SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended March 31, 2002 Commission File No. 1-13696
AK STEEL HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 31-1401455
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
703 Curtis Street, Middletown, Ohio 45043
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 425-5000
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
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.
107,925,609 shares of common stock
----------------------------------
(as of April 29, 2002)
AK STEEL HOLDING CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income -
Three-Month Periods Ended March 31, 2001 and 2002 1
Consolidated Balance Sheets -
December 31, 2001 and March 31, 2002 2
Condensed Consolidated Statements of Cash Flows -
Three-Month Periods Ended March 31, 2001 and 2002 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of the
Consolidated Financial Statements 6
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AK STEEL HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
Three Months Ended
March 31,
----------------------
2001 2002
---- ----
Net sales $ 998.8 $ 1,010.1
Cost of products sold 863.7 917.8
Selling and administrative expenses 63.7 67.2
Depreciation 59.2 58.5
----- -----
Total operating costs 986.6 1,043.5
Operating profit (loss) 12.2 (33.4)
Interest expense 34.4 31.8
Gain on sale of Anthem shares (Note 5) -- 24.1
Other income 1.9 0.5
------- ----
Loss before income taxes (20.3) (40.6)
Income tax benefit (7.5) (15.0)
----- -------
Net loss $ (12.8) $ (25.6)
======= =========
Loss per share: (Note 2)
Basic loss per share $ (0.12) $ (0.24)
Diluted loss per share (0.12) (0.24)
Cash dividend per common share $ 0.0625 $ --
Common shares and common share equivalents
outstanding (weighted average in millions):
For basic loss per share 107.8 107.9
For diluted loss per share 107.8 107.9
-----------
See notes to consolidated financial statements
-1-
AK STEEL HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(dollars in millions)
ASSETS December 31, March 31,
2001 2002
---------------- ----------------
Current Assets:
Cash and cash equivalents $ 101.0 $ 98.6
Accounts receivable 410.0 490.3
Inventories (Note 3) 943.2 905.9
Deferred tax asset 76.6 68.0
Other current assets 17.0 24.6
-------- -------
Total Current Assets 1,547.8 1,587.4
------- -------
Property, Plant and Equipment 4,805.7 4,831.3
Less accumulated depreciation (2,013.0) (2,071.4)
------- -------
Property, plant and equipment, net 2,792.7 2,759.9
------- -------
Other Assets:
Investment in AFSG Holdings, Inc. 55.6 55.6
Other investments 154.3 77.7
Goodwill (Note 4) 109.7 109.7
Other intangible assets (Note 4) 111.9 111.8
Deferred tax asset 393.5 374.9
Other assets 60.3 60.4
------- -------
TOTAL ASSETS $5,225.8 $5,137.4
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 537.6 $ 475.4
Accrued liabilities 270.5 242.8
Current portion of long-term debt 78.0 77.8
Current portion of pension and other postretirement benefit obligations 68.3 67.2
-------- --------
Total Current Liabilities 954.4 863.2
------- ------
Noncurrent Liabilities:
Long-term debt 1,324.5 1,324.5
Pension and other postretirement benefit obligations 1,740.1 1,763.8
Other liabilities 173.5 167.7
------- -------
Total Noncurrent Liabilities 3,238.1 3,256.0
------- -------
TOTAL LIABILITIES 4,192.5 4,119.2
------- -------
Stockholders' Equity:
Preferred stock 12.5 12.5
Common stock, authorized 200,000,000 shares of $.01 par value each;
issued 2001, 115,987,777 shares, 2002, 116,275,908 shares;
outstanding 2001, 107,713,329 shares, 2002, 107,925,775 shares 1.2 1.2
Additional paid-in capital 1,807.2 1,808.5
Treasury stock, common shares at cost, 2001, 8,274,448 shares;
2002, 8,350,133 shares (120.4) (121.4)
Accumulated deficit (479.9) (505.5)
Accumulated other comprehensive income (loss) (Note 6) (187.3) (177.1)
------- --------
TOTAL STOCKHOLDERS' EQUITY 1,033.3 1,018.2
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,225.8 $ 5,137.4
======= =======
----------
See notes to consolidated financial statements.
-2-
AK STEEL HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
Three Months Ended
March 31,
----------------------
2001 2002
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(12.8) $(25.6)
Depreciation 59.2 58.5
Amortization 4.1 2.5
Deferred income taxes (7.5) (15.1)
Working capital (63.4) (67.9)
Other 5.0 (1.6)
---- -----
NET CASH FLOWS FROM OPERATING ACTIVITIES (15.4) (49.2)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital investments (21.4) (25.6)
Proceeds from the sale of investments 1.3 73.7
Other (0.5) --
----- ---
NET CASH FLOWS FROM INVESTING ACTIVITIES (20.6) 48.1
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuing common stock -- 0.2
Principal payments on long-term debt (0.2) (0.2)
Common stock dividends paid (6.8) --
Preferred stock dividends paid (0.2) --
Treasury stock -- (1.0)
Other 0.4 (0.3)
---- -------
NET CASH FLOWS FROM FINANCING ACTIVITIES (6.8) (1.3)
----- -----
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (42.8) (2.4)
Cash and cash equivalents, beginning of period 86.8 101.0
----- ------
Cash and cash equivalents, end of period $ 44.0 $ 98.6
===== =====
Supplemental disclosure of cash flow information:
-------------------------------------------------
Net cash paid (received) during the period for:
Interest, net of capitalized interest $ 25.0 $ 24.8
Income taxes (1.0) 0.4
Supplemental disclosure of non-cash investing
and financing activities
Issuance of restricted stock $ 0.3 $ 3.3
----------
See notes to consolidated financial statements.
-3-
AK STEEL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share data)
--------------------------------------------------------------------------------
1. Basis of Presentation
In the opinion of the management of AK Steel Holding Corporation ("AK
Holding") and AK Steel Corporation ("AK Steel", and together with AK
Holding, the "Company"), the accompanying consolidated financial statements
contain all adjustments, consisting of normal recurring adjustments,
necessary to present fairly the financial position of the Company as of
March 31, 2002, and the results of its operations and cash flows for the
three-month periods ended March 31, 2001 and 2002. The results of
operations for the three months ended March 31, 2002 are not necessarily
indicative of the results to be expected for the year ending December 31,
2002. These consolidated financial statements should be read in conjunction
with the audited consolidated financial statements of AK Holding for the
year ended December 31, 2001.
2. Loss Per Share
The calculations of basic and diluted loss per share for each of the
periods presented are identical. Preferred stock dividends are cumulative
and, while not declared in the first quarter of 2002, are nevertheless
added to the net loss in the following calculation.
Three Months Ended
March 31,
--------------------
2001 2002
------- ------
Net loss $ (12.8) $ (25.6)
Less: Preferred stock dividends 0.2 0.2
---- ----
Loss available to common stockholders $ (13.0) $ (25.8)
====== ======
Weighted average common shares (in millions) 107.8 107.9
===== =====
Loss per share: $ (0.12) $ (0.24)
====== ======
3. Inventories
Inventories are valued at the lower of cost or market. The cost of the
majority of inventories is measured on the last in, first out (LIFO)
method. Other inventories are measured principally at average cost.
December 31, March 31,
2001 2002
---- ----
Finished and semi-finished $766.5 $738.4
Raw materials 180.9 164.1
----- -----
Total cost 947.4 902.5
Adjustment to state inventories at LIFO value (4.2) 3.4
------ -----
Net inventories $943.2 $905.9
===== =====
4. Accounting for Goodwill and Other Intangible Assets
The Company adopted Statement of Financial Accounting Standards No. 142 as
of January 1, 2002. Statement No. 142 requires that goodwill no longer be
amortized to earnings, but instead be reviewed annually for impairment. The
Company has begun the process of identifying its reporting units,
allocating goodwill and determining fair values. The Statement allows the
Company until June 30, 2002 to complete this initial stage, which
determines whether impairment may be necessary, and until the end of the
year to determine the final effect adoption will have on its financial
statements. The Company currently does not know if impairment will be
necessary.
As of December 31, 2001 and March 31, 2002, goodwill on the consolidated
balance sheets was $109.7, of which $105.4 related to Steel Operations,
$2.4 related to Snow and Ice Control Products and $1.9 related to Other
Operations. On the December 31, 2001 and March 31, 2002 consolidated
balance sheets were other intangible assets of $111.9 and $111.8,
respectively, which included as of both dates $108.2 of an intangible asset
necessary to record a minimum pension liability, of which $105.2 was for
the Steel Operations and $3.0 was for Snow and Ice Control Products. The
remaining intangible assets as of these dates related to Snow and Ice
Control Product assets with an original value of $9.7, which are subject to
amortization over a period of up to seventeen years.
The amount of goodwill amortized in the first quarter of 2001 was $1.0. No
goodwill was amortized in the first quarter of 2002.
-4-
5. Sale of Anthem Inc. Stock During the three months ended March 31, 2002, the
Company liquidated all of the nearly 1.5 million shares of Anthem Inc.
stock it had received in 2001 upon the demutualization of its primary
healthcare insurance provider. In the first quarter of 2002, the Company
recorded a gain on sale of Anthem shares of $24.1. The stock was sold for a
total of $80.2, of which $72.2 was received in the first quarter and $8.0
was received early in the second quarter. At March 31, 2002, accrued
liabilities on the Company's balance sheet included $6.3 for a liability
established for the portion of the proceeds deemed to be healthcare plan
assets.
6. Comprehensive Loss
Comprehensive loss, net of tax, is as follows:
Three Months Ended
March 31,
--------------------
2001 2002
---- ----
Net loss $(12.8) $(25.6)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 0.8 (0.3)
Derivative instrument hedges, mark to market:
Cumulative effect adjustment 27.5 --
Gains (losses) arising in period (14.7) 8.5
Reclass of losses (gains) included in net loss (9.6) 13.7
Unrealized gains/losses on securities:
Unrealized holding losses arising in period (0.1) (0.4)
Reclass of gains included in net loss (0.9) (11.3)
---- -----
Comprehensive loss $ (9.8) $ (15.4)
===== ======
A 40% deferred tax rate is applied to derivative instrument hedges and
unrealized gains and losses.
Accumulated other comprehensive income (loss) is as follows:
December 31, March 31,
2001 2002
---- ----
Foreign currency translation $ (2.1) $ (2.4)
Derivative instrument hedges (28.9) (6.7)
Unrealized gains (losses) on securities 8.3 (3.4)
Minimum pension liability (164.6) (164.6)
------ ------
Accumulated other comprehensive income $(187.3) $(177.1)
======= ======
7. Segment Information
The Company's Steel Operations consist of the production, finishing and
sale of flat-rolled carbon, stainless and electrical steels. The Company
also owns a Snow and Ice Control Products business, which manufactures
snowplows and salt and sand spreaders for four-wheel drive light trucks.
The Company's Other Operations include the production and sale of steel
pipe and tubular products and an industrial park. The following presents
the results of the Company's segments.
Three Months Ended
March 31,
2001 2002
---- ----
Net sales:
Steel Operations $ 937.0 $ 935.2
Snow and Ice Control Products 15.9 11.5
Other Operations 45.9 63.4
----- -----
Total net sales $ 998.8 $ 1,010.1
===== =======
Operating profit (loss):
Steel Operations $ 8.5 $ (37.6)
Snow and Ice Control Products 1.7 (0.6)
Other Operations 2.0 4.8
---- ----
Total operating profit (loss) $ 12.2 $ (33.4)
===== ========
8. Dividends
As of March 31, 2002, the Company could not declare or pay dividends to
holders of its common or preferred stock because of a restrictive covenant
contained in the instruments governing its outstanding debt. The preferred
stock dividends are cumulative and, as such, holders of the preferred stock
are entitled to payment of all accrued, but unpaid dividends, before
payment of dividends to the holders of common stock. As of March 31, 2002,
dividends on the preferred stock were in arrears in an aggregate amount of
$0.5, or $1.8125 per share.
-5-
9. Sale of Sawhill Tubular
On April 19, 2002, the Company completed the sale of Sawhill Tubular for
$50.0 in net cash and the assumption of certain liabilities by the buyer.
The cash amount is net of certain other current liabilities, which the
Company retained. The Company expects to record a pretax loss of
approximately $11.0 (approximately $6.0 after tax or $0.06 per share) in
the second quarter of 2002, reflecting when the Company's Board of
Directors approved the plan of sale. As of March 31, 2002, the carrying
value of Sawhill's assets included $23.8 in accounts receivable, $35.7 in
inventories and $23.5 in property, plant & equipment.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
(dollars in millions, except per share and per ton data)
Results of Operations
---------------------
The Company's principal business focus is its Steel Operations, which currently
consist of seven steelmaking and finishing facilities that produce flat-rolled
carbon, stainless and electrical steel products. These products are sold
primarily to the automotive, appliance, industrial machinery and equipment, and
construction markets, as well as to distributors, service centers and
converters. The Company also owns a Snow and Ice Control Products business,
which manufactures snowplows and salt and sand spreaders for four-wheel drive
light trucks. The Company also produces steel pipe and tubular products and
operates an industrial park on the Houston, Texas ship channel.
Total steel shipments during the three months ended March 31, 2002, inclusive of
tubular products, increased to 1,510,300 tons from 1,507,600 tons shipped in the
first quarter of 2001, due in part to the addition of AK Tube, which was
acquired in the third quarter of 2001. For the three months ended March 31,
2002, value-added products comprised approximately 93% of total shipments,
compared to 92% for the corresponding period of 2001. Steel Operations shipments
were 1,415,000 tons in the first quarter of 2002 and 1,437,800 tons in the
comparable quarter of 2001. The period-to-period decrease in flat-rolled steel
shipments primarily reflected a reduction in lower margin hot-rolled steel
shipments.
For the quarter ended March 31, 2002, net sales were $1,010.1, a slight increase
over the $998.8 reported for the corresponding period in 2001. Steel Operations
contributed $935.2 to total net sales in the first quarter of 2002, compared to
$937.0 for the 2001 period. Steel Operations' sales per ton increased $8 to $660
per ton in the first quarter of 2002 compared to the prior year first quarter,
primarily as a result of increased shipments to the automotive sector, partially
offset by lower current year contract pricing.
The operating loss for the three months ended March 31, 2002, totaled $33.4, or
$22 per ton shipped, while first quarter 2001 operating profit totaled $12.2, or
$8 per ton. The variance in operating results was primarily due to higher costs,
including approximately $34.0 in increased pension and other postretirement
benefit expenses, or $23 per ton shipped. In addition, the operating loss
includes approximately $7.0 for a scheduled maintenance outage at the Middletown
Works blast furnace plus approximately $13.0 for other planned and unplanned
maintenance that was accelerated to the first quarter, in part, in anticipation
of stronger markets during the remainder of the year.
Snow and Ice Control Products recorded a first quarter 2002 operating loss of
$0.6 on sales of $11.5, compared to first quarter 2001 operating profit of $1.7
on sales of $15.9. The unfavorable variance in the year-to-year comparison
reflects lower shipments due to one of the mildest winters in recent history.
First quarter sales and profits are typically the weakest of its annual business
cycle.
During the three months ended March 31, 2002, the Company liquidated all of the
nearly 1.5 million shares of Anthem Inc. stock it had received last year upon
the demutualization of its primary healthcare insurance provider. In the first
quarter of 2002, the Company recorded a gain on sale of Anthem shares of $24.1.
The gain was net of changes to the liability established to provide an
allocation of proceeds to Company employees and retirees who paid a small
portion of the premiums for the applicable plans of the insurance provider.
The Company recorded a net loss for the three months ended March 31, 2002 of
$25.6, or $0.24 per share, compared to a net loss of $12.8, or $0.12 per share,
reported for the first quarter of 2001. On a pro forma basis, excluding the
net-of-tax gain on the sale of Anthem Inc. shares, the loss would have been
$40.8, or $0.38 per share. The unfavorable variance was primarily due to the
increase in maintenance expenditures and substantially higher pension and
healthcare costs, partially offset by reduced income taxes.
Outlook
-------
The Company anticipates that second quarter shipments will be approximately 1.5
million tons. Value-added shipments should remain near 93% during the next
quarter, including continued strong volumes shipped to automotive customers.
Approximately 20% to 25% of the Company's sales are in the spot market. During
the first
-6-
quarter of 2002, the Company announced three spot market price increases,
totaling $100 per ton for hot-rolled steel and $120 per ton for cold-rolled and
coated products, along with a 7% price increase for non-oriented electrical
products. If realized, the higher announced prices and resulting stronger
margins, along with a strong product mix, are expected to benefit the Company's
operating profit by about $30.0 in the second quarter. Sales and income for the
next quarter will also benefit from the normal seasonal rise in shipments at the
Snow and Ice Control Products segment, resulting in an estimated $10.0 operating
profit improvement from the first quarter.
The Company expects to experience lower costs in the second quarter of 2002 as
compared to the first quarter. Expected savings of approximately $25.0 are
anticipated from lower maintenance, raw material, energy and overtime costs.
Liquidity and Capital Resources
-------------------------------
The Company's liquidity needs are primarily for capital investments, working
capital, employee benefit obligations and debt service. At March 31, 2002, the
Company had $98.6 of cash and cash equivalents, as well as $199.6 available for
borrowings under its $300.0 accounts receivable purchase credit facility. At
that date, there were no outstanding borrowings under the credit facility and
availability was reduced primarily by outstanding letters of credit.
Cash used in operations totaled $49.2 for the three months ended March 31, 2002.
The Company's reported loss of $25.6, excluding depreciation of $58.5,
amortization expense of $2.5 and a non-cash income tax benefit of $15.1,
generated $20.3 in cash. However, working capital utilized $67.9 during the
period, including a decrease in accounts payable totaling $63.6, primarily
related to payments for slabs purchased in the fourth quarter in preparation for
the blast furnace outage at Middletown. A reduction in inventories partially
offset an increase in trade accounts receivable. Accounts receivable increased
primarily due to higher sales in March 2002 compared to December 2001 and the
recording of a tax refund receivable of $35.0. Inventories decreased as the
Company consumed material acquired in anticipation of the maintenance outage at
the Middletown Works, along with a reduction in raw materials.
During the three months ended March 31, 2002, cash generated by investing
activities totaled $48.1. The Company liquidated the Anthem Inc. stock it had
received from Anthem's demutualization, generating $72.2 of cash in the current
period and an additional $8.0 received early in the second quarter. At March 31,
2002, accrued liabilities on the Company's balance sheet included $6.3 for a
liability established for the portion of the proceeds deemed to be healthcare
plan assets. Capital investments were $25.6 in the first quarter, with total
capital investments for 2002 expected to approximate $125.0, which will be
funded by existing cash balances, cash generated from operations and proceeds
from the sale of Sawhill Tubular.
During the three months ended March 31, 2002, cash flows from financing
activities used $1.3, primarily for employee benefit plans.
On March 9, 2002, President Bush signed into law the Job Creation and Worker
Assistance Act. One of the provisions of the Act increases the net operating
loss (NOL) carryback period to five years from two years for losses generated in
tax years 2001 and 2002 and allows an NOL deduction arising in these tax years
to offset 100% of alternative minimum taxable income during the carryback
period. The Company estimates that application of this provision will allow it
to claim a $35.0 refund of previously paid alternative minimum taxes. The
refund, which it expects to receive in the second quarter of this year and which
is recorded in accounts receivable on the March 31, 2002 balance sheet, reduced
the Company's deferred tax asset but will not affect current or future reported
net income or loss.
Dividends
---------
As of March 31, 2002, the Company could not declare or pay dividends to holders
of its common or preferred stock because of a restrictive covenant contained in
the instruments governing its outstanding debt. The preferred stock dividends
are cumulative and, therefore, holders of the preferred stock are entitled to
payment of all accrued, but unpaid dividends, before payment of dividends to the
holders of common stock. As of March 31, 2002, dividends on the preferred stock
were in arrears in an aggregate amount of $0.5, or $1.8125 per share.
New Accounting Pronouncement
----------------------------
The Company adopted Statement of Financial Accounting Standards No. 142 as of
January 1, 2002. Statement No. 142 requires that goodwill no longer be amortized
to earnings, but instead be reviewed annually for impairment. The Company has
begun the process of identifying its reporting units, allocating goodwill and
determining fair values. The Statement allows the Company until June 30, 2002 to
complete this initial stage, which determines whether impairment may be
necessary, and until the end of the year to determine the final effect adoption
will have on its financial statements. The Company currently does not know if
impairment will be necessary.
-7-
Sale of Sawhill Tubular
-----------------------
On April 19, 2002, the Company completed the sale of Sawhill Tubular for $50.0
in net cash and the assumption of certain liabilities. The cash amount is net of
certain other current liabilities, which the Company retained. The Company
expects to record a pretax loss on the sale of approximately $11.0
(approximately $6.0 after tax, or $0.06 per share) in the second quarter of
2002.
Forward-Looking Statements
--------------------------
Certain statements in this Form 10-Q, particularly those in the paragraph
entitled "Outlook," reflect management's estimates and beliefs and are intended
to be, and are hereby identified as "forward-looking statements" for purposes of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. As discussed in its Form 10-K for the year ended December 31, 2001, the
Company cautions readers that such forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
currently expected by management.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported, on July 27, 2001, AK Steel received a Special Notice
Letter from the United States Environmental Protection Agency requesting that AK
Steel agree to conduct a Remedial Investigation/Feasibility Study ("RI/FS") and
enter into an administrative order on consent pursuant to Section 122 of CERCLA
regarding the former Hamilton Plant of Armco located in New Miami, Ohio. The
Hamilton Plant is no longer an operating steel mill, having ceased operations in
1990, and all of its former structures have been demolished and removed. While
AK Steel does not believe that a site-wide RI/FS is necessary or appropriate at
this time, in April 2002 it did enter into a mutually agreed-upon administrative
order on consent to perform such an investigation and study of the Hamilton
Works site.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits. None.
--------
B. Reports on Form 8-K.
--------------------
Item Reported Date
------------- ----
Retirement of James L. Wareham.......... February 8, 2002
-8-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on behalf of the registrant by the following duly authorized
persons.
AK Steel Holding Corporation
----------------------------------------
(Registrant)
Date May 2, 2002 /s/ James L. Wainscott
------------------------------- ----------------------------------------
James L. Wainscott
Senior Vice President and
Chief Financial Officer
(and principal accounting officer)
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