THE L.J. SKAGGS AND MARY C. SKAGGS FOUNDATION
REPORT ON AUDIT OF FINANCIAL STATEMENTS ~ DECEMBER 31, 2004 and 2003

INDEPENDENT AUDITOR’S REPORT

To The Board of Directors of
The L.J. Skaggs and Mary C. Skaggs Foundation:

We have audited the accompanying statement of financial position of The L.J. Skaggs and Mary C. Skaggs Foundation as of December 31, 2004 and 2003 and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the Foundation's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The L.J. Skaggs and Mary C. Skaggs Foundation as of December 31, 2004 and 2003 and the changes in its net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

BUCKLEY, PATCHEN, RIEMANN & HALL

Lafayette, California
January 25, 2005