude oil is associated
with unmarketable natural gas, it is frequently flared or re-injected in
order to produce the associated oil.  However,  in many countries  flaring
is not allowed by law and  re-injection  is frequently  not an  economical
option. Natural gas may also be unmarketable due to the nature or quantity
of impurities in the gas, such as excessive quantities of carbon dioxide,
nitrogen or hydrogen sulfide.  A cost  effective  Syntroleum  plant may be
a viable option in many of these cases.

     In the  Syntroleum  Process  certain impurities such as nitrogen and
carbon dioxide  do not have to be  removed  in order for the gas to be used
as a viable feedstock.   The  liquid   hydrocarbon  or  "Syncrude"  that
results  from  the Syntroleum Process  is  free from sulfur, metals,
aromatics, nitrogen,  salt and other impurities that may be found in crude
oil. These and other characteristics make the Syncrude a valuable  blending
stock for  upgrading  natural  crude oil products.

     Products.  Depending on the  catalyst  used and the design of the
plant the Syntroleum  Process  will  produce short chain liquid
hydrocarbons  that can be upgraded  into liquid fuels such as diesel,
kerosene (for jet fuel) and naphtha (for use in gasoline  production).
These may be  differentiated  from  existing commodity  fuels  because
they are free of  sulfur,  metals,  particulates  and aromatics and may
therefore be marketed at premium prices as a blending agent in US and
European markets and as a substitute for  LNG  (liquefied  natural  gas).
Other  proprietary catalysts may be used to produce longer chain
hydrocarbons  that can be further processed to produce synthetic
lubricants, waxes and petrochemical feedstocks.

     Competition-Early Stage Development.    The Syntroleum Process is in
direct competition  with  processes  developed by or under  development  by
a number of major oil companies  which have  substantially  greater
financial and technical resources   relative  to  those  available  to
Syntroleum.    Furthermore,  the Syntroleum  Process  has  not  been
tested  in  a  plant  designed  to  produce commercial  quantities  and
such  testing  can not occur  until a plant has been developed,   which
could  take  up  to  two  years  from  the  commencement  of construction.
Although,  Syntroleum  has  entered  into  a  joint  development agreement
with  Texaco,  that  agreement  does not assure that the  development
process will be completed or that Texaco will use its license  rights to
build a plant using the Syntroleum Process.    Accordingly, until a plant
is constructed and placed in profitable  operation,  Syntroleum  will not
have assurance of the commercial feasibility of its process or whether it
will be able to successfully compete with  processes  developed by
companies  having much greater  financial resources.

     No Market for Syntroleum Common Stock.  Syntroleum's capital stock
consists of a single class of Common Stock,  18,311,057 shares of which
were outstanding at December 31, 1996. There is no public market for the
Syntroleum Common Stock. It is privately held by approximately  114
stockholders  under agreements which restrict the transfer of the stock.
Transfers  are  not  permitted  except  to certain affiliates and in
connection with sales to other third parties after the stock has first
been  offered  to  Syntroleum  and then to the other Syntroleum
stockholders.   During  1996, Syntroleum sold shares in two private
transactions at $7.42 per share,  the  largest  of  which  transactions
involved  a catalyst supplier who purchased a portion of the shares for $1
million in cash and agreed to purchase  the balance at $7.42 per share
through the  delivery of $7 million of catalyst and other non cash
consideration.

     Syntroleum  Financial  Condition and Results of Operations.  As of
December 31, 1996,  Syntroleum had an unaudited  accumulated deficit of $5
million (1996 losses from operations were $1.8 million) and net
shareholders' equity of $450,000.

     Syntroleum Management and Employees.   Syntroleum's officers consist
of :

         Mr. Kenneth  Agee, age 39, who has been  Chairman  and Chief
         Executive Officer since inception and who is a licensed
         professional engineer and the inventor of most of Syntroleum's
         proprietary technology.

         Mr. Mark A.  Agee, age 43,  who has  been  the  President  and
         Chief Operating  Officer of Syntroleum since January 1996, Vice
         President and Chief Financial Officer from January 1994 until
         December 1996,  and who is the  brother of  Kenneth  Agee.  From
         1989 to 1993, Mr. Agee was the President and Chief  Executive
         Officer of  Convergent  Communications, Inc., a private
         telecommunications company that was sold in 1993.

         Mr. Peter  Snyder, age 51, has been Vice  President of Marketing
         since January 1996.  From 1990 to 1995 he was the President of C&
         C Petroleum and Chemicals Group, a wax and lubricants marketing
         company.

         Mr.  Larry J.  Weick, age 48, has been  employed as Vice
         President  of Project  Development  since  January  1996.  From
         1993 to 1996 he was a consultant  for natural gas and electric
         utilities.  Previously he was employed for twelve years in
         finance, planning and business development for ARCO.

         Mr. Randall M. Thompson,  age 38, has been the Vice President and
         Chief Financial  Officer since December  1996.  From 1994 to
         December 1996 he was a Vice  President  of  Tenneco  Energy  and
         from  1983 to 1994 was Planning and Evaluation Manager for
         Atlantic Richfield Company.

     The Syntroleum Board consists of eight directors, two of which are
officers of the Company,  being Mr. Seward and Mr.  Jacobs,  Mr. Frank  M.
Bumstead,  a Director of a Seafield  Subsidiary,  Mr. Kenneth Agee and Mr.
Mark Agee, who are Syntroleum officers,  and three other non employee
directors,  consisting of Mr. Alvin Albe, Mr. Robert Rosene, Jr., and Mr.
Ted Sheridan.

     At December 31, 1996, Syntroleum had 8 full time and 8 part time
employees.

     Oil and Gas Properties

     BMA Resources owns minority general  partnership  interests in four
oil and gas general partnerships,  which were formed from 1987 to 1989,
with the purpose of engaging in the business of acquiring,  exploring and
developing oil and gas prospects.  The  partnerships  have working
interests in producing wells in the Gulf of Mexico  and  have  a  combined
carrying  value of  $3.5 million  as  of December 31, 1996.

Miscellaneous Assets and Liabilities

     The  Company  also owned other  assets  consisting  primarily  of (a)
three investments in privately held venture  capital  limited  partnerships
having an aggregate book value at December 31, 1996, of $1,203,000, (b)
184,878 shares (of which 100,000 shares were sold on February 28, 1997),
of common stock of Watson Pharmaceuticals,  a publicly  traded  company
which  closed on March 27,  1997, at $38.38 per share,  and (c) a preferred
stock interest in Norian  Corporation, a privately owned developer of
proprietary  bone  substitute   technology,   which  had  a  carrying
value  of approximately  $1.0 million at December 31, 1996.  These assets
were acquired by Seafield in connection  with its Insurance  Business that
was sold in 1990.  The Company plans to liquidate all of these  investments
in an orderly  manner with the view to maximizing their value to
stockholders.

     Under the  Distribution  Agreement and the Assignment  the Company
assumed certain contingent  Seafield  liabilities,  including  Seafield's
liability for disputed  income  taxes  which the  Internal  Revenue
Service  and the State of California claims to be owed by Seafield for its
1986, 1987, 1988, 1989 and 1990 tax years (the "Tax  Claims").  The Tax
Claims  amount to  approximately  $14.6 million,  plus  interest.  Although
the Company  believes that a combination  of defenses  against the claims
and contested  offsetting tax losses generated by a real estate project
sold at a loss in 1990, could result in a positive  outcome, the Company
can not provide any  assurance  that its defense of such claims will be
successful. The Company has accrued for the estimated settlement with the
IRS in the accompanying combined financial statements.

Company Employees

     The Company and Scout, but not including Syntroleum employed 9
individuals as  of  March 3, 1997,  none  of  whom are  covered  by
collective  bargaining agreements.   All of the Company's employees,  other
than 6 property management employees  of  Scout,   provide   management,
financial,   accounting,   tax, administrative and other services with
respect to its assets.      The  Company believes that relations with its
employees are good.

Regulation - Possible Application of the Investment Company Act of 1940

     Generally, and subject to certain exceptions, an issuer of securities
is an "investment  company" under the Investment  Company Act of 1940 (the
"1940 Act") if, among other criteria, it is engaged in or proposes to
engage in the business of investing,  owning,  holding or trading of
securities and it owns or proposes to acquire  investment  securities
having a value exceeding 40% of the value of such issuer's total assets
(exclusive of government  securities and cash items) on an  unconsolidated
basis.  "Investment  securities"  for  purposes  of  this definition,
includes stock of non-majority  owned  companies,  so the Company's holding
of Syntroleum would be part of its investment  securities.  Although the
value of the Company's  investment  securities as of December 31, 1996,
based in part  on  appraisals,  do not  exceed  40%  of the  value  of its
total  assets (exclusive  of  government  securities  and cash),  the
Company  could meet this definition of an investment  company in the future
as its real estate assets are sold and if the value of Syntroleum
increases.

     However,  under a rule  adopted  under the 1940 Act by the  Securities
and Exchange Commission (the "SEC"), an issuer generally will not be deemed
to be an investment  company  under  the 1940 Act if (a) no more than 45%
of the value of the issuer's  total assets  (exclusive of government
securities and cash items) consists  of, and no more than 45% of the
issuer's  net income after taxes (for the last four fiscal quarters
combined) is derived from,  securities other than (a)  government
securities,   (b)  securities  issued  by  certain  employees' securities
companies,  (c) securities issued by majority owned  subsidiaries of the
issuer  and (d)  securities  issued  by  companies  other  than  investment
companies  which are  controlled  primarily by the issuer and through
which the issuer engages in a business other than that of investing,
reinvesting, owning, holding or trading in securities (the "45% Rule").
Under the 1940 Act an issuer is presumed to be in control of another
company if it holds more than 25% of the voting stock of the company.  The
Company believes that Syntroleum is "primarily controlled"  by the Company
based on the amount of actual  control  exercised by the Company over
Syntroleum's business and the amount of its ownership of voting stock  in
Syntroleum.  Accordingly,  the Company  believes that its only assets that
are securities for purposes of the 45% test are its  Miscellaneous  Assets.
Based  in part on appraisals,  the  Company's  Board  believes that the
value of those assets as of  December 31, 1996,  would be less than 15% of
the  Company's total assets as of that date, exclusive of government
securities and cash items, that the income from  such  assets  in the
future  will  be  less  than  45% of the  Company's anticipated  net income
in the future and that the Company should therefore  be  well  within  the
parameters of the 45% test and not  subject to regulation  under the 1940
Act.

     Nevertheless,  if the Company's percentage ownership interest in
Syntroleum should drop below 25% or if the amount of the Company's
Miscellaneous Assets and other  securities  that do not fall within the
exclusion  should become  greater than 45% of the Company's  total assets
(other than  government  securities  and cash) or if the income derived
from such securities exceeds 45% of the Company's net income after taxes,
and if the Company can not meet the 40% test,  then the Company could
become  subject to regulation by the SEC under the 1940 Act, which
regulation could significantly and adversely affect the Company's
activities. In order  to  minimize  the  likelihood  of  such  event  and
to  stay  within  the requirements  of the 45% Rule, the Company intends to
take such action as may be reasonable  and  appropriate  in order to
maintain  its  primary  control  over Syntroleum   and  to  reinvest  the
proceeds  of  sales  of  its  Real  Estate, Miscellaneous  Assets and Oil
and Gas  properties in government  securities  and other operating assets
pending any merger or other  disposition of the Company's assets and
businesses.

     If the Company does fail to meet the  requirements of the 40% or 45%
Rules, it may  nevertheless  avoid  regulation  under  the  1940  Act if it
meets  the requirements of another SEC rule applicable to "transient"
investment companies. Under  this rule,  a company  will not,  for a period
of one year,  be deemed an investment company,  even though it fails the
test under the 45% Rule, if it has a bona fide intent to be engaged
primarily,  and as soon as reasonably  possible (and  in any  event  by the
end of the  one-year  period),  in a  non-investment company  business or,
under an SEC  statement  respecting  the rule, a bona fide intent to
liquidate within such period of time. The transient investment company rule
is  frequently  relied on by companies  which have  received a  substantial
amount of cash  through a sale of  significant  assets or  through a
securities offering;  they  typically  need time to expand their business
or to start up or acquire a new operating business.

     Under the transient  investment  company rule, a company's intent to
engage primarily in a non-investment  company business must be evidenced by
appropriate resolutions  of its  board of  directors  and by its  business
activities.  The Company's  board of directors has adopted a resolution
evidencing its intent to engage primarily in a non-investment company
business, and the Company presently believes that its business  activities
will  demonstrate the intent required for it to fall within the rule.


ITEM 2.  PROPERTIES.

     The  Company's  headquarters  occupy  approximately  13,700 square
feet of leased space in a building at 2600 Grand Boulevard,  Suite 500,  PO
Box 410949, Kansas City,  Missouri  64141.  The term of this lease expires
on April 1, 2002, subject to an option to cancel the lease on April 1,
1999.

     The Company's real estate subsidiary owns diversified types of
properties for sale or investment purposes in various geographical
locations.  In certain cases, projects were developed on a joint venture
basis with one or more joint venture partners.  Title to property in such
cases may be held jointly with such partners or in the name of the venture.
Rights and obligations with respect to such properties are governed by the
terms of the joint venture agreement.  Real estate is described in greater
detail in Items 1 and 7 and Schedule III.  The Company and subsidiaries
lease office space, equipment, land and buildings under various
noncancelable leases that expire over the next several years.  See Note 9
of the Notes to Consolidated Financial Statements for additional lease
information


ITEM 3.   LEGAL PROCEEDINGS.

     Under the Distribution Agreement and Assignment the Company has
assumed the rights and  obligations of Seafield with respect to the legal
matters  described below.

     Claim  Against  Skidmore,  Owings  &  Merrill, et al.   In 1986, a
lawsuit was initiated in the Circuit Court of Jackson County,  Missouri by
Seafield's former insurance subsidiary (i.e., Business Men's Assurance
Company of America) against Skidmore,  Owings & Merrill  ("SOM") which is
an  architectural  and engineering firm,  and a  construction  firm to
recover costs incurred to remove and replace the  facade  on the  former
home  office  building.  Because  the  removal  and replacement  costs  had
been  incurred  prior  to the  sale  of  the  insurance subsidiary,
Seafield negotiated with the buyer for an assignment of the cause of action
from the insurance subsidiary.  Under the Distribution Agreement Seafield
has assigned to the Company all of its rights to any  recoveries and the
Company has assumed any costs relating to the  prosecution of any of the
above described claims.  Thus any recovery  will be for the benefit of the
Company and all costs incurred in  connection  with the  litigation  will
be paid by the Company.  Any ultimate  recovery  will be  recognized  as
income  when  received  and would be subject to income  taxes.  In
September  1993,  the  Missouri  Court of Appeals reversed a $5.7 million
judgment granted in 1992 in favor of Seafield; the Court of Appeals
remanded the case to the trial court for a jury trial limited to the
question  of whether or not the  applicable  statute of  limitations
barred the claim. The Appeals Court also set aside $1.7 million of the
judgment  originally granted in 1992. In July 1996,  the case was retried
to a judge.  On January 21, 1997,  the judge  entered a judgment in favor
of Seafield for the benefit of the Company.    The amount of that judgment,
together with interest is approximately $5.8 million.  While the judgment
has been appealed,  counsel for the Company  expects that it will be
difficult  for the defendants  to  cause  the  judgment  to  be reversed.
The final outcome  is not expected  for at least another year. Settlement
arrangements  with  other  defendants  have  resulted in payments to
plaintiff  which  have  offset  legal  fees  and costs to date of
approximately $478,000.  Future legal fees and costs can not reliably be
estimated.

     Claim Against Scout. On January 30, 1997, Scout Development
Corporation was served with a complaint filed in the District Court of
Tarrant County,  Texas by the parents of a 36 week old fetus who did not
survive an automobile accident at an intersection in Fort Worth,  Texas,
the view of which is alleged to have been obstructed  by weeds  growing on
property  that is alleged to have been owned by Scout.  The  Company  has
denied  liability,  has turned the matter  over to its insurance  carrier
and believes that if it has any  liability,  it is adequately covered by an
existing policy of insurance.

     Internal Revenue Service Audits.  Seafield has received notices of
proposed adjustments  (Revenue  Agent's  Reports) from the Internal Revenue
Service (IRS) with  respect to 1986-1990  federal  income  taxes.  These
notices  claim total federal income taxes due for the entire five year
period in the  approximate net amount of $13,867,000, exclusive of interest
thereon.

     The substantive  issues raised in these notices for the years 1986-
1990 are primarily composed of the former television  subsidiaries'
amortization of film rights, the sale of the stock of a former television
station,  certain insurance company  tax  issues  and a $27  million  loss
on the  sale  of a  real  estate partnership interest.

     The IRS' denial of film right amortization  equates to approximately
$10.5 million of the $13.9 million in additional taxes;  provided that if
the IRS were to prevail on the amortization  issues, the tax basis in the
television stations would be  increased.  This  would have the effect of
reducing  income  taxes in connection with the sale of the television
stations.

     With  respect  to the  loss on the  sale  of the  real  estate
partnership interest,  the IRS has  claimed  that the sale did not occur
during  1990,  but rather  occurred after 1991. If the sale did not occur
in 1990, then 1990 losses could not be carried  back to 1987,  to reduce
Seafield's  significant  taxable income in 1987.

     Seafield has filed  protests  regarding the  1986-1990  notices of
proposed adjustments.  Seafield  is  currently  pursuing a  compromise
with the  Appeals Division of the IRS for the 1986-1989  years.  The 1990
issues have not yet been formally  addressed  at the  Appeals  Division
but  Seafield  is advised by IRS representatives  that tax  issues in all
years  under  audit  will be  addressed together.  Resolution of these tax
disputes may  reasonably  be expected, but is not certain, during 1997.

     The Company is assuming from Seafield all contingent tax liabilities
and is acquiring all rights to refunds as well as any interest thereon
related to these tax years (the "Tax Claims") and  liabilities  and refunds
related to any issues raised by the IRS for years 1986-1990  whose
resolution may extend to tax years beyond the 1990 tax year. Based upon the
advice of counsel, the Company believes that it will prevail on the 1990
loss carryback  issue.  In addition,  there are meritorious  defenses  or
pending  favorable  compromises  for many of the other substantive issues.
The Company believes that adequate accruals for these income tax
liabilities have been made.

     California Tax Issues.  In December 1996, the California state auditor
sent Seafield an audit report  covering the 1987- 1989  taxable  years.
The State of California  has  determined to include,  as a "unitary
taxpayer,"  all majority owned  non-life  insurance  subsidiaries  and
joint  ventures of  Seafield.  The auditor's  report has been forwarded to
the  California  Franchise Tax Board for action.  A billing is expected to
be made to Seafield within six months from the submission of the report by
the auditor.  The total amount of  California  state income  taxes  due for
the  1987-1989  years  is  expected  to be  approximately $750,000,
exclusive of  interest.  The Company is assuming  all  potential  tax
liabilities  and  interest  thereon  regarding  the  California  audit  for
the 1987-1989 taxable years. The Company believes that it has established
on the pro forma balance sheet appropriate  accruals  for the California
state  income  tax liability.  See Note 11 to Combined Financial
Statements.

      The Company  believes that final  resolution of the above Tax Claims
after taking into account  offsetting  claims for refunds and amounts
accrued,  should not have a material adverse effect on the Company's
financial position.


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

     No matters have been submitted to a vote of stockholders  during the
fourth quarter of the fiscal year covered by this report.


                                   PART II

ITEM 5.  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS
MATTERS.

     The Common Stock of the Company has been traded on the OTC  Bulletin
Board under the symbol SLHO since February 24, 1997.  Since that date the
high and low closing  prices of the Common  Stock were $31.00 and $16.62
respectively.  At February 24, 1997, there were  approximately  1,800
holders of record of the Company's Common Stock. It is believed that the
Common Stock is held by more than 1,000 beneficial owners.

DIVIDEND POLICY
     The Company has paid no cash  dividends  since inception.   Under  the
Distribution Agreement with Seafield,  the  Company will be restricted from
paying dividends, in cash or property, or redeeming its capital stock,  for
a period of two years following  the Distribution Date of  March 3, 1997,
without  the  consent  of Seafield.






ITEM 6.  SELECTED FINANCIAL DATA

The following table sets forth a summary of selected historical financial
data for the Company.  The historical financial information presented
reflects periods during which the Company did not exist but rather reflects
the financial information of Seafield's businesses and assets transferred
to the Company in connection with the Distribution as well as related
liabilities assumed by the Company.  The historical financial information
presented may not necessarily be indicative of the results of operations or
financial condition that would have been obtained if the Company had been a
separate, independent company during the periods shown.  Neither should the
information be deemed to be indicative of the Company's future performances
as an independent company.  The financial information should be read in
conjunction with the Combined Financial Statements and the notes thereto.
See Item 7, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS".


                                        Years ended December 31,
                                  1996     1995     1994     1993    1992
                                ------------------------------------------
                                              (in thousands)

Statement of Operations Data
----------------------------
Real estate sales              $ 15,606   10,485   10,932   16,297  33,067
Real estate rentals
  and other                         759    1,001    1,059    1,173   1,701
                                ------------------------------------------
  Total Revenues               $ 16,365   11,486   11,991   17,470  34,768
                                ==========================================
Cumulative effect of change
  in accounting principle (1)  $ (1,400)     --       --       --      --
Net loss                         (5,598) (11,232)  (6,545)  (4,166) (5,904)

Balance Sheet Data
------------------
Current assets                 $  5,529   4,432     3,707    6,006    1,538
Real estate held for sale        24,202   35,073   40,998   39,047   50,703
Investment securities             4,718    5,136    6,161    6,624    6,990
Investment in oil and gas
  partnerships and interests      3,526    5,255    6,703    8,543   11,427
Total assets                     38,474   51,638   64,627   70,155   84,471
Current liabilities               2,165      365      239    2,150    1,186
Long-term debt                      --     1,289    2,689    1,153    1,153
Combined equity                  35,813   49,686   61,147   66,438   81,271

(1)  Adoption of statement of Financial Accounting Standard No. 121,
"Acounting for the Impairment of Long-Lived Assets and Long-Lived Assets to
be Disposed Of"



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


RESULTS OF OPERATIONS

Introductory remarks about results of operations

This Management's Discussion and Analysis of Financial Condition and
Results of Operations covers periods when Company's assets were owned by
Seafield and operated as part of Seafield.  It should be read in
conjunction with Items 1 and 6 and the Notes to Company's Historical
Combined Financial Statements included elsewhere herein.  It covers the
years ended December 31, 1996, 1995 and 1994.


1996 Compared to 1995.

Real estate revenues in 1996 were $16.4 million compared with $11.5 million
in 1995.  The real estate sales revenues in 1996 include the sale of 40
residential units in Florida and New Mexico ($14.8 million); 20 acres of
land in Oklahoma ($275,000) and 1.5 acres of land in Kansas ($580,000).  In
1995, the real estate sales revenue included the sale of 29 residential
units or lots in Florida, Missouri, New Mexico and Texas ($7.9 million) and
302 acres of land in Kansas and Texas ($2.6 million).  Real estate rental
and other revenues decreased from $1 million in 1995 to $759,000 in 1996,
reflecting sales of rental property and an approximate 15% decrease in
rentals at the Reno parking garage.

At the end of 1996, real estate holdings include residential land,
undeveloped land, single-family housing and commercial structures located
in the following states:  Florida, Kansas, Nevada, New Mexico, Texas and
Wyoming, all of which are listed for sale.  The total acreage consisted of
approximately 1,147acres and approximately 71 lots or units for sale.  Real
estate operations are influenced from period to period by several factors
including seasonal sales cycles for projects in Florida and New Mexico.

Cost of the real estate sales in 1996 totaled $15.3 million, compared with
a cost of approximately $10.9 million in 1995, reflecting the mix of real
estate sold during each period as discussed above in the revenue analysis.
Real estate operating expenses totaled $2.7 million in 1996, compared with
$3.2 million in 1995.  The decrease is attributable to a reduction in
expenses associated with the substantial completion of the residential
projects and a reduction of depreciation in 1996 as real estate available
for sale is not depreciated under SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of," which was implemented effective January 1, 1996.

Adoption of SFAS No. 121 on January 1, 1996 resulted in an impairment loss
on real estate held for sale of $1.4 million which is included in the
accompanying statement of operations for 1996 as the cumulative effect of a
change in accounting principle.  This impairment loss resulted primarily
from discounting expected future cash flows in estimating fair values less
cost to sell of certain real estate properties.

An additional $1.1 million net impairment loss on real estate held for sale
was recorded in 1996.  This impairment loss resulted from changes in
estimated expected future cash flows based primarily on lower expected
sales prices on certain properties based on appraisals and other current
market conditions.

General and administrative expenses in the statements of operations include
a $1.5 million estimate in both 1996 and 1995 of Seafield's actual costs.
Management estimates that the Company will incur approximately $1.5 million
of expenses annually when the Company operates on a stand alone basis.

The above factors produced a loss from operations of $4.3 million in 1996,
compared with $12.2 million in 1995.

Investment income in 1996 increased to $401,000 from $278,000 in 1995.
The 1996 income primarily reflects cash received in excess of basis from
two venture capital funds while 1995's income consists of interest on notes
receivable from the sale of real estate.

Equity in affiliates' operations produced a loss of $1.2 million in 1996,
compared with a loss of $267,000 in 1995.   During 1996, the oil and gas
operations recorded affiliated losses of $1.1 million, compared to a
$209,000 loss in 1995, reflecting increased costs recorded by Syntroleum
and variances in operating results of the oil and gas general partnership
interests.  Syntroleum is a developmental venture which is expected to
incur losses throughout its development stage.  See Item 1 and Notes to
Combined Financial Statements for additional information regarding
Syntroleum."

Interest expense decreased to $107,000 in 1996 from $189,000 in 1995
reflecting retirement of a real estate note payable in 1995.

Equity in earnings of venture capital investment funds totaled $890,000 in
1996 while 1995 produced a loss of $249,000.  These funds invested in
development stage companies which cause earnings to be subject to
significant variations.

The $159,000 of other income in 1996 consists of cash received during the
fourth quarter in excess of the $800,000 of Tenenbaum assets at September
30, 1996.  See Item 1 for additional information.  All future Tenenbaum
receipts will be recorded since all costs have been recovered on this asset
that has been accounted for on the costs recovery method.  The 1995 income
on sale of affiliates reflects the Company's net gain of $111,000 on the
sale of a partnership interest in a commercial property in Colorado.

Tax expense of $56,000 was recorded in 1996 compared with tax benefits of
$1.3 million in 1995.  Because the Company is a party to a tax sharing
agreement with other Seafield entities, some tax benefits were recorded in
1995 for utilization of the Company's losses by Seafield.  Valuation
allowances of $2.6 million in 1996 and $3.7 million in 1995 were provided
on the tax benefits because utilization within the Seafield group was not
expected.  See Note 8 to Combined Financial Statements for additional
information.

The net loss in 1996 of $5.6 million and $11.2 million in 1995 reflect the
above results of operations.


1995 Compared to 1994.

Real estate revenues in 1995 were $11.5 million compared with $12 million
in 1994.  The real estate sales revenues in 1995 include the sale of 29
residential units or lots in Florida, Missouri, New Mexico and Texas ($7.9
million) and 302 acres of land in Kansas and Texas ($2.6 million).  The
1994 real estate sales revenue included the sale of 47 residential units or
lots in Florida, New Mexico and Texas ($10.4 million) and land in
California ($500,000).  Real estate rental and other revenues decreased
$58,000 to $1 million in 1995 reflecting the sale of a rental property in
1994.

At the end of 1995, real estate holdings include residential land,
undeveloped land, single family housing and commercial structures.  The
total acreage consisted of approximately 1,165 acres and 99 lots or units
for sale.

Cost of the real estate sales totaled approximately $10.9 million in both
1995 and 1994.  Real estate operating expenses totaled $3.2 million in
1995, compared with $4 million in 1994.  The decrease primarily reflects
termination costs in 1994 associated with a real estate project.

During 1995, a $7.9 million net realizable value provision on real estate
was recorded.  The loss reflected decreases in sales prices during 1995.
Management believed the decline was other than temporary and therefore
recorded a loss provision on the affected sales inventory.  Likewise, in
1994, a $4.4 million loss was recorded on Texas land held for sale when
conditions indicated that a decline was occurring in the market for this
type of sale inventory.  Management regularly analyzes market trends and
adjusts the carrying values when an impairment condition is indicated.

General and administrative expenses include a $1.5 million estimate in both
1995 and 1994  of Seafield's actual costs.  Management estimates that the
Company will  incur approximately $1.5 million of expenses annually when
the Company operates on a stand alone basis.

The above factors produced a loss from operations of $12.2 million in 1995,
compared with $8.9 million in 1994.

Investment income in 1995 was $278,000 compared to $1,127,000 in 1994.  The
1994 increase included the recognition of deferred interest income on a
real estate note receivable.

Equity in affiliates' operation produced a loss of $267,000 in 1995,
compared with earnings of $254,000 in 1994.   During 1995, the oil and gas
operations recorded affiliated losses of $209,000, compared to earnings of
$373,000 in 1994, reflecting variances in operating results of the oil and
gas general partnership interests and increased costs recorded by
Syntroleum.  See Notes to Combined Financial Statements for additional
information regarding operations accounted for on the equity method.

Interest expense, all associated with real estate, decreased slightly to
$189,000 in 1995 from $222,000 in 1994 reflecting decreases in notes
payable.

Equity in losses of venture capital investments were approximately the same
in 1995 and 1994.  Variance in results are expected as these funds have
investment in development stage companies.

Gain on sale of affiliates income in 1995 reflects the Company's net gain
of $111,000 on the sale of a partnership interest in a commercial property
in Colorado.

Tax  benefits of approximately $1.3 million were recorded in 1995 and $1.4
million in 1994.  Because the Company is a party to a tax sharing agreement
with other Seafield entities, benefits were recorded for utilization of the
Company's losses by Seafield.  In 1995, valuation allowances were provided
on some tax benefits because it was not expected Seafield could realize
utilization of the Company's losses.

The net loss in 1995 of $11.2 million and $6.5 million in 1994  reflect the
above results of operations.


Liquidity and Capital Resources

Prior to September 30, 1996, the Company's liquidity was provided by
Seafield.  However, as discussed in Item 1, Seafield transferred to the
Company cash of $6.9 million and approximately $3.1 million of short-term
investments (consisting of a U.S. Treasury Note which is pledged to a bank
for a real estate letter of credit) on March 3, 1997, (Distribution Date).
Additionally, any cash generated from operations of or the sale of the
Company's assets from October 1, 1996 to March 3, 1997 will be for the
benefit of the Company.  The $3.9 million of cash and cash equivalents in
the December 31, 1996 combined balance sheet represents the net cash
generated by the Company during 1996's fourth quarter.

The residential condominiums projects were substantially complete by the
end of 1995.  Cash provided from operations in 1996 totaled $8.9 million
compared to $33,000 of cash used in 1995, reflecting decreased expenditures
to complete real estate projects.  Additionally, cash provided by real
estate sales increased approximately $3 million to $13 million in 1996,
including a $225,000 deposit on a sale that closed in 1997.  The timing of
receipts from real estate sales and/or collections of notes thereon, as
well as distributions from venture capital investments, may vary
significantly.

Debt associated with real estate totaled $1.2 million at December 31, 1996
and is due in December 1997.  This consolidated debt is non-recourse and
comprises the increase in current notes payable and decrease in long-term
notes payable on the Combined Balance Sheets.  The Company is obligated
under recourse debt (with an unpaid balance of $6.2 million) of an
affiliate accounted for on the equity method.  The Company's obligation on
this recourse debt is secured by a $3.1 million U.S. Treasury Note
transferred to the Company at the Distribution Date.  See Notes to Combined
Financial Statements for additional information.

Management anticipates that future additions to property, plant and
equipment will be minimal.  During 1997, management estimates that
construction and disposal costs to complete real estate projects in
development will be approximately $2 million.  The Company may seek its own
credit facilities but management expects cash flow from operations, cash
from the capitalization at Distribution Date and the sale of assets will be
sufficient to fund cash needs.  The capitalization and operations cash will
increase the Company's December 31, 1996 combined historical equity of
$35.8 million.  See Note 11 of Combined Financial Statements

Subsequent Events.

On January 21, 1997, the Circuit Court of Jackson County, Missouri entered
a judgment favorable to  the Company in the claim against Skidmore, Owings
& Merrill that is described under Item 3  The amount of the judgment,
together with accrued  interest at December 31, 1996,  is approximately
$5.8 million.  While the judgment has been appealed, the Company  has been
advised by its Counsel that it will be difficult for the defendants to
cause the judgment to be reversed.  The final outcome is not expected for
at least another year.

During January and February of 1997, approximately $600,000 of net cash was
generated from the Company's real estate assets, including sales and
operations.  Additionally, the sale of a 547 acre Fort Worth, Texas tract
of undeveloped real estate generated a $1.5 million three year secured note
which the Company financed.  Approximately $650,000 was also received with
respect to Tenenbaum receivables that are described under Item 1.

On February 28, 1997, Seafield sold 100,000 shares of Watson Pharmaceutical
stock for approximately $4.3 million, producing a gain for the Company of
approximately $3 million.  The cash generated by the sale was transferred
to the Company when received by Seafield in March 1997.

RECENTLY ISSUED ACCOUNTING STANDARDS

Statement of Financial Accounting Standards No. 128 "Earnings per Share" is
required to be implemented for both interim and annual periods ending after
December 15, 1997.  The adoption of this standard is not expected to have
any significant impact on the Company's financial position or results of
operations.

Statement of Financial Accounting Standards No. 129 "Disclosure of
Information about Capital Structure" is required to be implemented for
periods ending after December 15, 1997. The adoption of this standard is
not expected to have any significant impact on the Company's financial
position or results of operations.

No other recently issued accounting standards presently exist which will
require adoption in future periods.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

See Item 14(a).

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

(Not Applicable)



                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The directors and executive officers of the Company are as follows:

Name                       Age     Position

James R. Seward, CFA        44     President, Chief Executive Officer
                                     and Class  A Director
P. Anthony Jacobs, CFA      55     Chairman of the Board  and Class A
                                     Director.
Steven K. Fitzwater         50     Vice President, Chief Accounting and
                                     Financial Officer, Treasurer and
                                     Secretary and Class C Director
Lan C. Bentsen              49     Class C Director
W. D. Grant                 80     Class B Director
W.T. Grant II               46     Class B Director
Michael E. Herman           55     Class A Director
David W. Kemper             46     Class B Director

     Mr. Seward has been a director of Seafield  since 1990,  the Executive
Vice President of Seafield  since May 1993;  Senior Vice  President of
Seafield  from August 1990 to May 1993 and Chief Financial Officer of
Seafield since 1990. Mr. Seward also is a director of Syntroleum, LabOne,
Inc. (LabOne) and Response Oncology, Inc. (Response).  Seafield owns 82% of
LabOne and 67% of Response.

     Mr.  Jacobs has been a director of Seafield  since 1987,  the
President of Seafield since May 1993 and Chief  Operating  Officer of
Seafield since 1990. He is also a director of Syntroleum,  LabOne, Response
and Trenwick Group, Inc..

     Mr.  Fitzwater has been the Vice President,  Chief  Accounting
Officer and Secretary of Seafield since 1990.

     Mr.  Bentsen has been a Seafield  director since 1986 and has been
Managing Partner of Remington  Partners  (Investments)  since 1995;  prior
to its sale in 1994, Mr. Bentsen was Chairman and Chief Executive Officer
of Sovereign National Management, Inc. (property management).

     Mr. W. D. Grant has been a consultant to Seafield since August 1990;
he was Chairman  of the Board of  Seafield  until May 1993.  Mr. Grant also
is a director of LabOne and Boatmen's First National Bank of Kansas City.

     Mr. W. T. Grant II has been a director of Seafield since 1980, the
Chairman and Chief  Executive  Officer  of  Seafield  since May 1993;  and
President  of Seafield  prior to May 1993.  Since  November 1995, Mr. Grant
has also served as President, Chairman of the Board and Chief Executive
Officer of LabOne  Mr. Grant also is a director of AMC Entertainment, Inc.,
Commerce Bancshares, Inc., Kansas City Power & Light Company, and Response.

     Michael  E.  Herman has been a  Seafield  director  since 1991 and has
been engaged in  private  investments  since  1990  (partner  Herman
Family  Trading Company);  he has been  President  of Kansas  City Royals
Baseball  Team (major league  baseball)  since 1993;  and  Chairman of the
Finance  Committee of Ewing Marion  Kauffman  Foundation  since  1990.  Mr.
Herman  also is a  director  of Boatmen's First National Bank of Kansas
City, Cerner Corporation,  Janus Capital Corporation and Agouron
Pharmaceuticals, Inc.

     Mr.  Kemper has been Chairman of the Board,  President and Chief
Executive Officer of Commerce  Bancshares,  Inc.  (bank holding  company)
and Chairman and Chief  Executive  Officer and a director of Commerce Bank,
N.A. (St. Louis) for more  than the past  five  years.  Mr.  Kemper  also
is a  director  of  Ralcorp Holdings,  Inc.,  Wave  Technologies
International,  Inc. and Tower  Properties Company.

     The Articles of  Incorporation  and Bylaws  provide that the Company
Board will be divided  into  three  classes of  directors,  with the
classes to be as nearly equal in number as possible,  and that,  of the
initial  directors of the Company  following the  Distribution as
identified  above, the Class A directors will continue to serve until the
2000 Annual Meeting of Stockholders,  the Class B Directors will continue
to serve until the 1998 Annual Meeting of Stockholders and the Class C
Directors  will continue to serve until the 1999 Annual  Meeting of
Stockholders.  Starting with the 1997 Annual Meeting of  Stockholders,
which was held in January  1997,  one class of  directors  is elected  each
year for a three-year  term. The Bylaws  provide that beginning in 1998
annual  meetings of stockholders  shall be held on the second Wednesday in
May or such other date as may be fixed by resolution of the Company  Board.
The first annual  meeting for which proxies will be solicited from
stockholders is expected to be held on May 13, 1998.

Certain Board Committees

     The Company  Board has  established  an Executive  Committee
consisting of Messrs. Seward, Jacobs,  Fitzwater and Grant II, an Audit
Committee consisting of Messrs.  Kemper,  Bentsen  and  W.D.  Grant,  and
a  Nominating  Committee  and Compensation  Committee  consisting of
Messrs.  Bentsen,  Kemper and Herman. The specific  duties of such
committees  will be  established  at a meeting  of the Company Board prior
to the next annual meeting of the stockholders.

ITEM 11.   EXECUTIVE COMPENSATION.

Compensation of Directors

           Nonemployee directors of the Company receive compensation
consisting of annual cash retainers, meeting fees and stock option awards.

           Cash Compensation.  Directors who are not employees of the
Company are paid an annual  retainer for Company  Board  service of $1,000
per quarter and a fee of $500 for each Company Board meeting attended.
Directors who are employees of the Company, Messrs.  Seward,  Jacobs and
Fitzwater, are not paid any fee or additional  remuneration  for  services
as members of the  Company  Board or any committee thereof.

           Directors' Stock Options.  Pursuant to the SLH Corporation 1997
Stock Incentive Plan (the " SLH Stock Option Plan"),  all of the above
named directors of the Company other than Messrs.  Seward,  Jacobs and
Fitzwater  have received options to purchase  16,200  shares of the
Company's  Common  Stock at the fair market  value of such stock as of the
close of business on March 3, 1997,  which the Company has determined to be
$19.15 per share.

Compensation of  Executive Officers

           The  following  table  summarizes  compensation  paid  to  all
of the Company's  Executive  Officers for services  rendered to Seafield
during 1996 . Under the Interim Services  Agreement,  all of the Company's
Executive Officers will remain full time employees of Seafield after the
Distribution  Date, until the earlier of the termination of that agreement
or the cessation of their full time  employment with Seafield.  Pursuant to
that agreement,  Seafield will make their services and the services of
certain other Seafield employees available to the  Company  on an as
needed  basis  in  exchange  for  Seafield's  use of the Company's offices,
equipment  and  other  facilities.  See "Item 13.  Certain Relationships
and Related Transactions." Upon any termination of the arrangement during
1997 it is expected  that each of Messrs.  Seward,  Jacobs and  Fitzwater
will  receive a base salary  from the Company in the amount of $75,000,
$75,000 and $60,000, respectively ,  auto  allowances  and  usual  health
insurance, vacation and other benefits customarily provided to all salaried
employees.  Each of Messrs. Jacobs, Seward and Fitzwater have also received
stock  options  under  the  1997  SLH  Stock  Incentive  Plan to the extent
indicated in Note 2 to the table.  The  principal  positions  listed in the
footnotes to the table are those  held  by  the  Named  Executive  Officers
with  the  Company  as of  the Distribution Date.

                               SUMMARY COMPENSATION TABLE

                                                   Long-Term
                                                  Compensation
                                                     Awards
Name and                            Annual         Securities
Principal                        Compensation      Underlying     All Other
Position                Year   Salary      Bonus     Options       Compens.
                              ($) (1)       ($)      (#) (2)        ($) (3)
James R. Seward, CFA    1996  $147,290       --         --          20,810
President and Chief
Executive Officer

P. Anthony Jacobs, CFA  1996   249,590       --         --           95,110
Chairman of the Board

Steven K. Fitzwater     1996    94,266       --         --            9,937
Vice President - Chief
Financial and Accounting
Officer, Treasurer and
Secretary

     (1)  Consists  of cash  compensation  paid  by  Seafield  for all
services rendered to Seafield  during 1996. At the  Distribution  Date, it
is anticipated that each Executive Officer's annual rate of salary will be
the same as the 1996 amount  shown in the  Summary  Compensation  Table;
however,  under the Interim Services  agreement,  that part of it which is
attributable to services rendered to Seafield will be allocated to Seafield
and the remaining part for services to the Company.  Following  termination
of the  Interim  Services  Agreement,  the  Executive  Officers  will  be
compensated  by the Company at the following annual rates: James R. Seward:
$75,000;  P.  Anthony  Jacobs:  $75,000 and Steven K. Fitzwater: $60,000.

     (2) On March 3, 1997, Messrs. Seward, Jacobs and Fitzwater received
options to purchase  65,000,  65,000 and 40,500  shares,  respectively,
of the Company Common  Stock.  All such options are  nonqualified  stock
options with exercise prices  equal  to the  fair  market  value of the
Company  Common  Stock on the Distribution  Date,  which was determined by
the Company to be $19.15 per share; all options have ten year terms and
become  exercisable in equal installments as follows:  one  fourth on March
3,  1997,  and  one-fourth  on each of the first, second and third
anniversary dates of such date. See "SLH Stock Incentive Plan."

     (3)  The  amounts  include  contributions  paid  or  accrued  to the
named executive  officers'  accounts in Seafield's  401(k) Plan  ("401(k)")
and Money Purchase Pension Plan ("MPP"),  pursuant to a Supplemental
Retirement Agreement ("SERP") with the executive and for term life
insurance for the executive.

Employment Agreements

         Each of the Executive Officers named in the Summary  Compensation
Table is a  party  to an  Employment  Agreement  with  the  Company.  Each
Employment Agreement  provides for employment of the Executive  Officer for
an initial term commencing on the date the Executive  Officer  ceases to be
employed by Seafield under the Interim Services  Agreement on behalf of the
Company and ending on the third  anniversary  of  the  Distribution  Date.
The  term  of  the  Employment Agreements is  automatically  extended for
successive one year periods unless a notice of non-extension is given by
either party at least twelve months prior to the end of the then current
term.

         Compensation does not commence under the Employment Agreement
until the date the Executive  Officer  ceases to be employed by Seafield
under the Interim Services Agreement. Base compensation, which is initially
at the rates per annum set forth  above  under  "Compensation  of
Executive  Officers,"  is subject to adjustment  annually by the Company
Board,  provided that base salary may not be decreased  by more than five
percent year to year.  The  Employment  Agreements provide that an
Executive Officer's full time is not required and such Executive Officer
is  entitled  to pursue  other  employment  or  business  opportunities
simultaneously with his duties to the Company.

         The employment of each of the Company's  Executive  Officers is
subject to termination for cause,  which is defined as including willful
misconduct with respect  to an  Executive  Officer's  duties,  or the
perpetration  of a fraud, embezzlement, or other act of dishonesty, or a
breach of trust or fiduciary duty which materially  adversely affects the
Company or its stockholders or the other employment or business activities
of such Executive Officer conflicting with the Company's  business.  The
Employment  Agreements  provide  that  the  Executive Officers  will not
compete  with the Company  during the term of the  Employment Agreements
and, if an Executive  Officer is terminated with cause or voluntarily
terminates his employment, for a period of one year thereafter.

SLH Stock Incentive Plan

         The Company has adopted a stock incentive plan,  which provides
for the granting of stock options respecting Company Common Stock to
officers, employees and  non-employee  directors of the Company.  Pursuant
to the stock option plan, the initial  non-employee  directors of the
Company  have been  granted  options respecting 16,200 shares of Company
common stock,  effective on the Distribution Date. Non-employee directors
who first become directors of the Company after the distribution  date
would be granted  stock options  respecting  16,200 shares of Company
common stock  effective on the date such a  non-employee  director first
assumes  office  as  a  director  of  the  Company.  Each  option  granted
to a non-employee  director  pursuant to the terms of the stock  incentive
plan will have a term of ten years,  will  provide for an exercise  price
equal to 100% of the fair market value of the Company Common Stock on the
Distribution  Date and will become exercisable in four installments as
follows:  one-fourth on the date of grant and one fourth on each of the
first,  second and third anniversaries of the date of grant.  Non-employee
directors  are entitled to receive  additional grants of stock  options
under the  stock  option  plan,  but only  subject  to approval of such
subsequent grants by Company stockholders. The Company does not presently
expect that non-employee  directors will be granted options other than
those described above.

         Except  for  grants  of stock  options  to  non-employee
directors  as discussed above (which grants are provided for in the stock
option plan itself), stock option grants will be  administered  by the
Nominating  and  Compensation Committee of the Company Board ("Committee").
The Committee shall consist of two or more  non-employee  directors.  The
Committee  has  authority to issue stock options  to  officers  and
employees,  with such  terms and  provisions  as the Committee shall
determine.  The stock incentive plan limits the number of shares of Company
Common Stock with  respect to which stock  options may be granted to
260,000  in the  aggregate  and  further  limits the number of shares of
Company Common Stock which may be subject to stock options granted to any
one individual to  65,000.  Stock  options  granted  to  officers  or
employees  may be either incentive stock options (ISO's) or non-qualified
stock options (NQSO's),  at the discretion of the Committee. Except in the
case of officers or employees who are beneficial owners of more than ten
percent of the voting power of Company Common Stock (which is not expected
to be the case with any of the  Company's  officers or employees),
options, including both NQSO's and ISO's, may be granted with an exercise
price not less than 100% of the fair  market  value of the  underlying
shares on the date of grant.  Options  granted to officers and employees
may not expire later than the tenth  anniversary of the date of grant and
no options may be granted after  December 31, 2001.  Options  granted to
officers and employees may contain such vesting schedule as is deemed
appropriate by the Committee. The options  initially  granted to officers
and  employees  and  referred to in the Summary  Compensation  Table  above
all  provide  for  vesting  in  four  equal installments as follows:  one-
fourth on the date of grant and one-fourth on each of the first, second and
third anniversaries of the date of grant.

         All options held by officers and  employees  expire six months
after an option holder's employment with the Company terminates;  provided,
however, that except in the case of an ISO,  the period is  extended  to
twelve  months in the case of a holder's  death or  disability  and is
extended to three years in the case of a holder's  retirement.  A  non-
employee  director's  options  terminate ninety days after his term as a
director terminates,  except that said period is extended to twelve months
if the  non-employee  director dies while in office or during the ninety
days  thereafter.  Generally,  options  which are  exercisable following
termination of an option  holder's  employment or the expiration of a non-
employee  director's  term as a director may be exercised only to the
extent exercisable  on the date  employment  terminates  or the term as a
non-employee director  expires.  However,  vesting  shall be  accelerated
in the event of an option  holder's  death,  or in the  case  of  options
granted  other  than  to non-employee directors, disability or retirement.

         All unvested options shall become immediately  exercisable in the
event of one or more of the following:  (i) acquisition of beneficial
ownership of 25% or more of the voting  power of Company  common  stock by
any person  other than descendants  of W. D. Grant's  father;  (ii) a
change in the  composition of the Company  Board such that a majority of
the Board is comprised  of persons  other than the  initial  directors  and
future  directors  nominated  by the  initial directors  or persons who
have been  nominated by the initial  directors;  (iii) consummation  of a
merger  or  consolidation  involving  the  Company;  or (iv) adoption of a
plan of complete  liquidation and dissolution by the Company Board and the
Company's stockholders.

          Except in the case of ISOs,  payment of the exercise  price for
options may, at the holder's election,  be made either in cash, in the form
of shares of Company Common Stock  previously  owned by the option  holder,
or by way of the Company  withholding  shares  otherwise  issuable upon the
exercise of an option with a fair market value at the time of exercise
equal to the exercise price.


ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENTS.

By Management

         The following  table sets forth the number of shares of Company
Common Stock  beneficially owned as of March 3, 1997,  directly or
indirectly,  by each director,  each Named Executive Officer and all
directors and executive officers as a group,  based on their  holdings  of
record  of  Seafield  Common  Stock on February 24, 1997. Except as
otherwise indicated, each individual named has sole investment and voting
power with respect to the securities shown.

                              Amount and Nature of
                Name       Beneficial Ownership (1)(2)(11)   Percentage(12)

James R. Seward (9)                 25,444                       1.6%
P. Anthony Jacobs (8)               28,785                       1.8%
Steven K. Fitzwater                 13,837                        --
Lan C. Bentsen (3)                   6,012                        --
W. D. Grant (4)                    271,846                      17.0%
W.T. Grant II (5)                   40,770                       2.5%
Michael E. Herman (6)                5,860                        --
David W. Kemper (7)                  4,702                        --
All Directors and Officers
  as a group of eight (10)         396,227                      23.5%
----------------

(1) A  beneficial  owner of a security  includes a person who,  directly or
indirectly,  has or shares  voting or  investment  power  with  respect  to
such security. Voting power is the power to vote or direct the voting of
the security and  investment  power is the power to dispose or direct the
disposition of the security.  Each  person  listed has  stated  that he,
either  alone or with his spouse,  has sole voting  power and sole
investment  power with  respect to the shares shown as beneficially owned,
except as otherwise indicated.

     (2) Shares of Company  Common  Stock shown as  beneficially  owned
include shares issuable upon the exercise of stock options that were
exercisable on the Distribution  Date or that  become  exercisable  within
60 days  thereafter,  as follows:  Lan C. Bentsen,  4,050 shares, W. D.
Grant,  4,050 shares; W. T. Grant II, 4,050 shares; Michael E. Herman,
4,050 shares; David W. Kemper, 4,050 shares; P. Anthony Jacobs,  16,250
shares,  James R. Seward,  16,250 shares;  Steven K.  Fitzwater, 10,125
shares,  and all  directors and  executive  officers as a group,  62,875
shares.

     (3)  Includes  355  shares  held by a family  trust for the  benefit
of Mr. Bentsen's  children,  as  to  which  he  disclaims  beneficial
ownership.   An unaffiliated person is trustee with sole voting and
investment powers.

     (4)  Includes  59,490  shares held by a family  trust for which W. D.
Grant serves as a co-trustee and in that capacity shares voting and
investment  powers with UMB Bank,  Kansas City, N.A.; and 1,350 shares held
by a family  foundation of which W.D. Grant shares voting and investment
power with UMB Bank, N.A.; also including  6,712 shares owned by W. D.
Grant's  wife,  as to which he disclaims beneficial ownership.

     (5)  Includes  7,814  shares  held by W. T. Grant II as  custodian
for his children; includes 11,250 shares held in a family trust for which
W. T. Grant II serves as a co-trustee  with Laura Gamble and in that
capacity shares voting and investment  powers;  also includes 2,967 shares
owned by the wife of W. T. Grant II, as to which he disclaims beneficial
ownership.

     (6) Includes 50 shares owned by the Herman Family Trading  Company of
which Mr. Herman is a general partner and approximately 73% owner.

     (7) Includes 489 shares held in a family trust for which Mr.  Kemper
serves as a trustee,  and in that capacity  shares voting power and has
sole investment power.

     (8) Includes 250 shares owned by the wife and 50 shares owned by the
son of P. Anthony Jacobs as to which he disclaims beneficial ownership.

     (9) Includes 375 shares held in a family trust for which Mr.  Seward
serves as a  co-trustee  with  his  mother,  and in that  capacity  shares
voting  and investment powers.

     (10) Includes (i) 62,875 shares of Company  Common Stock  issuable
upon the exercise of stock options  granted under the SLH 1997 Stock
Incentive Plan that became  exercisable on March 3, 1997 or that become
exercisable  within 60 days thereafter.

     (11)  Includes  as to  each of the  following  individuals,  the
following numbers of shares held in their  respective  accounts under the
Seafield Capital Corporation  401(k) Plan and Trust,  as to which  shares
the  individual  shares investment power, but does not have voting power:
James R. Seward,  166 shares; P. Anthony Jacobs, 565 shares;  Steven K.
Fitzwater,  160 shares; and W.T. Grant II, 297 shares  (plus,  in the case
of both Messrs.  Fitzwater  and Seward,  the balance of the shares in the
Seafield 401(K) Plan as to which each shares voting power as a member of
the  Seafield  401(K) Plan  Administrative  Committee;  the Seafield 401(K)
Plan own an aggregate of 1,712 shares).

     (12) The  percentages  represent the total number of shares of Common
Stock shown in the  adjacent  column  divided  by  1,622,276  the number of
issued and outstanding shares of the Company's Common Stock on March 3,
1997, plus, in each instance,  all shares of Common Stock issuable to the
person or group named upon the exercise of stock  options  granted under
the SLH  Corporation  Stock Option Plan for 1997 that were exercisable on
March 3, 1997, or that become exercisable within 60 days thereafter.
Percentages of less than one percent are omitted.

 By Others

         The table  below sets forth each person or entity  (other than
persons set forth in the  preceding  table) that has reported to the
Company  beneficial ownership  of more than 5% of the  Company's  Common
Stock as of March 17, 1997. The percentage of ownership is based on
1,622,276 shares outstanding as of March 3, 1997.

                               Amount and Nature of
         Name                  Beneficial Ownership           Percentage(1)

Gotham Partners, L.P (2)                83,215                     5.1%
110 East 42nd Street, 18th
Floor, New York, New York 10017.
------------

     (2) As  reported in a Schedule  13D filed on March 17,  1997.  Gotham
Partners II, L.P. reports ownership of an additional 760 shares.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The Company and Seafield have entered into certain  agreements
for the purpose of effecting  the  Distribution  and  defining the ongoing
relationship between  them.   These  agreements   consist  of  the
Distribution   Agreement, Assignment, Interim Services Agreement and Tax
Sharing Agreement.

Distribution Agreement and Assignment

         The  Distribution  Agreement and  Assignment  provide for,  among
other things, the principal corporate transactions required to effect the
Distribution and certain other matters  governing the  relationship
between Seafield and the Company with respect to or in consequence of the
Distribution.

     Transfer Assets and Liabilities.  Under the Distribution  Agreement
and Assignment  Seafield  placed with the Company  (1) the  Transfer
Assets and the personnel  currently  involved in the management of those
assets and (2) and the Transfer  Liabilities,  which include  Seafield's
financial  responsibility for known and contingent or unknown  liabilities
which relate  directly to the Real Estate,  Energy and  Miscellaneous
businesses  and assets as  conducted  on the Distribution  Date and certain
other  liabilities  of Seafield  described in the Distribution  Agreement,
including Seafield's  obligations under the Tax Claims described under
"Item 3. Legal Proceedings."

         As  security  for the  Company's  obligations  in  connection
with the Distribution,  the Company has agreed in the Distribution
Agreement that it will not pay any dividends in cash or property or redeem
any of its capital stock for a period of two years following the
Distribution  Date,  without the consent of the  Seafield  Board.  That
covenant  will also  limit the  extent to which the Company may pay
dividends or otherwise  effect a complete  liquidation  prior to such date.

         Contingent Claims and Insurance.  Under the Distribution
Agreement, the Company will be entitled to the benefit of  insurance
coverage  under  Seafield policies,  to the extent such insurance  coverage
existed and is available,  for claims relating to the ownership or
operation of the Transfer Assets by Seafield prior to the Distribution Date
subject to, among other things, the obligation to reimburse  Seafield for
increases in insurance  premiums as a result of payments for such claims.

         Employee Benefits.  The Distribution Agreement and Assignment
contain a number of provisions relating to current and former employees.
Generally, under those  provisions the Company assumed no obligations or
liabilities with respect to employee  plans or  benefits  prior to the
Distribution  Date but did assume responsibility for providing  employee
benefits for certain Seafield  personnel, primarily consisting of employees
of Scout Development Corporation,  that became employees of the Company
through its  acquisition  of Scout.  Pursuant to these agreements  the
Company  also   contracted  with  Seafield  for  executive  and
administrative  services  as  described  under the  Interim  Services
Agreement described below.

         No  Representations  or  Warranties.  The  Distribution  Agreement
and Assignment  provide that Seafield  transferred  the Transfer Assets and
Transfer Liabilities to the Company without representation or warranty "as
is, where is," except as otherwise expressly provided.

Interim Services Agreement

         At the date of the transfer of the Transfer  Assets and
Liabilities to the Company under the  Distribution  Agreement  and
Assignment  (the  "Transfer Date"), all of Seafield's  operations were
conducted by 17 employees from 13,674 square feet of leased  offices at
2600 Grand  Boulevard,  Kansas City,  Missouri (the  "Lease").  Under  the
Assignment  Seafield  transferred  the Lease to the Company and all
Seafield  employees  continued  to remain  employees of Seafield (the
"Seafield  Personnel")  except  for  9  employees  of  Scout  Development
Corporation  and its  subsidiaries  (the "Company  Personnel").  In
particular, Messrs.  Jacobs,  Seward,  and  Fitzwater  and  other
administrative  personnel remained officers and employees of Seafield while
also serving the Company under the Interim Services Agreement.

         On the Transfer Date Seafield and the Company  entered into the
Interim Services  Agreement  for the purpose of  permitting  Seafield and
the Company to continue to jointly use their  respective  personnel and
facilities until either party elects to terminate the arrangement.  Under
the arrangement,  Seafield has agreed to provide to the Company during the
term of the arrangement all services required  by the  Company  for the
operation  of the  offices of the  Company's Chairman,  Chief Executive
Officer, Chief Financial Officer and Chief Accounting Officer together with
clerical and  administrative  services,  but not including services
required   exclusively  by  Scout  Development   Corporation  and  its
subsidiaries.  In exchange for those services, the Company agrees to
provide the retained Seafield Personnel with office facilities and
equipment  sufficient for the conduct of Seafield's  activities.  Seafield
and the Company are required to review the amount of personnel and
facilities  used under the  arrangement  and each will  reimburse the other
to the extent that the exchange of facilities for services is not
equivalent.

Tax Sharing Agreement

         Generally. In connection with the Distribution the Company and
Seafield have entered into a Tax Sharing  Agreement which  provides,  among
other things, for the  allocation  among the parties  thereto of Federal,
state,  local,  and foreign tax liabilities for all periods through the
Distribution  Date.  Though valid as between the parties thereto,  the Tax
Sharing  Agreement is not binding on the IRS and does not affect the joint
and several  liability  of Seafield and its  subsidiaries  to the  IRS  for
all  Federal  taxes  owed to the IRS by such corporations.

         Prior Tax Agreement.  Seafield and all of its  subsidiaries,
including subsidiaries  of  the  Company,   were  members  of  a
consolidated   group  of corporations  that filed  consolidated  Federal
income tax returns,  and all of these  corporations are parties to a tax
sharing  agreement dated August 1, 1990 that  governs  their  relationship
as members of this  consolidated  group (the "Prior Tax  Agreement").  The
Tax Sharing  Agreement  modifies and amplifies the Prior Tax Agreement in
certain  respects and  expressly  provides that the Prior Tax  Agreement,
as so modified and  amplified,  will continue in full force and effect
with  respect to all tax  returns  for  periods  beginning  prior to the
Distribution Date that are otherwise covered by such Prior Tax Agreement.

         Under the Prior Tax Agreement each member of the Seafield
consolidated group is  essentially  liable for the amount of Federal income
tax that it would pay if it filed a  separate  Federal  income  tax
return.  As a  result  of the continuation  of the Prior Tax Agreement,
among other things,  Seafield will be responsible  and liable for all
Federal income tax liability  attributable to it as the  payor of the
Distribution.  Also  under  the  Prior  Tax  Agreement  as continued in
effect by the Tax Sharing Agreement, each subsidiary of the Company will be
liable to Seafield and will pay to Seafield after the Distribution  Date an
amount  equal to any  Federal  income tax  liability  attributable  to
income generated by the  subsidiary  prior to such date and Seafield  will
be liable to the Company and will pay to the Company  after the
Distribution  Date an amount equal to any Federal income tax savings
attributable to losses generated by the subsidiary prior to such date..

         Other Matters.  The Tax Sharing Agreement  generally  provides
that the parties  will  cooperate  with each other in the  preparation  and
filing of tax returns and with regard to handling  post-filing audits and
similar proceedings. The Tax  Sharing  Agreement  expressly  provides  that
it does not deal with the liability of the parties  with respect to the Tax
Claims or any tax  liabilities that arise out of or are related to the Tax
Claims,  since such liability is the subject of the Distribution Agreement
and the Assignment.

Conflicts of Interest

          The above agreements were developed by Seafield in connection
with its strategy  to  create  the  Company  and  to  cause  the  Company's
stock  to be distributed to Seafield shareholders in the Distribution.
Accordingly,  none of the agreements are the result of arm's-length
negotiation  between  independent parties.

         P. Anthony Jacobs,  CFA, James R. Seward, CFA, and Steven K.
Fitzwater, who are the President and Chief Operating Officer,  Executive
Vice President and Chief  Financial  Officer,  and Vice President and Chief
Accounting  Officer of Seafield, respectively, are the Chairman, President
and Chief Executive Officer, and Vice President and Chief  Financial and
Accounting  Officer of the Company, respectively.  All but one of the
directors of the Company are also directors of Seafield. These officers and
directors of the Company will continue in such dual capacities  with
Seafield  and the  Company for an  indefinite  period of time. Because  the
management  of both  Seafield  and  the  Company  are  essentially
identical,  conflicts  may arise with respect to the operation and effect
of the agreements  and  arrangements  described  above  and also  with
respect  to the negotiation of any additional  agreements  which may well
arise between Seafield and the Company.  Although Seafield and the Company
plan to utilize  independent directors who have no affiliation with the
Company to resolve any material issue that may arise between Seafield and
the Company following the Distribution, such resolutions  may not  reflect
the  results of actual  arms-length  negotiations. Accordingly,  conflicts
arising out of the  management of both Seafield and the Company by the same
persons could have an adverse  affect on the Company and its stockholders
if not properly resolved.


                                   PART IV

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

The following documents are filed as part of this report:

(a)(1) Financial Statements:
       Independent Auditors Report on SLH Combined Financial Statements and
         Schedule
       SLH Operations  Combined Balance Sheets as of December 31, 1996 and
         1995
       SLH Operations  Combined  Statements of Operations for the years
         ended December 31, 1996, 1995 and 1994
       SLH Operations Statements of Combined Equity
       SLH Operations  Combined  Statements  of Cash  Flows for the years
         ended December 31, 1996, 1995 and 1994
       Notes to SLH Operations Combined Financial Statements

   (2) Financial Statement Schedule:
       III.  Real Estate and Accumulated Depreciation

       All other  schedules are omitted because they are not applicable
         or  the   information  is  contained  in  the   Combined
         Financial Statements or notes thereto.

   (3) Exhibits required by Item 601 of Regulation S-K(see Index to
         Exhibits in paragraph (c) infra,)

(b)Reports on Form 8-K.
       No reports on Form 8-K were filed during the quarter ended
         December 31, 1996.

(c)Index to Exhibits (Exhibits follow the Schedules);
  Number   Description

   2(a)    Copy  of  Distribution  Agreement   [incorporated  by reference
           to Exhibit 2(a) to Form 10/A of the Company dated February 3,
           1997].

   2(b)  * Copy  of  Blanket  Assignment,  Bill of  Sale,  Deed and
           Assumption Agreement.

   3(a)    Articles   of   Incorporation   of  SLH   Corporation
           [incorporated  by  reference  to Exhibit  3(a) to the Form 10 of
           the Company filed December 24, 1996].

   3(b)    Bylaws of SLH Corporation  [incorporated by reference to Exhibit
           3(b) to the Form 10 of the Company  filed December 24, 1996].

   4       Copy of Rights Agreement dated as of January 31, 1997
           [incorporated  by  reference to Exhibit 4 to the Form 10/A of
           the Company filed February 12, 1997].

  10(a)  * Copy of Facilities Management and  Interim Services Agreement.

  10(b)  * Copy of Tax Sharing Agreement .

  10(c)    Copy of SLH  Corporation  1997 Stock  Incentive  Plan
           [incorporated  by reference  to Exhibit  10(c) to the Form 10/A
           of the Company filed February 12, 1997].  **   ***

  10(d)    Form of Employment  Agreements with certain executive officers
           of  SLH   [(incorporated  by  reference  to Exhibit B to Exhibit
           2(a)]. **

  21       Subsidiaries of SLH Corporation (reference is made to Item 1
           hereof)

  23     * Consent of KPMG Peat Marwick LLP with respect to Form 10-K

  27       Financial Data Schedule - as filed electronically by the
           Registrant in conjunction with this 1996 Form 10-K


   * These documents may be obtained by stockholders of the Company upon
     written request to:   SLH Corporation, P.0. Box 410949, Kansas City,
     Missouri 64141.

  ** Management Compensatory Plan

 *** Non-Management Director Compensatory Plan

(d)  Not Applicable.





                                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.

                                     SLH CORPORATION
                                     By:    /s/ P. Anthony Jacobs
                                         -----------------------------
                                            P. Anthony Jacobs
                                     Title: Chairman of the Board
                                            Officer and Director
                                     Date:  March 31, 1997

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


By:    /s/ James R. Seward           By:    /s/ Steven K. Fitzwater
    -----------------------------        -----------------------------
       James R. Seward                      Steven K. Fitzwater
Title: President and Chief           Title: Vice President, Chief
       Executive Officer                    Financial Officer, Chief
       and Director                         Accounting Officer, and
Secretary and Director
Date:  March 31, 1997                Date:  March 31, 1997


By:    /s/ David W. Kemper           By:    /s/ Michael E. Herman
    -----------------------------        -----------------------------
       David W. Kemper                      Michael E. Herman
Title: Director                      Title: Director
Date:  March 31,1997                 Date:  March 31, 1997




INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
SLH Corporation:

We have audited the combined balance sheets of SLH Operations as of
December 31, 1996 and 1995 and the related combined statements of
operations, equity and cash flows for each of the years in the three-year
period ended December 31, 1996.  These combined financial statements are
the responsibility of the Company's management.  Our responsibility is to
express an opinion on these combined 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 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 combined financial statements referred to above present
fairly, in all material respects, the financial position of SLH Operations
at December 31, 1996 and 1995 and the results of its operations and its
cash flows for each of the years in the three-year period ended December
31, 1996, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic combined financial statements taken as
a whole, present fairly, in all material respects, the information set
forth therein.


                                      /s/ KPMG Peat Marwick LLP


Kansas City, Missouri
March 31, 1997




SLH OPERATIONS
Combined Balance Sheets
---------------------------------------------------------------------
December 31,                                       1996         1995
---------------------------------------------------------------------
                                                     (In thousands)
ASSETS
Current assets:
  Cash and cash equivalents                    $   3,925          --
  Accounts and notes receivable                       33           69
  Real estate under contract                       1,223        3,868
  Other current assets                               348          495
                                                ---------------------
      Total current assets                         5,529        4,432
Real estate held for sale                         24,202       35,073
Investment securities                              4,718        5,136
Investment in affiliates:
  Oil and gas partnerships and interests           3,526        5,255
  Other                                             (116)         123
Property, plant and equipment                        425          630
Notes receivable                                     --            22
Intangible assets                                    113          839
Deferred income taxes                                 73          118
Other assets                                           4           10
                                                ---------------------
                                               $  38,474       51,638
                                                =====================
LIABILITIES AND COMBINED EQUITY
Current liabilities:
  Accounts payable                             $     289          115
  Notes payable                                    1,194          --
  Other current liabilities                          682          250
                                                ---------------------
      Total current liabilities                    2,165          365
Notes payable                                        --         1,289
Deferred income taxes                                183          183
Other liabilities                                    313          115
                                                ---------------------
      Total liabilities                            2,661        1,952
                                                ---------------------
Total combined equity                             35,813       49,686
                                                ---------------------
                                               $  38,474       51,638
                                                =====================

See accompanying notes to combined financial statements.



SLH OPERATIONS
Combined Statements of Operations
----------------------------------------------------------------------
Year Ended December 31,                     1996      1995      1994
----------------------------------------------------------------------
                                           (In thousands except
                                            per share amounts)
REVENUES
  Real estate sales                     $  15,606    10,485    10,932
  Real estate rentals and other               759     1,001     1,059
                                         ----------------------------
    Total revenues                         16,365    11,486    11,991

COSTS AND EXPENSES
  Real Estate:
     Cost of sales                         15,250    10,984    10,897
     Operating expense                      2,733     3,217     4,048
     Provision for loss on real
       estate held for sale, net            1,069     7,901     4,400
  General and administrative                1,581     1,564     1,554
                                         ----------------------------
  Loss from operations                     (4,268)  (12,180)   (8,908)
Investment income - net                       401       278     1,127
Equity in net earnings (loss)
  of affiliates                            (1,217)     (267)      254
Interest expense                             (107)     (189)     (222)
Equity in net earnings (loss) of
  venture capital investment funds            890      (249)     (233)
Other income                                  159       --        --
Gain on sale of affiliates                    --        111       --
                                         ----------------------------
  Loss before income taxes
    and cumulative effect                  (4,142)  (12,496)   (7,982)
                                         ----------------------------
  Taxes on income (benefits):
    Current                                    11    (1,225)   (1,638)
    Deferred                                   45       (39)      201
                                         ----------------------------
      Total                                    56    (1,264)   (1,437)
                                         ----------------------------
Loss before cumulative effect of
   change in accounting principle          (4,198)  (11,232)   (6,545)
Cumulative effect of change in
  accounting principle                     (1,400)      --        --
                                         ----------------------------
NET LOSS                                $  (5,598)  (11,232)   (6,545)
                                         ============================



See accompanying notes to consolidated financial statements.



SLH OPERATIONS
STATEMENT OF COMBINED EQUITY
--------------------------------------------------------------------
                                                      (in thousands)
--------------------------------------------------------------------

Balance, December 31, 1993                               $ 66,438
Net loss                                                   (6,545)
Capital contributions from Seafield Capital Corporation     1,254
                                                          -------
Balance, December 31, 1994                                 61,147
Net loss                                                  (11,232)
Distributions to Seafield Capital Corporation                (229)
                                                          -------
Balance, December 31, 1995                                 49,686
Net loss                                                   (5,598)
Distributions to Seafield Capital Corporation              (8,275)
                                                          -------
Balance, December 31, 1996                               $ 35,813
                                                          =======



See accompanying notes to combined financial statements.


SLH OPERATIONS
COMBINED STATEMENTS OF CASH FLOWS
                                                   Years Ended December 31,
---------------------------------------------------------------------------
                                                   1996      1995     1994
---------------------------------------------------------------------------
                                                        (in thousands)
OPERATING ACTIVITIES
Net loss                                        $ (5,598)  (11,232) (6,545)
Adjustments to reconcile net loss to net cash
  provided (used) by operations
  Cumulative effect of change in accounting
      principle                                    1,400        --      --
  Depreciation and amortization                      374       582     641
  Equity in net (earnings)loss of affiliates       1,217       267    (254)
  Equity in net (earnings) loss of venture capital
     investment funds                               (890)      249     233
  (Gain) loss on sale of affiliates                   --      (111)     --
  Provision for loss of real estate held for sale  1,069     7,901   4,400
  Sales of real estate                            12,773     9,890   9,400
  Collections of notes receivable from sales
    of real estate                                    14     4,132     658
  Increase of notes receivable from sales of
    real estate                                       --        --    (138)
  Additions to real estate held for sale          (1,726)  (12,637)(10,991)
  Change in accounts receivable                       22       352    (122)
  Change in accounts payable                         174         8    (419)
  Increase in deposits                               225        --      --
  Income taxes and other                            (201)      566  (1,032)
                                                  -------------------------
Net cash provided (used) by operations             8,853       (33) (4,169)
                                                  -------------------------
INVESTING ACTIVITIES
Investments in affiliates                            (44)   (1,000)   (114)
Distributions from affiliates                      1,383     1,447   2,314
Additions to property, plant and equipment, net      (27)      (21)   (112)
Collections of other notes receivable                 22        35     159
Proceeds from sale of affiliates                      --       425      --
Proceeds from sales of leased land                    --        --     438
Net cash received on Tenenbaum assets                800        --      --
Investments in venture capital investment funds       --        --    (120)
Distributions from venture capital
    investment funds                               1,308       776     350
                                                  -------------------------
  Net cash provided by investing activities        3,442     1,662   2,915
                                                  -------------------------
FINANCING ACTIVITIES
Payments of principal on long-term debt              (95)   (1,400)     --
Net transactions with Seafield Capital
    Corporation                                   (8,275)     (229)  1,254
                                                  -------------------------
Net cash provided (used) by financing activities  (8,370)   (1,629)  1,254
                                                  -------------------------
Net change in cash and cash equivalents            3,925        --      --
Cash and cash equivalents - beginning of year         --        --      --
                                                  -------------------------
Cash and cash equivalents - end of year         $  3,925        --      --
                                                  =========================

Supplemental disclosures of cash flow information:
Cash paid (received) during the year for:
  Interest                                      $    107       189     222
                                                  =========================
  Income taxes, net                             $     12    (1,224) (1,638)
                                                  =========================

See accompanying notes to combined financial statements.



SLH OPERATIONS
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION AND BASIS OF PRESENTATION
Pursuant to a Distribution Agreement between SLH Corporation (SLH) and
Seafield Capital Corporation (Seafield), the parent company of SLH,
Seafield transferred certain assets (the Transfer Assets) and liabilities
(the Transfer Liabilities), including two wholly-owned subsidiaries, Scout
Development Corporation (Scout) and BMA Resources, Inc. (Resources), to SLH
on February 28, 1997.  The Transfer Assets and Transfer Liabilities are
reflected in SLH's financial statements at Seafield's historical cost.  All
stock of SLH was then distributed to the shareholders of Seafield (the
Distribution) on March 3, 1997.  See Note 11 for additional information
about the Distribution.

The accompanying combined financial statements present the financial
position, results of operations and cash flows of the business, assets and
liabilities comprising the Transfer Assets and Transfer Liabilities which
relate directly to the businesses transferred (SLH Operations or the
Company).  Other Transfer Assets and Transfer Liabilities are discussed in
Note 11.  The Company is primarily engaged in the business of managing,
developing and disposing of real estate and energy businesses and other
assets consisting of stock investments of privately-held corporations and
limited partnership interests in privately-held venture capital funds.

Scout's assets consist of partially developed and undeveloped land,
residential development projects and commercial property.  Resources has
investments in oil and gas partnerships and Syntroleum Corporation
(Syntroleum), a development-stage company with a process for the conversion
of natural gas into synthetic liquid hydrocarbons which can be further
processed into fuels, such as diesel, kerosene and naphtha.  All
significant intercompany transactions have been eliminated in combination.

The financial information included herein may not necessarily reflect the
financial position and results of operations of the Company in the future
or what these amounts would have been if it had been a separate, stand-
alone entity during the periods presented.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.

Significant assumptions include estimates of fair value less cost to sell
assets to be disposed of, principally real estate properties.   Management
utilizes a variety of sources in estimating fair values including recent
sales of comparable assets, internal appraisals based on current market
conditions, discounted cash flows, and, to a lesser extent, independent
appraisals.  Significant assumptions used in discounting cash flows include
the amount and timing of expected cash flows and the discount rate.
Management estimates the amount and timing of cash flows as described
above.  Discount rates estimated to be commensurate with the risk involved
for individual properties are selected based on current economic conditions
and industry practices.  The amounts the Company will ultimately realize
could materially differ from the carrying amounts in the accompanying
combined balance sheets.

General and administrative expenses have been included in the statements of
operations based on management's estimate of what expenses would have been
incurred had the Company operated on a stand alone basis for all periods
presented.  Such amounts are not materially  different than what are
expected for future periods.  The estimated expense is approximately $1.5
million for each of the years ended December 31, 1996, 1995 and 1994.

CASH AND CASH EQUIVALENTS
All highly liquid investments with an original maturity of three months or
less when purchased are considered to be cash equivalents.

REAL ESTATE AND OTHER LONG-LIVED ASSETS
Real estate sales are recognized when consummated.  Profit is recognized
using the full accrual method when the down payment, continuing investment,
and transfer of risk criteria have been satisfied.  Payments received from
buyers prior to recording of a sale are recorded as deposits.  Real estate
rentals and other revenues are accrued in the period when earned.

Prior to January 1, 1996, real estate held for sale was valued at the lower
of cost, including development costs less allowances for depreciation, or
market.  Development costs which are incurred during the period of
development or construction are capitalized.  Capitalized costs are charged
to operations as properties or units are sold or, in the case of income
producing properties, are amortized as part of the depreciation charges.

During 1994 and 1995, the Company made provisions for loss on real estate
held for sale of $4.4 million and $7.9 million, respectively.  The
provisions resulted from changes in net realizable value based upon
management's analysis of recent sales transactions and other current market
conditions.

With the adoption of SFAS 121, long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less costs to sell.
Any impairment loss is recognized as the amount by which the carrying
amount of the asset exceeds the fair value of the asset less cost to sell.
The best evidence of fair value is quoted market prices.  When quoted
market prices are not available, the estimate of fair value is based on the
best information available including prices for similar assets or
discounted cash flows of estimated expected future cash flows.  Assets to
be held and used in operations are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of the asset
may not be recoverable.  If the sum of the expected future cash flows
(undiscounted and without interest charges) of the asset is less than the
carrying amount of the asset, an impairment would be recognized as the
difference between the carrying amount and estimated fair value.

Adoption of SFAS 121 on January 1, 1996 resulted in an impairment loss on
real estate held for sale of $1.4 million which is included in the
accompanying 1996 statement of operations as the cumulative effect of a
change in accounting principle.  This impairment loss resulted primarily
from discounting expected future cash flows in estimating fair values less
cost to sell of certain real estate properties.

An additional net impairment loss on real estate held for sale of $1.1
million was recorded in 1996.  This impairment loss resulted from changes
in estimated expected future cash flows based primarily on lower expected
sales prices on certain properties based on appraisals and other current
market conditions.

INVESTMENT SECURITIES
Investment securities consisting of stock investments of two privately-held
corporations (representing 4.8% and 1.9% ownership) are accounted for at
cost.  Investment in limited partnership interests in privately-held
venture capital funds (representing 3.7%, 7.6% and 9.3% ownership) are
accounted for using the equity method.  Fair values are not readily
determinable; however, management believes the estimated fair value of each
investment exceeds its carrying value.  See Note 10 for additional
information about fair values of financial instruments.

PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is recorded at cost with depreciation
provided over the useful lives.  Upon sale or retirement, the costs and
related accumulated depreciation are eliminated from the accounts.  Any
resulting gains or losses are included in the results of operations.

OIL AND GAS INVESTMENTS
Investments in oil and gas partnerships are accounted for using the equity
method as they are less than 50% owned and the Company is a noncontrolling
investor.  The Company uses the full cost method of accounting for oil and
gas properties.  Under this method, all costs incurred in acquisition and
development are capitalized.  Depletion is computed on the units of
production method based on all proven reserves.  All general operating
costs are expensed as incurred.

INTANGIBLE ASSETS
Goodwill is recorded at acquisition as the excess of cost over fair value
of net assets acquired and is being amortized on a straight-line basis over
periods up to twenty years.  Goodwill is presented net of accumulated
amortization of $277,000, $195,000 and $135,000 at December 31, 1996, 1995
and 1994, respectively.  On a periodic basis, the Company estimates the
fair value of the business to which goodwill relates in order to ensure
that the carrying value of goodwill has not been impaired.

INCOME TAXES

Income taxes are accounted for as if the Company filed separate tax returns
pursuant to tax sharing agreements among Seafield and its subsidiaries.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases.  Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.  The effect
on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

RECENTLY ISSUED ACCOUNTING STANDARDS
Effective December 31, 1995, the Company adopted Statement of Financial
Accounting Standards No. 123, "Accounting for Stock Based Compensation,"
(FAS 123) which permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of grant.
Alternately, FAS 123 allows entities to continue to apply the provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," (APB 25) and provide pro forma net earnings and pro forma
earnings per share disclosures for employee stock option grants made in
1995 and future years as if the fair-value-based method defined in FAS 123
had been applied.  SLH has elected to continue to apply the provisions of
APB 25 and provide the pro forma disclosure provisions of FAS 123.  SLH had
no stock options granted in 1995 or 1996.

Statement of Financial Accounting Standards No. 128 "Earnings per Share" is
required to be implemented for both interim and annual periods ending after
December 15, 1997.  The adoption of this standard is not expected to have
any significant impact on the Company's financial position or results of
operations.

Statement of Financial Accounting Standards No. 129 "Disclosure of
Information about Capital Structure" is required to be implemented for
periods ending after December 15, 1997. The adoption of this standard is
not expected to have any significant impact on the Company's financial
position or results of operations.

No other recently issued accounting standards presently exist which will
require adoption in future periods.



Note 2 - Real Estate Held for Sale

A summary of real estate held for sale follows:


                                              December 31,
                                           1996          1995
                                         --------------------
                                              (in thousands)
Land investments/developments          $   26,658      27,831

Commercial building
  Gross amount                              5,296       5,296
  Less accumulated depreciation             1,293       1,293
                                          -------------------
                                            4,003       4,003

Residential developments
  Gross amount:  Land                       1,940       2,697
                 Buildings/improvements    24,259      34,074
  -------------------
                                           26,199      36,771
                                          -------------------
                                           56,860      68,605
Less valuation allowance for write-downs   28,966      29,664
Less valuation allowance for impairments    2,469         --
                                          -------------------
                                           25,425      38,941
Less real estate under contract             1,223       3,868
                                          -------------------
Net real estate                        $   24,202      35,073
                                          ===================



A summary of real estate revenues follows (dollars in thousands):

                                       Years Ended December 31,
                             1996               1995              1994
                       ----------------   ---------------   ---------------
                                 Units/            Units/            Units/
                                 -----             -----             ------
                        Amounts  Acres    Amounts  Acres    Amounts  Acres
                        -------  -----    -------  -----    -------  -----


Real estate sales:
Condominiums and homes $ 14,751      40     7,348      24     9,165      29
Improved lots               --      --        546       5     1,267      18
Undeveloped land            855    21.5     2,591     302
Leased land investments     --      --        --      --        500       1
                        -------          --------           -------
    Total real estate
      sales              15,606            10,485            10,932
                        -------          --------           -------

Real estate rentals
  and other
Lease revenue               134               134               169
Commercial Parking
  operations                595               744               793
Other                        30               123                97
                        -------          --------           -------
    Total real estate
      rentals and other     759             1,001              1,059
                        -------          --------           --------

     Total real estate
       revenues        $ 16,365            11,486             11,991
                        =======           =======            =======



Note 3 - Investment in Oil and Gas Partnerships and Interests

The Company's investment in oil and gas consists principally of four oil
and gas general partnership interests and prior to 1996, oil and gas
working interests.  The oil and gas partnerships represent 36% and 40%
interests in general partnerships.  These partnerships are accounted for on
the equity method as they are less than 50% owned and the Company is a
noncontrolling investor.

Equity in operations of oil and gas partnerships are generally recorded
based on periods ended within one month of the Company's accounting period.
Shown below is unaudited combined financial information for the oil and gas
investments:
                                               Years Ended December 31,
                                             ----------------------------
Results of Operations                         1996       1995        1994
---------------------                        ------     ------      ------
                                                     (in thousands)
Oil and gas revenue                         $ 7,731      6,344       8,989
Net income (loss)                              (797)      (647)      1,386
The Company's equity in net earnings (loss)    (291)       (70)        464

Cash distributions received from the partnerships were $1,382,000,
$1,348,000 and $2,264,000 in 1996, 1995 and 1994, respectively.

                                                December 31
                                             -----------------
Financial Position                            1996       1995
------------------                           -----------------
                                               (in thousands)
Current Assets                              $ 7,410      5,146
Oil and gas                                   3,620     10,359
                                            -------    -------
  Total assets                               11,030     15,505
                                            -------    -------
Current liabilities                              25         27
Other liabilities                             1,301      1,297
                                            -------    -------
  Total liabilities                           1,326      1,324
                                            -------    -------

The Company's investment in oil and
  gas partnerships and interests              3,526      5,255

The Company's proportional interest in oil and gas reserves of partnerships
accounted for by the equity method (in equivalent barrels) was 440,000 as
of December 31, 1995.  The Company's proportional share of standardized
measure of discounted future net cash flows from these reserves was
$3,593,000 at December 31, 1995.  Such information is not currently
available for any periods subsequent to 1995.

The Company's proportional share of net capitalized costs relating to oil
and gas producing activities of partnerships accounted for by the equity
method is $1,400,000 and $4,028,000 at December 31, 1996 and 1995,
respectively.  The Company's proportional share of costs capitalized was
$454,000, $368,000 and $417,000 in 1996, 1995 and 1994, respectively.



Note 4 - Investment in Other Affiliates

The Company's 32.5% investment in Syntroleum Corporation (a development
stage enterprise) is accounted for on the equity method.  Equity in
operations of Syntroleum is generally recorded based on periods with a one
to two month delay of the Company's accounting period, depending upon the
availability of financial information.

Syntroleum is the developer and owner of a patented process and several
related proprietary technologies ("Syntroleum(R) Process") for the
conversion of natural gas into synthetic liquid hydrocarbons which can be
further processed into fuels such as diesel, kerosene (used by jet
aircraft) and naptha and related non-fuel chemical feedstocks and
lubricants.  Sale of the Company's common shares of Syntroleum is subject
to certain restrictions pursuant to shareholder agreements which require
that a selling shareholder first offer the shares to be sold to Syntroleum
and if Syntroleum does not accept the offer, then to the other Syntroleum
shareholders.

Summarized unaudited financial information for Syntroleum is shown below.

                                                    Years Ended
                             Cumulative             December 31,
                            Amounts From    --------------------------
Results of Operations        Inception *     1996      1995       1994
-------------------------   ------------    --------------------------
                                                   (in thousands)
Revenue                      $    721         612        41         68
Net loss                       (5,008)     (1,752)     (426)      (307)
The Company's equity in
  net loss                     (1,465)       (811)     (139)       (91)
----------------
*  November 15, 1984 to December 31, 1996

                                                December 31
                                             -----------------
Financial Position                            1996       1995
------------------                           -----------------
                                               (in thousands)
Current assets                              $  888        500
Other assets                                   658        431
                                             ------     ------
  Total assets                               1,546        931
                                             ------     ------
Current liabilities                             96          4
Long-term borrowing                          1,000         --
                                             ------     ------
  Total liabilities                          1,096          4
                                             ------     ------
The Company's investment in Syntroleum         147        313

Total investment in Syntroleum is presented on the combined balance sheet
as follows:

                                                December 31,
                                             -----------------
                                              1996       1995
                                             -----------------
                                               (in thousands)
Investment in affiliate                     $  147        313
Intangible asset - goodwill, net               113        839
                                             ------     ------
  Total                                     $  260      1,152
                                             ======     ======

The Company is a 49.9% partner in a general partnership which owns a
shopping center.  Prior to September 1995, the Company was also a 49.9%
partner in a general partnership which owned a commercial building.  Prior
to September 1994, the Company was a 50% partner in a general partnership
which owned land.  All of these partnerships are accounted for on the
equity method.  Summarized unaudited financial information for these
partnerships is shown below.


                                                    Years Ended
                                                    December 31,
                                            --------------------------
                                             1996      1995       1994
                                            --------------------------
                                                   (in thousands)
Results of Operations
---------------------
Revenue                                    $  816       764        956
Net loss                                     (207)     (160)      (255)
The Company's equity in net
  loss of affiliates                         (115)      (58)      (119)

                                                December 31,
                                             -----------------
                                              1996       1995
                                             -----------------
                                               (in thousands)
Financial Position
------------------
Current assets                              $  367        514
Real estate                                  5,190      5,466
Other assets                                   205        229
                                             ------     -----
  Total assets                               5,762      6,209
                                             ------     -----
Short-term borrowings                           --        130
Other current liabilities                      121        292
Long-term borrowings                         6,170      6,170
                                             ------     ------
  Total liabilities                          6,291      6,592
                                             ------     ------
The Company's investment in
  real estate affiliates                      (263)      (190)



Note 5 - Property, Plant and Equipment and Accounts and Notes
Receivable

A summary of property, plant and equipment follows:

                                                  December 31
                                 Rate of       -----------------
                               Depreciation     1996       1995
                               ------------    -----------------
                                                 (in thousands)
Property, plant and equipment     5%-33%      $2,580      2,554
Less accumulated depreciation                  2,155      1,924
                                              -------    -------
                                              $  425        630
                                              =======    =======

A summary of accounts and notes receivable follows:

                                                  December 31,
                                               -----------------
                                                1996       1995
                                               -----------------
                                                 (in thousands)
Accounts receivable                           $   33         55
Notes receivable                                  --         36
                                               ------     ------
                                                  33         91
Less current portion                              33         69
                                               ------     ------
                                              $   --         22
                                               ======     ======


Interest rate on notes receivable was 8%.



Note 6 - Notes Payable

Notes payable are as follows:

                                                  December 31,
                                               -----------------
                                                1996       1995
                                               -----------------
                                                 (in thousands)
  8.625% loan, secured by real estate
    final maturity in December 1997          $ 1,194      1,289
                                               =====      =====


The 8.625% loan requires semiannual payments of interest only and
a lump sum payment of any outstanding principal on December 31,
1997.  If portions of the secured property are sold prior to
December 31, 1997, the Company is required to pay certain minimum
release prices to the lender for the partial release of the
property from the mortgage lien.

The Company is obligated under recourse debt (with an unpaid
balance of $6,170,000 at December 31, 1996) of an affiliate
accounted for on the equity method (see Note 4).  The Company's
obligation on this recourse debt is secured by a $3,150,000 U.S.
Treasury note transferred to the Company as part of the
Distribution and is not reflected in the accompanying combined
balance sheets.



Note 7 - Other Assets and Liabilities

The components of other current assets, other current liabilities
and other liabilities follow:

                                                  December 31
                                               -----------------
                                                1996       1995
                                               -----------------
                                                 (in thousands)
Other Current Assets
--------------------
Prepaid expenses                             $   238        386
Restricted cash                                  110        109
                                               -----------------
  Total                                      $   348        495
                                               =================

Other Current Liabilities
-------------------------
Accrued property tax                         $   150        191
Deposits                                         235         12
Accrued rent expense                             250         --
Deferred income                                   47         47
                                               -----------------
  Total                                      $   682        250
                                               =================

Other Liabilities
-----------------
Deferred income                              $    59         106
Accrued rent expense                             250          --
Other                                              4           9
                                               ------------------
  Total                                      $   313         115
                                               ==================



Note 8 - Income Taxes

The real estate assets, energy assets, and other miscellaneous assets of
the Company were acquired from Seafield, and were included in Seafield's
consolidated U.S. federal income tax returns.  The income tax provisions
and tax liabilities have been calculated as if the Company had filed
separate returns, utilizing a tax sharing agreement with Seafield.

During 1995, the Company generated approximately $1 million in current
capital losses that exceeded capital gains.  These losses are carried
forward through the year 2000. Future realization of these tax assets or
any existing deductible temporary differences or carryforwards ultimately
depend on sufficient taxable income of the appropriate character occurring
within the carryover period.  When it becomes more likely than not that a
deferred tax asset will not be realized, a valuation allowance is accrued
against that deferred tax asset.

The components of the provision (benefit) for income taxes on income from
the Company are as follows:

                                    Years ended
                                    December 31,
                             --------------------------
                             1996       1995       1994
                             ----       ----       ----
                                    (in thousands)
Current:
   Federal                $    --      (1,234)    (1,480)
   State                       11           9       (158)
                            -----       -----      -----
                               11      (1,225)    (1,638)
                            -----       -----      -----
Deferred:
   Federal                     --          --         --
   State                       45         (39)       201
                            -----       -----      -----
                               45         (39)       201
                            -----       -----      -----
                          $    56      (1,264)    (1,437)
                          =======      ======     ======



The reconciliation of income tax computed at federal statutory tax rates to
income tax expense is as follows:

                                                      Years ended
                                                      December 31,
                                                 ----------------------
                                                 1996     1995     1994
                                                 ----     ----     ----
                                                    (in thousands)

Computed expected tax expense (benefit)        $(1,408)  (4,249)  (2,714)
State income taxes, net of federal benefit
  and changes in state valuation allowances         37      (20)      28
  Goodwill amortization                             28       20       16
Tax benefits not available for subsidiary
  losses                                           276       47       31
Increase in federal taxes due to
  valuation allowances                           1,333    2,845    1,518
Other, net                                        (210)      93     (316)
                                                 -----    -----     -----
Actual income tax expense (benefit)            $    56   (1,264)  (1,437)
                                               =======   ======   ======
Effective tax rates                                 1%     (10%)   (18%)



The significant components of deferred income tax assets and liabilities
are as follows:

                                                        Years ended
                                                        December 31,
                                                     ----------------
                                                     1996        1995
                                                     ----        ----
                                                       (in thousands)

Current deferred income tax assets(liabilities):

Excess book expense accruals                      $   782         229
State income tax deficiency and interest              661
Other, net                                             19          12
                                                   ------      ------
Gross current deferred income tax assets            1,462         241
Current valuation allowance                        (1,462)       (241)
                                                   ------      ------
Net current deferred income tax assets                 --          --
                                                   ------      ------

Non-current deferred income tax assets (liabilities):

Excess book expense accruals                          176         267
Excess book partnership expenses                      273         200
Excess book oil and gas expenses                      519         225
Real estate valuation allowances and other basis
  differences                                       7,618       7,282
Excess book depreciation and amortization              82         238
Alternative minimum tax credit                         --         157
Other, net                                             92          42
Capital loss carryforwards                            337         337
Federal net operating loss carryforwards            1,100          --
Federal audit adjustment carryback                    535         535
State net operating loss carryforwards              2,954       3,026
                                                   ------      ------
Gross non-current deferred income tax assets       13,686      12,309
Valuation allowance for non-current deferred
  income tax assets                               (13,796)    (12,374)
                                                  -------       ------
Net non-current deferred income tax assets
  (liabilities)                                      (110)        (65)
                                                  -------       ------
Net deferred income tax assets (liabilities)      $  (110)        (65)
                                                  =======       ======
Presented on the balance sheet as:
  Deferred income tax asset                       $    73         118
  Deferred income tax liability                      (183)       (183)
                                                   ------      ------
                                                  $  (110)        (65)
                                                  =======      ======

Included in SLH Operations, on a historical basis, are deferred income tax
liabilities that have been accrued for potential Internal Revenue Service
(IRS) audit adjustments to Seafield's 1986-1990 federal income tax years.
Please refer to footnote 11 for additional information regarding this
matter.  Also, included in SLH Operations, on a historical basis, are
deferred income tax assets resulting from refund claims filed by Seafield
for the 1990 taxable year.  This refund claim results primarily from
taxable losses generated by the sale of a real estate partnership in 1990.
These deferred income tax liabilities and assets are both classified as
non-current.  The IRS audit issues for all five years will be settled
contemporaneously.  Therefore, the assets and liabilities for these years
have been netted for balance sheet presentation purposes.

The gross accruals are as follows for each of the balance sheet dates
presented:

                                                        In thousands
                                                        ------------

Deferred income tax liability for IRS adjustments         $(7,782)
Deferred income tax asset for 1990 loss carryback           7,599
                                                           ------
  Net deferred tax liability for IRS adjustments          $  (183)
                                                           ======

The federal and state  valuation allowances increased during 1996 by
$2,643,000, increased during 1995 by  approximately $3,660,000 and
increased by $706,000 during 1994.  The federal and state  valuation
allowances as of December 31, 1993 were $8,249,000.



Note 9 - Lease Commitments

Office space, equipment, land and buildings are leased under various,
noncancelable leases that expire over the next several years. Rental
expense, including an allocation of Seafield's total lease expense, was
$371,000, $372,000 and $352,000 for 1996, 1995 and 1994, respectively.

Total future minimum lease payments under these agreements as of December
31, 1996 are as follows:

     Year	                                                Amount
     ----                                                 ------
                                                      (in thousands)
     1997                                                $  543
     1998                                                   538
     1999                                                   355
     2000                                                   294
     2001                                                   294
     Thereafter                                           6,218

Included above is annual rent for the ground lease on a parking garage in
Reno, Nevada of $294,000.  The lease agreement provides for increases every
five years based on the Consumer Price Index and expires in 2023.




Note 10 - Fair Value of Financial Instruments

The estimated fair values of the Company's financial instruments are
summarized as follows:

                                  December 31, 1996     December 31, 1995
                                 --------------------  -------------------
                                 Carrying   Estimated  Carrying   Estimated
                                  Amount   Fair Value   Amount   Fair Value
                                 --------  ----------  --------  ----------
                                               (in thousands)
  Cash equivalents              $  3,925       3,925        --          --
  Accounts and notes receivable       33          33        69          69
  Investment securities-not
    practical to estimate
    fair value                     4,718         --      5,136          --
  Note payable                     1,194       1,012     1,289       1,092

The fair value of accounts and notes receivable approximate cost because of
the short-term maturity of these financial instruments.  The estimated fair
value of the note payable was calculated by discounting scheduled cash
flows using estimated market discount rates.

At December 31, 1996 the Company owned (a) three equity investments in
privately held venture capital limited partnerships having an aggregate
carrying value of $1.2 million, (b) a common stock interest in Oclassen
Pharmaceuticals, Inc., a privately owned pharmaceutical manufacturer, which
had a carrying value of $2.5 million and (c) a preferred stock interest in
Norian Corporation, a privately owned developer of proprietary bone
substitute technology, which had a carrying value of approximately $1
million.  Investment in these closely-held enterprises was made on a
principal-to-principal basis at negotiated values.  Therefore, it is not
practical to estimate fair value for these investments at December 31, 1996
and 1995.

On February 27, 1997, Watson Pharmaceuticals, a publicly traded company,
merged with Oclassen Pharmaceuticals which converted the Company's Oclassen
stock into 184,878 shares of Watson.  On February 28, 1997, the Company
sold 100,000 shares of Watson for proceeds of $4.4 million and a gain of
approximately $3 million.



Note 11- Subsequent Events, Contingencies and
         Pro Forma Financial Information

Transfer of Certain Assets and Liabilities from Seafield

On February 28, 1997, Seafield transferred to the Company the Transfer
Assets and Transfer Liabilities pursuant to a Distribution Agreement and a
Blanket Assignment, Bill of Sale, Deed and Assumption Agreement (the
Agreements).  These Agreements also provide for the Company to receive cash
and a U.S. Treasury note, rights with respect to claims in pending
litigation  and to incur obligations described below.

Employee Benefits

The Agreements contain a number of provisions relating to employees.  The
provisions generally contemplate that the Company will assume no
obligations or liabilities with respect to Seafield employee plans or
benefits prior to the Distribution Date and that after the Distribution
Date, the Company will be responsible for providing employee benefits for
Seafield personnel that become employees of the Company.

The Agreements provide that the Company will provide each executive
officer of the Company employment agreements and participation in a new
stock incentive plan.   SLH has adopted a stock incentive plan which
provides for the granting of stock options of SLH Common Stock to officers,
employees and non-employee directors of SLH.  Except for grants of stock
options to non-employee directors, stock option grants will be administered
by the Nominating and Compensation Committee of the Board of Directors.
The Committee has authority to issue stock options to officers and
employees with such terms and provisions as the Committee shall determine.
The stock incentive plan limits the number of shares of SLH Common Stock
with respect to which stock options may be granted to 260,000 in the
aggregate.  Pursuant to the stock option plan, the initial non-employee
directors of SLH were granted options in 1997 totaling 81,000 shares of SLH
common stock effective on the Distribution Date.  The officers and
employees were granted options totaling 179,000 shares effective on the
Distribution Date.  Each option initially granted to non-employee directors
and officers and employees has a term of ten years, provides for an
exercise price equal to the fair market value ($19.15) of SLH Common Stock
on the Distribution Date and become exercisable in four installments as
follows:  one-fourth on the date of grant and one-fourth on each of the
first, second and third anniversaries of the date of grant.

Tax Agreements

Through the Distribution Date, the results of the operations of the Company
will be included in Seafield's consolidated federal income tax returns.  As
part of the Distribution, the Company and Seafield entered into a Tax
Sharing Agreement which provides, among other things, for the allocation
among the parties of federal, state, local and foreign tax liabilities for
all periods through the Distribution Date.  In general, the Tax Sharing
Agreement provides that the Company will be liable for all federal, state,
local and foreign tax liabilities, including any such liabilities resulting
from the audit or other adjustment to previously filed tax returns, which
are attributable to the Company, and that Seafield will be responsible for
all other such taxes, except for the tax liabilities arising out of or that
are related to the tax claims as described below.

Interim Services Agreement

Seafield and the Company entered into the Interim Services Agreement for
the purpose of permitting Seafield and the Company to continue to jointly
use their respective personnel and facilities.  Under the arrangement,
Seafield agrees to provide to the Company services required by the Company
for its executive and administrative  operations.  In exchange for those
services, the Company agrees to provide the retained Seafield personnel
with office facilities and equipment sufficient for the conduct of
Seafield's activities.  Following the Distribution, Seafield and the
Company will review the amount of personnel and facilities used under the
arrangement and each will reimburse the other to the extent that the
exchange of facilities for services is not equivalent.

Claims in Pending Litigation

In 1986, a lawsuit was initiated in the Circuit Court of Jackson County,
Missouri by Seafield's former insurance subsidiary (i.e., Business Men's
Assurance Company of America) against Skidmore, Owings & Merrill (SOM)
which is an architectural and engineering firm, and a construction firm to
recover costs incurred to remove and replace the facade on the former home
office building.  Because the removal and replacement costs had been
incurred prior to the sale of the insurance subsidiary, Seafield negotiated
with the buyer for an assignment of the cause of action from the insurance
subsidiary.  Pursuant to the Distribution Agreement this lawsuit has been
assigned to the Company.  Thus, any recovery will be for the benefit of the
Company and all future costs incurred in connection with the litigation
will be paid by the Company.  Any ultimate recovery will be recognized as
income when received and would be subject to income taxes.  In September
1993, the Missouri Court of Appeals reversed a $5.7 million judgment
granted in 1992 in favor of Seafield; the Court of Appeals remanded the
case to the trial court for a jury trial limited to the question of whether
or not the applicable statute of limitations barred the claim.  The Appeals
Court also set aside $1.7 million of the judgment originally granted in
1992.  In July 1996, this case was retried to a judge.   On January 21,
1997, the judge entered a judgment in favor of Seafield.  The amount of
that judgment, together with interest is approximately $5.8 million.
Although the judgment has been appealed, counsel for the Company expects
that it will be difficult for the defendants to cause the judgment to be
reversed.  The final outcome is not expected for at least another year.

Tax Issues

Internal Revenue Service Audits. Seafield has received notices of proposed
adjustments (Revenue Agent's Reports) from the Internal Revenue Service
(IRS) with respect to 1986-1990 federal income taxes.  These notices claim
total federal income taxes due for the entire five year period in the
approximate net amount of $13,867,000, exclusive of interest thereon.

The substantive issues raised in these notices for the years 1986-1990 are
primarily composed of the former television subsidiaries' amortization of
film rights, the sale of the stock of a former television station, certain
insurance company tax issues and a $27 million loss on the sale of a real
estate partnership interest.

The IRS' denial of film right amortization equates to approximately $10.5
million of the $13.9 million in additional taxes; provided that if the IRS
were to prevail on the amortization issues, the tax basis in the television
stations would be increased.  This would have the effect of reducing income
taxes in connection with the stations' sales; all have been sold.

With respect to the loss on the sale of the real estate partnership
interest, the IRS has claimed that the sale did not occur during 1990, but
rather occurred after 1991. If the sale did not occur in 1990, then 1990
losses could not be carried back to 1987, to reduce Seafield's significant
taxable income in 1987.

Seafield has filed protests regarding the 1986-1990 notices of proposed
adjustments.  Seafield is currently pursuing a compromise with the Appeals
Division of the IRS for the 1986-1989 years.  The 1990 issues have not yet
been formally addressed at the Appeals Division but Seafield is advised by
IRS representatives that tax issues in all years under audit will be
addressed together.  Resolution of these tax disputes may reasonably be
expected, but is not certain, during 1997.

The Company assumed from Seafield all of the contingent tax liabilities
described above and acquired all rights to refunds plus any interest
related to these tax years.  SLH also assumed all contingent liabilities
and refunds related to any issues raised by the IRS for the years 1986-1990
whose resolution may extend to tax years beyond the 1990 tax year.  Based
upon the advice of counsel, the Company believes that it will prevail on
the 1990 loss carryback issue.  In addition, there are meritorious defenses
or pending favorable compromises for many of the other substantive issues.
The Company believes that adequate accruals for these income tax
liabilities have been made in the accompanying Combined Financial
Statements.

California Tax issues.   In December 1996, the California state auditor
sent Seafield an audit report covering the 1987-1989 taxable years.  The
State of California has determined to include, as a "unitary taxpayer," all
majority owned non-life insurance subsidiaries and joint ventures of
Seafield.  The auditor's report has been forwarded to the California
Franchise Tax Board for action.  The total amount of California state
income taxes due for the 1987-1989 years is expected to be approximately
$750,000, exclusive of interest.  The Company is assuming all potential tax
liabilities and interest thereon regarding the California audit for the
1987-1989 tax years.

The Company believes that final resolution of the above Tax Claims after
taking into account offsetting  claims  for refunds and amounts reserved,
should not have a material adverse effect on the Company's financial
position, results of operations or liquidity.

Other

Claim Against Scout.  On January 30, 1997, Scout Development Corporation
was served with a complaint filed in the District Court of Tarrant County,
Texas by the parents of a 36 week old fetus who did not survive an
automobile accident at an intersection in Fort Worth, Texas, the view of
which is alleged to have been obstructed by weeds growing on property that
is alleged to have been owned by Scout.  The Company expects to deny
liability, has turned the matter over to its insurance carrier and believes
that if it has any liability, it is adequately covered by an existing
policy of insurance.


Unaudited Pro Forma Combined Financial Information

The following unaudited Pro Forma Combined Balance Sheet of the Company as
of December 31, 1996 has been prepared pursuant to the Distribution
Agreement to reflect the transfer to the Company of the Transfer Assets and
Transfer Liabilities including the assumption by the Company of certain
federal and state tax and related interest claims of Seafield and the
distribution of the shares to Seafield's stockholders.  The accounting for
this transfer of assets and liabilities represents a reorganization of
companies under common control and, accordingly, all assets and liabilities
will be reflected at their historical carrying value.  The unaudited Pro
Forma Combined Balance Sheet has been prepared as if the transactions had
occurred on December 31, 1996.  Pro forma statements of operations are not
included because there are no material adjustments to be made.

Pro forma per share loss before cumulative effect of a change in accounting
principle was $(2.58), $(6.92) and $(4.03) for the years ended December 31,
1996, 1995 and 1994, respectively, based on 1,622,276 shares outstanding on
the date of distribution.

The SLH Board of Directors declared a dividend of one preferred share
purchase right, effective and paid as of the Distribution Date, on each
share of SLH Common Stock.  Each Right entitles the registered holder to
purchase from SLH one one-hundredth of a share of junior participating
preferred stock, par value $0.01 per share with a $100 liquidation
preference, at a price of $125.00 per one one-hundredth of a share, subject
to adjustment.

Under the Distribution Agreement with Seafield, SLH will be restricted from
paying dividends, in cash or property, or redeeming its capital stock for a
period of two years following the Distribution Date of March 3, 1997,
without the consent of the Seafield Board of Directors.


SLH OPERATIONS
Unaudited Pro Forma Combined Balance Sheets
----------------------------------------------------------------------
                                          December 31, 1996
                              ----------------------------------------
                              Historical     Adjustments     Pro Forma
---------------------------------------------------------------------
                                            (In thousands)
ASSETS
Current assets:
  Cash and cash equivalents      $  3,925        6,850 (a)   10,775
  Short-term investments              --         3,150 (a)    3,150
  Accounts and notes receivable        33                        33
  Real estate under contract        1,223                     1,223
  Other current assets                348                       348
                                  ----------------------------------
      Total current assets          5,529       10,000       15,529
Real estate held for sale          24,202                    24,202
Investment securities               4,718                     4,718
Investment in affiliates:
  Oil and gas partnerships
    and interests                   3,526                     3,526
  Other                              (116)                     (116)
Property, plant and equipment         425                       425
Intangible assets                     113                       113
Deferred income taxes                  73                        73
Other assets                            4                         4
                                  ----------------------------------
                                 $ 38,474       10,000       48,474
                                  ==================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable               $    289                       289
  Notes payable                     1,194                     1,194
  Income tax payable                  --           750 (b)      750
  Other current liabilities           682        1,350 (b)(c) 2,032
                                  ----------------------------------
      Total current liabilities     2,165        2,100        4,265
Deferred income taxes                 183                       183
Other liabilities                     313          350 (c)      663
                                  ----------------------------------
      Total liabilities             2,661        2,450        5,111
                                  ----------------------------------

Stockholders' equity:
  Preferred stock of $0.01 par
    value with $100 liquidation
    preference.  Authorized
    1,000,000 shares; none issued     --           --           --
  Common stock of $0.01 par value.
    Authorized 30,000,000 shares;
    issued 1,622,276 shares           --            16 (d)       16
  Paid-in capital                     --        35,797 (d)   43,347
                                                10,000 (a)
                                                (1,750)(b)
                                                  (700)(c)

Total combined equity              35,813      (35,813)(d)      --
                                  ----------------------------------
  Total stockholders' equity       35,813        7,550       43,363
                                  ----------------------------------
                                 $ 38,474       10,000       48,474
                                  ==================================


Notes to Pro Forma Combined Financial Information:

(a)  Represents the cash and short-term investments, consisting of
     U.S. Treasury obligations, transferred to the Company on the date of
     distribution.
(b)  Represents the estimated state tax liability ($750,000) and accrued
     interest ($1,000,000) assumed by the Company.
(c)  Represents contractual lease obligation for the Seafield office
     space (approximately $700,000 through April 1999).  The lease to
     be assumed from Seafield expires in April 2002 with a right to
     cancel in April 1999.  The lease has been accounted for as an
     operating lease.
(d)  Represents the issuance of 1,622,276 shares of $.01 par value
     stock to Seafield's stockholders and the reclassification of the
     combined equity in excess of par value to the paid-in capital
     account.



                                  SLH OPERATIONS
                                   Schedule III
                     Real Estate and Accumulated Depreciation
                                December 31, 1996
                                  (Page 1 of 2)


                                  Costs Capitalized       Gross Amount
                 Initial Cost         Subsequent        At Which Carried
                  to Company        to Acquisition    at December 31, 1996
               -----------------  -----------------  ----------------------
                       Buildings &                         Buildings &
                        Improve-  Improve- Carrying         Improve-
Description      Land    ments     ments    Costs   Land     ments    Total
-------------------------------   -----------------  ----------------------
                                    (In thousands)
Land Investments/
Developments:
Houston, TX   $  6,158      49      977    1,553    4,283       --    4,283
Ft Worth, TX    11,501      --       91       --    7,720       --    7,720
Ft Worth, TX    11,289      --       --       42   11,331       --   11,331
Ft Worth, TX     1,000      --       --       --      665       --      665
Olathe, KS       3,292      --       49       --    2,659       --    2,659

Parking:
Reno, NV            --   5,277       19       --       --    5,296    5,296

Residential:
Juno Beach, FL  13,740      --   33,233    2,723    1,313    6,601    7,914
Santa Fe, NM     4,576      --   66,236   17,423      627   17,658   18,285
             --------------------------------------------------------------
              $ 51,556   5,326  100,605   21,741   28,598   29,555   58,153
                ==================================================

Reserves                                                            (31,435)
                                                                    -------
Net real estate before depreciation                                  26,718
Accumulated depreciation                                             (1,293)
                                                                    -------
Net real estate                                                      25,425
Less current portion                                                 (1,223)
                                                                    -------
 Real estate, net of current portion                               $ 24,202
                                                                    =======

(1)  Reserves have been established to reflect lower net realizable values
     based on periodic evaluation of changes in market conditions, recent
     sales prices, and appraisals.










                                  SLH OPERATIONS
                                   Schedule III
                     Real Estate and Accumulated Depreciation
                                December 31, 1996
                                  (Page 2 of 2)


                                                  Date
                              Accum.    Tax      Constr.     Date      Depr.
Description        Reserves    Depr.   Basis      Began    Acquired    Life
---------------------------------------------------------------------------
                                  (In thousands)
Land Investments/
Developments
Houston, TX       $  2,065      --      4,580       --        1974       --
Ft Worth, TX         5,569      --      7,495       --        1986       --
Ft Worth, TX        10,559      --      8,021       --        1986       --
Ft Worth, TX           632      --        665       --        1986       --
Olathe, KS              --      --      2,438       --        1991       --

Parking:
Reno, NV               947   1,293      4,385       --        1989    20 yrs

Residential:
Juno Beach, FL       2,393      --      5,557      1985       1983       --
Santa Fe, NM         9,270      --     12,078      1987       1985       --
                    -------------------------
                  $ 31,435   1,293     45,219
                    =========================



                                  SLH OPERATIONS
                                   Schedule III
                     Real Estate and Accumulated Depreciation
                           Reconciliation Between Years


A) Reconciliations of total real estate carrying value for the three years
ended December 31, 1996 are as follows:

                                            1996         1995         1994
---------------------------------------------------------------------------
                                                    (In thousands)
Balance at beginning of year           $   40,234       44,595       44,550

Additions during year:
  Improvements                              1,726       12,637       10,991
  Consolidate joint venture                   --           --         3,292
                                         ----------------------------------
                                           41,960       57,232       58,833

Deductions during year:
  Value of real estate sold                12,773        9,890        9,838
  Provision for loss on sale of
    real estate                             1,069        7,108        4,400
  Cumulative effect of change in
    accounting principle                    1,400          --           --
                                         ----------------------------------
                                           15,242       16,998       14,238
                                         ----------------------------------
Balance at end of year                 $   26,718       40,234       44,595
                                         ==================================


B) Reconciliations of accumulated depreciation for the three years ended
   December 31, 1996 are as follows:

                                            1996         1995         1994
---------------------------------------------------------------------------
                                                    (In thousands)
Balance at beginning of year           $    1,293        1,081          868

Additions during year - depreciation          --           212          213
                                         ----------------------------------
                                            1,293        1,293        1,081

Deductions during year - accumulated
  depreciation of real estate sold            --           --           --
                                         ----------------------------------
Balance at end of year                 $    1,293        1,293        1,081
                                         ==================================