Wells Fargo Financial 10-Q 2002 Q1 Quarterly report

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Form 10-Q

For Quarter Ended                  March 31, 2002                       Commission file number                2-80466           

Wells Fargo Financial, Inc.
(Exact name of registrant as specified in its charter)

Iowa	42 1186565
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
206 Eighth Street, Des Moines, Iowa	50309
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code                                                       (515) 243-2131

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    ý            No           o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  Common Stock (without par value):  1,000 shares outstanding as of May 3, 2002.

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format.

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PART I.  FINANCIAL INFORMATION

WELLS FARGO FINANCIAL, INC.

Consolidated Balance Sheets (Unaudited)

(Thousands of Dollars)

	March 31 ,		December 31,
	2002		2001
Assets
Cash and cash equivalents	$	220,937	$	260,038
Securities available-for-sale	1,421,877		1,377,148
Finance receivables	13,965,944		13,433,569
Less allowance for credit losses	533,900		521,948
Finance receivables — net	13,432,044		12,911,621
Notes receivable — affiliates	604,018		636,588
Property and equipment (at cost, less accumulated depreciation of $89,839 for 2002 and $87,299 for 2001)	104,782		94,017
Deferred income taxes	97,094		62,290
Goodwill	342,243		335,990
Other assets	210,870		231,570
Total assets	$	16,433,865	$	15,909,262

See accompanying notes to consolidated financial statements.

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	March 31,			December 31,
	2002			2001
Liabilities and  Stockholder’s Equity
Loans payable — short-term:
Commercial paper	$	4,022,244		$	4,067,707
Affiliates	86,600			64,600
Other	113,229			93,742
Unearned insurance premiums and commissions	128,720			133,465
Insurance claims and policy reserves	33,723			34,635
Accrued interest payable	124,170			131,752
Other liabilities	506,175			426,876
Long-term debt:
Senior	8,068,212			8,145,636
Affiliate	1,200,000			700,000
Total liabilities	14,283,073			13,798,413
Stockholder’s equity:
Common stock without par value (authorized 1,000 shares, issued and outstanding 1,000 shares)	3,855			3,855
Additional paid in capital	442,302			442,302
Retained earnings	1,711,722			1,657,815
Accumulated other comprehensive income (loss), net of income taxes	(7,087		)	6,877
Total stockholder’s equity	2,150,792			2,110,849
Total liabilities and
stockholder’s equity	$	16,433,865		$	15,909,262

See accompanying notes to consolidated financial statements.

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WELLS FARGO FINANCIAL, INC.

Consolidated Statements of Income (Unaudited)

(Thousands of Dollars)

	Three Months Ended March 31,
	2002		2001
Income:
Finance charges and interest	$	562,129	$	542,833
Insurance premiums and commissions	29,185		30,340
Other income	65,464		64,253
Total income	656,778		637,426
Expenses:
Operating expenses	238,639		216,331
Goodwill amortization			8,908
Interest and debt expense	142,600		189,764
Provision for credit losses	140,062		108,435
Insurance losses and loss expenses	11,410		11,264
Total expenses	532,711		534,702
Income before income taxes	124,067		102,724
Income taxes	45,160		37,922
Net income	$	78,907	$	64,802

See accompanying notes to consolidated financial statements.

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WELLS FARGO FINANCIAL, INC.

Consolidated Statements of Comprehensive Income (Unaudited)

(Thousands of Dollars)

	Three Months Ended March 31,
	2002			2001
Net income	$	78,907		$	64,802
Other comprehensive income (loss) before income taxes:
Unrealized gains (losses) on securities available-for-sale:
Unrealized gains (losses) arising during the period	(16,488		)	16,206
Reclassification adjustment for net gains included in net income	(4,490		)	(2,110		)
	(20,978)			14,096
Foreign currency translation adjustment	(144		)	(2,432		)
Other comprehensive income (loss) before income taxes	(21,122		)	11,664
Income tax expense (benefit) related to unrealized gains/losses on securities available-for-sale	(7,158		)	4,884
Other comprehensive income (loss), net of income taxes	(13,964		)	6,780
Comprehensive income	$	64,943		$	71,582

See accompanying notes to consolidated financial statements.

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WELLS FARGO FINANCIAL, INC.

Consolidated Statements of Cash Flows (Unaudited)

(Thousands of Dollars)

	Three Months Ended March 31,
	2002			2001
Cash flows from operating activities:
Net income	$	78,907		$	64,802
Adjustments to reconcile net income to net cash flows from operating activities, net of effect of transferred subsidiaries:
Provision for credit losses	140,062			108,435
Depreciation and amortization	4,088			13,053
Deferred income taxes	(25,931		)	3,721
Other assets	7,359			35,456
Unearned insurance premiums and commissions	(4,745		)	799
Insurance claims and policy reserves	(912		)	180
Accrued interest payable	(7,582		)	(345		)
Other payables to affiliates	52,815			(12,060		)
Other liabilities	26,458			7,969
Net cash provided by operating activities	270,519			222,010
Cash flows from investing activities:
Finance receivables:
Principal collected	2,692,046			2,264,657
Receivables originated or purchased	(3,070,413		)	(2,372,766		)
Proceeds from sales of securities	159,030			93,161
Proceeds from maturities of securities	28,496			43,018
Purchases of securities	(248,995		)	(193,620		)
Net additions to property and equipment	(14,532		)	(4,714		)
Net decrease (increase) in notes receivable — affiliates	32,570			(157,465		)
Cash and cash equivalents of subsidiary transferred				(1,567		)
Net cash used for acquisitions	(280,756		)	(324,573		)
Other	46,015			(50,067		)
Net cash used by investing activities	(656,539		)	(703,936		)
Cash flows from financing activities:
Net decrease in loans payable — short term	(3,976		)	(37,147		)
Proceeds from issuance of long term debt:
Senior	400,000			581,364
Affiliate	500,000			244,130
Repayment of senior long-term debt	(524,105		)	(409,389		)
Capital contribution by parent				130,000
Dividends paid	(25,000		)
Net cash provided by financing activities	346,919			508,958
Net (decrease) increase in cash and cash equivalents	(39,101		)	27,032
Cash and cash equivalents beginning of period	260,038			205,036
Cash and cash equivalents end of period	$	220,937		$	232,068

See accompanying notes to consolidated financial statements.

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WELLS FARGO FINANCIAL, INC.

Consolidated Statements of Stockholder’s Equity (Unaudited)

(Thousands of Dollars)

								Accumulated Other
								Comprehensive Income (Loss)
											Unrealized Gains
			Additional					Foreign			(Losses) on Securities
	Common		Paid In		Retained			Currency			Available-
	Stock		Capital		Earnings			Translation			for-Sale			Total
Balance, December 31, 2000	$	3,855	$	312,302	$	1,540,902		$	(11,220	)	$	8,776		$	1,854,615
Comprehensive income (loss):
Net income					64,802									64,802
Other								(2,432		)	9,212			6,780
Capital contribution from parent			130,000											130,000
Transfer of subsidiary					(4,759		)							(4,759		)
Balance, March 31, 2001	$	3,855	$	442,302	$	1,600,945		$	(13,652	)	$	17,988		$	2,051,438
Balance, December 31, 2001	$	3,855	$	442,302	$	1,657,815		$	(14,335	)	$	21,212		$	2,110,849
Comprehensive income (loss):
Net income					78,907									78,907
Other								(144		)	(13,820		)	(13,964		)
Dividends					(25,000		)							(25,000		)
Balance, March 31, 2002	$	3,855	$	442,302	$	1,711,722		$	(14,479	)	$	7,392		$	2,150,792

See accompanying notes to consolidated financial statements.

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WELLS FARGO FINANCIAL, INC.

Notes to Consolidated Financial Statements (Unaudited)

The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with the accounting policies set forth in Wells Fargo Financial, Inc.’s 2001 Annual Report on Form 10-K and should be read in conjunction with the Notes to Consolidated Financial Statements therein. In the opinion of management, all adjustments (none of which were other than normal recurring accruals) necessary to present fairly the financial statements for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.

1.             Principles of Consolidation.

The consolidated financial statements include the accounts of Wells Fargo Financial, Inc. (the “Company”) and subsidiaries (collectively, “Wells Fargo Financial”).  Intercompany accounts and transactions are eliminated.  The Company is a wholly-owned subsidiary of Wells Fargo Financial Services, Inc. (the “Parent”) which is a wholly-owned subsidiary of Wells Fargo & Company (“Wells Fargo”).

2.             Dividend Restrictions.

Certain long-term debt instruments restrict payment of dividends on and acquisitions of the Company’s common stock.  In addition, such debt instruments and the Company’s bank credit agreements contain certain requirements as to maintenance of net worth (as defined).  Approximately $884.3 million of consolidated stockholder’s equity was unrestricted at March 31, 2002.

3.             Other Income.

Income from affiliates was $10.6 million and $11.4 million for the three months ended March 31, 2002 and 2001,  respectively.

Interest and dividends from securities available-for-sale and cash equivalents were $19.3 million and $19.0 million for the three months ended March 31, 2002 and 2001, respectively.

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4.             Finance Receivables.

Finance receivables are as follows:

	March 31,		December 31,
(In Thousands)	2002		2001
United States consumer finance:
Real estate-secured loans	$	3,206,042	$	2,984,226
Consumer loans	1,408,084		1,483,055
Total loans	4,614,126		4,467,281
Sales finance contracts	1,147,228		1,228,396
Credit cards	1,380,109		1,341,039
Total United States consumer finance	7,141,463		7,036,716
Canadian consumer finance:
Real estate-secured loans	96,037		90,919
Consumer loans	460,060		461,668
Total loans	556,097		552,587
Sales finance contracts	579,288		585,725
Credit cards	24,179		24,494
Total Canadian consumer finance	1,159,564		1,162,806
Automobile finance	3,478,789		3,375,101
Leasing	1,262,526		1,290,658
Other	923,602		568,288
Total finance receivables (1)	$	13,965,944	$	13,433,569

(1)Outstanding receivable balances at March 31, 2002 and December 31, 2001 are net of unearned income, including net deferred fees, of $2.30 billion and $2.25 billion, respectively.  Non-accrual finance receivables were $70.0 million at March 31, 2002 compared with $76.0 million at December 31, 2001.  In addition, finance receivables outstanding which were more than three payments contractually delinquent and which were still accruing interest were $161.2 million at March 31, 2002 compared with $172.4 million at December 31, 2001.

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5.Allowance for Credit Losses.

The analysis of the allowance for credit losses is as follows:

	Three Months Ended March 31,
(In Thousands)	2002			2001
Allowance for credit losses beginning of period	$	521,948		$	462,555
Provision for credit losses charged to expense	140,062			108,435
Write-offs	(148,648		)	(127,519		)
Recoveries	23,611			20,028
Allowance related to business combinations and other	(3,073		)	39,575
Allowance for credit losses end of period	$	533,900		$	503,074

6.Statements of Consolidated Cash Flows.

The Company and its subsidiaries consider highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.  Supplemental disclosure of certain cash flow information is presented below:

	Three Months Ended March 31,
(In Thousands)	2002		2001
Cash paid for:
Interest	$	153,354	$	184,928
Income taxes	9,830		40,423

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7.             Segment Information.

The Company has four reportable segments: U.S. consumer finance, Canadian consumer finance, automobile finance, and leasing.  The Company’s operating segments are determined by product type and geography.  U.S. consumer finance operations make loans to individuals and purchase sales finance contracts through 768 consumer finance branches in 47 states, Guam, Saipan, and Puerto Rico.  The U.S. consumer finance segment also issues credit cards through two banking subsidiaries.  Canadian consumer finance operations make loans to individuals and purchase sales finance contracts through 162 consumer finance branches in the 10 provinces.  Automobile finance operations specialize in purchasing sales finance contracts directly from automobile dealers and making loans secured by automobiles through 189 branches in 33 states and Puerto Rico.  Leasing operations specialize in financing commercial equipment such as office copiers, telephone systems, health care equipment, small computers, and light industrial equipment.  Lease finance receivables are generated primarily from equipment distributors ranging from small independently-owned vendors to large equipment manufacturers.  Results from insurance operations are included in the appropriate segment.

Selected financial information for each segment is shown below:

(In Thousands)

	U.S. Consumer				Canadian Consumer				Automobile
	Finance				Finance				Finance				Leasing				Other*				Total
Three Months Ended
March 31,:	2002		2001		2002		2001		2002		2001		2002		2001		2002		2001		2002		2001
Finance charges and interest	$	314,233	$	304,082	$	63,954	$	60,926	$	137,127	$	129,920	$	37,028	$	32,021	$	9,787	$	15,884	$	562,129	$	542,833
Total income	375,869		370,589		70,224		67,427		145,303		137,334		45,515		37,210		19,867		24,866		656,778		637,426
Net income	43,170		31,799		11,530		10,308		14,492		11,444		8,790		8,183		925		3,068		78,907		64,802
Total assets	8,957,203		8,248,182		1,410,128		1,066,770		3,732,021		3,403,378		1,400,158		1,394,597		934,355		575,709		16,433,865		14,688,636

*Information from other segments below the quantitative threshold are attributable to miscellaneous insurance companies, collection services, operations in Argentina (2001 only) and commercial finance operations including rediscounting.

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8.             Recent Accounting Standards.

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement No. 142 (FAS 142), Goodwill and Other Intangible Assets.

FAS 142 eliminates amortization of goodwill associated with business combinations completed after June 30, 2001.  During the transition period from July 1, 2001 through December 31, 2001, goodwill associated with business combinations completed prior to July 1, 2001, continued to be amortized through the income statement.  Effective January 1, 2002, goodwill amortization ceased.

As required by the statement, goodwill was assessed for impairment at the reporting unit level by applying a fair-value-based test during the first quarter of 2002.  The Company determined no goodwill impairment had occurred in its reporting units.

“Adjusted Earnings” — FAS 142 Transitional Disclosure

Effective January 1, 2002, the amortization of goodwill was discontinued.  The table below reconciles reported earnings for first quarter 2001 to “adjusted” earnings, which exclude goodwill amortization.

	Quarter ended		Quarter ended
	March 31, 2002		March 31, 2001
	Reported		Reported		Goodwill		“Adjusted”
(in thousands)	earnings		earnings		amortization		earnings
Income before income tax expense	$	124,067	$	102,724	$	8,908	$	111,632
Income tax expense	45,160		37,922		2,713		40,635
Net income	$	78,907	$	64,802	$	6,195	$	70,997

9.             Goodwill.

The changes in the carrying amount of goodwill for the three months ended March 31, 2002 are as follows:

(In Thousands)	U.S.		Canadian
	Consumer Finance		Consumer Finance			Automobile Finance		Leasing		Other		Total
Balance as of January 1, 2002	$	12,894	$	33,864		$	178,815	$	110,417	$		$	335,990
Goodwill acquired										6,333		6,333
Changes due to exchange rates			(80		)							(80		)
Balance as of March 31, 2002	$	12,894	$	33,784		$	178,815	$	110,417	$	6,333	$	342,243

The additional goodwill resulted from the purchase of the rediscount operations of Washington Mutual Bank, FA on March 28, 2002.

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WELLS FARGO FINANCIAL, INC.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

Statements made in Management’s Discussion and Analysis may be forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements address management’s present expectations about future performance and involve inherent risks and uncertainties.  A number of important factors (some of which are beyond the Company’s control) could cause actual results to differ materially from those in the forward-looking statements.  Those factors include the economic environment, competition, products and pricing in the geographic and business areas in which the Company conducts its operations, prevailing interest rates, changes in government regulations and policies affecting financial services companies, credit quality and credit risk management, acquisitions, and integration of acquired businesses.

Wells Fargo Financial’s net income for the first three months of 2002 was $78.9 million compared with $64.8 million for the first three months of 2001.  Wells Fargo Financial adopted FAS 142, Goodwill and Other Intangible Assets, effective January 1, 2002.  Accordingly, goodwill amortization ceased.  Net income in the first quarter of 2001 included $6.2 million of goodwill amortization (net of tax).  Excluding amortization of goodwill, net income for the first three months of 2002 was $78.9 compared with $71.0 million for the first three months of 2001.

Well’s Fargo Financial’s total income (revenue) increased 3% for the first three months ($656.8 million in the first three months of 2002 compared with $637.4 million in the first three months of 2001).

Income from finance charges and interest increased 4% for the first three months ($562.1 million in the first three months of 2002 compared with $542.8 million in the first three months of 2001).  Changes in income from finance charges and interest result predominantly from (1) changes in the amount of finance receivables outstanding and (2) changes in the rate of charge on those receivables.  In total, average finance receivables outstanding in the first three months of 2002 increased 12% from the first three months of 2001; average U.S. consumer finance receivables outstanding increased 9%, average Canadian consumer finance receivables outstanding increased 12%, average automobile finance receivables outstanding increased 9%, average leasing finance receivables outstanding increased 28%, and average other finance receivables outstanding increased 34%.

	2002		2001
Rate of charge on finance receivables:
U.S. consumer finance	17.76	%	18.78	%
Canadian consumer finance	22.08		23.53
Automobile finance	16.16		16.76
Leasing	11.60		12.81
Other	6.82		14.84
Total	16.68		18.03

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The increase in income from finance charges and interest was due to growth in average receivables outstanding.  Growth in average receivables for U.S. consumer finance, Canadian consumer finance and automobile finance was due to regular business activity.  The increase in average leasing finance receivables was due primarily to the purchase of Conseco Finance Vendor Services Corporation on January 31, 2001.  The majority of the increase in other average receivables was due to significant receivable growth of the rediscounting operations.  Changes in the earned rates of charge were due to changes in prevailing market rates combined with a change in the portfolio mix.  The decline in the earned rate of charge for other finance receivables occurred due to the change in portfolio mix occurring due to the growth of rediscounting operations and the transfer of the Company’s operations in Argentina to its parent during December 2001.

Other income increased 2% ($65.5 million in the first three months of 2002 compared with $64.3 million in the first three months of 2001).  The increase in other income was due predominantly to additional fee income originating from the companies acquired in the past year and realized gains on the sale of securities.

Operating expenses increased 10% ($238.6 million in the first three months of 2002 compared with $216.3 million in the first three months of 2001).  The increase was due primarily to increases in employee compensation and benefits and other costs relating to business expansion and acquisitions.

Interest and debt expense decreased 25% ($142.6 million in the first three months of 2002 compared with $189.8 million in the first three months of 2001).  Changes in interest and debt expense result predominantly from (1) changes in the amount of borrowings outstanding and (2) changes in the cost of those borrowings.  Average total outstanding borrowings in the first three months of 2002 increased 19% from the first three months of 2001.

	Three Months Ended March 31,
	2002		2001
Costs of funds:
Short-term	2.11	%	6.11	%
Long-term	6.08		6.66
Total	4.77		6.49

Changes in average debt outstanding generally correspond to changes in average finance receivables outstanding combined with the change in notes receivable - affiliates.  Average finance receivables and notes receivable - affiliates increased 12% from the first three months of 2001.

Provision for credit losses increased 29% ($140.1 million in the first three months of 2002 compared with $108.4 million in the first three months of 2001).  Net write-offs increased 16% ($125.0 million in the first three months of 2002 compared with $107.5 million in the first three months of 2001).  The increase was due primarily to higher write-offs in the Company’s automobile finance business (see following table).

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	Three Months
	Ended March 31,
	2002		2001
Net write-offs, not annualized, as a percentage of average net receivables outstanding:
U.S. consumer finance	1.00	%	1.02	%
Canadian consumer finance	1.06		1.02
Automobile finance	.99		.75
Leasing	.57		.58
Other	.20		.32
Total	.93		.89

During 2002, the provision for credit losses exceeded net write-offs by $15.0 million.  At March 31, 2002, the Company had an allowance for credit losses of $533.9 million (3.82% of receivables) compared with $521.9 million (3.89% of receivables) at December 31, 2001.  There were no material changes in estimation methods and assumptions during 2002 and 2001.  Non-accrual finance receivables were $70.0 million at March 31, 2002 compared with $76.0 million at December 31, 2001.  In addition, finance receivables outstanding which were more than three payments contractually delinquent and which were still accruing interest were $161.2 million at March 31, 2002 compared with $172.4 million at December 31, 2001.  The process of determining the allowance for credit losses is a critical accounting policy of the Company.  The process requires subjective and complex judgements by management.  Assumptions about economic conditions, unemployment rates, and projected write-offs are factors considered when evaluating the allowance for losses.  Management believes the allowance for credit losses at March 31, 2002, is adequate to absorb probable losses on existing receivables in the finance receivables portfolio.  However, no assurance can be given that the Company will not, in any particular period, sustain credit losses that are sizeable in relation to the amount reserved, or that subsequent evaluations of the portfolio, in light of the factors then prevailing, including economic conditions and the ongoing examination process by the Company will not require significant increases in the allowance for losses.

Income taxes increased 19% ($45.2 million in the first three months of 2002 compared with $37.9 million in the first three months of 2001).  Income before income taxes increased 21% ($124.1 million in the first three months of 2002 compared with $102.7 million in the first three months of 2001.)  The effective tax rate was 36.4% for the first three months of 2002 and 36.9% for the first three months of 2001.

The Company maintains bank lines of credit and revolving credit agreements to provide an alternative source of liquidity to support the Company’s commercial paper borrowings.  At March 31, 2002, lines of credit and revolving credit agreements totaling $2,751 million were being maintained at 19 domestic and international banks; the entire amount was available on that date.  Additionally, the Company’s bank subsidiaries, Wells Fargo Financial Bank and Wells Fargo Financial National Bank, have access to federal funds borrowings.  At March 31, 2002, federal funds availability at the two banks was $435 million.

The Company and a Canadian subsidiary obtain long-term debt capital primarily from the issuance of debt securities to the public through underwriters on a firm-commitment basis and the issuance of debt securities to institutional investors.  The Company and a Canadian subsidiary also obtain long-term debt from the issuance of medium-term notes (which have maturities ranging from nine months to 30 years) through underwriters (acting as agent or principal).

The Company anticipates the continued availability of borrowed funds, at prevailing interest rates, to provide for Wells Fargo Financial’s growth in the foreseeable future.  Funds are also generated internally from payments of principal and interest on Wells Fargo Financial’s finance receivables.

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PART II.  OTHER INFORMATION

WELLS FARGO FINANCIAL, INC.

Item 5.  Other Information.

RATIOS OF EARNINGS TO FIXED CHARGES

The following table sets forth the ratios of earnings to fixed charges of Wells Fargo Financial, Inc. and its subsidiaries for the periods indicated:

Three Months Ended	Years Ended December 31,
March 31, 2002	2001	2000	1999	1998	1997
1.85	1.61	1.58	1.78	1.72	2.00

The ratios of earnings to fixed charges have been computed by dividing net earnings plus fixed charges and income taxes by fixed charges.  Fixed charges consist of interest and debt expense plus one-third of rentals (which is deemed representative of the interest factor).

Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits:

Exhibit (12) Computation of ratios of earnings to fixed charges for the years ended December 31, 2001, 2000, 1999, 1998 and 1997 and the three months ended March 31, 2002.

(b)  Reports on 8-K

On January 28, 2002, the Company filed a current report on Form 8-K related to entering into a distribution agreement with certain agents providing for the sale from time to time of the Company’s Medium-Term Notes.

S I G N A T U R E S

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.

	WELLS FARGO FINANCIAL, INC.
Date:  May 3, 2002
	By	/s/ Eric Torkelson
		Eric Torkelson
		Senior Vice President and Controller
		(Principal Accounting Officer)

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