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Form 1O-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or
15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended June 30, 2002
Commission File No. 0-1392
Central Natural Resources, Inc. and Subsidiaries
Incorporated in State of Delaware IRS Number: 44-0195290
127 West 10th Street, Suite 666
Kansas City, Missouri 64105
Phone: 816-842-2430
Common stock outstanding as of June 30, 2002
$1 par value; 503,924 shares
The Registrant (l) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such
filing requirements for the past ninety days.
Yes [X] No [ ]
CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets - June 30, 2002 and
December 31, 2001
Consolidated Statements of Earnings and Retained Earnings
- Six months ended June 30, 2002 and 2001 and three
months ended June 30, 2002 and 2001
Consolidated Statements of Comprehensive Income
-Six months ended June 30, 2002 and 2001 and
three months ended June 30, 2002 and 2001
Consolidated Statements of Cash Flows - Six months
ended June 30, 2002 and 2001
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI
Consolidated Balance Sheets
June 30, 2002 and December 31, 2001
(amounts in unit dollars)
ASSETS 2002 2001
__________ __________
(Unaudited)
Current assets:
Cash and cash equivalents $ 1,206,613 1,285,926
Accounts receivable 14,920 104,882
Securities maturing within one year,
at amortized cost (note 2) 3,989,924 3,998,404
Notes receivable, current 18,817 18,084
Deferred income taxes - 17,709
Other 29,151 10,013
__________ __________
Total current assets 5,259,425 5,435,018
Equity securities, at fair value (note 2) 622,529 1,030,491
Notes receivable, noncurrent 51,603 65,221
Other investments 350,002 350,002
Deferred income taxes 255,143 71,494
Coal deposits, real estate, equipment
and leasehold improvements:
Coal deposits 1,602,882 1,602,882
Mineral rights 39,988 39,988
Surface land 25,562 25,562
__________ __________
1,668,432 1,668,432
Less accumulated depletion, depreciation
and amortization (582,061) (581,498)
__________ __________
Net coal deposits, real estate,
equipment and leasehold improvements 1,086,371 1,086,934
__________ __________
Total assets $ 7,625,073 8,039,160
See accompanying notes to consolidated financial statements.
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 8,554 4,838
Deferred income advance oil lease bonus - 47,353
Federal and state income taxes 16,496 46,112
__________ __________
Total current liabilities 25,050 98,303
__________ __________
Preferred stock of $1 par value; 100,000
Shares authorized; no shares issued - -
Common stock of $1 par value; 2,500,000
Shares authorized; 503,924 issued 503,924 503,924
Retained earnings 7,104,746 7,445,022
Accumulated other comprehensive loss,
net of deferred taxes of $(4,656) in 2002
and $(4,356) in 2001 (8,647) (8,089)
__________ __________
Total stockholders' equity 7,600,023 7,940,857
__________ __________
Total liabilities and stockholders, equity $ 7,625,073 8,039,160
See accompanying notes to consolidated financial statements.
CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI
Consolidated Statements of Earnings and Retained Earnings
Six months ended June 30, 2002 and 2001 and
three months ended June 30, 2002 and 2001
(Unaudited)
(amounts in unit dollars)
Six months ended Three months ended
June 30, June 30,
2002 2001 2002 2001
_________ _________ _________ _________
Operating revenue:
Coal royalties $ 22,500 23,300 22,500 22,500
Oil and gas royalties 189,556 421,197 124,721 222,494
Oil and other mineral lease
rentals and bonuses 96,578 4,025 72,677 -
_________ _________ _________ _________
Total operating revenue 308,634 448,522 219,898 244,994
General and administrative
expenses 292,000 286,675 123,841 121,713
_________ _________ _________ _________
Operating income 16,634 161,847 96,057 123,281
Nonoperating income (loss):
Investment income (loss) (471,308) 139,112 (290,855) 60,066
Other 149 16 18 -
_________ _________ _________ _________
Total nonoperating
income (loss) (471,159) 139,128 (290,837) 60,066
_________ _________ _________ _________
Earnings (loss) before
income taxes (454,525) 300,975 (194,780) 183,347
Income taxes (benefit) (215,033) 89,427 (74,228) 57,476
_________ _________ _________ _________
Net earnings (loss) (239,492) 211,548 (120,552) 125,871
Retained earnings at
beginning of period 7,445,022 7,639,659 7,275,690 7,599,355
Deduct cash dividends paid
of $.20 per share in 2002
and $.50 per share in 2001 (100,784) (251,962) (50,392) (125,981)
_________ _________ _________ _________
Retained earnings at end
of period $ 7,104,746 7,599,245 7,104,746 7,599,245
Earnings (loss) per share-
basic and diluted $ (0.48) 0.42 (0.24) 0.25
Weighted average number
of shares of common stock
outstanding
Basic 503,924 503,924 503,924 503,924
Diluted 503,924 503,998 503,924 503,924
See accompanying notes to consolidated financial statements.
CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI
Consolidated Statements of Comprehensive Income
Six months ended June 30, 2002 and 2001 and
three months ended June 30, 2002 and 2001
(Unaudited)
(amounts in unit dollars)
Six months ended Three months ended
June 30, June 30,
2002 2001 2002 2001
_________ _________ _________ _________
Net earnings (loss) $ (239,492) 211,548 (120,552) 125,871
_________ _________ _________ _________
Other comprehensive income:
Realized gains and unrealized
appreciation (depreciation)
on investments 16.311 (260,194) (14,906) (23,277)
Income taxes (5,709) 91,069 5,217 8,148
_________ _________ _________ _________
Realized gains and
unrealized appreciation
(depreciation)
on investments, net 10,602 (169,125) (9,689) (15,129)
________ _________ _________ _________
Less:
Realized investment gains
included in net
earnings (loss) (17,169) (47,729 (8,433) (44,769)
Income taxes 6,009 16,705 2,952 15,669
_________ _________ _________ _________
(11,160) (31,024) (5,481) (29,100)
_________ _________ _________ _________
(558) (200,149) (15,170) (44,229)
_________ _________ _________ _________
Comprehensive
income (loss) $ (240,050) 11,399 (135,722) 81,642
See accompanying notes to consolidated financial statements.
CENTRAL NATURAL RESOURCES, INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI
Consolidated Statements of Cash Flows
Six months ended June 30, 2002 and 2001
(Unaudited)
(amounts in unit dollars)
2002 2001
_________ _________
Cash flows from operating activities:
Net earnings (loss) $ (239,492) 211,548
Adjustments to reconcile net earnings (loss)
to net cash provided by operating
activities:
Depletion, depreciation
and amortization 563 573
Gain on sales of equity securities (17,169) (47,729)
Amortization of premiums and discounts of
Securities, net (34,128) (101,819)
Impairment charge on equity securities 535,133 46,088
Changes in assets and liabilities:
Accounts receivable and other assets 70,824 8,381
Deferred oil lease bonus (47,353) -
Accounts payable and accrued expenses 3,716 2,137
Federal and state income taxes (195,256) (54,959)
_________ _________
Net cash provided by
operating activities 76,838 64,584
_________ _________
Cash flows from investing activities:
Proceeds from note receivable 12,885 12,208
Proceeds from matured/called investment
debt securities 12,000,000 12,000,000
Purchases of investment debt securities (11,957,392) (11,915,195)
Purchases of equity securities (171,250) (285,698)
Proceeds from sales of equity securities 60,390 256,892
Purchase of other investments - (250,000)
_________ _________
Net cash used in
investing activities (55,367) (181,793)
_________ _________
Cash flows from financing activities
Dividend paid (100,784) (251,962)
Net decrease in cash and cash equivalents (79,313) (369,171)
Cash and cash equivalents,
beginning of year 1,285,926 1,748,510
_________ _________
Cash and cash equivalents,
end of period $ 1,206,613 1,379,339
See accompanying notes to consolidated financial statements.
CENTRAL NATURAL RESOURCES INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI
Notes to Consolidated Financial Statements
June 30, 2002
(1) Basis of Presentation:
In the opinion of Central Natural Resources Inc. (the Company),
the accompanying unaudited consolidated financial statements
contain all adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position as of June 30, 2002
and the results of operations and cash flows for the periods ended
June 30, 2002 and 2001.
The consolidated financial statements are presented in accordance with
the requirements of Form 10-Q and, consequently, do not include all the
disclosures required by accounting principles generally accepted in the
United States of America. 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,
2001.
Results of operations for interim periods are not necessarily indicative
of results to be expected for a full year.
Oil Lease Bonuses
Oil lease bonuses which relate to future periods are deferred and
recognized as income over the related future periods (generally
One year).
(2) Investment Securities:
The amortized cost, gross unrealized holding gains, gross
unrealized holding losses and fair value for held-to-maturity and
available-for-sale securities by major security type at June 30, 2002
and December 31, 2001 are as follows:
Gross Gross
unrealized unrealized
Amortized holding holding Fair
June 30, 2002 cost gains losses value
__________________ __________ __________ __________ __________
Held-to-maturity:
U. S. government
agency securities $ 3,989,924 0 (1,124) 3,988,800
Available-for-sale:
Equity securities $ 635,832 14,358 (27,661) 622,529
December 31, 2001
_________________
Held-to-maturity:
U. S. government
agency securities $ 3,998,404 0 44 3,998,360
Available-for-sale:
Equity securities $ 1,042,936 52,497 (64,942) 1,030,491
CENTRAL NATURAL RESOURCES INC. AND SUBSIDIARIES
KANSAS CITY, MISSOURI
Notes to Consolidated Financial Statements
Investment income consists of the following for each of the periods
ended June 30:
Six months ended Three months ended
June 30, June 30,
2002 2001 2002 2001
________ _______ _______ _______
Realized gains on sales
of equity securities $ 17,169 47,729 8,433 44,769
Interest Income 44,052 132,082 22,416 58,768
Dividend Income 2,604 5,389 1,302 2,617
Impairment charge (535,133) (46,088) (323,006) (46,088)
________ _______ _______ _______
$(471,308) 139,112 (290,855) 60,066
Investments in debt securities are classifiedas held-to-maturity
securities, which are carried at amoritizedCost. Investments
in marketable equity securitites are classified as
available-for-sale securities, which are carried at fair
value, with unrealized gains and losses excluded from earnings
and reported in other comprehensive income.
A decline in the market value of any available-for-sale or
held-to-maturity security below cost that is deemed to be other
than temporary results in a reduction in carrying amount to
fair value. The impairment is charged to earnings and a new cost
basis for the security is established. Other than temporary
impairment is analyzed quarterly on an individual security
basis based on the length of time and the extent to which market
value has been less than cost; the financial condition and any
specific events which effect the issuer; and the Company's
intent and ability to hold the security. During the six
and three months ended June 30, 2002, the Company recognized
an impairment charge for declines in market values of equity
securities considered to be other than temporary of $535,133
and $323,006, respectively. During the six and three months
ended June 30, 2001, the Company recognized an impairment charge
for declines in market values of equity securities considered to
be other than temporary of $46,088.
(3) Subsequent Event
During the quarter ended June 30, 2002, the Company's Board of
Directors authorized to spend up to $250,000 to participate
in oil and gas exploration on certain property located in Texas.
The Company has incurred $137,466 in relation to this project
subsequent to June 30, 2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Total operating revenue was down substantially in the first six
months of 2002 from the first six months of 2001, and also down
somewhat in the second quarter of 2002 from the second quarter
of 2001. The decreases were due primarily to decreased revenues
from oil and gas royalties which, in turn, were due to decreases
in the prices for oil and gas during the current periods under
comparison, coupled with somewhat decreased production. As
mentioned in prior reports, a lessee has completed drilling
operations and commenced production of coal bed methane gas from
certain of the Company's coal properties located in Sebastian
County, Arkansas. Some revenue from royalties from this
operation have been received during the current periods under
comparison. However, commercial production has only begun during
the current fiscal year, and the level of commercial production
on an ongoing basis is uncertain at this time. Should production
increase, and royalty revenue from this source increase, it still
may very well be in the intermediate term before the Company
realizes materially increased royalty income from this source.
Further, the amount of revenue ultimately received from this
source will be subject to the uncertainties of price fluctuations
in the market price of natural gas.
The decreases in revenues from oil and gas royalties in the current
periods were somewhat offset by increases in revenue from oil and
other mineral lease rentals and bonuses in the first six months of
2002 over the first six months of 2001, and also in the second
quarter of 2002 over the second quarter of 2001. These increases
resulted from more leases being in effect in the current periods
with income recognizable in those periods.
Nonoperating income was down substantially both in the first
six-month period of 2002 compared to the first six months of
2001, and also in the second quarter of 2002 from the second
quarter of 2001. These decreases resulted from somewhat lower
rates of return on temporary fixed income investments, and
the reduced size of the portfolio of fixed income investments
during the current periods. Also, contributing to the decreases
were reduced gains realized on sales of equity securities.
Additionally, the Company recognized impairment charges during
both the first and second quarter of 2002 reflecting write-downs
in the carrying value of certain equity securities because
decreases in current market values of those securities have
been deemed by Management to be other than temporary. This
is explained in more detail in Note 2 to the accompanying
Consolidated Financial Statements. There was such a write-down
in the second quarter of 2001, but none in the first quarter of
2001.
Income taxes were lower for the first six months of 2002
from the first six months of 2001, principally as a result of
reduced earnings before income taxes, and receipt of a sizeable
refund of state income taxes for prior years in 2002 amounting to
$70,093.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
Financial Condition - Liquidity and Capital Resources
The financial condition of the Company continued to be strong
through the end of the second quarter of 2002 as it was at the end
of fiscal year 2001. The liquidity of the Company continues to be
high as is evidenced by a favorable ratio of current assets to
current liabilities, and the fact that a significant portion of the
Company's net worth continues to be represented by liquid assets.
The Company continues to have no bank debt or other lender liability
outstanding and no significant other liabilities. There are no off
balance sheet arrangements. In addition, since the Company carries
no inventory and has no significant amount of accounts receivable or
accounts payable, its working capital needs are minimal, and since
it has significant liquid assets, and there are no current known
demands, commitments, or contractual obligations, Management
believes that liquidity should continue to be favorable and the
financial condition of the Company strong. The only continuing
commercial commitment is the operating lease for general office
space of the Company.
Regarding future capital expenditures, as reported last quarter,
the Board of Directors authorized the Company to participate in
an oil and gas exploration venture in the Willow Creek area in
Liberty and Hardin Counties, Texas. The Board has authorized a
capital expenditure of up to $250,000 for this project,
approximately $137,466 of which was paid after the close of
the second quarter of 2002. Other than this project, the
Company has no specific commitment for material capital
expenditures at the present time. Management does, however,
continue to actively pursue other business opportunities which
may result in a more productive deployment of its assets and
ultimately increase earnings, and in pursuit of that objective
has focused on possible acquisition of additional mineral
properties or working interests in selected oil and gas
operations. In addition, Management continues to aggressively
pursue development of its currently owned oil and gas and coal
properties and to attempt to lease more of its mineral
properties in order to generate additional rental, bonus and
royalty income.
Although as discussed above, the liquidity of the Company
continues to be favorable, it is affected by cash flows. The
consolidated statement of cash flows in the accompanying
Consolidated Financial Statements illustrate that there were
net decreases in cash and cash equivalents both in the first
six months of 2002 and the first six months of 2001, however,
the decrease was greater in the first six months of 2001. The
most significant component of the changes between the periods
under comparison was the difference in cash provided by or used
in investment activities; specifically, differences in the amount
of proceeds from the sale of equity securities and purchases of
equity securities during each such period, differences in the
amount of proceeds from mature/called investment debt securities
which were reinvested, and the purchase of a greater amount of
other investments in the first six months of 2001. The net
loss in the first six months of 2002 included certain impairment
charges on equity securities described above which reduced
earnings but did not reduce cash, while the amount of such
impairment charges in the first six months of 2001 was
substantially less. The decrease in cash flows from operating
activities was also affected by the timing of income tax
payments. Cash used in the payment of dividends was
significantly less in the first six months of 2002 than in the
first six months of 2001 due to a reduction in the amount of
quarterly dividend as explained hereafter.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Continued
Accounting Policies, Recent Accounting Pronouncements
and Other Matters
A summary of significant accounting policies was contained
in Note 1 to the consolidated financial statements of the
Company filed with Form 10-K for the year ended
December 31, 2001. One example of a judgment made in applying
a critical accounting policy is the impairment charge made
relative to the decline in market value of certain securities
that is deemed to be other than temporary as is referred to
above. Other than temporary impairment is analyzed quarterly
on an individual security basis based on length of time
(generally six to nine months), and the extent to which
market value has been less than cost; the financial condition
and any specific events which affect the issues; and the
Company's intent and ability to hold the security. There
would be materially different reported results if different
assumptions or conditions were to prevail. In the judgment
of Management and the Board of Directors, the indicated
charges were appropriate, however, they have taken note of
the fact that for the last two complete fiscal years
(2000 and 2001) and the first two quarters of 2002 in the
aggregate, total return on the equity portfolio (including
realized gains on the sale of equity securities, dividends
and other income items) net of all such impairment charges
was still positive by over $44,000. Another example of a
judgment made in applying a critical accounting policy is the
periodic review of long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. This accounting
policy was also explained in Note 1 referred to above, and
has been applied in the past, for example, in downward adjustments
to the carrying value of the Company's coal properties.
However, this accounting policy does not permit an upward
adjustment in such carrying values when Management believes
the current fair market value of an asset is greater than the
carrying value on the balance sheet and in fact Management believes
that this may be the case with respect to the carrying value of
certain assets on the balance sheet carried at their historical
cost.
A one share for one share stock dividend was distributed to
Stockholders in the first quarter of 2001. All per share and share
data in the consolidated financial statements accompanying this
report, and related notes, retroactively reflect the stock dividend
for the periods presented. Cash dividends of $0.25 per share were
paid in the first quarter and second quarter of 2001, while cash
dividends of $0.10 per share were paid in the first quarter and
second quarter of 2002. While the Board of Directors had expressed
the intention early in 2001 to continue paying a $0.25 per share
quarterly dividend if the operating results and financial condition
of the Company continued to justify it, the Board subsequently
expressed a consensus that in subsequent quarters the Board might
reevaluate the quarterly dividend policy in light of possible
needs to retain liquidity for potential acquisitions or other
projects under consideration and for other possible areas of
internal growth. In the fourth quarter of 2001, the Board
declared a dividend for that quarter of $0.125 per share and
explained that since total year to date earnings for that year
were somewhat below total net earnings for the same period of the
previous year, due in substantial part to a recent decrease in
energy prices, and in furtherance of the objective to retain
liquidity for potential acquisitions under consideration and for
other possible areas of internal growth, it would be advisable to
reduce the quarterly dividend payment accordingly. In the first
quarter of 2002, the Board reduced the dividend to $0.10 per share
because earnings were again down due in part to a continuation of
lower energy prices and reduced production, and in light of the
decision to acquire a working interest in oil and gas properties
in Texas as described above, and the reduced dividend of $0.10
per share was also paid in the second quarter of 2002.
The Company was required to adopt SFAS No. 142, Goodwill and
Other Intangible Assets, effective January 1, 2002. The
Company currently has no goodwill or significant other intangible
assets, and accordingly the adoption of SFAS had no impact on
the Company's financial statements.
On October 3, 2001, the FASB issued SFAS No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets, which
addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. While this statement
supersedes, SFAS No.121, Accounting for Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of , it
retains many of the fundamental provisions of that statement.
This statement also supersedes the accounting and reporting
provisions of APB Opinion No. 30, Reporting the Results of
Operations - Reporting the Effects of Disposal of a Segment
of a Business and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions, for the disposal of a segment
of a business. However, it retains the requirement in Opinion
No. 30 to report separately discontinued operations and extends
that reporting to a component of an entity that either has been
disposed of (by sale, abandonment, or in a distribution to owners)
or is classified as held for sale. The Company was required to
adopt SFAS No. 144 on January 1, 2002. The adoption of SFAS No.
144 had no impact on the Company's financial statements.
Forward-Looking Statements
This report contains forward-looking statements that are based
on current expectations, estimates, forecasts, and projections
about the business segment in which the Company operates,
Management's beliefs, and assumptions made by Management.
These and other written or oral statements that constitute
forward-looking statements may be made by or on behalf of the
Company. These statements are not guarantees of future
performance and involve assumptions and certain risks and
uncertainties that are difficult to predict, such as future
changes in energy prices, including fluctuations in prevailing
prices for oil and gas, the Company's ability to participate in
or co-venture successful exploration or production of natural
resources (such as oil, gas, coal and other minerals), results
of drilling and other exploration and development activities,
uncertainties regarding future political, economic, regulatory,
fiscal, and tax policies and practices as well as assumptions
concerning a relatively stable national economy, and the absence
of a major disruption such as a domestic act of terrorism.
Therefore, actual outcomes and results may differ materially
from what is expressed, implied, or forecast in such
forward-looking statements. The Company does not, by including
this statement, assume any obligation to review or revise any
particular forward-looking statement referenced herein in light
of future events
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
The primary market risk exposures of the Company relate to
changes in interest rates, changes in equity security prices,
and changes in certain commodity prices.
The Company's exposure to market risk for changes in
interest rates relates solely to its fixed income portfolio
which consists of U. S. government agency securities. All such
securities are held-to-maturity and have original maturities
of less than one year. The Company does not use derivative
financial instruments to hedge interest rates on its fixed
income investment securities.
The Company's exposure to market risk for changes
in equity security prices relates solely to its marketable
equity investment portfolio which consists primarily of
common stocks of domestic, publicly held enterprises.
The Company's exposure to market risk for changes in
commodity prices relates to changes in the prices of coal,
oil, and natural gas, and the effect thereof on its royalties
and rentals relating to coal deposits and mineral rights,
as is discussed in more detail in Management's Discussion
and Analysis of Financial Condition and Results of Operations
set forth in Part 1, Item 2 of this report. The Company
does not use derivative commodity instruments to hedge its
commodity risk exposures.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - Attached
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None
PART II, ITEM 4. - SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
The following meeting of Stockholders was held during the second
quarter of 2002, the quarter to which this report pertains.
(a) The Annual Meeting of Stockholders was held April 18, 2002.
(b) The meeting involved the election of Directors, and the
following are the Directors elected at that meeting:
Bruce L. Franke
Ray A. Infantino
Patrick J. Moran
James R. Ukropina
Phelps C. Wood
Phelps M. Wood
There were no other Directors whose term of office as a Director
continued after the meeting.
(c)(i) For the election of Directors, the votes received by all
nominees were as follows:
Bruce L. Franke 401,552
Ray A. Infantino 401,552
Patrick J. Moran 401,552
James R. Ukropina 401,552
Phelps C. Wood 401,502
Phelps M. Wood 401,552
Cumulative voting is not permitted.
(ii) At the same meeting, the Stockholders approved the
appointment of the accounting firm KPMG LLP as independent public
accountants to examine the financial statements of the Company for
the year ending December 31, 2002 and to perform other appropriate
accounting services. The holders of 407,552 shares cast their votes
in favor of that appointment, the votes of 242 shares were cast against
it, and the holders of 200 shares abstained.
(d) There were no settlements between the Company and any
other participants terminating any solicitation subject to Rule 14a-11.
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.
CENTRAL NATURAL RESOURCES INC.
(Registrant)
Date: August 13, 2002
____________________________
By: /s/ Leonard L. Noah
____________________________
Leonard L. Noah,
Chief Financial Officer
Date: August 13, 2002
____________________________
By: /s/ Phelps C. Wood
____________________________
Phelps C. Wood
President
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
With respect to the Quarterly Report of Central Natural Resources, Inc.,
a Delaware corporation (the "Company") on Form 10-Q for the period
ending June 30, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Leonard Noah, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of
the Company.
Date: August 13, 2002
____________________________
By: /s/ Leonard L. Noah
____________________________
Leonard L. Noah,
Chief Financial Officer
The foregoing certification is being furnished solely pursuant to
18 U.S.C. section 1350 and is not being filed as a part of the Report or
as a separate disclosure document.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
With respect to the Quarterly Report of Central Natural Resources, Inc.,
a Delaware corporation (the "Company") on Form 10-Q for the period
ending June 30, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), I, Phelps C. Wood,
President of the Company, certify, pursuant to 18 U.S.C. section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of
the Company.
Date: August 13, 2002
____________________________
By: /s/ Phelps C. Wood
____________________________
Phelps C. Wood,
President
The foregoing certification is being furnished solely pursuant to
18 U.S.C. section 1350 and is not being filed as a part of the Report or
as a separate disclosure document.