<PAGE>   1

                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549


                                  FORM 10-Q


      [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1997

                        Commission File Number 1-9948


                         AMERICAN REALTY TRUST, INC.
          --------------------------------------------------------
           (Exact Name of Registrant as Specified in Its Charter)


          Georgia                                              54-0697989     
-------------------------------                          ---------------------
(State or Other Jurisdiction of                             (I.R.S. Employer
Incorporation or Organization)                             Identification No.)


10670 North Central Expressway, Suite 300, Dallas, Texas            75231 
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                          (Zip Code)


                               (214) 692-4700
                      ---------------------------------
                       (Registrant's Telephone Number,
                            Including Area Code)


Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.  
Yes  X    No
    ---      ---

                     APPLICABLE ONLY TO CORPORATE ISSUERS:


Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.


Common Stock, $.01 par value                             11,954,721             
----------------------------                  --------------------------------  
          (Class)                              (Outstanding at August 1, 1997)





                                       1
<PAGE>   2
                         PART I.  FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS

The accompanying Consolidated Financial Statements have not been examined by
independent certified public accountants but in the opinion of the management
of American Realty Trust, Inc. (the "Company"), all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of consolidated
results of operations, consolidated financial position and consolidated cash
flows at the dates and for the periods indicated, have been included.


                         AMERICAN REALTY TRUST, INC.
                         CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                 June 30,            December 31,
                                                                                   1997                 1996 
                                                                                 --------            -----------
                                                                                      (dollars in thousands)
                     Assets
                     ------
<S>                                                                        <C>                  <C>
Notes and interest receivable
  Performing........................................                       $        49,922       $       50,784
  Nonperforming.....................................                                   149                1,627
                                                                           ---------------       --------------
                                                                                    50,071               52,411

Less - allowance for estimated losses...............                                (3,926)              (3,926)
                                                                           ---------------       -------------- 
                                                                                    46,145               48,485
Real estate held for sale, net of accumulated
  depreciation ($5,098 in 1997 and 1996)............                               139,361               77,688

Real estate held for investment, net of accumulated
  depreciation ($5,115 in 1997 and $4,234 in 1996)..                                42,968               41,347

Plant and equipment, net of accumulated depreciation
  ($521 in 1997)....................................                                 3,999                  -

Marketable equity securities, at market value.......                                 5,502                2,186
Cash and cash equivalents...........................                                 4,827                1,254
Investments in equity investees.....................                                46,219               55,880
Intangibles, net of accumulated amortization ($407
  in 1997)..........................................                                15,482                  -
Other assets........................................                                18,012                8,197
                                                                           ---------------       --------------

                                                                           $       322,515       $      235,037
                                                                           ===============       ==============
</TABLE>




The accompanying notes are an integral part of these Consolidated Financial
Statements.





                                       2
<PAGE>   3
                          AMERICAN REALTY TRUST, INC.
                    CONSOLIDATED BALANCE SHEETS - Continued





<TABLE>
<CAPTION>
                                                                               June 30,          December 31,
                                                                                 1997                1996    
                                                                           ---------------       --------------
                                                                                   (dollars in thousands)
<S>                                                                        <C>                   <C>
      Liabilities and Stockholders' Equity
      ------------------------------------

Liabilities
Notes and interest payable ($9,183 in 1997 and
  $8,973 in 1996 to affiliates)....................                        $       188,333       $      127,863
Margin borrowings..................................                                 44,347               40,044
Accounts payable and other liabilities (including
  $22,340 in 1997 to affiliate)....................                                 29,360                8,433
                                                                           ---------------       --------------
                                                                                   262,040              176,340

Minority interest..................................                                 10,911               10,911

Commitments and contingencies

Stockholders' equity
Preferred Stock, $2.00 par value, authorized
  20,000,000 shares, issued and outstanding
     4,000 shares Series B.........................                                      8                    8
     16,681 shares Series C........................                                     33                   32
Common stock, $.01 par value; authorized
  16,667,000 shares, issued 13,479,348 shares
  in 1997 and 1996................................                                     120                  129
Paid-in capital...................................                                  68,700               68,601
Accumulated (deficit).............................                                 (19,282)             (20,978)
Treasury stock at cost, 1,524,704 shares in 1997
  and 564,704 shares in 1996......................                                     (15)                  (6)
                                                                           ---------------       -------------- 

                                                                                    49,564               47,786
                                                                           ---------------       --------------
                                                                           $       322,515       $      235,037
                                                                           ===============       ==============
</TABLE>





The accompanying notes are an integral part of these Consolidated Financial
Statements.





                                       3
<PAGE>   4
                          AMERICAN REALTY TRUST, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                      For the Three Months                 For the Six Months
                                                        Ended June 30,                       Ended June 30,    
                                                    ------------------------            ------------------------
                                                    1997                1996            1997              1996
                                                    ----                ----            ----              ----
                                                               (dollars in thousands, except per share)
<S>                                       <C>                 <C>                 <C>                 <C>
Income
 Sales........................            $        2,181      $          -        $         2,181     $         -
 Rents........................                     5,014               4,084               10,922             9,394
 Interest.....................                     1,176               1,135                2,297             2,273
 Other........................                     1,296                 127                1,766               469
                                          --------------      --------------      ---------------     -------------
                                                   9,667               5,346               17,166            12,136
                                          --------------      --------------      ---------------     -------------
Expenses
 Cost of sales................                     1,688                 -                  1,688               -
 Property operations..........                     4,018               3,856                8,471             7,566
 Interest.....................                     6,870               3,270               12,074             6,416
 Advisory and servicing fees
  to affiliate  ..............                       585                 381                1,009               701
 Incentive compensation to
  affiliate...................                       299                 -                    299               -
 General and administrative...                     1,556                 595                2,351             1,237
 Depreciation and
  amortization................                       600                 453                1,147               890
 Minority interest............                       344                 -                    716               -  
                                          --------------      --------------      ---------------     -------------
                                                  15,960               8,555               27,755            16,810
                                          --------------      --------------      ---------------     -------------

(Loss) from operations........                    (6,293)             (3,209)             (10,589)           (4,674)
Equity in income (loss) of
 investees....................                     4,970              (1,530)               5,250            (2,420)
Gain on sale of real estate...                     3,863               2,348                8,150             4,475
                                          --------------      --------------      ---------------     -------------
Income (loss) before
 extraordinary gain...........                     2,540              (2,391)               2,811            (2,619)

Extraordinary gain............                       -                   247                  -                 260
                                          --------------      --------------      ---------------     -------------
Net income (loss).............                     2,540              (2,144)               2,811            (2,359)

Preferred dividend
 requirement..................                       (49)                (17)                 (99)              (17)
                                          --------------      --------------      ---------------     -------------
Net income (loss) applicable
 to Common shares.............            $        2,491      $       (2,161)     $         2,712     $      (2,376)
                                          ==============      ==============      ===============     ============= 
Earnings per share
 Income (loss) before
  extraordinary gain .........            $          .21      $         (.19)     $           .23     $        (.21)
 Extraordinary gain...........                      -                    .02                  -                 .02
                                          --------------      --------------      ---------------     -------------
 Net income (loss) applicable
  to Common shares............            $          .21      $         (.17)     $           .23     $        (.19)
                                          ==============      ==============      ===============     ============= 
Weighted average Common shares
 used in computing earnings
 per share....................                12,075,307          13,230,634           12,114,939        12,473,646
                                          ==============      ==============      ===============     ============= 
</TABLE>


The accompanying notes are an integral part of these Consolidated Financial 
Statements.





                                       4
<PAGE>   5
                          AMERICAN REALTY TRUST, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     For the Six Months Ended June 30, 1997




<TABLE>
<CAPTION>
                                 Series B        Series C
                                 Preferred      Preferred        Common      Treasury     Paid-in    Accumulated    Stockholders'
                                   Stock          Stock           Stock         Stock     Capital     (Deficit)        Equity    
                                 ---------      ---------       ---------    ---------   ---------    ---------       ---------
                                                            (dollars in thousands, except per share)
<S>                                <C>            <C>            <C>           <C>        <C>         <C>            <C>     
Balance, January 1, 1997...        $  8           $  32          $  129        $  (6)     $ 68,601    $ (20,978)     $  47,786

Dividends
  Common Stock ($.10 per
    share).................           -               -               -            -             -       (1,013)        (1,013)
  Series B Preferred Stock
    ($5.00 per share)......           -               -               -            -             -          (20)           (20)
  Series C Preferred Stock
    ($5.00 per share)......           -               1               -            -            81          (82)
                                             
Treasury stock, at cost....           -               -              (9)          (9)           18            -              -

Net income.................           -               -               -            -             -        2,811          2,811
                                   ----           -----          ------        -----      --------    ---------      ----------
Balance, June 30, 1997....         $  8           $  33          $  120        $ (15)     $ 68,700    $  (19,282)     $  49,564
                                   ====           =====          ======        =====      ========    ==========      =========
</TABLE>





The accompanying notes are an integral part of these Consolidated Financial
Statements.





                                       5
<PAGE>   6
                          AMERICAN REALTY TRUST, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    For the Six Months
                                                                                       Ended June 30,     
                                                                           -------------------------------------
                                                                               1997                   1996  
                                                                           ---------------       ---------------
                                                                                 (dollars in thousands)
<S>                                                                        <C>                    <C>  
Cash Flows From Operating Activities
  Revenues collected..............................                         $        12,624       $        8,677
  Interest collected..............................                                   2,071                2,250
  Distributions received from equity investees'
    operating cash flow...........................                                   1,315                5,982
  Payments for property operations and cost of
     sales.........................................                                 (7,626)              (8,209)
  Interest paid...................................                                  (7,517)              (3,688)
  Advisory and servicing fees paid to affiliate...                                  (1,009)                (701)
  General and administrative expenses paid........                                  (2,404)              (1,274)
  Other...........................................                                    (396)                 (98)
                                                                           ---------------       -------------- 
    Net cash provided by (used in) operating
      activities..................................                                  (2,942)               2,939

Cash Flows From Investing Activities
  Collections on notes receivable.................                                   5,499                  449
  Funding of notes receivable.....................                                  (2,888)                (100)
  Proceeds from sale of real estate...............                                  12,385                1,951
  Proceeds from sale of marketable equity
    securities....................................                                   4,613               17,122
  Purchases of marketable equity securities.......                                  (6,345)             (18,421)
  Investment in real estate entities..............                                    (463)             (13,545)
  Acquisition of real estate......................                                 (37,063)                (798)
  Deposits........................................                                  (3,883)              (1,865)
  Real estate improvements........................                                  (3,162)                (731)
                                                                           ---------------       -------------- 
    Net cash (used in) investing activities.......                                 (31,307)             (15,938)

Cash Flows From Financing Activities
  Proceeds from notes payable....................                                   39,472               43,750
  Payments on notes payable......................                                  (22,535)             (20,050)
  Deferred borrowing costs.......................                                   (2,454)              (1,735)
  Net advances (payments) to/from affiliates.....                                   22,735               (3,960)
  Margin (payments) borrowings, net..............                                    2,353               (6,281)
  Common dividends paid..........................                                   (1,013)                 -
  Proceeds for issuance of Series B Preferred
    Stock........................................                                      -                    400
  Preferred dividends paid.......................                                      (20)                  (6)
  Distributions to minority interest.............                                     (716)                 -  
                                                                           ---------------       --------------
    Net cash provided by financing activities....                                   37,822               12,118

    Net increase (decrease) in cash and cash
     equivalents................................                                     3,573                 (881)

Cash and cash equivalents, beginning of period...                                    1,254                1,054
                                                                           ---------------       --------------
Cash and cash equivalents, end of period.........                          $         4,827       $          173
                                                                           ===============       ==============
</TABLE>



The accompanying notes are an integral part of these Consolidated Financial
Statements.





                                       6
<PAGE>   7
                          AMERICAN REALTY TRUST, INC.
               CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued

<TABLE>
<CAPTION>
                                                                                    For the Six Months
                                                                                       Ended June 30,     
                                                                           -------------------------------------
                                                                               1997                   1996  
                                                                           ---------------       ---------------
                                                                                 (dollars in thousands)
<S>                                                                        <C>                    <C>  
Reconciliation of net income (loss) to net cash
  provided by (used in) operating activities
  Net income (loss).................................                       $         2,811       $       (2,359)
  Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities
     Extraordinary gain.............................                                   -                   (260)
     Depreciation and amortization..................                                 1,147                  890
     Amortization of deferred borrowing cost........                                 1,712                  -
     Gain on sale of real estate....................                                (8,150)              (4,475)
     Distributions from equity investees' operating
     cash flow....................................                                  14,448                5,982
     Equity in (income) losses of investees.........                                (5,250)               2,420
     Unrealized (gain) on marketable equity
     securities...................................                                  (1,600)                (663)
     (Increase) decrease in accrued interest
     receivable...................................                                     (93)                  11
     (Increase) decrease in other assets............                                (5,856)               1,882
     (Decrease) in accrued interest payable.........                                (1,680)                 219
     (Decrease) in accounts payable and other
     liabilities..................................                                    (613)                (843)
     Other..........................................                                   182                  135
                                                                           ---------------       --------------
       Net cash provided by operating activities....                       $         2,942       $        2,939
                                                                           ===============       ==============
Schedule of noncash investing activities

  Issuance of 15,000 shares of Series B Preferred
     Stock with an aggregate liquidation value of
     $1.5 million..................................                        $           -         $        1,500

  Stock dividends on Series C Preferred Stock.....                                      82                  -

  Notes payable from acquisition of real estate....                                 32,154                  -

  Notes payable from acquisition of minority
     interest.......................................                                 5,000                  -

  Note receivable from sale of real estate.........                                    800                  -

Acquisition of Pizza World Supreme, Inc.

  Carrying value of intangibles....................                        $        15,482       $          -

  Carrying value of plant and equipment............                                  3,998                  -

  Carrying value of note receivable retired........                                 13,387                  -

  Carrying value of accounts payable and other
     liabilities....................................                                 1,314                  -
</TABLE>

The accompanying notes are an integral part of these Consolidated Financial
Statements.





                                       7
<PAGE>   8
                          AMERICAN REALTY TRUST, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.      BASIS OF PRESENTATION

The accompanying Consolidated Financial Statements of American Realty Trust,
Inc. and consolidated entities (the "Company") have been prepared in conformity
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
Operating results for the six month period ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997.  For further information, refer to the Consolidated
Financial Statements and Notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996 (the "1996 Form 10-K").

Certain balances for 1996 have been reclassified to conform to the 1997
presentation.  Shares and per share data have been restated for the two for one
forward share split effected February 17, 1997.

NOTE 2.      SYNTEK ASSET MANAGEMENT, L.P.

The Company owns a 96% limited partner interest in Syntek Asset Management,
L.P. ("SAMLP").  SAMLP is the general partner of National Realty, L.P. ("NRLP")
and National Operating, L.P. ("NOLP"), the operating partnership of NRLP.  Gene
E. Phillips, a Director and Chairman of the Board of the Company until November
16, 1992, is also a general partner of SAMLP.  As of June 30, 1997, the Company
owned approximately 54% of the outstanding limited partner units of NRLP.

NRLP, SAMLP and Mr. Phillips were among the defendants in a class action
lawsuit arising from the formation of NRLP.  An agreement settling such lawsuit
for the above mentioned defendants became effective on July 5, 1990.  The
settlement agreement provided for, among other things, the appointment of an
NRLP oversight committee;  the establishment of specified annually increasing
targets for five years relating to the price of NRLP's units of limited partner
interest; a limitation and deferral or waiver of NRLP's reimbursement to SAMLP
of certain future salary costs; a deferral or waiver of certain future
compensation to SAMLP; the required distribution to unitholders of all of
NRLP's cash from operations in excess of certain renovation costs unless the
NRLP oversight committee approves alternative uses for such cash from
operations; the issuance of unit purchase warrants to members of the
plaintiff class; and the contribution by the then individual general partners
of $2.5 million to NRLP over a four-year period.  In accordance with the
indemnification provisions of SAMLP's agreement of  limited partnership, SAMLP
agreed to indemnify Messrs. Phillips and Friedman, the individual general
partners, at the time, of SAMLP, for the $2.5 million payment to NRLP.  The
final annual installment of principal and interest was paid by SAMLP in May
1994.

The settlement agreement provides for the resignation and replacement of SAMLP
as general partner if the unit price targets are not met for two





                                       8
<PAGE>   9
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 2.      SYNTEK ASSET MANAGEMENT, L.P. (Continued)

consecutive anniversary dates.  NRLP did not meet the unit price targets for
the first and second anniversary dates.  On July 8, 1992, SAMLP notified the
NRLP oversight committee of the failure of NRLP to meet the unit price targets
for two successive years and that it expects to resign as general partner of
NRLP and NOLP.

The withdrawal of SAMLP as general partner would require NRLP to purchase
SAMLP's general partner interest (the "Redeemable General Partner Interest") at
its then fair value, and to pay certain fees and other compensation as provided
in the partnership agreement.  Syntek Asset Management, L.P. ("SAMI"), the
managing general partner of SAMLP, has calculated the fair value of such
Redeemable General Partner Interest to be $40.2 million at June 30, 1997,
before reduction for the principal balance ($4.2 million at June 30, 1997) and
accrued interest ($6.7 million at June 30, 1997) on the note receivable from
SAMLP for its original capital contribution to the partnership.

In January 1995, NRLP, SAMLP, William H. Elliott and the NRLP oversight
committee executed an Implementation Agreement which provides for the
nomination of a  successor general partner to succeed SAMLP and for the
resolution of all related matters under the class action settlement.  On
February 20, 1996, the parties to the Implementation Agreement executed an
Amended and Restated Implementation Agreement.

In April 1995, the Company's Board of Directors approved the Company's entering
into a comfort and indemnification letter whereby the Company would agree to
indemnify Mr. Elliott and any entity controlled by Mr. Elliott which is elected
to serve as the successor general partner of NRLP and NOLP.  Such
indemnification will stand behind any indemnification to which Mr. Elliott or
any entity controlled by Mr. Elliott may be entitled to under the NRLP
partnership agreement.

Provided that the successor general partner is elected pursuant to the terms of
the Amended and Restated Implementation Agreement, SAMLP shall receive
$12,471,500 from NRLP.  This amount represents a compromise settlement of the
net amounts owed by NRLP to SAMLP upon SAMLP's withdrawal as general partner
and any amounts which SAMLP and its affiliates may owe to NRLP.  This amount
shall be paid to SAMLP pursuant to a promissory note in accordance with the
terms set forth in the Amended and Restated Implementation Agreement.

In September 1996, the Judge appointed to supervise the class action settlement
(the "Supervising Judge") entered an order granting tentative approval of the
Amended and Restated Implementation Agreement and the form of notice to be sent
to the original class members.  On April 7, 1997, the Supervising Judge entered
an order amending the September 23, 1996 order, approving the formal notice and
setting a hearing on the Amended and Restated Implementation Agreement for June
27, 1997.  A notice was sent to all class members and unitholders in April 1997
and





                                       9 
<PAGE>   10
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 2.      SYNTEK ASSET MANAGEMENT, L.P. (Continued)

the hearing was held on June 27, 1997.  As of August 8, 1997, the Supervising
Judge had not entered the order granting final approval of the Amended and
Restated Implementation Agreement.  Upon final approval by the Supervising
Judge, the proposal to elect the successor general partner will be submitted to
the NRLP unitholders for a vote.  In addition, the unitholders will vote upon
amendments to NRLP's partnership agreement which relate to the proposed
compensation of the successor general partner and other related matters.

The Amended and Restated Implementation Agreement provides that SAMLP, and its
affiliates owning units in NRLP, shall not vote to remove the successor general
partner, except for removal with cause, for a period of 36 months from the date
the successor general partner takes office.

Upon approval by NRLP's unitholders, SAMLP shall resign as general partner of
NRLP and NOLP and the successor general partner shall take office.  If the
required approvals are obtained, it is anticipated that the successor general
partner may be elected and take office during the fourth quarter of 1997.

Upon the election and taking office of the successor general partner, the class
action settlement and the NRLP oversight committee shall be terminated.  If the
successor general partner nominee is not elected, the existing settlement shall
remain in full force and effect and all of the provisions of the Amended and
Restated Implementation Agreement shall be voided, including the compromise
settlement referred to above.

NOTE 3.      NOTES AND INTEREST RECEIVABLE

The borrower on a $1.7 million mortgage note receivable secured by land in
Osceola, Florida failed to pay the note on its November 1, 1993 maturity.  The
Company instituted foreclosure proceedings and was awarded a summary judgment
in January 1994.  During 1994 and 1995, the borrower paid the Company a total
of $270,000 in nonrefundable fees to delay foreclosure of the property until
April 24, 1995.  On April 25, 1995, the borrower filed for bankruptcy
protection.  On August 26, 1996, the bankruptcy court's stay was lifted
allowing the Company to proceed with foreclosure.  In February 1997, the
Company sold its mortgage note receivable for $1.8 million in cash.  The
Company recognized a gain of $171,000 on the sale.

Related Party.  In December 1996, the Company and the borrower on a $3.7
million note receivable secured by an apartment complex in Merrillville,
Indiana agreed to an extension of the notes December 1996 maturity date to
December 2000.  The property is owned by a subsidiary of Davister Corp.
("Davister"), a general partner in a partnership that owns approximately 13.7%
of the Company's outstanding shares of Common Stock.  In May 1997, the note
plus accrued but unpaid interest was paid in full.  See NOTE 10. "CERTAIN
RELATIONSHIPS AND TRANSACTIONS."





                                       10
<PAGE>   11
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 4.      REAL ESTATE

In January 1997, the Company sold 3.0 acres of the Las Colinas I Land in Las
Colinas, Texas, for $1.2 million in cash.  The Company recognized a gain of
$697,000 on the sale.

In January 1997, the Company purchased Scout land, 546 acres of undeveloped
land in Tarrant County, Texas, for $2.2 million.  The Company paid $725,000 in
cash and obtained mortgage financing for the remaining $1.5 million of the
purchase price.  The mortgage bears interest at 16% per annum, requires
quarterly interest only payments of $61,000, and matures in January 2000.  The
Company paid a real estate brokerage commission of $135,000 to Carmel Realty,
Inc.  ("Carmel Realty"), an affiliate of Basic Capital Management, Inc.
("BCM"), the Company's advisor, based on the $2.2 million purchase price of the
property.

In October 1995, the Company purchased BP Las Colinas land, a 92.6 acre parcel
of partially developed land in Las Colinas, Texas.  In February 1996, the
Company entered into a contract to sell 72.5 acres of such parcel for $12.9
million.  The contract called for the sale to close in two phases.  In July
1996, the Company completed the first phase sale of 32.3 acres.  In February
1997, the Company completed the second phase sale of 40.2 acres for $8.0
million, of which $7.2 million was paid in cash.  Of the net sales proceeds of
$6.9 million, $1.5 million was used to payoff the underlying debt secured by
the BP Las Colinas parcel, pay a $500,000 maturity fee to the lender, make a
$1.5 million principal paydown on note secured by Parkfield land in Denver,
Colorado with the same lender, and $1.0 million was applied as a principal
paydown on the term loan secured by the Las Colinas I land parcel.  In
conjunction with the sale the Company provided $800,000 in purchase money
financing in the form of a six month unsecured loan.  The loan bears interest
at 12% per annum, with all accrued but unpaid interest and principal due at
maturity in August 1997.  The Company recognized a gain of $3.4 million on such
sale, deferring an additional $800,000 of gain until the unsecured loan is paid
in full.  The Company paid a real estate brokerage commission of $239,000 to
Carmel Realty based on the $8.0 million sales price of the property.

In March 1997, the Company purchased Katy Road land, 130.6 acres of undeveloped
land in Harris County, Texas, for $5.6 million.  The Company paid $1.6 million
in cash with the seller providing purchase money financing for the remaining
$4.0 million of the purchase price.  The mortgage bears interest at 9% per
annum, requires quarterly interest only payments of $92,000 and matures in
March 2000.  The Company paid a real estate brokerage commission of $209,000 to
Carmel Realty based on the $5.6 million purchase price of the property.

In April 1997, the Company purchased McKinney Corners I land, 30.4 acres of
undeveloped land in Collin County, Texas, for $3.5 million.  The Company paid
$1.0 million in cash and obtained mortgage financing for





                                       11
<PAGE>   12
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 4.      REAL ESTATE (Continued)

the remaining $2.5 million of the purchase price.  The loan bears interest at
14% per annum, requires monthly interest only payments of $29,000 and matures
in April 1998.  The Company paid a real estate brokerage commission of $208,000
to Carmel Realty based on the $3.5 million purchase price of the property.

In April 1997, the Company purchased McKinney Corners II land, 173.9 acres of
undeveloped land in Collin County, Texas, for $5.7 million.  The Company paid
$700,000 in cash and obtained mortgage financing for the remaining $5.0 million
of the purchase price as a fourth advance under the term loan from the Las
Colinas I lender.  The term loan was amended increasing the term loan amount
from $19.5 million to $24.5 million.  The amendment also changed the required
principal reduction payments to $500,000 in June, July, September and October
1997 and $1.0 million in August and November 1997.  The McKinney Corners II
land was added as additional collateral on the term loan.  The Company paid a
real estate brokerage commission of $343,000 to Carmel Realty based on the $5.7
million purchase price of the property.

In April 1997, the Company sold 3.115 acres of the Las Colinas I land for $1.3
million in cash.  The Company used $1.0 million of the sales  proceeds as a
collateral escrow deposit in accordance with the provision of the Valley Ranch
land loan.  The Company recognized a gain of $648,000 on the sale.  The Company
paid a real estate brokerage commission of $38,000 to Carmel Realty based on
the $1.3 million sales price of the property.

In May 1997, the Company purchased McKinney Corners III land, 15.5 acres
undeveloped land in Collin County, Texas, for $896,000 in cash.  The Company
paid a real estate brokerage commission of $54,000 to Carmel Realty based on
the $896,000 purchase price of the property.

In May 1997, the Company purchased Lacy Longhorn land, 17.1 acres of
undeveloped land in Farmers Branch, Texas, for $1.8 million.  The Company paid
$200,000 in cash and obtained seller financing of the remaining $1.6 million of
the purchase price.  The loan bears interest at 10% per annum, requires monthly
principal and interest payments of $400,000 and matures in October 1997.  The
Company paid a real estate brokerage commission of $105,000 to Carmel Realty
based on the $1.8 million purchase price of the property.

In May 1997, the Company purchased Chase Oaks land, 60.5 acres of undeveloped
land in Plano, Texas, for $4.2 million.  The Company paid $200,000 in cash and
obtained seller financing of the remaining $4.0 million of the purchase price.
The note bears interest at 18% per annum, requires monthly interest only
payments of $60,000 and matures May 2000.  The Company paid a real estate
brokerage commission of $250,000 to Carmel Realty based on the $4.2 million
purchase price of the property.





                                       12
<PAGE>   13
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 4.      REAL ESTATE (Continued)

In May 1997, the Company purchased Pioneer Crossing land, 1,448 acres of
undeveloped land in Austin, Texas, for $21.5 million.  The Company paid $5.4
million in cash and obtained seller financing of the remaining $16.1 million of
the purchase price.  The notes bear interest at 9.5% per annum, requires
monthly interest only payments of $127,000 and matures in May 2001.  The
Company paid a real estate brokerage commission of $675,000 to Carmel Realty
based on the $21.5 million purchase price of the property.

In June 1997, the Company purchased Kamperman land, 129.6 acres of undeveloped
land in Collin County, Texas, for $5.0 million in cash.  The Company
simultaneously closed on a sale of 99.7 acres for $4.5 million in cash.  The
Company recognized a $215,000 gain on the sale.  The Company paid a real estate
brokerage commission of $152,000 to Carmel Realty based on the $5.0 million
purchase price of the property and $135,000 to Carmel Realty based on the $4.5
million sales price of a portion of the property.

Also in June 1997, the Company purchased Keller land, 811.8 acres of
undeveloped land in Tarrant County, Texas, for $6.3 million.  The Company paid
$2.3 million in cash and obtained mortgage financing for the remaining $4.0
million of the purchase price.  The loan bears interest at 12.95% per annum,
requires monthly interest only payments of $43,000 and matures in June 1998.
The Company paid a real estate brokerage commission of $280,000 to Carmel
Realty based on the $6.3 million purchase price of the property.

In June 1997, the Company purchased McKinney Corners IV land, 31.3 acres of 
undeveloped land in Collin County, Texas, for $2.4 million.  The Company paid
$400,000 in cash and obtained mortgage financing for the remaining $2.0 million
of the purchase price, as a fifth advance under the term loan from the Las
Colinas I lender.  The McKinney Corners IV land was added as additional
collateral on the term loan.  The Company paid a real estate brokerage
commission of $151,000 to Carmel Realty based on the $2.4 million purchase price
of the property.

Also in June 1997, the Company purchased Pantex land, 182.5 acres of
undeveloped land in Collin County, Texas, for $5.4 million.  The Company paid
$900,000 in cash and obtained seller financing of the remaining $4.5 million of
the purchase price.  The note bears interest at 10.5% per annum, requires
semiannual interest only payments of $239,000 and matures in December 2000.
The Company paid a real estate brokerage commission of $321,000 to Carmel
Realty based on the $5.4 million purchase price of the property.

In 1991, the Company purchased all of the capital stock of a corporation which
owned 198 developed residential lots in Fort Worth, Texas.  Through December
31, 1996, 188 of the residential lots had been sold.  During 1997, 4 additional
lots were sold for an aggregate gain of $8,000.  At June 30, 1997, 6 lots
remained to be sold.





                                       13
<PAGE>   14
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 4.      REAL ESTATE (Continued)

In November 1991, the Company transferred the Porticos Apartments to Income
Opportunity Realty Investors, Inc. ("IORI"), an equity investee, in
satisfaction, at the time, of the Company's $3.6 million obligation to IORI.
The Company recorded a deferred gain of $3.0 million on the transfer.  In June
1997, IORI sold the property, and accordingly the Company recognized such
previously deferred gain.  See NOTE 5. INVESTMENT IN EQUITY INVESTEES."

NOTE 5.      INVESTMENT IN EQUITY INVESTEES

Real estate entities.  The Company's investment in real estate entities at June
30, 1997, includes (i) equity securities of three publicly traded Real Estate
Investment Trusts (collectively the "REITs"), Continental Mortgage and Equity
Trust ("CMET"), IORI and Transcontinental Realty Investors, Inc. ("TCI"), (ii)
units of limited partner interest of NRLP, (iii) a general partnership interest
in NRLP and NOLP, the operating partnership of NRLP, through the Company's 96%
limited partner interest in SAMLP and (iv) interests in real estate joint
venture partnerships.  BCM, the Company's advisor, serves as advisor to the
REITs, and performs certain administrative and management functions for NRLP
and NOLP on behalf of SAMLP.

The Company accounts for its investment in the REITs, NRLP and the joint
venture partnerships under the equity method.  The Company continues to account
for its investment in NRLP under the equity method due to the pending
resignation of SAMLP as general partner of NRLP and NOLP.  See NOTE 2.  "SYNTEK
ASSET MANAGEMENT, L.P."  Substantially all of the Company's equity securities
of the REITs and NRLP are pledged as collateral for borrowings.  See NOTE 7.
"NOTES AND INTEREST PAYABLE."

The Company's investment in real estate entities, accounted for using the
equity method, at June 30, 1997 was as follows:

<TABLE>
<CAPTION>       
                                                         Equivalent
                  Percentage           Carrying           Investee
                of the Company's       Value of          Book Value       Market Value
                 Ownership at        Investment at           at         of Investment at
Investee        June 30, 1997        June 30, 1997      June 30, 1997     June 30, 1997   
--------       ----------------      -------------      -------------     -------------
<S>              <C>                  <C>              <C>                <C>
NRLP               54.4%             $      15,570      $           *     $      65,812
CMET               40.6                     15,780             35,764            18,789
IORI               29.6                      3,564              7,474             5,176
TCI                30.6                      5,904             23,693            17,907
                                     -------------                        -------------
                                            40,818                        $     107,684
                                                                          =============
General partner interest in
     NRLP and NOLP                           6,419          
Other equity investees                      (1,018)         
                                     -------------          
                                     $      46,219          
                                     =============          
</TABLE>
--------------------

*         At June 30, 1997, NRLP reported a deficit partners' capital.  The
          Company's share of NRLP's revaluation equity at December 31, 1996,
          was





                                       14
<PAGE>   15
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 5.   INVESTMENT IN EQUITY INVESTEES (Continued)

     $188.5 million.  Revaluation equity is defined as the difference
     between the appraised value of the partnership's real estate,
     adjusted to reflect the partnership's estimate of disposition costs,
     and the amount of the mortgage notes payable and accrued interest
     encumbering such property as reported in NRLP's Annual Report on Form
     10-K for the year ended December 31, 1996.

The difference between the carrying value of the Company's investment and the
equivalent investee book value is being amortized over the life of the
properties held by each investee.

The Company's management continues to believe that the market value of each of
the REITs and NRLP undervalues their assets and the Company may, therefore,
continue to increase its ownership in these entities in 1997.

Other equity investees.  In April 1996, a newly formed subsidiary of the
Company purchased, for $10.7 million in cash, 80% of the common stock of Pizza
World Supreme, Inc. ("PWSI"), which in turn had acquired 26 operating pizza
parlors in various communities in California's San Joaquin Valley.  Concurrent
with the purchase, the Company granted to an individual an option to purchase
36.25% of the Company's subsidiary at any time for the Company's net investment
in such subsidiary.  Additionally, the Company held negotiations with
underwriters to take such subsidiary public.  The Company believes that such
option will be exercised and further, that the subsidiary would become publicly
held approximately one year from its date of acquisition.  Accordingly, the
Company believed its control of such subsidiary was temporary and therefore
accounted for such subsidiary under the equity method through April 1997.  In
May 1997, the Company acquired the remaining 20% of PWSI and discontinued
equity accounting.  See NOTE 8. "ACQUISITION OF PIZZA WORLD SUPREME, INC."

Set forth below is summarized results of operations for the Company's equity
investees for the six months ended June 30, 1997:

Equity investees owned over 50%:

<TABLE>
       <S>                                   <C>
       Revenues............................  $    64,527
       Property operating expenses.........       42,680
       Depreciation........................        5,222
       Interest expense....................       17,325
                                             -----------  
       (Loss) from operations..............         (700)
       Gain on sale of real estate.........        3,587
                                             -----------
       Net income..........................  $     2,887
                                             ===========
</TABLE>

The Company's share of over 50% owned equity investees' operations was $773,000
for the six months ended June 30, 1997.  The Company's share of equity
investees gains on sale of real estate was $1.9 million for the six months
ended June 30, 1997.





                                       15
<PAGE>   16
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 5.   INVESTMENT IN EQUITY INVESTEES (Continued)

Equity investees owned less than 50%:

<TABLE>
    <S>                                                    <C>
    Revenues.........................................   $  58,605
    Equity in income (loss) of partnerships..........         896
    Property operating expenses......................      38,221
    Depreciation.....................................       8,272
    Interest expense.................................      17,442
                                                        ---------
    (Loss) from operations...........................      (4,434)
                                                     
    Gain on sale of real estate......................      11,587
                                                        ---------
    Net income.......................................   $   7,153
                                                        =========
</TABLE>

The Company's share of less than 50% owned equity investees' loss from
operations was $1.3 million for the six months ended June 30, 1997.  The
Company's share of equity investees gains on sale of real estate was $4.0
million for the six months ended June 30, 1997.

The Company's cash flow from the REITs and NRLP is dependent on the ability of
each of the entities to make distributions.  CMET and IORI have paid regular
quarterly distributions since the first quarter of 1993, NRLP since the fourth
quarter of 1993 and TCI since the fourth quarter of 1995.  In the first six
months of 1997, the Company received aggregate distributions of $1.3 million
from the REITs and NRLP.

In the first six months of 1997, the Company purchased a total of $173,000 of
equity securities of the REITs and NRLP.

In January 1992, the Company entered into a partnership agreement with an
entity affiliated with the owner, at the time, of in excess of 14% of  the
Company's outstanding shares of Common Stock, to acquire 287 developed
residential lots adjacent to the Company's other residential lots in Fort
Worth, Texas.  The partnership agreement designates the Company as managing
general partner.  The partnership agreement also provides each of the partners
with a guaranteed 10% return on their respective investments.  Through December
31, 1996, 184 residential lots had been sold.  In the first six months of 1997
an additional 8 lots were sold.  At June 30, 1997, 95 lots remained to be sold.
In 1997, each partner has received $21,000 in return of capital distributions.

In June 1996, a newly formed limited partnership, of which the Company is a 1%
general partner, purchased 580 acres of undeveloped land in Collin County,
Texas.  In April 1997, the partnership sold 35.0 acres for $1.3 million in
cash.  The net proceeds of $1.2 million were distributed to the limited
partners in accordance with the partnership agreement.  The partnership
recognized a gain of $884,000 on the sale.  In July 1997, the Partnership sold
an additional 24.6 acres for $800,000 in cash.  In accordance with the terms of
the term loan secured by such property, $197,000 of the net sales proceeds were
used to paydown such term loan.  The remaining $545,000 was distributed to the
limited





                                       16
<PAGE>   17
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 5.   INVESTMENT IN EQUITY INVESTEES (Continued)

partners in accordance with the partnership agreement.  The partnership will
record a gain of approximately $497,000 on the sale.  The Company has received
no distributions from the partnership in 1997.

NOTE 6.      MARKETABLE EQUITY SECURITIES - TRADING PORTFOLIO

In the first quarter of 1994, the Company began purchasing equity securities of
entities other than those of the REITs and NRLP to diversify and increase the
liquidity of its margin accounts.  In the first six months of 1997, the Company
purchased $6.3 million and sold $4.4 million of such securities.  These equity
securities are considered a trading portfolio and are carried at market value.
At June 30, 1997, the Company recognized an unrealized increase in the market
value of its trading portfolio securities of $1.3 million.  Also in the first
six months of 1997, the Company realized a net gain of $161,000 from the sale
of trading portfolio securities and received $62,000 in dividends.  Unrealized
and realized gains and losses on trading portfolio securities are included in
other income in the accompanying Consolidated Statements of Operations.

NOTE 7.      NOTES AND INTEREST PAYABLE

In May 1997, the Company financed 10.6 acres of the BP Las Colinas land for
$3.1 million.  The note bears interest at 9.5% per annum, requires monthly
interest only payments of $24,000 and matures in November 1997.

In May 1997, the Company obtained a second mortgage of $3.0 million on the Pin
Oak land.  The note bears interest at 12.5% per annum compounded monthly, and
matures in October 1997.  See NOTE 10. "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS."

In June 1997, the Company obtained a second mortgage of $3.0 million on the
Lewisville land.  The note bears interest at 12.5% per annum, compounded
monthly and matures in December 1997.  See NOTE 10. "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS."

In June 1997, the Company refinanced the Valwood land for $15.8 million.  The
note bears interest at prime plus 4.5% per annum, currently 13%, requires
monthly interest only payments of $176,000 and matures in June 1998.  The
Company received net refinancing proceeds of $4.9 million, after $6.2 million
was applied to the Valwood debt, $3.0 million being applied to payoff Jefferies
land loan and $1.4 million being applied to paydown Las Colinas I land loan.

The Company has margin arrangements with various brokerage firms which provide
for borrowing of up to 50% of the market value of the Company's marketable
equity securities.  The borrowings under such margin arrangements are secured
by equity securities of the REITs, NRLP and the Company's trading portfolio and
bear interest rates ranging from 7.0% to 9.0%.  Margin borrowings totaled $44.0
million at June 30, 1997.





                                       17
<PAGE>   18
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued



NOTE 7.      NOTES AND INTEREST PAYABLE (Continued)

In August 1996, the Company consolidated its existing NRLP margin debt held by
various brokerage firms into a single loan of $20.3 million.  The loan is
secured by the Company's NRLP units with a market value of at least 50% of the
principal balance of the loan.  As of June 30, 1997, 3,349,169 NRLP units with
a market value of $64.0 million were pledged as security for such loan.  In
July, the lender advanced an additional $3.7 million, increasing the loan
balance to $24.0 million.

NOTE 8.     ACQUISITION OF PIZZA WORLD SUPREME, INC.

In April 1996, a newly formed subsidiary of the Company purchased, for $10.7
million in cash, 80% of the common stock of PWSI, an entity which had acquired
26 operating pizza parlors in various communities in California's San Joaquin
Valley.  The Company accounted for such subsidiary under the equity method.
See NOTE 5. "INVESTMENT IN EQUITY INVESTEES."

In May 1997, the Company purchased the remaining 20% of the common stock of
PWSI for $5.0 million in unsecured promissory notes.  The notes bear interest
at 8% per annum, for three years and 10% per annum thereafter, require
quarterly interest only payments of $100,000 and mature in May 2007.  The
Company now consolidates PWSI's operations.

NOTE 9.     INCOME TAXES

Financial statement income varies from taxable income principally due to the
accounting for income and losses of investees, gains and losses from asset
sales, depreciation on owned properties, amortization of discounts on notes
receivable and payable and the difference in the allowance for estimated
losses.  The Company had no taxable income or provision for income taxes in the
six months ended June 30, 1997, due to operating loss carryforwards.

NOTE 10.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In May, June and July 1997, the Company obtained a total of $8.0 million in
mortgage loans from entities and trusts affiliated with the limited partner in
a partnership that owns approximately 13.7% of the Company's outstanding shares
of Common Stock.

NOTE 11.    COMMITMENTS AND CONTINGENCIES

Litigation.  The Company is involved in various lawsuits arising in the
ordinary course of business.  In the opinion of the Company's management, the
outcome of these lawsuits will not have a material impact on the Company's
financial condition, results of operations or liquidity.





                                       18
<PAGE>   19
                          AMERICAN REALTY TRUST, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued



NOTE 12.    SUBSEQUENT EVENTS

In July 1997, the Company sold 3.9 acres of the Las Colinas I land in Las
Colinas, Texas, for $1.6 million in cash.  In accordance with the provisions of
the term loan secured by such parcel, the Company applied the net sales
proceeds of $1.4 million, to paydown the term loan in exchange for that
lender's release of its collateral interest in such land.  The Company will
record a gain of approximately $750,000 on such sale.  The Company paid a real
estate brokerage commission of $48,000 to Carmel Realty based on the $1.6
million sales price of the property.

In July 1997, the Company purchased Dowdy and McKinney Corners V land, which
parcels are adjacent to the Company's other McKinney Corners land, and consists
of a total of 175 acres of undeveloped land in Collin County, Texas, for $2.9
million.  The Company obtained mortgage financing of $3.3 million as a sixth
advance under the term loan from the Las Colinas I lender.  The Dowdy land,
McKinney Corners V land and McKinney Corners III land were added as additional
collateral on the term loan.  The Company paid a real estate brokerage
commission of $173,000 to Carmel Realty based on the $2.9 million purchase
price of the properties.

In July 1997, the Company purchased Perkins land, 645.4 acres of undeveloped
land in Collin County, Texas, for $5.8 million.  The Company paid $3.3 million
in cash and assumed the existing mortgage of $2.5 million.  The loan bears
interest at 8.5% per annum, requires quarterly interest only payments of
$53,000 and matures in March 2002.  The Company paid a real estate brokerage
commission of $224,000 to Carmel Realty based on the $5.8 million purchase
price of the property.

In July 1997, the Company obtained a third mortgage loan of $2.0 million from
the second mortgage lender on the Pin Oak land.  The loan bears interest at 12%
per annum compounded monthly and matures in December 1997.  See NOTE 10.
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

In July 1997, the Company purchased LBJ land, 10.4 acres of undeveloped land in
Dallas County, Texas, for $2.3 million.  The Company paid $300,000 in cash and
obtained seller financing of the remaining $2.0 million of the purchase price.
The loan bears interest at 13% per annum, with interest and principal payable
at maturity in October 1997.

In July 1997, the Company purchased an additional 9% interest in Campbell
Center Joint Venture, for $868,000 in cash, increasing to 36% the Company's
interest in the Campbell Center Joint Venture.





                     [THIS SPACE INTENTIONALLY LEFT BLANK.]





                                       19
<PAGE>   20
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS

Introduction

American Realty Trust, Inc. (the "Company") was organized in 1961 to provide
investors with a professionally managed, diversified portfolio of equity real
estate and mortgage loan investments selected to provides opportunities for
capital appreciation as well as current income.

Liquidity and Capital Resources

General.  Cash and cash equivalents at June 30, 1997 aggregated $4.8 million,
compared with $1.3 million at December 31, 1996.  Although the Company
anticipates that during the remainder of 1997 it will generate excess cash flow
from operations, as discussed below, such excess cash is not expected to be
sufficient to discharge all of the Company's debt obligations as they mature.
The Company will therefore continue to rely on externally generated funds,
including borrowings against its investments in various real estate entities,
mortgage notes receivable, the sale or refinancing of properties and, to the
extent available or necessary, borrowings from its advisor, which totaled $22.3
million at June 30, 1997, to meet its debt service obligations, pay taxes,
interest and other non-property related expenses.

At December 31, 1996, notes payable totaling $36.0 million had either scheduled
maturities or principal payments required during 1997.  Through July 31, 1997,
the Company has paid a total of $8.5 million of such debt and refinanced an
additional $18.8 million.  The Company intends to either pay off, extend the
maturity dates or obtain alternate financing for the remaining $8.7 million of
debt obligations that mature during the remainder of 1997.  There can be no
assurance, however, that these efforts to obtain alternative financing or debt
extensions will be successful.

The Company expects an increase in cash flow from property operations during
the remainder of 1997.  Such increase is expected to be derived from operations
of the Inn at the Mart, Kansas City Holiday Inn, Best Western Oceanside Hotel,
Rosedale Towers Office Building and the Oak Tree Village Shopping Center.  The
Company also expects continued lot sales at its Texas residential subdivisions
and substantial sales of its Las Colinas, Texas land and its Valley Ranch land
to generate additional cash flow.  See NOTE 4. "REAL ESTATE."

In January 1997, the Company sold 3.0 acres of the Las Colinas I Land in Las
Colinas, Texas, for $1.2 million in cash.  The Company recognized a gain of
$697,000 on the sale.

In January 1997, the Company purchased Scout land, 546 acres of undeveloped
land in Tarrant County, Texas, for $2.2 million.  The Company paid $725,000 in
cash and obtained mortgage financing for the remaining $1.5 million of the
purchase price.

In October 1995, the Company purchased BP Las Colinas, a 92.6 acre parcel of
partially developed land in Las Colinas, Texas.  In February  1996, the Company
entered into a contract to sell 72.5 acres of such





                                       20
<PAGE>   21
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

parcel for $12.9 million.  The contract called for the sale to close in two
phases.  In July 1996, the Company completed the first phase sale of 32.3
acres.  In February 1997, the Company completed the second phase sale of 40.2
acres for $8.0 million, of which $7.2 million was paid in cash.  Of the net
sales proceeds of $6.9 million, $1.5 million was used to payoff the underlying
debt secured by the BP Las Colinas parcel, pay a $500,000 maturity fee to the
lender, make a $1.5 million principal paydown on the note secured by Parkfield
land in Denver, Colorado with the same lender, and $1.0 million was applied as
a principal paydown on the term loan secured by the Las Colinas I land parcel.
In conjunction with the sale, the Company provided $800,000 in purchase money
financing in the form of a six month unsecured loan.  The Company recognized a
gain of $3.4 million on such sale, deferring an additional $800,000 of gain
until the unsecured loan is paid in full.

In March 1997, the Company purchased Katy Road land, 130.6 acres of undeveloped
land in Harris County, Texas, for $5.6 million.  The Company paid $1.6 million
in cash with the seller providing purchase money financing of the remaining
$4.0 million of the purchase price.

In April 1997, the Company purchased McKinney Corners I, 30.4 acres of
undeveloped land in Collin County, Texas, for $3.5 million.  The Company paid
$1.0 million in cash and obtained mortgage financing for the remaining $2.5
million of the purchase price.

In April 1997, the Company purchased McKinney Corners II, 173.9 acres of
undeveloped land in Collin County, Texas, for $5.7 million.  The Company paid
$700,000 in cash and obtained mortgage financing for the remaining $5.0 million
of the purchase price as a fourth advance under the term loan from the Las
Colinas I lender.  The term loan was amended changing the required principal
reduction payments to $500,000 in June, July, September and October 1997 and
$1.0 million in August and November 1997.

In April 1997, the Company sold 3.1 acres of the Las Colinas I land for $1.3
million in cash.  The Company used $1.0 million of the net sales proceeds as a
collateral escrow deposit in accordance with the provisions of the Valley Ranch
land loan.  The Company recognized a gain of $648,000 on the sale.

In May 1997, the Company purchased McKinney Corners III land, 15.5 acres
undeveloped land in Collin County, Texas, for $896,000 in cash.

In May 1997, the Company purchased Lacy Longhorn land, 17.1 acres of
undeveloped land in Farmers Branch, Texas, for $1.8 million.  The Company paid
$200,000 in cash and obtained seller financing of the remaining $1.6 million of
the purchase price.  The loan matures in October 1997.

In May 1997, the Company purchased Chase Oaks land, 60.5 acres of undeveloped
land in Plano, Texas, for $4.2 million.  The Company paid $200,000 in cash and
obtained seller financing of the remaining $4.0 million of the purchase price.





                                       21
<PAGE>   22
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

In May 1997, the Company purchased the remaining 20% of Pizza World Supreme,
Inc. ("PWSI"), for $5.0 million in unsecured promissory notes.  See NOTE 8.
"ACQUISITION OF PIZZA WORLD SUPREME, INC."

In May 1997, the Company purchased Pioneer Crossing land, 1,448 acres of
undeveloped land in Austin, Texas, for $21.5 million.  The Company paid $5.4
million in cash and obtained seller financing of the remaining $16.1 million of
the purchase price.

In June 1997, the Company purchased Kamperman land, 129.6 acres of undeveloped
land in Collin County, Texas, for $5.0 million in cash.  The Company
simultaneously closed on a sale of 99.7 acres for $4.5 million in cash.  The
Company recognized a $215,000 gain on the sale.

Also in June 1997, the Company purchased Keller land, 811.8 acres of
undeveloped land in Tarrant County, Texas, for $6.3 million.  The Company paid
$2.3 million in cash and obtained mortgage financing for the remaining $4.0
million of the purchase price.

In June 1997, the Company purchased McKinney Corners IV land, 31.3 acres of
undeveloped land in Collin County, Texas, for $2.4 million.  The Company paid
$400,000 in cash and obtained mortgage financing for the remaining $2.0 million
of the purchase price, as a fifth advance under the term loan from the Las
Colinas I lender.

Also in June 1997, the Company purchased Pantex land, 182.5 acres of
undeveloped land in Collin County, Texas, for $5.4 million.  The Company paid
$900,000 in cash and obtained seller financing of the remaining $4.5 million of
the purchase price.

In July 1997, the Company sold 3.9 acres of the Las Colinas I land in Las
Colinas, Texas for $1.6 million in cash.  In accordance with the provisions of
the term loan secured by such parcel, the Company applied the net proceeds of
the sale, $1.4 million, to paydown the term loan in exchange for that lender's
release of its collateral interest in such land.  The Company will record a
gain of approximately $750,000 on such sale.

In July 1997, the Company purchased Dowdy and McKinney Corners V land, which
parcels are adjacent to the Company's other McKinney Corners land, and consists
of a total of 175 acres of undeveloped land in Collin County, Texas, for $2.9
million.  The Company obtained mortgage financing of $3.3 million as a sixth
advance under the term loan from the Las Colinas I lender.  The Dowdy land,
McKinney Corners V land and McKinney Corners III land were added as additional
collateral on the term loan.

In July 1997, the Company purchased Perkins land, 645.4 acres of undeveloped
land in Collin County, Texas, for $5.8 million.  The Company paid $3.3 million
in cash and assumed the existing mortgage of $2.5 million.





                                       22
<PAGE>   23
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

In July 1997, the Company purchased LBJ land, 10.4 acres of undeveloped land in
Dallas County, Texas, for $2.3 million.  The Company paid $300,000 in cash and
obtained seller financing of the remaining $2.0 million of the purchase price.

In 1991, the Company purchased all of the capital stock of a corporation which
owned 198 developed residential lots in Fort Worth, Texas.  Through December
31, 1996, 188 of the residential lots had been sold.  During 1997, 4 additional
lots were sold for an aggregate gain of $8,000.  At June 30, 1997, 6 lots
remained to be sold.

The Company expects that funds from existing cash resources, collections on
mortgage notes receivable, sales or refinancing of real estate and/or mortgage
notes receivable, and borrowings against its investments in marketable equity
securities, mortgage notes receivable and to the extent available, borrowings
from the Company's advisor, will be sufficient to meet the cash requirements
associated with the Company's current and anticipated level of operations,
maturing debt obligations and existing commitments.  To the extent that
financing sources are available, the Company will continue to make investments
in real estate, primarily investments in partially developed and/or undeveloped
land, continue making additional investments in real estate entities and
marketable equity securities and fund or acquire mortgage notes.

Notes Receivable.  The Company has received $5.3 million in principal payments
on its notes receivable in the six months ended June 30, 1997.

The borrower on a $1.7 million mortgage note receivable secured by land in
Osceola, Florida failed to pay the note on its November 1, 1993 maturity.  The
Company instituted foreclosure proceedings and was awarded a summary judgment
in January 1994.  During 1994 and 1995, the borrower paid the Company a total
of $270,000 in nonrefundable fees to delay foreclosure of the property until
April 24, 1995.  On April 25, 1995, the borrower filed for bankruptcy
protection.  On August 26, 1996, the bankruptcy court's stay was lifted
allowing the Company to proceed with foreclosure.  In February 1997, the
Company sold its mortgage note receivable for $1.8 million in cash.  The
Company recognized a gain of $171,000 on the sale.

In December 1996, the Company and the borrower on a $3.7 million note
receivable secured by an apartment complex in Merrillville, Indiana agreed to
an extension of the note's maturity to December 2000.  In May 1997, the Company
received $3.7 million plus accrued but unpaid interest in full payment of the
loan.  See NOTE 3. "NOTES AND INTEREST RECEIVABLE."

Loans Payable.  In May 1997, the Company financed 10.6 acres of the BP Las
Colinas land for $3.1 million.  The note matures in November 1997.

In May 1997, the Company obtained a second mortgage of $3.0 million on the Pin
Oak land.  The note matures in October 1997.





                                       23
<PAGE>   24
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

In June 1997, the Company obtained a second mortgage of $3.0 million on the
Lewisville land.  The loan matures in December 1997.

In June 1997, the Company refinanced the Valwood land for $15.8 million.  The
note matures in June 1998.  The Company received net cash of $4.9 million after
the payoff of the existing $6.2 million Valwood land loan, an additional $3.0
million being applied to payoff the Jefferies land loan and $1.4 million being
applied to paydown the Las Colinas land loan.

In July 1997, the Company obtained a third mortgage of $2.0 million on the Pin
Oak land.  The note matures in December 1997.

Margin debt.  The Company has margin arrangements with various brokerage firms
which provide for borrowing up to 50% of the market value of the Company's
marketable equity securities.  The borrowing under such margin arrangements are
secured by equity securities of the REITs, NRLP and the Company's trading
portfolio and bear interest rates ranging from 7.0% to 9.0%.  Margin borrowing
totaled $44.0 million at June 30, 1997.

In August 1996, the Company consolidated its existing NRLP margin debt held by
the various brokerage firms into a single loan of $20.3 million.  The loan is
secured by the Company's NRLP units with a market value of at least 50% of the
principal balance of the loan.  As of June 30, 1997, 3,349,169 NRLP units with
a market value of $64.0 million were pledged as security for such loans.  In
July 1997, the lender advanced an additional $3.7 million, increasing the loan
balance to $24.0 million.

Equity Investments.  During the fourth quarter of 1988, the Company began
purchasing shares of various real estate investment trusts having the same
advisor as the Company, and units of limited partner interest in National
Realty, L.P.  ("NRLP").  It is anticipated that additional equity securities of
NRLP and the REITs, Continental Mortgage and Equity Trust ("CMET"), Income
Opportunity Realty Investors, Inc. ("IORI") and Transcontinental Realty
Investors, Inc. ("TCI"), will be acquired in the future through open-market and
negotiated transactions to the extent the Company's liquidity permits.

Equity securities of the REITs and NRLP held by the Company may be deemed to be
"restricted securities" under Rule 144 of the Securities Act of 1933
("Securities Act").  Accordingly, the Company may be unable to sell such equity
securities other than in a registered public offering or pursuant to an
exemption under the Securities Act for a period of one year after they are
acquired.  Such  restrictions may reduce the Company's ability to realize the
full fair market value of such investments if the Company attempted to dispose
of such securities in a short period of time.

The Company's cash flow from these investments is dependent on the ability of
each of the entities to make distributions.  CMET and IORI have paid regular
quarterly distributions since the first quarter of





                                       24
<PAGE>   25
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

1993, NRLP since the fourth quarter of 1993 and TCI since the fourth quarter of
1995.  The Company received distributions totaling $1.3 million in the first
six months of 1997 from the REITs and NRLP.

The Company's management reviews the carrying values of the Company's
properties and mortgage notes receivable at least annually and whenever events
or a change in circumstances indicate that impairment may exist.  Impairment is
considered to exist if, in the case of a property, the future cash flow from
the property (undiscounted and without interest) is less than the carrying
amount of the property.  For notes receivable impairment is considered to exist
if it is probable that all amounts due under the terms of the note will not be
collected.  In those instances  where impairment is found to exist, a provision
for loss is recorded by a charge against earnings.  The Company's mortgage note
receivable review includes an evaluation of the collateral property securing
such note.  The property review generally includes selective property
inspections, a review of the property's current rents compared to market rents,
a review of the property's expenses, a review of maintenance requirements, a
review of the property's cash flow, discussions with the manager of the
property and a review of properties in the surrounding area.

Commitments and Contingencies

In January 1995, NRLP, Syntek Asset Management, L.P. ("SAMLP") and the NRLP
oversight committee and William H. Elliott executed an Implementation Agreement
which provides for the nomination of a successor general partner to succeed
SAMLP as general partner of NRLP and National Operating, L.P. ("NOLP"), the
operating partnership of NRLP and for the resolution of all related matters
under the 1990 settlement of a class action lawsuit.  On February 20, 1996, the
parties to the Implementation Agreement executed an Amended and Restated
Implementation Agreement.

Provided that the successor general partner is elected pursuant to the terms of
the Amended and Restated Implementation Agreement, SAMLP shall receive
$12,471,500 from the Partnership.  This amount represents a compromise
settlement of the net amounts owed by the Partnership to SAMLP upon SAMLP's
withdrawal as general partner and any amounts which SAMLP and its affiliates
may owe to the Partnership.  This amount shall be paid to SAMLP pursuant to a
promissory note in accordance with the terms set forth in the Amended and
Restated Implementation Agreement.

In September 1996, the Judge appointed to supervise the class action settlement
(the "Supervising Judge") entered an order granting tentative approval of the
Amended and Restated Implementation Agreement and the form of notice to be sent
to the original class members.  However, the order reserved jurisdiction to
determine other matters which must be resolved prior to final approval. Upon
final approval by the Supervising Judge, the proposal to elect the successor
general partner will be submitted to the NRLP's unitholders for a vote.  In
addition, the





                                       25
<PAGE>   26
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)

Commitments and Contingencies (Continued)

unitholders will vote upon amendments to the NRLP's Partnership Agreement which
relate to the proposed compensation of the successor general partner and other
related matters.

Upon approval by NRLP's unitholders, SAMLP shall withdraw as General Partner
and the successor general partner shall take office.  If the required approvals
are obtained, it is anticipated that the successor general partner will be
elected and take office during the fourth quarter of 1996.

The Amended and Restated Implementation Agreement provides that SAMLP, and its
affiliates owning units in NRLP shall not vote to remove the successor general
partner, except for removal with cause, for a period of 36 months from the date
the successor general partner takes office.

Upon election and taking office of the successor general partner, the class
action settlement and the NRLP oversight committee shall be terminated.  If the
successor general partner is not elected, the existing class action settlement
shall remain in full force and effect and all of the provisions of the Amended
and Restated Implementation Agreement shall be voided, including the compromise
settlement of amounts owed by SAMLP and NRLP to each other.  See NOTE 2.
"SYNTEK ASSET MANAGEMENT, L.P."

In April 1995, the Company's Board of Directors approved the Company's entering
into a comfort and indemnification letter whereby the Company would agree to
indemnify Mr. Elliott and any entity controlled by Mr. Elliott which is elected
to serve as the successor general partner of NRLP and NOLP.  Such
indemnification will stand behind any indemnification to which Mr. Elliott or
any entity controlled by Mr. Elliott may be entitled to under the NRLP
partnership agreement.

Results of Operations

For the three months ended June 30, 1997, the Company reported net income of
$2.5 million, compared to a net loss of $2.1 million for the three months ended
June 30, 1996.  For the six months ended June 30, 1997, the Company reported
net income of $2.8 million compared with a net loss of $2.4 million for the six
months ended June 30, 1996.  The primary factors contributing to the Company's
operating results are discussed in the following paragraphs.

Sales and cost of sales for the three and six months ended June 30, 1997 relate
to the operations of PWSI.  See NOTE 8.  "ACQUISITION OF PIZZA WORLD SUPREME,
INC."

Rents increased from $4.1 million and $9.4 million for the three and six months
ended June 30, 1996 to $5.0 million and $10.9 million for the three and six
months ended June 30, 1997.  The increases are principally due to increased
rents at the Company's commercial properties and





                                       26
<PAGE>   27
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)


Results of Operations (Continued)

increased rents and occupancy at the Company's hotels.  One of the Company's
hotels, the Best Western Oceanside was purchased in December 1996.

Interest income from mortgage notes receivable of $1.2 million and $2.3 million
for the three and six months ended June 30, 1997 approximated the $1.2 million
and $2.3 million for the three and six months ended June 30, 1996.  Interest
income for the remainder of 1997 is expected to be less than in the first six
months of 1997 due to a note payoff in May 1997.

Other income increased from $127,000 and $469,000 for the three and six months
ended June 30, 1996 to $1.3 million and $1.8 million for the three and six
months ended June 30, 1997.  The increases are primarily due to a $34,000
increase and a $821,000 decrease in realized losses incurred on the sale of
trading portfolio securities and a $946,000 and a $673,000 increase in
unrealized gains on trading portfolio securities.

Property operating expenses increased from $3.9 million and $7.6 million for
the three and six months ended June 30, 1996 to $4.0 million and $8.5 million
for the three and six months ended June 30, 1997.  The increases are primarily
due to the acquisition of the Best Western Oceanside Hotel in 1996 and taxes
and property maintenance on the Company's land parcels.

Interest expense increased from $3.3 million and $6.4 million for the three and
six months ended June 30, 1996 to $6.9 million and $12.0 million for the three
and six months ended June 30, 1997.  The increases are primarily due to the
debt incurred related to the acquisition of 14 parcels of land and the Best
Western Oceanside Hotel subsequent to June 1996.  These increases were offset
in part by a decrease of $969,000 due to the sale of 40.2 acres of the BP Las
Colinas land in February 1997.  Interest expense is expected to increase as the
Company continues to acquire properties on a leveraged basis.

Advisory and mortgage servicing fees increased from $381,000 and $701,000 for
the three and six months ended June 30, 1996 to $585,000 and $1.0 million for
the three and six months ended June 30, 1997.  The  increases are primarily
attributable to the increase in the Company's gross assets, the basis for such
fee.  Such fee is expected to increase as the Company acquires additional
properties.

Depreciation and amortization expense increased from $453,00 and $890,000 for
the three and six months ended June 30, 1996 to the $600,000 and $1.1 million
for the three and six months ended June 30, 1997.  The increases are primarily
due to the purchase of Best Western Oceanside Hotel in December 1996.
Depreciation and amortization for the remainder of 1997 is expected to be
higher than in the first six months of 1997 due to the May 1997 acquisition of
PWSI.





                                       27
<PAGE>   28
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)

Results of Operations (Continued)

General and administrative expenses increased from $595,000 and $1.2 million
for the three and six months ended June 30, 1996 to $1.6 million and $2.3
million for the three and six months ended June 30, 1997.  The increase is
primarily attributable to legal fees and travel expenses incurred in 1997
relating to pending acquisitions and refinancings, increases in advisor cost
reimbursements, and the general and administrative expenses of PWSI.  See NOTE
8. "ACQUISITION OF PIZZA WORLD SUPREME, INC."

Incentive compensation for the six months ended June 30, 1997 was $299,000.
Incentive compensation relates to the sale of Porticos Apartments.  See NOTE 4.
"REAL ESTATE."

Equity in income of investees improved from a loss of $1.5 million and $2.4
million for the three and six months ended June 30, 1996 to income of $5.0
million and $5.2 million for the three and six months ended June 30, 1997.  The
increases in equity income are attributable in part to an increase in the
combined operating income of REITs and NRLP.  Such improvement is generally
attributable to improved occupancy and increased rental rates.  The remainder
of the increase is due to gains on sale of real estate in the REITs.  See NOTE
5. "INVESTMENT IN EQUITY INVESTEES."

Gains on sale of real estate were $3.9 million and $8.1 million for the three
and six months ended June 30, 1997 compared to $2.3 million and $4.5 million
for the three and six months ended June 30, 1996.  In June 1997, the Company
recognized a previously deferred gain of $3.0 million on the sale of Porticos
Apartments and a $216,000 gain on the sale of Kamperman land.  In April 1997, a
gain of $668,000 on the sale of 3.1 acres of Las Colinas land.  In February
1997, a gain of $3.4 million on the sale of 40.2 acres of BP Las Colinas land,
a gain of $171,000 on the sale of Osceola land and a gain of $676,000 on the
sale of 3.0 acres of Las Colinas I land.  See NOTE 3. "NOTES AND INTEREST
RECEIVABLE" and NOTE 4. "REAL ESTATE."

For the three months ended June 30, 1996, the Company recognized a $538,000
gain on the sale of 2.3 acres of Las Colinas land, a $44,000 gain on the sale
of a parcel of land in Midland, Michigan and a $10,000 gain on the sale of
eight residential lots.  The first six months of 1996 includes an additional
$538,000 gain on the sale of another 2.3 acres of land in Las Colinas, Texas.

Environmental Matters

Under various federal, state and local environmental laws, ordinances and
regulations, the Company may be potentially liable for removal or remediation
costs, as well as certain other potential costs relating to hazardous or toxic
substances (including governmental fines and injuries to persons and property)
where property-level managers have arranged for the removal, disposal or
treatment of hazardous or toxic substances.  In





                                       28
<PAGE>   29
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS (Continued)


Environmental Matters (Continued)

addition, certain environmental laws impose liability for release of
asbestos-containing materials into the air, and third parties may seek recovery
from the Company for personal injury associated with such materials.

The Company's management is not aware of any environmental liability relating
to the above matters that would have a material adverse effect on the Company's
business, assets or results of operations.


Inflation

The effects of inflation on the Company's operations are not quantifiable.
Revenues from property operations fluctuate proportionately with inflationary
increases and decreases in housing costs.  Fluctuations in the rate of
inflation also affect the sales values of properties and, correspondingly, the
ultimate gains to be realized by the Company from property sales.


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


                         PART II.  OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


(a) Exhibits: The following exhibits are filed herewith or incorporated by
reference as indicated below.


<TABLE>
<CAPTION>
Exhibit
Number                                    Description                       
-------            ---------------------------------------------------------
 <S>               <C>
 27.0              Financial Data Schedule, filed herewith.
</TABLE>


(b)     Reports on Form 8-K as follows:

        None.





                                       29
<PAGE>   30

                                 SIGNATURE PAGE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                        AMERICAN REALTY TRUST, INC.





Date:    August 13, 1997                By:  /s/ Karl L. Blaha                
     ------------------------              -----------------------------------
                                             Karl L. Blaha
                                             President
                                        
                                        
                                        
                                        
                                        
Date:    August 13, 1997                By:  /s/ Thomas A. Holland            
     ------------------------              -----------------------------------
                                             Thomas A. Holland
                                             Executive Vice President and
                                             Chief Financial Officer
                                             (Principal Financial and
                                              Accounting Officer)





                                       30
<PAGE>   31
                          AMERICAN REALTY TRUST, INC.

                                  EXHIBITS TO

                         QUARTERLY REPORT ON FORM 10-Q

                     For the Six Months Ended June 30, 1997





<TABLE>
<CAPTION>
Exhibit                                                                    Page
Number                        Description                                 Number
-------    ---------------------------------------------------            ------
 <S>       <C>                                                             <C>
 27.0      Financial Data Schedule                                          32
</TABLE>                                                       





                                       31