<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 1-10125
BERKSHIRE HATHAWAY INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04 2254452
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification number)
incorporation or organization)
1440 Kiewit Plaza, Omaha, Nebraska 68131
------------------------------------------
(Address of principal executive office)
(Zip Code)
(402) 346-1400
---------------------------------------------------
(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 and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Number of shares of common stock outstanding as of August 1, 1996:
Class A -- 1,189,768
Class B -- 629,820
<PAGE> 2
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE NO.
--------
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
------- --------------------
Condensed Consolidated Balance Sheets -- 2
June 30, 1996 and December 31, 1995
Consolidated Statements of Earnings -- 3
Second Quarter and First Half, 1996 and 1995
Condensed Consolidated Statements of Cash Flows -- 4
First Half, 1996 and 1995
Notes to Interim Consolidated Financial Statements 5-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 10-13
------- -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
PART II - OTHER INFORMATION 14
</TABLE>
1
<PAGE> 3
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions except per share amounts)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
--------------- ----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 866.4 $ 2,703.8
Investments:
Securities with fixed maturities at estimated fair value:
Maturing within two years (cost: 1996-$2,761.9; 1995-$596.5) 2,786.8 615.7
Maturing after two years (cost: 1996-$3,293.5; 1995-$651.7) . 3,425.9 807.5
Equity securities . . . . . . . . . . . . . . . . . . . . . . . 24,049.8 21,017.6
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,441.7 718.9
Assets of finance businesses . . . . . . . . . . . . . . . . . . 899.3 756.7
Goodwill of acquired businesses . . . . . . . . . . . . . . . . . 2,259.6 672.0
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . 1,664.4 1,419.2
---------- ----------
$37,393.9 $28,711.4
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Losses and loss adjustment expenses . . . . . . . . . . . . . . . $ 6,094.3 $ 3,698.6
Unearned premiums . . . . . . . . . . . . . . . . . . . . . . . . 1,435.2 374.1
Accounts payable, accruals and other liabilities . . . . . . . . 1,463.1 1,039.1
Income taxes, principally deferred . . . . . . . . . . . . . . . 5,771.5 4,849.5
Borrowings under investment agreements and other debt . . . . . . 1,500.4 1,061.7
Liabilities of finance businesses . . . . . . . . . . . . . . . . 828.3 685.2
---------- ---------
17,092.8 11,708.2
--------- ---------
Minority shareholders' interests . . . . . . . . . . . . . . . . 290.1 264.5
---------- ---------
Shareholders' equity:
Common Stock: *
Class A Common Stock, $5 par value, 1,378,135 and
1,381,308 shares issued; 1,190,339 and
1,193,512 shares outstanding . . . . . . . . . . . . . . . $ 6.9 $ 6.9
Class B Common Stock, $0.1667 par value, 612,690 shares
issued and outstanding in 1996 . . . . . . . . . . . . . . 0.1 --
Capital in excess of par value . . . . . . . . . . . . . . . . 1,566.6 1,001.7
Unrealized appreciation of investments, net . . . . . . . . . . 10,068.1 9,220.7
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . 8,404.0 6,544.1
---------- ----------
20,045.7 16,773.4
Less: Cost of 187,796 Class A common shares in treasury . . . . 34.7 34.7
----------- ----------
Total shareholders' equity . . . . . . . . . . . . . . . . . 20,011.0 16,738.7
--------- ---------
$37,393.9 $28,711.4
========= =========
</TABLE>
* As more fully described in the Notes to Interim Consolidated Financial
Statements, on May 8, 1996, Berkshire issued 517,500 shares of Class B
Common Stock having economic rights equal to one-thirtieth (1/30) of
the economics rights of Class A Common Stock. Accordingly, on an
equivalent Class A Common Stock basis, there are 1,210,762 shares
outstanding at June 30, 1996 versus 1,193,512 outstanding at December
31, 1995. Net book value per equivalent Class A Common share is
$16,528 at June 30, 1996 and $14,025 at December 31, 1995.
See accompanying Notes to Interim Consolidated Financial Statements
2
<PAGE> 4
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in millions except per share amounts)
<TABLE>
<CAPTION>
Second Quarter First Half
----------------------------- -----------------------------
1996 1995 1996 1995
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
REVENUES:
Insurance premiums earned . . . . . . . . . . . . . . $1,011.7 $ 174.2 $1,933.6 $ 405.6
Sales and service revenues . . . . . . . . . . . . . 715.1 617.0 1,415.2 1,188.7
Interest, dividend and other investment income . . . 190.0 138.6 362.2 280.5
Income from finance businesses . . . . . . . . . . . 5.2 6.9 11.0 13.2
Realized investment gain (loss) . . . . . . . . . . . (7.2) 81.7 2,332.5 74.4
--------- --------- -------- ---------
1,914.8 1,018.4 6,054.5 1,962.4
-------- -------- -------- --------
COST AND EXPENSES:
Insurance losses and loss adjustment expenses . . . . 784.1 132.8 1,522.0 315.7
Insurance underwriting expenses . . . . . . . . . . . 172.2 50.4 333.7 108.1
Cost of products and services sold . . . . . . . . . 449.0 388.0 880.5 747.4
Selling, general and administrative expenses . . . . 203.7 166.4 414.6 318.1
Goodwill amortization . . . . . . . . . . . . . . . . 15.5 3.7 30.6 6.9
Interest expense . . . . . . . . . . . . . . . . . . 26.9 13.4 53.2 26.6
--------- --------- --------- ---------
1,651.4 754.7 3,234.6 1,522.8
-------- -------- -------- --------
EARNINGS BEFORE INCOME TAXES AND MINORITY INTEREST . . 263.4 263.7 2,819.9 439.6
Income taxes . . . . . . . . . . . . . . . . . . . . 69.1 67.4 947.2 100.8
Minority interest . . . . . . . . . . . . . . . . . . 3.1 4.3 12.8 7.6
--------- --------- --------- ---------
NET EARNINGS . . . . . . . . . . . . . . . . . . . . . $ 191.2 $ 192.0 $1,859.9 $ 331.2
======== ======== ======== ========
Average shares outstanding * . . . . . . . . . . . . 1,203,748 1,183,392 1,198,630 1,180,587
NET EARNINGS PER SHARE * . . . . . . . . . . . . . . . $159 $162 $1,552 $281
==== ==== ====== ====
</TABLE>
* As more fully described in the Notes to Interim Consolidated Financial
Statements, on May 8, 1996, Berkshire issued 517,500 shares of Class B
Common Stock having economic rights equal to one-thirtieth (1/30) of
Class A Common Stock. Average shares outstanding for the 1996 periods
include average Class A Common shares and average Class B Common
shares determined on an equivalent Class A Common Stock basis. Net
earnings per share shown above represents net earnings per Class A
Common share. Net earnings per Class B Common share is equal to
one-thirtieth (1/30) of such amount or $5 and $52 per share for the
second quarter and first half of 1996 respectively.
See accompanying Notes to Interim Consolidated Financial Statements
3
<PAGE> 5
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
<TABLE>
<CAPTION>
First Half
-------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Net cash flows from operating activities . . . . . . . . . . . . . . . $ 346.1 $ 512.3
--------- ---------
Cash flows from investing activities:
Purchases of investments . . . . . . . . . . . . . . . . . . . . . (2,430.8) (1,260.6)
Proceeds on sales and maturities of investments . . . . . . . . . . 1,759.3 1,626.2
Loans and investments originated in finance businesses . . . . . . (332.5) (167.3)
Principal collections on loans and investments originated
in finance businesses . . . . . . . . . . . . . . . . . . . . . . 189.9 163.5
Acquisition of business . . . . . . . . . . . . . . . . . . . . . . . (1,946.2) --
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.6) (8.2)
--------- ----------
Net cash flows from investing activities . . . . . . . . . . . . . . . (2,778.9) 353.6
--------- ---------
Cash flows from financing activities:
Proceeds from borrowings of finance businesses . . . . . . . . . . . 115.3 74.7
Proceeds from other borrowings . . . . . . . . . . . . . . . . . . . 610.6 513.7
Repayments of borrowings of finance businesses . . . . . . . . . . . (129.5) (144.6)
Repayments of other borrowings . . . . . . . . . . . . . . . . . . . (580.8) (596.1)
Net proceeds from issuance of Class B Common Stock . . . . . . . . . 565.0 --
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.2) (0.3)
---------- -----------
Net cash flows from financing activities . . . . . . . . . . . . . . . 579.4 (152.6)
--------- --------
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . (1,853.4) 713.3
Cash and cash equivalents at beginning of year* . . . . . . . . . . . . 2,744.5 289.9
-------- --------
Cash and cash equivalents at end of first half* . . . . . . . . . . . . $ 891.1 $1,003.2
======== ========
Supplemental cash flow information:
Cash paid during the period for:
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 524.6 $ 145.5
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.8 39.8
Non-cash investing activities:
Liabilities assumed in connection with acquisitions of businesses . . 3,901.5 248.5
Common shares issued in connection with acquisitions of businesses . -- 348.6
* Cash and cash equivalents are comprised of the following:
Beginning of year --
Finance businesses . . . . . . . . . . . . . . . . . . . . . . . . $ 40.7 $ 16.0
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,703.8 273.9
-------- --------
$2,744.5 $ 289.9
======== ========
End of first half --
Finance businesses . . . . . . . . . . . . . . . . . . . . . . . . $ 24.7 $ 26.2
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 866.4 977.0
-------- -------
$ 891.1 $1,003.2
========= ========
</TABLE>
See accompanying Notes to Interim Consolidated Financial Statements
4
<PAGE> 6
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. GENERAL
As more fully discussed in Note 2, on January 2, 1996, GEICO
Corporation ("GEICO") became a wholly-owned subsidiary of Berkshire Hathaway
Inc. ("Berkshire" or "Company"). Consequently, the Condensed Consolidated
Balance Sheet as of June 30, 1996 and the Consolidated Statements of Earnings
for the second quarter and first half of 1996 include the accounts of GEICO.
Prior to January 2, 1996, Berkshire owned approximately 51% of the outstanding
common stock of GEICO. Previously the investment in GEICO common stock had
been classified as an available-for-sale security and was carried in
Berkshire's Consolidated Balance Sheet at fair value.
Generally accepted accounting principles require that prior year
financial statements be restated when control of a business is obtained on a
"step-by-step" basis. Accordingly, the Condensed Consolidated Balance Sheet as
of December 31, 1995 and the Consolidated Statements of Earnings for the second
quarter and first half of 1995 have been restated to account for Berkshire's
previous investment in GEICO common stock under the equity method. Berkshire's
proportionate share of GEICO's net income reduced by amortization of related
goodwill is included in the 1995 Consolidated Statement of Earnings as a
component of interest, dividend and other investment income. The principal
effect of the restatement was to decrease shareholders' equity as of December
31, 1995 by $478.4 million from the amount previously reported.
Reference is made to Berkshire's most recently issued Annual Report
that included information necessary or useful to understanding of Berkshire's
businesses and financial statement presentations. In particular, Berkshire's
significant accounting policies and practices were presented as Note 1 to the
Consolidated Financial Statements included in that Report.
Financial information in this Report reflects any adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary to a fair statement of results for the interim periods in
accordance with generally accepted accounting principles.
For a number of reasons, Berkshire's results for interim periods are
not normally indicative of results to be expected for the year. Most
significantly, the estimation error inherent to the process of determining
liabilities for unpaid losses of insurance subsidiaries can be relatively more
significant to results of interim periods than to results for a full year.
Variations in amount and timing of realized securities gains or losses cause
significant variations in periodic net earnings.
NOTE 2. BUSINESS ACQUISITIONS
On January 2, 1996, GEICO became a wholly-owned subsidiary as a result
of the merger of an indirect wholly-owned subsidiary of Berkshire with and into
GEICO. The date of January 2, 1996 is hereafter referred to as the "Merger
Date". GEICO, through its subsidiaries, is a multiple line property and
casualty insurer, the principal business of which is underwriting private
passenger automobile insurance.
The merger was consummated pursuant to an Agreement and Plan of Merger
(the "Agreement") dated August 25, 1995. Pursuant to the Agreement, each
issued and outstanding common share of GEICO, except shares held by Berkshire
subsidiaries and GEICO, was converted into the right to receive $70 per share,
or an aggregate amount of $2.3 billion (the "Merger Consideration"). The
amount of Merger Consideration was based upon 33,284,733 outstanding shares
held by the public on the Merger Date.
As of the Merger Date, subsidiaries of Berkshire owned 34,250,000
common shares of GEICO, which were acquired in years prior to 1981 at an
aggregate cost of $45.7 million. Up to the Merger Date, neither Berkshire nor
its subsidiaries had acquired any shares of GEICO common stock since 1980.
However, Berkshire's ownership percentage, due to intervening stock repurchases
by GEICO, gradually increased from about 33% in 1980 to almost 51% immediately
prior to the Merger Date.
5
<PAGE> 7
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 2. BUSINESS ACQUISITIONS (CONTINUED)
The merger has been accounted for by the purchase method. The excess of
the purchase cost over the fair value of net assets acquired at the Merger Date
is recorded as goodwill of acquired businesses and will subsequently be
amortized over 40 years. The following sets forth certain consolidated
earnings statement information on a pro forma basis for the first half of 1995
as if the GEICO merger had been consummated, on the same terms, at the
beginning of that year. Dollars are in millions, except per share amounts.
<TABLE>
<S> <C>
Insurance premiums earned . . . . . . . $1,753.2
Total revenues . . . . . . . . . . . . 3,301.2
Net income . . . . . . . . . . . . . . 323.7
Earnings per share . . . . . . . . . . 274
</TABLE>
During 1995, the Company consummated mergers with Helzberg's Diamond
Shops, Inc. ("Helzberg's") and R.C. Willey Home Furnishings ("R.C. Willey") by
reissuing 15,762 shares of its common stock (subsequently redesignated Class A
Common Stock) held in treasury in exchange for 100% of the common stock of each
of these companies. Helzberg's consists of a chain of 175 jewelry stores
operating in 28 states and R.C. Willey, through its seven locations, is the
dominant retailer of home furnishings in Utah.
Each of these mergers was accounted for by the purchase method and,
accordingly, the operating results of these businesses are included in the
Company's consolidated results of operations from the effective dates of the
mergers (Helzberg's -- April 30, 1995; R.C. Willey -- June 29, 1995). Had the
results of these businesses been included commencing with operations at the
beginning of 1995, the reported results would not have been materially
affected.
NOTE 3. RECAPITALIZATION
On May 6, 1996, Berkshire shareholders approved a recapitalization
plan which creates a new class of common stock, designated as Class B Common
Stock. In connection therewith, Berkshire's existing common stock was
redesignated as Class A Common Stock. Each share of Class A Common Stock is
convertible, at the option of the holder, into thirty shares of Class B Common
Stock.
On May 8, 1996, Berkshire completed its previously announced public
offering of 517,500 shares Class B Common Stock. Berkshire received net
proceeds from the offering of $565.0 million. The Company expects that, in
time, it will use the net proceeds for acquisitions of businesses, for
augmenting the capital of its insurance subsidiaries, or for other general
corporate purposes.
Since the Class B Common shares are equivalent to one-thirtieth (1/30)
of the economic rights of Class A Common shares, the issuance of the Class B
Common Stock was equivalent to the issuance of 17,250 Class A Common shares or
approximately 1.4% of Class A Common shares outstanding at the time of the
issuance of Class B Common shares.
Subsequent to the issuance of Class B Common Stock and as of June 30,
1996, shareholders formerly holding 3,173 shares of Class A Common Stock
elected to convert such shares into 95,190 shares of Class B Common Stock. The
following table summarizes Berkshire's common stock activity during the first
six months of 1996.
<TABLE>
<CAPTION>
Shares of Shares of
Class A Common Stock Class B Common Stock
--------------------------------------------- --------------------
Issued Held in Treasury Outstanding Issued and Outstanding
--------- ---------------- ----------- ----------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 . . . . . 1,381,308 (187,796) 1,193,512 --
Issuance of Class B Common Stock . . . -- -- -- 517,500
Conversions of Class A Common Stock
to Class B Common Stock . . . . . . (3,173) -- (3,173) 95,190
--------- -------- --------- -------
Balance at June 30, 1996 . . . . . . . 1,378,135 (187,796) 1,190,339 612,690
========= ======== ========= =======
</TABLE>
6
<PAGE> 8
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4. INVESTMENTS IN EQUITY SECURITIES
Data with respect to investments in equity securities are shown in the
tabulation below (in millions).
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
--------- ----------
<S> <C> <C>
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,558.1 $ 7,176.2
Gross unrealized gains . . . . . . . . . . . . . . . . . . . . . . . . . 15,541.0 13,933.4
Gross unrealized losses . . . . . . . . . . . . . . . . . . . . . . . . . (49.3) (92.0)
--------- ----------
Total carrying value . . . . . . . . . . . . . . . . . . . . . . . . . . $24,049.8 $21,017.6
========= =========
Carrying value:
American Express Company . . . . . . . . . . . . . . . . . . . . . . . $2,207.0 $ 2,046.3
Capital Cities/ABC, Inc. (a) . . . . . . . . . . . . . . . . . . . . . -- 2,467.5
The Coca-Cola Company . . . . . . . . . . . . . . . . . . . . . . . . . 9,800.0 7,425.0
The Walt Disney Company (a) . . . . . . . . . . . . . . . . . . . . . . 1,547.6 --
Federal Home Loan Mortgage Corporation . . . . . . . . . . . . . . . . 1,373.3 1,044.0
GEICO Corporation (b) . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,175.8
The Gillette Company . . . . . . . . . . . . . . . . . . . . . . . . . 2,994.0 2,502.0
Wells Fargo & Company . . . . . . . . . . . . . . . . . . . . . . . . . 1,743.6 1,466.9
All others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,384.3 2,890.1
--------- ---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,049.8 $21,017.6
========= =========
</TABLE>
(a) In March 1996, The Walt Disney Company ("Disney") completed its
acquisition of Capital Cities/ABC, Inc. Subsidiaries of Berkshire
received aggregate consideration of $2.5 billion, which included cash
of $1.2 billion and common shares of Disney with a value of $1.3
billion. The Consolidated Statement of Earnings for the first half of
1996 includes a pre-tax realized investment gain of $2.2 billion from
the Disney transaction.
(b) The carrying value of GEICO common stock as of December 31, 1995 has
been restated from the amount previously reported. See Notes 1 and 2.
NOTE 5. DEFERRED INCOME TAX LIABILITY
The tax effects of significant items comprising the Company's net deferred
tax liability as of June 30, 1996 and December 31, 1995 are as follows (in
millions):
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
<S> <C> <C>
Deferred tax liabilities:
Relating to unrealized appreciation of investments . . . . . . . . . . . $5,478.0 $4,908.5
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718.4 157.0
-------- --------
6,196.4 5,065.5
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (573.2) (302.8)
------- -------
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . $5,623.2 $4,762.7
======== ========
</TABLE>
7
<PAGE> 9
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6. FINANCE BUSINESSES
Assets and liabilities of Berkshire's finance businesses are
summarized below (in millions).
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- ------------
<S> <C> <C>
Assets
------
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . $ 24.7 $ 40.7
Installment loans and other receivables . . . . . . . . . . . . . . . . . 209.2 185.9
Fixed maturity investments . . . . . . . . . . . . . . . . . . . . . . . 664.9 529.4
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 0.7
------ ------
$899.3 $756.7
====== ======
Liabilities
-----------
8.125% Notes, payable in 1996 . . . . . . . . . . . . . . . . . . . . . . $120.0 $120.0
Borrowings under investment agreements . . . . . . . . . . . . . . . . . 389.3 403.6
Annuity reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264.1 116.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.9 44.9
------ ------
$828.3 $685.2
====== ======
</TABLE>
The preceding summarized financial data includes the commercial and
consumer finance activities conducted by the Scott Fetzer Financial Group and
its subsidiaries. Assets and liabilities of these businesses are summarized
below (in millions).
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . $ 24.4 $ 40.5
Installment loans and other receivables * . . . . . . . . . . . . . . . . 291.4 334.9
Mortgage-backed securities, at cost . . . . . . . . . . . . . . . . . . 213.4 211.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.4 0.7
------ ------
$529.6 $587.8
====== ======
LIABILITIES
8.125% Notes, payable in 1996 . . . . . . . . . . . . . . . . . . . . . . $120.0 $120.0
Borrowings under investment agreements . . . . . . . . . . . . . . . . . 345.2 403.6
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.9 29.9
------- -------
$495.1 $553.5
====== ======
</TABLE>
* Includes receivables from affiliated companies of $145.1 and $182.8 at June
30, 1996 and December 31, 1995, respectively.
Net income from Scott Fetzer Financial Group businesses for the second
quarter and first half of 1996 and 1995 is summarized below (in millions).
<TABLE>
<CAPTION>
Second Quarter First Half
----------------------------- -----------------------------
1996 1995 1996 1995
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . $15.3 $13.8 $31.2 $27.7
Costs and expenses . . . . . . . . . . . . . . 12.8 10.8 25.9 21.4
----- ----- ----- -----
Income before income taxes . . . . . . . . . . 2.5 3.0 5.3 6.3
Income taxes . . . . . . . . . . . . . . . . . 0.9 1.0 1.8 2.2
----- ----- ----- -----
Net income . . . . . . . . . . . . . . . . . . $ 1.6 $ 2.0 $ 3.5 $ 4.1
===== ===== ===== =====
</TABLE>
8
<PAGE> 10
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7. UNREALIZED APPRECIATION OF INVESTMENTS
Changes in "Unrealized appreciation of investments, net", the balance
of which is carried in shareholders' equity, were as follows during the second
quarter and first half of 1996 and 1995 (in millions):
<TABLE>
<CAPTION>
Second Quarter First Half
------------------------------ -----------------------------
1996 1995 1996 1995
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Increase in unrealized appreciation . . . . . . $ 1,764.8 $ 1,706.5 $ 1,349.6 $3,275.9
Increase in deemed applicable
income taxes . . . . . . . . . . . . . . . . (617.4) (600.1) (488.7) (1,154.1)
Increase in minority shareholders' interest . . (10.6) (14.6) (13.5) (30.3)
--------- --------- --------- ---------
Net increase . . . . . . . . . . . . . . . . 1,136.8 1,091.8 847.4 2,091.5
Balance at beginning of period . . . . . . . . 8,931.3 6,276.6 9,220.7 5,276.9
--------- --------- --------- ---------
Balance at end of second quarter . . . . . . . $10,068.1 $ 7,368.4 $10,068.1 $ 7,368.4
========= ========= ========= =========
</TABLE>
9
<PAGE> 11
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net earnings for the second quarter and first half of the current and prior
year are disaggregated in the following table. Amounts are in millions and
each figure is income tax effected.
<TABLE>
<CAPTION>
Second Quarter First Half
----------------------------- -----------------------------
1996 1995 1996 1995
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Insurance, except realized investment gain/loss . . $ 160.5 $ 104.0 $ 289.1 $ 210.9
Manufacturing, merchandising and services . . . . . 43.3 38.4 83.2 77.6
Unallocated income/expense, net . . . . . . . . . . 6.7 6.2 13.8 12.2
Interest expense * . . . . . . . . . . . . . . . . (16.8) (8.4) (32.2) (16.5)
-------- -------- -------- --------
Earnings before realized investment gain/loss . 193.7 140.2 353.9 284.2
Realized investment gain (loss) . . . . . . . . . . (2.5) 51.8 1,506.0 47.0
-------- -------- -------- --------
Net earnings . . . . . . . . . . . . . . . . . $ 191.2 $ 192.0 $1,859.9 $ 331.2
======== ======== ======== ========
</TABLE>
* For purposes of the above table, interest expense of finance businesses is
netted against the directly related service activity revenues.
INSURANCE GROUP
The after tax figures shown above for Insurance Group earnings, except
realized investment gain/loss, are aggregated in the following table. Dollar
amounts are in millions.
<TABLE>
<CAPTION>
Second Quarter First Half
----------------------------- -----------------------------
1996 1995 1996 1995
------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Premiums earned from:
Direct insurance . . . . . . . . . . . . . . . $ 823.6 $ 57.5 $1,629.4 $ 115.9
Reinsurance assumed . . . . . . . . . . . . . . 188.1 116.7 304.2 289.7
-------- -------- ------- --------
$1,011.7 $ 174.2 $1,933.6 $ 405.6
======== ======== ======== ========
Underwriting gain (loss) attributable to:
Direct insurance . . . . . . . . . . . . . . . $ 50.1 $ 1.4 $ 90.2 $ 3.5
Reinsurance assumed . . . . . . . . . . . . . . 5.5 (10.7) (12.3) (22.2)
-------- -------- -------- --------
Total underwriting gain (loss) . . . . . . . 55.6 (9.3) 77.9 (18.7)
Net investment income . . . . . . . . . . . . . . . 165.9 128.7 318.9 260.6
Goodwill amortization . . . . . . . . . . . . . . . (10.6) -- (21.4) --
-------- -------- -------- --------
Earnings before income taxes . . . . . . . . 210.9 119.4 375.4 241.9
Income tax expense . . . . . . . . . . . . . . . . 48.8 13.6 82.7 26.9
Minority interest . . . . . . . . . . . . . . . . . 1.6 1.8 3.6 4.1
-------- -------- -------- --------
Net earnings from Insurance,
except realized investment gain/loss . . . $ 160.5 $ 104.0 $ 289.1 $ 210.9
======== ======== ======== ========
</TABLE>
As discussed more fully in the Notes to Interim Consolidated Financial
Statements, Berkshire acquired control of GEICO Corporation ("GEICO") in
January, 1996. The inclusion of GEICO's accounts in Berkshire's consolidated
financial statements beginning in 1996 will have a significant impact on the
revenues and operating results of Berkshire's Insurance Group.
In direct insurance activities, Insurance Group members assume risks
of loss from parties who are directly subject to the risks. In reinsurance
activities, the members assume defined portions of similar or dissimilar risks
to which other insurers or reinsurers have subjected themselves in their own
insuring activities.
GEICO, through its subsidiaries, provides primarily private passenger
automobile coverages to insureds in 49 states and the District of Columbia.
Limited amounts of homeowners, fire and boat insurance are also offered. GEICO
policies are marketed mainly by direct response methods in which customers
apply for coverage directly to the company over the telephone or through the
mail. This is a significant element in GEICO's strategy to be a low cost
provider of such coverages.
10
<PAGE> 12
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
INSURANCE GROUP (Continued)
GEICO's underwriting results for the second quarter and first half of
1996 are summarized below. Amounts for 1995 periods are shown for comparative
purposes, although such amounts are not included in Berkshire's Consolidated
Financial Statements. Dollar amounts are in millions.
<TABLE>
<CAPTION>
Second Quarter First Half
-------------------------------------- -----------------------------------
1996 1995 1996 1995
---------------- ------------------ ---------------- ---------------
Amount % Amount % Amount % Amount %
-------- ----- -------- ----- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Premiums earned . . . . . . . . $757.4 100.0 $688.6 100.0 $1,497.6 100.0 $1,347.6 100.0
------ ----- ------ ----- -------- ----- -------- -----
Losses and loss expenses . . . 605.6 80.0 577.3 83.8 1,206.8 80.6 1,110.3 82.4
Underwriting expenses . . . . . 114.1 15.0 102.3 14.9 223.3 14.9 202.3 15.0
------ ----- ------ ----- ------- ----- -------- -----
719.7 95.0 679.6 98.7 1,430.1 95.5 1,312.6 97.4
------ ===== ------ ===== -------- ===== -------- =====
Underwriting gain . . . . . . . $ 37.7 $ 9.0 $ 67.5 $ 35.0
====== ====== ======== ========
</TABLE>
Intensified marketing efforts for GEICO's voluntary preferred-risk,
standard and non-standard risk private passenger auto insurance have contributed
to the increases in business accepted. Such efforts have resulted in in-force
policy growth over the past twelve months of 5.5% in preferred-risk auto and
26.5% in the standard and non-standard auto lines. Recent trends indicate that
growth in GEICO's voluntary auto lines may accelerate for the remainder of 1996.
Premiums earned in 1996 by other direct insurance businesses totaled
$66.2 million for the second quarter and $131.8 million for the first half.
Premiums earned in the second quarter and first half of 1995 were $57.5 million
and $115.9 million, respectively. Most of the comparative increases in
premiums earned derived from a relatively small number of commercial property
insurance policies written by the Group's professional liability/specialty risk
operations.
In 1996, Berkshire's other direct insurance businesses produced
underwriting gains of $12.4 million for the second quarter and $22.7 million
for the first half. In each period over half of these gains were produced by
the professional liability/specialty risk operations. The Group's traditional
commercial motor vehicle and credit card credit insurance businesses
contributed most of the other net underwriting gains. In the comparable 1995
periods, Berkshire's other direct businesses produced underwriting gains of
$1.4 million for the second quarter and $3.5 million for the first half.
Premiums earned from reinsurance activities for the second quarter and
first half of 1996 included $94.1 million and $126.9 million, respectively,
from catastrophe excess-of-loss policies. In 1995 periods, premiums earned
from such policies were $39.6 million for the second quarter and $120.3 million
for the first half. Premiums earned from catastrophe excess-of-loss policies
reflect the Group's practice to defer earning such premiums until the earlier
of a loss occurrence or policy expiration. Most of the other reinsurance
premiums earned in both the 1996 and 1995 periods derived from a few sizable
excess-of-loss policies.
Underwriting results from reinsurance activities include gains from
catastrophe excess-of-loss policies of $58.3 million for the second quarter of
1996 and $72.7 million for the first half of 1996. In 1995, gains from
catastrophe excess-of-loss policies were $29.1 million for the second quarter
and $68.0 million for the first half. The magnitude of underwriting gains
achieved over the past few years by this business should not be viewed as
predictive of future profitability. Depending on the timing and magnitude of
catastrophe loss events, underwriting gains achieved in one period can be
easily exceeded by losses in the next period. Potential for extreme volatility
in periodic underwriting results from this business remains.
Charges related to the amortization of deferred charges re reinsurance
assumed and accretion of discounted structured settlement liabilities have been
a recurring element of the underwriting results of Berkshire's reinsurance
business. These charges reflect recognition of time-value-of-money concepts.
In 1996, such charges were $17.0 million for the second quarter and $36.7
million for the first half. In 1995, such charges totaled $17.8 million for
the second quarter and $34.3 million for the first half.
11
<PAGE> 13
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
INSURANCE GROUP (Continued)
Other reinsurance activities produced underwriting losses for the
second quarter and first half of 1996 totaling $35.8 million and $48.3 million,
respectively. In 1995, such losses were $22.0 million for the second quarter
and $55.8 million for the first half. Generally, time-value-of-money concepts
are important considerations in establishing premiums for non-catastrophe
policies due to the anticipation of more extended claim payment periods.
Underwriting losses often occur as the estimates of losses and loss adjustment
expenses are established on an undiscounted basis, often in amounts exceeding
premiums. Nevertheless, this business is accepted because of the large amounts
of investable policyholder funds ("float") generated.
The accompanying consolidated balance sheet includes liabilities of
about $6.1 billion representing estimated unpaid losses and loss adjustment
expenses related to insurance and reinsurance activities. Subsequent loss
payments will likely differ and further revisions of the estimates will occur.
These revisions will be reflected in earnings in the period made and may have a
substantial effect on future periodic underwriting results.
The Insurance Group continues to generate significant levels of
investment income, reflecting large amounts of invested assets. Investable
policyholder funds (or "float") at June 30, 1996 approximated $6.6 billion and
included over $2.5 billion added upon the acquisition of GEICO in January 1996.
Net investment income of the Insurance Group for the second quarter and first
half of 1996 includes the investment results of GEICO. Net investment income
of GEICO was $53.6 million for the second quarter of 1996 and $106.0 million
for the first half of 1996. In 1995 periods, net investment income of the
Insurance Group included the equity in net earnings of GEICO -- $22.7 million
for the second quarter and $52.4 million for the first half.
MANUFACTURING, MERCHANDISING AND SERVICES
Results of operations of Berkshire's diverse non-insurance businesses are
aggregated in the following table. Dollar amounts are in millions.
<TABLE>
<CAPTION>
Second Quarter First Half
------------------------------------ ----------------------------------
1996 1995 1996 1995
---------------- ---------------- ---------------- ---------------
Amount % Amount % Amount % Amount %
-------- ----- -------- ----- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues . . . . . . . . . . . $721.8 100.0 $622.5 100.0 $1,428.7 100.0 $1,202.1 100.0
Costs and expenses . . . . . . 648.0 89.8 555.9 89.3 1,286.9 90.1 1,070.9 89.1
------ ----- ------ ----- -------- ----- -------- -----
Earnings before income taxes . 73.8 10.2 66.6 10.7 141.8 9.9 131.2 10.9
Applicable income taxes . . . . 29.3 4.0 27.2 4.4 56.6 4.0 51.7 4.3
Applicable minority interest . 1.2 0.2 1.0 0.1 2.0 0.1 1.9 0.1
------ ----- ------- ----- -------- ----- -------- ------
Net earnings . . . . . . . . . $ 43.3 6.0 $ 38.4 6.2 $ 83.2 5.8 $ 77.6 6.5
====== ===== ======= ===== ======== ===== ======== =====
</TABLE>
Revenues from these several and diverse business activities during
1996's second quarter and first half were greater by $99.3 million (16.0%) and
$226.6 million (18.9%) than revenues recorded during the corresponding 1995
periods. The comparative increases are primarily due to the acquisitions
during 1995's second quarter of Helzberg's Diamond Shops, Inc. ("Helzberg's")
and R.C. Willey Home Furnishings ("R.C. Willey"). Helzberg's operates a chain
of 175 jewelry stores and R.C. Willey is the dominant retailer of home
furnishings in Utah. (See Notes to Interim Consolidated Financial Statements
for additional information regarding these acquisitions).
Net earnings from this group of businesses increased $4.9 million
(12.8%) during 1996's second quarter and $5.6 million (7.2%) during 1996's
first half as compared to the prior year. The inclusion of Helzberg's and R.C.
Willey for the entire first half of 1996 had a favorable impact on comparative
results as did improved comparative results for Berkshire's home cleaning
systems segment. However, somewhat offsetting these increases were comparative
declines in the second quarter and first half in Berkshire's shoe and newspaper
segments.
12
<PAGE> 14
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
REALIZED INVESTMENT GAIN/LOSS
Realized investment gain/loss has been a recurring element in
Berkshire's net earnings for many years. The amount -- recorded when
securities are sold or other than temporarily impaired -- may fluctuate
significantly from period to period, with a meaningful effect upon Berkshire's
consolidated net earnings. However, the amount of realized investment gain or
loss for any given period has no predictive value, and variations in amount
from period to period have no practical analytical value, particularly in view
of the net unrealized price appreciation now existing in Berkshire's
consolidated investment portfolio.
The Consolidated Statement of Earnings for the first half of 1996
reflects a pre-tax realized investment gain of $2.3 billion ($1.5 billion after
tax). Most of this gain resulted from The Walt Disney Company's ("Disney")
acquisition of Capital Cities/ABC, Inc. ("Capital Cities"). Prior to the
acquisition, subsidiaries of Berkshire owned common stock of Capital Cities
which had been acquired in 1986 for an aggregate cost of $345.0 million. In
exchange for the Capital Cities common stock, Berkshire subsidiaries received
cash and Disney common stock having an aggregate value of $2.5 billion.
While the effect of this transaction is material to the Consolidated
Statement of Earnings, the completion of the acquisition had a minimal impact
on Berkshire's shareholders' equity. This is due to the fact that Berkshire's
investment in Capital Cities had been carried in the prior periods'
consolidated financial statements at market value with unrealized gains, net of
tax, reported as a separate component of shareholders' equity. As of December
31, 1995, the pre-tax unrealized gain related to Berkshire's investment in
Capital Cities was approximately $2.1 billion.
FINANCIAL CONDITION
As discussed in the Notes to Interim Consolidated Financial
Statements, on May 8, 1996, Berkshire completed a public offering of a new
class of common stock. The net proceeds from the offering were approximately
$565.0 million. The Company expects that in time it will use the net proceeds
for acquisitions of businesses, for augmenting the capital of its insurance
subsidiaries, or for other general corporate purposes. At this time, Berkshire
has no immediate or specific plan for the use of the net proceeds from the
offering.
Berkshire's balance sheet continues to reflect significant liquidity
and above average capital strength. Shareholders' equity at June 30, 1996, was
$20.0 billion or $16,528 per Class A Common share.
PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of shareholders of Berkshire Hathaway Inc.
("Berkshire"), held May 6, 1996, Berkshire's shareholders reelected Berkshire's
Directors in an uncontested election. Proxies for the meeting had previously
been solicited pursuant to Regulation 14A under the Securities Exchange Act of
1934.
Following are the votes cast in favor and against each Director.
There were no votes withheld, abstentions or broker non-votes.
<TABLE>
<CAPTION>
Directors For Against
--------- ------------ -----------
<S> <C> <C>
Warren E. Buffett 1,056,820 838
Howard G. Buffett 1,056,753 905
Susan T. Buffett 1,056,765 893
Malcolm G. Chace III 1,056,846 812
Charles T. Munger 1,056,836 822
Walter Scott, Jr. 1,056,827 831
</TABLE>
13
<PAGE> 15
FORM 10-Q
BERKSHIRE HATHAWAY INC. Q/E 6/30/96
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(CONTINUED)
At the aforementioned annual meeting, Berkshire's shareholders
approved the recommendation of its Board of Directors to amend its Restated
Certificate of Incorporation so as to add a provision authorizing the Board to
(A) create a new class of Class B Common Stock in which each share has economic
rights equivalent to one-thirtieth (1/30) of a share of the current common
stock, but has one-two-hundredth (1/200) of the vote of a share of the then
current common stock; (B) redesignate the Corporation's then current common
stock as Class A Common Stock and change each share of existing common stock
into a share of Class A Common Stock; and (C) make each share of Class A Common
Stock convertible into thirty (30) shares of Class B Common Stock at the option
of the holder at any time.
Following is a tabulation of the votes regarding this matter:
<TABLE>
<CAPTION>
Broker
For Against Abstain Non-Votes
--------- ------- ------- ----------
<S> <C> <C> <C>
979,383 8,672 10,891 58,665
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit 27 -- Financial Data Schedule
b. Reports on Form 8-K *
i) Form 8-K Filed January 16, 1996 -- Item 2 -
Acquisition or Disposition of Assets - Report
described merger which occurred on January 2,
1996 of GEICO Corporation with an indirect
wholly-owned subsidiary of Berkshire Hathaway
Inc. Included in the report are Unaudited
Pro Forma Condensed Financial Statements for
the nine months ended September 30, 1995 and
the year ended December 31, 1994.
ii) Form 8-K Filed February 15, 1996 -- Item 5 -
Other Events - Report described a plan
approved by Berkshire Hathaway Inc.'s Board
of Directors to create a new class of stock
to be called Class B Common Stock and to
simultaneously designate its existing common
stock as Class A Common Stock.
iii) Form 8-K Filed March 26, 1996 -- Item 5 -
Other Events - Report contains supplemental
disclosures with respect to Form 8-K filed
January 16, 1996. Included in the report are
Unaudited Pro Forma Condensed Financial
Statements for the year ended December 31,
1995. (See i) above).
* Registrant inadvertently omitted describing
in its Form 10-Q for the quarterly period
ending March 31, 1996, three reports on Form
8-K which were filed during the first quarter
of 1996. A description of the three Form
8-K's is being provided in this Form 10-Q.
SIGNATURE
Pursuant to the requirement 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.
BERKSHIRE HATHAWAY INC.
----------------------------------
(Registrant)
Date August 13, 1996 /s/ Marc D. Hamburg
----------------------------------
(Signature)
Marc D. Hamburg, Vice President
and Principal Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FINANCIAL STATEMENTS AND RELATED NOTES CONTAINED IN FORM 10-Q AS
FILED HEREWITH, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS AND RELATED NOTES.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 866
<SECURITIES> 30,263
<RECEIVABLES> 1,442
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 37,394
<CURRENT-LIABILITIES> 0
<BONDS> 1,500
0
0
<COMMON> 7
<OTHER-SE> 20,004
<TOTAL-LIABILITY-AND-EQUITY> 37,394
<SALES> 1,415
<TOTAL-REVENUES> 3,360
<CGS> 881
<TOTAL-COSTS> 2,736
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53
<INCOME-PRETAX> 2,820
<INCOME-TAX> 947
<INCOME-CONTINUING> 1,860
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,860
<EPS-PRIMARY> 1,552
<EPS-DILUTED> 1,552
</TABLE>
