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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2003
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from.......... to..........
Blue Ridge 0-28-44
Commission File No.: Big Boulder 0-28-43
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION
State or other jurisdiction of incorporation or organization: Pennsylvania
24-0854342 (Blue Ridge)
I.R.S. Employer Identification Number: 24-0822326 (Big Boulder)
Address of principal executive office: Blakeslee, Pennsylvania
Zip Code: 18610
Registrant's telephone number, including area code: (570)-443-8433
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 and Exchange
Act
of 1934 during the preceding 12 months (or for such period that the
registrant
was required to file such reports) and (2) has been subject to such
filing
requirements for the past 90 days.
YES___X____ NO__________
Indicate the number of shares outstanding of each of the issuer's
classes
of common stock, as of the close of the period of this report:
Class Outstanding at January 31, 2003
Common Stock, without par value, 1,916,130
stated value $.30 per combined share*
*Under a Security Combination Agreement between Blue Ridge Real Estate Company
("Blue Ridge") and Big Boulder Corporation ("Big Boulder") (referred to as the
"Corporations") and under the by-laws of the Corporations, shares of the
Corporations are combined in unit certificates, each certificate representing
the same number of shares of each of the Corporations. Shares of each
Corporation may be transferred only together with an equal number of shares of
the other Corporation. For this reason, a combined Blue Ridge/Big Boulder Form
10-Q is being filed. Except as otherwise indicated, all information applies to
both Corporations.
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Combined Condensed Balance Sheets
January 31, 2003 and October 31, 2002 1 & 2
Combined Condensed Statements of
Operations - Three Months ended
January 31, 2003 and January 31, 2002 3
Combined Condensed Statements of
Cash Flows - Three Months Ended
January 31, 2003 and January 31, 2002 4
Notes to Financial Statements 5 & 6
Item 2-Management's Discussion and Analysis
of Financial Condition and Results
of Operations 6,7 & 8
Item 3-Quantitative and Qualitative Disclosures
About Market Risk - Not applicable
Item 4-Controls and Procedures 9
PART II - OTHER INFORMATION 9
Item 6-Exhibits and Reports on Form 8-K 9
Signatures 10
Chief Executive Officer Certification 11
Chief Financial Officer Certification 12
President Certification 13
Executive Vice President and Treasurer Certification 14
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION AND SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
(UNAUDITED)
January 31, October 31,
2003 2002
ASSETS
Current Assets
Cash and cash equivalents $ 393,086 $ 261,311
(all funds are interest bearing)
Accounts receivable 634,136 388,292
Inventories 272,581 247,460
Prepaid expenses, principally insurance
and real estate taxes 948,729 918,210
Deferred operating costs 1,224,288 2,275,784
--------- ---------
Total current assets 3,472,820 4,091,057
--------- ---------
Cash held in escrow 726,651 107,909
------- -------
Notes receivable noncurrent 244,300 0
------- -------
Properties:
Land, principally unimproved (19,580 and 1,861,951 1,867,352
19,714 acres respectively, per
land ledger)
Land improvements, buildings and equipment 58,047,684 56,190,649
---------- ----------
59,909,635 58,058,001
Less accumulated depreciation and amortization 38,129,057 37,611,139
---------- ----------
21,780,578 20,446,862
---------- ----------
$26,224,349 $24,645,828
=========== ===========
See accompanying notes to unaudited financial statements.
1
LIABILITIES AND SHAREHOLDERS' EQUITY
January 31, October 31,
2003 2002
Current Liabilities:
Notes payable - lines of credit $0 $600,000
Current installments of:
long-term debt and capital lease
obligations 5,416,497 5,266,548
Accounts and other payables 1,383,814 913,825
Accrued claims 231,824 208,642
Deferred income taxes 1,046,000 796,000
Accrued pension expense 932,493 890,493
Accrued liabilities 929,046 631,913
Deferred revenue 727,599 698,242
------- -------
Total current liabilities 10,667,273 10,005,663
---------- ----------
Long-term debt and capital lease obligations,
less current installments 3,334,195 2,783,257
--------- ---------
Deferred income taxes 1,110,000 1,110,000
--------- ---------
Other non-current liabilities 24,468 28,756
------ ------
Deferred income non-current 515,631 515,631
------- -------
Commitments and Contingencies
Combined shareholders' equity: 659,444 659,444
------- -------
Capital Stock, without par value,
stated value $.30 per combined share,
Blue Ridge and Big Boulder each have
authorized 3,000,000 shares and each
have issued 2,198,148 shares as of January
31, 2003 and as of October 31, 2002
Capital in excess of stated value 1,461,748 1,461,748
Earnings retained in the business 10,536,997 10,166,211
---------- ----------
12,658,189 12,287,403
LESS: Cost of 282,018 and 281,968 shares 2,085,407 2,084,882
------- ------- --------- ---------
of capital stock in treasury as of
January 31, 2003 & October 31, 2002,
respectively.
10,572,782 10,202,521
---------- ----------
$26,224,349 $24,645,828
=========== ===========
See accompanying notes to unaudited financial statements.
2
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JANUARY 31, 2003 & 2002
(UNAUDITED)
2003 2002
Revenues:
Ski operations $5,568,512 $4,941,020
Real estate management 775,839 839,708
Summer recreation operations 85,988 178,357
Land resource management 1,109,900 148,359
Rental income 456,686 429,856
------- -------
7,996,925 6,537,300
--------- ---------
Costs and expenses:
Ski operations 5,631,001 4,921,516
Real estate management 659,136 674,647
Summer recreation operations 197,984 168,173
Land resource management 298,033 5,360
Rental operations 291,141 245,825
General & administrative expenses 185,696 304,337
------- -------
7,262,991 6,319,858
--------- ---------
Income from operations 733,934 217,442
------- -------
Other income (expense):
Interest & other income 1,327 5,797
Interest expense (114,475) (106,702)
-------- --------
(113,148) (100,905)
-------- --------
Income before income taxes 620,786 116,537
------- -------
Provision for income taxes 250,000 46,600
------- ------
Net income $ 370,786 $ 69,937
========== ==========
Basic and diluted earnings per
weighted average combined share $0.19 $0.04
===== =====
See accompanying notes to unaudited financial statements.
3
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED JANUARY 31, 2003 & 2002
(UNAUDITED)
2003 2002
Cash Flows From(Used In) Operating Activities:
Net Income $ 370,786 $ 69,937
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 911,760 884,265
Deferred income taxes 250,000 46,542
Gain on sale of assets 0 (1,632)
Changes in assets and liabilities:
Accounts receivable (236,714) 11,241
Prepaid expenses and other current assets (55,640) (50,946)
Deferred operating costs 661,029 515,956
Notes Receivable (253,430)
Accounts Payable & accrued liabilities 828,016 1,210,573
Deferred revenue 29,357 (49,888)
------ -------
Net cash provided by operating activities 2,505,164 2,636,048
--------- ---------
Cash Flows From (Used In) Investing Activities:
Proceeds from disposition of assets 0 17,191
Additions to properties (848,631) (926,195)
Cash held in escrow (613,341) 0
-------- -
Net cash used in investing activities (1,461,972) (909,004)
---------- --------
Cash flows From (Used In) Financing Activities:
Payment of short-term financing (2,250,000) (1,448,195)
Proceeds from short-term financing 1,650,000 800,000
Payment of long-term debt and capital lease (310,892) (219,583)
obligations
Purchase of Treasury stock (525) 0
---- -
Net cash used in financing activities (911,417) (867,778)
-------- --------
Net increase in cash and cash equivalents 131,775 859,266
Cash and cash equivalents, beginning of period 261,311 263,178
------- -------
Cash and cash equivalents, end of period $ 393,086 $1,122,444
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during period:
Interest $ 108,762 $ 107,516
Income taxes $ 0 $ 47,069
Supplemental disclosure of non cash investing $ 1,011,778 $ 0
and financing activities, additions to property
acquired through capital lease obligations
See accompanying notes to unaudited financial statements.
4
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. The combined financial statements include the accounts of Blue
Ridge Real Estate Company and its wholly-owned subsidiaries (Northeast Land
Company, Jack Frost Mountain Company and BRRE Holdings, Inc.) and Big Boulder
Corporation and its wholly-owned subsidiaries (Lake Mountain Company and
BBC Holdings, Inc.). In the opinion of Management, the accompanying
unaudited combined condensed financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly
the financial position as of January 31, 2003, and the results of operations
and the statements of cash flows for the three month periods ended January 31,
2003 and January 31, 2002.
Certain information and footnote disclosures have been condensed or
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. These combined financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Companies' Annual Report on Form 10-K for the year ended October 31, 2002.
2. The preparation of financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. For example, unexpected changes in market conditions or
a downturn in the economy could adversely affect actual results. Estimates are
used in accounting for, among other things, inventory obsolescence, accounts
and notes receivables, legal liability, insurance liability, depreciation,
employee benefits, taxes, and contingencies. Estimates and assumptions are
reviewed periodically and the effects of revisions are reflected in the
Combined Condensed Financial Statements in the period they are determined to be
necessary.
Management believes that its accounting policies regarding accounts and
notes receivable, merchandise inventories, long lived assets, revenue
recognition and other reserves, among others, affect its more significant
judgments and estimates used in the preparation of its Combined Condensed
Financial Statements. For a description of these critical accounting policies
and estimates, see "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in the Company's Form 10-K for the fiscal year ended
October 31, 2002. Management believes there have been no significant changes
in the Companies' critical accounting policies or estimates since the
Companies' fiscal year ended October 31, 2002.
3. The Companies account for notes receivable on a cost basis. Interest
income is recorded on a monthly basis. Late payment fees are charged on
overdue payment of principal and interest. Notes receivable are evaluated at
origination and monitored on an ongoing basis for credit worthiness. Notes
receivable are considered fully collectible by management and accordingly no
allowance for loan losses is considered necessary. Any note 90 days past due
is reviewed by management for write off.
5
Accounts receivable, trade are reported at net realizable value. Accounts
are written off when they are determined to be uncollectible based upon
management's assessment of individual accounts. The allowance for doubtful
accounts which is insignificant, is estimated based on the Company's historical
losses and the financial stability of its customers.
4. The Companies and the subsidiaries, under SFAS No. 131, operate in four
business segments - Ski Operations, Real Estate Management/Rental Operations,
Summer Recreation Operations and Land Resource Management.
The results of operations for the three months are not
necessarily indicative of the results to be expected for the full year since
the Companies' two ski facilities operate principally during the months of
December through March. Costs and expenses net of revenues received in
advance attributable to the Ski Operations for the months of April through
November are deferred and recognized as revenue and operating expenses,
ratably, over the operating period. Therefore revenues and operating
expenses of the Real Estate Management/Rental Operations and Summer
Recreation Operations are as disclosed on the statement of operations.
Depreciation of ski facility fixed assets is calculated over the 12-
month period. The expense is deferred until the operating period, at which
time it will be recognized ratably.
5. The provision for income taxes for the three months ended January
31, 2003 represents the estimated annual effective tax rate for the year
ending October 31, 2003. The effective income tax rate for the first three
months of Fiscal 2003 was 40%.
6. Reclassifications have been made to the January 31, 2002 Combined
Condensed Statement of Operations to reflect changes in presentation for the
three months ended January 31, 2003. Namely, Land Resource Management is
reported as a separate segment of the Companies.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operations for the three months ended January 31, 2003 resulted in a net
income of $0.19 per combined share compared to a net income of $.04 per
combined share for the three months ended January 31, 2002.
Combined revenue of $7,996,925 represents an increase of $1,459,625 as
compared to the three months ended January 31, 2002. Ski operations increased
$627,492. Real Estate Management decreased $63,869, Summer recreation
operations decreased $92,329, Land resource management increased $961,541 and
Rental income increased $26,830.
Ski operations increase in revenue for the three months ended January 31,
2003 as compared to the three months ended January 31, 2002 was due to an
increase in lift revenue ( 32%), season pass revenue ( 12% ), rental shop
revenue ( 17% ) , tubing revenue ( 7% ) , food revenue ( 14% ) and retail
revenue ( 8% ).
6
Real Estate Management revenue decreased $63,869. This decrease in revenue
is attributable to property management of homes in our resort communities (38
%) and property sales for which we earn commission, within our resort
communities (28%).
Summer recreation operations decreased $92,329 for three months ended
January 31, 2003 as compared to the three months ended January 31, 2002. This
decrease was the result of a decrease in Splatter revenue (32%) and Traxx
revenue (66%). The decrease in Traxx revenue is a result of the discontinuation
of Snocross snow mobile rentals.
Land resource management increased $961,541 for the three months ended
January 31, 2003 as compared to the three months ended January 31, 2002. This
is a new business segment that encompasses land sales and timbering.
Rental operations increased $26,830 for the three months ended January 31,
2003 as compared to the three months ended January 31, 2002. This increase is
attributable to the management of homes in our resort communities.
Operating costs increased $1,061,774 during the first three months of
Fiscal 2003 as compared to the three months ended January 31, 2002. Ski
operation expenses increased $709,485. This increase was attributable to an
increase in salaries and wages ( 41% ) , utilities ( 15% ) and insurance
expense ( 9% ).
Real Estate Management operating expenses decreased $15,511.
Summer recreational operations expenses increased $29,811. This increase
was the result of an increase in Splatter supplies & services (55%) and Traxx
insurance (45%).
Land Resource Management operation expenses increased $292,673. This is a
new business segment that had minimal activity in the first three months of
Fiscal 2002.
General and Administrative expenses decreased $118,641. This decrease was
due primarily to the reclassification of operating expenses, such as certain
salaries, legal and auditing fees, to the revenue generating centers within the
Company.
Interest expense increased $7,773 for the three months ended January 31,
2003 as compared to the three months ended January 31, 2002. This increase is
attributable to an additional line of credit for Land resource management
purposes ( 6%), interest on the new D lift loan at Jack Frost Mountain ( 67% )
and interest on capital lease obligations ( 27% ) for the groomers and
compressors at both ski areas. These increases were also offset by a pay down
on existing debt and the reduction in the prime interest rate.
Financial Condition, Liquidity and Capital Resources
The deficit in working capital as of January 31, 2003, increased by
$1,279,847 as compared to October 31, 2002. The change is primarily due to the
cyclical nature of the Companies' business. The change in the balance of
deferred operating costs from October 31, 2002 to January 31, 2003 was due
primarily to revenue and expenses that are applicable to the ski facilities,
which are deferred and recognized ratably during the months of December through
March.
7
On November 8, 2002 the Companies entered into an additional line of
credit with a bank, aggregating $1,000,000 available for short term financing,
expiring March 31, 2003. The purpose of the new line of credit is to provide
funds for mortgage financing of land sales.
During Fiscal 2003 the Companies entered into two capital lease agreements
for the purpose of financing snowmaking and grooming equipment. The equipment
is being amortized over the five year term of the agreements.
Moving Forward
During Fiscal 2003 the Companies will actively pursue land sales and
purchases. The Companies will offer financing to attract new land sale
customers. The Companies will continue to generate timbering revenues from
selective harvesting of timber.
Management is organizing a subsidiary company, Boulder Creek Resort
Company. This new company will be used as a marketing tool to consolidate and
brand the Companies' holdings as one resort destination and to facilitate the
land sales division.
The Companies are planning further real estate development of multi-family
dwellings at our ski resorts.
An offer to purchase the Dreshertown Plaza Shopping Center has been
presented to the Companies. Management is currently reviewing the proposal. A
final price has not been determined. A mortgage note payable on the
Dreshertown Plaza approximating $4,500,000 is classified as a current
obligation with a maturity date of August 31, 2003.
The proposed selling price in the proposal exceeds our current obligation.
In the event management does not accept the proposal, it intends and has the
capability to refinance this debt.
In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock Based
Compensation-Transition and Disclosure". SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock Based Compensation", to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this Statement amends the
disclosure requirements of Statement 123 to require prominent disclosures in
both annual and interim financial statements about the method of accounting for
stock-based employee compensation. These expanded disclosures will be required
for the Companies' second quarter ending April 30, 2003. The Company
anticipates that it will continue to apply Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees". Accordingly, the Companies
believe that the adoption of this standard will have no material impact on its
financial position, results of operations or cash flows.
8
PART II - OTHER INFORMATION
Item 4. Controls and Procedures
Within the 90 days prior to the date of this report, the Companies carried
out an evaluation, under the supervision and with the participation of its
management, including its President and Chief Executive Officer and its Chief
Financial Officer, of the effectiveness of the design and operation of its
disclosure controls and procedures pursuant to Rule 13a-15 under the Securities
Exchange Act of 1934. Based upon that evaluation, the President and Chief
Executive Officer, and Chief Financial Officer have concluded that the
Companies disclosure controls and procedures are effective in timely alerting
them to material information relating to the Companies that is required to be
included in the Companies periodic SEC filings.
There have been no significant changes in the Companies internal
controls or in any factors that could significantly affect the controls
subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
99.1 Certification of chief executive officer
99.2 Certification of chief financial officer
(b) Reports on Form 8-K
None.
The Companies have no matters to report with respect to Items 1, 2, 3, and
5.
9
FORM 10-Q
SIGNATURES
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:
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION
(Registrant)
/s/ Eldon D. Dietterick
Eldon D. Dietterick
Executive Vice President/Treasurer
/s/ Cynthia A. Barron
Cynthia A. Barron
Chief Accounting Officer
Date: March 6, 2003
10
CERTIFICATION*
I, Patrick M. Flynn, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Blue Ridge Real
Estate Company and Big Boulder Corporation (together, the "registrants");
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrants as of, and for, the periods presented in this quarterly report;
Date: March 6, 2003
/s/ PATRICK M. FLYNN
Patrick M. Flynn
Chief Executive Officer and President
_____________
* Pursuant to the transition provisions of Release No. 34-46427 (Aug. 28,
2002), the portions of this certification required by paragraphs (b)(4), (5)
and (6) of Exchange Act Rule 13a-14 are inapplicable to this quarterly report.
Accordingly, the portions have been omitted from this certification.
11
CERTIFICATION*
I, Eldon D. Dietterick, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Blue Ridge Real
Estate Company and Big Boulder Corporation (together, the "registrants");
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrants as of, and for, the periods presented in this quarterly report;
Date: March 6, 2003
/s/ ELDON D. DIETTERICK________
Eldon D. Dietterick
Executive Vice President and Treasurer (chief financial officer)
_____________
* Pursuant to the transition provisions of Release No. 34-46427 (Aug. 28,
2002), the portions of this certification required by paragraphs (b)(4), (5)
and (6) of Exchange Act Rule 13a-14 are inapplicable to this quarterly report.
Accordingly, the portions have been omitted from this certification.
12
CERTIFICATION
I, PATRICK M. FLYNN, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Blue Ridge Real
Estate Company/Big Boulder Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respect the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 45 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers, and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
March 6, 2003 /s/ PATRICK M. FLYNN
Patrick M. Flynn
President
13
CERTIFICATION
I, ELDON D. DIETTERICK, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Blue Ridge Real
Estate Company/Big Boulder Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respect the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 45 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers, and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
March 6, 2003 /s/ ELDON D. DIETTERICK
Eldon D. Dietterick
Executive Vice President and Treasurer
14