SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
- --------------------------------------------------------------------------------
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, 1997
Commission file number 1-12215
Quest Diagnostics Incorporated
(formerly known as Corning Clinical Laboratories Inc.)
One Malcolm Avenue
Teterboro, NJ 07608
(201) 393-5000
Delaware
(State of Incorporation)
16-1387862
(I.R.S. Employer Identification Number)
- --------------------------------------------------------------------------------
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 12 months (or for 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 [ ]
As of October 31, 1997, there were outstanding 29,891,893 shares of Common
Stock, $.01 par value.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Index to consolidated financial statements filed as part of this report:
Page
Consolidated Statements of Operations for the
Three and Nine Months Ended September 30, 1997 and 1996 2
Consolidated Balance Sheets as of
September 30, 1997 and December 31, 1996 3
Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1997 and 1996 4
Notes to Consolidated Financial Statements 5
1
<PAGE>
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Sept 30, 1997 Sept 30, 1996 Sept 30, 1997 Sept 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenues .................... $373,633 $ 405,352 $1,163,259 $1,231,290
Costs and expenses:
Cost of services.............. 229,164 255,390 708,071 768,809
Selling, general and
administrative .............. 119,691 125,190 371,518 371,439
Interest expense, net ........ 10,385 19,866 31,497 59,887
Amortization of intangible
assets....................... 6,082 10,328 18,104 31,772
Provision for restructuring and
other special charges....... -- 155,730 -- 201,730
Other, net ................... 2,045 1,837 2,942 (198)
-------- --------- ---------- ----------
Total ...................... 367,367 568,341 1,132,132 1,433,439
-------- --------- ---------- ----------
Income (loss) before taxes ...... 6,266 (162,989) 31,127 (202,149)
Income tax expense (benefit) .... 3,273 (43,553) 15,999 (43,280)
-------- --------- ---------- ----------
Net income (loss) ............... $ 2,993 $(119,436) $ 15,128 $ (158,869)
======== ========= ========== ==========
Net income per common share...... $ 0.10 $ 0.52
Weighted average common shares
outstanding .................. 29,293 29,090
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(in thousands, except per share data)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
(unaudited)
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents .............................. $ 124,509 $ 41,960
Accounts receivable, net of allowance of $96,596 and
$115,018 at September 30, 1997 and
December 31, 1996, respectively..................... 271,116 297,743
Inventories ............................................ 29,235 28,524
Deferred taxes on income ............................... 91,597 98,162
Due from Corning Incorporated........................... 22,139 30,894
Prepaid expenses and other assets ...................... 14,839 13,682
---------- ----------
Total current assets ................................ 553,435 510,965
Property, plant and equipment, net ........................ 267,912 287,749
Intangible assets, net .................................... 535,497 546,457
Other assets............................................... 64,898 49,895
---------- ----------
TOTAL ASSETS............................................... $1,421,742 $1,395,066
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts payable and accrued expenses................... $232,991 $206,701
Short-term borrowings................................... 24,408 20,785
Income taxes payable ................................... 21,560 21,946
---------- ---------
Total current liabilities............................ 278,959 249,432
Long-term debt............................................. 490,965 515,008
Other liabilities.......................................... 85,196 91,907
---------- ---------
Total liabilities.................................... 855,120 856,347
---------- ----------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock......................................... 1,000 1,000
Common stock, par value $0.01 per share; 100,000 shares
authorized; 29,796 and 28,822 shares issued at
September 30, 1997 and December 31, 1996, respectively. 298 288
Additional paid-in capital.............................. 1,185,677 1,170,152
Accumulated deficit..................................... (612,863) (627,892)
Cumulative translation adjustment ...................... (984) (619)
Market valuation adjustment............................. (1,445) (4,210)
Unearned compensation................................... (5,061) --
---------- ----------
Total stockholders' equity........................... 566,622 538,719
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................ $1,421,742 $1,395,066
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(in thousands)
(unaudited)
1997 1996
--------- ---------
Cash flows from operating activities:
Net income (loss) ...................................... $ 15,128 $(158,869)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization ....................... 57,809 75,232
Provision for doubtful accounts ..................... 86,227 81,891
Provision for restructuring and other special charges -- 201,730
Deferred income tax provision ....................... 8,861 (31,612)
Other, net .......................................... 4,375 (753)
Changes in operating assets and liabilities:
Accounts receivable .............................. (64,616) (87,339)
Accounts payable and accrued expenses ............ 35,813 3,355
Restructuring, integration and other special
charges .......................................... (11,819) (19,863)
Due from/to Corning Incorporated and affiliates .. 8,755 5,320
Other assets and liabilities, net ................ (2,616) (27,155)
--------- ---------
Net cash provided by operating activities .............. 137,917 41,937
--------- ---------
Cash flows from investing activities:
Capital expenditures ................................ (21,579) (58,802)
Proceeds from disposition of assets ................. 1,103 13,285
Acquisition of business ............................. (16,000) --
Decrease (increase) in investments .................. 1,338 (7,580)
--------- ---------
Net cash used in investing activities .................. (35,138) (53,097)
--------- ---------
Cash flows from financing activities:
Repayments under Working Capital Facility ........... (19,300) --
Proceeds from borrowings ............................ -- 59,090
Repayment of long-term debt ......................... (861) (34,885)
Dividends paid ...................................... (69) (1,172)
--------- ---------
Net cash (used in) provided by financing activities .... (20,230) 23,033
--------- ---------
Net change in cash and cash equivalents ................ 82,549 11,873
Cash and cash equivalents, beginning of year ........... 41,960 36,446
--------- ---------
Cash and cash equivalents, end of period ............... $ 124,509 $ 48,319
========= =========
Cash paid during the period for:
Interest ............................................ $ 28,532 $ 64,211
Income taxes ........................................ $ 5,647 $ 8,089
The accompanying notes are an integral part of these statements.
4
<PAGE>
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, unless otherwise indicated)
(unaudited)
1. BASIS OF PRESENTATION
Background
Prior to January 1, 1997, Quest Diagnostics Incorporated and its subsidiaries
(the "Company") was a wholly-owned subsidiary of Corning Incorporated
("Corning"). On December 31, 1996, Corning distributed all of the outstanding
shares of common stock of the Company to the stockholders of Corning, with one
share of common stock of the Company being distributed for each eight shares of
outstanding common stock of Corning (the "Spin-Off Distribution").
Basis of Presentation
The interim consolidated financial statements reflect all adjustments which,
in the opinion of management, are necessary for a fair statement of the results
of operations for the periods presented. All such adjustments are of a normal
recurring nature. The interim consolidated financial statements have been
compiled without audit and are subject to year-end adjustments. Operating
results for the interim periods are not necessarily indicative of the results
that may be expected for the full year. These interim consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements included in the Company's Form 10-K for the year ended December 31,
1996.
Earnings Per Share
Earnings per share are computed by dividing net income less dividends on the
Company's Preferred Stock (approximately $30 per quarter) by the weighted
average number of common shares outstanding during the period. Historical
earnings per share for 1996 is not meaningful as the Company's capital structure
in 1996 is not comparable to the capital structure subsequent to the Spin-Off
Distribution.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 128, "Earnings per Share." The statement is
effective for financial statements for periods ending after December 15, 1997,
and changes the method in which earnings per share will be determined. Adoption
of this statement by the Company is not expected to have a material impact on
earnings per share in 1997.
2. COMMITMENTS AND CONTINGENCIES
The Company has entered into several settlement agreements with various
governmental and private payors during recent years relating primarily to
industry-wide billing and marketing practices that had been substantially
discontinued by early 1993. At present, a government investigation of certain
practices by Nichols Institute, which were substantially discontinued prior to
its acquisition by the Company in 1994, is ongoing. As part of the Spin-Off
Distribution, Corning has agreed to indemnify the Company against all
settlements for any governmental claims relating to billing practices of the
Company and its predecessors that were pending on December 31, 1996. Corning
also agreed to indemnify the Company for 50% of the aggregate of all settlement
payments made by the Company that are in excess of $42 million to private
parties that relate to indemnified or previously settled governmental claims for
services provided prior to January 1, 1997; however, the indemnification of
private party claims will not exceed $25 million in the aggregate and will be
paid to the Company net of anticipated tax benefits to be realized by the
Company. Such indemnification does not cover any non-governmental claims settled
after December 31, 2001. Coincident with the Spin-Off Distribution, the Company
recorded a receivable from Corning of $22.4 million which is equal to
management's best estimate of amounts to be received from Corning to satisfy the
remaining indemnified governmental claims on an after-tax basis. At September
30, 1997, the receivable from Corning was $22.1 million.
5
<PAGE>
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, unless otherwise indicated)
(unaudited)
At September 30, 1997, settlement reserves totaled $77.9 million, including
$41.2 million in other long-term liabilities. Although management believes that
established reserves for both indemnified and non-indemnified claims are
sufficient, it is possible that additional information may become available
which may cause the final resolution of these matters to exceed established
reserves by an amount which could be material to the Company's results of
operations and, for non-indemnified claims, the Company's cash flows in the
period in which such claims are settled. The Company does not believe that these
issues will have a material adverse effect on its overall financial condition.
3. RESTRUCTURING RESERVES
The Company has recorded charges for restructuring plans in previous years.
Reserves relating to these programs totaled $8.7 million and $16.1 million at
September 30, 1997 and December 31, 1996, respectively. Management believes that
the costs of the restructuring plans will be financed through cash from
operations and does not anticipate any significant impact on its liquidity as a
result of the restructuring plans.
4. SUMMARIZED FINANCIAL INFORMATION
The Company's 10.75% senior subordinated notes due 2006 are guaranteed,
fully, jointly and severally, and unconditionally, on a senior subordinated
basis by substantially all of the Company's wholly-owned, domestic subsidiaries
("Subsidiary Guarantors"). Non-guarantor subsidiaries, individually and in the
aggregate, are inconsequential to the Company. The following is summarized
financial information of the Subsidiary Guarantors as of September 30, 1997 and
December 31, 1996 and for the nine months ended September 30, 1997 and 1996.
Full financial statements of the Subsidiary Guarantors are not presented because
management believes they are not material to investors.
September 30, 1997 December 31, 1996
------------------ -----------------
Current assets........................ $243,647 $230,024
Noncurrent assets..................... 538,165 547,219
Current liabilities................... 90,414 61,383
Noncurrent liabilities................ 267,233 290,980
Stockholder's equity.................. 424,165 424,880
For the nine months ended September 30,
---------------------------------------
1997 1996
---- ----
Net revenues.......................... $645,364 $677,489
Cost of services...................... 405,330 427,583
Net loss.............................. (715) (20,564)
6
<PAGE>
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, unless otherwise indicated)
(unaudited)
5. STOCKHOLDERS' EQUITY
Unearned Compensation
Under the Company's Employees Equity Participation Program, approximately 400
thousand shares of restricted stock were granted in 1997, primarily to executive
employees. These shares are contingent on achievement of financial performance
goals and are subject to forfeiture if employment terminates prior to the end of
the prescribed period. The market value of the shares awarded under the plan is
recorded as unearned compensation. The unearned amounts are amortized to
compensation expense as earned and are subject to adjustment based upon changes
in earnings estimates.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Net income for the three and nine months ended September 30, 1997 increased
from the prior year primarily as a result of reduced interest and amortization
expense and the impact of special charges in 1996. Partially offsetting these
factors was lower volume resulting from changes in physician ordering patterns,
intensified competition, and the Company's increased selectiveness in retaining
and pursuing new business.
Net Revenues
Net revenues for the three and nine months ended September 30, 1997 decreased
by $31.7 million and $68.0 million, respectively, from the prior year levels.
For the three and nine months, the decrease was principally due to declines in
clinical testing volume of 9.8% and 5.5%, respectively, and the sale in 1996 of
a majority share of the Company's imaging business, partially offset by an
improvement in average prices of 3.1% and 2.2%, respectively. The volume decline
for each period is primarily attributable to changes in physician ordering
patterns resulting from government regulations requiring documentation of the
medical necessity of testing, intense competition for existing business, the
July 1997 contribution of the Company's Arizona operations to a joint venture
and the Company's increased selectiveness in retaining and pursuing new
business.
Costs and Expenses
Total operating costs for the three and nine months declined $31.7 million
and $60.7 million, respectively, from the year earlier periods. A portion of
these declines, $10.9 million for the quarter and $23.5 million year to date,
was attributable to the July 1997 contribution of the Company's Arizona
operations to a joint venture and the sale of the majority share of the
Company's imaging business. The Company's efforts to reduce its operating cost
structure have had a favorable impact on costs as a percentage of net revenue.
However, this benefit was principally offset by lower volume. Bad debt expense,
which exceeded the prior year level on a year to date basis, was below the prior
year during the third quarter, reflecting progress in the Company's efforts to
improve the efficiency and effectiveness of its billing operations. During the
third quarter, the Company achieved operating cost reductions equal to its
revenue decline. Plans are currently being implemented which are expected to
further reduce the Company's cost structure.*
Cost of services, which includes the costs of obtaining, transporting and
testing specimens, decreased $26.2 million in the third quarter from the prior
year, and as a percentage of net revenues decreased to 61.3% from 63.0% in the
prior year. Cost of services in the first nine months of 1997 decreased $60.7
million from the prior year, and as a percentage of net revenues decreased to
60.9% from 62.4% in the prior year. These decreases reflect the Company's
progress in reducing its cost structure, the sale of the
- ----------
* This is a forward looking statement within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 27E of the Securities Act of
1934, as amended, and is based on current expectations. Forward looking
statements involve risks and uncertainties that could cause actual results to
differ materially from the forward looking statement. These risks and
uncertainties include computer or other system failures, development of
technologies that substantially alter the practice of medicine, and the impact
upon the Company's expenses resulting from compliance with Medicare
administrative policies. See Item 1. "Business--Cautionary Statement for
Purposes of the 'Safe Harbor' Provisions of the Private Securities Litigation
Reform Act of 1995" contained in the Company's 1996 Annual Report on Form 10-K.
8
<PAGE>
majority share of the Company's imaging business, and the contribution of the
Company's Arizona operations to a joint venture. Selling, general and
administrative expenses, which includes the costs of the sales force, billing
operations, bad debt expense and general management and administrative support,
decreased $5.5 million in the third quarter from the prior year. The decrease
was principally due to bad debt expense which decreased from 7.5% of net
revenues to 7.1% of net revenues for the third quarter. For the first nine
months, bad debt expense was above the prior year level, but was offset by
progress the Company has made in aligning its cost structure with business
conditions, resulting in selling, general and administrative expenses which
approximated the prior year level. While beginning to make progress, the Company
continues to be impacted by Medicare medical necessity documentation
requirements imposed during the past year. During the first nine months of 1997,
additional medical necessity requirements were imposed by various state agencies
and private carriers. These requirements, when initially imposed or subsequently
expanded, increase the backlog of unbilled requisitions and further complicate
the billing process. The Company has successfully dealt with these requirements
in a number of its billing sites where they were imposed earlier and is
leveraging the processes and experiences from those locations in addressing the
impact of additional requirements across its billing operations.
Net interest expense decreased from the prior year by $9.5 million and $28.4
for the third quarter and year to date periods, respectively, primarily due to
reduced debt levels as a result of Corning forgiving in excess of $700 million
of intercompany debt in connection with the Spin-Off Distribution.
Amortization of intangible assets decreased from the prior year by $4.2
million and $13.7 million for the third quarter and year to date periods,
respectively, principally due to the write-down of intangible assets coincident
with the Spin-Off Distribution, as well as certain other intangible assets
having become fully amortized.
In the second quarter of 1996, the Company recorded a special charge of $46.0
million to establish additional reserves equal to management's estimate, at that
time, of the low end of potential amounts which could be required to satisfy the
government's claims related to investigations ongoing at the time. During the
third quarter of 1996 the Company recorded a $142.0 million charge to establish
additional reserves to provide for the Damon settlement and to increase reserve
balances to management's best estimate of amounts necessary to satisfy remaining
claims. In addition, in the third quarter of 1996 the Company recorded a charge
of $13.7 million to write off capitalized software as a result of its decision
to abandon the billing system which had been intended as its company-wide
billing platform.
The year to date change in other, net compared with the prior year is
primarily the result of the prior year including a gain on the sale of an
investment and the favorable settlement of a contractual obligation, and the
current year including charges related to the integration of a small, strategic
acquisition completed during the second quarter as well as the formation of the
Arizona joint venture in the third quarter.
The Company's effective tax rate is significantly impacted by goodwill
amortization, a majority of which is not deductible for tax purposes, and has
the effect of increasing the overall tax rate or reducing the tax benefit rate.
The change in the effective tax rate is due principally to a reduction in
non-deductible amortization expense associated with the write-down of intangible
assets coincident with the Spin-Off Distribution.
9
<PAGE>
Liquidity and Capital Resources
Cash increased by $82.5 million over the year end balance, to $124.5 million
at September 30, 1997, due to operating activities which provided cash of $137.9
million, partially offset by investing and financing activities which used cash
of $55.4 million. Net cash provided by operating activities for the period
improved by $96.0 million compared to the same period in the prior year. The
improvement is primarily the result of changes in accounts payable and accrued
expense levels, changes in deferred tax levels, improvements in billing
operations, and a reduction in restructuring spending. Improvements in the
billing operations have led to an improvement in the number of days sales
outstanding. The number of days sales outstanding, a measure of billing and
collection efficiency, was 67 days at September 30, 1997 compared to 70 days at
year end and 72 days a year earlier.
The decrease in net cash used in investing activities is primarily the result
of reduced capital spending partially offset by a small, strategic acquisition
in the second quarter of 1997. Capital spending for the first nine months of
1997 was $21.6 million compared to $58.8 million for the comparable prior year
period. The Company estimates that it will invest approximately $35 million to
$40 million during 1997 for capital expenditures, principally related to
equipment and facility upgrades and investments in information technology.*
During the first quarter the Company paid down the entire balance of $19.3
million on its revolving working capital credit facility. Other than for the
reduction for outstanding letters of credit, which currently approximate $6.7
million, all of the revolving working capital credit facility is currently
available for borrowing.
Adjusted EBITDA
Adjusted EBITDA represents earnings before interest, taxes, depreciation and
amortization and non-recurring charges. Adjusted EBITDA for the three months
ended September 30, 1997 was $35.7 million, or 9.6% of net revenues, compared to
$37.6 million, or 9.3% of net revenues, in the prior year period. Adjusted
EBITDA for the nine months ended September 30, 1997 was $120.4 million, or 10.4%
of net revenues, compared to $134.7 million, or 10.9% of net revenues, in the
prior year period. Adjusted EBITDA increased as a percentage of net revenues
from the prior year for the three months ended September 30, 1997, reflecting
the Company's continued progress in reducing its cost structure. However, this
improvement was offset by lower volume as a result of changes in physician
ordering patterns, intensified competition, and the Company's increased
selectiveness in retaining and pursuing new business.
- ----------
* This is a forward looking statement within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 27E of the Securities Act of
1934, as amended, and is based on current expectations. Forward looking
statements involve risks and uncertainties that could cause actual results to
differ materially from the forward looking statement. These risks and
uncertainties include computer or other system failures, development of
technologies that substantially alter the practice of medicine, and the impact
upon the Company's expenses resulting from compliance with Medicare
administrative policies. See Item 1. "Business--Cautionary Statement for
Purposes of the 'Safe Harbor' Provisions of the Private Securities Litigation
Reform Act of 1995" contained in the Company's 1996 Annual Report on Form 10-K.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
At September 30, 1997, the Company had an aggregate reserve of $77.9 million
with respect to all governmental and private claims that are either presently
pending or anticipated as a consequence of settlements and self-reported matters
described in the Company's 1996 Annual Report on Form 10-K. The Company believes
that these reserves are adequate. See Item 1. "Business--Government
Investigations and Related Claims" contained in the Company's Annual Report on
Form 10-K and see Part II, Item 1. of the Company's Form 10-Q for the quarterly
period ended June 30, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K:
None
11
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
November 11, 1997
Quest Diagnostics Incorporated
By /s/ Kenneth W. Freeman Chairman of the Board,
- ------------------------- Chief Executive Officer
Kenneth W. Freeman and President
By /s/ Robert A. Carothers Vice President and
- -------------------------- Chief Financial Officer
Robert A. Carothers
12
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001022079
<NAME> Quest
<MULTIPLIER> 1000
<CURRENCY> US$
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 124,509
<SECURITIES> 0
<RECEIVABLES> 271,116
<ALLOWANCES> 96,596
<INVENTORY> 29,235
<CURRENT-ASSETS> 553,435
<PP&E> 267,912
<DEPRECIATION> 317,710
<TOTAL-ASSETS> 1,421,742
<CURRENT-LIABILITIES> 278,959
<BONDS> 0
0
1,000
<COMMON> 1,185,975
<OTHER-SE> (620,353)
<TOTAL-LIABILITY-AND-EQUITY> 1,421,742
<SALES> 1,163,259
<TOTAL-REVENUES> 1,163,259
<CGS> 708,071
<TOTAL-COSTS> 1,079,589
<OTHER-EXPENSES> 2,942
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<INTEREST-EXPENSE> 31,497
<INCOME-PRETAX> 31,127
<INCOME-TAX> 15,999
<INCOME-CONTINUING> 15,128
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
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<EPS-PRIMARY> 0.52
<EPS-DILUTED> 0.52
</TABLE>
