UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 Commission file number 1-10466 St. Joe Corporation (Exact name of registrant as specified in its charter) Florida 59-0432511 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Suite 400, 1650 Prudential Drive, Jacksonville, Florida 32207 (Address of principal executive offices) (Zip Code) (904) 396-6600 (Registrant's telephone number, including area code) St. Joe Paper Company (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO APPLICABLE ONLY TO CORPORATE ISSUERS: As of June 30, 1996 there were 30,498,650 shares of common stock, no par value, outstanding.
ST. JOE CORPORATION INDEX Page No. PART I Financial Information: Consolidated Balance Sheet - June 30, 1996 and December 31, 1995 3 Consolidated Statement of Income and Retained Earnings - Six months ended June 30, 1996 and 1995 4 Consolidated Statement of Cash Flows - Six months ended June 30, 1996 and 1995 5 Notes to Consolidated Financial Statements 6 Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations 8 PART II Other Information 12
<TABLE> <CAPTION> ST. JOE CORPORATION CONSOLIDATED BALANCE SHEET (Unaudited) (Dollars in thousands) June 30 December 31 1996 1995 </CAPTION> <S> <C> <C> ASSETS Current Assets: Cash and cash equivalents $ 557,581 $ 16,802 Short-term investments 102,917 96,923 Accounts receivable 45,882 44,390 Income taxes refundable - 4,314 Inventories 26,046 20,592 Other assets 24,339 18,162 Net assets of discontinued operations - 296,001 ---------- ---------- Total Current Assets 756,765 497,184 Investment and Other Assets: Marketable securities 239,895 189,865 Other assets 55,962 38,971 ---------- ---------- Total Investments and Other Assets 295,857 228,836 Property, Plant and Equipment, Net 820,568 804,974 ---------- ---------- Total Assets $1,873,190 $1,530,994 ============ ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 32,544 $ 26,024 Accrued liabilities 46,229 18,445 Income taxes payable 131,390 - ---------- ---------- Total Current Liabilities 210,163 44,469 Accrued casualty reserves and other liabilities 20,125 11,043 Deferred income taxes 198,815 192,036 Minority interest in consolidated subsidiaries 271,971 266,741 Stockholders' Equity: Common stock, no par value; 60,000,000 shares authorized; 30,498,650 shares issued and outstanding 8,714 8,714 Retained earnings 1,108,774 955,239 Net unrealized gains on debt and marketable equity securities 54,628 52,114 --------- --------- Total Stockholders' Equity 1,172,116 1,016,067 ---------- ---------- Total Liabilities and Stockholders' Equity $1,873,190 $1,530,994 </TABLE> See accompanying notes.
<TABLE> <CAPTION> ST. JOE CORPORATION CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS (Unaudited) (Dollars in thousands except per share amounts) Three Months Six Months ended June 30 ended June 30 1996 1995 1996 1995 </CAPTION> <S> <C> <C> <C> <C> Net sales $ 33,195 $ 37,145 $ 158,714 $ 70,347 Operating revenues 46,995 48,760 92,438 91,936 ---------- ---------- ---------- ---------- Net sales and operating revenue 80,190 85,905 251,152 162,283 Cost of sales 16,394 29,216 50,670 55,553 Operating expenses 35,213 36,758 69,865 68,424 Selling, general and administrative expenses 5,530 7,074 14,166 14,621 ---------- ---------- ---------- ---------- Operating profit 23,053 12,857 116,451 23,685 Other income (expense): Dividends 1,009 768 1,715 1,333 Interest income 6,493 4,052 10,553 7,067 Interest expense (257) (1,086) (324) (1,893) Gain on sales and other dispositions of property 125 1,274 2,936 2,089 Other, net 1,208 2,229 2,605 2,672 ---------- ---------- ---------- ---------- 8,578 7,237 17,485 11,268 ---------- ---------- ---------- ---------- Income before income taxes and minority interest 31,631 20,094 133,936 34,953 Provision for income taxes 22,875 8,614 62,072 14,306 ---------- ---------- ---------- ---------- Income before minority interest 8,756 11,480 71,864 20,647 Income applicable to minority interest in consolidated subsidiaries 2,966 3,141 6,395 5,656 --------- ---------- ---------- ---------- Income from continuing operations 5,790 8,339 65,469 14,991 Earnings from discontinued operations net of income taxes of ($4,448), $8,536, $527 and $16,912 respectively (8,143) 17,997 746 32,859 Gain on sale of discontinued operations, net of income taxes of $61,638, $0, $61,638 and $0, respectively 90,370 - 90,370 - ---------- ---------- ---------- ---------- 82,227 17,997 91,116 32,859 ---------- ---------- ---------- ---------- Net income $ 88,017 $ 26,336 $ 156,585 $ 47,850 Retained earnings at beginning of period 1,022,282 907,509 955,239 887,520 Dividends (1,525) (1,525) (3,050) (3,050) ---------- ---------- ---------- ---------- Retained earnings at end of period $1,108,774 $ 932,320 $1,108,774 $ 932,320 ========== ========== ========== ========== Per share data: Dividends $ 0.05 $ 0.05 $ 0.10 $ 0.10 ========== ========== ========== ========== Income from continuing operations $ 0.19 $ 0.27 $ 2.15 $ 0.49 Earnings of discontinued operations 2.70 0.59 2.98 1.08 ---------- ---------- ---------- ---------- Net income $ 2.89 $ 0.86 $ 5.13 $ 1.57 ========== ========== ========== ========== </TABLE> See accompanying notes.
<TABLE> <CAPTION> ST. JOE CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Dollars in thousands except per share amounts) Six Months ended June 30 1996 1995 </CAPTION> <S> <C> <C> Cash flows from operating activities: Net income $ 156,585 $ 47,850 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and depletion 13,652 13,614 Minority interest in income 6,395 5,656 Gain on sale of property (2,936) (2,089) Gain on sale of discontinued operations (90,370) - Increase in deferred income taxes 6,779 7,857 Changes in operating assets and liabilities: Accounts receivable (1,492) 3,099 Inventories (5,454) (5,118) Other assets (23,168) 1,852 Accounts payable, accrued liabilities and casualty reserves 43,386 5,926 Income taxes payable 29,335 (7,012) Discontinued operations - noncash charges and working capital changes 12,165 (7,295) ---------- ---------- Cash provided by operating activities 144,877 64,340 ---------- ---------- Cash flows from investing activities: Purchases of property, plant and equipment (31,116) (51,040) Investing activities of discontinued operations - (6,411) Purchases of investments: Available for sale (14,515) (16,351) Held to maturity (118,171) (77,695) Proceeds from dispositions of assets 4,806 11,682 Proceeds from sale of discontinued operations 497,937 - Maturities and redemption of investments: Available for sale 8,420 18,193 Held to maturity 70,421 78,863 ---------- ---------- Cash provided by (used in) investing activities 399,782 (42,759) ---------- ---------- Cash flows from financing activities: Financing activities of discontinued operation - (7,626) Dividends paid to stockholders (3,050) (3,050) Dividends paid to minority interest (830) (825) ---------- ---------- Cash used in financing activities (3,880) (11,501) ---------- ---------- Net decrease in cash and cash equivalents 540,779 10,080 Cash and cash equivalents at beginning of period 16,802 71,890 ---------- ---------- Cash and cash equivalents at end of period $ 557,581 $ 81,970 ========== ========== Supplemental disclosure of cash flow information: Cash paid during the year for: Interest $ 733 $ 2,524 Income taxes $ 23,136 $ 26,572 </TABLE> See accompanying notes
ST. JOE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollars in thousands) 1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 1996 and December 31, 1995 and the results of operations and cash flows for the three and six month periods ended June 30, 1996 and 1995. The 1995 statements have been restated to reflect the reclass- ification of the Communications segment and linerboard mill and container plants as discontinued operations. 2. The results of operations for the three and six month periods ended June 30, 1996 and 1995 are not necessarily indicative of the results that may be expected for the full year. 3. On April 11, 1996, St. Joe Industries, Inc., a wholly owned subsidiary of the Company, sold the stock of St. Joe Communications, Inc. (SJCI) to TPG Communications, Inc. as previously discussed. SJCI also sold its interest in four cellular partnerships. These sales represent the CompanyOs entire Communication segment. On May 30, 1996, the Company sold its linerboard mill and container plants. The Company retains its timberlands and will continue to operate in this segment. Operating revenues for the three month periods ended June 30, 1996 and 1995 for the Communications segment were $0 and $8,060, respectively and for the six month periods ended June 30, 1996 and 1995 were $8,435 and $15,859 respectively and net sales for the linerboard mill and container plants for the three month periods ended June 30, 1996 and 1995 were $60,100 and $156,533, respectively and for the six month periods ended June 30, 1996 and 1995 were $153,406 and $302,104, respectively. These amounts are not included in net sales and operating revenues in the accompanying statement of income and retained earnings. The gain on the sale of these operations was $90.4 million after income taxes of $61.6 million. The gain is subject to final post closing working capital adjustments. Net operating results of the Communications segment and for the liner- board mill and container plants for the three and six month periods ended June 30, 1996 and 1995 are shown separately as earnings from discontinued operations in the accompanying statement of income and retained earnings. Net assets to be disposed of have been separately classified in the accompanying balance sheets at December 31, 1995. At June 30, there were no assets or liabilities to be disposed of. 4. As a result of the sale of the Communications segment and the linerboard mill and container plants and the attendant reduction in employees covered by the Company's pension plans, an estimated gain from curtailment of the pension plans of $1,200, net of tax, was recorded as part of the gain on sale of discontinued operations. In addition, the Company's pension plans are in an overfunded position and, with the reduction in employees resulting from the sales, it is unlikely that the overfunding will be realized other than by a plan termination and reversion of excess assets. Accordingly, the Company has recorded the 50% excise tax applicable to plan terminations as additional deferred taxes which amounted to approximately $11,000. The Company has no immediate plans to terminate the pension plans and is in the process of evaluating other alternatives. 5. Inventories at June 30, 1996 and December 31, 1995: June 30 December 31 1996 1995 Materials and supplies $14,766 $12,875 Sugar 11,280 7,717 ------- ------- $26,046 $20,592 ======= ======= 6. Accrued liabilities at June 30, 1996 consist of real estate and personal property taxes of $9,026, accrued casualty and other reserves of $14,910, purchase price adjustments on the sale of discontinued operations of $14,888 and other accrued liabilities of $7,405. 7. The Company and its subsidiaries are involved in litigation on a number of matters and are subject to certain claims which arise in the normal course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company's consolidated financial position or results of operations. The Company has retained certain self-insurance risks with respect to losses for third party liability, property damage and group health insurance provided to employees. The Company is subject to costs arising out of environmental laws and regulations, which include obligations to remove or limit the effects on the environment of the disposal or release of certain wastes or substances at various sites. It is the Company's policy to accrue and charge against earnings environmental cleanup costs when it is probable that a liability has been incurred and an amount is reasonably estimable. As assessments and cleanups proceed, these accruals are reviewed and adjusted, if necessary, as additional information becomes available. The Company is currently a party to, or involved in, legal proceedings directed at the cleanup of three Superfund sites. The Company has accrued its allocated share of the total estimated cleanup costs for these three sites. Based upon management's evaluation of the other potentially responsible parties, the Company does not expect to incur additional amounts even though the Company has joint and several liability. Other proceedings involving environmental matters such as alleged discharge of oil or waste material into water or soil are pending against the Company. It is not possible to quantify future environmental costs because many issues relate to actions by third parties or changes in environmental regulation. However, based on information presently available, management believes that the ultimate disposition of currently known matters will not have a material effect on the financial position, liquidity, or results of operation of the Company. As of June 30, 1996 and December 31, 1995, the aggregate environmental related accruals were $6.2 million. Environmental liabilities are paid over an extended period and the timing of such payments cannot be predicted with any confidence.
ST. JOE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW During the second quarter, the Company sold its Communication segment and its linerboard mill and container plants. Sale of the Communications segment occured on April 11, 1996 and the linerboard mill and containter plants on May 30, 1996. Operating revenues for the three month periods ended June 30, 1996 and 1995 for the Communications segment were $0 and $8,060, respectively and for the six month periods ended June 30, 1996 and 1995 were $8,435 and $15,859 respectively and net sales for the linerboard mill and container plants for the three month periods ended June 30, 1996 and 1995 were $60,100 and $156,635, respectively and for the six month periods ended June 30, 1996 and 1995 were $153,406 and $302,104, respectively. These amounts are not included in net sales and operating revenues in the accompanying statement of income and retained earnings. The gain on the sale of these operations was $90.4 million after income taxes of $61.6 million. The gain is subject to final post-closing working capital adjustments. Upon the completion of these sales, revenues of the Company will be materially lower than historical levels. Net income, earnings per share and cash flows may also be materially different than previous periods. Quarter ended June 30, 1996 Net sales and operating revenues for the quarter were $80.2 million, a $5.7 million decrease from the same period in 1995 and a $90.8 million decrease from the first quarter of 1996. A land sale to the State of Florida for $13.7 million was offset by a decline of $11.6 million in sales by the sugar segment and a $5.4 million dollar decline in forestry net sales. Cost of sales and operating expenses were $51.6 million, down from $66.0 million in 1995 and $68.9 million in the first quarter of 1996. These costs were 64.4% of net sales and operating revenues in 1996 compared to 76.8% in 1995 and 40.3% in the first quarter of 1996. Selling, general and administrative expenses were $5.5 million in the second quarter of 1996 compared to $7.1 million in the second quarter of 1995 and $8.7 million in the first quarter 1996. As a result of these changes, operating profit was $23.1 million compared to $12.8 million in the same quarter of 1995 and $93.4 million in the first quarter of 1996. Six Months ended June 30, 1996 Net sales and operating revenues were $251.2 million for the first half of 1996, an increase of $88.8 million over the same period in 1995. The increase was due to land sales to the State of Florida of $97.8 million. Cost of sales and operating expenses dropped to $120.5 million from 1995's $124.0 million. Selling, general and administrative expenses declined slightly to $14.2 million in 1996. Operating profit increased to $116.5 million compared to 1995's $23.7 million. An analysis of operating results by segment follows: <TABLE> <CAPTION> Forestry Quarter ended June 30, 1996 <S> <C> <C> <C> 1996 1995 % Decrease Net Sales 11.6 17.0 (31.8) Cost of Sales 10.9 16.8 (35.1) Selling, General and Administrative Expenses (0.7) 0.9 (177.8) Operating Profit (Loss) 1.4 (0.7) 300.0 </TABLE> A month long shutdown at the Company's linerboard mill prior to its sale resulted in sales to the mill decreasing. Delivered prices to the mill dropped by $0.42 per ton from the first quarter reflecting the execution of the fiber supply agreement with the purchaser of the linerboard mill on May 30, 1996. The fiber supply agreement is for fifteen years with two five year extensions. Annual wood fiber tonnage to be supplied from the Company's lands will not exceed that previously provided and is be at negotiated market prices adjusted on a quarterly basis. The Company plans in the future to shift its remaining fiber production from the Company's lands to higher margin timber products. <TABLE> <CAPTION> Six Months ended June 30, 1996 1996 1995 % Decrease </CAPTION> <S> <S> <S> <S> Net Sales 25.7 31.9 (19.4) Cost of Sales 25.1 30.3 (17.2) Selling, General and Administrative Expenses 0.6 2.1 (71.4) Operating Loss (0.0) (0.5) (100.0) </TABLE> Reduced production at the Company's linerboard mill prior to its sale resulted in sales to the mill decreasing. Cost of sales increased from 95.0% of sales in the first half of 1995 to 97.6% in the same period of 1996. <TABLE> <CAPTION> Transportation Quarter ended June 30, 1996 1996 1995 % Increase (Decrease) </CAPTION> <S> <C> <C> <C> Operating Revenues 47.0 48.7 (3.5) Operating Expenses 35.2 36.7 (4.1) Selling, General and Administrative Expenses 4.6 5.0 (7.8) Operating Profit 7.2 7.0 2.5 </TABLE> Rail traffic continued to decline on both the Company's rail subsidiaries. The lower operating revenues are primarily attributable to a decline in rail traffic of 1.6% on FEC and 5.8% on ANRR. <TABLE> <CAPTION> Six Months ended June 30, 1996 1996 1995 % Increase </CAPTION> (Decrease) <S> <C> <C> <C> Operating Revenues 92.4 91.9 0.5 Operating Expenses 69.9 68.4 2.1 Selling, General and Administrative Expenses 9.8 9.3 5.3 Operating Profit 12.7 14.2 (10.3) </TABLE> A decline of approximately 4.4% in rail shipments for the first six months together with the revenue reduction due to the haulage agreement, were the main contributors to the fall in operating profit. <TABLE> <CAPTION> Sugar Quarter ended June 30, 1996 1996 1995 % Increase (Decrease) </CAPTION> <S> <C> <C> <C> Net Sales 0.0 11.6 (100.0) Cost of Sales 0.0 7.9 (100.0) Selling, General and Administrative Expenses 0.8 0.5 60.0 Operating Profit (Loss) (0.8) 3.2 (125.0) </TABLE> The sugar segment had no shipments in the second quarter of 1996. The contract with the segment's customer calls for specific shipment levels throughout the year, but, at the request of the customer, the Company had shipped in the first quarter of 1996 in advance of the contract in an amount equal to approximately four months additional shipments. Normal shipments resumed in August. <TABLE> <CAPTION> Six Months ended June 30, 1996 1996 1995 % Decrease </CAPTION> <S> <C> <C> <C> Net Sales 18.7 23.9 (21.8) Cost of Sales 13.1 16.2 (19.1) Selling, General and Administrative Expenses 1.9 2.0 (5.0) Operating Profit 3.7 5.7 (35.1) </TABLE> Shipments in 1996 dropped 18.2% from 1995 levels. Prices also declined 4.3%. The cost of production declined by $3.89 in 1996 from $311.53 in 1995. <TABLE> <CAPTION> Real Estate Quarter ended June 30, 1996 1996 1995 % Increase </CAPTION> <S> <C> <C> <C> Net Sales 21.6 8.6 151.2 Cost of Sales 5.5 4.6 20.2 Selling, General and Administrative Expenses 0.9 0.6 46.6 Operating Profit 15.2 3.4 346.8 </TABLE> In 1996, a single realty property sale of $13.8 million was made to the State of Florida which did not occur in 1995. Rent and other income increased by $1.1 million in the second quarter of 1996 compared to the same period in 1995. Cost of sales increased due to cost associated with the sale of the property to the State of Florida. Selling, general and administrative expenses increased by $0.3 million. <TABLE> <CAPTION> Six Months ended June 30, 1996 1996 1995 % Increase </CAPTION> <S> <C> <C> <C> Net Sales 114.3 14.6 682.9 Cost of Sales 12.5 9.1 37.8 Selling, General and Administrative Expenses 1.8 1.2 51.5 Operating Profit 99.9 4.3 2,224.3 </TABLE> In 1996, realty property sales of $97.8 million were made to the State of Florida which did not occur in 1995. Rent and other income increased by $3.1 million in 1996 compared to the same period in 1995. Cost of sales increased principally due to cost associated with the sale of the property to the State of Florida. Selling, general and administrative expenses increased by $0.6 million. Other Income increased $1.5 million in the second quarter of 1996 compared to 1995. Interest income increased by $2.4 million reflecting increased investment and higher rates. Gain on sales and other dispositions of property, plant and equipment decreased $1.1 million. Other income, net fell by $1.0 million. Income from Continuing Operations decreased $2.5 million (31%) during the second quarter of 1996 from the same period in 1995. As a result of the sale of the Communications segment and the linerboard mill and container plants and the attendant reduction in employees covered by the Company's pension plans, an estimated gain from curtailment of the pension plans of $1.2 million, net of tax, was recorded as a part of the gain on the sale of discontinued operations. In addition, the Company's pension plans are in an overfunded position and, with the reduction in employees resulting from the sales, it is unlikely that the overfunding will be realized other than by a plan termination and reversion of the excess assets. Accordingly, the Company has recorded the 50% excise tax applicable to plan terminations as additional deferred taxes which amounted to approximately $11.0 million. The Company has no immediate plans to terminate the pension plans and is in the process of evaluating other alternatives. Earnings from discontinued operations (net of income taxes), representing the Company's former Communication segment and linerboard mill and container plants, were $26.1 million less than the second quarter of 1995. Net income for the quarter was 234% above the same period in 1995, due mainly to the $90.4 million gain on the sale of discontinued operations. Net income per share increased $2.03 to $2.89. Income from continuing operations was $0.19 per share. Financial Position The Company's financial position remains strong. Current assets rose to $756.8 million, an $259.6 million increase from year end. Current liabilities increased by $162.2 million causing the current ratio to drop from 11.2 to 1 at year end to 3.7 to 1 at the end of the second quarter. The Company increased its investment in marketable securities by $50.1 million over year end. Net property, plant and equipment increased by $15.6 million, largely in FECI. Deferred income taxes grew by $6.8 million, due primarily to deferred taxes on the proceeds of the condemnation sale to the State of Florida. Stockholders' equity at June 30, 1996 was $38.43 per share, an increase of $5.11 from December 31, 1995. PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At a Special Meeting of the stockholders held on April 24, 1996, the stockholders approved a proposal for the sale by the Company of those assets of St. Joe Forest Products Company ("SJFP") related to its paper mill business to PSJ Paper company L.L.C. ("JV") (a joint venture organized by Four M Corporation ("FMC") and Stone Container Corporation) and of St. Joe Container Company ("SJCC") related to its container business to FMC pursuant to an Asset Purchase Agreement dated as of November 1, 1995, as amended, among the Company, SJFP, and SJCC on one hand, and FMC and JV on the other hand. 25,155,461 votes were cast for, 17,002 votes were cast against, and 3,440 votes abstained as to the proposal. At the Annual Meeting of the stockholders held on May 14, 1996, stockholders approved a proposed change in the name of the corporation from St. Joe Paper Company to St. Joe Corporation and an amendment to the company's articles of incorporation to effect the same. 24,095,914 votes were cast for, 3,275 votes were cast against, and 3,637 abstained as to the proposal. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 3(i) Articles of Incorporation 3(ii)Bylaws 10 Wood Fiber Supply Agreement between St. Joseph Land and Development Company and Florida Coast Paper Company dated as of May 30, 1996 27 Financial Data Schedule (b) Reports on Form 8-K A Current Report on Form 8-K was filed on August 19, 1996 to report the closing on May 30, 1996 of the sale of the linerboard mill and container plant under Item 2, "Acquisition or Disposition of Assets." Except for the actual date of closing that was announced by press release on May 30, 1996, essentially all information concerning the sale was previously reported in the Company's Special Meeting Proxy Statement dated April 11, 1996 in connection with stockholder approval of the sale and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 which segregated discontinued operations.
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. St. Joe Corporation (Registrant) /s/ J. M. Jones, Jr. Vice President and CFO /s/ D. M. Groos Comptroller