<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6589
WISCONSIN BELL, INC.
(Incorporated under the laws of the State of Wisconsin)
722 North Broadway, Milwaukee, Wisconsin 53202
I.R.S. Employer Identification Number 39-0716650
Telephone Number - (800) 257-0902
THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF AMERITECH CORPORATION, MEETS
THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-
Q AND IS THEREFORE FILING THIS FORM WITH REDUCED DISCLOSURE FORMAT PURSUANT
TO GENERAL INSTRUCTION H(2).
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
---- ----
At April 30, 1996, 31,960,395 common shares were outstanding.
<PAGE>2
Part I - Financial Information
------------------------------
The following condensed financial statements have been prepared by
Wisconsin Bell, Inc. (the Company) pursuant to the rules and regulations of
the Securities and Exchange Commission (SEC) and, in the opinion of the
Company, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair statement of results for each period
shown. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such SEC
rules and regulations. The Company believes that the disclosures made are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's latest Annual Report on Form 10-K.
CONDENSED STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
(Dollars in Millions)
(Unaudited)
Three Months Ended
March 31
-------------
1996 1995
---- ----
Revenues................................. $ 296.7 $ 270.8
--------- ---------
Operating Expenses
Employee-related expenses.............. 54.2 57.2
Depreciation and amortization.......... 43.7 42.1
Other operating expenses............... 97.1 84.2
Restructuring credit................... -- (26.4)
Taxes other than income taxes.......... 14.8 14.7
--------- ---------
209.8 171.8
--------- ---------
Operating income......................... 86.9 99.0
Interest expense......................... 6.8 7.7
Other income, net........................ 0.8 0.4
--------- ---------
Income before income taxes............... 80.9 91.7
Income taxes............................. 30.8 36.6
--------- ---------
Net income............................... 50.1 55.1
Accumulated deficit,
beginning of period.................... (126.9) (195.5)
Less, dividends declared............. 45.1 39.4
--------- ---------
Accumulated deficit,
end of period.......................... $ (121.9) $ (179.8)
========= =========
See Notes to Condensed Financial Statements.
<PAGE>3
CONDENSED BALANCE SHEETS
(Dollars in Millions)
Mar. 31, 1996 Dec. 31, 1995
------------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
ASSETS
- ------
Current assets
Cash and temporary cash investments......... $ 0.1 $ 0.1
Receivables, net
Customers................................. 227.7 230.3
Ameritech and affiliates.................. 17.7 18.1
Other..................................... 8.2 9.5
Material and supplies....................... 2.0 1.9
Prepaid and other........................... 10.0 10.8
--------- ---------
265.7 270.7
--------- ---------
Property, plant and equipment................ 2,837.3 2,815.9
Less, accumulated depreciation............... 1,685.9 1,649.0
--------- ---------
1,151.4 1,166.9
--------- ---------
Investments, primarily in affiliates......... 24.9 27.4
Other assets and deferred charges............ 92.6 91.9
--------- ---------
Total assets................................. $ 1,534.6 $ 1,556.9
========= =========
See Notes to Condensed Financial Statements.
<PAGE>4
CONDENSED BALANCE SHEETS (continued)
(Dollars in Millions)
Mar. 31, 1996 Dec. 31, 1995
------------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
LIABILITIES AND SHAREOWNER'S EQUITY
Current liabilities
Debt maturing within one year
Ameritech............................... $ 123.9 $ 110.8
Other................................... -- 0.1
Accounts payable
Ameritech Services, Inc. (ASI).......... 34.5 45.5
Ameritech and affiliates................ 21.5 13.8
Other................................... 61.5 78.2
Other current liabilities................ 72.2 85.1
--------- ---------
313.6 333.5
--------- ---------
Long-term debt............................ 305.8 305.8
--------- ---------
Deferred credits and other long-term liabilities
Accumulated deferred income taxes........ 57.9 59.0
Unamortized investment tax credits....... 24.8 26.0
Postretirement benefits
other than pensions.................... 260.7 262.7
Long-term payable to ASI................. 7.7 8.3
Other.................................... 34.4 36.9
--------- ---------
385.5 392.9
--------- ---------
Shareowner's equity
Common shares - ($20 par value;
31,995,000 shares authorized;
31,960,395 issued and outstanding)..... 639.2 639.2
Proceeds in excess of par value.......... 12.4 12.4
Accumulated deficit....................... (121.9) (126.9)
--------- ---------
529.7 524.7
--------- ---------
Total liabilities and shareowner's equity.. $ 1,534.6 $ 1,556.9
========= =========
See Notes to Condensed Financial Statements.
<PAGE>5
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
Three Months Ended
March 31
-------------
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................... $ 50.1 $ 55.1
Adjustments to net income
Restructuring credit, net of tax............ -- (15.8)
Depreciation and amortization............... 43.7 42.1
Deferred income taxes, net.................. (1.1) 4.7
Investment tax credits, net................. (1.3) (1.4)
Capitalized interest........................ (0.2) (0.2)
Provision for uncollectibles................ 6.6 2.6
Change in accounts receivable............... (2.3) 3.9
Change in material and supplies............. (1.4) 0.8
Change in certain other current assets...... 0.7 9.2
Change in accounts payable.................. (20.0) (23.8)
Change in certain other current liabilities. (12.9) 18.8
Change in certain other noncurrent
assets and liabilities.................... (5.8) (6.5)
Other....................................... 2.8 2.9
-------- --------
Net cash from operating activities............. 58.9 92.4
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................... (28.7) (29.1)
Proceeds from disposals of
property, plant and equipment................. 1.9 0.3
-------- --------
Net cash from investing activities............. (26.8) (28.8)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany financing, net.................... 13.1 (63.4)
Retirements of long-term debt.................. (0.1) (0.2)
Dividend payments.............................. (45.1) --
-------- --------
Net cash from financing activities............. (32.1) (63.6)
-------- --------
Net increase in cash and
temporary cash investments.................... -- --
Cash and temporary cash investments,
beginning of period........................... 0.1 --
-------- --------
Cash and temporary cash investments,
end of period................................. $ 0.1 $ --
======== ========
See Notes to Condensed Financial Statements.
<PAGE>6
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Dollars in Millions)
MARCH 31, 1996
NOTE 1: Work Force Restructuring
As announced in March 1994, the Company's parent, Ameritech Corporation,
restructured its existing nonmanagement work force, reducing the work force
by 11,500 employees during 1994 and 1995, including 1,113 at the Company.
As a result of the restructuring, the Company recorded a gain of $26.4
million or $15.8 million after-tax in the first three months of 1995,
resulting primarily from settlement gains from lump sum pension payments
from the Ameritech Pension Plan to former employees. No restructuring
charges or credits were recorded in the first three months of 1996.
The Company recorded additional restructuring charges in the fourth quarter
of 1995, primarily for the consolidation of data centers and additional
work force reductions.
<PAGE>7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
(Dollars in Millions)
The following is a discussion and analysis of the changes in revenues,
operating expenses and other income and expenses for the first three months
of 1996 as compared with the first three months of 1995.
Results of Operations
- ---------------------
Revenues
- --------
Total revenues in the first three months of 1996 were $296.7 million and
were $270.8 million for the same period in 1995. The following paragraphs
explain the components of that change.
- ----------------------------------------------------------------------
Local service
- -------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 147.2 $ 131.6 $ 15.6 11.9
The increase in local service revenues for the three months ended March 31,
1996 was primarily attributable to higher network volumes, which resulted
in an increase to revenues of $13.5 million. The higher volumes result
principally from growth in the number of access lines, which increased 3.5
percent to 2,068,000 as of March 31, 1996 as compared with 1,999,000 at
March 31, 1995, and greater sales of call management services, such as Call
Forwarding and Caller ID. Also included in the revenue increase were rate
increases of $0.8 million, as well as the results of a prior year
unfavorable billing adjustment of $1.3 million.
- ----------------------------------------------------------------------
Network access
- --------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Interstate
- ----------
Three Months Ended $ 64.7 $ 61.1 $ 3.6 5.9
Intrastate
- ----------
Three Months Ended $ 15.2 $ 15.3 $ (0.1) (0.7)
The increase in interstate network access revenues for the three months
ended March 31, 1996 was due primarily to higher network usage, which
resulted in additional revenues of $9.0 million, partially offset by net
rate reductions of $3.5 million, as well as the results of a prior year
favorable billing adjustment. Minutes of use related to interstate calls
increased 9.7 percent in 1996.
The decrease in intrastate network access revenues for the three months
ended March 31, 1996 was primarily attributable rate reductions of $4.2
million, partially offset by higher network usage, which resulted in
additional revenues of $4.1 million. Minutes of use related to intrastate
calls increased 17.0 percent in 1996.
<PAGE>8
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Long distance service
- ---------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 43.6 $ 42.3 $ 1.3 3.1
The increase in long distance service revenues for the three months ended
March 31, 1996 was due primarily to volume increases.
- ----------------------------------------------------------------------
Other
- -----
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 26.0 $ 20.5 $ 5.5 26.8
Other revenues include revenues derived from directory advertising, billing
and collection services, inside wire installation and maintenance services
and other miscellaneous services. The increase in other revenues for the
three months ended March 31, 1995 was due primarily to growth in voice
messaging, sales of equipment and other nonregulated services of $6.2
million, as well as an increase in inside wire installation and maintenance
revenues of $1.5 million. These increases were partially offset by a
decrease in rent revenue and other miscellaneous revenues of $1.9 million.
- ----------------------------------------------------------------------
Operating expenses
- ------------------
Total operating expenses for the three months ended March 31, 1996
increased by $38.0 million or 22.1 percent to $209.8 million. The increase
was primarily attributable to work force restructuring, which resulted in a
credit of $26.4 million in the first quarter of 1995 related to settlement
gains previously discussed.
- ----------------------------------------------------------------------
Employee-related expenses
- -------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 54.2 $ 57.2 $ (3.0) (5.2)
The decrease in employee-related expenses for the three months ended March
31, 1996 was due primarily to a decrease of $2.4 million related to lower
work force levels and overtime, as well as decreases of $1.9 million in
payroll taxes and $1.6 million in benefits and other employee-related
expenses. These decreases were partially offset by wage and bonus
increases of $1.3 million, as well as a decrease of $1.5 million in the
amount of pension credit recorded in the first quarter of 1996 compared to
the prior year period.
There were 4,346 employees at March 31, 1996, compared with 4,392 at March
31, 1995.
<PAGE>9
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Depreciation and
amortization
- ------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 43.7 $ 42.1 $ 1.6 3.8
The increase in depreciation and amortization for the three months ended
March 31, 1996 is primarily due to an increase in depreciable plant
balances, resulting in an increase in depreciation expense of $1.7 million.
- ----------------------------------------------------------------------
Other operating expenses
- ------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 97.1 $ 84.2 $ 12.9 15.3
The increase in other operating expenses for the three months ended March
31, 1996 was due to increases in uncollectible and other expenses of $11.6
million related to increased sales efforts for equipment sales, call
management services, such as voice messaging and other nonregulated
services, cost of sales increases of $3.2 million related to equipment
sales, and an increase of $2.9 million in affiliated services. These
increases were partially offset by a decrease in contract services of $4.9
million.
- ----------------------------------------------------------------------
Restructuring credit
- --------------------
March 31 Percent
----------
(dollars in millions) 1996 1995 Change Change
------------------- ---- ---- -------- ------
Three Months Ended $ -- $ (26.4) $ 26.4 (100.0)
As discussed in Note 1, the Company significantly reduced its nonmanagement
work force during 1994 and 1995 by 1,113 employees. New employees with
different skills were added during this period to accommodate growth and
meet staffing requirements for new business opportunities. As of March 31,
1995, 934 employees had left the Company, with 20 leaving in the first
quarter of 1995. A pretax, noncash settlement gain of $26.4 million was
recorded in the first quarter of 1995, associated with lump-sum pension
payments to former employees. No restructuring charges or credits were
recorded in the first quarter of 1996.
<PAGE>10
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Taxes other than income taxes
- -----------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 14.8 $ 14.7 $ 0.1 0.7
The increase in taxes other than income taxes for the three months ended
March 31, 1996 is due to increased gross receipts taxes over the prior year
period.
- ----------------------------------------------------------------------
Other Income and Expenses
- -------------------------
Interest expense
- -----------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 6.8 $ 7.7 $ (0.9) (11.7)
The decrease in interest expense for the three months ended March 31, 1996
was due primarily to a decrease in interest on borrowings from the
Ameritech short-term funding pool.
- ----------------------------------------------------------------------
Other income, net
- -----------------
Change
March 31 Income Percent
----------
(dollars in millions) 1996 1995 (Expense) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 0.8 $ 0.4 $ 0.4 100.0
Other income, net includes equity earnings in affiliates, interest income
and other nonoperating items. The increase in other income, net for the
three months ended March 31, 1996 was primarily due to increases in equity
earnings from ASI and interest income.
- ----------------------------------------------------------------------
Income taxes
- ------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 30.8 $ 36.6 $ (5.8) (15.9)
The decrease in income taxes in the three months ended March 31, 1996 as
compared to the prior year period was primarily attributable to the
decrease in pretax earnings, related to the revenue and expense items
previously discussed.
<PAGE>11
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Ratio of earnings to fixed charges
- ----------------------------------
The ratio of earnings to fixed charges for the three months ended March 31
was 10.40 in 1996 and 11.56 in 1995. The ratio in 1995 was favorably
affected by a credit of $26.4 million for work force restructuring (see
prior discussion of this item). The work force restructuring program has
largely been funded by the Ameritech Pension Plan.
The computations of the ratio of earnings to fixed charges for the five
years ended December 31, 1995 have been restated. The ratio, as adjusted,
for the years ended December 31, 1995, 1994, 1993, 1992 and 1991 was 10.01,
5.87, 6.73, 4.55 and 4.30, respectively. The impact of the restatement was
not significant and was made to be consistent with unregulated enterprises.
- ----------------------------------------------------------------------
Other Matters
- --------------
Telecommunications Act of 1996
- ------------------------------
The Telecommunications Act of 1996 was signed into law by the President on
February 8, 1996. This legislation defines the conditions under which
Ameritech will be permitted to offer interLATA long distance service and
provides certain mechanisms intended to facilitate local exchange
competition. This legislation, in addition to allowing Ameritech to offer
interLATA long distance services, will allow competitors into the Company's
traditional local exchange markets. Management believes the legislation
gives the Company an opportunity to expand its revenue base by providing
long distance services, while retaining lower-margin access revenues as
other local service providers, acting as resellers, continue to use
Ameritech's network facilities.
On April 19, 1996 the Federal Communications Commission (FCC) issued a
notice of proposed rulemaking seeking comment on proposed rules opening
local telephone markets to competition. The FCC has until August 8, 1996
to issue the new rules.
Dial 1+
- -------
In December 1995 tariffs were filed, effective January 1, 1996, which
implemented intraLATA Dial 1+ capability, the ability to choose an
alternate long distance carrier for intraLATA toll calls by dialing 1
before the regular phone number. As of April 1996, approximately 40
percent of the Company's service area had been converted to Dial 1+. On
April 2, 1996 the Public Service Commission of Wisconsin (PSCW) reopened
the Dial 1+ Docket to consider suspension of the remaining implementation
schedule due to changes and implications related to the Federal
Telecommunications Act of 1996. The next implementation date for an
additional 40 percent of the service area is scheduled for July 1996 and
has not yet been suspended. The Company's recent court appeal of the Dial
1+ decision declaring it contrary to public interest and anticompetitive is
still pending.
<PAGE>12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits
--------
12 Computation of Ratio of Earnings to Fixed Charges for the
three months ended March 31, 1996 and March 31, 1995, and
for the five years ended December 31, 1995.
27 Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
No Form 8-K was filed by the registrant during the quarter which
this report is filed.
<PAGE>13
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.
WISCONSIN BELL, INC.
------------------
(Registrant)
Date: May 10, 1996 /s/ Laurie L. Streling
----------------------
Laurie L. Streling
Comptroller
State Finance Organization
(Principal Accounting Officer)
EXHIBIT 12
WISCONSIN BELL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
Three Months Ended
March 31
-------------
1996 1995
---- ----
1. EARNINGS
a) Income before interest expense,
income taxes and undistributed
equity earnings (2).......... $ 90.2 $ 102.9
b) Portion of rental expense
representative of the
interest factor (1)................. 1.0 1.1
-------- --------
Total 1(a) through 1(b)................. $ 91.2 $ 104.0
-------- --------
2. FIXED CHARGES
a) Total interest expense including
capital lease obligations........... $ 6.8 $ 7.7
b) Capitalized interest................. 0.2 0.2
c) Portion of rental expense
representative of the
interest factor (1)................. 1.0 1.1
-------- --------
Total 2(a) through 2(c)................. $ 8.0 $ 9.0
-------- --------
3. RATIO OF EARNINGS TO FIXED CHARGES...... 11.40 11.56
===== =====
(1) One-third of rental expense is considered to be the amount
representing return on capital.
(2) The results for the first three months of 1995 reflect a $26.4 million
pretax credit primarily from settlement gains resulting from lump sum
pension payments from the pension plan to former employees who left
the business in the nonmanagement work force restructuring.
EXHIBIT 12
WISCONSIN BELL, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
1. EARNINGS
a) Income before interest expense, income
tax, extraordinary charge, cumulative
effect of change in accounting
principles and undistributed
equity earnings (2)........... $ 348.8 $ 192.4 $ 242.2 $ 208.3 $ 208.7
b) Portion of rental expense representative
of the interest factor (1).... 4.6 4.4 4.7 4.9 6.4
-------- ------- ------- ------- -------
Total 1(a) through 1(b)... $ 353.4 $ 196.8 $ 246.9 $ 213.2 $ 215.1
======== ======= ======= ======= =======
2. FIXED CHARGES
a) Total interest expense including capital
lease obligations............. $ 29.5 $ 28.5 $ 31.6 $ 41.6 $ 43.3
b) Capitalized interest........... 1.2 0.6 0.4 0.4 0.3
c) Portion of rental expense representative
of the interest factor (1).... 4.6 4.4 4.7 4.9 6.4
------- ------- ------- ------- -------
Total 2(a) through 2(c)... $ 35.3 $ 33.5 $ 36.7 $ 46.9 $ 50.0
======== ======= ======= ======= =======
3. RATIO OF EARNINGS TO FIXED CHARGES 10.01 5.87 6.73 4.55 4.30
======== ======= ======= ======= =======
(1) One-third of rental expense is considered to be the amount
representing return on capital.
(2) The results for 1995 reflect a $24.1 pretax credit primarily from
settlement gains resulting from lump sum pension payments from the
pension plan to former employees who left the business in the
nonmanagement work force restructuring partially offset by increased
force costs related to the restructuring started in 1994. Results
for 1994 reflect a $71.8 pretax charge associated with the
nonmanagement work force restructuring. Costs of the work force
restructuring program have largely been funded from the Ameritech
Pension Plan.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
WISCONSIN BELL, INC.'S MARCH 31, 1996 FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 100
<SECURITIES> 0<F1>
<RECEIVABLES> 267,600
<ALLOWANCES> 14,000
<INVENTORY> 2,000
<CURRENT-ASSETS> 265,700
<PP&E> 2,837,300
<DEPRECIATION> 1,685,900
<TOTAL-ASSETS> 1,534,600
<CURRENT-LIABILITIES> 313,600
<BONDS> 305,800
0
0
<COMMON> 639,200
<OTHER-SE> (109,500)
<TOTAL-LIABILITY-AND-EQUITY> 1,534,600
<SALES> 0<F2>
<TOTAL-REVENUES> 296,700
<CGS> 0<F3>
<TOTAL-COSTS> 209,800
<OTHER-EXPENSES> (800)
<LOSS-PROVISION> 6,600
<INTEREST-EXPENSE> 6,800
<INCOME-PRETAX> 80,900
<INCOME-TAX> 30,800
<INCOME-CONTINUING> 50,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 50,100
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>SECURITIES ARE NOT MATERIAL AND THEREFORE HAVE NOT BEEN STATED SEPARATELY
IN THE FINANCIAL STATEMENTS. THIS AMOUNT IS INCLUDED IN THE CASH TAG.
<F2>NET SALES OF TANGIBLE PRODUCTS IS NOT MORE THAN 10% OF TOTAL OPERATING
REVENUES AND THEREFORE HAS NOT BEEN STATED SEPARATELY IN THE FINANCIAL
STATEMENTS PURSUANT TO REGULATION S-X, RULES 5-03(B). THIS AMOUNT IS
INCLUDED IN THE "TOTAL REVENUES" TAG.
<F3>COST OF TANGIBLE GOODS SOLD IS INCLUDED IN COST OF SERVICE AND PRODUCTS
IN THE FINANCIAL STATEMENTS AND THE "TOTAL COST" TAG, PURSUANT TO
REGULATION S-X, RULE 5-03(B).
</FN>
</TABLE>
