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*
<PAGE>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.
<PAGE>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.
<PAGE>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
<PAGE>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.
<PAGE>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.
<PAGE>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.
<PAGE>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.
<PAGE>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.
<PAGE>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.
<PAGE>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)
<PAGE>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
<PAGE>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 ___________
<PAGE>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
<PAGE>14
COMBINED SCHEDULE III.
REAL ESTATE AND ACCUMULATED DEPRECIATION March 31, 1999
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
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
<PAGE>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
</TABLE>
<PAGE>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
<PAGE>17
<TABLE>
<CAPTION>
<S> <C> <C>
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.
</TABLE>
<PAGE>18
<TABLE>
<CAPTION>
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,
<S> <C> <C> <C>
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.
<PAGE>19
</TABLE>
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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.
</TABLE>
<PAGE>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.
<PAGE>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.
<PAGE>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.
<TABLE>
<CAPTION>
<PAGE>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> <C> <C> <C>
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.
</TABLE>
<PAGE>24
<TABLE>
<CAPTION>
6. LONG-TERM DEBT:
Long-term debt as of March 31, 1999 and 1998 consists of the following:
<S> <C> <C>
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
</TABLE>
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
<PAGE>25
7. INCOME TAXES:
The provision (credit) for income taxes is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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)
<PAGE>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
</TABLE>
<PAGE>27
<TABLE>
<CAPTION>
<S> <C> <C>
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
<PAGE>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
</TABLE>
*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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
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
</TABLE>
<PAGE>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.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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
<PAGE>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
</TABLE>
<PAGE>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
<PAGE>32
Option activity during the periods ended March 31, 1999, 1998 and 1997 is as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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
<PAGE>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
<PAGE>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.
<PAGE>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
</TABLE>
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
<TABLE>
<CAPTION>
<S> <C> <C> <C>
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
</TABLE>
<PAGE>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.
<PAGE>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.
<PAGE>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.
<PAGE>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
<PAGE>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
<TABLE>
<S> <C>
[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
</TABLE>
