SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______________ TO
______________
Commission file number 001-11769
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KEY PRODUCTION COMPANY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 84-1089744
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
707 Seventeenth Street, Suite 3300 Denver, Colorado 80202-3404
- ---------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 303/295-3995.
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
----- -----
The number of shares of Key Production Company, Inc. common stock, $.25 par
value, outstanding as of March 31, 2000, is 11,614,437.
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PART 1 - FINANCIAL INFORMATION
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ITEM 1 - FINANCIAL STATEMENTS
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KEY PRODUCTION COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
For the Three Months
March 31,
--------------------
(In thousands, except per share data) 2000 1999
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Revenues:
Natural gas production...................... $ 8,409 $ 6,087
Oil production.............................. 10,463 3,654
Plant production............................ 362 164
Other....................................... 99 100
-------- --------
19,333 10,005
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Operating Expenses:
Depreciation, depletion and
amortization............................... 7,944 5,279
Lease operating............................. 2,714 1,980
Production taxes............................ 564 635
General and administrative.................. 720 547
Financing costs:
Interest expense........................... 1,132 962
Capitalized interest....................... (342) (319)
Interest income............................ (48) (23)
-------- --------
12,684 9,061
-------- --------
Income Before Income Taxes................... 6,649 944
Provision for Income Taxes................... 2,460 359
-------- --------
Net Income................................... $ 4,189 $ 585
======== ========
Basic Earnings Per Share..................... $ .36 $ .05
======== ========
Diluted Earnings Per Share................... $ .34 $ .05
======== ========
Weighted Average Common Shares Outstanding... 11,595 11,518
======== ========
Weighted Average Diluted Shares Outstanding.. 12,202 11,995
======== ========
The accompanying notes to consolidated financial statements
are an integral part of this statement.
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KEY PRODUCTION COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For the Three Months
March 31,
------------------
(In thousands, except per share data) 2000 1999
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Cash Flows from Operating Activities:
Net income $ 4,189 $ 585
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 7,944 5,279
Deferred income taxes 2,194 321
Changes in operating assets and liabilities:
Increase in receivables (1,956) (1,858)
(Increase) decrease in prepaid expenses
and other 643 (108)
Decrease in accounts payable and
accrued expenses (598) (1,338)
Increase in long-term property
liabilities and other 301 17
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Net cash provided by operating activities 12,717 2,898
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Cash Flows from Investing Activities:
Oil and gas exploration and development
expenditures (11,861) (8,188)
Acquisition of proved oil and gas reserves (80) (75)
Proceeds from sale of oil and gas properties 53 134
Other capital expenditures (69) (45)
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Net cash used by investing activities (11,957) (8,174)
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Cash Flows From Financing Activities:
Long-term borrowings - 5,000
Payments on long-term debt (3,000) -
Payments to acquire treasury stock (1) (1)
Proceeds from issuance of common stock 23 -
-------- -------
Net cash provided (used) by financing
activities (2,978) 4,999
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Net Decrease in Cash and Cash Equivalents (2,218) (277)
Cash and Cash Equivalents at Beginning of Year 6,087 4,720
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Cash and Cash Equivalents at End of Period $ 3,869 $ 4,443
======== =======
The accompanying notes to consolidated financial statements
are an integral part of this statement.
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KEY PRODUCTION COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31, December 31,
(In thousands) 2000 1999
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ASSETS
Current Assets:
Cash and cash equivalents $ 3,869 $ 6,087
Receivables 14,162 12,206
Prepaid expenses and other 580 1,223
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18,611 19,516
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Oil and Gas Properties, on the basis of
full cost accounting:
Proved properties 232,902 223,285
Unproved properties and properties
under development, not being amortized 19,391 18,104
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252,293 241,389
Less - accumulated depreciation,
depletion and amortization (93,743) (85,990)
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158,550 155,399
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Other Assets, net 1,820 1,942
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$ 178,981 $ 176,857
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 12,310 $ 13,189
Accrued exploration and development 1,404 2,388
Accrued lease operating expense and other 2,229 1,901
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15,943 17,478
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Long-Term Debt 57,000 60,000
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Non-current Liabilities:
Deferred income taxes 24,049 21,855
Long-term property liabilities and other 952 651
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25,001 22,506
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Stockholders' Equity:
Common stock, $.25 par value, 50,000,000
shares authorized, 11,847,915 and
11,820,190 shares issued, respectively 2,962 2,955
Paid-in capital 37,550 37,557
Retained earnings 42,707 38,518
Treasury stock at cost, 233,478, and
232,887 shares, respectively (2,182) (2,157)
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81,037 76,873
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$ 178,981 $ 176,857
========== ===========
The accompanying notes to consolidated financial statements
are an integral part of this statement.
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KEY PRODUCTION COMPANY, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Total
Stock-
Common Paid-in Retained Treasury holders'
Stock Capital Earnings Stock Equity
------ -------- -------- --------- --------
(In thousands, except per share data)
Balance, December 31, 1999 $2,955 $37,557 $ 38,518 $ (2,157) $ 76,873
Net income - - 4,189 - 4,189
Common stock issued 7 (16) - - (9)
Treasury stock issued - 9 - 51 60
Treasury stock purchased - - - (76) (76)
------ ------- -------- ------- --------
Balance, March 31, 2000 $2,962 $37,550 $ 42,707 $(2,182) $ 81,037
====== ======= ======== ======= ========
The accompanying notes to consolidated financial statements
are an integral part of this statement.
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KEY PRODUCTION COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Introduction
The accompanying financial statements are unaudited and were prepared from
our records. Our management believes these financial statements include all
adjustments necessary for a fair presentation of our financial position and
results of operations. All adjustments are of a normal and recurring nature
unless specifically noted. We prepared these statements on a basis consistent
with our annual audited statements and Regulation S-X. Regulation S-X allows us
to omit some of the footnote and policy disclosures required by generally
accepted accounting principles and normally included in annual reports on Form
10-K. You should read these interim financial statements together with the
financial statements, summary of significant accounting policies and notes in
our most recent annual report on Form 10-K.
Basis of Presentation
We included the accounts of Key and its subsidiaries in the accompanying
consolidated financial statements. All intercompany accounts and transactions
were eliminated in consolidation.
Use of Estimates
We rely on estimates and assumptions made by our management to prepare
financial statements in conformity with generally accepted accounting
principles. Those estimates and assumptions affect the reported amounts of
assets and liabilities and 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.
Income Taxes
Income tax expense consisted of the following:
Three Months Ended March 31,
----------------------------
2000 1999
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Current Taxes:
Federal $ - $ -
State 266 38
Deferred Taxes 2,194 321
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$ 2,460 $ 359
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Earnings Per Share
The components of basic and diluted net income per common share for the
periods ended March 31, 2000 and 1999 are presented in the table below:
(In thousands, except per share amounts) 2000
-------------------------
Income Shares Per Share
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Basic:
Income available to common stockholders... $4,189 11,595 $ .36
=========
Effect of dilutive securities:
Stock Options............................. - 607
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Diluted:
Income available to common stockholders,
including assumed conversions............ $4,189 12,202 $ .34
====== ====== =========
1999
-------------------------
Income Shares Per Share
------ ------ ---------
Basic:
Income available to common stockholders... $ 585 11,518 $ .05
=========
Effect of dilutive securities:
Stock Options............................. - 477
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Diluted:
Income available to common stockholders,
including assumed conversions............ $ 585 11,995 $ .05
====== ====== =========
Cash and Cash Equivalents
We consider all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents. These investments
earned 5.7 and 3.4 percent rates of interest at March 31, 2000 and December 31,
1999, respectively, with cost approximating market.
Supplemental Disclosure of Cash Flow Information
For the Three Months
Ended March 31,
--------------------------
2000 1999
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(In thousands)
Cash paid during the period for:
Interest (net of amounts capitalized:
$342,000 and $319,000, respectively) $ 803 $ 689
Income taxes (net of refunds received) $ 1 $ 14
Long Term Debt
In November of 1999, we signed a new long-term credit agreement funded by a
group of banks led by Banc of America Securities LLC. It replaced our prior
credit arrangement with NationsBank of Texas. Our new agreement specifies a
maximum loan amount of $150 million. We set our initial borrowing base at $85
million and our outstanding balance was $57 million at March 31, 2000. The
lenders may periodically re-determine the borrowing base depending upon the
value of our oil and gas properties.
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The agreement has a maturity date of January 1, 2006, including a revolving
period that ends on January 1, 2002. On the later date, if not amended before
then, the outstanding loan amount converts to a term loan and we must commence
quarterly principal payments.
We secured this debt with oil and gas assets owned by Key and our
subsidiaries. We are also subject to customary covenants and restrictions
including: 1) limitations on additional borrowings, 2) working capital
requirements, and 3) net worth maintenance. We are currently, and have been
since inception, in compliance with the covenants of the agreement.
Please see our annual report on Form 10-K if you would like more
information about the terms of the agreement.
Reclassification
We reclassified a few prior year amounts to conform with the current year
presentation.
Subsequent Event
Pursuant to the registration statement we filed on May 5, 2000, our chief
executive officer (Mr. Merelli) exercised options for 500,000 shares of our
common stock. The options were granted in 1992 in accordance with his
employment agreement. These options had an exercise price of $3.00 and would
have expired in 2002. We received proceeds valued at $1.5 million from Mr.
Merelli for the exercise price of the options. The proceeds were a combination
of cash and 70,000 mature shares of Key common stock. We issued 370,000 new
shares of stock to him after withholding 130,000 shares to cover his tax
liability. This transaction is dilutive because there are 300,000 additional
shares outstanding that will be included in our basic earnings per share
calculations going forward.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Financial Results
We reported net income of $4.2 million or $.34 per diluted share for the
first quarter of 2000. This is almost seven times the $.6 million and $.05 per
diluted share we reported a year ago. Results for these periods are based on
revenues of $19.3 and $10 million in 2000 and 1999, respectively. Strong
commodity prices in 2000 and very low prices in 1999 drove the variance between
our quarterly results. A five-percent boost to production in the first quarter
of 2000 was also a positive factor.
Results of Operations
For the Three Months
Ended March 31,
--------------------
2000 1999
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Selected Oil and Gas
Operating Statistics
- ------------------------------
Gas Volume - Mcf per day 38,055 38,744
Gas Price - Per Mcf $ 2.43 $ 1.75
Oil Volume - Barrels per day 4,268 3,619
Oil Price - Per barrel $ 26.94 $ 11.22
Full Cost Amortization Rate 40.3% 52.1%
-8-
As generally used in the oil and gas business and in this Form 10-Q, the
following terms have the following meanings:
Mcf - Thousand cubic feet (of natural gas)
Mcfe - Thousand cubic feet equivalent
MMcfe - Million cubic feet equivalent
BBls - Barrels (of oil)
In calculating Mcf equivalents, we use a generally recognized standard in
which one BBl of oil is equal to six Mcf of gas.
Our sales nearly doubled between the first quarters of 2000 and 1999 to
reach $19.2 million. Most of that increase was from oil sales, which increased
by $6.8 million. Our gas sales increased by $2.3 million and plant product
sales rose by $.2 million. We produced combined oil and gas volumes of 63.7
MMcfe per day in 2000 compared to 60.5 MMcfe per day in 1999.
Gas sales climbed to $8.4 million in 2000 from $6.1 million in 1999. Most
of the change was derived from favorable prices in 2000. Our average realized
gas price was $2.43 per Mcf in 2000, compared to $1.75 per Mcf in 1999. The
$.68 per Mcf increment added approximately $2.3 million to sales. Our gas
production held steady at 38,055 and 38,744 Mcf per day in 2000 and 1999,
respectively.
Our oil sales rose to $10.5 million in 2000 from $3.7 million in 1999. The
driving force behind this 186 percent increase was significantly higher prices
in the first quarter of 2000. We watched our average oil price sink to $11.22
per barrel in the first quarter of 1999 and then surge to $26.94 per barrel in
the first quarter of 2000. The price difference between these two quarters
added about $6.1 million to oil sales. We also experienced 19 percent growth in
production in the same timeframe. We produced an average of 4,268 BBls per day
in 2000 compared to 3,619 BBls per day in 1999. Our increase in production is
responsible for $.7 million of the oil sales increase.
Our product sales from gas processing plants were approximately $362,000
and $197,000 in the first quarters of 2000 and 1999, respectively. Just like
gas and oil, price was also the basis for our improved plant product sales.
The source of our oil and gas revenues is changing right along with the
prices. In the first quarter of 2000, our revenues came from the following
product mix: 54 percent oil, 44 percent gas and 2 percent plant products. This
compares to the following mix for the first quarter of 1999: 37 percent oil, 61
percent gas and 2 percent plant products. If you look at our total production
volumes for the first quarter of 2000, 40 percent of our output is oil and 60
percent is gas. Production for the same period of 1999 was 36 percent oil and
64 percent gas.
Other revenues were approximately $99,000 and $100,000 in the first
quarters of 2000 and 1999, respectively. For both periods presented, the
primary source of other revenue is income from our two gathering systems in
California.
Costs and Expenses
Depreciation, depletion and amortization (DD&A) expense increased 50
percent between the first quarters of 2000 and 1999. A portion of this increase
can be attributed to the 94 percent increase in oil and gas sales. Notably, the
increase from higher sales is partially offset by a decrease in the depletion
rate. The depletion rate as a percentage of oil and gas sales decreased to 40.3
percent in 2000 from 52.1 percent in 1999. We use the future gross revenue
method and rolling average prices to compute DD&A expense. Higher product
prices over the last year, for both oil and gas, are helping to bring the
depletion rate down. We also
-9-
include a small amount of fixed asset depreciation and amortization of financing
costs associated with our credit facility in this income statement line.
For the first quarters, our 2000 lease operating expense (LOE) exceeded
1999 LOE by 37 percent. LOE was $2.7 million in 2000 and $2.0 million in 1999.
LOE also increased on a unit basis. If you compare LOE on a unit of production
basis, 2000 LOE increased to $.47 per Mcfe from $.35 per Mcfe in 1998. We found
that the following are just a few of the many things that are pushing LOE
upward: 1) production from drilling is growing and we are paying expenses on
more wells, 2) commodity prices are very good and it is becoming economical to
do more workovers to increase production, and 3) higher prices are increasing
property values and, as a result, ad valorem taxes.
Our production taxes were 11 percent less in the first quarter of 2000 than
they were in the first quarter of 1999. On a Mcfe basis, production taxes
decreased to $.10 per Mcfe in 2000 from $.13 per Mcfe in 1999. In the fourth
quarter of 1999, we realized that we had over estimated production tax expense
for the entire year. At that time, we made a downward adjustment which
reflected a decrease in our overall production tax rate and a change in our
procedure for accruing unpaid production taxes. You are seeing a difference
between periods because the first quarter of 2000 is calculated using updated
rates and procedures, and LOE reported for the first quarter of 1999 was
overstated.
General and administrative expense (G&A) increased to $720,000 in the first
quarter of 2000 from $547,000 in the first quarter of 1999. With a six percent
increase in production, this translates to $.12 and $.10 per Mcfe in 2000 and
1999, respectively. As prescribed by full cost accounting rules, we capitalize
direct overhead related to exploration and development activities.
Interest expense before capitalization was $1,132,000 and $962,000 for 2000
and 1999, respectively. Even though our long-term debt balance is $8 million
less than it was a year ago, our interest expense is higher due to an increase
in interest rates. Our average interest rate was 7.14 percent on March 31, 2000.
On the same day a year ago, our average interest rate was only 5.99 percent. We
capitalized interest of $342,000 and $319,000 in 2000 and 1999, respectively.
These capitalized amounts are for borrowings associated with undeveloped
leasehold.
We calculated our provision for income taxes using effective rates of 37
percent and 38 percent for 2000 and 1999, respectively.
Cash Flow and Liquidity
We primarily need cash to fund oil and gas exploration, development, and
acquisition activities and to pay existing obligations and trade commitments
related to oil and gas operations. Our primary sources of liquidity are cash
flows from operating activities and proceeds from financing activities.
We generated cash from operating activities of $12.7 million in the first
quarter of 2000. This was a $9.8 million increase, or more than four times, the
$2.9 million reported for the same period a year ago. Most of this increase was
related to higher prices and production.
In the first quarter of 2000, we made cash expenditures for exploration and
development of $11.9 million, or 93 percent of cash from operating activities.
This was $3.7 million more than the $8.2 million we spent in the first quarter
of 1999.
Using cash from operating activities, we paid down $3.0 million of our
long-term debt balance in the first quarter of 2000. The payment brought our
balance to
-10-
$57 million at March 31, 2000. During the first quarter of 1999, we borrowed $5
million to help fund our exploration and development projects. Please refer to
the section titled "Long Term Debt" for more information about our long-term
credit arrangements.
We believe that cash on hand, net cash generated from operations and
amounts available under our existing line of credit will be adequate to meet
future liquidity needs, including satisfying our financial obligations and
funding operations, exploration and development.
Year 2000 Compliance
We assessed the effects of Year 2000 computer issues and determined that
there was no material adverse impact on our business. We do not expect to
record any losses related to this event. Our computer systems for accounting,
land and lease records, and reservoir engineering did not have any interruption
in the transition between 1999 and 2000 and continue to operate normally in
2000. Further, we are not aware of any material problems experienced by the
various entities we do business with that would materially impact us.
Future Trends
Key's main objective is to increase shareholder value. We continue to plan
to accomplish this goal through strategies designed to profitably increase oil
and gas reserves, production, and cash flow through exploration and development,
supplemented from time to time by acquisitions or mergers.
At the present time, we anticipate that the bulk of our exploration and
development spending will be concentrated in our four main exploration focus
areas: the Anadarko Basin of western Oklahoma, the Mississippi Salt Basin,
south Louisiana, and the Sacramento Basin of northern California. We also plan
to continue to explore our undeveloped acreage and participate in lower-risk
exploitation projects in the Rocky Mountain region.
We expect exploration and development expenditures for 2000 to range from
$42-48 million. We also expect to fund these expenditures from cash provided by
operating activities, supplemented, if necessary, by borrowings under our bank
line of credit. The amount and allocation of future capital expenditures will
depend upon a number of factors, including the impact of oil and gas prices on
investment opportunities and available cash flow, the availability of debt and
equity capital, and the number and size of attractive acquisition opportunities.
As part of its on-going business strategy, Key will continue to evaluate
merger and acquisition opportunities. We will actively pursue potential
transactions with the economic and strategic attributes necessary to facilitate
the profitable growth of Key.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We use financial instruments, which inherently have some degree of market
risk. Our primary sources of market risk include fluctuations in commodity
prices and interest rates.
Price Fluctuations
Our results of operations are highly dependent upon the prices we receive
for natural gas and crude oil production, and those prices are constantly
changing in response to market forces. Nearly all of our revenue is from the
sale of gas and oil, so these fluctuations, positive and negative, can have a
significant impact.
-11-
If we wanted to increase our financial flexibility and attempt to smooth
out the effect of commodity price fluctuations, we could enter into: non-
speculative hedge arrangements, commodity swap agreements, forward sale
contracts, commodity futures, options and other similar agreements relating to
natural gas and crude oil. To date, we have not used any of these financial
instruments to mitigate commodity price changes.
Changes in product prices also affect the limitation on capitalized costs
under the full cost accounting rules. To apply this rule, we determine a
"ceiling" by pricing future revenues at the unescalated prices in effect at the
end of the fiscal quarter. If the value of our capitalized costs exceeds the
ceiling, we would be required to do a write-down. We have never taken a full-
cost ceiling write-down.
Interest Rate Risk
Our reported earnings are impacted by changes in interest rates. Any
fluctuation in the rate will directly affect the amount of interest expense we
report. At March 31, 2000, we had $57 million of long-term debt outstanding at
an average interest rate of 7.14 percent. At our election, our interest charges
are based on either the prime rate or the LIBOR rate plus a margin predetermined
by our debt agreement. Assuming there is no change in the balance outstanding
during 2000, a ten percent change in the average interest rate would impact
interest expense by approximately $400,000. As the interest rate is variable
and is reflective of current market conditions, the carrying value approximates
the fair value.
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISION OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This report contains "forward-looking statements" within the meaning of the
federal securities laws. These forward-looking statements include, among
others, statements concerning Key's outlook for the remainder of 2000 with
regard to production levels, price realizations, expenditures for exploration
and development, plans for funding operations and capital expenditures, and
other statements of expectations, beliefs, future plans and strategies,
anticipated events or trends and similar expressions concerning matters that are
not historical facts. The forward-looking statements in this report are subject
to risks and uncertainties that could cause actual results to differ materially
from those expressed or implied by the statements.
These risks and uncertainties include, but are not limited to, fluctuations
in the price we receive for oil and gas production, reductions in the quantity
of oil and gas sold due to decreased industry-wide demand and/or curtailments in
production from specific properties due to mechanical, marketing or other
problems, operating and capital expenditures that are either significantly
higher or lower than anticipated because the actual cost of identified projects
varied from original estimates and/or from the number of exploration and
development opportunities being greater or fewer than currently anticipated and
increased financing costs due to a significant increase in interest rates.
These and other risks and uncertainties affecting Key are discussed in greater
detail in this report and the Form S-8 Registration Statement we filed with the
Securities and Exchange Commission on May 5, 2000.
-12-
PART II - OTHER INFORMATION
- ---------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
None.
ITEM 2. CHANGES IN SECURITIES
- -------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- -----------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
- -----------------------------------------------------------------
None.
ITEM 5. OTHER INFORMATION
- ---------------------------
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) Exhibits:
12.1 Statement RE: Computation of Ratio of Earnings to Fixed Charges.
27.1 Financial Data Schedule for Commercial and Industrial Companies
per Article 5 of Regulation S-X for the quarter ended March 31,
2000.
(b) Reports on Form 8-K:
None.
-13-
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:
Dated May __, 2000
KEY PRODUCTION COMPANY, INC.
/s/ Paul Korus
------------------------------------------
Paul Korus
Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Sherri M. Nitta
------------------------------------------
Sherri M. Nitta
Director, Financial Reporting
(Principal Accounting Officer)
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