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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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(Mark one)
[X] Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities and Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
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 1-14020
CASTLE & COOKE, INC.
(Exact name of registrant as specified in its charter)
HAWAII 77-0412800
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10900 WILSHIRE BOULEVARD, 16TH FLOOR
LOS ANGELES, CA 90024
(Address of principal executive offices and zip code)
(310) 208-3636
(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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS SHARES OUTSTANDING AT AUGUST 7, 1997
----- ------------------------------------
Common Stock, without par value 19,981,976 shares
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CASTLE & COOKE, INC.
FORM 10-Q
FOR THE QUARTER ENDED
JUNE 30, 1997
TABLE OF CONTENTS
PAGE
NUMBER
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -- June 30, 1997 and December 31, 1996 . . . . . . . . . . . . 3
Consolidated Statements of Operations -- Quarter and six months ended June 30, 1997
and June 30, 1996. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -- Six months ended June 30, 1997
and June 30, 1996. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2
CASTLE & COOKE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, December 31,
1997 1996
(UNAUDITED) (AUDITED)
Cash and cash equivalents $ 2,749 $ 5,663
Receivables, net 31,048 32,567
Real estate developments 512,365 511,358
Property and equipment, net 447,745 444,435
Income tax receivable - 9,209
Other assets 17,712 16,590
----------- -----------
Total assets $ 1,011,619 $ 1,019,822
----------- -----------
----------- -----------
Notes payable $ 143,666 $ 142,130
Note payable to Dole 10,000 10,000
Accounts payable 12,726 16,630
Accrued liabilities 26,870 30,150
Deferred income taxes 171,801 172,819
Deferred income and other liabilities 27,423 29,086
----------- -----------
Total liabilities 392,486 400,815
----------- -----------
Redeemable preferred stock 36,050 35,700
Common shareholders' equity
Common stock 511,148 511,075
Retained earnings 71,935 72,232
----------- -----------
Total common shareholders' equity 583,083 583,307
----------- -----------
Total liabilities and shareholders' equity $ 1,011,619 $ 1,019,822
----------- -----------
----------- -----------
The accompanying notes are an integral part of these consolidated balance
sheets.
3
CASTLE & COOKE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT EARNINGS (LOSS) PER COMMON SHARE AMOUNTS)
Quarter Ended Six Months Ended
JUNE 30, JUNE 30,
------------------------ -----------------------
1997 1996 1997 1996
------- ------- -------- --------
REVENUES
Residential property sales $27,046 $55,359 $ 53,973 $100,290
Resort revenues 15,282 11,169 30,284 30,488
Commercial and other revenues 12,729 14,107 24,978 26,915
------- ------- -------- --------
Total revenues 55,057 80,635 109,235 157,693
COST OF OPERATIONS
Cost of residential property sales 24,374 47,018 48,466 87,016
Cost of resort operations 17,928 15,747 36,161 36,136
Cost of commercial and other operations 7,529 9,007 14,814 17,251
General and administrative expenses 3,588 3,455 7,292 6,890
------- ------- -------- --------
Total cost of operations 53,419 75,227 106,733 147,293
------- ------- -------- --------
Operating income 1,638 5,408 2,502 10,400
Interest and other income, net 697 381 1,064 821
Interest expense, net 209 643 584 1,632
------- ------- -------- --------
Income before income taxes 2,126 5,146 2,982 9,589
Income tax provision (840) (2,033) (1,178) (3,788)
------- ------- -------- --------
Net income 1,286 3,113 1,804 5,801
Preferred stock dividend and accretion (1,050) (1,047) (2,100) (2,107)
------- ------- -------- --------
Net income (loss) available to
common shareholders $236 $2,066 $(296) $3,694
------- ------- -------- --------
Earnings (loss) per common share $0.01 $0.10 $ (0.01) $0.19
------- ------- -------- --------
------- ------- -------- --------
Average number of common shares outstanding 19,957 19,955 19,957 19,953
------- ------- -------- --------
------- ------- -------- --------
The accompanying notes are an integral part of these consolidated financial
statements.
4
CASTLE & COOKE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
SIX MONTHS ENDED
--------------------
June 30, June 30,
1997 1996
------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,804 $ 5,801
Adjustments to reconcile net income to cash flow
provided by operating activities:
Depreciation and amortization 8,822 8,813
Other 40 -
Changes in operating assets and liabilities:
Decrease in receivables, net 1,519 4,814
(Increase) decrease in real estate developments (46) 33,809
Decrease in income tax receivable 7,083 -
Decrease in accounts payable (3,904) (8,976)
(Decrease) increase in accrued liabilities (3,271) 2,949
Increase (decrease) in deferred income taxes 1,108 (8,719)
Net change in other assets and liabilities (2,630) (2,776)
-------- --------
Net cash provided by operating activities 10,525 35,715
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (13,248) (10,324)
-------- --------
Net cash used in investing activities (13,248) (10,324)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (reduction) under revolving loan agreement 1,536 (26,855)
Proceeds from exercise of stock options 33 47
Preferred stock dividends paid (1,760) (1,118)
-------- --------
Net cash used in financing activities (191) (27,926)
-------- --------
Net decrease in cash and cash equivalents (2,914) (2,535)
Cash and cash equivalents at beginning of period 5,663 4,781
-------- --------
Cash and cash equivalents at end of period $ 2,749 $ 2,246
-------- --------
-------- --------
SUPPLEMENTAL CASH FLOW DATA
Interest paid, net of amount capitalized $ 593 $ 721
Income taxes paid 71 12,507
The accompanying notes are an integral part of these consolidated financial
statements.
5
CASTLE & COOKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared
by Castle & Cooke, Inc. ("the Company"), without audit, and include all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the results of operations for the quarters and six months
ended June 30, 1997 and June 30, 1996, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that
the disclosures in such financial statements are adequate to make the
information presented not misleading. The consolidated financial statements
should be read in conjunction with the Company's consolidated financial
statements and the notes thereto for the year ended December 31, 1996,
included in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
The Company was formed on October 10, 1995 to be the successor of the
assets and related liabilities of the real estate and resorts business of
Dole Food Company, Inc. and its subsidiaries ("Dole"). On December 28, 1995,
Dole completed the separation of its real estate and resorts business from
its food business through a pro rata distribution of the stock of the Company
to its shareholders.
The Company's operating results are subject to significant variability as
a result of, among other things, the receipt of regulatory approvals, status
of development in particular projects and the timing of sales in developed
projects, income producing properties, and non-income producing properties.
The results of operations for the quarter and six months ended June 30, 1997,
are not necessarily indicative of the results to be expected for the full
year. In addition, the statements contained herein, which are not historical
facts, are forward-looking statements based on economic forecasts, strategic
plans and other factors that, by their nature, involve risk and
uncertainties. In particular, among the factors that could cause actual
results to differ materially are the following: business conditions and
general economy; competitive factors; political decisions affecting land use
permits, capital resources, interest rates and other risks inherent in the
real estate business.
Certain reclassifications have been made to the 1996 consolidated
financial statements to conform to the 1997 presentation.
NOTE 2. COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries are contingently liable as joint
indemnitors to surety companies for subdivision, off-site improvement and
construction bonds issued on their behalf.
The Company is a defendant in several lawsuits arising in the normal course
of business. In the opinion of management, the final resolution of these
lawsuits will not have a material adverse effect on its financial position or
results of operations.
NOTE 3. NEW ACCOUNTING PRONOUNCEMENT
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS
No. 128"). SFAS No. 128 revises and simplifies the computation for earnings per
share and requires certain additional disclosures. The Company will adopt this
standard in the fourth quarter of 1997. The adoption of this standard is not
expected to have an effect on the Company's earnings per share.
6
CASTLE & COOKE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
REVENUES
Second quarter consolidated revenues decreased from $80.6 million in 1996
to $55.1 million in 1997, and consolidated revenues for the first six months of
the year decreased from $157.7 million in 1996 to $109.2 million in 1997. Second
quarter residential property sales decreased from $44.2 million in 1996 to $27.0
million in 1996, excluding the sale of approximately 3,000 acres of agricultural
land in Bakersfield for $11.2 million in 1996. Residential property sales for
the first six months of the year decreased from $89.1 million in 1996 to $54.0
million in 1997, excluding the agricultural land sale in 1996. Second quarter
deliveries decreased from 155 homes in 1996 to 88 homes in 1997, and deliveries
for the first six months decreased from 296 homes in 1996 to 161 in 1997. The
average price per home decreased in the first six months from $266,000 in 1996
to $254,000 in 1997. The decrease in residential property sales, deliveries and
the average price per home sold was primarily due to a soft residential market
on Oahu. Second quarter resort revenues increased from $11.2 million in 1996 to
$15.3 million in 1997. This increase was primarily due to improved occupancy
and room rates at the resorts and increased luxury resort residential sales of
$2.8 million. Second quarter commercial and other revenues decreased from $14.1
million in 1996 to $12.7 million in 1997. This decrease in revenue is primarily
due to: (1) the sale of two Bakersfield industrial/commercial land parcels in
the second quarter 1996; (2) the sale of three Mississippi apartment complexes
and a Bakersfield commercial office building in the third quarter of 1996;
which was partially offset by (3) the opening of the Marketplace Shopping
Center in the fourth quarter of 1996.
COST AND EXPENSES
Second quarter consolidated cost of operations decreased from $75.2 million
in 1996 to $53.4 million in 1997, and consolidated cost of operations for the
first six months decreased from $147.3 million in 1996 to $106.7 million in
1997. The cost of residential property sales as a percentage of residential
property sales increased from 85% in the second quarter of 1996 to 90% in the
second quarter of 1997, excluding the agricultural land sale in 1996. The cost
of residential property sales as a percentage of residential property sales
increased from 87% in the first six months of 1996 to 90% in the first six
months of 1997, excluding the agricultural land sale. The increases are
primarily due to aggressive marketing programs and sales incentives used in the
Oahu residential operations, which have been necessary to stimulate activity in
the soft market. The 1996 agricultural land sale generated approximately $1.9
million in operating income. Excluding luxury resort residential sales and
depreciation, the cost of resort operations as a percentage of resort revenues
improved from 121% in the second quarter of 1996 to 108% in the second quarter
of 1997. This improvement is primarily due to increased occupancy and average
daily room rates. Since a significant portion of the resort operation's costs
are fixed costs, these costs will not increase or decrease proportionately as
occupancy and resort revenues increase or decrease. The second quarter luxury
resort residential operating margin improved from a loss of $74,000 in 1996 to
operating income of $824,000 in 1997. The luxury resort residential operating
margin improved from $648,000 in the first six months of 1996 to $905,000 in the
first six months of 1997. Resort depreciation increased from $2.2 million in
the second quarter of 1996 to $2.4 million in the second quarter of 1997.
Resort depreciation increased from $4.3 million for the first six months of 1996
to $4.7 million in the first six months of 1997.
7
CASTLE & COOKE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COST AND EXPENSES (CONTINUED)
Second quarter cost of commercial and other operations as a percentage of
commercial and other operations revenues improved from 64% in 1996 to 59% in
1997. This improvement is primarily due to the sale of two
industrial/commercial land parcels in Bakersfield in 1996. These sales had a
combined profit margin of 12%.
Total interest incurred in the second quarter and the first six months of
1997 was $3.0 million and $5.9 million, respectively. Total interest
capitalized into real estate development in the second quarter and first six
months of 1997 was $2.8 million and $5.3 million, respectively. Total
interest incurred in the second quarter and the first six months of 1996 was
$3.1 million and $6.8 million, respectively. Total interest capitalized into
real estate development in the second quarter and first six months of 1996
was $2.5 million and $5.2 million, respectively. Total borrowings were
$153.7 million at June 30, 1997 compared to $168.1 million at June 30, 1996.
Amortization in cost of sales of previously capitalized interest totaled
approximately $612,000 and $618,000 for the second quarters of 1997 and 1996,
respectively.
NET INCOME AND EARNINGS PER SHARE
Preferred stock dividend and accretion relates to the $35 million
cumulative preferred stock issued in connection with the Company's separation
from Dole in December of 1995.
Second quarter net income available to common shareholders decreased from
$2.1 million in 1996 to $236,000 in 1997. The net loss available to common
shareholders for the first six months of 1997 was ($296,000) compared to net
income of $3.7 million in 1996. These decreases are primarily due to lower
operating results described above.
BACKLOG
The Company's new orders and backlog for homes for 1997 compared to 1996
were as follows:
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ -----------------------
1997 1996 1997 1996
-------- -------- -------- --------
Units
Backlog at beginning of the period 65 193 55 133
Add: new orders 105 83 188 284
Less: deliveries (88) (155) (161) (296)
-------- -------- -------- --------
Backlog at end of the period 82 121 82 121
-------- -------- -------- --------
-------- -------- -------- --------
Dollars
Backlog at beginning of the period $ 18,711 $48,572 $ 15,143 $ 34,298
Add: new orders 27,898 24,583 50,442 78,138
Less: deliveries (22,475) (39,354) (41,451) (78,635)
-------- -------- -------- --------
Backlog at end of the period $ 24,134 $ 33,801 $ 24,134 $ 33,801
-------- -------- -------- --------
-------- -------- -------- --------
The decrease in new orders and deliveries for the first six months of 1997 as
compared to 1996 is primarily due to a soft residential housing market on Oahu.
8
CASTLE & COOKE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital to operate its resorts, to purchase and
develop land, to construct homes and homesites and to acquire, develop and
operate commercial property.
On May 16, 1997, the Company's existing credit agreement with a syndicate
of banks was amended and restated (the "Credit Agreement"). Pursuant to this
Credit Agreement, the banks agreed to provide a three-year revolving credit of
up to $250 million, based upon a percentage of value of certain commercial
properties and home building inventory (the "Borrowing Base"). At June 30,
1997, the Borrowing Base allows the Company to borrow up to $240.9 million. The
Borrowing Base is expected to be increased to the $250 million limit upon the
addition of certain real estate holdings. The Credit Agreement bears interest
at a variable rate based on the London Interbank Offered Rate ("LIBOR") or at an
alternative rate based upon a designated bank's prime rate or the federal funds
rate. At June 30, 1997, total borrowings under the Credit Agreement were $143.7
million and the weighted average interest rate was 7.02%. At June 30, 1997, the
Company is in compliance with the various financial covenants of the Credit
Agreement.
On Oahu, the Leilehua, Verifone, Cannery Development, Town Center of
Mililani, and Dole Plantation properties are pledged as collateral pursuant
to the Credit Agreement. On the mainland, the Marketplace, Schirra Court,
10000 Ming, Premier Plaza, Landmark Center, Horizon at Six Forks, Regents
Center, and One Norman Square properties are also pledged as collateral. In
connection with this agreement, independent third parties performed an
appraisal of each pledged property in the first quarter of 1997. The total
appraised value of these properties was $260.7 million. The undeveloped land
associated with these properties was not valued in connection with these
appraisals.
The Company believes that funds available under the Credit Agreement and
cash generated from operations combined with selective sales of commercial
and other properties from time to time will be adequate for its short-term
and long-term cash needs. There can be no assurance, however, that the
amounts available from such sources will be sufficient. The Company may be
required to seek additional capital in the form of public equity or debt
offerings or from a variety of potential sources, including additional bank
financing.
Residential development spending was $35.3 million in the first six
months of 1997. Spending during the first six months of 1997 at the
Mililani, Royal Kunia and Lalea residential developments on Oahu was
approximately $15.7 million, $4.0 million and $5.5 million, respectively.
Combined spending during the first six months of 1997 at the Bakersfield and
Arizona residential developments was approximately $8.4 million. The Company
expects to spend approximately $11.4 million in 1997 for the new Keene's
Point development in Orlando, Florida. The initial land purchase, which is
currently in escrow, is expected to close in the third quarter of 1997 with
lot sales commencing in the first quarter of 1998.
Total resort development and capital spending was approximately
$6.2 million during the first six months of 1997. Spending at the Manele and
Koele luxury home developments during the first six months of 1997 was
approximately $3.2 million and $1.0 million, respectively.
9
CASTLE & COOKE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Capital expenditures at the commercial projects totaled $11.3
million during the first six months of 1997 and primarily related to the
construction of the 299,000 square foot Marketplace shopping center in
Bakersfield, California ($4.4 million) and the 127,000 square foot Premier
Plaza II office building in Atlanta, Georgia ($4.1 million). During the
remainder of 1997, the Company expects to spend approximately $3.0 million
and $9.0 million on construction of the Marketplace and Premier II,
respectively. Phases I and II of the Marketplace, consisting of approximately
214,000 square feet are 97% leased. Construction on phase III is expected to
begin in the fourth quarter of 1997. Leases have been executed for 16% of
the Premier II building and letters of intent have been signed for an
additional 35%. The Company expects to spend approximately $3.7 million
during the remainder of 1997 on the construction of Regents II, a 41,000
square foot commercial office building adjacent to the Company's fully leased
Regents Center in Tempe, Arizona. Construction is expected to be completed in
the fourth quarter of 1997. A letter of intent was recently signed by a
single tenant to lease the entire 41,000 square feet. The Company recently
began construction on an 18-hole daily fee golf course adjacent to the
Company's existing course in San Jose, California. Construction costs in
1997, relating to this Jack Nicklaus designed course, are expected to be
approximately $6.0 million.
Cash flow from operating activities decreased $25.2 million during
the first six months of 1997 as compared to the corresponding period in 1996.
The decrease is primarily due to a net decrease in real estate projects of
$33.8 million in 1996 due to weak market conditions on Oahu. Cash flow used
in investing activities increased $2.9 million during the first six months of
1997 as compared to the corresponding period in 1996. The increase is
primarily due to capital spending relating to the construction of the
Marketplace shopping center and Premier Plaza II office building as explained
above. Cash flow used in financing activities decreased $27.7 million during
the first six months in 1997 as compared to the corresponding period in 1996.
The decrease is primarily due to net reductions under the Credit Agreement
(or its predecessor) of $26.9 million during the first six months of 1996
compared to net borrowings of $1.5 million in 1997.
10
CASTLE & COOKE, INC.
PART II.
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Castle & Cooke, Inc. held its Annual Meeting of Stockholders
(the "Meeting") on May 21, 1997, at which the Company's
stockholders voted: (1) to elect the nominated slate of seven
directors, each to serve until the next meeting and until his or
her successor has been duly elected and qualified: Edward M.
Carson, Lodwrick M. Cook, Edward J. Hogan, Wallace S. Miyahira,
David H. Murdock, Lynne Scott Safrit, and Dell Trailor; and (2) to
elect Arthur Andersen LLP as the Company's independent public
accountants and auditors for the 1997 fiscal year.
Holders of record of the Company's common stock as of April 2,
1997 were entitled to vote at the meeting. On April 2, 1997,
there were 19,957,084 shares of common stock outstanding and
entitled to vote and 17,281,087 were represented at the Meeting.
Each of the directors received at least 99.0% of the shares cast
in favor of his or her election. The shares cast for each director
are as follows: Edward M. Carson: 17,197,354 for and 83,733
withheld; Lodwrick M. Cook: 17,196,502 for and 84,585 withheld;
Edward J. Hogan: 17,197,350 for and 83,737 withheld; Wallace S.
Miyahira: 17,197,411 for and 83,676 withheld; David H. Murdock:
17,193,777 for and 87,310 withheld; Lynne Scott Safrit: 17,196,846
for and 84,241 withheld; Dell Trailor: 17,195,966 for and 85,121
withheld. With respect to the election of Arthur Andersen LLP,
the shares cast were 17,231,846 shares for 29,552 shares against,
and 19,689 shares in abstention.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
No.
-------
4.2 Amended and Restated Credit Agreement dated as of May 16, 1997,
among Castle & Cooke, Inc., as Borrower, and the Lenders named
therein, and The Chase Manhattan Bank, as Administrative Agent
and Collateral Agent.
27 Financial Data Schedule
(b) Reports on Form 8-K
THE REGISTRANT FILED NO REPORTS ON FORM 8-K DURING THE QUARTER
ENDED JUNE 30, 1997.
All other items required under Part II are omitted because they are not
applicable.
11
CASTLE & COOKE, INC.
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.
CASTLE & COOKE, INC.
Registrant
Date: August 13, 1997 BY /S/ EDWARD C. ROOHAN
-----------------------------------
Edward C. Roohan
Vice President and
Chief Financial Officer
(Principal financial officer)
Date: August 13, 1997 BY /S/ SCOTT J. BLECHMAN
-----------------------------------
Scott J. Blechman
Vice President and
Corporate Controller
(Principal accounting officer)
12