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 MAY 31, 1996
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: 717 - 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*
Page 1
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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
requirements 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 con-
tained, 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 August 16, 1996,
was $13,527,095. The market value per share is based upon the per share
cost of shares as indicated by NASDAQ on May 31, 1996. 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 August 16, 1996
Common Stock, without par value 2,004,014 Shares
stated value $.30 per
combined share
DOCUMENTS INCORPORATED BY REFERENCE
Specified portions of the Companies' 1996 Annual Report to Shareholders
are incorporated by reference into Part II hereof.
Specified portions of the Companies' definitive Proxy Statement for the
October 7, 1996 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 repre-
senting 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.
Page 2
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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 18,852 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 150-site campground
a retail stosre 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 during the
current year 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. Northeast
Land Company also receives revenue from a land lease to a Burger King
franchise.
Northeast Land Company was the developer of the resort community known as
Midlake located on Big Boulder Lake. This project, located adjacent to the
Big Boulder Lake shore directly west of Blue Heron, was completed in the
Summer of 1989 and consists of 132 resort homes.
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 28 full-time employees. Jack Frost Mountain Company,
which operates the Jack Frost Mountain Ski Area, has 24 full-time employees
and during the skiing season there are approximately 376 additional
employees. Northeast Land Company has 9 full-time employees.
Page 3
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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, to
provide certain services to other facilities, such as the Blue Heron, Midlake
and Laurelwoods resort communities, and operate the recreational facilities
as they are located within the Big Boulder Lake tract.
The Blue Heron Grille is currently being leased to a restaurant operator.
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, has 28 full-time employees. During the skiing season,
there are approximately 525 additional employees.
INDUSTRY SEGMENT INFORMATION
Information with respect to industry segments is presented in Note 13 to the
Registrants' financial statements included in Item 8.
The quarterly results of operations for 1996, 1995 and 1994 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 June 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 18,955 acres
owned by Blue Ridge and Northeast Land Company, the Jack Frost 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.
Page 4
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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, snow-
mobile course, snowtubing hill, four double chairlifts, two triple chair-
lifts, 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 10,800 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 $17,267,494, 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 May 31, 1996, the
outstanding debt on the Jack Frost Mountain Ski Area was $903,144.
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 May 31, 1996. 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 May 31, 1996, a mortgage totaling
$1,477,654 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 99,233 square feet located on approxi-
mately 15 acres of land. On May 31, 1996, the center was 96% occupied under
leases expiring on various dates from August 31, 1996 to August 31, 2006.
The total capital investment in the shopping center is $5,304,971. At May
31, 1996, a mortgage totaling $5,436,135 was outstanding on this property.
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 150 campsites, 75 with water and electric.
Its operating period is from April 1 through September 30. At May 31, 1996,
the Company's investment in this facility was $296,269.
Page 5
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ITEM 2. PROPERTIES - (Continued)
Blue Ridge owns 18,852 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 May 31, 1996 was $1,195,170 with outstanding
debt of $214,675.
Blue Ridge also owns The Sports Complex at Jack Frost Mountain which consists
of a swimming pool, fitness trail, tennis courts, 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.
For the fiscal year ended May 31, 1996, revenues from operations of Blue
Ridge and its subsidiaries amounted to $9,407,238 Approximately 59% of this
revenue or $5,555,210 was derived from the Jack Frost Mountain Ski Area which
operated 108 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.
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, 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 approxi-
mately 90 acres owned by Big Boulder. The total capital investment in the
ski area is $12,899,656. At May 31, 1996, the outstanding debt on the Big
Boulder Ski Area was $1,330,047.
Page 6
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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 May 31,
1996, was $1,698,917 with an outstanding debt of $332,512 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 with a nightclub. The capital investment in
the facility at May 31, 1996 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 May 31, 1996, revenues from operations of Big
Boulder amounted to $5,901,748. Approximately 83% of this revenue of
$4,899,344 was derived from the Big Boulder Ski Area which operated 104 days
during that fiscal year.
ITEM 3. LEGAL PROCEEDINGS
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANTS
Age Office Held Since
Michael J. Flynn 61 1991
Chairman of the Board
Gary A. Smith 53 1992
President
Melanie Murphy 36 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.
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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 until
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, 1985.
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 13
of the Fiscal 1996 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 1996 Annual Report
to Shareholders.
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 14 through 15 of the Fiscal 1996 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 1996 Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
_ON ACCOUNTING AND FINANCIAL DISCLOSURES_____
Not applicable.
Page 8
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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' defini-
tive Proxy Statement for the 1996 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 45 1991
President -
Northeast Land Company
Vice President
Jack Frost Mountain Company
Lake Mountain Company
Carl V. Kerstetter has 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 1996 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 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 1996 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.
Page 9
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PART IV
ITEM 14(a). EXHIBITS, FINANCIAL STATEMENT SCHEDULES
________AND REPORTS ON FORM 8-K________
Financial statements included in Registrants' Fiscal 1996 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.
(b) 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 29 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 state-
ments, 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
IV. Mortgage Loans on Real Estate
(c) Reports on Form 8-K
A Form 8-K was filed August 7, 1996, to report a change in the fiscal year end
from May 31 to March 31, taking effect March 31, 1997. This change was
approved by the Board of Directors on July 24, 1996.
(d) 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.
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 (9)
3(ii).2 By-Laws of Big Boulder Corporation
as amended through July 25, 1990 (9)
Page 10
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
________AND REPORTS ON FORM 8-K________
Legend for
Documents
Incorporated
By Reference
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)
10.1.15 First Mortgage, American International
Life Assurance Company - Dreshertown
Plaza Shopping Center (9)
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
Agreement with Executive Officers and Director
10.4.1 Stock Option - Michael J. Flynn (10)
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
Page 11
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
_______AND REPORTS ON FORM 8-K__________ - (Continued)
Subsidiaries of the Registrants - (Continued)
21.1 List of the Subsidiaries of the Registrants (6)
(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 27, 1993 as an Exhibit to Form
10-K and incorporated herein by reference
(10) Filed August 26, 1994 as an Exhibit to Form
10-K and incorporated herein by reference
(11) 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 Lois K. McCurdy, Secretary, Blakeslee,
PA 18610. A charge of $.25 per page to cover the
Registrants' expenses will be made.
Page 12
<PAGE>
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 Russell S. Mollath
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
Gary A. Smith President
Chief Operating Officer
Principal Financial Officer
Kieran E. Burke Director
Milton Cooper Director
Allen J. Model Director
Wolfgang Traber Director
Page 13
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of
Blue Ridge Real Estate Company
and Big Boulder Corporation
Our report on the combined financial statements of Blue Ridge Real Estate
Company and subsidiaries and Big Boulder Corporation and subsidiaries has
been incorporated by reference in this Form 10-K from page 12 of the 1996
Annual Report to Shareholders of Blue Ridge Real Estate Company and
subsidiaries and Big Boulder Corporation and subsidiaries. In connection
with our audits of such financial statements, we have also audited the
related financial statement schedules on pages 15 to 17 inclusive of this
Form 10-K.
In our opinion, these financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly,
in all material respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
July 26, 1996
Page 14
<PAGE>
<TABLE>
COMBINED SCHEDULE III. REAL ESTATE AND ACCUMULATED DEPRECIATION
MAY 31, 1996
<CAPTION>
Column A Column B Column C Column D
Initial Cost Cost Capitalized
to Company Subsequent To
Encum- Buildings &
Description brances Land Improvements Improvements
<S> <C> <C> <C> <C>
Land located
in N.E.Penna.
including
various
improvements 1,867,766 49,915 6,725,314
Corporate
Building 282,918 151,594
Buildings Leased
to Others
Eastern Penna.
Exchanged Asset-
Shopping Center 5,700,000 780,700 4,554,235 0
Other 0 0 0 325,157
Laurens,S.C. 1,452,522 276,000 1,914,470 0
TOTAL 7,152,522 2,924,466 6,801,538 7,202,065
<CAPTION>
Column E Column F
Gross Amount at which Carried
Land located at Close of Period (1)(2)
in N.E.Penna. Build- Accumu-
including ing & lated
various Improve- Deprecia-
improvements Land ments Total tion
<S> <C> <C> <C> <C>
1,867,766 6,725,314 8,593,080 3,885,367
Corporate
Building 434,512 434,512 192,551
Buildings Leased
to Others
Eastern Penna.
Exchanged Asset-
Shopping Center 780,700 4,554,235 5,334,935 2,058,324
Other 0 325,157 325,157 64,692
Laurens, S.C. 276,000 1,914,470 2,190,470 401,523
TOTAL 2,924,466 13,953,688 16,878,154 6,602,457
</TABLE>
Page 15
<PAGE>
<TABLE>
<CAPTION>
Column G Column H Column I
Life on
Date of which Depre-
Construc- Date ciation in
tion Acquired Latest income
Statement is
Computed
<S> <C> <C> <C>
Land located
in N.E. PA
including
various
improvements Various Various 5 to 30 Years
Corporate
Building 1982 10 to 30 Years
Buildings leased
to Others
Others
Eastern Penna.
Exchanged Asset-
Shopping N/A Various 5 to 30 Years
Other N/A Various 5 to 30 Years
Laurens, S.C. N/A Various 5 to 30 Years
TOTAL
(1) Activity for the three years ended May 31, 1996 is as follows:
1996 1995 1994
<S> <C> <C> <C>
Balance at beginning of year 16,875,710 16,934,242 16,934,242
Additions during year:
Acquisition 0 0 225,000
Improvements 181,260 0 0
(reclassify) (178,816) (54,845)
2,444 (54,845) 0
16,878,154 16,879,397 16,934,242
Deductions during year:
Cost of real estate sold 0 3,687 0
Balance at end of year 16,878,154 16,875,710 16,934,242
</TABLE>
(2) The aggregate cost for Federal Income Tax purposes at May 31, 1996
is $13,640,298
(3) Activity for the three years ended May 31, 1996 is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Balance at beginning of year 5,996,856 5,334,921 4,677,142
Additions during year:
Current year depreciation 605,601 661,935 657,779
Less retirements 0 0 0
Balance at end of year 6,602,457 5,996,856 5,334,921
Page 16
<PAGE>
</TABLE>
<TABLE>
COMBINED SCHEDULE IV. MORTGAGE LOANS ON REAL ESTATE - MAY 31, 1996
<CAPTION>
Column A Column B Column C Column D Column E
Final Periodic
Interest Maturity Payment Prior
Description Rate Date Terms Liens
<S> <C> <C> <C> <C>
First Mortgages:
Land located
in N.E. Penna. 11% May 1997 $2,480 Qtrly.
plus interest None
Land located
in N.E. Penna. Aug. 1996 $250 monthly None
Column F Column G Column H
Principal
Amount of
Carrying Loans Subject
Face Amounts to delinquent
Amounts of Mortgages Principal or
Mortgages (1)(2) Interest
<S> <C> <C> <C>
First Mortgages:
Land located
in N.E. Penna. 99,191 12,399 None
Land located
in N.E. Penna. 7,500 750 None
106,691 13,149 0
(1) Activity for the three years ended May 31, 1996 is as follows:
1996 1995 1994
<S> <C> <C> <C>
Balance at beginning of year 26,824 55,407 100,926
Additions during year:
New mortgage loans arising
from real estate sales 0 0 7,500
26,824 55,407 108,426
Deductions during year:
Collections of principal 13,675 28,583 53,019
13,675 28,583 53,019
Balance at end of year 13,149 26,824 55,407
(2) The aggregate cost for Federal Income Tax purposes at 5/31/96 is
$13,149
Page 17
<PAGE>
</TABLE>
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION
ANNUAL REPORT
1996
To Our Shareholders:
For Fiscal 1996, the Companies report net income of $43,263 or $.02
per combined share, compared to a net loss of $435,768 or $.21 for the
previous year. Included with this year's expenses is a one-time write-
off of $179,000 of project costs related to real estate development.
The ski areas experienced 267,000 skier visits and 64,000 tubing
visits to give us a profitable winter season, despite some extreme
weather patterns that occurred on several weekends.
Two years ago we introduced snowtubing to the Pocono ski industry
at Jack Frost Mountain and last year we added a tubing complex at Big
Boulder. With the growing interest in this winter activity, we plan
to expand our tubing areas for the 1996-97 season.
Additional capital expenditures include the installation of 10,000
CFM of air at Jack Frost Mountain, giving us the opportunity to open
East Mountain for Christmas week.
The Retail Shops, formerly operated on a concession basis, were
taken in-house this year and operated successfully.
Big Boulder Ski Area, which opened in December 1947, will be
celebrating its 50th year during the 1996-97 season. Special
activities are being planned.
The ski areas operating revenues are dependent upon favorable
weather patterns during the season. Over the last four years, we have
made efforts to supplement this revenue with summertime activities
which are proving successful.
Festivals contribute the biggest portion of revenue during the
summer months and this year we added two new festivals to our
calendar--the American Roots Music Festival in June and the Pocono
Gathering in August. Our Blues Festival held the last weekend in July,
features top National and International Blues Recording Artists and
has grown to be one of the top Blues Festivals in the Country.
Splatter, our paintball game, operates primarily from April
through November, and continues to grow in popularity. Due to demand,
this activity now remains open on a reduced basis during the winter
months.
An In-Line Skate and Board Park, named "Wheels", is being
introduced at Jack Frost this summer. Popular with Generation "X",
this sport offers the growth we are looking for during our summer
months.
Fern Ridge Campground completed its first year of operation under
Company management and has expanded the number of sites to 150 from its
long-time capacity of 110. Future expansion is under consideration.
We realize the key to our potential lies in the future sales and
development opportunities of our Companies' large land holdings. As
reported for several years, the real estate market for second homes
in the Pocono Mountains remains weak. Should an upturn occur, the
Companies are well prepared to respond with municipal approval for some
800 homesites adjacent to our ski areas. Additionally, Blue Ridge has
necessary permits to construct a golf course at Jack Frost Mountain.
These projects are continually evaluated as to market timing.
I would like to thank our dedicated employees for their efforts
throughout the year. After all, their commitment to service is our
key to success.
Our Companies are prepared and indded look forward to this
upcoming year with enthusiasm.
Gary A. Smith
President
Blakeslee, Pennsylvania
August 16, 1996
Page 1
<PAGE>
<TABLE>
<CAPTION>
COMBINED BALANCE SHEETS
May 31, 1996 and 1995
ASSETS 1996 1995
<S> <C> <C>
Current Assets:
Cash and cash equivalents (including interest-
bearing deposits of $1,770,546 in 1996 and
$2,058,412 in 1995) 1,958,963 2,085,287
Marketable securities 293,588 0
Current installments of mortgage notes receivable 10,670 13,156
Accounts receivable 334,397 199,580
Refundable income taxes 0 10,000
Inventories 123,257 0
Prepaid expenses and other current assets 766,921 571,651
Total current assets 3,487,796 2,879,674
Mortgage notes receivable less current
installments 2,479 13,668
Other non-current assets 71,297 36,797
Properties:
Land, principally unimproved (19,884 acres
per land ledger) 1,867,766 2,046,582
Land improvements, buildings and equipment 45,779,980 44,565,426
47,647,746 46,612,008
Less accumulated depreciation & amortization 27,999,628 25,878,476
19,648,118 20,733,532
23,209,690 23,663,671
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
Current liabilities:
Current installments of long-term debt 504,681 661,141
Accounts and other payables 503,063 319,721
Accrued claims 204,147 154,605
Accrued income taxes 59,098 0
Accrued liabilities 684,835 542,627
Deferred revenue 293,095 412,224
Total current liabilities 2,248,919 2,090,318
Long-term debt, less current installments 9,189,486 9,578,025
Deferred income taxes 2,157,823 2,425,129
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 8,748,503 8,705,240
10,869,695 10,826,432
Less cost of 194,134 shares of
capital stock in treasury 1,256,233 1,256,233
9,613,462 9,570,199
23,209,690 23,663,671
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
Page 2
<PAGE>
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF OPERATIONS AND
EARNINGS RETAINED IN THE BUSINESS
<S> <C> <C> <C>
For years ended May 31,1996,1995&1994 1996 1995 1994
Revenues:
Ski operations 10,618,961 7,837,872 9,539,184
Real estate management 2,928,213 2,757,217 2,359,231
Rental income 1,761,812 1,587,139 1,524,750
Disposition of properties 0 62,262 745
15,308,986 12,244,490 13,423,910
Costs and expenses:
Ski operations 9,741,679 7,720,572 8,345,886
Real estate management 3,062,437 2,656,771 2,813,067
Rental income 827,229 798,759 793,608
Disposition of properties 0 3,687 0
General and administrative 941,001 972,146 996,582
14,572,346 12,151,935 12,949,143
Income from operations 736,640 92,555 474,767
Other income (expense):
Interest and other income 88,060 82,956 105,917
Interest expense (866,262) (884,068) (864,102)
Income(loss)before income taxes and
cumulative effect of change in
accounting method (41,562) (708,557) (283,418)
Provision(credit)for income taxes:
Current 58,731 3,810 161,116
Deferred (143,556) (276,599) (272,295)
(84,825) (272,789) (111,179)
Income(loss)before cumulative effect
of change in accounting method 43,263 (435,768) (172,239)
Cumulative effect on prior years (to
May 31, 1994) of change in method of
accounting for income taxes 0 0 8,355
Net income (loss) 43,263 (435,768) (163,884)
Earnings retained in business:
Beginning of year 8,705,240 9,141,008 9,304,892
End of year 8,748,503 8,705,240 9,141,008
Per weighted average combined share:
Income(loss)before cumulative effect
of change in accounting method 0.02 (.21) (.08)
Net income (loss) 0.02 (.21) (.08)
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
Page 3
<PAGE>
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF CASH FLOW
for the years ended May 31, 1996,1995 & 1994
<S> <C> <C> <C>
1996 1995 1994
Cash Flows From Operating Activities
Net income (loss) 43,263 (435,768) (163,884)
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation 2,132,581 2,255,928 2,303,977
Deferred income taxes (143,556) (276,599) (272,295)
Cumulative effect of accounting change 0 0 (8,355)
Write-off of project development costs 178,818 0 344,600
Deferred revenue (119,129) 174,363 63,917
Gain on sale of land 0 (58,575) 0
Changes in operating assets and
liabilities:
Accounts receivable (132,331) (29,976) (14,781)
Refundable income taxes 10,000 30,000 85,558
Prepaid expenses & other current assets (318,527) (89,123) (195,217)
Accounts payable & accrued liabilities 251,340 89,985 (41,175)
Accrued income taxes 59,098 0 (25,835)
Net cash provided by operating
activities 1,961,557 1,660,235 2,076,510
Cash Flows From (used in) Investing
Activities:
Marketable securities (293,558) 0 0
Collection of mortgage receivable 11,189 9,919 53,019
Other non-current assets (34,500) 0 (7,500)
Proceeds from sale of land 0 62,262 0
Additions to properties (1,225,983) (1,414,650) (1,611,406)
Cash(used in)investing activities (1,542,882) (1,342,469) (1,565,887)
Cash Flows From (used in) Financing
Activities:
Borrowings under short-term financing 900,000 1,075,000 665,000
Payment of short-term financing (900,000) (1,075,000) (665,000)
Payment of long-term debt (544,999) (511,227) (511,735)
Purchase of treasury stock 0 (609,863) (125,426)
Net cash provided by (used in)
financing activities (544,999) (1,121,090) (637,161)
Net increase (decrease) in cash
& cash equivalents (126,324) (803,324) (126,538)
Cash & cash equivalents, beginning
of year 2,085,287 2,888,611 3,015,149
Cash & cash equivalents, end of year 1,958,963 2,085,287 2,888,611
Supplemental disclosures of cash flow
information:
Cash paid (received) during year for:
Interest 863,438 888,550 848,298
Income taxes 25,091 (17,602) 145,029
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
Page 4
<PAGE>
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, North-
east Land Company, Jack Frost Mountain Company, and BRRE Holdings, Inc.;
and Big Boulder Corporation (Big Boulder) and its wholly-owned subsidiar-
ies, Lake Mountain Company and BBC Holdings, Inc. Under a Security
Combination Agreement between Blue Ridge and Big Boulder and under the By-
laws 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 trans-
ferred 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 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.
In 1996, the Companies adopted Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." Impairment losses are recog-
nized 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. In
Page 5
<PAGE>
cases when the Companies do not expect to recover their carrying
cost, the Companies recognize an impairment loss. No such losses
have been recognized to date.
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 require-
ments as to age and length of employment. Pension benefits vest after
five years of credited service and are based on the total 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 aggregate cost method which
spreads past service costs over the average future service lives of
covered employees. The Companies' policy is to fund pension contribu-
tions in accordance with statutory requirements.
INVESTMENTS:
The Companies have classified their marketable securities as held
to maturity and have stated these securities at amortized cost. The
investment represents Discount Commercial Paper.
DEFERRED REVENUE:
Deferred revenues include revenues billed in advance for services
and dues which are not yet earned.
INCOME TAXES:
Effective June 1, 1993, the Companies adopted Statement of Finan-
cial Accounting Standards No. 109, "Accounting for Income Taxes"
(SFAS 109) . The cumulative effect of the change in method of account-
ing as of the beginning of the 1994 fiscal year has been reported in
the combined statements of operations. SFAS 109 is based upon 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, the standard requires current
recognition of the effect of changes in statutory tax rates on
previously provided deferred taxes. Valuation allowances are estab-
lished, 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.
Page 6
<PAGE>
FAIR VALUE:
The Companies have estimated the fair value of their financial
instruments at May 31, 1996, as required by Statement of Financial
Accounting Standards No. 107. 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.
EARNINGS PER SHARE:
Earnings per combined share are computed on the basis of the
weighted average number of unit certificates outstanding during the year.
Outstanding stock options had no dilutive effect on earnings per share.
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.
2. SALE OF LAND
The Companies had no land sales for Fiscal 1996 or Fiscal 1994.
The Companies sold land in Fiscal 1995 for cash consideration of
$62,262.
3. CONDENSED FINANCIAL INFORMATION
Condensed financial information of the constituent companies,
Blue Ridge and its subsidiaries and Big Boulder and its subsidiaries,
at May 31, 1996, 1995, and 1994 and for each of the years then ended,
is as follows:
<TABLE>
<CAPTION>
Blue Ridge and Subsidiaries
1996 1995 1994
<S> <C> <C> <C>
Financial position:
Current assets 2,882,803 2,499,262 3,295,047
Total assets 15,654,413 17,217,104 18,607,050
Current liabilities 1,427,707 2,679,640 2,919,877
Shareholders' equity 4,764,634 4,656,463 5,364,795
Operations:
Revenues 9,407,238 8,082,007 8,353,991
Income(loss)before income taxes 20,797 (430,741) (432,839)
Provision(credit)for income taxes (87,373) (176,487) (154,802)
Net income (loss) 108,170 (254,254) (269,682)
Page 7
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Big Boulder and Subsidiaries
1996 1995 1994
<S> <C> <C> <C>
Financial position:
Current assets 604,993 1,541,450 1,751,690
Total assets 7,555,277 7,570,807 8,044,772
Current liabilities 821,212 537,532 647,028
Shareholders' equity 4,848,828 4,913,736 5,251,035
Operations:
Revenues 5,901,748 4,162,483 5,069,919
Income(loss)before income taxes (62,359) (277,816) 149,421
Provision(credit)for income taxes 2,548 (96,302) 43,623
Net income (loss) (64,907) (181,514) 105,798
</TABLE>
4. SHORT-TERM FINANCING:
At May 31, 1996, Blue Ridge had an unused line of credit aggrega-
ting $2,000,000 available for short-term financing, expiring November 2,
1996, which management expects to be renewed. The line of credit bears
interest at the bank's prime rate.
5. LONG-TERM DEBT:
Long-term debt as of May 31, 1996 and 1995 consists of the following:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Mortgage note payable to insurance company,
interest fixed at 9% payable in monthly
installments of $47,834 including interest to
August 1998 with the remaining balance due
September 1998 5,436,135 5,516,900
Mortgage note payable to bank, interest at
80% of the bank's prime rate (6.6% at May 31,
1996) payable in monthly installments of
$14,517 through Fiscal 2005 2,684,778 2,944,276
Mortgage note payable to bank, interest at
80% of the bank's prime rate (6.6% at May 31,
1996) payable in monthly installments of
$11,951 through December 1996 95,600 239,017
Mortgage note payable to insurance company,
interest fixed at 10.5% payable in monthly
installments of $19,132 including interest
through Fiscal 2014 1,477,654 1,505,120
Mortgage note payable to bank, interest at
85% of the bank's prime rate (7.65% at May
31, 1996), payable in monthly installments
of $6,771 through November 1995 0 33,853
9,694,167 10,239,166
Less current installments 504,681 661,141
9,189,486 9,578,025
Properties at net book value, which have been pledged as collateral
for long-term debt, include the following at May 31, 1996:
Investment properties leased to others 7,525,405
Ski facilities 23,370,299
</TABLE>
The aggregate amount of long-term debt maturing in each of the years
ending subsequent to May 31, 1996, is as follows: 1997-$504,681;
1998-$5,671,891; 1999-$327,829; 2000-$331,969; and 2001-$336,568
Page 8
<PAGE>
6. INCOME TAXES
The provision (credit) for income taxes is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Currently payable:
Federal 58,731 3,810 144,712
State 0 0 16,404
58,731 3,810 161,116
Deferred
Federal (142,441) (229,616) (226,436)
State (1,115) (46,983) (45,859)
(143,556) (276,599) (272,295)
(84,825) (272,789) (111,179)
</TABLE>
A reconciliation between the amount computed using the statutory federal
income tax rate and the provision (credit) for income taxes is as
follows:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Computed at statutory rate (14,131) (240,911) (96,362)
State income taxes, net of federal
income tax (7,153) (21,156) (19,440)
Change in state tax rate 6,417 (19,162) 0
Other (7,124) 8,440 4,623
Change in valuation allowance (62,834) 0 0
Provision(credit)for income taxes (84,825) (272,789) (111,179)
</TABLE>
As discussed in Note 1, the Companies changed the method of accounting
for income taxes effective June 1, 1993. The components of the deferred
tax assets and liabilities under the new accounting method as of May 31,
1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Gross deferred tax asset:
Accrued expenses 134,710 123,753
Net operating loss and AMT credit carryforward 902,613 1,126,677
Contribution carryforward 168,647 457,918
1,205,970 1,708,348
Less valuation allowance (405,348) (931,463)
800,622 776,885
Gross deferred tax liability:
Depreciation 2,957,496 2,787,963
Deferred gains 949 266,569
Other 0 23,729
2,958,445 3,078,261
Net deferred tax liability 2,157,823 2,301,376
</TABLE>
At May 31, 1996, the Companies have contribution and Federal net operating
loss carryforwards available to reduce future taxable income, if any, of
$496,021 and $750,187, respectively. The Companies also have $410,482
of Alternative Minimum Tax (AMT) credit carryforward available to reduce
future federal income tax liabilities. The contribution and Federal net
operating loss carryforwards expire between Fiscal 1997 and 2001 and
between Fiscal 2009 and 2010, respectively; the AMT credit has no
expiration date. For state income tax purposes, the Companies have available
state net operating loss carryforwards of $358,976 which expire in Fiscal
1997 and 1998. The valuation allowance decreased by $526, 115 during
Page 9
<PAGE>
Fiscal 1996, due to the expiration of charitable contribution carryforwards
and the utilization/expiration of state net operating losses.
7. PENSION PLAN
Pension expense for 1996, 1995 and 1994 includes the following components:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Service costs, benefits earned during
the period 148,042 117,509 166,100
Interest cost on projected benefit
obligation 161,992 141,608 135,756
Actual return on plan assets (377,221) (188,902) (31,571)
Net amortization and deferral 231,468 50,079 (103,365)
Pension expense 164,281 120,294 166,920
</TABLE>
Net amortization and deferral consists of the deferral of differences
between actual and estimated return on assets and amortization of the
net unrecognized transition obligation on a straight-line basis over
26 years.
The funded status of the pension plan and the amounts recognized in the
Companies' combined balance sheets at May 31, 1996 were as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation (including vested
benefits of $1,545,200 and $1,369,800,
respectively) (1,606,000 (1,428,000)
Effect of future increase in compensation (615,300) (523,600)
Projected benefit obligation (2,221,300) (1,951,600)
Plan assets at fair value 2,491,554 2,125,835
Plan assets in excess of benefit
obligation 270,254 174,235
Unrecognized net gain (loss) (391,414) (277,561)
Unrecognized net transition obligation 144,159 152,639
Unrecognized prior service costs 12,223 12,834
Prepaid pension expense 35,222 62,147
</TABLE>
Significant assumptions used in determining the actuarial present value
of the projected benefit obligations and pension expense are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Discount rate 7.50% 7.50% 6.25%
Rate of compensation increase 5.00% 5.00% 5.00%
Expected long-term rate of return 7.25% 7.50% 7.50%
8. PROPERTIES
Properties consist of the following at May 31, 1996 and 1995:
</TABLE>
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Land, principally unimproved 1,867,766 2,046,582
Land improvements 6,725,314 6,574,018
Corporate buildings 434,512 434,512
Buildings leased to others 7,850,266 7,820,598
Page 10
<PAGE>
Ski facilities:
Land 4,552 4,552
Land improvements 4,244,068 3,948,118
Buildings 7,041,699 6,852,806
Machinery & equipment 18,452,243 17,928,747
Equipment & furnishings 1,027,326 1,002,075
47,647,746 46,612,008
Less accumulated depreciation 27,999,628 25,878,476
19,648,118 20,733,532
</TABLE>
Buildings leased to others include land of $1,056,700 at May 31, 1996 and
1995. Development costs relating to real estate projects of $178,816 were
written off during Fiscal 1996, which was included in the land
balance at May 31, 1995.
9. 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 4.01 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 May 31, 1996, is as follows:
<TABLE>
<CAPTION>
Properties Subject To Lease
Accumulated
Cost Depreciation
<S> <C> <C>
Investment properties leased to
others 7,850,266 2,524,553
Land and land improvements 5,394,621 372,594
Minimum future rentals:
Fiscal years ending May 31: 1997 1,365,988
1998 1,256,975
1999 1,047,360
2000 862,729
2001 673,181
Thereafter 7,144,066*
12,350,299
</TABLE>
*Includes $1,554,000 under a land lease expiring in 2072 and $2,597,130
under a net lease for a store expiring in 2014. There were no
contingent rentals included in income for Fiscal 1996 and 1995. Fiscal
1994 had contingent rentals of $1,495.
Page 11
<PAGE>
10. QUARTERLY FINANCIAL INFORMATION (Unaudited)
The results of operations for each of the quarters in the last two fiscal
years are presented below:
<TABLE>
<CAPTION>
Income(loss) Per Weighted
from Net Avg.Combined
Quarter Revenues Operations Income(Loss) Share
<S> <C> <C> <C> <C> <C>
1996
1st 1,490,288 168,625 (17,594) (0.01)
2nd 975,344 (129,757) (200,669) (0.10)
3rd 10,091,533 955,306 463,208 0.23
4th 2,751,821 (257,534) (201,682) (0.10)
15,308,986 736,640 43,263 (0.02)
1995
1st 1,282,030 83,530 (69,590) (0.03)
2nd 963,985 (127,702) (206,318) (0.10)
3rd 7,868,844 393,032 112,876 0.06
4th 2,129,631 (256,305) (272,736) (0.14)
12,244,490 92,555 (435,768) (0.21)
</TABLE>
The quarterly results of operations for 1996 and 1995, 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
June through November, are deferred and recognized as revenue and opera-
ting expenses, ratably, over the operating period.
The Fiscal 1996 fourth quarter includes the write-off of $178,816
of real estate development costs ($60,797 after tax) relating to the
preliminary phase of real estate projects. The fourth quarter of 1996
includes approximately $63,000 from the partial utilization of state
net operating losses which had been subject to a valuation allowance
in the prior year.
11. INDUSTRY SEGMENT INFORMATION:
The Companies and the subsidiaries operate in two industry
segments consisting of the following:
SKI OPERATIONS:
Two ski areas located in the Pocono Mountains of Northeastern
Pennsylvania.
REAL ESTATE MANAGEMENT OPERATIONS:
Investment properties leased to others located in Eastern Pennsyl-
vania 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 not specifically attributable to any one
industry segment. Identifiable assets are those utilized in the
Page 12
<PAGE>
operation of the respective segments; corporate assets consist
principally of cash and non-revenue producing properties held for
investment purposes.
<TABLE>
<CAPTION>
Year Ended May 31
1996 1995 1994
<S> <C> <C> <C>
Revenues:
Ski operations 10,618,961 7,837,872 9,539,184
Real estate management operations 4,690,025 4,406,618 3,884,726
15,308,986 12,244,490 13,423,910
Income:
Ski operations 877,282 117,300 1,193,298
Real estate management operations 800,359 947,401 278,051
1,677,641 1,064,701 1,471,349
General & administrative expenses (941,001) (972,146) (996,582)
Interest and other income 88,060 82,956 105,917
Interest expense (866,262) (884,068) (864,102)
Income(loss) before income taxes and
cumulative effect of change in
accounting method (41,562) (708,557) (283,418)
</TABLE>
In Fiscal 1996, 1995 and 1994, no one customer represented 10% or
more of total revenues.
Identifiable assets, net of accumulated depreciation at May 31,
1996, 1995 and 1994, and depreciation expense and capital expenditures
for the years then ended by industry segment are as follows:
<TABLE>
<CAPTION>
Identifiable Depreciation Capital
Assets Expense Expenditure
<S> <C> <C> <C>
1996
Ski Operations 9,186,757 1,451,159 1,066,507
Real Estate Management Operations 10,540,000 415,449 121,757
Other Corporate 3,482,933 283,181 104,626
Total 23,209,690 2,149,789 1,292,890
1995
Ski Operations 10,353,174 1,507,073 1,293,301
Real Estate Management Operations 10,315,950 333,597 8,789
Other Corporate 2,994,547 415,258 112,560
Total 23,663,671 2,255,928 1,414,650
1994
Ski Operations 9,719,420 1,537,592 1,197,144
Real Estate Management Operations 11,415,581 662,401 324,545
Other Corporate 4,097,779 103,984 89,717
Total 25,232,780 2,303,977 1,611,406
</TABLE>
12. 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 result of operations of the Companies.
Page 13
<PAGE>
At May 31, 1996, the Companies had an outstanding letter of credit
of $75,000 which guarantees the ski facilities' aggregate liability
insurance deductible.
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 approxi-
mately $2,696,119 at May 31, 1996.
13. STOCK OPTIONS AND CAPITAL STOCK:
The Chairman of the Board of the Companies was granted an Option
for 10,000 shares of the Companies' common stock in July 1993 at $6.75
per share, which expires in 10 years. The Option has not been exercised
at May 31, 1996. The Option price was not less than the market value
at the date of the grant.
The Board of Directors has authorized the repurchase of up to
200,000 shares of the Companies' common stock in the open market from
time to time. As of May 31, 1996, 194,134 shares had been purchased.
No shares were purchased in Fiscal 1996, and 96,600 and 20,113 shares
were purchased in Fiscal 1995 and Fiscal 1994, respectively.
REPORT OF INDEPENDENT ACCOUNTANTS
To Shareholders of
Blue Ridge Real Estate Company
and Big Boulder Corporation
We have audited the accompanying combined balance sheets of Blue Ridge
Real Estate Company and subsidiaries and Big Boulder Corporation and
subsidiaries as of May 31, 1996 and 1995, and related combined state-
ments of operations and earnings retained in the business and cash flows
for each of the three years in the period ended May 31, 1996. These
financial statements are the responsibility of the Companies' manage-
ment. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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 also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial posi-
tion of Blue Ridge Real Estate Company and subsidiaries and Big Boulder
Corporation and subsidiaries as of May 31, 1996 and 1995, and the com-
bined results of their operations and their cash flows for each of the
three years in the period ended May 31, 1996 in conformity with
generally accepted accounting principles.
Page 14
<PAGE>
As discussed in Note 1 to the combined financial statements, the
Companies changed their method of accounting for income taxes effec-
tive June 1, 1993.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
July 26, 1996
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 1996 and 1995.
No dividends were paid on common stock in either Fiscal Year.
<TABLE>
<CAPTION>
FISCAL YEAR HIGH LOW
1996 ASKED BID
<S> <C> <C> <C>
First Quarter 5.875 5.125
Second Quarter 6.250 5.500
Third Quarter 6.000 5.375
Fourth Quarter 6.750 5.375
FISCAL YEAR HIGH LOW
1995 ASKED BID
First Quarter 6.750 5.750
Second Quarter 7.500 6.000
Third Quarter 6.875 4.500
Fourth Quarter 5.750 5.000
</TABLE>
The reported quotations represent prices between dealers, do not
reflect retail mark-ups, mark-downs or commissions and do not neces-
sarily represent actual transactions. The approximate number of
holders of record of common stock on May 31, 1996 was 759.
BLUE RIDGE REAL ESTATE COMPANY AND SUBSIDIARIES
AND BIG BOULDER CORPORATION AND SUBSIDIARIES
COMBINED SUMMARY OF SELECTED FINANCIAL DATA
<TABLE>
(CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Revenues 15,308,986 12,244,490 13,423,910
Net income(loss) 43,263 (435,738) (163,884)
Net income(loss)per combined share .02 (.21) (.08)
Cash dividends per combined share 0 0 0
Weighted average number of
combined shares outstanding 2,004,014 2,029,630 2,109,246
Total assets 23,209,690 23,663,671 25,232,780
Long-term debt 9,694,167 10,239,166 10,750,393
Shareholders' equity 9,613,462 9,570,199 10,615,830
Page 15
<PAGE>
1993 1992
Revenues 13,370,007 13,671,296
Net income(loss) 130,214 180,449
Net income(loss)per combined share .06 .08
Cash dividends per combined share 0 0
Weighted average number of
combined shares outstanding 2,144,442 2,162,308
Total assets 26,190,005 26,036,984
Long-term debt 11,262,128 10,093,341
Shareholders' equity 10,905,140 10,915,571
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
Results of Operations
FISCAL 1996 VERSUS FISCAL 1995
For Fiscal Year ended May 31, 1996, the Companies reported net
income of $43,263 or $.02 per combined share as compared with a net
loss of $435,768 or $(.21) per combined share for Fiscal 1995.
Combined revenue of $15,308,986 represents an increase of
$3,064,496 or 25% when compared to Fiscal 1995. Ski Operations
increased $2,781,089 or 35%, and Real Estate Management Operations
increased $283,407 or 6% when compared to Fiscal 1995.
The Ski Operations had approximately 267,000 skiers visit our
slopes compared to 220,000 skier visits last season. The increase
of 47,000 skier visits represents a 21% increase. Revenue per skier
was $40 compared to $36 last season for an increase of $4.00 or 11%.
Tubing operations had approximately 64,000 tuber visits compared to
18,500 tuber visits last season. The increase of 45,500 tuber visits
represents a 246% increase. Revenue per tuber was $9.63 compared to
$9.99 last season for a decrease of $.36 or 3%. The ski areas
operated for a combined total of 212 days compared to 167 days last
season. The food and beverage operation at the ski area contributed
revenue of $6.75 per skier visit. The retail shop operation at the
ski area contributed revenue of $2.16 per skier visit compared to
$.32 the previous season with a concessionaire.
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 1996 or Fiscal 1995.
Operating costs associated with Ski Operations increased by
$2,021,107 when compared to Fiscal 1995. This increase is
attributed to more operating days, advertising costs, and associated
personnel costs.
Operating costs associated with Real Estate Management Operations
increased by $430,449 when compared to Fiscal 1995. This increase is
attributed to the write-off of $178,816 of costs, prior year's real
estate development projects, advertising costs, and associated
personnel costs. General and Administrative expenses decreased by
$31,145 when compared to Fiscal 1995. The decrease is attributed to
a reduction in supplies and services. Cost of properties disposed
is directly related to land sold.
Interest and Other Income increased by $5,104 compared to Fiscal
1995. This increase is attributed to interest earned from interest-
bearing deposits.
Interest expense decreased by $17,806 compared to Fiscal 1995.
This decrease is attributed to reduction of debt obligation.
The effective Tax Rate credit for Fiscal 1996 of 34% versus the
Tax Rate credit of 38% for Fiscal 1995, was reduced by approximately
$63,000 from the partial utilization of State net operating losses,
which had been subject to valuation allowance in prior years.
Page 16
<PAGE>
FISCAL 1995 VERSUS FISCAL 1994
For Fiscal Year ended May 31, 1995, the Companies reported a net
loss of $435,768 or $(.21) per combined share as compared with a net
loss of $163,884 or $(.08) per combined share for Fiscal 1994.
Combined revenue of $12,244,490 represents a decrease of $1,179,420
or 9% when compared to Fiscal 1994. Real Estate Management Operations
increased $521,892 or 13% when compared to Fiscal 1994. Ski Operations
decreased $1,701,312 or 18% when compared to Fiscal 1994.
The Ski Operations had approximately 220,000 skiers visit our
slopes compared to 270,000 skier visits last season. The decrease
of 50,000 skier visits represents a 19% decrease. Revenue per skier was
$36 compared to $35 last season for an increase of $1.00 or 3%. The ski
areas operated for a combined total of 167 days compared to 200 days last
season. The food and beverage operation at the ski areas contributed
revenue of $6.82 per skier visit.
The Real Estate Management Operations revenue increase is attri-
buted to fees for services provided to the Trust of the resort communi-
ties, fewer vacancies in investment properties, more campsites rented,
increased festival revenue, commissions for resales of homes in our
resort communities, fishing and hunting leases, and leasing commissions
in resort communities. Disposition of properties occur sporadically
and do not follow any pattern during the fiscal year. No major land
sales occurred in Fiscal 1995 or Fiscal 1994.
Operating costs associated with Ski Operations decreased by $625,314
when compared to Fiscal 1994. This decrease is attributed to personnel,
advertising costs, and less operating days.
Operating costs associated with Real Estate Management Operations decreased
by $147,458 when compared to Fiscal 1994. This decrease is
attributed to cost related to Real Estate Development projects. General
and Administrative expenses decreased by $24,436 because of personnel and
related benefits. Cost of properties disposed increased due to the sale
of property this fiscal year.
Interest and Other Income decreased by $22,961 compared to Fiscal
1994. This decrease was due to the disposition of certain assets in
Fiscal 1994.
Interest expense increased by $19,966 compared to Fiscal 1994. This
increase is attributed to higher interest rates.
The effective Tax Rate for Fiscal 1995 is a credit of 38% versus
a credit of 39% for Fiscal 1994.
Page 17
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Combined Statement of Cash flows reflects net cash provided
by operating activities of $1,961,557, $1,660,235,and $2,076,510 in
Fiscal 1996, 1995 and 1994, respectively.
No major capital investments were made in Fiscal 1996. The additions
to building and equipment at both ski areas were general in nature.
During Fiscal 1996, the Companies borrowed against their $2,000,000
line of credit for a period of one month in varying amounts with a
maximum of $900,000.
During Fiscal 1995, the Companies borrowed against their $2,000,000
line of credit for a period of one month in varying amounts with a
maximum of $1,075,000.
The Companies have a combined working capital of $1,238,877 at May
31, 1996, versus $789,356 at May 31, 1995.
MOVING FORWARD
Capital expenditures for Fiscal 1997 include expansion of our
tubing hill at Jack Frost Mountain and doubling the size of our tubing
facility at Big Boulder Ski Area. We also plan to add additional CFM
of air to our snowmaking system at Jack Frost Mountain. The Companies
plan to finance the air expansion through a bank and fund the tubing
facilities expansion with internal funds.
The Companies continue to develop activities to generate profit
during the non-ski season with increased festivals and the introduc-
tion in Fiscal 1997 of in-line skate and board park.
CHANGE IN FISCAL ACCOUNTING 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 will
be effective for each of the Companies 1997 Fiscal Year. The purpose is
to have the fiscal reporting period coincide with the operating
periods of the profit centers initiated over the last several years.
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
J. Anthony V. Townsend
Managing Director, Finsbury Asset Management Ltd;
Director, Rea Brothers Group, Plc.
Wolfgang Traber
Chairman of the Board, Hanseatic Corporation & Co.-N.Y.
The above Directors serve both Companies.
Page 18
<PAGE>
OFFICERS
Michael J. Flynn
Chairman of the Board
Gary A. Smith
President
Melanie A. Murphy
Vice President of Operations
Lois K. McCurdy
Secretary
Alisa J. O'Brien
Assistant Secretary
Russell S. Mollath
Controller
The above Officers serve both Companies.
TRANSFER AGENT
Summit Bank, Hackensack, New Jersey
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., Philadelphia, Pennsylvania
NOTICE OF ANNUAL MEETINGS
The Annual Meetings of Shareholders of Blue Ridge Real Estate Company
and Big Boulder Corporation will be held simultaneously at the Summit
Lodge at Jack Frost Mountain, Kidder Township, Carbon County, Pennsyl-
vania on Monday, October 7, 1996 at 11:00 am local time.
FORM 10-K AVAILABLE
The Companies will furnish to any shareholder, without charge, a copy
of their Fiscal Year 1996 Annual Report as filed with the Securities
and Exchange Commission on Form 10-K. Written requests 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
18,852 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
Page 20
<PAGE>
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<CASH> 1,958,963
<SECURITIES> 293,588
<RECEIVABLES> 334,397
<ALLOWANCES> 0
<INVENTORY> 123,257
<CURRENT-ASSETS> 3,487,796
<PP&E> 47,647,746
<DEPRECIATION> 27,999,628
<TOTAL-ASSETS> 23,209,690
<CURRENT-LIABILITIES> 2,248,919
<BONDS> 0
<COMMON> 2,004,014
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 23,209,690
<SALES> 15,308,986
<TOTAL-REVENUES> 15,308,986
<CGS> 0
<TOTAL-COSTS> 14,572,346
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 866,262
<INCOME-PRETAX> (778,202)
<INCOME-TAX> (84,825)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,263
<EPS-PRIMARY> .02
<EPS-DILUTED> 0
</TABLE>
