<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the Quarterly period ended March 31, 2000 or
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 1-4720
WESCO FINANCIAL CORPORATION
------------------------------------------------------
(Exact name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 95-2109453
- ------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
301 East Colorado Boulevard, Suite 300, Pasadena, California 91101-1901
-----------------------------------------------------------------------
(Address of Principal Executives Offices)
(Zip Code)
626/585-6700
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
----------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. 7,119,807 as of May
10, 2000
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed consolidated financial statements of Wesco Financial
Corporation, listed in the accompanying index, are incorporated as an
integral part of this report.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
See pages 10 through 13.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -- Exhibit 27 -- Financial Data Schedule.
(b) Reports on Form 8-K -- Report dated March 3, 2000
Items reported: 2 and 7.
(c) Reports on Form 8-K/A -- Report dated April 28, 2000
Item reported: 7.
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.
WESCO FINANCIAL CORPORATION
Date: May 15, 2000 By: /s/ JEFFREY L. JACOBSON
--------------------------------------
Jeffrey L. Jacobson
Vice President and
Chief Financial Officer
(principal financial officer)
-2-
<PAGE> 3
WESCO FINANCIAL CORPORATION
FINANCIAL STATEMENTS FILED WITH FORM 10-Q
FOR QUARTER ENDED MARCH 31, 2000
INDEX
<TABLE>
<CAPTION>
Page(s)
-------
<S> <C>
Condensed consolidated statement of income -- three-month
periods ended March 31, 2000 and March 31, 1999.................... 4
Condensed consolidated balance sheet --
March 31, 2000 and December 31, 1999............................... 5
Condensed consolidated statement of changes in shareholders'
equity -- three-month periods ended March 31, 2000
and March 31, 1999................................................. 6
Condensed consolidated statement of cash flows -- three-month periods
ended March 31, 2000 and March 31, 1999............................ 7
Notes to condensed consolidated financial statements................... 8-9
</TABLE>
-3-
<PAGE> 4
WESCO FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Dollar amounts in thousands except for amounts per share)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------
March 31, March 31,
2000 1999
--------- ---------
<S> <C> <C>
Revenues:
Sales and service revenues ..................................... $ 64,087 $ 17,048
Insurance premiums earned ...................................... 4,511 3,794
Dividend and interest income ................................... 11,997 11,608
Realized securities gains, net ................................. 183,405 --
Other .......................................................... 231 242
--------- ---------
264,231 32,692
--------- ---------
Costs and expenses:
Cost of products and services sold ............................. 26,231 13,497
Insurance losses, loss adjustment and underwriting expenses .... 4,246 1,346
Selling, general and administrative expenses ................... 29,622 2,738
Interest expense ............................................... 652 748
Amortization of goodwill ....................................... 957 196
--------- ---------
61,708 18,525
--------- ---------
Income before income taxes ......................................... 202,523 14,167
Provision for income taxes ......................................... (69,811) (3,546)
--------- ---------
Net income ..................................................... $ 132,712 $ 10,621
========= =========
Amounts per capital share based on 7,119,807 shares
outstanding throughout each period:
Net income ................................................. $ 18.64 $ 1.49
========= =========
Cash dividends ............................................. $ .305 $ .295
========= =========
</TABLE>
See notes beginning on page 8.
-4-
<PAGE> 5
WESCO FINANCIAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollar amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, Dec. 31,
2000 1999
---------- ----------
<S> <C> <C>
ASSETS
Cash and cash equivalents ................................. $ 109,034 $ 66,331
Accounts receivable ....................................... 36,304 8,685
Investments:
Securities with fixed maturities ....................... 90,365 309,976
Marketable equity securities ........................... 1,829,490 2,214,883
Rental furniture .......................................... 224,712 --
Property, plant and equipment ............................. 53,873 11,414
Goodwill of acquired businesses ........................... 262,878 28,556
Other assets .............................................. 39,589 12,350
---------- ----------
$2,646,245 $2,652,195
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses ..................... $ 43,340 $ 3,674
Insurance losses and loss adjustment expenses ............. 35,735 33,642
Deferred furniture rental income and security deposits .... 25,348 --
Notes payable ............................................. 64,935 3,635
Income taxes payable, principally deferred ................ 672,979 707,345
Other liabilities ......................................... 12,747 8,527
---------- ----------
Total liabilities ...................................... 855,084 756,823
---------- ----------
Shareholders' equity:
Capital stock and capital in excess of par value ........ 30,439 30,439
Unrealized appreciation of investments, net of taxes .... 1,077,839 1,312,590
Retained earnings ....................................... 682,883 552,343
---------- ----------
Total shareholders' equity ............................. 1,791,161 1,895,372
---------- ----------
$2,646,245 $2,652,195
========== ==========
</TABLE>
See notes beginning on page 8.
-5-
<PAGE> 6
WESCO FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollar amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Shareholders' Equity
---------------------------
Capital Total
Stock and Compre-
Capital in Unrealized hensive
Excess of Appreciation Retained Income
Par Value of Investments Earnings Total (Loss)
--------- -------------- -------- ----- ------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998......................... $30,439 $1,686,716 $506,601 $2,223,756
Net income......................................... 10,621 10,621
Unrealized depreciation of $(91,569)
investments, net of income tax effect............ (102,190) (102,190) ========
Cash dividends declared and paid................... (2,101) (2,101)
------- ---------- -------- ----------
Balance, March 31, 1999............................ $30,439 $1,584,526 $515,121 $2,130,086
======= ========== ======== ==========
* * * * *
Balance, December 31, 1999......................... $30,439 $1,312,590 $552,343 $1,895,372
Net income......................................... 132,712 132,712
Unrealized depreciation of
investments, net of income tax effect............ (115,538) (115,538)
Reversal of unrealized appreciation upon $(102,039)
inclusion of realized net gains in net income.... (119,213) (119,213) ========
Cash dividends declared and paid................... (2,172) (2,172)
------- ---------- -------- ----------
Balance, March 31, 2000............................ $30,439 $1,077,839 $682,883 $1,791,161
======= ========== ======== ==========
</TABLE>
See notes beginning on page 8.
-6-
<PAGE> 7
WESCO FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollar amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31, March 31,
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities, net ............................... $ 12,570 $ 6,555
--------- ---------
Cash flows from investing activities:
Acquisition of business, net of cash and cash equivalents acquired .... (380,460) --
Proceeds from sales of investments .................................... 484,555 --
Proceeds from maturities of investments ............................... 2,500 3,852
Purchases of investments .............................................. (55,873) --
Other, net ............................................................ (12,717) (274)
--------- ---------
Net cash flows from investing activities .......................... 38,005 3,578
--------- ---------
Cash flows from financing activities:
Repayment of notes .................................................... (5,700) --
Payment of cash dividends ............................................. (2,172) (2,101)
--------- ---------
Net cash flows from financing activities .......................... (7,872) (2,101)
--------- ---------
Increase in cash and cash equivalents ................................... 42,703 8,032
Cash and cash equivalents -- beginning of period ........................ 66,331 320,034
--------- ---------
Cash and cash equivalents -- end of period .............................. $ 109,034 $ 328,066
========= =========
Supplementary information:
Interest paid during period .......................................... $ 1,313 $ 70
Income taxes paid, net, during period ................................ 18,510 4,546
========= =========
</TABLE>
See notes beginning on page 8.
-7-
<PAGE> 8
WESCO FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands except for amounts per share)
(Unaudited)
Note 1
The condensed consolidated financial statements include the accounts of
Wesco Financial Corporation ("Wesco") and its subsidiaries, including CORT
Business Services, Inc. ("CORT"), acquired in the first quarter of 2000 (see
Note 3). In the opinion of management, all adjustments necessary to a fair
statement of the results of operations of Wesco and its subsidiaries (consisting
only of normal recurring accruals) are reflected in the condensed consolidated
financial statements.
Note 2
Reference is made to the following financial information deemed generally
applicable to the condensed consolidated financial statements: (1) the notes to
Wesco's consolidated financial statements appearing on pages 30 through 37 of
its 1999 Form 10-K Annual Report, and (2) the audited consolidated financial
statements of CORT, attached as Exhibit 99 to Wesco's Form 8-K/A filed April 28,
2000.
Note 3
In February 2000, a wholly owned subsidiary of Wesco acquired all of the
outstanding common stock of CORT for approximately $386 million cash pursuant to
a tender offer and merger. The acquisition has been accounted for as a purchase,
with CORT's accounts included in the condensed consolidated financial statements
as of the dates of acquisition. CORT is the leading national provider of rental
furniture, accessories and related services in the "rent-to-rent" segment of the
furniture industry. It rents high quality furniture to corporate and individual
customers who desire flexibility to meet their temporary office, residential or
tradeshow furnishing needs and who typically do not seek to own such furniture.
In addition, CORT sells previously rented furniture through company-owned
clearance centers.
The following unaudited table presents pro forma consolidated operating
data for Wesco and its subsidiaries for the quarters ended March 31, 2000 and
1999 as though CORT had been acquired on January 1, 1999. It reflects (1)
elimination of estimated income earned during the periods on investments
liquidated in 2000 to fund most of the purchase, (2) inclusion of interest
expense throughout the periods as if line-of-credit borrowings in 2000 to fund a
portion of the purchase had been made at the beginning of 1999, and (3)
amortization of the excess of purchase price over fair value of identified net
assets (goodwill) over 40 years.
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
March 31, March 31,
2000 1999
-------- ---------
<S> <C> <C>
Sales and service revenues ................... $114,314 $103,412
Total revenues ............................... 309,458 114,056
Income before income taxes ................... 203,292 19,725
Net income ................................... 133,755 13,063
Per capital share .......................... 18.79 1.83
======== ========
</TABLE>
-8-
<PAGE> 9
Note 4
Following is a summary of marketable equity securities (all common stocks):
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
----------------------------- -----------------------------
Quoted Market Quoted Market
(Carrying) (Carrying)
Cost Value Cost Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Freddie Mac .............. $ 58,030 $1,117,527 $ 71,729 $1,355,400
The Coca-Cola Company .... 40,761 338,213 40,761 419,726
The Gillette Company ..... 40,000 241,200 40,000 263,600
Other .................... 32,038 135,641 32,038 176,157
---------- ---------- ---------- ----------
$ 172,533 $1,829,490 $ 184,528 $2,214,883
========== ========== ========== ==========
</TABLE>
Note 5
Following is condensed consolidated financial information for Wesco, broken
down by business segment, including a furniture rental segment created in 2000
by the acquisition of CORT (see Note 3):
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
March 31, March 31,
2000 1999
----------- -----------
<S> <C> <C>
Insurance segment:
Total revenues ............................................... $ 199,777 $ 15,090
Realized net securities gains included in above revenues ..... 183,405 --
Net income ................................................... 128,619 10,362
Identifiable assets .......................................... 2,057,838 3,013,154
=========== ===========
Furniture rental segment:
Total revenues ............................................... $ 46,050 $ --
Net income ................................................... 4,197 --
Identifiable assets .......................................... 539,559 --
=========== ===========
Industrial segment:
Total revenues ............................................... $ 18,074 $ 17,080
Net income ................................................... 707 706
Identifiable assets .......................................... 26,831 25,716
=========== ===========
Goodwill amortization ........................................... $ (914) $ (196)
=========== ===========
Other items unrelated to business segments:
Total revenues ............................................... $ 330 $ 522
Net income (loss) ............................................ 103 (251)
Identifiable assets .......................................... 22,017 43,351
=========== ===========
</TABLE>
-9-
<PAGE> 10
WESCO FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to management's discussion and analysis of Wesco's
consolidated financial condition and results of operations appearing on pages 16
through 22 of its 1999 Form 10-K Annual Report and to Exhibit 99 to Wesco's Form
8-K/A filed April 28, 2000 for information deemed generally appropriate to an
understanding of the accompanying condensed consolidated financial statements.
The information set forth in the following paragraphs updates such discussion.
FINANCIAL CONDITION
Wesco's shareholders' equity at March 31, 2000 was approximately $1.8
billion ($252 per share), compared to $1.9 billion ($266 per share) at December
31, 1999 and $2.2 billion ($312 per share) at December 31, 1998. This downward
trend has been caused mainly by changes in the unrealized appreciation
component, which represented 60%, 69% and 76%, respectively, of total
shareholders' equity. Unrealized appreciation, which is based on current market
quotations, typically fluctuates to some degree, and the amount recorded at any
date could differ substantially from net gains ultimately realized.
RESULTS OF OPERATIONS
Following is a breakdown of Wesco's consolidated net (after-tax) income by
business segment, in thousands of dollars:
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31, March 31,
2000 1999
--------- ---------
<S> <C> <C>
Insurance segment ........................................ $ 9,407 $ 10,362
Furniture rental segment ................................. 4,197 --
Industrial segment ....................................... 707 706
Unrelated to business segment operations -
Goodwill amortization ................................. (914) (196)
Other ................................................. 103 (251)
--------- ---------
Net income before realized securities gains ...... 13,500 10,621
Realized net securities gains ............................ 119,212 --
--------- ---------
Net income .......................................... $ 132,712 $ 10,621
========= =========
</TABLE>
-10-
<PAGE> 11
Insurance Segment
The insurance segment comprises Wesco-Financial Insurance Company
("Wes-FIC" ) and The Kansas Bankers Surety Company ("KBS"). Following is a
summary of the results of normal segment operations, which represent the
combination of underwriting results with dividend and interest income, but
exclude, notably, realized securities gains and losses (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
March 31, March 31,
2000 1999
-------- --------
<S> <C> <C>
Premiums written .......................... $ 7,040 $ 6,367
======== ========
Premiums earned ........................... $ 4,511 $ 3,794
======== ========
Underwriting gain ......................... $ 264 $ 2,448
Dividend and interest income .............. 11,862 11,296
-------- --------
Income before income taxes ................ 12,126 13,744
Income tax provision ...................... (2,719) (3,382)
-------- --------
Insurance segment net operating income .... $ 9,407 $ 10,362
======== ========
</TABLE>
Premiums written for the first quarters of 2000 and 1999 included $4.3
million and $4.1 million attributable to KBS. The remainder in each quarter was
attributable to Wes-FIC; in 2000, it related principally to the first three
months of a three-year arrangement for a 3 1/3% participation in certain
property and casualty risk exposure of a large, unaffiliated insurance group.
Earned premiums for the first quarters of 2000 and 1999 included $4.0
million and $3.5 million attributable to KBS. The remainder in each period was
attributable to Wes-FIC.
The underwriting gains reported for the quarters ended March 31, 2000 and
1999 were attributable to the profitable underwriting results of KBS. The
decline in underwriting gain for the first quarter of 2000 from the comparable
prior year figure resulted mainly from an increase in losses incurred by KBS.
KBS's reinsurance program was restructured effective January 1, 1998 in an
effort to improve operating results over the long term in return for greater
short-term volatility.
The income tax provision of the insurance segment generally fluctuates
somewhat as a percentage of its pre-tax income mainly due to fluctuations in the
relationship of substantially tax-exempt components of income to total pre-tax
income.
Furniture Rental Segment
Wesco acquired all of the outstanding common stock of CORT Business
Services Corporation ("CORT") as follows: 98% on February 18, 2000 pursuant to a
cash tender offer; 2% on March 3, 2000 pursuant to a merger (see Note 3 to the
accompanying condensed consolidated financial statements). Following is a
summary of the results of CORT's normal operations since acquisition, which
exclude, notably, goodwill amortization (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
March 31, March 31,
2000 1999
-------- --------
<S> <C> <C>
Revenues:
Furniture rentals ..................... $ 38,443 $ --
Furniture sales ....................... 7,607 --
-------- -------
Total revenues ................... $ 46,050 $ --
======== =======
Income before income taxes ................ $ 6,684 $ --
Income tax provision ...................... (2,487) --
-------- -------
Furniture segment net operating income .... $ 4,197 $ --
======== =======
</TABLE>
-11-
<PAGE> 12
Industrial Segment
Following is a summary of the results of operations of the industrial
segment, consisting of the businesses of Precision Steel Warehouse, Inc. and its
subsidiaries (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
March 31, March 31,
2000 1999
-------- --------
<S> <C> <C>
Revenues, principally sales and services .... $ 18,074 $ 17,080
======== ========
Income before income taxes .................. $ 1,175 $ 1,173
Income tax provision ........................ (468) (467)
-------- --------
Industrial segment net operating income ..... $ 707 $ 706
======== ========
</TABLE>
Revenues of Precision Steel's businesses for the first quarter of 2000
increased $1.0 million, or approximately 6 percent, from those reported for the
first quarter of 1999. Pounds of steel products sold increased about 7 percent.
Income before income taxes and net income of the industrial segment are
dependent not only on revenues, but also on operating expenses and the cost of
products sold. The latter, as a percentage of revenues, amounted to 80.2% for
the first quarter of 2000 versus 79.2% for the comparable period last year. The
cost percentage typically fluctuates slightly from period to period as a result
of changes in product mix and price competition at all levels.
Unrelated to Business Segment Operations
Set forth below is a summary of items increasing (decreasing) Wesco's
consolidated earnings that are viewed by management, together with realized
securities gains and losses, as unrelated to the normal operations of the
insurance, furniture rental and industrial segments (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
March 31, March 31,
2000 1999
-------- --------
<S> <C> <C>
Amortization of goodwill of acquired businesses .... $(957) $(196)
Income tax benefit ................................. 43 --
----- -----
$(914) $(196)
===== =====
Other items, net ................................... 131 (553)
Income tax (provision) benefit .................... (28) 302
----- -----
$ 103 $(251)
===== =====
</TABLE>
The increase in amortization of goodwill in 2000 related mainly to the
excess of purchase price for CORT stock over the fair value of its tangible net
assets.
Other items unrelated to identified business segment operations, netted
above, typically fluctuate from period to period but are usually not significant
individually or in total. They comprise mainly (1) dividend and interest income
from investments owned outside the insurance segment and (2) rental income from
owned commercial real estate, reduced by interest and other corporate expenses.
* * * * *
Realized gains and losses on investments -- reflected on the consolidated
statement of income when securities are sold, or when required by other events
- -- tend to fluctuate in amount from period to period, sometimes impacting net
income significantly. However, the amount of realized gain or loss for any
period has no predictive value, and variations in amount from period to period
have no practical analytical value, particularly in view of the substantial
unrealized price appreciation now existing in Wesco's consolidated
-12-
<PAGE> 13
investment portfolio. (Wesco's shareholders' equity at March 31, 2000 contained
$1.1 billion, or $151 per share, of unrealized appreciation of investments, net
of taxes -- about 60% of shareholders' equity.)
Wesco's consolidated earnings for the first three months of 2000 included
realized net gains of $119.2 million, after income taxes. There were no realized
gains or losses reported in the first three months of 1999. The gains reported
for 2000, although material in relation to Wesco's quarterly earnings, had only
a minor impact on Wesco's total shareholders' equity: Wesco's investments are
carried at market value, and most of the gains had already been reflected in the
unrealized appreciation component of its shareholders' equity.
Wesco's effective consolidated income tax rate typically fluctuates from
period to period for various reasons, such as the inclusion in consolidated
revenues of significant, varying amounts of dividend income from preferred and
common stocks, which is substantially exempt from income taxes. The respective
income tax provisions, expressed as percentages of income before income taxes,
amounted to 34.5% and 25.0% for the quarters ended March 31, 2000 and March 31,
1999.
Consolidated revenues, expenses and net income reported for any period are
not necessarily indicative of future revenues, expenses and net income in that
they are subject to significant variations in amount and timing of securities
gains and losses and the possible occurrence of other unusual nonoperating items
such as the acquisition of CORT in February 2000 (see Note 3 to the accompanying
condensed consolidated financial statements). In addition, consolidated
revenues, expenses and net income from operations are expected to be much more
volatile than they were prior to Wes-FIC's entry into the super-catastrophe
reinsurance business and, to a lesser degree, the restructuring of KBS's
reinsurance program in 1998.
Shareholders' equity is impacted not only to the extent that unusual items
affect earnings, but also to reflect changes in unrealized appreciation of
investments, which are not reflected in net income.
FORWARD-LOOKING STATEMENTS
Certain written or oral representations of management stated herein or
elsewhere constitute "forward-looking" statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as contrasted with statements
of historical fact. Forward-looking statements include statements which are
predictive in nature, or which depend upon or refer to future events or
conditions, or which include words such as expects, anticipates, intends, plans,
believes, estimates, may, or could, or which involve hypothetical events.
Forward-looking statements are based on information currently available and are
subject to various risks and uncertainties that could cause actual events or
results to differ materially from those characterized as being likely or
possible to occur.
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 109,034
<SECURITIES> 1,919,855
<RECEIVABLES> 39,585
<ALLOWANCES> (3,281)
<INVENTORY> 12,429
<CURRENT-ASSETS> 0
<PP&E> 175,775
<DEPRECIATION> (121,902)
<TOTAL-ASSETS> 2,646,245
<CURRENT-LIABILITIES> 0
<BONDS> 64,935
0
0
<COMMON> 7,120
<OTHER-SE> 1,784,041
<TOTAL-LIABILITY-AND-EQUITY> 2,646,245
<SALES> 64,087
<TOTAL-REVENUES> 264,231
<CGS> 26,231
<TOTAL-COSTS> 30,477
<OTHER-EXPENSES> 30,579
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 652
<INCOME-PRETAX> 202,523
<INCOME-TAX> (69,811)
<INCOME-CONTINUING> 132,712
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132,712
<EPS-BASIC> 18.64
<EPS-DILUTED> 18.64
</TABLE>
