Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-2297
EASTERN ENTERPRISES
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(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1270730
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 RIVERSIDE ROAD, WESTON, MASSACHUSETTS 02493
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(Address of principal executive offices)
(Zip Code)
781-647-2300
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(Registrant's telephone number, including area code)
Former name, former address and former fiscal year,
if changed since last report.
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
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The number of shares of Common Stock outstanding of Eastern Enterprises as of
April 27, 1999 was 22,628,575.
Form 10-Q
Page 2.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Company or group of companies for which report is filed:
EASTERN ENTERPRISES AND SUBSIDIARIES ("Eastern")
Consolidated Statements of Operations
- -------------------------------------
Three months ended March 31,
- ---------------------------------------------------------------------------------------------------------------------
(In thousands, except per share amounts) 1999 1998
Revenues $344,829 $352,922
Operating costs and expenses:
Operating costs 229,988 238,704
Selling, general and administrative expenses 31,230 33,538
Depreciation and amortization 25,665 25,056
-------- --------
286,883 297,298
-------- --------
Operating earnings 57,946 55,624
Other income (expense):
Interest income 2,217 2,617
Interest expense (8,779) (9,324)
Other, net 925 1,427
-------- --------
Earnings before income taxes 52,309 50,344
Provision for income taxes 20,013 19,277
-------- --------
Earnings before extraordinary item and
accounting change 32,296 31,067
Extraordinary loss on early extinguishment
of debt, net of tax - (1,465)
Cumulative effect of accounting change,
net of tax - 8,193
-------- --------
Net earnings $ 32,296 $ 37,795
======== ========
Basic earnings per share before extraordinary
item and accounting change $ 1.43 $ 1.39
Extraordinary loss on early extinguishment
of debt, net of tax - (.07)
Cumulative effect of accounting change,
net of tax - .37
-------- --------
Basic earnings per share $ 1.43 $ 1.69
======== ========
Diluted earnings per share before
extraordinary item and accounting change $ 1.42 $ 1.37
Extraordinary loss on early extinguishment
of debt, net of tax - (.06)
Cumulative effect of accounting change,
net of tax - .36
-------- --------
Diluted earnings per share $ 1.42 $ 1.67
======== ========
Dividends per share $ .42 $ .41
======== ========
The accompanying notes are an integral part of these financial statements.
Form 10-Q
Page 3.
Eastern Enterprises and Subsidiaries
- ------------------------------------
Consolidated Balance Sheets
- ---------------------------
March 31, December 31, March 31,
(In thousands) 1999 1998 1998
- ----------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and short-term investments $178,818 $159,836 $124,737
Receivables, less reserves 158,043 104,869 169,814
Inventories 37,837 55,866 39,310
Deferred gas costs - 54,065 32,062
Other current assets 3,920 5,689 4,653
--------- --------- ---------
Total current assets 378,618 380,325 370,576
Property and equipment, at cost 1,731,589 1,722,718 1,649,789
Less--accumulated depreciation 771,989 746,969 711,075
--------- --------- ---------
Net property and equipment 959,600 975,749 938,714
Other assets:
Deferred postretirement health care
costs 77,228 78,567 85,747
Investments 14,965 15,395 16,655
Deferred charges and other costs,
less amortization 71,622 68,334 72,110
---------- ---------- ----------
Total other assets 163,815 162,296 174,512
---------- ---------- ----------
Total assets $1,502,033 $1,518,370 $1,483,802
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
Form 10-Q
Page 4.
Eastern Enterprises and Subsidiaries
- ------------------------------------
Consolidated Balance Sheets
- ---------------------------
March 31, December 31, March 31,
(In thousands) 1999 1998 1998
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current debt $ 7,353 $ 43,237 $ 26,944
Accounts payable 47,746 56,567 71,539
Accrued expenses 61,905 38,540 64,583
Other current liabilities 42,932 40,011 68,150
---------- ------------ ----------
Total current liabilities 159,936 178,355 231,216
Gas inventory financing 32,554 52,644 35,271
Long-term debt 384,307 385,519 321,508
Reserves and other liabilities:
Deferred income taxes 137,136 134,911 106,336
Postretirement health care 96,739 97,197 97,868
Coal miners retiree health care - - 55,632
Preferred stock of subsidiary 29,368 29,360 29,335
Other reserves 91,852 94,315 93,023
---------- ------------ ----------
Total reserves and other
liabilities 355,095 355,783 382,194
Commitments and Contingencies
Shareholders' equity:
Common stock, $1.00 par value
Authorized shares -- 50,000,000; Issued shares -- 22,634,750 at March 31,
1999, 22,535,734 at December 31, 1998 and 22,480,449
at March 31, 1998 22,635 22,536 22,480
Capital in excess of par value 55,270 53,421 51,729
Retained earnings 493,418 470,576 438,914
Accumulated other comprehensive
earnings (loss) (823) (105) 1,204
Treasury stock at cost - 10,461
shares at March 31, 1999 and
December 31, 1998, and 20,783
shares at March 31, 1998 (359) (359) (714)
---------- ---------- ----------
Total shareholders' equity 570,141 546,069 513,613
---------- ---------- ----------
Total liabilities and
shareholders' equity $1,502,033 $1,518,370 $1,483,802
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
Form 10-Q
Page 5.
Eastern Enterprises and Subsidiaries
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Consolidated Statements of Cash Flows
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Three months ended March 31,
(In thousands) 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 32,296 $ 37,795
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Extraordinary loss on early extinguishment of debt - 1,465
Cumulative effect of accounting change - (8,193)
Depreciation and amortization 25,665 25,056
Income taxes and tax credits 14,597 10,870
Net gain on sale of assets - (1,135)
Other changes in assets and liabilities:
Receivables (53,174) (44,684)
Inventories 18,029 22,239
Deferred gas costs 54,642 37,445
Accounts payable (8,821) (1,205)
Other 11,522 10,220
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Net cash provided by operating activities 94,756 89,873
--------- ---------
Cash flows from investing activities:
Capital expenditures (9,552) (28,661)
Proceeds on sale of assets - 5,654
Investments (270) (5,273)
Other (118) (2,723)
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Net cash used by investing activities (9,940) (31,003)
--------- ---------
Cash flows from financing activities:
Dividends paid (9,455) (9,071)
Changes in notes payable (35,985) (24,443)
Repayment of long-term debt (1,260) (51,582)
Changes in gas inventory financing (20,090) (24,552)
Other 956 4,858
--------- ---------
Net cash used by financing activities (65,834) (104,790)
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Net increase (decrease) in cash and cash equivalents 18,982 (45,920)
Cash and cash equivalents at beginning of year 159,836 170,657
--------- ---------
Cash and cash equivalents at the end of the period 178,818 124,737
Short-term investments - -
- -
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Cash and short-term investments $ 178,818 $ 124,737
========= =========
The accompanying notes are an integral part of these financial statements.
Form 10-Q
Page 6.
EASTERN ENTERPRISES AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
1. Accounting policies
It is Eastern's opinion that the financial information contained in this report
reflects all adjustments necessary to present a fair statement of results for
the periods reported. All of these adjustments are of a normal recurring nature.
Results for the period are not necessarily indicative of results to be expected
for the year, due to the seasonal nature of Eastern's operations. All accounting
policies have been applied in a manner consistent with prior periods. Such
financial information is subject to year-end adjustments and annual audit by
independent public accountants.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the 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.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in this Form 10-Q. Therefore, these interim
financial statements should be read in conjunction with Eastern's 1998 Annual
Report filed on Form 10-K with the Securities and Exchange Commission.
Earnings per share
Basic earnings per share is based on the weighted average number of shares
outstanding. Diluted earnings per share gives effect to the exercise of stock
options using the treasury stock method, as reflected below:
Three months ended March 31,
(In thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
Weighted average shares 22,600 22,431
Dilutive effect of options 126 239
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Adjusted weighted average shares 22,726 22,670
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Form 10-Q
Page 7.
Comprehensive Income
The following is a summary of the reclassification adjustments and the income
tax effects for the components of other comprehensive income (loss) for the
three months ended March 31:
Unrealized Holding
Gains (Losses) on Reclassification
Investments Arising Adjustments for Other Comprehensive
During the Period Gains Included in Income (Loss)
(In thousands) Net Income
- -------------------------------------------------------------------------------------------------------------------
1998
Pretax income (loss) $ 491 $(1,154) $ (663)
Income tax (benefit) - - -
- - -
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Net change $ 491 $(1,154) $ (663)
===== ======= =======
1999
Pretax (loss) $(852) $ (253) $(1,105)
Income tax benefit (298) (89) (387)
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Net change $(554) $ (164) $ (718)
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In 1998, a capital loss carryforward eliminated the income taxes associated with
capital gains.
2. Essex Gas Merger
On September 30, 1998, Eastern completed a merger with Essex Gas which was
accounted for as a pooling of interests and the accompanying consolidated
financial statements include the accounts of Essex Gas for all periods. Prior to
the merger, Essex Gas' fiscal year ended on August 31. Accordingly, the
accompanying consolidated statement of operations for the current period
reflects a calendar alignment of periods for Eastern and Essex Gas, while the
prior period comparative statement of operations reflects the three months ended
March 31, 1998 of Eastern combined with the three months ended February 28, 1998
of Essex Gas.
Three months ended March 31,
(In thousands) 1999 1998
- ------------------------------------------------------------------------------------------------------------
Revenues:
Eastern $322,780 $329,894
Essex Gas 22,049 23,028
-------- --------
Combined $344,829 $352,922
======== ========
Earnings before extraordinary item
and accounting change
Eastern $ 28,327 $ 28,550
Essex Gas 3,969 2,517
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Combined $ 32,296 $ 31,067
======== ========
Form 10-Q
Page 8.
In conforming Essex Gas' historical periods based on a fiscal year ending August
31 with Eastern's operations and changing Essex Gas' fiscal year-end, the
consolidated statement of cash flows for the three months ended March 31, 1998
includes the effect of Essex Gas' excluded period, September 1, 1997 through
November 30, 1997, of ($585,000) for net operating activity, ($1,908,000) for
net investing activity and $2,428,000 for net financing activity. These amounts
are reflected in the other captions in the consolidated statement of cash flows.
3. Business Segments
Eastern's reportable business segment information with respect to revenues and
operating earnings is presented below:
Revenues: Three months ended March 31,
(In thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------
Natural Gas Distribution $ 280,283 $ 290,232
Marine Transportation 61,326 62,658
Other Services 3,220 32
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$ 344,829 $ 352,922
========= =========
Operating Earnings: Three months ended March 31,
(In thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------
Natural Gas Distribution $57,294 $52,838
Marine Transportation 3,141 6,088
Other Services (1,296) (2,226)
Headquarters (1,193) (1,076)
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$57,946 $55,624
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4. Inventories
The components of inventories were as follows:
March 31, December 31, March 31,
(In thousands) 1999 1998 1998
- -----------------------------------------------------------------------------------------------------------
Supplemental gas supplies $ 26,072 $ 45,266 $ 26,923
Other materials, supplies and
marine fuels 11,765 10,600 12,387
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$ 37,837 $ 55,866 $ 39,310
======== ======== ========
5. Supplemental cash flow information
The following are supplemental disclosures of cash flow information:
Three months ended March 31,
(In thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------------
Cash paid during the year for:
Interest, net of amounts capitalized $ 1,453 $ 3,211
Income taxes $ 4,952 $ 8,288
Form 10-Q
Page 9.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Natural Gas Distribution
The natural gas distribution segment includes the operations of Boston Gas
Company and Essex Gas Company, which Eastern acquired in September, 1998, as
discussed in Note 2 of Notes to Financial Statements. The 3% decrease in
revenues reflects lower non-firm sales ($21 million), the pass through of lower
gas costs ($5 million) and the migration of customers from firm sales to
transportation-only service ($5 million), all factors that have no impact on
operating earnings. Partially offsetting were colder weather ($17 million) and
growth in throughput. Although weather for the quarter was 5% warmer than
normal, it was 9% colder than the extremely warm weather experienced in the
first quarter of 1998.
Operating earnings for 1999 increased by $4.5 million, reflecting the gross
margin impact of colder weather ($5 million), growth in throughput ($2 million)
and a pension settlement gain ($1 million), partially offset by higher operating
costs ($4 million). The increase in operating costs reflects the impact of
colder weather and higher systems maintenance.
Marine Transportation
Lower shipments by electric utility customers, reduced demand for industrial raw
materials and the pass through of lower fuel costs reduced first quarter
revenues by 2%, as compared to 1998. Although first quarter tonnage declined
nearly 5% from 1998, related ton miles increased 2% due to longer average trip
lengths. Coal tonnage declined 7%, reflecting lower demand by Ohio River-based
utilities. Coal ton miles increased 5% due to additional shipments to the
Southeast.
Operating earnings decreased by $2.9 million, reflecting higher operating
expenses, lower tonnage and rates for coal and other dry cargo, partially offset
by 17% lower fuel costs and operating conditions less disruptive than 1998.
Higher operating costs reflected increased crew labor and vessel maintenance,
along with depreciation on new equipment. In 1999, heavy ice on the Illinois and
mid-Mississippi rivers in January and flooding along the Lower Mississippi River
in February increased operating costs, damaged vessels and delayed shipments.
Other Services
Revenues of $3.2 million include $2.9 million from ServicEdge, which commenced
operations in April 1998 and $.3 million from AMR Data. The $.9 million lower
operating loss in 1999 primarily reflects a reduction of costs associated with
starting these new businesses, principally ServicEdge.
Other
Net interest expense remained unchanged as the reduced interest associated with
the issuance of $75.0 million of 6.25% (effective rate 7.5%) debt by Midland in
September 1998, which replaced of $50.0 million of 9.9% Midland debt redeemed in
March 1998, was offset by the combination of lower average investment balances
and interest rates.
Form 10-Q
Page 10.
In 1998 Eastern recognized an extraordinary loss of $2.3 million pretax,
$1.5 million net, or $.06 per share, on redeeming the
Midland debt noted above.
Net earnings for 1998 include $8.2 million, or $.36 per share, for the
cumulative effect of changing Boston Gas' method of accounting
for unbilled revenues to an accrual method.
YEAR 2000 ISSUES
State of Readiness
Eastern has assessed the impact of the year 2000 with respect to its information
technology ("IT") and embedded chip systems as well as the Company's exposure to
significant third party risks. In such regard, Eastern has completed substantial
portions of its plans to replace or modify existing systems and technology and
to assure that major customers and critical vendors are also addressing these
issues.
With respect to IT systems, natural gas distribution has tested and certified as
year 2000 ready, seven of its eleven "mission critical" business systems.
Replacement of the remaining four systems is in process and scheduled to be
completed by June 30, 1999. All "less than critical" applications are scheduled
to be tested and/or upgraded by the June 30, 1999. Conversion and testing of all
mainframe hardware and software has been completed. Replacements are in process
for client server, data/voice communications, e-mail and desktop hardware and
software, with completion scheduled by June 30, 1999. An end-to-end integration
test plan has been developed to test all business systems supporting mission
critical processes. The tests will be executed during the third quarter of 1999.
With respect to embedded chip systems, natural gas distribution has completed an
inventory, an assessment and a remediation plan. All remediation, conversion and
testing is scheduled for completion by September 30, 1999.
Natural gas distribution has identified material third party relationships and
has completed a detailed survey and assessment of third party readiness.
Selected testing and implementation of risk mitigation strategies for
significant risk vendors are scheduled for completion by June 30, 1999. However,
there can be no assurance that third party systems, on which the Company's
systems rely, will be timely converted or that any such failure to convert by a
third party would not have an adverse effect on the Company's operations.
Marine transportation has modified and tested all mainframe-based programs and
systems, which have been operating on a new, year 2000 compliant mainframe since
July 1998. All non-mainframe (server) based systems have been tested and
modified except for the accounts receivable system, which is scheduled for
completion by June 30, 1999.
With respect to embedded chip systems, marine transportation has reviewed its
major operating assets and their sub-systems. Based on this review and actions
taken, management believes its operations will not be impaired by year 2000
issues with regard to embedded chip technology.
Form 10-Q
Page 11.
Marine transportation has assessed third party risk with respect to significant
suppliers, services and customers and is actively seeking written confirmation
of third party readiness. While many third parties express confidence in their
year 2000 programs and project completion by mid-1999, they do not make 100%
guarantees or assurances.
Cost of year 2000 remediation
Natural gas distribution and marine transportation expect the cost
of year 2000 compliance to approximate $15.9 million,
respectively, as detailed in the following chart:
Cost through Expected
(In millions) March 1999 subsequent cost
- ---------------------------------------------------------------------------------------------------
Natural gas distribution - capitalized $ 8.3 $ .9
- expensed 3.2 1.2
Marine transportation - capitalized 1.0 .3
- expensed .8 .2
----- -----
$13.3 $ 2.6
===== =====
Risks of year 2000 issues
Natural gas distribution and marine transportation operations have assessed the
most reasonably likely worst case year 2000 scenario.
Given its efforts to minimize the risk of year 2000 failure by its internal
systems and its distribution network control systems, natural gas distribution
believes its worst case scenario would involve failures by a pipeline supplier
or by suppliers of telecommunications, electricity or banking services. A
short-term interruption in pipeline supplies would require enactment of business
contingency and disaster recovery measures to enable the continuation of service
to its customers.
Marine transportation believes its worst case scenario would involve failures by
the Army Corps of Engineers, which operates the various lock and dam systems on
the inland waterways, by rail services, which are essential for bringing
commodities to the rivers for transit in barges, or by suppliers of
telecommunications, electricity or banking services. Major delays to river
traffic and customers could result in a loss of revenues. Such failures would
require marine transportation operations to enact disaster recovery plans, use
alternate service providers and seek other routes of navigation, to the extent
possible.
Contingency plans
Natural gas distribution has initiated the development of a business contingency
plan concerning year 2000 risks to its internal systems, embedded chips and
significant suppliers. An impact analysis of business processes has been
completed which identified major sources of risk and their impact on mission
critical processes. Contingency plans for critical business process are expected
to be completed by June 30, 1999 with testing to occur during the third quarter
of 1999.
Form 10-Q
Page 12.
Marine transportation is developing a contingency plan, which it expects to
complete by June 30, 1999. To the extent marine transportation believes that any
supplier of critical goods or services poses a significant risk of year 2000
failure, it expects to locate backup providers by September 30, 1999.
FORWARD-LOOKING INFORMATION:
This report and other company statements and statements issued or made from time
to time contain certain "forward-looking statements" concerning projected future
financial performance, expected plans or future operations. Eastern cautions
that actual results and developments may differ materially from such projections
or expectations.
Investors should be aware of important factors that could cause actual results
to differ materially from forward-looking projections or expectations. These
factors include, but are not limited to: the effect of the Colonial Gas merger
and other strategic initiatives on earnings and cash flow, Eastern's ability to
successfully integrate its new gas distribution operations, temperatures above
or below normal in eastern Massachusetts, changes in market conditions for barge
transportation, adverse weather and operating conditions on the inland
waterways, uncertainties regarding the profitability of ServicEdge, the
timetable and cost for completion of Eastern's year 2000 plans, the impact of
third parties' year 2000 issues, changes in economic conditions, including
interest rates and the value of the dollar versus other currencies, regulatory
and court decisions and developments with respect to Eastern's
previously-disclosed environmental liabilities. Most of these factors are
difficult to predict accurately and are generally beyond Eastern's control.
LIQUIDITY AND CAPITAL RESOURCES
Management believes that projected cash flows from operations, in combination
with currently available resources, is more than sufficient to meet Eastern's
1999 capital expenditure requirements, potential funding of its environmental
liabilities, normal debt repayments, anticipated dividends to shareholders and
the planned acquisition of Colonial Gas.
Consolidated capital expenditures are budgeted at approximately $110 million,
with about 60% at natural gas distribution segment and
the balance at marine transportation.
PART II. OTHER INFORMATION
Item 2. Changes in Securities
Eastern issued an aggregate of 9,001 shares of its common stock on January 26,
1999 to executives of Eastern and its subsidiaries, other than its Chairman and
Chief Executive Officer and its former President and Chief Operating Officer,
pursuant to Eastern's Executive Incentive Compensation Plan ("Incentive Plan").
Eastern issued 4,630 shares of its common stock on February 24, 1999 to its
Chairman and Chief Executive Officer and its former President and Chief
Operating Officer pursuant to its Incentive Plan. The issuances of such shares
were exempt from registration under the Securities Act of 1933, as amended,
pursuant to Section 4 (2) thereof.
Form 10-Q
Page 13.
Item 4. Submission of Matters to a Vote of Security Holders
A Special Meeting of Shareholders of the registrant was held on February 10,
1999, at which the shareholders approved the issuance of shares of common stock
of the registrant in connection with the merger of Colonial Gas Company with and
into a wholly-owned subsidiary of the registrant pursuant to the Agreement and
Plan of Reorganization, dated as of October 17, 1998, by and between the
registrant and Colonial Gas Company, with 17,748,798 shares voting for, 55,147
shares voting against and 101,540 shares abstaining.
The Annual Meeting of Shareholders of the registrant was held on April 28, 1999,
at which the shareholders voted to elect the following Trustees for terms of
office expiring at the 2002 Annual Meeting of Shareholders:
John D. Curtin, Jr., with shares voting for 17,541,080 and
643,575 shares withholding authority;
Wendell J. Knox, with shares voting for 17,544,337 and
643,575 shares withholding authority;
Rina K. Spence, with shares voting for 17,543,342 and
643,575 shares withholding authority;
Item 6. Exhibits and reports on Form 8-K
(a) List of Exhibits
10.19.2 Amendment to Master Trust Agreement, made as
of April 15, 1999, between Eastern
Enterprises and the Key Trust Company of
Ohio, National Association.
(b) Report on Form 8-K
There were no reports on Form 8-K filed in the first quarter
of 1999.
Form 10-Q
Page 14.
SIGNATURES
It is Eastern's opinion that the financial information contained in
this report reflects all adjustments necessary to present a fair statement of
results for the period reported. All of these adjustments are of a normal
recurring nature. Results for the period are not necessarily indicative of
results to be expected for the year, due to the seasonal nature of Eastern's
operations. All accounting policies have been applied in a manner consistent
with prior periods other than changes disclosed in Notes to Financial
Statements. Such financial information is subject to year-end adjustments and
annual audit by independent public accountants.
Pursuant to the requirements of the Securities Exchange Act of 1934,
Eastern has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EASTERN ENTERPRISES
Date: April 29, 1999 By /s/ JAMES J. HARPER
-------------- -----------------------------
James J. Harper
Vice President and Controller
(Chief Accounting Officer)
Date: April 29, 1999 By /s/ WALTER J. FLAHERTY
-------------- ------------------------------
Walter J. Flaherty
Senior Vice President and
Chief Financial Officer