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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

Registration File No. 333-40708

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Chesapeake Funding LLC(Formerly known as Greyhound Funding LLC) (Exact name of Registrant as specified in its charter)

|Delaware(State or other jurisdiction
of incorporation or organization)                |  | 51-0391968(I.R.S. Employer
Identification Number)
|------------------------------------------------------------------------------------- |  | -------------------------------------------------
|307 International Circle
Hunt Valley, Maryland(Address of principal executive office) |  | 21030(Zip Code)                                  

(410) 771-1900(Registrant's telephone number, including area code)

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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 and Exchange Act of 1934 during the
preceding 12 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 ý        No o

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Chesapeake Funding LLC    Index

|        |  |                                                                                                |  | Page
|------- |  | ---------------------------------------------------------------------------------------------- |  | ----
|PART I  |  | Financial Information                                                                          |  |     
|Item 1. |  | Financial Statements                                                                           |  |     
|        |  | Condensed Statements of Income for the three and nine months ended September 30, 2002 and 2001 |  | 2   
|        |  | Condensed Balance Sheets as of September 30, 2002 and December 31, 2001                        |  | 3   
|        |  | Condensed Statements of Cash Flows for the nine months ended September 30, 2002 and 2001       |  | 4   
|        |  | Notes to Condensed Financial Statements                                                        |  | 5   
|Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations          |  | 7   
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risks                                    |  | 13  
|Item 4. |  | Controls and Procedures                                                                        |  | 13  
|PART II |  | Other Information                                                                              |  |     
|Item 6. |  | Exhibits and Reports on Form 8-K                                                               |  | 14  
|        |  | Signatures                                                                                     |  | 15  
|        |  | Certifications                                                                                 |  | 16  

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PART IFINANCIAL INFORMATION

Item 1.    Financial Statements

Chesapeake Funding LLC  CONDENSED STATEMENTS OF INCOME  (in thousands)

|                                                                                      |                               | Three Months Ended
September 30, |        | Three Months Ended
September 30, |       
|------------------------------------------------------------------------------------- | ----------------------------- | -------------------------------- | ------ | -------------------------------- | ------
|
|Income:                                                                               |                               |                                  |        |                                  |       
|Income from investment in related party special unit of beneficial interest in leases |                               | $                                | 37,924 |                                  | $     
|                                                                                      |                               |                                  |        |                                  |       
|Expenses:                                                                             |                               |                                  |        |                                  |       
|                                                                                      | Interest expense              |                                  |        | 18,031                           |       
|                                                                                      | Service fees to related party |                                  |        | 2,141                            |       
|                                                                                      |                               |                                  |        |                                  |       
|                                                                                      |                               | Total expenses                   |        |                                  | 20,172
|                                                                                      |                               |                                  |        |                                  |       
|Operating income                                                                      |                               |                                  | 17,752 |                                  |       
|Interest income                                                                       |                               |                                  | 912    |                                  |       
|                                                                                      |                               |                                  |        |                                  |       
|Income before income taxes                                                            |                               |                                  | 18,664 |                                  |       
|Provision for income taxes                                                            |                               |                                  | 446    |                                  |       
|                                                                                      |                               |                                  |        |                                  |       
|Income before cumulative effect of accounting change                                  |                               |                                  | 18,218 |                                  |       
|Cumulative effect of accounting change, net of tax                                    |                               |                                  |       |                                  |       
|                                                                                      |                               |                                  |        |                                  |       
|Net income                                                                            |                               | $                                | 18,218 |                                  | $     
|                                                                                      |                               |                                  |        |                                  |       

See
Notes to Condensed Financial Statements.

2

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Chesapeake Funding LLC  CONDENSED BALANCE SHEETS  (In thousands)

|                                      |                                                                        | September 30,
2002 |           | December 31,
2001
|------------------------------------- | ---------------------------------------------------------------------- | ------------------ | --------- | -----------------
|Assets:                               |                                                                        |                    |           |                  
|                                      | Cash and cash equivalents                                              |                    | $         | 204,862          
|                                      | Restricted cash                                                        |                    |           | 91,809           
|                                      | Other assets                                                           |                    |           | 19,136           
|                                      | Special unit of beneficial interest in fleet receivablesrelated party |                    |           | 80,000           
|                                      | Special unit of beneficial interest in leasesrelated party            |                    |           | 3,350,347        
|                                      |                                                                        |                    |           |                  
|Total assets                          |                                                                        | $                  | 3,746,154 |                  
|                                      |                                                                        |                    |           |                  
|Liabilities and members' equity       |                                                                        |                    |           |                  
|Liabilities:                          |                                                                        |                    |           |                  
|                                      | Accrued interest and income taxes payable                              |                    | $         | 5,957            
|                                      | Deferred income taxes                                                  |                    |           | 5,761            
|                                      | Medium-term notes                                                      |                    |           | 1,668,086        
|                                      | Variable funding notes                                                 |                    |           | 1,039,967        
|                                      |                                                                        |                    |           |                  
|Total liabilities                     |                                                                        |                    | 2,719,771 |                  
|                                      |                                                                        |                    |           |                  
|Members' equity:                      |                                                                        |                    |           |                  
|                                      | Preferred membership interests                                         |                    |           | 364,073          
|                                      | Common membership interests, no par value                              |                    |           | 454,531          
|                                      | Retained earnings                                                      |                    |           | 207,779          
|                                      |                                                                        |                    |           |                  
|Total members' equity                 |                                                                        |                    | 1,026,383 |                  
|                                      |                                                                        |                    |           |                  
|Total liabilities and members' equity |                                                                        | $                  | 3,746,154 |                  
|                                      |                                                                        |                    |           |                  

See
Notes to Condensed Financial Statements.

3

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Chesapeake Funding LLC  CONDENSED STATEMENTS OF CASH FLOWS  (in thousands)

|                                                          |                                                                                   | Nine Months Ended
September 30,        |         
|--------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------- | --------
|
|Operating Activities                                      |                                                                                   |                                        |         
|                                                          | Net income                                                                        |                                        | $       
|                                                          | Adjustments to reconcile net income to net cash provided by operating activities: |                                        |         
|                                                          |                                                                                   | Cumulative effect of accounting change |         
|                                                          |                                                                                   | Amortization                           |         
|                                                          |                                                                                   | Deferred income taxes                  |         
|                                                          |                                                                                   | Losses on interest-related derivative  |         
|Net changes in other assets and liabilities:              |                                                                                   |                                        |         
|                                                          | Accrued interest and income taxes payable                                         |                                        |         
|                                                          | Restricted cash                                                                   |                                        |         
|                                                          |                                                                                   |                                        |         
|Net cash provided by operating activities                 |                                                                                   |                                        | 54,261  
|                                                          |                                                                                   |                                        |         
|Investing Activities                                      |                                                                                   |                                        |         
|                                                          | Special unit of beneficial interest in leases                                     |                                        |         
|                                                          |                                                                                   |                                        |         
|Net cash provided by investing activities                 |                                                                                   |                                        | 63,573  
|                                                          |                                                                                   |                                        |         
|Financing Activities                                      |                                                                                   |                                        |         
|                                                          | Payment of deferred financing fees                                                |                                        |         
|                                                          | Purchase of interest rate cap                                                     |                                        |         
|                                                          | Proceeds from issuance of preferred membership interests                          |                                        |         
|                                                          | Capital contributions from (distributions to) common member                       |                                        |         
|                                                          | Preferred membership interest dividends paid                                      |                                        |         
|                                                          | Proceeds from issuance of variable funding notes                                  |                                        |         
|                                                          | Principal payments of variable funding notes                                      |                                        |         
|                                                          | Proceeds from issuance of medium-term notes                                       |                                        |         
|                                                          | Principal payments of medium-term notes                                           |                                        |         
|                                                          |                                                                                   |                                        |         
|Net cash used in financing activities                     |                                                                                   |                                        | (105,516
|                                                          |                                                                                   |                                        |         
|Net increase in cash and cash equivalents                 |                                                                                   |                                        | 12,318  
|Cash and cash equivalents, beginning of period            |                                                                                   |                                        | 192,544 
|                                                          |                                                                                   |                                        |         
|Cash and cash equivalents, end of period                  |                                                                                   | $                                      | 204,862 
|                                                          |                                                                                   |                                        |         
|Supplemental disclosures of cash flow information:        |                                                                                   |                                        |         
|Interest and preferred membership interest dividends paid |                                                                                   | $                                      | 51,706  
|                                                          |                                                                                   |                                        |         
|Income taxes paid                                         |                                                                                   | $                                      | 1,726   
|                                                          |                                                                                   |                                        |         

See
Notes to Condensed Financial Statements.

4

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Chesapeake Funding LLC  NOTES TO CONDENSED FINANCIAL STATEMENTS

1.    Summary of Significant Accounting Policies



Chesapeake
Funding LLC ("Chesapeake" or "the Company") is a special purpose limited liability company, which was organized on June 24, 1999 as Greyhound Funding LLC under the laws of the State
of Delaware. On April 25, 2002 the Company's name was changed to Chesapeake Funding LLC. The sole common member of Chesapeake is Raven Funding LLC ("Raven"), which itself is a special purpose
limited liability company established under the laws of the State of Delaware. The sole member of Raven is PHH Vehicle Management Services LLC ("PHH" or "Vehicle Management Services"), a limited
liability company and, from its date of organization to March 1, 2001, a wholly-owned subsidiary of Avis Group Holdings, Inc. ("Avis").

On
March 1, 2001, Avis was acquired by PHH Corporation. PHH became a wholly-owned subsidiary of PHH Corporation, which is a wholly-owned subsidiary of Cendant Corporation ("Cendant"). All
assets and liabilities were recorded by the Company at fair value as of March 1, 2001. No significant adjustments were made by the Company.

Chesapeake
was formed for the purpose of issuing indebtedness, issuing preferred membership interests, acquiring a special unit of beneficial interest in certain leases (the "Lease SUBI"), and
acquiring a portion of a special unit of beneficial interest in certain fleet service receivables (the "Fleet Receivable SUBI") owned by D.L. Peterson Trust ("DLPT"). The Lease SUBI is a beneficial
ownership interest in the leases, vehicles and paid-in-advance vehicles owned by DLPT ("SUBI Assets"). DLPT is a statutory business trust established by PHH in order to
administer the titling of the vehicles in connection with the financing and transfer of vehicles subject to leases. Chesapeake owns a certificate representing the Lease SUBI (the "Lease SUBI
Certificate") and a certificate representing an interest in the Fleet Receivable SUBI which entitles Chesapeake to receive up to $80 million a month of the collections received in respect of
the fleet services receivables (the "Fleet Receivable SUBI Certificate"). PHH acts as servicer of the assets held by DLPT, including the assets allocated to the Lease SUBI and the Fleet Receivable
SUBI. In its role as servicer, PHH will maintain all property and equipment and employees required to perform the servicing activities. The Fleet Receivable SUBI Certificate and the Lease SUBI
Certificate were issued by DLPT to Raven, which were then contributed to Chesapeake by Raven.

In
management's opinion, the accompanying unaudited Financial Statements contain all normal recurring adjustments necessary for a fair presentation of interim results reported. The results of
operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. In addition, management is required to make
estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could
differ from those estimates. The Financial Statements should be read in conjunction with the Company's Annual Report on Form 10-K dated March 29, 2002.

2.    Restricted Cash

The
Company is required by its debt agreements to set aside certain amounts of cash to provide additional credit enhancement on its medium-term and variable funding notes. Amounts required
to be set aside by the Company are not readily available for disbursements and are based on an applicable percentage of the total commitment under the respective agreements.

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3.    Debt

For
the nine months ended September 30, 2002, the Company made principal payments to the holders of its Series 1999-2 Class A-1 notes totaling
approximately $467 million.

The
Company issued $650 million of medium-term Series 2002-1 notes in June 2002 bearing interest at a rate that is reset monthly at LIBOR plus 20 basis
points for $295 million of such notes and LIBOR plus 27 basis points for $355 million of such notes.

The
proceeds from this issuance were used to repay $500 million of the Company's then outstanding variable funding notes balance.

For
the nine months ended September 30, 2002, the Company borrowed approximately $401 million under its variable funding notes.

In
connection with the issuance of such notes, the Company issued senior preferred membership interests ("PMI's"), which approximated $62.9 million as of September 30, 2002. The holders
of the PMI's are entitled to receive dividends at a rate equal to monthly LIBOR plus 170 basis points. The dividend periods correspond to the same interest periods as the variable funding notes.
Dividends on the PMI's must be declared and paid on each dividend payment date to the extent that on such date, the Company has funds legally available for the payment of such dividends based on the
covenants specified in the Company's LLC agreement.

*****

6

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussions should be read in conjunction with our Condensed Financial Statements and accompanying Notes thereto included elsewhere herein. Unless otherwise
noted, all dollar amounts are in thousands.

We
are a special purpose limited liability company organized on June 24, 1999 as Greyhound Funding LLC under the laws of the State of Delaware. On April 25, 2002, we changed our name to
Chesapeake Funding LLC. Our sole common member is Raven Funding, which is also a special purpose limited
liability company established under the laws of the State of Delaware. The sole member of Raven Funding is Vehicle Management Services, a limited liability company and an indirect wholly-owned
subsidiary of Cendant Corporation. Our activities are limited to acquiring and holding an investment in the Lease SUBI (which is a special unit of beneficial interest in certain leases and vehicles
owned by D. L. Peterson Trust) and a portion of the Fleet Receivable SUBI (which is a special unit of beneficial interest in certain fleet service receivables owned by D. L. Peterson Trust), issuing
indebtedness and preferred membership interests to finance such investment and engaging in other activities that are related or incidental to the foregoing and necessary, convenient or advisable to
accomplish the foregoing. We do not conduct operating activities.

Income
from investment in related party special unit of beneficial interest in leases for the three and nine months ended September 30, 2002 decreased by $13.9 and $58.7 million,
respectively. Such decreases are the result of declines in the floating rate indices on which interest billings under the leases allocated to the Lease SUBI are based. Interest expense for the three
and nine months ended September 30, 2002 also decreased by $8.5 and $51.3 million, respectively, as a result of corresponding decreases in commercial paper rates and LIBOR. Accordingly,
operating income decreased by $5.5 and $7.7 million, respectively, primarily as a result of the fact that the floating rate indices on which Lease SUBI lease billings are based decreased at a
faster rate during 2002 than the commercial paper rates and LIBOR at which our floating rate debt expense accrues.

The
principal source of our revenue is payments received on the Lease SUBI held by us. Set forth below is certain historical data with respect to delinquency experience, loss and recovery experience,
residual value loss experience, conversions of floating rate leases to fixed rate leases, and fleet management billing experience, in each case for leases and fleet management receivables that are of
the same type as those allocated to the Lease SUBI and the Fleet Receivable SUBI.

7

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Delinquency Experience

The
following table sets forth delinquency data with respect to aggregate billings of lease payments for all of Vehicle Management Services' leases and fleet management receivables for the nine months
ended September 30, 2002 and 2001. These leases and fleet management receivables are of the same type as the leases allocated to the Lease SUBI and the fleet management receivables allocated to
the Fleet Receivable SUBI and do not include any other types of leases or fleet management receivables.

|                                          |  | Nine Months Ended
September 30,
|----------------------------------------- |  | -------------------------------
|
|Percentage of billings delinquent (1)(2): |  |                                
|30-59 days                                |  | 1.24%                          
|60 days or more                           |  | 2.99%                          
|                                          |  |                                
|Total 30 or more days delinquent          |  | 4.23%                          
|                                          |  |                                

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Total
delinquencies for the nine months ended September 30, 2002 remained below 5% of total billings, which is consistent with the performance of the portfolio over the last several years.
Delinquencies of 60 days or more increased to 2.99% of total billings compared to 2.91% in the nine months ended September 30, 2001 due to the continuing effects of Chapter 11 bankruptcy
filings of several customers and a lower level of billings partially offset by a decline in non-bankruptcy delinquent receivables of 60 days or more from the comparable period in
2001. Delinquencies of 30-59 days decreased to 1.24% in the nine months ended September 30, 2002 from 1.41% in the nine months ended September 30, 2001.

8

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Loss and Recovery Experience

The
following table sets forth loss and recovery data with respect to Vehicle Management Services' leases and fleet management receivables for the nine months ended September 30, 2002 and 2001.
These leases and fleet management receivables are of the same type as the leases allocated to the Lease SUBI and the fleet management receivables allocated to the Fleet Receivable SUBI and do not
include any other types of leases or fleet management receivables.

|                                                           |  | Nine Months Ended
September 30, |          
|---------------------------------------------------------- |  | ------------------------------- | ---------
|
|Ending dollar amount of leases (1)                         |  | $                               | 3,350,347
|Total billings for period                                  |  |                                 | 1,625,148
|Gross losses (2)                                           |  |                                 | 770      
|Recoveries (3)                                             |  |                                 | 22       
|                                                           |  |                                 |          
|Net losses                                                 |  | $                               | 792      
|                                                           |  |                                 |          
|Net losses as percentage of ending dollar amount of leases |  |                                 | 0.02%    
|Net losses as percentage of total billings for period      |  |                                 | 0.05%    

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Net
losses as a percentage of ending dollar amount of leases decreased from .06% for the nine months ended September 30, 2001 to .02% for the nine months ended September 30, 2002 due to
lower losses from bankruptcies in 2002. Net losses as a percentage of total billings decreased from .10% for the nine months ended September 30, 2001 to .05% for the nine months ended
September 30, 2002 due to lower losses from bankruptcies in 2002. Gross losses with respect to bankrupt obligors generally are not recognized by Vehicle Management Services until it receives
payment upon the confirmation of the plan of reorganization of the bankrupt obligor and receives any terminal rental adjustment payments that may be applied to satisfy outstanding obligations with
respect to fleet management receivables. Losses are charged against previously established reserves. Reserve adequacy for the purposes of Vehicle Management Services' financial statements is
determined at the time of a client's bankruptcy filing and any necessary charge is recorded to the statement of income at that time.

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Residual Value Loss Experience

The following table sets forth residual value performance data for Vehicle Management Services' closed-end leases for the nine months ended September 30,
2002 and 2001. These closed-end leases are of the same type as the closed-end leases allocated to the Lease SUBI and do not include any other types of closed-end
leases.

|                                                  |  | Nine Months Ended
September 30, |      
|------------------------------------------------- |  | ------------------------------- | -----
|
|Total number of closed-end leases                 |  |                                 |      
|scheduled to terminate                            |  |                                 | 3,445
|Number of sold vehicles                           |  |                                 | 3,099
|Full termination ratio (1)                        |  |                                 | 89.96
|Total loss on sold vehicles (2)                   |  | $                               | (101 
|Average loss per sold vehicles (3)                |  | $                               | (32  
|Loss as a percentage of stated residual values of |  |                                 |      
|sold vehicles (4)                                 |  |                                 | (0.35

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Total
residual value losses decreased $5.2 million to $101 thousand and the total number of sold vehicles decreased 28.9%. The decrease in units sold is the result of a lower number of
closed-end leases scheduled to terminate and an increase in clients retaining vehicles beyond their original lease term. The average loss per vehicle returned and sold in the nine months
ended September 30, 2002 decreased 97.3% from the comparable period in 2001 to $32 per unit. The decrease in residual value losses during 2002 is the result of establishing lower residual
values at lease inception which was initiated in the beginning of 2000.

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Conversions of Floating Rate Leases to Fixed Rate Leases

The following table sets forth data with respect to conversions of Vehicle Management Services' floating rate leases to fixed rate leases during the nine months ended
September 30, 2002 and 2001.

|                                                              |  | Nine Months Ended
September 30, |          
|------------------------------------------------------------- |  | ------------------------------- | ---------
|
|Dollar amount of conversions for period (1)                   |  | $                               | 4,862    
|Ending dollar amount of leases                                |  | $                               | 3,350,347
|Conversions as a percentage of ending dollar amount of leases |  |                                 | 0.15     

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Total
conversions of floating rate leases to fixed rate leases were $4.9 million during the nine months ended September 30, 2002 compared with $31.2 million in the period ended
September 30, 2001. Conversions of floating rate to fixed rate leases was lower for the nine months ended September 30, 2002 compared to the comparable period in 2001 due to continued
low interest rates during the year.

Fleet Management Receivable Billing Experience

The following table sets forth data for Vehicle Management Services' aggregate billings of fleet management receivables for the nine months ended September 30, 2002 and
2001. These fleet management receivables are of the same type as the fleet management receivables allocated to the Fleet Receivable SUBI and do not include any other types of fleet management
receivables.

|                         |  | Nine Months Ended
September 30,
|------------------------ |  | -------------------------------
|
|Aggregate billings       |  | $                              
|Average monthly billings |  |                                
|Maximum monthly billings |  |                                
|Minimum monthly billings |  |                                

Aggregate
fleet management receivable billings decreased to $660.1 million during the nine months ended September 30, 2002 compared to $789.9 million during the nine months ended
September 30, 2001. The primary factor for this decrease was a decrease in billings relating to vehicles purchased directly for customers.

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Characteristics of Leases Allocated to Lease SUBI

The following table contains certain statistical information relating to the leases allocated to the Lease SUBI as of September 19, 2002 (the last monthly reporting
period cutoff date during the third quarter of 2002). All of the leases and vehicles owned by DLPT as of September 19, 2002 were allocated to the Lease SUBI. The following information does not
include vehicles ordered at the request of lessees party to a master lease agreement allocated to the Lease SUBI, which have an aggregate cost of $80,171,655 as of that date, because they are not yet
subject to a lease. For the purposes of preparing the following tables, we assumed the original term of each lease to be the period over which the related vehicle is scheduled to be depreciated.

|Composition of Leases                                                                       |  |                     
|------------------------------------------------------------------------------------------- |  | --------------------
|Aggregate Unit Balance of Leases                                                            |  | $3,124,231,900.09   
|Number of Leases                                                                            |  | 209,578             
|Average Unit Balance                                                                        |  | $14,907.25          
|Range of Unit Balances                                                                      |  | $0.10 to $685,654.20
|Aggregate Unit Balance of Open-End Leases                                                   |  | $3,015,890,095.64   
|Aggregate Unit Balance of Floating Rate Leases                                              |  | $2,338,839,097.08   
|Aggregate Lease Balance of CP Rate Index Floating Rate leases                               |  | $2,282,298,989.11   
|Weighted Average Spread Over CP Rate                                                        |  | 0.346%              
|Range of Spreads Over CP Rate                                                               |  | 0.00% to 3.00%      
|Aggregate Unit Balance of Floating Rate Leases Indexed to Floating Rates Other Than CP Rate |  | $56,540,107.97      
|Aggregate Unit Balance of Fixed Rate Leases                                                 |  | $785,392,803.01     
|Weighted Average Fixed Rate                                                                 |  | 5.682%              
|Range of Fixed Rates                                                                        |  | 0.000% to 19.152%   
|Weighted Average Original Lease Term                                                        |  | 62.73 months        
|Range of Original Lease Terms                                                               |  | 6 to 132 months     
|Weighted Average Remaining Term                                                             |  | 43.17 months        
|Range of Remaining Terms                                                                    |  | 0 to 120 months     
|Aggregate Unit Balance of Closed-End Leases                                                 |  | $108,341,804.45     
|Average Unit Balance of Closed-End Leases                                                   |  | $14,021.20          
|Range of Unit Balance of Closed-End Leases                                                  |  | $0.10 to $206,834.75
|Average Stated Residual Value of Closed-End Leases                                          |  | $8,927.30           

---

Note:
Dollar amounts are in whole amounts.

As
of September 19, 2002, the aggregate lease balance of the leases allocated to the Lease SUBI with the lessee having the largest aggregate lease balances was $110,476,012. The aggregate lease
balance of the leases allocated to the Lease SUBI with the lessees having the five largest aggregate lease balances was $462,816,026 and the aggregate lease balance of the leases allocated to the
Lease SUBI with the lessees having the ten largest aggregate lease balances was $794,629,898.

Forward-Looking Statements

Forward-looking statements in our public filings or other public statements are subject to known and unknown risks, uncertainties and other factors which may cause our actual
results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking
statements were based on

12

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various factors and were derived utilizing numerous important assumptions and other important factors that could cause actual results to differ materially from those in the forward-looking
statements.

Statements
preceded by, followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "project", "estimates", "plans", "may increase", "may fluctuate" and similar
expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. You should understand that the
following important factors and assumptions could affect our future results and could cause actual results to differ materially from those expressed in such forward-looking statements:



Other
factors and assumptions not identified above were also involved in the derivation of these forward-looking statements, and the failure of such other assumptions to be realized as well as other
factors may also cause actual results to differ materially from those projected. Most of these factors are difficult to predict accurately and are generally beyond our control.

You
should consider the areas of risk described above in connection with any forward-looking statements that may be made by us. Except for our ongoing obligations to disclose material information
under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events
unless required by law. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

We
use interest rate caps to manage and reduce the interest rate risk related specifically to our asset-backed debt. Interest rate risk is our only market exposure. We do not engage in trading,
market-making, or other speculative activities in the derivatives markets. We assess our interest rate risk based on changes in the interest rates utilizing a sensitivity analysis, which measures the
potential loss in earnings, fair values and cash flows based on a hypothetical 10% change (increase and decrease) in our asset-backed debt and interest rate caps. We used September 30, 2002
interest rates to perform a sensitivity analysis. We have determined, through such analyses, that the impact of a 10% change in interest rates on our earnings, fair values and cash flows would not be
material.

Item 4. Controls and Procedures



13

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PART IIOTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K

(a)  Exhibits

See Exhibit Index

(b)  Reports on Form 8-K

On
August 14, 2002, we filed a current report on Form 8-K to report under Item 5 the certification by our executives of our financial statements.

14

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SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) 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.

|                        |  | CHESAPEAKE FUNDING LLC
|----------------------- |  | ----------------------
|Date: November 13, 2002 |  | By:                   

15

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I, George J. Kilroy, certify that:



|Date: November 13, 2002 |  | By: |  | /s/GEORGE J. KILROYGeorge J. Kilroy
Chief Executive Officer and President
|----------------------- |  | --- |  | -------------------------------------------------------------------------

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I, Neil J. Cashen, certify that:



|Date: November 13, 2002 |  | By: |  | /s/NEIL J. CASHENNeil J. Cashen
Chief Financial Officer
|----------------------- |  | --- |  | -------------------------------------------------------

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Exhibit Index

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                               
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Certificate of Formation of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC), incorporated by reference to the Registration Statement on Form S-1 (File no. 333-40708) filed with the Securities
and Exchange Commission on June 30, 2000.                                                                                                                
|3.2         |  | Certificate of Amendment to Certificate of Formation of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC) dated April 25, 2002, incorporated by reference to the Registration Statement on Form S-3 (File no. 333-87568)
filed with the Securities and Exchange Commission on May 3, 2002.                                                                 
|3.3         |  | Amended and Restated Limited Liability Company Agreement of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC) dated as of October 28, 1999, incorporated by reference to the Registration Statement on Form S-1 (File
no. 333-40708) filed with the Securities and Exchange Commission on June 30, 2000.                                                   
|3.4         |  | Amendment No. 1, dated as of April 25, 2002, to the Amended and Restated Limited Liability Company Agreement of Chesapeake Funding LLC (formerly known as Greyhound Funding LLC), dated as of October 28, 1999, incorporated by reference
to the Registration Statement on Form S-3 (File no. 333-87568) filed with the Securities and Exchange Commission on May 3, 2002.
|99.1        |  | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                            

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