September, 1999


Dear Shareholders:

Greetings!

On behalf of your Board of  Directors,  I am pleased to report  that fiscal year
1999 was another good year for the Company.  Total revenue  increased by 3% from
the previous year and assets grew to $19,900,219.  During this past fiscal year,
Westland  developed  the  third  phase  of  Cedar  Ridge  Estates,  and laid the
groundwork for three new subdivisions,  two of which should be introduced during
fiscal year 2000.  The Company  was also active on the  acquisition  side of our
business.  In June, we added the Marie Callender's  restaurant  located at Spain
and Eubank to our portfolio of income properties. Overall, it was a strong year.

Looking  forward to the year 2000 and beyond,  the Company has made  significant
strides in implementing a major development program. I have reported to you many
times on Westland's  master plan,  the 6,400 acre project  located north of I-40
and west of Unser Blvd.  Westland continues to gain support for its master plan,
despite the sentiments of certain groups who hope to limit Albuquerque's growth.
The master  plan has been  approved  by both  Bernalillo  County and the City of
Albuquerque and, at this writing,  annexation  approval of the first 1,732 acres
to the city is imminent.  Our focus now is on the  introduction  of major public
infrastructure.

The Company has entered  into an  arrangement  with the City that  provides  for
Westland to pay for new water and sewer  utilities  and  transfer the systems to
the City.  Repayment  will be made to Westland for its cost of  construction  as
users  tie  into  the  systems.   The  costs  involved  in  this  endeavor  will
significantly  impact  the  Company's  financial  statements  in  future  years.
Currently, we are investigating  prospective capital sources. The development of
the master plan area is the top priority for the Company.

I would like to invite each of you to visit the  Company  owned  cemeteries.  We
have fenced all three and planted  over one hundred  trees.  In essence,  we are
beautifying these sacred places. I hope you find our efforts satisfying.

I look forward to seeing each of you at our Annual  Shareholder  Meeting.  Until
then,  please remember to take advantage of our open door policy.  I am happy to
meet with you to address any concern you may have.

God Bless you all!

Sincerely,


Barbara Page
President and CEO



BUSINESS OF WESTLAND

Westland  owns a large tract of land  consisting of  approximately  59,000 acres
(the "Land")  located on the west side of the City of  Albuquerque,  New Mexico.
Most of the Land is held for  long-term  investment  and is leased to others for
grazing  purposes while the balance is held for  development,  sales and leasing
activities.  Approximately 48,000 acres of this Land were originally part of the
Atrisco Land Grant, which was granted to a group of Spanish settlers in 1692.

Westland generates cash internally through its land operations  (grazing leases,
real  estate  sales and  commercial  leases)  and  externally  through  long and
short-term  borrowing.  The profitability and resulting cash flows of Westland's
land operations depend on numerous  factors,  such as demand for grazing leases,
land  leases,  supply  of  competitively   priced,   developed  or  undeveloped,
properties for  residential,  industrial or commercial uses. Over the long term,
Westland  expects that residential and industrial  growth on Albuquerque's  west
side will  increase  demand for  Westland's  land,  thus  increasing  Westland's
ability to generate  revenue from land development and sales. In the short term,
however, periodic local and national economic conditions may decrease the number
of land  sales and  hinder  development,  such as during  the  period  from 1986
through 1992.

Westland's basic business  philosophy has been to hold certain areas of the land
in trust for  shareholders  and to enhance  the value of other areas of the Land
through  careful  planning and  development to assure  perpetual  benefit to the
Company and its shareholders.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATION OPERATIONS

In the past  fiscal  year,  land sales were  greater  than the prior year as the
Company  experienced  increased sales of improved  residential lots and sales to
the National Park Service, even though large parcel sales decreased.

During  the last  fiscal  year there  were  $2,605,000  of sales of lands to the
National Park Service  ("NPS") as part of its  acquisition of the lands included
in the Petroglyph  National Monument.  This was the final acquisition of land to
be purchased from the Company by NPS. The sales to NPS amounted to approximately
54% of the Company's land revenue for 1999,  while such sales during fiscal 1998
amounted  to  $1,507,000,  or 33% of  land  revenue.

During 1999,  Albuquerque  continued to be one of the fastest  growing cities in
the Southwest and, because of certain  geographical and other limitations on its
growth,  Westland's lands lie directly in the path of future  predictable growth
patterns.  Sales  of  improved  residential  lots  in  1999  were  approximately
$1,221,000,  compared  to  sales  of  approximately  $224,000  in  fiscal  1998.

Westland's  future revenues will continue to be largely  dependent upon the sale
of land. The Company's assets are illiquid,  comprising principally  undeveloped
land. Sales are dependent upon the market conditions in Albuquerque, New Mexico.

Westland  anticipates making capital  commitments for land development  projects
over the next few  years as the  economy  and  opportunities  dictate  that such
expenditures  would  be  warranted.  Capital  commitments  may  include  special
assessment  districts  for roads and water and sewer lines on its land.  In some
cases infrastructure improvements are paid for by assessments which increase the
value of Westland's land and make further development possible. Westland intends
to incur capital  expenditures when management  determines such investments will
increase the value of the land and generate future  revenue.

Land is Westland's  principal  capital  resource,  and is valued,  for financial
accounting purposes, at its 1907 value plus the cost of improvements. Westland's
balance  sheet does not reflect  the actual  current  value of this  asset.  The
Company has no current appraisals of the land and,  therefore,  the actual value
of the land is not known.  The carrying  value of the land was increased  during
the fiscal year ended June 30, 1999, primarily reflecting increased  investment.
The  carrying  value  will be  increased  or  decreased  regularly  as  Westland
acquires,  sells or develops parcels of land.  Management  believes the June 30,
1999 carrying  value of the land is  substantially  less than its current market
value.  Westland's  balance sheet also  segregates  income-producing  properties
which consist of commercial  real estate and  improvements.  The actual value of
Westland's land varies depending on national and local market conditions and the
amount and proximity of roads,  utilities and other  amenities to the land under
development.  As Albuquerque continues to grow, the land value of both developed
and undeveloped  land should increase.

After some delay,  Westland has received approval of its Master Plan by both the
City of Albuquerque and Bernalillo  County. The Master Planned land includes the
area north of Interstate 40 and south of the area  designated for the Petroglyph
National  Monument between Unser Boulevard and Paseo del Volcan Road. The Master
Plan area encompasses  approximately  6,400 acres, but does not include any land
located  within the  Monument and will have no adverse  impact on the  Monument.
Management  anticipates that development and sale of the initial parcels of land
within  the  Master  Planned  area  will  occur  in  the  year  2000,   however,
unforeseeable  delays in getting utilities to the lands may cause this period to
be extended beyond that anticipated date.

Financial Condition:

During fiscal 1999,  total assets  increased to  $19,900,219  from  $17,557,093,
while liabilities increased from $11,350,853 to $13,208,119.  During fiscal 1999
the Company  invested  $3,978,514 in income  producing and other  properties and
increased net borrowing on notes and mortgages by  $1,180,072.  Including  these
uses of cash and payment of cash  dividends of $802,708,  cash  equivalents  and
short-term   investments   decreased  by  $1,909,711,   as  operations  provided
$1,691,439.

In fiscal  1999,  the  Company  maintained  lines of  credit  with  local  banks
aggregating approximately  $3,000,000,  collateralized by certain real property.
The  purpose of these  lines is to provide  funds  necessary  for its  continued
expansion.  At June 30,  1999,  the  lines  had  outstanding  balances  totaling
$656,669.

During  fiscal  2000,  the  Company  will  be  obligated  to pay  income  tax of
approximately  $600,000 should replacement  properties  totaling  $1,510,000 for
lands sold to the National  Park not be acquired.  Management  diligently  seeks
income producing properties for acquisition as replacement  properties and fully
expects to off-set this tax obligation.

Management  believes that the  uncommitted  balance of cash,  cash  equivalents,
investments  and its  borrowing  capacity  are  sufficient  to  meet  all of the
Company's  obligations during 2000 without considering  additional revenues that
may be generated during that period.

Results of Operations:

In fiscal 1999,  land revenues  increased by $154,676 from $4,630,523 in 1998 to
$4,785,199. The related cost of land revenues increased to $838,032, or $388,241
from $449,791 in fiscal 1998. Rental revenue increased from $697,385 to $702,065
and the related costs  increased from $169,907 to $173,800.  These increases are
expected to continue as the Company expands its activities in these areas.

Year 2000 Issues:

Management  has  assessed  the  Year  2000  issues  and  determined  that  their
consequences would not have a material effect on the Company's business, results
of  operations  or financial  condition.  The total cost of  compliance  in both
information   and   non-information   technology   systems  is  expected  to  be
approximately  $30,000.  Since a substantial portion of this cost is third party
hardware and software, the effect on net earnings will be immaterial. Changes in
internal  systems are  substantially  complete and any  remaining  costs will be
insignificant.  Determination  of  level  of  risk  in  the  Company's  material
relationships  with third parties is incomplete,  but is expected to be finished
by year end, and is considered negligible. Therefore, contingency plans have not
been formulated at this time.

MARKET  PRICE  OF  AND  DIVIDENDS  ON  WESTLAND'S   COMMON  EQUITY  AND  RELATED
STOCKHOLDER MATTERS

Because  ownership of Westland's  stock is  restricted  in the manner  discussed
below,  no established  public trading market exists for Westland's  outstanding
shares and, to the best of Westland's knowledge,  no dealer has made, is making,
or is  attempting  to create such a market from which to  determine an aggregate
market  value of any of  Westland's  stock.  In 1989,  Westland  entered into an
arrangement with an independent stockbroker to broker transactions in Westland's
stock between  shareholders.  The broker has informed Westland that the price at
which   Westland's   common  stock  had  been  bought  and  sold  by  Westland's
shareholders  during the ninety (90) days preceding this date of this report has
been $20.00 per share.

Since 1982, the outstanding shares have been subject to restrictions  imposed by
a majority  of  Westland's  shareholders  who  amended  Westland's  Articles  of
Incorporation.   Those  Articles  prohibit  (with  certain  limited  exceptions)
transfer  of Westland  stock to persons  other than  lineal  descendants  of the
original incorporators of the Town of Atrisco (a New Mexico Community Land Grant
Corporation).

The following  table sets forth the  approximate  number of holders of record of
each class of Westland's common stock as of October 8, 1999:

                                                            Number of
         Title of Class                                   Record Holders

No Par Value Common                                           5622
$1.00 Par Value Common          Class A                          0
$1.00 Par Value Common          Class B                         22

Dividends:  During each of the last two (2) fiscal years ended June 30, 1998 and
June 30, 1999, Westland paid cash dividends to shareholders, aggregating a total
during those two years of  $1,404,739.  Subsequent to June 30, 1999, the Company
has paid an  additional  cash  dividend  of $1.00  per  share  for an  aggregate
dividend payment to the shareholders of $802,708.

ON WRITTEN  REQUEST,  THE COMPANY WILL PROVIDE,  WITHOUT  CHARGE,  A COPY OF ITS
ANNUAL  REPORT ON FORMS  10-KSB FOR THE FISCAL YEAR ENDED JUNE 30,  1999,  FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION  (INCLUDING THE FINANCIAL STATEMENTS
AND THE  SCHEDULES  THERETO)  TO ANY RECORD  HOLDER OR  BENEFICIAL  OWNER OF THE
COMPANY'S  SHARES AS OF THE CLOSE OF  BUSINESS  ON OCTOBER 8, 1999.  ANY EXHIBIT
WILL  BE  PROVIDED  ON  REQUEST  UPON  PAYMENT  OF THE  REASONABLE  EXPENSES  OF
FURNISHING THE EXHIBIT. ANY SUCH WRITTEN REQUEST SHOULD BE ADDRESSED TO DAVID C.
ARMIJO,  SECRETARY,  WESTLAND DEVELOPMENT CO., INC., 401 COORS BOULEVARD,  N.W.,
ALBUQUERQUE, NEW MEXICO 87121.


                            FINANCIAL STATEMENTS AND
                             REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS

                         WESTLAND DEVELOPMENT CO., INC.

                             June 30, 1999 and 1998



               Report of Independent Certified Public Accountants


Stockholders
Westland Development Co., Inc.

We have audited the  accompanying  balance  sheet of Westland  Development  Co.,
Inc., as of June 30, 1999, and the related statements of earnings, stockholders'
equity,  and cash flows for each of the two years in the  period  ended June 30,
1999.  These  financial  statements  are  the  responsibility  of the  Company's
manage-ment.  Our  responsibility  is to express  an opinion on these  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 financial  statements  referred to above present fairly, in
all material respects, the financial position of Westland Development Co., Inc.,
as of June 30, 1999,  and the results of its  operations  and its cash flows for
each of the two years in the  period  ended  June 30,  1999 in  conformity  with
generally accepted accounting principles.






Oklahoma City, Oklahoma
August 19, 1999 (except for Note P, as to which
     the date is August 26, 1999)



                       Westland Development Company, Inc.

                                 BALANCE SHEET

                                 June 30, 1999


                      ASSETS

Cash and cash equivalents ..........................                 $ 1,300,182

Short-term investments .............................                   2,578,019

Receivables
  Real estate contract (note B) ....................   $    24,291
  Note receivable - related party (note M) .........        59,808
  Other receivables ................................        39,331       123,430
                                                       -----------
Land and improvements held for future
  development (notes C and E) ......................                   6,897,415

Income-producing properties, net (notes D and E) ...                   8,221,092

Property and equipment, net of accumulated
  depreciation of $477,340 (note E) ................                     391,133

Investments in partnerships and joint ventures .....                     231,901

Income taxes receivable ............................                       5,000

Other assets .......................................                     152,047
                                                                     -----------

                                                                     $19,900,219
                                                                     ===========
       LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable, accrued expenses,
   and other liabilities ...........................                 $   519,468
Deferred income taxes (note F) .....................                   5,312,000
Notes, mortgages, and assessments payable (note E) .                   7,376,651
                                                                     -----------

              Total liabilities ....................                  13,208,119

Commitments and contingencies (notes E and L) ......                        --

Stockholders' equity (note G)
   Common  stock - no par value;  authorized,
     736,668  shares;  issued and outstanding,
     716,608 shares ................................   $     8,500
Class B common stock - $1 par value;
  authorized, 491,112 shares; issued and
  outstanding, 86,100 shares .......................        86,100
Additional paid-in capital .........................       581,527
Retained earnings ..................................     6,015,973     6,692,100
                                                       -----------   -----------

                                                                     $19,900,219
                                                                     ===========

         The accompanying notes are an integral part of this statement.


                      Westland Development Company, Inc.

                             STATEMENTS OF EARNINGS

                              Year ended June 30,


                                                        1999           1998
                                                     -----------    -----------

Revenues
  Land ...........................................   $ 4,785,199    $ 4,630,523
  Deferred profit recognized on installment sales         30,306         20,701
  Rentals ........................................       702,065        697,385
                                                     -----------    -----------
                                                       5,517,570      5,348,609

Costs and expenses
  Cost of land revenues ..........................       838,032        449,791
  Cost of rentals ................................       173,800        169,907
  Other general, administrative, and operating ...     1,991,667      2,106,395
                                                     -----------    -----------
                                                       3,003,499      2,726,093
                                                     -----------    -----------

              Operating income ...................     2,514,071      2,622,516

Other (income) expense
  Interest income ................................      (136,611)       (99,672)
  Gain on sale or disposition of property
     and equipment (note O) ......................      (747,560)          (779)
  Other, net (note O) ............................       789,158         11,451
  Interest expense ...............................       540,516        631,356
                                                     -----------    -----------
                                                         445,503        542,356
                                                     -----------    -----------

              Earnings before income taxes .......     2,068,568      2,080,160

Income tax expense (note F) ......................       780,000        826,000
                                                     -----------    -----------

              NET EARNINGS .......................   $ 1,288,568    $ 1,254,160
                                                     ===========    ===========

Weighted average common shares outstanding .......       807,775        807,755
                                                     ===========    ===========

Earnings per common share ........................   $      1.60    $      1.55
                                                     ===========    ===========

        The accompanying notes are an integral part of these statements.


                      Westland Development Company, Inc.

                       STATEMENT OF STOCKHOLDERS' EQUITY

                       Years ended June 30, 1999 and 1998

<TABLE>
<CAPTION>

                                    Class B
                                  Common stock                Common stock           Additional
                                  no par value                $1 par value            paid-in       Retained
                               Shares        Amount       Shares         Amount       capital       earnings        Total
<S>                         <C>           <C>           <C>           <C>           <C>           <C>
Balances at July 1, 1997        716,608   $     8,500        86,100   $    86,100   $   581,527   $ 4,275,953    $ 4,952,080

Net earnings ............          --            --            --            --            --       1,254,160      1,254,160
                            -----------   -----------   -----------   -----------   -----------   -----------    -----------
Balances at June 30, 1998       716,608         8,500        86,100        86,100       581,527     5,530,113      6,206,240

Net earnings ............          --            --            --            --            --       1,288,568      1,288,568

Cash dividends paid
  - $1 per share ........          --            --            --            --            --        (802,708)      (802,708)
                            -----------   -----------   -----------   -----------   -----------   -----------    -----------

Balances at June 30, 1999       716,608   $     8,500        86,100   $    86,100   $   581,527   $ 6,015,973    $ 6,692,100
                            ===========   ===========   ===========   ===========   ===========   ===========    ===========
</TABLE>

         The accompanying notes are an integral part of this statement.


                      Westland Development Company, Inc.

                            STATEMENTS OF CASH FLOWS

                              Year ended June 30,


                                                         1999          1998
                                                     -----------    -----------

Increase (Decrease) in Cash and Cash Equivalents

Cash flows from operating activities
  Cash received from land sales and collections
    on real estate contracts receivable ..........   $ 4,822,132    $ 4,647,316
  Development and closing costs paid .............    (1,277,974)      (874,634)
  Cash received from rental operations ...........       680,780        732,254
  Cash paid for rental operations ................        (5,321)          (816)
  Cash paid for property taxes ...................       (78,409)       (58,150)
  Interest received ..............................       136,735        100,866
  Interest paid ..................................      (538,845)      (667,609)
  Income taxes (paid) refunded, net ..............      (171,162)        18,274
  Other general and administrative costs paid ....    (1,983,301)    (1,536,439)
  Other ..........................................       106,804         21,839
                                                     -----------    -----------

      Net cash provided by operating activities ..     1,691,439      2,382,901

Cash flows from investing activities
  Capital expenditures ...........................    (1,404,295)       (60,958)
  (Investments in) distributions from
     partnerships and joint ventures .............        (1,993)         8,588
  Change in short-term investments ...............    (2,578,019)          --
  Proceeds from sale of assets ...................          --            3,150
  Proceeds from note receivable - related party ..         5,793          2,402
                                                     -----------    -----------

      Net cash used in investing activities ......    (3,978,514)       (46,818)

Cash flows from financing activities
  Borrowings on notes, mortgages, and
    assessments payable ..........................     2,498,309        132,063
  Repayments of notes, mortgages, and
    assessments payable ..........................    (1,318,237)      (987,372)
  Payment of dividends ...........................      (802,708)      (602,031)
                                                     -----------    -----------

      Net cash provided by (used in)
        financing activities .....................       377,364     (1,457,340)
                                                     -----------    -----------

      NET INCREASE (DECREASE) IN CASH AND
        CASH EQUIVALENTS .........................    (1,909,711)       878,743

Cash and cash equivalents at beginning of year ...     3,209,893      2,331,150
                                                     -----------    -----------

Cash and cash equivalents at end of year .........   $ 1,300,182    $ 3,209,893
                                                     ===========    ===========


Reconciliation of Net Earnings to Net Cash
  Provided by Operating Activities

Net earnings .....................................   $ 1,288,568    $ 1,254,160
Adjustments to  reconcile  net  earnings to
  net cash  provided by  operating activities
    Depreciation .................................       227,955        221,879
    Loss on partnerships and joint  ventures .....          --           33,289
    (Gain)  loss on sale of  property
       and equipment .............................         2,440           (779)
    Collections  on real  estate  contracts
      receivable .................................        35,483          9,259
    Profit  recognized on installment sales ......       (30,306)       (20,701)
    Deferred income taxes ........................       785,000        517,000
    Change in
       Income taxes recoverable/payable ..........      (177,273)       327,274
       Other receivables .........................         4,749        105,163
       Land and improvements held for
         future development ......................      (439,942)      (424,843)
       Other assets ..............................       (69,702)       130,632
       Accounts payable, accrued expenses,
         and other liabilities ...................        62,796        266,821
       Accrued interest payable ..................         1,671        (36,253)
                                                     -----------    -----------

             Net cash provided by operating
               activities ........................   $ 1,691,439    $ 2,382,901
                                                     ===========    ===========

        The accompanying notes are an integral part of these statements.


                      Westland Development Company, Inc.

                         NOTES TO FINANCIAL STATEMENTS

                             June 30, 1999 and 1998


NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

   1. History of Company and Beginning Basis of Financial Reporting
      -------------------------------------------------------------

   In 1892, the  descendants of the owners of a land grant deeded in 1692 by the
   Kingdom of Spain became  incorporators of a land grant corporation named Town
   of  Atrisco.  Ownership  of the Town of  Atrisco  was based on  proportionate
   ownership of the land grant. In 1967, the Town of Atrisco was reorganized and
   became  Westland  Development  Co.,  Inc.  (the  "Company"),  with the  heirs
   receiving shares in the Company in proportion to their  ancestors'  interests
   in the Town of Atrisco corporation. The net assets of $232,582 at the date of
   reorganization were assigned as follows:

              Value of no par common stock as stated in
                the Articles of Incorporation .........   $  8,500
              Additional paid-in capital ..............    224,082
                                                          --------

                                                          $232,582
                                                          ========

   The Company estimated that it owned approximately 49,000 acres of land at the
   date of incorporation as Westland Development Co., Inc. Such acreage was used
   as the beginning cost basis for financial  reporting  purposes and was valued
   at $127,400  ($2.60 per acre) based on an appraisal in 1973 which  determined
   the approximate  value of the land in 1907. This date  approximates  the date
   that the Patent of Confirmation covering the land comprising the Atrisco Land
   Grant was given to the Town of Atrisco by the United States of America. Since
   the date of the Patent of Confirmation,  the Company's  acreage has increased
   in market value, but a full determination of such value has not been made.

   2. Nature of Operations
      --------------------

   The Company  develops,  sells, or leases its land holdings,  all of which are
   located near Albuquerque,  New Mexico.  The Company may use joint ventures or
   participation in limited partnerships to accomplish these activities. Revenue
   sources  for the years  ended June 30,  1999 and 1998  consist  primarily  of
   proceeds  from land sales and  rentals  from  developed  properties,  such as
   single-tenant  retail  stores and office  space.  Land sales are primarily to
   commercial  developers  and  others  in  the  Albuquerque  area  and  certain
   governmental  agencies,  and the terms of sale include both cash and internal
   financing  by the Company.  Such sales are  collateralized  by the land.  The
   Company has relied primarily upon cash land sales over the past several years
   due to the collection risk associated with real estate contracts.

   3. Cash and Cash Equivalents
      -------------------------

   Cash and cash equivalents are considered to include highly liquid investments
   with  maturities of three months or less and money market funds.  At June 30,
   1999 and 1998,  United States  Treasury bills of  approximately  $899,000 and
   $2,248,000, respectively, are included in cash and cash equivalents.

   The Company  maintains its cash in bank deposit accounts which, at times, may
   exceed  federally  insured  limits and in certain  other  funds which are not
   federally  insured.  The  Company  has not  experienced  any  losses  in such
   accounts  and  believes it is not exposed to any  significant  credit risk on
   cash and cash equivalents.

   4. Short-Term Investments
      ----------------------

   Short-term  investments  include  certificates  of deposit and U.S.  Treasury
   bills  carried at cost,  which  approximates  fair  value.  Such  investments
   generally have maturities of more than three months and less than one year.

   5. Land and Improvements Held for Future Development
      -------------------------------------------------

   Land and improvements held for future development are recorded at cost not to
   exceed net  realizable  value.  Improvements  consist of abstracts,  surveys,
   legal fees, master and sector plans, infrastructure  improvements,  and other
   costs  related to land held by the Company  which are allocated to respective
   tracts primarily by specific identification of costs.

   6. Income-Producing Properties and Property and Equipment
      ------------------------------------------------------

   Income-producing  properties  and property and  equipment are stated at cost,
   less accumulated  depreciation,  computed on a straight-line basis over their
   estimated  lives of three to thirty years.  The cost of the building in which
   the Company has its offices, a portion of which is rented to others, has been
   allocated to property and equipment  and  income-producing  properties  based
   upon square footage.

   7. Recognition of Income on Real Estate Transactions
      -------------------------------------------------

   The  Company  recognizes  the  entire  gross  profit on sales  where the down
   payment is sufficient to meet the requirements  for the full-accrual  method.
   Transactions   where  the  down  payment  is  not   sufficient  to  meet  the
   requirements  for the  full-accrual  method are recorded using the deposit or
   installment method.  Under the deposit method, cash received is recorded as a
   deposit on land sale. Under the installment  method,  the Company records the
   entire  contract  price and the related costs at the time the  transaction is
   recognized as a sale. Concurrently,  the gross profit on the sale is deferred
   and is  subsequently  recognized as revenue in the  statements of earnings as
   payments of principal are received on the related contract receivable.

   8. Income Taxes
      ------------

   Deferred  income  tax  assets  or  liabilities  are  determined  based on the
   difference  between  financial  statement and tax bases of certain assets and
   liabilities  as  measured  by the  enacted  tax  rates in  effect  using  the
   liability method.

   9. Earnings Per Common Share
      -------------------------

    Earnings  per common  share are based upon the  weighted  average  number of
    common shares  outstanding  during the year,  including the number of no par
    value  common  shares  which may be issued in  connection  with  eliminating
    fractional shares (which resulted from the  determination  made by the Court
    in the heirship case) and the number of no par value common shares for which
    the Court ruled that no  incorporator  or heirs existed.  The Company has no
    potential common stock items.

   10. Investments in Partnerships and Joint Ventures
       ----------------------------------------------

   Investments  in  partnerships  and joint  ventures are  accounted  for on the
   equity method.

   11. Use of Estimates
       ----------------

   In preparing  financial  statements in  conformity  with  generally  accepted
   accounting   principles,   management  is  required  to  make  estimates  and
   assumptions   that  affect   certain   reported   amounts  and   disclosures;
   accordingly, actual results could differ from those estimates.

   12. Long-Lived Assets
       -----------------

   Long-lived assets to be held and used are reviewed for impairment,  generally
   on a property-by-property  basis, whenever events or changes in circumstances
   indicate  that the  related  carrying  amount  may not be  recoverable.  When
   required,  impairment  losses are  recognized  based upon the estimated  fair
   value of the asset.


NOTE B - REAL ESTATE CONTRACT RECEIVABLE

   Real estate  contract  receivable  at June 30, 1999 consists of one contract,
   due  in  monthly   installments  with  an  interest  rate  of  9.5%,  and  is
   collateralized by land.

   Principal  collections  due on the real estate  contract  receivable  for the
   years ending June 30 are as follows:

              2000                                   $ 4,393
              2001                                     4,829
              2002                                     5,308
              2003                                     9,761
                                                     -------

                                                     $24,291
                                                     =======


NOTE C - LAND AND IMPROVEMENTS HELD FOR FUTURE DEVELOPMENT

   The Company  estimates  that it  presently  owns in excess of 59,000 acres of
   land,  primarily  including land located within the boundaries of the Town of
   Atrisco Land Grant and land located  elsewhere which the Company has acquired
   since  incorporation.  Plans for ultimate  development of the properties have
   not been finalized.

   Land and improvements consist of the following at June 30, 1999:

     Land                                                   $1,059,122
     Improvements                                            5,838,293
                                                            ----------

                                                            $6,897,415
                                                            ==========


NOTE D - INCOME-PRODUCING PROPERTIES

   Income-producing  properties  consist  of  four  single-tenant  retail  store
   buildings and a portion of the Company's  office  building and are summarized
   as follows at June 30, 1999:

     Buildings and equipment                                $5,713,813
     Less accumulated depreciation                             691,754
                                                            ----------
                                                             5,022,059
     Land                                                    3,199,033
                                                            ----------

                                                            $8,221,092
                                                            ==========

   The  Company's  rentals  from  income-producing  properties  are  principally
   obtained  from  tenants   through  rental  payments  as  provided  for  under
   noncancelable  operating  leases.  The lease  terms  range from one to twenty
   years and typically provide for guaranteed minimum rent, percentage rent, and
   other charges to cover certain operating costs.

   Minimum  future  rentals from  income-producing  properties on  noncancelable
   tenant operating leases as of June 30, 1999 are as follows:

           Year ending June 30
              2000                               $   827,906
              2001                                   798,783
              2002                                   801,196
              2003                                   805,018
              2004                                   808,001
              Thereafter                           7,119,116
                                                 -----------

                                                 $11,160,020
                                                 ===========


NOTE E - NOTES, MORTGAGES, AND ASSESSMENTS PAYABLE

   Notes,  mortgages,  and assessments payable are summarized as follows at June
   30, 1999:

     Promissory note, due in monthly installments of $17,970
     through   May  2015,   including   interest  at  9.37%;
     collateralized    by    income-producing     properties       $1,780,407

     Promissory note, due in monthly  installments of $9,079
     through  July  2014,   including   interest  at  8.00%;
     collateralized by income-producing properties                    950,000

     Note  payable,  due in monthly  installments  of $6,893
     through  September 2015,  including  interest at 8.75%;
     collateralized by income-producing properties                    714,395

     Note payable to bank;  due on demand,  but if no demand
     is made,  then on October 30,  1999,  with  interest at
     9.25%; collateralized primarily by real estate                   577,665

     Revolving  line of  credit  due to  bank,  due June 29,
     2000,  interest payable  quarterly at an effective rate
     of 8.75%;  collateralized  by  specific  tracts of land          639,632

     Mortgage note, due in monthly  installments of $24,682,
     including  interest  at 8.52%,  due  November  1, 2016;
     collateralized by income-producing properties                  2,683,944

     Line of credit due to bank in monthly  installments  of
     $6,701  with any  unpaid  amounts  due March 15,  2000,
     interest  at 9.25%;  collateralized  primarily  by real
     estate                                                            17,037

     Other                                                             13,571
                                                                    ---------

                                                                   $7,376,651
                                                                   ==========

   The Company's revolving line of credit with a bank provides for borrowings up
   to  $2,000,000  at the  bank's  prime  rate of  interest.  At June 30,  1999,
   $639,632 was outstanding on this line of credit.

   The  Company's  line of credit  with a bank  provides  for  borrowings  up to
   approximately  $1,005,000  at the bank's prime rate of interest.  At June 30,
   1999, $17,037 was outstanding on this line of credit.


   Aggregate  required  principal   payments  on  the  notes,   mortgages,   and
   assessments payable as of June 30, 1999 are as follows:

        Year ending June 30
              2000                                $1,409,500
              2001                                   190,155
              2002                                   204,455
              2003                                   220,325
              2004                                   240,625
              Thereafter                           5,111,591
                                                  ----------

                                                  $7,376,651
                                                  ==========

   Also, at June 30, 1999, the Company had approximately  $13,500 of outstanding
   letters of credit to the City of Albuquerque in connection  with  subdivision
   improvements done for the Company.


NOTE F - INCOME TAXES

   An analysis of the deferred  income tax assets and liabilities as of June 30,
   1999 is as follows:

     Deferred tax assets
       Contribution carryforwards                           $  316,000
       Property, equipment, and land                           342,000
       Investments                                              31,000
       Other                                                    72,000
       Valuation allowance                                    (316,000)
                                                            ----------
                                                               445,000

     Deferred tax liabilities
       Deferred tax gain on involuntary
         conversion of land                                  5,757,000
                                                            ----------

              Net deferred tax liability                    $5,312,000
                                                            ==========

   Income tax expense (benefit) consists of the following:

                                                       Year ended June 30,
                                                  1999                   1998
                                                ---------              ---------
     Current
       Federal ....................             $  (5,000)             $ 289,242
       State ......................                  --                   19,758
                                                ---------              ---------
                                                   (5,000)               309,000

     Deferred
       Federal ....................               667,000                439,000
       State ......................               118,000                 78,000
                                                ---------              ---------
                                                  785,000                517,000
                                                ---------              ---------

                                                $ 780,000              $ 826,000
                                                =========              =========

   The income tax provision is reconciled to the tax computed at statutory rates
   as follows:
                                                               June 30,
                                                         1999           1998
                                                       ---------      ---------

     Tax expense at statutory rates ..............     $ 703,000      $ 707,000
     State income taxes at statutory rates .......       104,000         97,000
     Change in valuation allowance ...............       227,000       (151,000)
     Change in effective state tax rate ..........      (159,000)          --
     Nontaxable gain .............................      (255,000)          --
     Nondeductible expenses ......................        27,000         23,000
     Expiration of contribution carryforwards ....        73,000        104,000
     Other .......................................        60,000         46,000
                                                       ---------      ---------

           Total expense .........................     $ 780,000      $ 826,000
                                                       =========      =========

   A valuation  allowance of approximately  $316,000 has been recognized at June
   30, 1999 based on estimates of tax assets which are not likely to be realized
   in the future.  Significant changes in assumptions  concerning future taxable
   income and deductions may cause changes in the valuation allowance.


NOTE G - COMMON STOCK

   Under its original Articles of Incorporation  (the  "Articles"),  the Company
   was authorized to issue  1,964,448  shares of common stock.  During 1999, the
   Articles were amended to eliminate  the authority to issue 736,668  shares of
   Class A common stock for $1.45 a share. The remaining  authorized stock is as
   follows:

   (a)  736,668  shares  of no par value  common  stock to  represent  $8,500
        estimated value of land held by the Town of Atrisco;

   (b)  491,112  shares to be sold for a price to be  determined by the Board
        of Directors,  designated as Class B, $1 par value, common stock. The
        holders of no par value  common  stock have no  preemptive  rights to
        purchase Class B stock.

   At June 30,  1999,  the  5,047  shares  of no par value  common  stock,  upon
   judicial  determination,  can be distributed to  stockholders of record as of
   the date of incorporation.

   There is no established  market value for the Company's common stock. At June
   30,  1999,  716,608  shares of the  Company's  no par value common stock were
   issued and  outstanding.  Of the 5,047  shares of no par value  common  stock
   issuable,   1,872  shares  may  be  issued  in  connection  with  eliminating
   fractional shares which resulted from the determinations made by the Court in
   the heirship  case and 3,175 shares  represent  shares for which the Court in
   the heirship case ruled that no  incorporator  or heirs existed.  The Company
   also has reacquired  and canceled  15,013 shares of no par value common stock
   which have been constructively  retired.  These shares have not been formally
   retired  and, as such,  may be issuable to  stockholders  of record as of the
   date of incorporation.

   During  the year  ended  June 30,  1999,  the  Board  of  Directors  approved
   protection  against takeover  measures whereby a threat of change of three or
   more  directors  in any one year would result in  directors  threatened  with
   replacement being granted an immediate Class B stock bonus of 5,000 shares if
   in office as a director ten years or more,  and 2,500 shares of Class B stock
   if in office as a director  for less than ten years.  The  maximum  number of
   shares which could be issued under this  agreement at June 30, 1999 is 40,000
   shares.


NOTE H - SEGMENT INFORMATION

   The Company has adopted Statement of Financial  Accounting Standards ("SFAS")
   No. 131,  Disclosures  about  Segments of a Business  Enterprise  and Related
   Information.  Pursuant to SFAS No. 131,  prior period data have been restated
   to conform to the new requirements.

   The Company operates primarily in two industry segments. They are as follows:

     Land    -  Operations  involve the development  and sale of tracts,  both
                residential and commercial. In addition, included are incidental
                revenues from leasing of grazing rights.

     Rentals -  Operations  involve  rentals from four  single-tenant  retail
                store buildings and a portion of the Company's office building.

   Financial information for each industry segment is summarized as follows:

                                                        General
                                 Land      Rentals     corporate       Total
                              ----------  ----------  ------------  -----------
     1999
       Revenues               $4,815,505  $  702,065  $      --     $ 5,517,570
       Operating income
         (loss)                3,341,526     445,421   (1,272,876)    2,514,071
       Interest income              --          --        136,611       136,611
       Interest expense             --          --       (540,516)     (540,516)
       Income tax expense           --          --       (829,000)     (829,000)
       Identifiable assets     6,981,514   8,442,383    4,476,322    19,900,219
       Capital expenditures         --     1,330,931       73,364     1,404,295
       Depreciation                 --       168,479       59,476       227,955
       Noncash gain on
         disposition of land        --          --        750,000       750,000

     1998
       Revenues               $4,651,224  $  697,385  $      --     $ 5,348,609
       Operating income
         (loss)                3,547,773     433,945   (1,359,202)    2,622,516
       Interest income              --          --         99,672        99,672
       Interest expense             --          --       (631,356)     (631,356)
       Income tax (expense)
         benefit                    --          --       (826,000)     (826,000)
       Identifiable assets     6,552,542   7,277,962    3,726,589    17,557,093
       Capital expenditures         --           972       59,986        60,958
       Depreciation                 --       169,091       52,788       221,879

   General corporate assets consist primarily of cash, furniture, equipment, and
   a portion of an office building,  of which the remaining one-half is included
   in income-producing properties.


NOTE I - BENEFIT PLANS

   The  Company has  certain  defined  benefit  employee  retirement  plans that
   provide for employee and employer  contributions.  The Company's contribution
   expense  for  these  plans  was  $121,000  and  $89,000  for 1999  and  1998,
   respectively.


NOTE J - SALES TO MAJOR CUSTOMERS

   Sales to major customers are summarized as follows:

   During the year  ended June 30,  1999,  sales to two  customers  individually
   accounted for 52% and 21% of total revenues.

   During the year  ended June 30,  1998,  sales to two  customers  individually
   accounted for 28% and 13% of total revenues.


NOTE K - SALE OF LAND FOR NATIONAL PARK

   On June 28, 1990, the Petroglyph National Monument ("National  Monument") was
   established by an act of the United States Congress  ("Congress").  Under the
   bill passed by Congress,  the National  Park Service is authorized to acquire
   acreage within the National Monument using funds specifically appropriated by
   Congress  each  year.  In 1999  and  1998,  approximately  362 and 85  acres,
   respectively,  were  transferred  to the  National  Park  Service for cash of
   $2,600,000 and  $1,500,000,  respectively.  The Company has no remaining land
   set aside for sale to the National Park Service at this time.


NOTE L - LITIGATION

   The Company is engaged in various  lawsuits  either as plaintiff or defendant
   which have arisen in the  conduct of its  business  which,  in the opinion of
   management, based upon advice of counsel, would not have a material effect on
   the Company's financial position.


NOTE M - RELATED PARTY TRANSACTIONS

   During the year ended June 30, 1999, the Company sold land to a member of the
   Board of  Directors.  Under  the  sales  agreement,  the  Board  member  paid
   approximately $52,000 for three lots.

   The Company  purchases  its  directors'  and  officers'  liability  insurance
   through a corporation controlled by a member of the Board of Directors. Total
   premiums for these policies paid in 1999 and 1998 were $50,000 each year.

   The note  receivable  - related  party is from a joint  venture  partner,  is
   payable in monthly  installments  of $758  including  interest at 10%, and is
   collateralized by developed property. The note matures April 2006.

   During  the year ended  June 30,  1998,  the  Company  acquired  land from an
   ownership  group  which  included  a member of the Board of  Directors  and a
   member of the director's  immediate  family.  Under the sales agreement,  the
   Board member  received  approximately  $81,000 and the family member received
   approximately $49,000.


NOTE N - FINANCIAL INSTRUMENTS

   The following  table includes  various  estimated  fair value  information as
   required  by  SFAS  No.  107,  Disclosures  about  Fair  Value  of  Financial
   Instruments.  Such  information,  which  pertains to the Company's  financial
   instruments,  is based on the requirements set forth in SFAS No. 107 and does
   not purport to represent  the  aggregate  net fair value of the Company.  The
   carrying  amounts  in the  table  are the  amounts  at  which  the  financial
   instruments are reported in the financial statements.

   All of the Company's  financial  instruments are held for purposes other than
   trading.

   The following methods and assumptions were used to estimate the fair value of
   each class of financial instruments:

   1.   Cash and Cash Equivalents
        -------------------------

   The carrying  amount  approximates  fair value because either the Company has
   the  contractual  right to  receive  immediate  payment  or  because of short
   maturities.

   2.   Short-Term Investments
        ----------------------

   The carrying amount  approximates  fair value due to the short  maturities of
   the investments.

   3.   Real Estate Contracts Receivable
        --------------------------------

   These notes receivable are generally collateralized by real estate and accrue
   interest at 9.5%.  Because the ultimate  collectibility of these notes is not
   reasonably assured, it is not practicable to estimate fair value.

   4.   Note Receivable - Related Party
        -------------------------------

   Note receivable - related party is valued at the present value of future cash
   flows  based on the  current  rates at which  similar  loans would be made to
   borrowers with similar credit ratings.

   5.   Notes, Mortgages, and Assessments Payable
        -----------------------------------------

   The  discounted  amount of future  cash  flows  using the  Company's  current
   incremental  rate of borrowing  for similar  liabilities  is used to estimate
   fair value.

   The carrying  amounts and estimated  fair values of the  Company's  financial
   instruments at June 30, 1999 are as follows:

                                                    Carrying    Estimated
                                                     amount     fair value
                                                   ----------   ----------
     Financial assets
       Cash and cash equivalents ...............   $1,300,182   $1,300,182
       Short-term investments ..................    2,578,019    2,578,019
       Real estate contract receivable
         (not practicable to estimate
         fair value) ...........................       24,291         --
       Note receivable - related party .........       59,808       59,808
     Financial liabilities
       Notes, mortgages, and assessments payable    7,376,691    7,587,000


NOTE O - CONTRIBUTION OF LAND

   In keeping with the Company's long-standing  commitment to the furtherance of
   community  projects  which  benefit  the  education  and  welfare of its less
   fortunate citizens, during 1999 the Company donated approximately fifty acres
   of land to a  nonprofit  organization  to  develop  a  residential  and  work
   facility for seriously  disabled/mentally  ill persons.  The contributed land
   had a fair value of  approximately  $790,000  which was  recorded as an other
   expense  and a pretax  gain of  approximately  $750,000  was  recorded on the
   donation.


NOTE P - SUBSEQUENT EVENT

   On August 26,  1999,  the  Company  declared  a dividend  of $1 per share for
   stockholders  of record as of August 27,  1999.  The  dividend  is payable on
   September 10, 1999.


DIRECTORS OF WESTLAND

SOSIMO S. PADILLA,  Chairman of the Board of Directors  and Director.  Member of
the Executive Committee.  Mr. Padilla is retired from the circulation department
of  the  Albuquerque  Publishing  Company  and  was  owner/operator  of  Western
Securities Transportation Corporation for over thirty years.

BARBARA PAGE, President, Chief Executive Officer and Director.  Secretary of the
Executive  Committee.  Ms. Page is employed by Westland Development Co., Inc. as
its President.

POLECARPIO (LEE) ANAYA, Executive Vice President,  Assistant Secretary/Treasurer
and Director.  Mr. Anaya is also Chairman of the Executive Committee.  Mr. Anaya
was owner/operator of Lee's Conoco.

DAVID C. ARMIJO,  Secretary/Treasurer  and Director.  Mr. Armijo is an insurance
broker  and  serves as  President  and  Chairman  of the  Board of  California's
All-Risk Insurance Agency, Inc. in Los Angeles, California.

CARMEL CHAVEZ,  Director.  Member of the Executive  Committee and the Disclaimer
Committee  and Vice  Chairman of El Campo Santo,  Inc.  Mr.  Chavez is a retired
employee of the Albuquerque Public Schools.

JOSIE G. CASTILLO,  Director. Member of the Executive Committee,  Chairman of El
Campo  Santo,  Inc.  and member of the  Disclaimer  Committee.  Ms.  Castillo is
retired from the Human Services Department of the State of New Mexico.

CARLOS  SAAVEDRA,   Director.  Alternate  member  of  the  Executive  Committee,
Alternate  Member  of El  Campo  Santo,  Inc.  and  Chairman  of the  Disclaimer
Committee.  Dr.  Saavedra is a former  director of bilingual  education  for the
Colorado  Department  of  Education  and the Oakland  Unified  School  District,
Oakland, California. Dr. Saavedra retired from education in 1985.

JOE S. CHAVEZ,  Director.  Member of the  Disclaimer  Committee.  Mr.  Chavez is
employed at Galles Chevrolet in Albuquerque, New Mexico.

CHARLES V. PENA,  Director.  Member of El Campo Santo,  Inc., and the Disclaimer
Committee. Mr. Pena owns and operates CJ's New Mexican Food Restaurant.