FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2003
Commission file Number 0-21304
RIDGEWOOD ELECTRIC POWER TRUST II
(Exact name of registrant as specified in its charter.)
Delaware 22-3206429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
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(Address of principal executive offices) (Zip Code)
(302) 888-7444 Registrant's telephone number, including area code:
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
PART I. - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Ridgewood Electric Power Trust II
Consolidated Financial Statements
March 31, 2003
Ridgewood Electric Power Trust II
Consolidated Balance Sheets (unaudited)
- --------------------------------------------------------------------------------
March 31, December 31,
2003 2002
----------- -----------
Assets:
Cash and cash equivalents ...................... $ 1,188,761 $ 1,348,825
Restricted cash ................................ 550,000 550,000
Trade receivables .............................. 255,990 255,082
Current portion of note receivable
from sale of investment ....................... 140,147 277,528
Due from affiliates ............................ 17,917 14,512
Other current assets ........................... 35,361 47,151
----------- -----------
Total current assets .................... 2,188,176 2,493,098
Note receivable from transfer of investment
in Limited Partnership interests under
contractual agreements ........................ 1,074,462 1,207,795
Plant and equipment ............................ 3,441,432 3,441,432
Accumulated depreciation ....................... (1,700,707) (1,643,080)
----------- -----------
1,740,725 1,798,352
----------- -----------
Electric power sales contract .................. 3,032,000 3,032,000
Accumulated amortization ....................... (1,000,560) (970,240)
----------- -----------
2,031,440 2,061,760
----------- -----------
Total assets ........................... $ 7,034,803 $ 7,561,005
----------- -----------
Liabilities and Shareholders' Equity:
Liabilities:
Accounts payable and accrued expenses .......... $ 90,564 $ 286,007
Due to affiliates .............................. 49,994 47,883
----------- -----------
Total current liabilities ............. 140,558 333,890
Commitments and contingencies
Shareholders' Equity:
Shareholders' equity (235.3775 investor shares
issued and outstanding) ....................... 7,026,546 7,356,088
Managing shareholder's accumulated deficit
(1 management share issued and outstanding) .... (132,301) (128,973)
----------- -----------
Total shareholders' equity ............... 6,894,245 7,227,115
----------- -----------
Total liabilities and shareholders' equity $ 7,034,803 $ 7,561,005
----------- -----------
See accompanying notes to the consolidated financial statements.
Ridgewood Electric Power Trust II
Consolidated Statements of Operations(unaudited)
- --------------------------------------------------------------------------------
Three Months Ended
----------------------
March 31, March 31,
2003 2002
--------- ---------
Power generation revenue ..................... $ 668,814 $ 736,785
Cost of sales, including depreciation and
amortization of $87,947 and $86,551 in 2003
and 2002 .................................. 584,027 697,605
--------- ---------
Gross profit ................................. 84,787 39,180
General and administrative expenses .......... 39,358 31,959
Management fee paid to managing shareholder
27,102 29,264
--------- ---------
Total other operating expenses .......... 66,460 61,223
--------- ---------
Income (loss) from operations ................ 18,327 (22,043)
--------- ---------
Other income (expense):
Interest income ........................... 8,058 18,116
Equity loss from B-3 Limited Partnership
-- (48,193)
Other expense ............................ (2,622) (16,702)
--------- ---------
Other income (expense), net ............. 5,436 (46,779)
--------- ---------
Net income (loss) ............................ $ 23,763 $ (68,822)
--------- ---------
See accompanying notes to the consolidated financial statements.
Ridgewood Electric Power Trust II
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
- --------------------------------------------------------------------------------
Managing
Shareholders Shareholder Total
----------- ------------ -----------
Shareholders' equity,
December 31, 2002 ...... $ 7,356,088 $ (128,973) $ 7,227,115
Cash distributions ...... (353,067) (3,566) (356,633)
Net income for the period 23,525 238 23,763
----------- ----------- -----------
Shareholders' equity,
March 31, 2003 ......... $ 7,026,546 $ (132,301) $ 6,894,245
----------- ----------- -----------
See accompanying notes to the consolidated financial statements
Ridgewood Electric Power Trust II
Consolidated Statements of Cash Flows(unaudited)
- --------------------------------------------------------------------------------
Three Months Ended
March 31, March 31,
2003 2002
----------- -----------
Cash flows from operating activities:
Net income (loss) ........................... $ 23,763 $ (68,822)
----------- -----------
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation and amortization ............... 87,947 86,551
Equity loss from unconsolidated B-3
Limited Partnership ........................ -- 48,193
Changes in assets and liabilities:
Increase in trade receivables ............. (908) (15,390)
Decrease (increase) in other current assets 11,790 (755)
Decrease in accounts payable and
accrued expenses ......................... (195,443) (81,127)
Decrease in due to/from affiliates, net ... (1,294) (115,525)
----------- -----------
Total adjustments ....................... (97,908) (78,053)
----------- -----------
Net cash used in operating activities ... (74,145) (146,875)
----------- -----------
Cash flows from investing activities:
Proceeds from note receivable ............... 137,381 126,853
Cash received from transfer of investments .. 133,333 --
Reimbursement of capital expenditures ....... -- 3,305
----------- -----------
Net cash provided by investing activities 270,714 130,158
----------- -----------
Cash flows from financing activities:
Cash distributions to shareholders .......... (356,633) --
----------- -----------
Net cash used in financing activities ... (356,633) --
----------- -----------
Net decrease in cash and cash equivalents ........ (160,064) (16,717)
Cash and cash equivalents, beginning of year ..... 1,348,825 175,403
----------- -----------
Cash and cash equivalents, end of period ......... $ 1,188,761 $ 158,686
----------- -----------
See accompanying notes to the consolidated financial statements.
Ridgewood Electric Power Trust II
Notes to the Consolidated Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. General
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments, which consist of normal recurring
adjustments, necessary for the fair presentation of the results for the interim
periods. Additional footnote disclosure concerning accounting policies and other
matters are disclosed in Ridgewood Electric Power Trust II's consolidated
financial statements included in the 2002 Annual Report on Form 10-K, which
should be read in conjunction with these consolidated financial statements.
Certain prior year amounts have been reclassified to conform to the current year
presentation.
The results of operations for an interim period should not necessarily be taken
as indicative of the results of operations that may be expected for a twelve
month period.
2. Summary Results of Operations for Selected Investments
Summary results of operations for the B-3 Limited Partnership, which was
accounted for under the equity method, are as follows:
Three Months Ended March 31,
2002
-----------
Revenue $ 1,202,000
Operating expenses 1,189,000
Net income* 13,000
*The partnership agreement required income (loss) earned by the partnership to
be allocated and distributed to the partners as follows:
1.Gross income is allocated as distributions declared have been allocated to the
partners.
2.The difference between distributions declared and net income before
depreciation is allocated to the partners according to partnership interests
3. Depreciation expense is allocated to the partners proportionally according to
their original capital contributions to the partnership.
3. New Accounting Standards and Disclosures
SFAS 142
In June 2001, the FASB issued SFAS 142, Goodwill and Other Intangible Assets,
which eliminates the amortization of goodwill and other acquired intangible
assets with indefinite economic useful lives. SFAS 142 requires an annual
impairment test of goodwill and other intangible assets that are not subject to
amortization. Other intangible assets with definite economic lives will continue
to be amortized over their useful lives. The Trust adopted SFAS 142 effective
January 1, 2002, with no material impact on the consolidated financial
statements.
SFAS 143
In June 2001, the FASB issued SFAS 143, Accounting for Asset Retirement
Obligations, on the accounting for obligations associated with the retirement of
long-lived assets. SFAS 143 requires a liability to be recognized in the
consolidated financial statements for retirement obligations meeting specific
criteria. Measurement of the initial obligation is to approximate fair value,
with an equivalent amount recorded as an increase in the value of the
capitalized asset. The asset will be depreciated in accordance with normal
depreciation policy and the liability will be increased for the time value of
money, with a charge to the income statement, until the obligation is settled.
SFAS 143 is effective for fiscal years beginning after June 15, 2002. The Trust
adopted SFAS 143 effective January 1, 2003, with no material impact on the
consolidated financial statements.
SFAS 144
In August 2001, the FASB issued SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which replaces SFAS 121, Accounting for the
Impairment of Long-lived Assets and for Long-Lived Assets to Be Disposed Of. For
long-lived assets to be held and used, SFAS 144 retains the requirements of SFAS
121 to (a) recognize an impairment loss only if the carrying amount is not
recoverable from undiscounted cash flows and (b) measure an impairment loss as
the difference between the carrying amount and fair value of the asset. For
long-lived assets to be disposed of, SFAS 144 establishes a single accounting
model based on the framework established in SFAS 121. The accounting model for
long-lived assets to be disposed of by sale applies to all long-lived assets,
including discontinued operations and replaces the 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 segments of a business. SFAS 144
also broadens the reporting of discontinued operations. The Trust adopted SFAS
144 effective January 1, 2002, with no material impact on the consolidated
financial statements.
SFAS 145
In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Correction.
SFAS No. 145 eliminates extraordinary accounting treatment for reporting gain or
loss on debt extinguishment, and amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. The Trust adopted SFAS
145 effective January 1, 2003, with no material impact on the consolidated
financial statements.
SFAS 146
In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. SFAS No. 146 requires recording costs associated
with exit or disposal activities at their fair values when a liability has been
incurred. The Trust adopted SFAS 146 effective January 1, 2003, with no material
impact on the consolidated financial statements.
FIN 45
In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees and Indebtedness of Others." FIN 45 elaborates on the
disclosures to be made by the guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also requires that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while the provisions of the disclosure
requirements are effective for financial statements of interim or annual reports
ending after December 15, 2002. The Trust adopted the disclosure provisions of
FIN 45 during the fourth quarter of 2002 with no material impact to the
consolidated financial statements.
FIN 46
In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46") which changes the criteria by which one
company includes another entity in its consolidated financial statements. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns or both. The consolidation requirements of FIN 46 apply immediately to
variable interest entities created after January 31, 2003, and apply in the
first fiscal period beginning after June 15, 2003, for variable interest
entities created prior to February 1, 2003. The Trust adopted the disclosure
provisions of FIN 46 effective July 1, 2003, with no material impact to the
consolidated financial statements.
SFAS 150
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150
establishes standards for classifying and measuring certain financial
instruments with characteristics of both liabilities and equity. The Trust
adopted SFAS 150 effective July 1, 2003, with no material impact on the
consolidated financial statements.
4. Sale of Investments
On September 20, 2002, the Trust, sold 100% of its ownership interest in the B-3
Limited Partnership ("B-3") and the Pittsfield Investors Limited Partnership
("PILP"), to EAC Operations, Inc., the other limited partner of both entities.
The acquisition agreement provides for the sale of 100% of the Trust's ownership
in the two partnerships in return for $1,200,000 cash and $5,000,000 of interest
bearing promissory notes. The notes bear interest at a rate of 10% per annum,
and will be repaid monthly over a 17 year term, of which the first two years of
payments will consist of interest only. The notes are collateralized by all the
assets of the partnerships.
The purchase price for B-3 was $3,400,000, of which $400,000 was paid in cash at
the time of closing. The purchase price for PILP was $2,800,000, of which
$800,000 was paid in cash at the time of closing. The Trust wrote off its
investment in PILP in 1998.
Recovery of interest and principal under the promissory notes is dependent
solely upon the operating results of the limited partnership investments sold.
Consequently, in accordance with SEC Staff Accounting Bulletin Topic 5E, the
Trust has not reflected the transaction as a sale. The cash proceeds received
were recorded as a reduction of its investment in the limited partnership
investments and interest and principal received under the promissory note will
continue to be recorded as a reduction of investment balance until the carrying
value has been reduced to zero. In the event the divested business incurs
operating losses in future periods, a corresponding reduction in investment will
be recorded as a valuation allowance.
5. Related Party Transactions
At March 31, 2003 and December 31, 2002, the Trust had outstanding payables and
receivables, with the following affiliates:
Due To Due From
---------------------- ---------------------
March 31, December 31, March 31, December 31,
2003 2002 2003 2002
------- -------- ------- --------
Ridgewood Power Management LLC $ -- $ -- $49,280 $47,169
Other affiliates ............. 17,917 14,512 714 714
From time to time, the Trust records short-term payables and receivables from
other affiliates in the ordinary course of business. The amounts payable and
receivable with the other affiliates do not bear interest.
6. Financial Information by Business Segment
The Trust's business segments were determined based on similarities in economic
characteristics and customer base. The Trust's principal business segments
consist of wholesale and retail.
Common services shared by the business segments are allocated on the basis of
identifiable direct costs, time records or in proportion to amount invested in
projects managed by Ridgewood Management.
The financial data for business segments are as follows:
Wholesale
--------------------------------------------
For the Three Months Ended March 31,
--------------------------------------------
2003 2002
-------------------- --------------------
Revenue $556,114 $545,054
Depreciation and
amortization 61,512 61,516
Operating income (loss) 121,959 (5,356)
Total assets 3,714,573 3,851,656
Capital expenditures -- (3,305)
Retail
---------------------------------------------
For the Three Months Ended March 31,
---------------------------------------------
2003 2002
-------------------- ---------------
Revenue $112,700 $191,731
Depreciation and
amortization 26,435 25,035
Operating income (loss) (40,370) 25,615
Total assets 342,719 575,276
Capital expenditures -- --
Corporate
---------------------------------------------
For the Three Months Ended March 31,
---------------------------------------------
2003 2002
-------------------- ---------------
Revenue $ -- $ --
Depreciation and
amortization -- --
Operating loss (63,262) (42,302)
Total assets 2,977,511 3,523,749
Capital expenditures -- --
Total
---------------------------------------------
For the Three Months Ended March 31,
---------------------------------------------
2003 2002
-------------------- ---------------
Revenue $668,814 $736,785
Depreciation and
amortization 87,947 86,551
Operating income (loss) 18,327 (22,043)
Total assets 7,034,803 7,950,681
Capital expenditures -- (3,305)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Dollar amounts in this discussion are rounded to the nearest $1,000.
Introduction
The consolidated financial statements include the accounts of the Trust and the
limited partnerships owning the Monterey and California Pumping Projects. The
Trust uses the equity method of accounting for its investment in the B-3 Limited
Partnership, in which the Trust owned a 50.01% non-controlling interest through
September 20, 2002.
Critical Accounting Policies and Estimates
For a complete discussion of critical accounting policies, refer to "Significant
Accounting Policies" in Item 7 of the Trust's 2002 Form 10-K. There have been no
substantive changes to those policies and estimates.
Results of Operations
Power generation revenue decreased $68,000, or 9.2%, to $669,000 in the first
quarter of 2003 compared to $737,000 in the first quarter of 2002. The decrease
is primarily due to the rainy weather experienced in Southern California, thus
reducing the California Pumping project's operations.
Gross profit increased by $46,000 to $85,000 in the first quarter of 2003. The
increase is a result of the Monterey project incurring lower maintenance
expenses.
General and administrative expenses and the management fee for the first quarter
were consistent with the prior year.
Interest income decreased from $18,000 in the first quarter of 2002 to $8,000 in
the first quarter of 2003 due to the decrease in the note receivable principal
balance and the lower interest rates paid on cash deposits.
Equity loss from the B-3 Limited Partnership was $48,000 in the first quarter of
2002. The Trust transferred its partnership interest in the third quarter of
2002.
Liquidity and Capital Resources
Cash used in operating activities for the three months ended March 31, 2003 was
$74,000 as compared to $147,000 for the three months ended March 31, 2002. The
increase in cash flow from operating activities is primarily due to the increase
in net income, which is attributable to the Monterey project's improved
operations.
Cash provided by investing activities for the first quarter of 2003 increased to
$271,000 from $130,000 for the first quarter of 2002. The increase in cash flow
is primarily due to the $133,000 of payments received from the sale of the B-3
and PILP Limited Partnerships.
Cash used in financing activities for the first three months of 2003 was
$357,000 compared to zero for the first three months of 2002. The use of cash
flow in financing activities is due to distributions made to shareholders.
On June 26, 2003, Ridgewood Renewable Power LLC, the Managing Shareholder of the
Trust, entered into a $5,000,0000 Revolving Credit and Security Agreement with
Wachovia Bank, National Association. The agreement allows the Managing
Shareholder to obtain loans and letters of credit for the benefit of the trusts
and funds that it manages. The agreement expires on June 30, 2004. As part of
the agreement, the Trust agreed to limitations on its ability to incur
indebtedness and liens and make guarantees.
The Trust has historically financed its operations from cash generated from its
subsidiaries' operations. Obligations of the Trust are generally limited to
payment of the management fee to the Managing Shareholder and payment of certain
accounting and legal services to third parties. The Trust expects that its cash
flows from operations and cash on hand will be sufficient to fund its
obligations and any distributions declared for the next twelve months.
Item 4. Controls and Procedures
Based on their evaluation, as of a date within 90 days of the filing date of
this Form 10-Q, the Trust's Chief Executive Officer and Chief Financial Officer
have concluded that the Trust's disclosure controls and procedures (as defined
in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as
amended) are effective. There have been no significant changes in internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses. Management has
identified deficiencies in the Trust's ability to process and summarize
financial information of certain individual projects and equity investees on a
timely basis. Management is establishing a project plan to address this
deficiency.
Forward-looking statement advisory
This Quarterly Report on Form 10-Q, as with some other statements made by the
Trust from time to time, contains forward-looking statements. These statements
discuss business trends and other matters relating to the Trust's future results
and the business climate and are found, among other places, in the notes to
financial statements and at Part I, Item 2, Management's Discussion and
Analysis. In order to make these statements, the Trust has had to make
assumptions as to the future. It has also had to make estimates in some cases
about events that have already happened, and to rely on data that may be found
to be inaccurate at a later time. Because these forward-looking statements are
based on assumptions, estimates and changeable data, and because any attempt to
predict the future is subject to other errors, what happens to the Trust in the
future may be materially different from the Trust's statements here.
The Trust therefore warns readers of this document that they should not rely on
these forward-looking statements without considering all of the things that
could make them inaccurate. The Trust's other filings with the Securities and
Exchange Commission and its Confidential Memorandum discuss many (but not all)
of the risks and uncertainties that might affect these forward-looking
statements.
Some of these are changes in political and economic conditions, federal or state
regulatory structures, government taxation, spending and budgetary policies,
government mandates, demand for electricity and thermal energy, the ability of
customers to pay for energy received, supplies of fuel and prices of fuels,
operational status of plant, mechanical breakdowns, availability of labor and
the willingness of electric utilities to perform existing power purchase
agreements in good faith. Some of the cautionary factors that readers should
consider are described in the Trust's most recent Annual Report on Form 10-K.
By making these statements now, the Trust is not making any commitment to revise
these forward-looking statements to reflect events that happen after the date of
this document or to reflect unanticipated future events.
PART II - OTHER INFORMATION
None
SIGNATURES
Pursuant to the requirement 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.
RIDGEWOOD ELECTRIC POWER TRUST II
Registrant
August 27, 2003 By /s/ Christopher I. Naunton
Date Christopher I. Naunton
Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)
CERTIFICATION
I, Robert E. Swanson, Chief Executive Officer of Ridgewood Electric Power Trust
II ("registrant"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of the registrant;
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
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer 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 we 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 90 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 officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and senior management:
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 officer and I have indicated in this
quarterly report whether or not 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.
Date: August 27, 2003
/s/ Robert E. Swanson
- -----------------------
Robert E. Swanson
Chief Executive Officer
CERTIFICATION
I, Christopher I. Naunton, Chief Financial Officer of Ridgewood Electric Power
Trust II ("registrant"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of the registrant;
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
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer 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 we 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 90 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 officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and senior management:
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 officer and I have indicated in this
quarterly report whether or not 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.
Date: August 27, 2003
/s/ Christopher I. Naunton
- --------------------------
Christopher I. Naunton
Chief Financial Officer