-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HZK4cW55w8OX2SQxXlCkSKjym2prbR4H8EhYPrZ3XDYmByJ/bL6WWOVFf9ueDdwL AbxE6v4KlmO4EVaPZgyX+A== 0000012779-99-000010.txt : 19990630 0000012779-99-000010.hdr.sgml : 19990630 ACCESSION NUMBER: 0000012779-99-000010 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLUE RIDGE REAL ESTATE CO CENTRAL INDEX KEY: 0000012779 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 240854342 STATE OF INCORPORATION: PA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-02844 FILM NUMBER: 99655031 BUSINESS ADDRESS: STREET 1: PO BOX 707 CITY: BLAKESLEE STATE: PA ZIP: 18610 BUSINESS PHONE: 7174438433 MAIL ADDRESS: STREET 1: PO BOX 707 CITY: BLAKESLEE STATE: PA ZIP: 18610 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (X) ANNUAL REPORTS* PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES ACT OF 1934 (FEE REQUIRED) For the fiscal year ended MARCH 31, 1999 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transtion period from to 0-2844 (Blue Ridge) Commission File No. 0-2843 (Big Boulder) BLUE RIDGE REAL ESTATE COMPANY BIG BOULDER CORPORATION (exact name of Registrants as specified in their charters) State or other jurisdiction of incorporation or organization: Pennsylvania 24-0854342 (Blue Ridge) I.R.S. Employer Identification Number: 24-0822326 (Big Boulder) Address of principal executive office: Blakeslee, Pennsylvania Zip Code: 18610 Registrants' telephone number, including area code: 570- 443 - 8433 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, without par value, stated value $.30 per combined share* 1 Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing require- ments for the past 90 days: Yes_X_ No___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (X) The aggregate market value of common stock, without par value, stated value $.30 per combined share, held by non-affiliates at June 16,1998, was $22,159,799. The market value per share is based upon the per share cost of shares as indicated over the counter on March 31, 1998. There is no established public trading market for the Companies' stock. Number of shares outstanding of each of the issuer's classes of common stock. Class Outstanding June 18, 1999 Common Stock, without par value 1,971,958 Shares stated value $.30 per combined share DOCUMENTS INCORPORATED BY REFERENCE Specified portions of the Companies' 1999 Annual Report to Shareholders are incorporated by reference into Part II hereof. Specified portions of the Companies' definitive Proxy Statement for the 1999 Annual Meetings of Shareholders to be filed pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this report and is incorporated herein by reference. - -------------------- *Under a Security Combination Agreement between Blue Ridge Real Estate Company ("Blue Ridge") and Big Boulder Corporation ("Big Boulder") (the "Corporations") and under the By-Laws of the Corporations, shares of the Corporations are combined in unit certificates, each certificate representing the same number of shares of each of the Corporations. Shares of each Corporation may be transferred only together with an equal number of shares of the other Corporation. For this reason, a combined Blue Ridge/Big Boulder Form 10-K is being filed. Except as otherwise indicated, all information applies to both Corporations. 2 FORM 10-K PART I ITEM 1. BUSINESS BLUE RIDGE REAL ESTATE COMPANY Blue Ridge Real Estate Company ("Blue Ridge"), which was incorporated in Pennsylvania in 1911, is believed to be one of the largest owners of investment property in Northeastern Pennsylvania. It owns 18,843 acres of land which are predominately located in the Pocono Mountains. These lands are held entirely as investment property. Income is derived from these lands through leases, selective timbering by others, condemnation, sales, and other dispositions. Blue Ridge also owns the Jack Frost Mountain Ski Area which is leased to Jack Frost Mountain Company, a 225-site campground, a retail store leased to Wal-Mart and a shopping center. The ski area, campground retail store and shopping center are more fully described under Item 2. Jack Frost Mountain Company, a wholly-owned subsidiary of Blue Ridge was incorporated in Pennsylvania in 1980 and commenced operations on June 1, 1981. It was created to lease and operate the Jack Frost Mountain Ski Area and to provide certain services to other facilities, such as the Snow Ridge resort community, and to operate recreational facilities located within the Jack Frost Mountain tract. Northeast Land Company, a wholly owned subsidiary of Blue Ridge, was incorporated in Pennsylvania in 1967. The major assets of the company consist of 103 acres of land in Northeast Pennsylvania. Revenues are from managing the rental homes at Snow Ridge, Blue Heron, Laurelwoods and Midlake as resort accommodations, and from real estate commissions for the sale of homes at these resort communities, and from Trust and Condo fees for Services to these resort communities. Northeast Land Company also receives revenue from a land lease to a Burger King franchise, and leased space on a 196 foot communication tower.. BRRE Holdings, Inc., a wholly-owned subsidiary of Blue Ridge, was incorporated in Delaware in 1986. It was established for investment purposes. Blue Ridge employs 31 full-time employees. Jack Frost Mountain Company, which operates the Jack Frost Mountain Ski Area, has 40 full-time employees and during the skiing season there are approximately 500 additional employees. Northeast Land Company has 22 full-time employees. 3 ITEM 1. BUSINESS - (continued) BIG BOULDER CORPORATION Big Boulder Corporation ("Big Boulder") was incorporated in Pennsylvania in 1949. The major assets of the company are 929 acres of land, which includes a 175 acre lake, the Big Boulder Ski Area, and the Blue Heron Grille. The principal source of revenue for Big Boulder is derived from the Big Boulder Ski Area which is leased to Lake Mountain Company. Lake Mountain Company, a wholly-owned subsidiary of Big Boulder Corporation was incorporated in Pennsylvania in 1983 and commenced operations on June 1, 1983. It was created to lease and operate the Big Boulder Ski Area, and operate the recreational facilities as they are located within the Big Boulder Lake tract. BBC Holdings, Inc., a wholly-owned subsidiary of Big Boulder, was incorporated in Delaware in 1986. It was established for investment purposes. Big Boulder has no employees. Lake Mountain Company, which operates the Big Boulder Ski Area, no longer has any employees. The Lake Mountain Company has been merged with the payroll of Jack Frost Mountain Company. Big Boulder Ski area has 19 full-time employees. During the skiing season, there are approximately 525 additional employees. INDUSTRY SEGMENT INFORMATION Information with respect to business segments is presented in Note 12 to the Registrants' financial statements included in Item 8. The quarterly results of operations for 1999, 1998 and 1997 reflect the cyclical nature of the Companies' business since (a) the Companies' two ski facilities operate principally during the months of December through March and (b) land dispositions occur sporadically and do not follow any pattern during the fiscal year. Costs and expenses, net of revenues received in advance attributable to the ski facilities for the months of April through November, are deferred and recognized as revenue and operating expenses, ratably, over the operating period. ITEM 2. PROPERTIES A. BLUE RIDGE REAL ESTATE COMPANY The physical properties of Blue Ridge consist of approximately 18,946 acres owned by Blue Ridge and Northeast Land Company, the Jack Frost 4 Mountain Ski Area, the Fern Ridge Campground, the Wal-Mart Store, the Dreshertown Shopping Center, a sewage treatment facility, corporate headquarters building, and other miscellaneous facilities. SKI FACILITIES The Jack Frost Mountain Ski Area, under lease to Jack Frost Mountain Company since June 1, 1981, is located near White Haven, Carbon County, Pennsylvania, and commenced operations in December 1972. The Jack Frost Mountain Ski Area consists of twenty-one slopes and trails including a snowboard slope, snowmobile course, snowtubing hill, five double chairlifts, two triple chairlifts, one quad chairlift, and various buildings including a Summit Lodge with food service, a cocktail lounge, a ski shop, and a ski rental shop. The total lift capacity per hour is 12,000 skiers. These lifts are in good condition and are operated as needed during the ski season. These facilities are situated on approximately 473 acres owned by Blue Ridge and leased to Jack Frost Mountain Company. The total capital investment in the ski area is $19,950,240, the major portion of which represents the cost of the slopes and trails, chairlifts, snowmaking equipment, water supply, roads and parking areas, and all buildings including the Summit Lodge. The remainder is for furnishings and equipment for the Summit Lodge, trucks, maintenance equipment, and miscellaneous outside equipment. At March 31, 1999 the outstanding debt on the Jack Frost Mountain Ski Area was $855,661. REAL ESTATE MANAGEMENT OPERATIONS The Wal-Mart Store located in Laurens, South Carolina, was acquired in September 1990 for cash consideration of $2,190,470 which was the total capital investment at March 31, 1999. The building consists of 70,000 square feet, located on 10.217 acres of land and is leased to Wal-Mart on a triple net basis through January 31, 2014. At March 31, 1999 a mortgage totaling $1,379,007 was outstanding on this property. The Dreshertown Plaza Shopping Center, Dresher, Montgomery County, Pennsylvania, was acquired in July, 1986 for consideration of $4,592,579. The center consists of approximately 101,233 square feet located on approximately 15 acres of land. On March 31, 1999, the center was 97% occupied under leases expiring on various dates from April 30, 1999 to October 31, 2011. The total capital investment in the shopping center is $5,441,971. At March 31, 1999, a mortgage totaling $5,298,500 was outstanding on this property. 5 The Fern Ridge Campground is located at the intersection of Route 115 and Interstate 80 in Monroe County, Pennsylvania. This campground is built on 85 acres and consists of 225 campsites, 75 with water and electric, 25 with rustic cabins and the remaining 125 are wilderness sites. Its operating period is from April 1 through September 30. At March 31, 1999, the Company's investment in this facility was $640,290. Blue Ridge owns 18,843 acres of land which are predominately located in the Pocono Mountains. The majority of this property is leased to various hunting clubs. Blue Ridge also owns several cottages in the area that are leased to private individuals. Blue Ridge owns and leases to Jack Frost Mountain Company a sewage treatment facility to serve the resort housing at Jack Frost Mountain. The total investment in this facility at March 31, 1999 was $1,273,443 with outstanding debt of $148,919. Blue Ridge also owns The Sports Complex at Jack Frost Mountain which consists of a swimming pool, fitness trail, tennis courts, in-line skate park, A.T.V. (All Terrain Vehicle) park and accompanying buildings. The Stretch is an exclusive fishing club. The Corporate Office Building is located on Route 940 and Mosey Wood Road. Northeast Land Company owns 103 acres of land which are located in the Pocono Mountains and a 196 foot communication tower. For the fiscal year ended March 31, 1999, revenues from operations of Blue Ridge and its subsidiaries amounted to $11,468,148. Approximately 51% of this revenue or $5,852,082 was derived from the Jack Frost Mountain Ski Area which operated 93 days during the fiscal year. B. BIG BOULDER CORPORATION The physical properties owned by Big Boulder consist of approximately 929 acres, the Big Boulder Ski Area, a sewage treatment facility, a 200 foot communications tower, and the Blue Heron Grille. 6 SKI FACILITIES The Big Boulder Ski Area's physical properties have been leased to Lake Mountain Company since June 1, 1983, and are located in Kidder Township, Carbon County, Pennsylvania. Big Boulder Ski Area commenced operations in 1947. The Big Boulder Ski Area contains fourteen slopes and trails including a snowboard slope, snowtubing hill, five double chairlifts, two triple chairlifts, and various buildings including a base lodge, providing food service, a cocktail lounge, a ski shop and a ski rental service. The total lift capacity per hour is 9,600 skiers. These lifts are in good condition and are operated as needed during the ski season. These facilities are situated on approximately 90 acres owned by Big Boulder. The total capital investment in the ski area is $13,328,302. At March 31, 1999, the outstanding debt on the Big Boulder Ski Area was $726,583. REAL ESTATE MANAGEMENT OPERATIONS A sewage treatment facility was constructed by Big Boulder Corporation to serve the resort housing within the Big Boulder tract. The facility has the capacity of treating 225,000 gallons per day and is leased to Lake Mountain Company for operation. The capital investment in the facility at March 31, 1999, was $1,511,847 with an outstanding debt of $391,237 at that date. Big Boulder Corporation constructed the Blue Heron Grille which consists of 8,800 square feet and is located on the east shore of Big Boulder Lake, Kidder Township, Carbon County, Pennsylvania. The facility, leased to a private operator, commenced operations in May 1986. The restaurant has dining capacity for 100 patrons. The capital investment in the facility at March 31, 1999 was $1,563,626. Big Boulder owns 929 acres of land which are located in the Pocono Mountains. The Big Boulder Lake Club includes a 175 acre lake, swimming pool, tennis courts, boat docks and accompanying buildings. For the fiscal year ended March 31, 1999, revenues from operations of Big Boulder amounted to $6,319,332. Approximately 83% of this revenue of $5,271,936 was derived from the Big Boulder Ski Area which operated 86 days during that fiscal year. ITEM 3. LEGAL PROCEEDINGS Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. 7 ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANTS Age Office Held Since Michael J. Flynn 64 1991 Chairman of the Board Gary A. Smith 56 1992 President Melanie Murphy 39 1996 Vice President-Operations All officers of the Registrants serve for a one-year period or until their election at the first meeting of the Board of Directors after the Annual Meeting of Shareholders. Michael J. Flynn was elected Chairman of the Board of the Registrants on July 11, 1991. He is Vice Chairman of the Board of Kimco Realty Corporation since January 1996. Mr. Flynn serves as a Director of Kimco Realty Corporation. Mr. Flynn was formerly Chairman of the Board and President of Slattery Associates, Inc. and Director of Slattery Group, Inc. From 1987 to December 1995. Gary A. Smith was appointed President in July, 1992. He has been employed by the Registrants on a full-time basis since September 1982; he was appointed Vice President and Treasurer in July 1983 and Senior Vice President in September 1987. Melanie Murphy was appointed Vice President-Operations in June, 1996. She has been employed by the Registrants on a full-time basis since July, 1984. ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS Information required with respect to Registrants' common stock and related shareholder matters is incorporated herein by reference to the caption entitled "Price Range of Common Shares and Dividend Information" on Page 12 of the Fiscal 1999 Annual Report to Shareholders. ITEM 6. SELECTED FINANCIAL DATA Information required with respect to the specified financial data is incorporated herein by reference to Page 13 of the Fiscal 1999 Annual Report to Shareholders. 8 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Information required with respect to Registrants' financial condition, changes in financial condition and results of operations is incorporated herein by reference to Pages 13 through 15 of the Fiscal 1999 Annual Report to Shareholders. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The required financial statements are incorporated herein by reference to Pages 2 through 12 of the Fiscal 1999 Annual Report to Shareholders. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS The information concerning Directors required by Item 10 of Form 10-K is set forth under the caption "Election of Directors" in the Registrants' definitive Proxy Statement for the 1999 Annual Meetings of Shareholders to be filed pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this report and is incorporated herein by reference. The information concerning Executive Officers required by Item 10 of Form 10-K is set forth in Item 4A of this report. CERTAIN SIGNIFICANT EMPLOYEES OF THE REGISTRANTS Employed in Present Age Position Since Carl V. Kerstetter, Director of Marketing 48 1991 Eldon D. Dietterick, Secretary/Treasurer 53 1996 Carl V. Kerstetter and Eldon D. Dietterick have been employed by the Registrants on a full-time basis for more than five years. ITEM 11. EXECUTIVE COMPENSATION The information concerning Executive Compensation required by Item 11 of Form 10-K is set forth under the caption "Remuneration of Executive Officers and Directors" in the registrant's definitive Proxy Statement for the 1999 Annual Meetings of Shareholders to be filed pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this report and is incorporated herein by reference. 9 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by Item 12 of Form 10-K is set forth under the caption "Holdings of Common Stock" in the Registrants' definitive Proxy Statement for the 1999 Annual Meetings of Shareholders to be filed pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the end of the fiscal year covered by this report and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Not applicable. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K A. (1) Financial statements included in Registrants' Fiscal 1997 Annual Report to Shareholders on Pages 2 through 12 are incorporated by reference. The Report of Independent Accountants for the combined financial statements appears on Page 14 of this Form 10-K. A. (2) Financial Statement Schedules The following is a list of financial statement schedules filed as part of this Annual Report on Form 10-K. The report of Independent Accountants for the financial statement schedule appears on Page 28 of this Form 10-K. All other schedules omitted herein are so omitted because either (1) they are not applicable, (2) the required information is shown in the financial statements, or (3) conditions are present which permit their omission, as set forth in the instructions pertaining to the content of financial statements: Schedules: III. Real Estate and Accumulated Depreciation A. (3) Exhibits, Including Those Incorporated by Reference The following is a list of Exhibits filed as part of this Annual Report on Form 10-K. Where so indicated by footnote, Exhibits that were previously filed are incorporated by reference. For Exhibits incorporated by reference, the location of the Exhibit in the previous filing is indicated in parentheses. 10 Legend for Documents Incorporated Page Articles of Incorporation and By-Laws By Reference Number 3( 1).1 Articles of Incorporation (1) 3( 1).4 Articles of Amendment (2) 3(ii).1 By-Laws of Blue Ridge Real Estate Company as amended through July 25, 1990 (8) 3(ii).2 By-Laws of Big Boulder Corporation as amended through July 25, 1990 (8) Instruments Defining the Rights of Security Holders including Indentures 4.1 Specimen Certificate for Shares of (1) Common Stock 4.2 Security Combination Agreement (1) 4.3 Revised Specimen Unit Certificates for shares of common stock (7) Material Contracts Financial Agreements 10.1.1 Mortgage Relating to the Construction of the Jack Frost Mountain Ski Area (2) 10.1.2 Construction Loan - Jack Frost Mountain Ski Area (3) 10.1.3 Loan from PNC Bank, Wilkes-Barre (4) 10.1.4 First Mortgage, Principal Mutual, Building leased to Wal-Mart (8) 10.1.16 First Mortgage, CoreStates Bank, NA, Dreshertown Plaza Shopping Center, Montgomery County Acquisition of Properties 10.2.1 Acquisition of Dreshertown Plaza Shopping Center (6) 10.2.2 Acquisition of Building leased to Wal-Mart (8) Lease 10.3.1 Building leased to Wal-Mart (10) 11 Agreement with Executive Officers and Director 10.4.1 Stock Option - Michael J. Flynn (9) Stock Option Agreement - Michael J. Flynn Subsidiaries of the Registrants 21.1 List of the Subsidiaries of the Registrants (6) (1) Filed September 23, 1966 as an Exhibit to Form 10 and incorporated herein by reference (2) Filed August 22, 1973 as an Exhibit to Form 10-K and incorporated herein by reference (3) Filed August 27, 1975 as an Exhibit to Form 10-K and incorporated herein by reference (4) Filed February 7, 1975 as an Exhibit to Form 8-K and incorporated herein by reference (5) Northeast Land Company - Incorporated in Commonwealth of Pennsylvania Jack Frost Mountain Company - Incorporated in Commonwealth of Pennsylvania Lake Mountain Company - Incorporated in Commonwealth of Pennsylvania Big Boulder Lodge, Inc. - Incorporated in Commonwealth of Pennsylvania BRRE Holdings, Inc. - Incorporated in State of Delaware BBC Holdings, Inc. - Incorporated in State of Delaware (6) Filed August 28, 1987 as an Exhibit to Form 10-K and incorporated herein by reference (7) Filed August 28, 1990 as an Exhibit to Form 10-K and incorporated herein by reference (8) Filed August 26, 1991 as an Exhibit to Form 10-K and incorporated herein by reference (9) Filed August 26, 1994 as an Exhibit to Form 10-K and incorporated herein by reference (10) Filed August 29, 1995 as an Exhibit to Form 10-K and incorporated herein by reference. Copies of Exhibits are available to Shareholders by contacting Eldon D. Dietterick, Secretary, Blakeslee, PA 18610. A charge of $.25 per page to cover the Registrants' expenses will be made. B. Reports on Form 8-K None 12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized. BLUE RIDGE REAL ESTATE COMPANY BLUE RIDGE REAL ESTATE COMPANY BIG BOULDER CORPORATION BIG BOULDER CORPORATION By:___________________________ By:___________________________ Gary A. Smith Cynthia A. Barron President Chief Accounting Officer Dated:________________________ Dated:________________________ Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrants and in the capacities and on the dates indicated. Each person in so signing also makes, constitutes and appoints Gary A. Smith, President, his true and lawful attorney-in-fact, in his name, place and stead to execute and cause to be filed with the Securities and Exchange Commission any or all amendments to this report. _______Signature_______ __________Title___________ ____Date___ - ----------------------- ----------- Michael J. Flynn Chairman of the Board Principal Executive Officer - ----------------------- ----------- Gary A. Smith President Chief Operating Officer Principal Financial Officer - ---------------------- ----------- Kieran E. Burke Director - ---------------------- ----------- Milton Cooper Director - ---------------------- ----------- Allen J. Model Director - ---------------------- Wolfgang Traber Director ___________ 13 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES To the Board of Directors of Blue Ridge Real Estate Company and Big Boulder Corporation Our audits of the combined financial statements referred to in our report dated June 4, 1999 appearing on the 1999 Annual Report to Shareholders of Blue Ridge Real Estate Company and Big Boulder Corporation (which report and combined financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the combined financial statements schedules listed in Item 14 (a)(2) of the Form 10K. In our opinion, these combined financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related combined financial statements. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania June 4, 1999 14 COMBINED SCHEDULE III. REAL ESTATE AND ACCUMULATED DEPRECIATION March 31, 1999
COLUMN A COLUMN B COLUMN C COLUMN D Initial Cost Cost Capitalized to Company Subsequent To Acquisition BUILDINGS & DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS IMPROVEMENTS Land located in N E PA including various improvements 1,867,766 49,915 3,829,968 Corporate Building 282,918 187,989 Buildings Leased to Others Eastern PA Exchanged Asset- Shopping Center 5,700,000 780,700 4,554,235 107,036 Other 0 0 0 2,308,869 Laurens,SC 1,600,000 276,000 1,914,470 0 TOTAL 7,300,000 2,924,466 6,801,538 6,433,862 COLUMN E COLUMN F Gross Amount at which Carried at Close of Period (1)(2) Land located in N E PA including BUILDING ACCUMULATED Various improvements LAND IMPROVEMENTS TOTAL DEPRECIATION 1,867,656 3,879,883 5,747,539 2,263,257 Corporate Building 470,907 470,907 235,639 Buildings Leased to Others Eastern PA Exchanged Asset- Shopping Center 780,700 4,661,271 5,441,971 2,543,189 Other 0 2,308,869 2,308,869 1,180,926 Laurens, SC 276,000 1,914,470 2,190,470 531,796 TOTAL 2,924,356 13,235,400 16,159,756 6,754,807 15 COLUMN G COLUMN H COLUMN I LIFE ON WHICH DEPRECIATION DATE OF DATE IN LATEST INCOME CONTSTRUCTION ACQUIRED STATEMENT IS COMPUTED Land located in NE PA Including various improvements Various Various 5 to 30 Yrs Corporate Building 1982 10 to 30 Yrs Buildings leased to others Eastern PA Exchanged Asset Shopping Center N/A Various 5 to 30 Yrs Other N/A Various 5 to 30 Yrs Laurens, SC N/A Various 5 to 30 Yrs TOTAL (1) Activity for the fiscal years ended March 31, 1999, March 31, 1998 & March 31, 1997 is as follows: 1999 1998 1997 ---- ---- ---- Balance at beginning of year 15,927,399 17,477,744 16,878,154 Additions during year: Improvements 232,439 181,369 599,590 (reclassify) 0 (1,731,686) 0 16,159,838 15,927,427 17,477,744 Deductions during year: Cost of real estate sold 82 28 0 Balance at end of year 16,159,756 15,927,399 17,477,744 (2) The aggregate cost for Federal Income Tax purposes at March 31, 1999 is $14,704,002 (3) Activity for the fiscal years ended March 31, 1999, March 31, 1998 & March 31, 1997 is as follows: 1999 1998 1997 ---- ---- ---- Balance at beginning of year 6,366,443 7,029,213 6,602,457 Additions during year: (Reclassification) 0 (920,651) 0 Current year depreciation 388,364 257,881 426,756 Less retirements 0 0 0 Balance at end of year 6,754,807 6,366,443 7,029,213
16 BLUE RIDGE REAL ESTATE COMPANY BIG BOULDER CORPORATION To Our Shareholders, For Fiscal 1999, the companies report net income of $153,081 or $.08 per combined share, compared to net income of $394,593 or $.20 for the previous year. The ski areas experienced 257,000 skier visits and 86,000 tubing visits compared to 293,000 skier visits and 92,000 tubing visits from the prior season. Sixty degree temperatures in early December plus rain on crucial weekends in January resulted in the reduction of revenue from ski operations. Our ski market has historically been Philadelphia. Recently we have made a strong effort to introduce ourselves in the New York area. This includes television, billboards and group leader contacts. We have seen some positive results from these efforts, and with a good ski season anticipate additional growth. We are proud to announce the second side of the East Mountain chairlift will be installed at Jack Frost Mountain. This gives us an additional uphill capacity of 1,200 skiers per hour on our most popular slopes. We are also investing in two state of the art grooming vehicles to maintain the excellent reputation we have for well-groomed terrain. Our on going strategy has been to generate revenue during the non-ski season to hedge against the effects of poor weather conditions during the ski season. The growing success of this strategy helped this year's profitability. Festivals contribute the biggest portion of revenue during the summer months. The nationally acclaimed Blues Festival and the Pocono Gathering on the Mountain are the two most popular festivals. Jack Frost Mountain's summer program caters to extreme sports enthusiasts with Splatter paintball games, an in-line skate and board park, an all terrain vehicle (ATV) ride park and a mountain bike center. Our Fern Ridge Campground continues to expand with 10 additional cabins this year bringing our total to 225 sites. Our summer festivals, activities at Jack Frost Mountain and other local events support the occupancy of this campground. The Pennsylvania Department of Transportation (PennDOT) plans to build a rest station on Interstate 80 located in our core area. We have contracted with PennDOT to build a sewer line from our Jack Frost treatment plant to the rest station and provide service. This $850,000 project is scheduled for completion in September 1999 and is treated as extraordinary income on the Financial Statement. The growth in cellular communication has created an opportunity for us in the form of leased space on communication towers. We currently have two towers located at strategic locations on our lands. Future development opportunities and the companies large land holdings is its major potential. We continue to explore possible real estate ventures and periodically test the market to move forward should an upturn occur. Municipal approval for home sites adjacent to our ski areas and permits for a golf course are in place. The key to our growth and success has been the upbeat attitude of our employees. I would like to thank them for their hard work and dedicated efforts throughout the year. Gary A. Smith President Blakeslee, Pennsylvania June 18, 1999 17
BLUE RIDGE REAL ESTATE COMPANY AND SUBSIDIARIES AND BIG BOULDER CORPORATION AND SUBSIDIARIES COMBINED BALANCE SHEETS March 31, 1999 and 1998 ASSETS 1999 1998 Current Assets: Cash and cash equivalents (all funds are Interest bearing) 2,707,188 $2,799,777 Accounts receivable 559,678 594,856 Refundable income taxes 0 8,614 Inventories 283,946 221,210 Prepaid expenses and other current assets 674,448 485,513 Total current assets 4,225,260 4,109,970 Other non-current assets 36,797 36,797 Properties: Land, principally unimproved (19,875 and 19,877, respectively, acres per land ledger) 1,867,655 1,867,738 Land improvements, buildings and equipment 50,533,623 48,907,191 52,401,278 50,774,929 Less accumulated depreciation & amortization 32,855,580 30,977,716 19,545,698 19,797,213 $23,807,755 $23,943,980 LIABILITIES AND SHAREHOLDERS' EQUITY 1999 1998 Current liabilities: Current installments of long-term debt 461,609 $ 457,503 Accounts and other payables 861,740 436,941 Accrued claims 68,943 78,423 Accrued income taxes 168,517 267,885 Accrued liabilities 1,005,919 923,949 Deferred revenue 328,207 236,598 Total current liabilities 2,894,935 2,401,299 Long-term debt, less current installments 8,338,296 8,833,406 Deferred income taxes 2,208,852 2,295,417 Commitments and contingencies Combined shareholders' equity: Capital stock, without par value, stated value $.30 per combined share, Blue Ridge and Big Boulder each authorized 3,000,000 shares, each issued 2,198,148 shares 659,444 659,444 Capital in excess of stated value 1,461,748 1,461,748 Earnings retained in the business 9,782,983 9,629,902 11,904,175 11,751,094 Less cost of 225,190 and 206,134 shares of capital stock in treasury as of March 31, 1999 and 1998, respectively 1,538,503 1,337,236 10,365,672 10,413,858 $23,807,755 $23,943,980 The accompanying notes are an integral part of the combined financial statements.
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BLUE RIDGE REAL ESTATE COMAPNY AND SUBSIDIARIES AND BIG BOULDER CORPORATION AND SUBSIDIARIES COMBINED STATEMENTS OF OPERATIONS AND EARNINGS RETAINED IN THE BUSINESS for the years ended March 31, 1999,1998 & the 10 months ended March 31, 1997, 1999 1998 1997 Revenues: Ski operations $11,124,018 $12,298,893 $11,251,882 Real estate management 4,926,533 4,610,779 3,367,627 Rental income 1,736,929 1,746,323 1,418,491 17,787,480 18,655,995 16,038,000 Costs and expenses: Ski operations 11,293,011 11,395,132 9,778,443 Real estate management 4,230,279 3,941,009 3,164,328 Rental income 868,536 826,504 768,565 General and administration 1,064,167 1,068,163 893,485 17,455,993 17,230,808 14,604,821 Income from operations 331,48 1,425,187 1,433,179 Other income (expense): Interest and other income 81,288 131,397 57,067 Interest expense (698,913) (818,994) (748,531) (617,625) (687,597) (691,464) Income (loss)before income taxes & extraordinary item (286,138) 737,590 741,715 Provision(credit)for income taxes: Current (11,173) 248,927 234,528 Deferred (86,564) 94,070 20,381 (97,737) 342,997 254,909 Income (loss) before extraordinary item (188,401) 394,593 486,806 Extraordinary income (net of tax of $72,162) 341,482 0 0 Net income 153,081 394,593 486,806 Earnings retained in business: Beginning of year 9,629,902 9,235,309 8,748,503 End of year $9,782,983 $9,629,902 $9,235,309 Basic earnings per weighted average combined share: Before extraordinary item ($0.09) $0.20 $0.24 Extraordinary item 0.17 $0.00 $0.00 Net Income $0.08 $0.20 $0.24 Diluted earnings per weighted average combined share: Before extraordinary item ($0.09) $0.20 $0.24 Extraordinary item $0.17 $0.00 $0.00 Net Income $0.08 $0.20 $0.24 The accompanying notes are an integral part of the combined financial statements. 19
BLUE RIDGE REAL ESTATE COMPANY AND SUBSIDIARIES AND BIG BOULDER CORPORATION AND SUBSIDIARIES COMBINED STATEMENTS OF CASH FLOWS For the years ended March 31, 1999, 1998 & the 10 months ended March 31, 1997.
1999 1998 1997 Cash Flows From Operating Activities: Net income $153,081 $394,593 $486,806 Adjustments to reconcile net income to net cash provided by operating activities: Extraordinary item (341,482) 0 0 Depreciation and Amortization 2,003,891 2,059,274 1,928,651 Deferred income taxes (86,564) 94,070 20,381 Deferred revenue 91,609 44,042 (100,539) Gain on sale of assets (4,930) (33,746) 0 Changes in operating assets and liabilities: Accounts receivable 35,178 (164,228) (85,561) Refundable income taxes 8,614 14,532 (23,146) Prepaid expenses & other current assets (251,671) 166,428 17,027 Accounts payable & accrued liabilities 497,289 47,746 (477) Accrued income taxes (99,368) 129,319 79,468 Net cash provided by operating activities 2,005,647 2,752,028 2,322,610 Cash Flows From (used in) Investing Activities: Marketable securities 0 303,096 (9,508) Collection of mortgage receivable 0 0 2,479 Other non-current assets 0 0 34,500 Contributed assets-sewer line construction 341,482 0 0 Proceeds from disposition of assets 16,150 33,773 4,200 Additions to properties (1,763,597) (1,804,696) (2,313,407) Cash(used in)investing activities (1,405,965) (1,467,827) (2,281,736) Cash Flows From (used in) Financing Activities: Additions to long-term debt 0 5,331,999 649,985 Borrowings under short-term financing 1,950,000 2,000,000 1,500,000 Payment of short-term financing (1,950,000) (2,000,000) (1,500,000) Payment of long-term debt (491,004) (5,819,521) (565,721) Purchase of treasury stock (201,267) (81,003) 0 Net cash provided by (used in)financing activities (692,271) (568,525) 84,264 Net increase (decrease) in cash & cash equivalents (92,589) 715,676 125,138 Cash & cash equivalents, beginning of year 2,799,777 2,084,101 1,958,963 Cash & cash equivalents, end of year $2,707,188 $2,799,777 $2,084,101 Supplemental disclosures of cash flow information: Cash paid during year for: Interest $714,107 $826,330 $726,430 Income taxes $214,100 $141,898 $207,300 The accompanying notes are an integral part of the combined financial statements.
20 NOTES TO COMBINED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: BASIS OF COMBINATION: The combined financial statements include the accounts of Blue Ridge Real Estate Company (Blue Ridge) and its wholly-owned subsidiaries, Northeast Land Company, Jack Frost Mountain Company, and BRRE Holdings, Inc.; and Big Boulder Corporation (Big Boulder) and its wholly-owned subsidiaries, Lake Mountain Company and BBC Holdings, Inc. Under a Security Combination Agreement between Blue Ridge and Big Boulder and under the bylaws of both Companies, shares of the Companies are combined in unit certificates, each certificate representing concurrent ownership of the same number of shares of each company; shares of each company may be transferred only together with an equal number of shares of the other company. All significant intercompany accounts and transactions are eliminated. DISPOSITION OF LAND AND RESORT HOMES: The Companies recognize income on the disposition of real estate in accordance with the provisions of Statement of Financial Accounting Standards No. 66, "Accounting for Sales of Real Estate" (SFAS 66). Down payments of less than 20% are accounted for as deposits as required by SFAS No 66. The costs of developing land for resale as resort homes and the costs of constructing certain related amenities are allocated to the specific parcels to which the costs relate. Such costs, as well as the costs of construction of the resort homes, are charged to operations as sales occur. Land held for resale and resort homes under construction are stated at lower of cost or market. PROPERTIES AND DEPRECIATION: Properties are stated at cost. Depreciation is provided principally using the straight-line method over the following years: Land improvements 10-30 Buildings 3-30 Equipment and furnishings 3-20 Ski facilities: Land improvements 10-30 Buildings 5-30 Machinery and equipment 5-20 Upon sale or retirement of depreciable property, the cost and related accumulated depreciation are removed from the related accounts, and resulting gains or losses are reflected in income. Interest, real estate taxes, and insurance costs, including those costs associated with holding unimproved land, are normally charged to expense as incurred. Interest cost incurred during construction of facilities is capitalized as part of the cost of such facilities. Maintenance and repairs are charged to expense, and major renewals and betterments are added to property accounts. Impairment losses are recognized in operating income as they are determined. The Companies periodically review their property and equipment to determine if its carrying cost will be recovered from future operating cash flows. 21 In cases when the Companies do not expect to recover their carrying cost, the Companies recognize an impairment loss. No such losses were recognized in the three periods ended March 31, 1999. INVENTORIES: Inventories consist of food, beverage, and retail merchandise and are stated at cost which approximates market, with cost determined using the first-in, first-out method. PENSIONS: The Companies are parties to a non-contributory defined benefit pension plan covering all permanent employees who meet certain requirements as to age and length of employment. Pension benefits vest after five years of vesting service and are based on the participant's earnings in the 60 consecutive months during the last ten years of employment in which earnings are highest. Plan assets consist primarily of U.S. Government Notes, common stocks and short-term investments. Pension expense is computed under the projected unit credit method which spreads past service costs over the average future service lives of covered employees. The Companies' policy is to fund pension contributions in accordance with statutory requirements. INVESTMENTS: The Companies have an investment in Commercial Paper which is liquid on a daily basis, and is classified as a cash equivalent. DEFERRED REVENUE: Deferred revenues include revenues billed in advance for services and dues which are not yet earned. INCOME TAXES: The Companies account for income taxes utilizing the asset and liability method of recognizing the tax consequence of transactions that have been recognized for financial reporting or income tax purposes. Among other things, this method requires current recognition of the effect of changes in statutory tax rates on previously provided deferred taxes. Valuation allowances are established, when necessary, to reduce tax assets to the amount expected to be realized. Blue Ridge, including its subsidiaries, and Big Boulder, including its subsidiaries, report as separate entities for federal income tax purposes. State income taxes are reported on a separate company basis. USE OF ESTIMATES AND ASSUMPTIONS: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. FAIR VALUE: The Companies have estimated the fair value of their financial instruments at March 31, 1999 as follows: The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair values. The carrying values of variable and fixed rate debt are reasonable estimates of their fair values based on their discounted cash flows at discount rates currently available to the Companies for debt with similar terms and remaining maturities. 22 STATEMENT OF CASH FLOWS: For purposes of reporting cash flows, the Companies consider cash equivalents to be all highly liquid investments with maturities of three months or less when acquired. CONCENTRATION OF CREDIT RISK: Financial instruments which potentially subject the Companies to concentration of credit risk consist principally of temporary cash investments. The Companies' temporary cash investments are held by financial institutions. The Companies have not experienced any losses related to these investments. RECLASSIFICATION Certain reclassifications have been made to conform to current year presentation. 2. CHANGE IN FISCAL REPORTING PERIOD At the July 24, 1996 Board of Directors meetings, a change in the fiscal year-end was approved from May 31 to March 31. This change is effective for each of the Companies' 1997 Fiscal years. The purpose is to have the fiscal reporting period coincide with the operating periods of the Companies. The results of operations from the comparable 10 month periods are as follows: (UNAUDITED) (UNAUDITED) 3/31/99 3/31/98 3/31/97 Revenues 16,871,433 17,686,316 16,038,000 Operating Income 416,031 1,437,240 1,433,179 Income Taxes ( 18,902) 396,947 254,909 Net Income 271,333 475,518 486,806 3. SALE OF LAND: The Companies sold land in Fiscal 1999 for cash consideration of $8,000.
23 4. CONDENSED FINANCIAL INFORMATION: Condensed financial information of the constituent Companies, Blue Ridge and its subsidiaries and Big Boulder and its subsidiaries, at March 31, 1999, 1998 and 1997 and for each of the periods then ended is as follows: BLUE RIDGE AND SUBSIDIARIES 12 Mos 12 Mos 10 Mos - -S> Ended Ended Ended 3/31/99 3/31/98 3/31/97 FINANCIAL POSITION: Current assets $1,839,683 $1,902,941 $1,894,928 Total assets 16,096,555 15,896,492 16,066,800 Current liabilities 2,403,281 1,864,255 1,723,363 Shareholders'equity 4,617,148 4,699,630 4,796,387 OPERATIONS: Revenues 11,468,148 10,914,914 8,880,248 Income(loss)before taxes & extraordinary item (350,493) 94,741 66,225 Provision(credit)for income taxes (127,795) 110,495 34,472 Extraordinary item 341,482 Net income (loss) 118,784 (15,754) 31,753 BIG BOULDER AND SUBSIDIARIES - -------------------------------------------------------------------------------- 12 mos 12 mos 10 mos - -------------------------------------------------------------------------------- Ended Ended Ended 3/31/99 3/31/98 3/31/97 FINANCIAL POSITION: Current assets $2,385,577 $2,207,029 $1,819,194 Total assets 7,711,200 8,047,488 7,735,937 Current liabilities 491,654 537,044 531,840 Shareholders'equity 5,748,524 5,714,228 5,303,881 OPERATIONS: Revenues 6,319,332 7,741,081 7,157,752 Income(loss)before taxes & extraordinary item 64,355 642,849 675,490 Provision(credit)for income taxes 30,058 232,502 220,437 Extraordinary item 0 Net income (loss) 34,297 410,347 455,053 5.SHORT-TERM FINANCING: At March 31, 1999, Blue Ridge had an unused line of credit aggregating $2,000,000 available for short-term financing, expiring August 31, 1999, which management expects to be renewed. The line of credit bears interest at .25% less than the prime rate.
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6. LONG-TERM DEBT: Long-term debt as of March 31, 1999 and 1998 consists of the following: 1999 1998 Mortgage note payable to bank, interest is LIBOR plus 145 basis points (7.125%), payable August 31, 1999. Interest is payable in monthly installments through August 1999. Refinancing of this loan is in process at March 31, 1999 $5,298,499 $5,331,999 Mortgage note payable to bank, interest at 80% of the bank's prime rate (6.2% at March 31, 1999) payable in monthly installments of $24,187 through Fiscal 2005 1,862,414 2,152,660 Mortgage note payable to insurance company, interest fixed at 10.5% payable in monthly installments of $15,351 including interest through Fiscal 2014 1,379,007 1,416,265 Mortgage note payable to bank, interest at 7% payable monthly with principle reduction at $32,500 per month December to March through 2001 259,985 389,985 8,799,905 9,290,909 Less current installments 461,609 457,503 $8,338,296 8,833,406
Properties at cost, which have been pledged as collateral for long-term debt, include the following at March 31, 1999: Investment properties leased to others 7,632,441 Ski facilities 18,276,882 The aggregate amount of long-term debt maturing in each of the years ending subsequent to March 31, 1999, is as follows: 2000-$461,609; 2001-$5,764,651; 2002-$341,228; 2003-$346,847; 2004-$353,085 25 7. INCOME TAXES: The provision (credit) for income taxes is as follows:
1999 1998 1997 Currently payable (receivable): Federal ($13,781) $246,896 $234,528 State 2,608 2,031 0 (11,173) 248,927 234,528 Deferred: Federal (86,564) 94,070 20,381 State 0 0 0 (86,564) 94,070 20,381 ($97,737) 342,997 $254,909 A reconciliation between the amount computed using the statutory federal income tax rate and the provision (credit) for income taxes is as follows: 1999 1998 1997 Computed at statutory rate ($97,287) $248,272 $253,060 State net operating losses subject to valuation allowance 0 27,311 0 State income taxes, net of federal income tax 1,721 1,341 0 Other 5,228 0 1,849 AMT (utilization) tax (7,399) 66,073 0 Provision(credit)for income taxes ($97,737) $342,997 $254,909 The components of the deferred tax assets and liabilities as of March 31, 1999 and 1998 are as follows: 1999 1998 Gross deferred tax asset: Accrued expenses $74,897 $73,124 Net operating loss and AMT credit carryforward 563,948 464,467 Contribution carryforward 1,384 0 640,229 537,591 Less valuation allowance (170,702) (78,620) 469,527 458,971 Gross deferred tax liability: Depreciation (2,678,379) (2,754,388) (2,678,379) (2,754,388) Net deferred tax liability ($2,208,852) ($2,295,417) 26 At March 31, 1999, the Companies have $393,246 of Alternative Minimum Tax (AMT) credit carryforward available to reduce future federal income taxes. The AMT credit has no expiration date. For state income tax purposes, the Companies have available state net operating loss carryforwards of $2,588,982 which start to expire in Fiscal 1999. The valuation allowance increased by $92,082 during Fiscal 1999 due to additional state net operating losses which are not expected to be utilized. 8. PENSION PLAN: ASSUMPTIONS 1999 1998 1997 Discount Rates used to determine projected benefit obligations as of March 31, 6.75% 7.00% 7.50% Expected long-term rate of return on assets 8.50% 8.50% 7.50% Rates of increase in compensation levels 5.00% 5.00% 5.00% CHANGE IN BENEFIT OBLIGATION 1999 1998 Benefit obligation $2,708,402 $2,262,900 Service cost(net of expenses) 184,417 209,791 Interest cost 186,169 170,907 Plan amendments 0 0 Actuarial loss 161,653 208,242 Benefit payments (138,539) (143,438) Benefit obligation at end of year $3,102,102 $2,708,402 CHANGE IN PLAN ASSETS 1999 1998 Fair value of plan assets at beginning of year $3,070,947 $2,633,321 Actual return on plan assets 243,655 649,694 Employer contributions 0 0 Benefits paid (138,539) (143,438) Actual expenses paid during the year (30,333) (68,630) Fair value of plan assets at end of year $3,145,730 $3,070,947 RECONCILIATION OF FUNDED STATUS OF THE PLAN 1999 1998 Funded status at end of year $43,628 $362,545 Unrecognized transition obligation 120,132 128,612 Unrecognized net prior service cost 10,492 11,103 Unrecognized net actuarial gain (501,089) (663,593) Net amount recognized at end of year ($326,837) $161,333) COMPONENTS OF NET PERIODIC BENEFIT COST 1999 1998 1997 Service Cost $240,717 177,661 124,044 Interest Cost 186,169 170,907 137,314 Expected return of plan assets 250,562 194,539 151,500 Net amortization and deferral: Amortization of transition obligation 8,480 8,480 7,067 Amortization of prior service cost 611 611 509 Amortization of accumulated gain (19,911) (12,463) (11,082) Net amortization and deferral ($10,820) ($3,372) ($3,506) Total net periodic pension cost $165,504 $150,657 $106,352
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9. PROPERTIES: Properties consist of the following at March 31, 1999 and 1998: 1999 1998 Land, principally unimproved $1,867,655 $1,867,738 Land improvements 3,867,885 3,705,080 Corporate buildings 470,907 441,072 Buildings leased to others 10,035,091 9,913,509 Ski facilities: Land 4,552 4,552 Land improvements 7,107,257 6,879,932 Buildings 7,405,053 7,054,009 Machinery & equipment 19,267,786 18,820,426 Equipment & furnishings 2,363,092 2,088,611 52,401,278 50,774,929 Less accumulated depreciation 32,855,580 30,977,716 $19,545,698 $19,797,213 Buildings leased to others include land of $1,056,700 at March 31, 1999, 1998 and 1997. 10. LEASES: The Companies are lessors under various operating lease agreements for the rental of land, land improvements and investment properties leased to others. Rents are reported as income over the terms of the leases as they are earned. A shopping center is leased to various tenants for renewable terms averaging 4.00 years with options for renewal. A store has been net leased until January 2014. Information concerning rental properties and minimum future rentals under current leases (excluding renewal options) as of March 31, 1999, is as follows: Properties Subject To Lease 28 Accumulated Cost Depreciation Investment properties leased to others $7,857,441 $3,135,005 Land and land improvements 3,956,078 1,163,807 Minimum future rentals: Fiscal years ending March 31: 2000 1,682,982 2001 1,294,049 2002 1,111,790 2003 939,435 2004 839,413 Thereafter 7,751,554* $13,619,223
*Includes $1,443,750 under a land lease expiring in 2072 and $1,898,870 under a net lease for a store expiring in 2014. There were no contingent rentals included in income for Fiscal 1999, 1998 or 1997. 11. QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The results of operations for each of the quarters in the last two years are presented below.
Earnings (Loss) Income(loss) Per Weighted Operating from Net Avg. Combined Quarter Revenues Operations Income(Loss) Share 1999 1st $1,463,539 ($121,966) ($152,464) ($0.08) 2nd 2,500,389 558,192 365,807 0.18 3rd 3,354,271 (324,569) (215,487) (0.11) 4th 10,469,281 219,830 155,225 0.09 $17,787,480 $331,487 $153,081 $0.08 1998 1st $1,502,232 $(2,143) $(131,615) ($0.07) 2nd 2,171,126 401,752 144,160 0.07 3rd 3,895,877 (342,831) (297,388) (0.15) 4th 11,086,760 1,368,409 679,436 0.35 $18,655,995 $1,425,187 $394,593 $0.20
29 The quarterly results of operations for 1999 and 1998 reflect the cyclical nature of the Companies' business since (1) the Companies' two ski facilities operate principally during the months of December through March and (2) land dispositions occur sporadically and do not follow any pattern during the fiscal year. Costs and expenses, net of revenues received in advance attributable to the ski facilities for the months of April through November, are deferred and recognized as revenue and operating expenses, ratably, over the operating period. 12. BUSINESS SEGMENT INFORMATION: The following information is presented in accordance with SFAS No.131, "Disclosures about Segments of an Enterprise and Related Information." In accordance with SFAS No. 131, the Companies' business segments were determined from the Companies' internal organization and management reporting, which are based primarily on differences in services. The Companies and the subsidiaries, under SFAS No.131, operate in two business segments consisting of the following: SKI OPERATIONS: Two ski areas located in the Pocono Mountains of Northeastern Pennsylvania. REAL ESTATE MANAGEMENT/RENTAL OPERATIONS: Investment properties leased to others located in Eastern Pennsylvania and South Carolina, fees from managing investor-owned properties, principally resort homes, recreational club activities and services to the trusts that operate resort communities, sales of land held for resale and investment purposes, and rental of land and land improvements. Income or loss for each segment represents total revenue less operating expenses. General and administrative expenses, other income, and interest expense are allocated to each Business segment based on percentage of revenue. Identifiable assets are those utilized in the operation of the respective segments; corporate assets consist principally of cash and non-revenue producing properties held for investment purposes.
12 Months 12 Months 10 Months Ended Ended Ended 3/31/99 03/31/98 03/31/97 Revenues: Ski operations $11,124,018 $12,298,893 $11,251,882 Real estate management/ Rental operations 6,663,462 6,357,102 4,786,118 $17,787,480 $18,655,995 $16,038,000 30 Income:(loss) Ski operations ($168,993) $ 903,761 $1,473,439 Real estate management/ Rental operations 1,564,647 1,589,589 853,225 $1,395,654 $2,493,350 $2,326,664 General & administrative expenses: Ski Operations ($670,425) ($672,943) ($562,896) Real estate management/ Rental operations (393,742) (395,220) (330,589) (1,064,167) ($1,068,163) ($893,485) Interest and other income: Ski Operations $51,211 $ 82,780 $35,952 Real estate management/ Rental operations 30,077 48,617 21,115 $81,288 $131,397 $57,067 Interest Expense: Ski Operations ($440,315) ($515,966) (471,575) Real estate management/ Rental operations (258,598) (303,028) (276,956) ($698,913) ($818,994) ($748,531) Income (loss) before income taxes and extraordinary item ($286,138) $ 737,590 $741,715 Extraordinary item (net of tax) $341,482 $0 $0 In Fiscal 1999, 1998 and 1997, no one customer represented 10% or more of total revenues. Identifiable assets, net of accumulated depreciation at March 31, 1999, 1998 and 1997 and depreciation expense and capital expenditures for the years then ended by Business segment are as follows: Identifiable Depreciation Capital 1999 Assets Expense Expenditure Ski Operations $11,622,619 $1,485,975 $1,249,973 Real Estate Management/Rental Operations 9,858,387 419,891 321,087 Other Corporate 2,326,749 98,025 192,537 Total $23,807,755 $2,003,891 $1,763,597 1998 Ski Operations $12,203,047 $1,417,719 $1,382,580 Real Estate Management/Rental Operations $9,730,578 449,728 181,369 Other Corporate 2,010,355 191,825 240,747 Total $23,943,980 $2,059,272 $1,804,696 1997 Ski Operations $10,364,590 $1,304,906 $2,091,557 Real Estate Management/Rental Operations 10,937,749 357,691 187,431 Other Corporate 2,500,398 266,054 34,419 Total $23,802,737 $1,928,651 $2,313,407
31 13 CONTINGENT LIABILITIES AND COMMITMENTS: The Companies are party to various legal proceedings incidental to their business. Certain claims, suits, and complaints arising in the ordinary course of business have been filed or are possible of assertion against the Companies. In the opinion of management, all such matters are without merit or are of such kind, or involve such amounts, that are not expected to have a material effect on the combined financial position or results of operations of the Companies. Blue Ridge has pledged approximately 20 acres of its leased land (cost $144,786) to serve as collateral, together with the lessee's land improvements, for the lessee's mortgage loan which amounts to approximately $1,300,000 at March 31, 1999. 14. STOCK OPTIONS AND CAPITAL STOCK: The Board of Directors has authorized the repurchase of the Companies' common stock in the open market from time to time. As of March 31, 1999, 225,190 shares have been repurchased. In Fiscal 1999 19,056 shares were repurchased. Twelve thousand shares were repurchased in Fiscal 1998 and no shares were repurchased in Fiscal 1997. In Fiscal 1998, the Chairman of the Board of the Companies was granted options for 35,000 shares of the Companies' common stock at $6.75 per share. Ten thousand options were granted in 1993 and 25,000 in July 1997. The options expire July 1, 2003. The option price of $6.75 was equal to the market value on the dates of grant. The Companies apply Accounting Principles Board Opinion 25 and the related interpretations in accounting for the options. Accordingly, no compensation cost has been recognized in the financial statements relative to these options. Had compensation cost for the Companies' options been determined consistent with Financial Accounting Standards Board Statement No. 123, the Companies' net income and earnings per share would have been reduced to the proforma amounts indicated below, based on the following assumptions: The fair value of the 1998 option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions for 1998: dividend yield of 0%; expected volatility of 37.8%; risk free interest rate of 6.4%, and expected life of 6 years. 1998 Net Income: As reported $394,593 Pro Forma $340,879 Basic earnings per share: As reported $0.20 Pro Forma $0.17 Diluted earnings per share: As reported $0.20 Pro Forma $0.17 32 Option activity during the periods ended March 31, 1999, 1998 and 1997 is as follows:
1999 1998 1997 Exercise Exercise Exercise Shares Price Shares Price Shares Price Outstanding at beginning of year: 35,000 $6.75 10,000 $6.75 10,000 $6.75 Granted - - 25,000 $6.75 - - Exercised - - - - - - Canceled - - - - - - Outstanding at end of year 35,000 $6.75 35,000 $6.75 10,000 $6.75 Options exercisable at year-end 35,000 $6.75 35,000 $6.75 10,000 $6.75 Option price range $6.75 $6.75 $6.75 Weighted average fair value of options granted during year $ - $3.26 $ - All 35,000 options outstanding are exercisable at $6.75 per share and have a remaining contractual life of 4.25 years. 15. EXTRAORDINARY ITEM: The Companies have contracted The Pennsylvania Department of Transportation to build a 2 mile sewer line from the Jack Frost treatment plant to a rest station on Interstate 80. The project began in September 1998 and is scheduled for completion in September 1999. Due to the unusual nature of this transaction and the unlikeliness of another such event during the foreseeable future, this project has been classified as an extraordinary item. The total estimated budget for the project is approximately $841,832 plus any tax consequence. As of March 31, 1999 the Companies have recognized a net extraordinary item as follows: Gross Income $413,644 Taxes (Deferred) (72,162) Net Extraordinary Income $341,482 33 16. PER SHARE DATA: Earnings per share and computed as follows: Year Year 10 Months Ended Ended Ended 3/31/99 3/31/98 3/31/97 Net Earnings $153,081 $394,593 $486,806 Weighted average combined shares of common stock out- standing used to compute basic earnings per combined common share 1,980,706 1,993,014 2,004,014 Additional combined common shares to be issued assuming exercise of stock options, net of combined shares assumed re-acquired 12,346 8,029 -- Combined shares used to compute dilutive effect of stock option 1,993,052 2,001,043 2,004,014 Basic earnings per combined common share $0.08 $0.20 $0.24 Diluted earnings per combined common share $0.08 $0.20 $0.24 34 REPORT OF INDEPENDENT ACCOUNTANTS To Shareholders of Blue Ridge Real Estate Company and Big Boulder Corporation: In our opinion, the accompanying combined balance sheets and the related combined statements of operations and earnings retained in the business and cash flows present fairly, in all material respects, the financial position of Blue Ridge Real Estate Company and subsidiaries and Big Boulder Corporation and subsidiaries (the "Companies") at March 31, 1999 and 1998, and the results of their operations and their cash flows for the years ended March 31, 1999 and 1998 and the ten months ended March 31, 1997, in conformity with generally accepted accounting principals. These financial statements are the responsibility of the Companies' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP June 4, 1999 PRICE RANGE OF COMMON SHARES AND DIVIDEND INFORMATION Prior to May 4, 1993, Blue Ridge Real Estate Company and Big Boulder Corporation common shares were listed and traded as unit certificates on the Over-the-Counter market and were quoted on the NASDAQ National Market System (Symbol: BLRGZ). Effective May 4, 1993, the Companies decided to discontinue their listing with NASDAQ. Subsequent to May 4, 1993, the Companies are aware of limited trades in their common stock; however, Management does not believe such limited activity constitutes an established public trading market. The following sets forth the high asked and low price quotations as reported on the monthly statistical reports of the National Association of Securities Dealers, Inc. for Fiscal Years 1999 and 1998. No dividends were paid on common stock in either Fiscal Year. 35 FISCAL YEAR HIGH LOW 1999 ASKED BID First Quarter 12.375 10.500 Second Quarter 12.375 10.375 Third Quarter 11.250 9.000 Fourth Quarter 10.500 9.375 FISCAL YEAR HIGH LOW 1998 ASKED BID First Quarter 7.000 6.625 Second Quarter 18.000 11.000 Third Quarter 13.500 11.250 Fourth Quarter 11.750 11.250
The reported quotations represent prices between dealers, do not reflect retail mark-ups, mark-downs or commissions and do not necessarily represent actual transactions. The approximate number of holders of record of common stock on March 31, 1999 and 1998 were 659 and 687, respectively. BLUE RIDGE REAL ESTATE COMPANY AND SUBSIDIARIES AND BIG BOULDER CORPORATION AND SUBSIDIARIES COMBINED SUMMARY OF SELECTED FINANCIAL DATA
1999 1998 1997 Revenues $17,787,480 $18,655,995 $16,038,000 Net income(loss) 153,081 394,593 486,806 Net income(loss)per combined share $0.08 $0.20 $0.24 Cash dividends per combined share 0 0 0 Weighted average number of combined shares outstanding 1,980,706 1,993,014 2,004,014 Total assets 23,807,755 23,943,980 23,802,737 Long-term debt 8,799,905 9,290,909 9,778,431 Shareholders' equity 10,365,672 10,413,858 10,100,268 1996 1995 Revenues $15,308,986 $12,244,490 Net income(loss) 42,263 (435,738) Net income(loss)per combined share $0.02 $(.21) Cash dividends per combined share 0 0 Weighted average number of combined shares outstanding 2,004,014 2,029,630 Total assets 23,209,690 23,663,671 Long-term debt 9,694,167 10,239,166 Shareholders' equity 9,613,462 9,570,199
36 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION RESULTS OF OPERATIONS FISCAL 1999 VERSUS FISCAL 1998 For Fiscal Year ended March 31, 1999, the Companies reported net income of $153,081 or $.08 per combined share as compared with a net income of $394,593 or $.20 per combined share for Fiscal 1998. Combined revenue of $17,787,480 represents a decrease of $868,515 or 5% when compared to Fiscal 1998. Ski Operations decreased $1,174,875 or 10%, and Real Estate Management Operations increased $306,360 or 5% when compared to Fiscal 1998. The Ski Operations had approximately 257,000 skiers visit our slopes compared to 293,000 skier visits last season. The decrease of 36,000 skier visits represents a 12% decrease. Revenue per skier was $27 compared to $28 last season for a decrease of $1.00 or 2%. Tubing operations had approximately 86,000 tuber visits compared to 92,000 tuber visits last season. The decrease of 6,000 tuber visits represents a 7% decrease. Revenue per tuber was $13.95 compared to $13.27 last season for an increase of $.68 or 5%. The ski areas operated for a combined total of 179 days compared to 208 days last season. The food and beverage operation at the ski area contributed revenue of $7.66 per skier visit. The retail shop operation at the ski area contributed revenue of $2.16 per skier visit compared to $1.83 the previous season. The Real Estate Management Operations increase is attributed to fewer vacancies in investment properties, festival revenues, leasing commissions in resort communities, fees for services provided to the Trust of the resort communities, and fishing and hunting leases. The increases were offset by a decrease in commissions for resale of homes in our resort communities. Disposition of properties occur sporadically and do not follow any pattern during the fiscal year. No major land sales occurred in Fiscal 1999 or Fiscal 1998. Operating costs associated with Ski Operations decreased by $102,121 when compared to Fiscal 1998. This decrease is attributed to decreased personnel costs due to a reduction in the number of operating days. Operating costs associated with Real Estate Management Operations increased by $331,302 when compared to Fiscal 1998. This increase is attributed to increased expenses related to summer activities and the investment properties. General and Administration expenses decreased by $3,996 when compared to Fiscal 1998. The decrease is attributable to a decrease in supplies and services. Interest and Other Income decreased by $50,109 when compared to Fiscal 1998. This decrease is attributable to a reduction in disposed assets and resulting gains. Interest expense decreased by $120,081 when compared to Fiscal 1998. This decrease is attributable to a reduction of debt. The effective Tax Rate for Fiscal 1999 and 1998 was 34.2% and 46.5% respectively. 37 FISCAL 1998 VERSUS FISCAL 1997 (FISCAL 1998 IS TWELVE MONTHS AND FISCAL 1997 IS TEN MONTHS) For Fiscal Year ended March 31, 1998, the Companies reported net income of $394,593 or $.20 per combined share as compared with a net income of $486,808 or $.24 per combined share for Fiscal 1997. Combined revenue of $18,655,995 represents an increase of $2,617,995 or 14% when compared to Fiscal 1997. Ski Operations increased $1,047,011 or 9%, and Real Estate Management Operations increased $1,570,984 or 25% when compared to Fiscal 1997. Both Fiscal 1998 and 1997 include a full ski season. The Ski Operations had approximately 293,000 skiers visit our slopes compared to 277,000 skier visits last season. The increase of 16,000 skier visits represents a 5% increase. Revenue per skier was $28 compared to $27 last season for an increase of $1.00 or 2%. Tubing operations had approximately 92,000 tuber visits compared to 97,000 tuber visits last season. The decrease of 5,000 tuber visits represents a 5% decrease. Revenue per tuber was $13.27 compared to $11.32 last season for an increase of $1.95 or 17%. The ski areas operated for a combined total of 208 days compared to 213 days last season. The food and beverage operations at the ski areas contributed revenue of $7.13 per skier visit. The retail shop operations at the ski areas contributed revenue of $1.83 per skier visit compared to $2.02 the previous season. The Real Estate Management Operations increase is attributed to fewer vacancies in investment properties, festival revenues, leasing commissions in resort communities, fees for services provided to the Trust of the resort communities, and fishing and hunting leases. The increases were offset by a decrease in commissions for resale of homes in our resort communities. Disposition of properties occur sporadically and do not follow any pattern during the fiscal year. No major land sales occurred in Fiscal 1998 or Fiscal 1997. Operating costs associated with Ski Operations increased by $1,616,689 when compared to Fiscal 1997. This increase is attributed to advertising costs, and associated personnel costs. Operating costs associated with Real Estate Management Operations increased by $834,620 when compared to Fiscal 1997. This increase is attributed to increased advertising costs, and associated personnel costs, and an additional two months of operations. General and Administration expenses increased by $174,678 when compared to Fiscal 1997. The increase is attributable to an increase in supplies and services and an additional two months of operations. Interest and Other Income increased by $74,330 when compared to Fiscal 1997. This increase is attributable to an additional two months of operations. Interest expense increased by $70,463 compared to Fiscal 1997. This increase is attributable to an additional two months of operations. The effective Tax Rate for Fiscal 1998 and 1997 was 46.5 and 34.4% respectively. This increase in effective rate was due primarily to utilization of AMT credits and state income tax benefits which were subject to a valuation allowance. RISKS AND UNCERTAINITIES The Companies are aware of the issues associated with computer programming code and certain embedded computer chips used in computer systems as the Year 2000 approaches. Some systems may not be able to distinguish between the year 2000 and the year 1900. The companies utilize personal computers and software packages developed by third party vendors, to manage its business. It has no internally developed software and does not sell any products that are derived from internally developed software. 38 The Companies have determined and are coordinating the actions necessary to provide uninterrupted, normal operation of business-critical systems. There are four stages to the Year 2000 project: 1) awareness, 2) vendor assessment, 3)selection of new software, and 4) implementation. The Companies have completed the fourth stage of the project plan except for lift ticket sales and ski equipment rentals which included surveying vendors as to Year 2000 readiness. The result of the surveys indicated that critical business systems and vendors are or anticipate being Year 2000 compliant in all material aspects of operations. The companies estimate that the potential impact of problems should any of the systems be non-compliant will not have a significant impact on operations. The Companies have cash equivalents which may be exposed to credit risk to the extent that investment companies are materially adversely affected by the Year 2000 issue. The results of the Companies' vendor surveys indicate that all banks and investment companies which the Companies currently utilize are in the process of testing Year 2000 modifications and expect to be compliant before the end of the year. It is anticipated that any Year 2000 impact would be short lived and would not impact the liquidity of the Companies or their operating results. Based on the review of its systems to date, management believes that the Year 2000 problem will not pose significant operational problems and that the total cost associated with the Year 2000 issues will not have material effect on the combined results of the Companies. To date, the Companies have determined that it will require nominal personal computer program upgrades to accommodate Year 2000 issues. These estimates and conclusions contain forward-looking statements and are based on management's best estimates of future events. Risk to completing the Year 2000 plan include the availability of alternative software, the Companies ability to discover and correct potential Year 2000 problems which might have a serious impact on operations, failure of vendors to complete their expected Year 2000 compliance, and liquidity issues surrounding securities investments. LIQUIDITY AND CAPITAL RESOURCES The Combined Statement of Cash flows reflects net cash provided by operating activities of $2,005,647, $2,752,028, and $2,322,610 in Fiscal 1999, 1998 and 1997 respectively. The major capital investment made in Fiscal 1999 were the construction of a communication tower, an in-house laundry facility and 10 cabins at the Fern Ridge campground. During Fiscal 1999, the Companies borrowed against their $2,000,000 line of credit for a period of five months in varying amounts with a maximum of $1,950,000. During Fiscal 1998, the Companies borrowed against their $2,000,000 line of credit for a period of five months in varying amounts with a maximum of $2,000,000. The Companies have a combined working capital of $1,330,325 at March 31, 1999 versus $1,708,671 at March 31, 1998. MOVING FORWARD The Companies continue to develop operation centers to generate profit during the non-ski season with expansion at Fern Ridge Campground and the introduction in Fiscal 1999 of Hub, a mountain bike center. Fiscal 2000 plans include investments at the ski areas consisting of the East Mountain chair lift at Jack Frost which will be upgraded to a dual double lift. This lift supports our most challenging and popular ski slopes. Each ski area will also receive a new groomer. 39 BOARD OF DIRECTORS Kieran E. Burke Chairman, Chief Executive Officer and Director Premier Parks, Inc. Milton Cooper Chairman, Kimco Realty Corporation; Director, Getty Petroleum Corp.; Director, Kimco Realty Corporation Michael J. Flynn Chairman of the Board of the Companies; Vice Chairman and Director, Kimco Realty Corporation Allen J. Model Private Investor, Model Entities Wolfgang Traber Chairman of the Board, Hanseatic Corporation & Co. N.Y. The above Directors serve both Companies. OFFICERS Michael J. Flynn Chairman of the Board Gary A. Smith President Melanie A. Murphy Vice President of Operations Eldon D. Dietterick Secretary/Treasurer Christine Liebold Assistant Secretary Cynthia A. Barron Controller The above Officers serve both Companies. TRANSFER AGENT Summit Bank, Hackensack, New Jersey INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP Philadelphia, Pennsylvania 40 NOTICE OF ANNUAL MEETINGS The Annual Meetings of Shareholders of Blue Ridge Real Estate Company and Big Boulder Corporation will be announced with mailing of Proxy Material in July. FORM 10-K AVAILABLE The Companies will furnish to any shareholder, without charge, a copy of their Fiscal Year 1999 Annual Report as filed with the Securities and Exchange Commission on Form 10-K. Written request should be directed to the attention of the Secretary, Blue Ridge Real Estate Company, P. O. Box 707, Blakeslee, PA 18610-0707 CORPORATE PROPERTIES RESORTS IN THE POCONO MOUNTAINS Big Boulder Ski Area Jack Frost Mountain Fern Ridge Campground INVESTMENT PROPERTIES Dreshertown Plaza Shopping Center Dresher, Montgomery County, Pennsylvania Wal-Mart Store, Laurens, South Carolina Blue Heron Grille, Lake Harmony, Pennsylvania LAND HOLDINGS Blue Ridge 18,843 acres of land, held for investment Big Boulder 929 acres of land, held for investment Northeast Land Company 103 acres of land RECREATIONAL AREAS "The Stretch" on the Tunkhannock Porter Run Hunting Preserve Splatter (Paintball game) Wheels, In-Line Skate and Board Park Ride, ATV Park Hub, Mountain Bike Facility DOCUMENT> [TYPE] EX-27 [ARTICLE] 5 [CIK] 0000012779 [NAME] BLUE RIDGE REAL ESTATE COMPANY [PERIOD-TYPE] 12-MOS [FISCAL-YEAR-END] MAR-31-1999 [PERIOD-START] APR-01-1998 [PERIOD-END] MAR-31-1999 [CASH] 2,707,188 [SECURITIES] 0 [RECEIVABLES] 559,678 [ALLOWANCES] 0 [INVENTORY] 283,946 [CURRENT-ASSETS] 4,225,260 [PP&E] 52,401,278 [DEPRECIATION] 32,855,580 [TOTAL-ASSETS] 23,807,755 [CURRENT-LIABILITIES] 2,894,935 [BONDS] 0 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [COMMON] 1,972,958 [OTHER-SE] 0 [TOTAL-LIABILITY-AND-EQUITY] 23,807,755 [SALES] 17,787,480 [TOTAL-REVENUES] 17,787,480 [CGS] 0 [TOTAL-COSTS] 17,455,993 [OTHER-EXPENSES] 0 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] 698,913 [INCOME-PRETAX] (286,138) [INCOME-TAX] (97,737) [INCOME-CONTINUING] 0 [DISCONTINUED] 0 [EXTRAORDINARY] 341,482 [CHANGES] 0 [NET-INCOME] 153,081 [EPS-BASIC] .08 [EPS-DILUTED] .08
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