10-Q 1 trend10q.txt TW 10-Q 3-31-01 United States SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2001 [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ____________ to ______________ Commission file number 000-22979 Trendwest Resorts, inc. ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Oregon 93-1004403 ----------------------------------- -------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation) 9805 Willows Road Redmond, Washington 98052 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (425) 498-2500 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares of the registrant's no-par voting common stock outstanding as of May 8, 2001: 25,274,955 shares. PART I - FINANCIAL INFORMATION Item I - Financial Statements TRENDWEST RESORTS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (dollars in thousands) (Unaudited)

See accompanying notes to the condensed consolidated financial statements. 2 TRENDWEST RESORTS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (dollars in thousands, except per share data) (Unaudited)

See accompanying notes to the condensed consolidated financial statements. 3 TRENDWEST RESORTS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flow (dollars in thousands) (Unaudited)

See accompanying notes to the condensed consolidated financial statements. 4 TRENDWEST RESORTS, INC. AND SUBSIDIARIES Condensed Consolidated Cash Flow Information (continued) (dollars in thousands) (unaudited)

See accompanying notes to condensed consolidated financial statements. 5 TRENDWEST RESORTS, INC. AND SUBSIDIARIES Notes to the Condensed Consolidated Financial Statements (dollars in thousands) (Unaudited) Note 1 - Background Trendwest Resorts, Inc., (Company) markets, sells and finances timeshare Vacation Ownership Interests in the form of Vacation Credits and Fractional Interests. The Company also acquires, develops and manages timeshare resorts. The Company's timeshare resorts (except Fractional Interests) are owned and operated through WorldMark, the Club, (WorldMark) and WorldMark South Pacific Club (WorldMark South Pacific) (collectively "The Clubs"). WorldMark is a non-profit mutual benefit corporation organized by Trendwest in 1989 to provide an innovative, flexible vacation ownership system. WorldMark South Pacific is a registered managed investment scheme regulated by the Australian Securities and Investments Commission ("ASIC"). The Company presently sells Vacation Ownership interests in the United States, Fiji, and Australia, primarily through off-site sales offices. Fractional Interests are sold on-site at the Depoe Bay resort in Oregon. These condensed consolidated financial statements do not include certain information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, in the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. Operating results for the three months ended March 31, 2001, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2001. These statements should be read in conjunction with the audited financial statements and footnotes included in the Company's 2000 Form 10-K filed with the Securities and Exchange Commission (SEC). The accounting policies used in preparing these financial statements are the same as those described in such Form 10-K, unless otherwise noted herein. Note 2 - New Accounting Pronouncements Effective January 1, 2001, the Company adopted Financial Accounting Standards Board Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities," ("FAS 133") which requires that all derivative instruments be recorded on the balance sheet at fair value. The adoption of FAS 133 did not have a material effect as of the adoption date of January 1, 2001, nor for the period ended March 31, 2001. On the date derivative contracts are entered into, the Company designates the derivative as either (a) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge), (b) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge), (c) a hedge of a net investment in a foreign operation (net investment hedge), or (d) a non-accounting hedge. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction and, if it is, depending on the type of hedge transaction. For fair value hedge transactions, changes in fair value of the derivative instrument are generally offset in the income statement by changes in the fair value of the item being hedged. For cash-flow hedge transactions, changes in the fair value of the derivative instrument are reported in other comprehensive income to the extent of effectiveness. For net investment hedge transactions, changes in the fair value are recorded as a component of the foreign currency translation account that is also included in other comprehensive income. The gains and losses on cash flow hedge transactions that are reported in other comprehensive income are reclassified to earnings in the periods in which earnings are affected by the variability of the cash flows of the hedged item. The ineffective portions of all hedges are recognized in current period earnings. From time to time, the Company acquires resorts outside of the United States, where payment for the resort is denominated in a foreign currency. It is the Company's policy to assess such transactions and ensure that any foreign exchange risks associated with the transaction are appropriately managed. As a result of this, the Company periodically enters into economic hedges by purchasing foreign exchange contracts as a hedge against foreign denominated commitments to purchase resort properties. As of March 31, 2001, the Company had foreign exchange contracts with notional amounts of 6 approximately $2,081 CDN at a rate of $1.4955 CDN/US and $16,919 CDN at a rate of $1.4905 CDN/US for fixed purchase commitments. The impact of recording the fair values of the forward contracts were $408, net of tax benefit, and have been included in other comprehensive income for the quarter. In September 2000, the FASB issued SFAS No. 140, which replaces SFAS No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities and rescinds SFAS No. 127, Deferral of the Effective Date of Certain Provisions of FASB Statement No. 125. SFAS 140 revises SFAS 125's standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but it carries over most of SFAS 125's provisions without reconsideration. SFAS 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001 and for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. The Company adopted the new disclosures required under SFAS 140 as of December 31, 2000. SFAS 140 is to be applied prospectively with certain exceptions. SFAS 140 is not expected to have a material impact on the Company's consolidated results of operations or financial position. Note 3 - Foreign Currency Translation Assets and liabilities in foreign functional currencies are translated into U.S. dollars based upon the prevailing currency exchange rates in effect at the balance sheet date, while revenues and expenses are translated at average rates prevailing during the year. Translation gains and losses are not included in the determination of net income but are accumulated in a separate component of shareholders' equity. Transaction gains or losses are recorded in the results of operations and were insignificant for the three month period ended March 31, 2001. Note 4 -- Comprehensive Income Comprehensive income is comprised of the following:

Note 5 - Stock Split On February 21, 2001, the Board of Directors declared a 3 for 2 stock split for shareholders of record on March 15, 2001, payable on March 29, 2001. Shares outstanding and earnings per share figures contained in this Form 10-Q and in the condensed consolidated financial statements contained herein have been adjusted to reflect the stock split as if it were effective for all periods presented. Note 6 - Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current presentation. 7 Note 7 - Basic and Diluted Net Income Per Common Share The following presents the reconciliation of weighted average shares used for basic and diluted net income per share:

Net income available to common shareholders for basic net income per share was $11,781 and $9,670 for the three months ended March 31, 2001 and 2000, respectively. At March 31, 2001 and 2000, there were options to purchase 0 and 669,000 shares of common stock outstanding, respectively, which were antidilutive and therefore not included in the computation of diluted net income per share. Note 8 - Inventories Inventories consist of Vacation Credits and construction in progress as follows:

Note 9 - Notes Receivable, Allowance For Doubtful Accounts, Recourse Liability and Sales Returns The following table summarizes the Company's total Notes Receivable portfolio at:

8 The activity in the allowance for doubtful accounts, recourse liability and sales returns is as follows for the three months ended March 31, 2001 and the year ended December 31, 2000:

Note 10 - Commitments and Contingencies (a) Purchase Commitments The Company routinely enters into purchase agreements with various parties to acquire and build resort properties. At March 31, 2001, the Company had outstanding purchase commitments of $51,124 related to properties under development. (b) Surety and Performance Bonds The Company utilizes surety and performance bonds as part of developing resort properties. As of March 31, 2001, there were $5,587 in surety bonds outstanding. (c) Litigation The Company is involved in various claims and lawsuits arising from the ordinary course of business. Management believes that outcome of these matters will not have a material adverse effect on the Company's financial position, results of operations, or liquidity. Note 11 - Segment Reporting The Company has two reportable segments; sales and financing. The sales segment markets and sells Vacation Credits and Fractional Interests. The finance segment is primarily responsible for servicing and collecting Notes Receivable originated in conjunction with the financing of sales of Vacation Credits and Fractional interest Sales. The finance segment does not include the activities of the Company's finance subsidiaries. Management evaluates the business based on sales and marketing activities as these are the primary drivers of the business. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on profits or losses from sales and marketing activities on a pre-tax basis. Intersegment revenues are recorded at market rates as if the transactions occurred with third parties. Assets are not reported by segment. 9 The following tables summarize the segment activity of the Company:

The following table provides a reconciliation of segment revenues and profits to the consolidated amounts:

The Company's revenue from external customers derived from sales within the United States totaled $88,000 and $62,513 for the three months ended March 31, 2001 and 2000, respectively. Revenue from external customers derived from sales in all foreign countries totaled $4,576 and $0 for the three months ended March 31, 2001 and 2000, respectively. Revenue from external customers is attributed to countries based on the location where the sale was made. Substantially all of the Company's long-lived assets are located within the United States. The net assets of foreign operations totaled $6,822 at March 31, 2001. 10 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS The statements below and other statements herein contain forward looking information which include future financing transactions, acquisition of properties, and the Company's future prospects and other forecasts and statements of expectations. Actual results may differ materially from those expressed in any forward-looking statement made by the Company, due among other things, to the Company's ability to develop or acquire additional resort properties, find acceptable debt or equity capital to fund such development, as well as other risk factors as outlined in the "Risk Factors" section of the Company's Form 10-K. The Company achieved total revenues of $105.0 million for the three months ended March 31, 2001, compared to $73.2 million for the three months ended March 31, 2000, an increase of 43.4%. The principal reason for the overall improvement was a 39.8% increase in Vacation Credit sales to $87.4 million for the three months ended March 31, 2001, from $62.5 million for the three months ended March 31, 2000. In addition, $5.2 million in Fractional Interest sales from the Depoe Bay, Oregon, resort were recognized during the first three months of 2001. No Fractional Interest sales were recognized in 2000. The increase in Vacation Credit sales was primarily the result of a 28.6% increase in the number of Vacation Credits sold in the United States, to 58.9 million for the three months ended March 31, 2001, from 45.8 million for the three months ended March 31, 2000. The increase in Vacation Credits sold was largely attributable to continued improvement in existing sales offices, improved performance in the eleven new offices opened during 2000, and increased Upgrade Sales. Revenues from Upgrade Sales increased 34.0% to $13.4 million for the three months ended March 31, 2001, from $10.0 million for the three months ended March 31, 2000. The increase in Upgrade sales is the result of continuing satisfaction on the part of WorldMark Owners and the ongoing growth in the owner base. In the United States, the average price per Vacation Credit sold increased to $1.41 per credit for the three months ended March 31, 2001, versus $1.37 per credit for the three months ended March 31, 2000, primarily as a result of a $0.05 increase in the selling price of Vacation Credits effective July 1, 2000, and an $0.05 increase in the price of Upgrade Vacation Credits effective September 1, 2000. For the quarter ended March 31, 2001, financing activities generated $9.7 million in revenues, compared to $7.8 million in the same quarter last year, a 24% increase. This increase is largely due to increased gains on sales of Notes Receivable. Gains increased due to increased sales of Notes Receivable. In addition, interest rates fell during the quarter, increasing the net interest spread and thus increasing the gains recognized. Vacation Credit and Fractional Interest cost of sales, as a percentage of Vacation Credit and Fractional Interest sales, was 28.1% for the three months ended March 31, 2001, versus 23.4% for the three months ended March 31, 2000. This increase is a result of the higher cost of sales of Fractional Interest sold during 2001, as well as the lower cost of the units at Fiji and at Rancho Vistoso in Arizona contributed to WorldMark during the first quarter of 2000, both of which had product costs lower than the Company's historical average. Over the remainder of 2001, the Company expects product cost, as a percentage of Vacation Credit sales, to remain at a similar level to first quarter results. The Company expects to recognize the remaining incremental revenue from the Fractional Sales program at the second phase of Depoe Bay, with its higher product cost as a percentage of sales, by the end of the third quarter, with most of this revenue being recognized in the second quarter. Sales and marketing costs, as a percentage of Vacation Credit and Fractional Interest sales, were 46.7% for the three months ended March 31, 2001, as compared to 49.0% for the three months ended March 31, 2000. This decrease was a result of the Company experiencing strong sales system wide. In addition, Fractional Interest sales have lower relative sales and marketing costs, offset by higher product cost. General and administrative expenses increased 27.4% to $9.3 million for the three months ended March 31, 2001, from $7.3 million for the three months ended March 31, 2000. As a percentage of total revenue, general and administrative costs decreased to 8.9% for the three months ended March 31, 2001, versus 10.0% for the three months ended March 31, 2000. In the first quarter of 2000, the Company fully expensed start-up costs for the new Midwest and South Pacific regions without the corresponding benefit of sales. 11 Resort management services contributed $1.0 million to total revenues, down from last year's $1.6 million as higher utility costs at Western resorts and higher labor costs negatively impacted the management fee received from WorldMark. The Company is currently evaluating various profit improvement initiatives to bring management fees more in line with prior periods. Provision for doubtful accounts and recourse liability, as a percentage of Vacation Credit and Fractional Interest sales, was 7.3% for the first quarter of 2001 versus 6.9% for the comparable period last year. This increase was the result of a higher mix of sales in newer sales offices with expected default rates higher than the Company's average historical experience. The Company maintains an allowance for doubtful accounts in respect of the Notes Receivable owned by the Company and an allowance for recourse liability in respect of the Notes Receivable that have been sold by the Company. The aggregate amount of these allowances at March 31, 2001 and December 31, 2000, were $41.4 million, and $38.9 million, respectively, both representing approximately 7.7% of the total portfolio of Notes Receivable at those dates, including the Notes Receivable that had been sold by the Company. No assurance can be given that these allowances will be adequate, and if the amount of the Notes Receivable that are ultimately written off materially exceed the related allowances, the Company's business, results of operations and financial condition could be materially adversely affected. The Company estimates its allowance for doubtful accounts and recourse liability by analysis of bad debts by each sales site by year of Note Receivable origination. The Company uses this historical analysis, in conjunction with other factors such as local economic conditions and industry trends in estimating the allowance for doubtful accounts and recourse liability. The Company also utilizes experience factors of more mature sales sites in establishing the allowance for bad debts at new sales offices. The Company generally charges off all receivables when they become 180 days past due and returns the credits associated with such charge-offs to inventory. At March 31, 2001 and December 31, 2000, 2.2% and 2.3% of the Company's total receivables portfolio of $538.1 million and $502.8 million, respectively, were more than 60 days past due. LIQUIDITY AND CAPITAL RESOURCES The Company generates cash from operations from down payments on sales of Vacation Credits which are financed, cash sales of Vacation Credits, principal and interest payments on Notes Receivable, and proceeds from sales and borrowings collateralized by Notes Receivable. The Company also generates cash on the interest differential between the interest charged on the Notes Receivable and the interest paid on loans collateralized by Notes Receivable. During the three months ended March 31, 2001 and 2000, cash (used in) provided by operating activities was ($12.6) million and $8.6 million, respectively. Cash used in operating activities increased principally due to the increased issuance of Notes Receivable and increased expenditures for inventory. For the three months ended March 31, 2001, cash provided by operating activities resulted primarily from sales and repayments of Notes Receivable of $66.3 million, a decrease in accounts payable and accrued liabilities of $4.4 million, an increase in taxes payable of $5.6 million, and net income of $11.8 million. For the three months ended March 31, 2001, cash used in operating activities was principally for the issuance and purchase of Notes Receivable of $83.3 million, and an increase in inventory of $20.9 million. For the three months ended March 31, 2000, cash provided by operating activities resulted primarily from sales and repayments of Notes Receivable of $58.9 million, an increase in taxes payable of $6.3 million, and net income of $9.7 million. For the three months ended March 31, 2000, cash used in operating activities was principally for the issuance and purchase of Notes Receivable of $59.3 million to finance the purchase of Vacation Credits by Owners, and an increase in inventory of $6.4 million. Net cash used in investing activities for the three months ended March 31, 2001 and 2000, was $2.4 million and $1.2 million, respectively. Cash used in investing activities for the three months ended March 31, 2001, was the result of leasehold, furniture, and equipment purchases to support the new sales offices opened to support expansion of both US and South Pacific operations. Cash used in investing activities for the three months ended March 31, 2000, was the result of furniture and equipment purchases to support the Company's ongoing growth. 12 Net cash provided by (used in) financing activities for the three months ended March 31, 2001 and 2000, was $15.1 million and ($7.6) million, respectively. For the three months ended March 31, 2001, cash provided by financing activities was principally the result of an increase in net borrowings under the bank line of credit and other of $13.4 million, issuance of common stock of $0.9 million, and an increase in due to Parent of $0.8 million. For the three months ended March 31, 2000, cash used in financing activities was principally the result of a decrease in net borrowings under the bank line of credit of $3.9 million, repurchase of common stock of $2.6 million, and decrease in receivable from Parent of $1.3 million. The Company has a three-year, $85.0 million unsecured revolving credit agreement (Credit Agreement) with a group of banks. The Agreement allows for borrowings in Australian dollars up to a maximum of $25 million US dollar equivalent. The Agreement provides for borrowings at either a reference rate or at LIBOR rates plus the applicable margin for the level of borrowings outstanding. In addition, the Agreement requires a quarterly commitment fee of 0.30% to 0.50% based on the usage level of the total commitment. Available borrowings under the Agreement are subject to a borrowing base which is a percentage of Notes Receivable and inventory, including property under development. Under the terms of the Credit Agreement, the Company is required to maintain certain interest coverage ratios and capitalization ratios and also imposes limitations on certain liens and carrying amounts of inventory. The Agreement was amended during the first quarter. The amendment increased the total commitment from $60 million to $85 million, raised the Australian dollar limit to $25 million US dollar equivalent, increased the quarterly commitment fee, and provided a first mortgage on the MountainStar property. Borrowings outstanding at March 31, 2001 and December 31, 2000, were $62.2 million and $48.4 million, respectively, at weighted average interest rates of 7.60% and 8.48%. The Company has a $10 million open line of credit with the Parent which bears interest at prime plus 1.25% (currently 9.25%) per annum. The line of credit is payable on demand. As of March 31, 2001, there was $1.2 million in indebtedness to the Parent. The Company may advance excess funds to the Parent at the prime rate minus 1.75% (currently 6.25%) per annum. At March 31, 2001, there was no Receivable from Parent. For the remainder of 2001, the Company anticipates spending approximately $85.5 million for acquisitions and development of new resort properties and for expansion and development activities. The Company plans to fund these expenditures with cash generated from operations, borrowings on the bank line of credit and further sales and securitizations of Notes Receivable. The acquisition of new resort sites and properties is an ongoing process and availability of certain properties in desired locations could result in increased expenditures for such activities. The Company believes that, with respect to its current operations, cash generated from operations and future borrowings, will be sufficient to meet the Company's working capital and capital expenditure needs through the end of 2001. Since completed units at various resort properties are acquired or developed in advance and a significant portion of the purchase price of Vacation Credits is financed by the Company, the Company continually needs funds to acquire and develop property, to carry Notes Receivable contracts and to provide working capital. The Company has historically secured additional funds through the sale of Notes Receivable through the Finance Subsidiaries, borrowings under the $85.0 million revolving line of credit and loans from the Parent. See "Risk Factors - Dependence on Acquisitions of Additional Resort Units for Growth; Need for Additional Capital" of the Company's 2000 Form 10-K. In the future, the Company may negotiate additional credit facilities, or issue corporate debt or equity securities. Any debt incurred or issued by the Company may be secured or unsecured, at a fixed or variable interest rate, and may be subject to such additional terms as management deems appropriate. Both WorldMark The Club and WorldMark South Pacific maintain replacement reserves for the Resorts, which are funded from the annual assessments of the Owners. At March 31, 2001, the amount of The Clubs' reserve was approximately $17.1 million. The replacement reserve is utilized to refurbish and replace the interiors and furnishings of the condominium units and to maintain the exteriors and common areas in The Clubs' Resorts in which all units are owned by The Clubs. The Company may advance funds to either Club from time to time. 13 Item 3 - Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to interest rate changes primarily as a result of its financing of timeshare purchases, the sale and securitization of notes receivable and borrowing under revolving lines of credit. The Company's interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to reduce overall borrowing costs. To achieve its objectives, the Company borrows funds, sells or securitizes Notes Receivable primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate its interest rate risk on a related financial instrument. The functional currency of the Company's Australian operations is the Australian dollar. The Australian operations are funded through the $85 million credit facility, which has an Australian dollar sub-limit of up to $25 million US dollar equivalent. The Company is also subject to foreign currency exchange rate risk when developing resort properties denominated in a foreign currency. As the Company continues expanding its operations worldwide, there will be additional exposure to foreign currency exchange rate risk. The Company occasionally enters into foreign exchange contracts to reduce exposure to exchange rate risk. In January 2001, the Company entered into a forward exchange contract, to receive $2,081 CDN at a rate of $1.4955 CDN/US on July 3, 2001, and $16,919 CDN at a rate of $1.4905 CDN/US on September 30, 2002. The Company is also exposed to credit losses in the event of nonperformance by the counterparties to its foreign exchange contracts. The Company does not obtain collateral to support financial instruments but monitors the credit standing of the counterparties. The Company does not maintain a trading account for any class of financial instrument, it does not purchase high risk derivative instruments and it is not directly subject to commodity price risk. There have been no material changes to the Company's exposure to market risk since December 31, 2000. 14 PART II - OTHER INFORMATION Item 1 - Legal Proceedings Incorporated by reference. See Note 11 of "Notes to Condensed Consolidated Financial Statements." Item 2 - Changes in Securities and Use of Proceeds None Item 3 - Defaults Upon Senior Securities None Item 4 - Submission of Matter to a Vote of Security Holders None Item 5 - Other Information None Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits 2.1 Restated Articles of Incorporation (1) 2.2 Restated Bylaws (1) 11 Statement re: Computation of Earnings per share - See note 4 of "Notes to Condensed Consolidated Financial Statements." (1) Incorporated by reference to the Company's Registration Statement on Form S-1 (File No. 333-26861). (a) Reports on Form 8-K FORM 8-K dated February 27, 2001, on Item 5. Other Events - Stock Split., relating to the 3 for 2 stock split declared by the Board of Directors on February 21, 2001, effective for stockholders of record on March 15, 2001. 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TRENDWEST RESORTS, INC. Date: May 15, 2001 /s/ WILLIAM F. PEARE ---------------- ----------------------------------------- William F. Peare President, Chief Executive Officer and Director (Principal Executive Officer) Date: May 15, 2001 /s/ TIMOTHY P. O'NEIL ---------------- ----------------------------------------- Timothy P. O'Neil Vice President, Chief Financial Officer (Principal Financial Officer) 16

TRENDWEST RESORTS INC 10-Q