SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1994
Commission File Number 1-4929
COMSAT CORPORATION
(Exact name of Registrant as specified in its charter)
District of Columbia 52-0781863
- - ------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6560 Rock Spring Drive, Bethesda, MD 20817
- - ---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant s telephone number, including area code (301) 214-3000
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 twelve (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 ninety (90) days. Yes X No
40,363,294 shares of the Registrant s common stock were
outstanding as of March 31, 1994.
Page 1
<PAGE>
PART I.FINANCIAL INFORMATION
Item 1.Interim Financial Statements for the Corporation (Unaudited)
COMSAT CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1994 1993
---- ----
<S> <C> <C>
Revenues $169,529 $166,283
-------- --------
Operating Expenses:
Cost of Services 88,436 87,056
Depreciation and Amortization 39,297 33,546
Research and Development 2,635 3,178
General and Administrative 5,364 5,248
-------- --------
Total Operating Expenses 135,732 129,028
-------- --------
Operating Income 33,797 37,255
Other Income (Expense), Net 1,071 (1,170)
Interest Income 152 165
Interest Cost (11,751) (11,951)
Interest Capitalized 5,740 5,132
-------- --------
Income Before Taxes and Cumulative Effect
of Accounting change 29,009 29,431
Income Tax Expense (10,716) (11,118)
-------- --------
Income Before Cumulative Effect
of Accounting change 18,293 18,313
Cumulative Effect of Accounting Change for
Income Taxes - 1,238
-------- --------
Net Income $18,293 $19,551
======== ========
Earnings Per Share:
Primary:
Before Cumulative Effect of Accounting
Change $0.45 $0.45
Cumulative Effect of Accounting Change - 0.03
----- -----
Net Income $0.45 $0.48
===== =====
Fully Diluted:
Before Cumulative Effect of Accounting
Change $0.45 $0.45
Cumulative Effect of Accounting Change - 0.03
----- -----
Net Income $0.45 $0.48
===== =====
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 2
<PAGE>
COMSAT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
---- ----
<S> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents $16,496 $8,794
Receivables 148,411 143,347
Deferred Income Taxes 9,073 8,769
Advances to Related Parties 2,578 -
Other 13,935 17,572
--------- ---------
Total Current Assets 190,493 178,482
--------- ---------
Property and Equipment (Net of accumulated
depreciation of $859,680 in 1994 and
$836,474 in 1993) 1,333,938 1,308,167
Investments 31,258 19,493
Goodwill 32,621 30,778
Franchise Rights 40,600 41,084
Other Assets 80,615 74,511
--------- ---------
Total Assets $1,709,525 $1,652,515
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Maturities of Long-Term Obligations $74,679 $74,904
Commercial Paper 79,738 43,233
Accounts Payable and Accrued Liabilities 77,863 97,329
Due to Related Parties 19,862 56,601
Accrued Interest 11,882 5,231
Income Taxes Payable 4,087 542
--------- ---------
Total Current Liabilities 268,111 277,840
--------- ---------
Long-Term Debt 437,649 402,402
Deferred Income Taxes 87,862 79,990
Deferred Investment Tax Credits 21,264 22,151
Accrued Postretirement Benefit Costs 50,652 50,014
Other Long-Term Liabilities 127,472 119,393
--------- ---------
Total Liabilities 993,010 951,790
--------- ---------
Minority Interest 23,213 21,373
--------- ---------
Stockholders' Equity:
Common Stock 284,502 281,371
Retained Earnings 432,650 421,833
Treasury Stock (12,881) (13,311)
Unearned Compensation, Key Employee
Stock Plans (8,668) (8,240)
Minimum Pension Liability (2,301) (2,301)
--------- ---------
Total Stockholders' Equity 693,302 679,352
--------- ---------
Total Liabilities and Stockholders' Equity $1,709,525 $1,652,515
========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 3
<PAGE>
COMSAT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENTS
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1994 1993
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $18,293 $19,551
Adjustments for Noncash Expenses:
Depreciation and Amortization 39,297 33,546
Changes in Operating Assets and Liabilities:
Receivables and Other Current Assets 5,063 6,092
Current Liabilities (45,402) (7,713)
Non-current Liabilities 17,029 5,006
Other (6,108) 384
------ ------
Net Cash Provided by Operating Activities 28,172 56,866
------ ------
Cash Flows from Investing Activities:
Purchase of Property and Equipment (85,305) (44,515)
Decrease in INTELSAT Ownership 7,024 9,661
Decrease in Inmarsat Ownership 3,031 4,686
Investments in Unconsolidated Businesses (11,562) (1,750)
Purchase of Minority Shares of Subsidiaries (1,578) -
Other (4,275) 94
------ ------
Net Cash Used in Investing Activities (92,665) (31,824)
------ ------
Cash Flows from Financing Activities:
Common Stock Issued 1,959 2,698
Cash Dividends Paid (7,446) (7,348)
Proceeds from Issuance of Long-term Debt 40,421 32,747
Repayment of Long-term Debt (1,488) (30,369)
Net Short-term Borrowings (Repayments) 36,505 (17,305)
Other 2,244 -
------ ------
Net Cash Provided by (Used for) Financing
Activities 72,195 (19,577)
------ ------
Net Increase in Cash and Cash Equivalents 7,702 5,465
Cash and Cash Equivalents, Beginning of Period 8,794 3,857
------ ------
Cash and Cash Equivalents, End of Period $16,496 $ 9,322
====== ======
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 4
<PAGE>
COMSAT CORPORATION
Notes to Consolidated Financial Statements (Unaudited)
- - --------------------------------------------------------------------------
1. Financial Statement Presentation
These financial statements include the accounts of COMSAT
Corporation and its majority owned subsidiaries (the corporation )
and reflect all adjustments that are, in the opinion of management,
necessary to fairly present the results of the periods covered.
These financial statements should be read in conjunction with the
consolidated financial statements of the corporation for the year
ended December 31, 1993.
2. INTELSAT and Inmarsat Share Changes
The corporation decreased its ownership share of INTELSAT
during the first quarter of 1994 from 20.9% at December 31, 1993 to
20.2% as of March 31, 1994. This resulted in decreases in assets of
$15.5 million and liabilities of $3.4 million. The corporation
received cash proceeds of $7.0 million and has recorded a $5.1
million interest-bearing receivable for the balance due.
The corporation also decreased its ownership share of Inmarsat
during the first quarter of 1994 from 23.0% at December 31, 1993 to
22.4% as of March 31, 1994. The corporation received cash proceeds
of $3.0 million, and recorded decreases in assets and liabilities of
$6.0 million and $3.0 million, respectively.
3. Litigation
As discussed in Note 7 to the corporation s financial
statements for the year ended December 31, 1993, the corporation is
engaged in an antitrust suit filed by Pan American Satellite
(PanAmSat). In the opinion of management, the complaint against the
corporation is without merit, and the ultimate disposition of this
matter will not have a material effect on the corporation s
financial statements.
The corporation is defending an intellectual property
infringement suit brought by Spectradyne, Inc. against its COMSAT
Video Enterprises, Inc. and On Command Video Corporation
subsidiaries as discussed in Note 7 to the corporation s 1993
financial statements. The corporation believes that these claims
are without merit and that the ultimate disposition of this matter
will not have a material effect on the corporation s financial
statements.
The corporation is engaged in a program to monitor a toxic
solvent spill of limited scope that occurred in California as
discussed in Note 6 to the corporation s 1993 financial statements.
The corporation believes that it has complied with remediation
requirements and that it has sufficient accruals to cover the
monitoring costs.
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4. New Accounting Pronouncements
Statement of Financial Accounting Standards (SFAS) No. 109,
Accounting for Income Taxes, was adopted by the corporation
effective January 1, 1993. The cumulative effect of adopting SFAS
No. 109 was to increase income by $1.2 million ($.03 per share) in
the first quarter of 1993.
SFAS No. 112, Employer s Accounting for Postemployment
Benefits, is effective for 1994. This statement requires that the
estimated cost of benefits provided to former or inactive employees
be accrued over the term of their active service as employees. The
effect of this new accounting pronouncement is not material to the
corporation, accordingly, no cumulative effect of adopting this
statement has been shown in the corporation s financial statements.
SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities, is effective for 1994. This statement requires
that certain investments in debt or equity securities be carried on
the balance sheet at fair value. The effect of adopting this
statement is not material to the corporation as of March 31, 1994.
5. Debt
In March 1994, INTELSAT issued $200.0 million of 6.625% notes
due March 22, 2004. Interest is payable annually in arrears. The
corporation has recorded its $40.4 million share of the long-term
debt.
The corporation increased its commercial paper program to $200
million in March 1994. At March 31, 1994, the corporation had $79.7
million in commercial paper borrowings.
6. Stockholders Equity
As discussed in Note 8 to the corporation s 1993 financial
statements, on June 1, 1993, the corporation effected a two-for-one
stock split on its common stock. All share and per share amounts
for the first quarter of 1993 have been restated for the stock
split.
7. Merger Agreement
In January 1994, the corporation entered into a definitive
merger agreement for the acquisition of Radiation Systems, Inc.
(RSi) as discussed in Note 15 to the corporation s 1994 financial
statements. Under the merger agreement, RSi will be merged into a
wholly owned subsidiary of the corporation, and each share of RSi s
common stock will be exchanged for $18.25 in the corporation s
common stock, based on the average closing price of the
corporation s stock during the 20 trading days ending five trading
days before the closing of the transaction. However, in no event
will a share of RSi common stock be exchanged for less than 0.638 or
more than 0.780 of a share of the corporation s common stock.
Page 6
<PAGE>
In May 1994, the corporation filed a registration statement on
Form S-4 with the Securities and Exchange Commission registering the
shares of the corporation s common stock to be issued in connection
with the merger. Consummation of the merger is subject to, among
other things, the vote of RSi s shareholders at a meeting scheduled
for June 3, 1994. If the merger is approved and the other
conditions are satisfied, it is expected that the merger will be
consummated immediately following the meeting and that RSi s results
of operations will be included with the corporation s consolidated
results of operations beginning with the second quarter of 1994.
The transaction is expected to be treated as a pooling of interests
for accounting purposes.
The corporation has incurred professional fees and expenses
associated with the merger amounting to approximately $1 million.
These costs have been deferred on the corporation s balance sheet as
of March 31, 1994. All merger costs will be charged to expense when
the proposed merger is consummated.
As discussed in Note 15 to the corporation s 1993 financial
statements, two class-action lawsuits have been filed challenging
the merger. The parties have stipulated to consolidate the two
actions and have agreed that the defendants will have ten days from
the date the stipulation is approved by the court to respond to the
consolidated complaint. The corporation believes that the lawsuits
are without merit and that the ultimate disposition of these matters
will not have a material effect on the merger or on the
corporation s financial statements.
8. Subsequent Event
In April 1994, the corporation used commercial paper borrowings
to pay the $70.0 million balance of its 9.55% notes. This amount
was classified as a current liability on the December 31, 1993 and
March 31, 1994 balance sheets.
Page 7
<PAGE>
Item 2.
MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE QUARTER ENDED MARCH 31, 1994
- - --------------------------------------------------------------------------
ANALYSIS OF OPERATIONS
Consolidated Operations
Consolidated revenues for the first quarter of 1994 increased
$3.2 million over last year s first quarter. The Video Enterprises
and Technology Services segments reported significant revenue
growth. Other corporate activities reported in Eliminations and
Other also had higher revenues. The International Communications
and Mobile Communications segments had lower revenues.
Operating income was $3.5 million less than the first quarter
of 1993. Technology Services operating income improved $2.1 million
and the operating results for other corporate activities were $3.5
million better than last year s first quarter. Video Enterprises
operating results fell $0.1 million. International Communications
and Mobile Communications operating results fell $5.9 million and
$3.0 million, respectively, resulting in a net decline in
consolidated operating income.
Other income (expense) improved $2.2 million over the first
quarter of 1993, primarily attributable to costs incurred to retire
$30 million of long-term debt in last year s first quarter.
Interest costs were slightly less than last year s first
quarter. Although borrowings have increased, the corporation has
benefitted from lower interest rates this year. Capitalized
interest increased $0.6 million due to higher amounts of property
under construction primarily for INTELSAT and Inmarsat satellites.
The income tax provision for the first quarter of 1994
decreased slightly from last year s first quarter. This was
primarily attributable to accruals for tax contingencies in last
year s first quarter offset somewhat by a higher Federal tax rate
this year.
The corporation adopted Statement of Financial Accounting
Standards No. 109 (SFAS No. 109) in the first quarter of 1993. SFAS
No. 109 requires that deferred tax assets and liabilities be
adjusted to reflect current tax rates. The cumulative effect of
adopting this standard was to increase income by $1.2 million or
three cents per share for the first quarter of 1993.
Two new accounting standards, SFAS No. 112 and SFAS No. 115,
which are effective for 1994, do not have a material impact on the
corporation s financial statements.
Page 8
<PAGE>
Segment Operating Results
As discussed in Note 13 to the corporation s 1993 financial
statements, the corporation reports operating results in four
segments: International Communications, Mobile Communications, Video
Enterprises, and Technology Services.
Results by Segment (in millions):
Three Months Ended
March 31,
1994 1993
REVENUES -------------------
International Communications $ 63.9 $ 64.9
Mobile Communications 44.0 50.0
Video Enterprises 26.1 21.7
Technology Services 24.3 20.1
Eliminations and Other 11.2 9.6
------- ------
Total Revenues $ 169.5 $166.3
======= ======
OPERATING INCOME (LOSS)
International Communications $ 22.0 $ 27.9
Mobile Communications 10.0 13.0
Video Enterprises(1) 2.2 2.3
Technology Services .9 (1.2)
Other(1) (1.3) (4.8)
------- ------
Total Operating Income $ 33.8 $ 37.2
======= ======
________________________
(1) 1993 operating results for Video Enterprises and Other have been
restated for a change in the method of allocating division overhead
costs.
International Communications
Revenues were down $1.0 million from the first quarter of 1993
due to a $2.2 million decline in COMSAT World Systems (CWS) revenues
and a $1.2 million improvement in COMSAT International Ventures
(CIV) revenues. The decline in CWS revenues was due primarily to
the anticipated conversion of analog circuits to more efficient
digital service. Also, in the second half of 1993 CWS entered into
new long-term carrier agreements with AT&T, MCI and Sprint, its
three major international carrier customers, that provide
significant rate reductions in exchange for additional service
commitments. Increases in revenues from new long-term TV leases and
short-term TV leases related to the Winter Olympics partially offset
the effects of the circuit conversions and rate reductions. CIV s
revenue improvement was due primarily to strong traffic growth.
Page 9
<PAGE>
Operating income was down $5.9 million from last year s first
quarter due to a $5.7 million decrease in operating income for CWS
and $0.2 million decrease in operating results for CIV. CWS
operating income fell primarily because of the decline in revenue
and higher depreciation and capitalized interest amortization for
the INTELSAT VII series satellite which became operational early
this year. CIV s management, administrative and operating expenses
related to new and existing ventures grew faster than revenues.
Mobile Communications
Revenues decreased $6.0 million as compared to the first quarter
of 1993. This was primarily due to the absence of traffic related
to conflicts in Somalia which resulted in record system usage in
last year s first quarter. In addition, prices for shore-to-ship
Standard A traffic were reduced with new agreements set in place in
the third quarter of 1993. A growth in Standard M (the new digital
service) telephone minutes driven by an increase in terminals in
service helped to moderate the loss in Standard A traffic.
Operating income decreased $3.0 million relative to the first
quarter of 1993. Savings in satellite use charges due to lower
system utilization partially offset the loss of revenues. An
increase in depreciation expense primarily for Inmarsat s new
headquarters building in London contributed to the decrease in
operating income.
Video Enterprises
Revenues increased $4.4 million as compared to last year s first
quarter. This is primarily due to higher revenues from rooms
equipped with the On Command Video (OCV) system, partially offset by
a decline in revenues from non-OCV system hotel rooms. The number
of rooms equipped with the OCV system has nearly tripled since the
first quarter of 1993. Non-OCV system rooms have decreased due to
conversions to the OCV system and contract expirations.
Operating income declined $0.1 million since last year s first
quarter. OCV system installation and maintenance costs were higher
due to the poor weather during the first quarter this year and to
delays related to the earthquake in California. Depreciation
expense has risen with the increase in OCV systems installed. These
factors more than offset the growth in revenues.
Technology Services
Revenues improved $4.2 million over the first quarter of 1993
primarily due to work on contracts in Guatemala and Cote d Ivoire
(Ivory Coast).
Operating income increased $2.1 million, up from a loss of $1.2
million in the first quarter of 1993. Operating margins from the
Guatemala contract and lower development expenses contributed to
this improvement. Additionally, the first quarter of 1993 included
a reserve recorded for the possible loss on a contract.
Page 10
<PAGE>
Eliminations and Other
Other revenues grew $1.6 million over the first quarter of 1993.
This was primarily attributable to increased ticket sales for the
Denver Nuggets. The net operating loss from other corporate
activities decreased $3.5 million due to the improvement in the
Denver Nuggets operating results and due to a reserve recorded in
last year s first quarter for costs related to the corporation s
move to its new headquarters facility. The Nuggets results have
been boosted by higher ticket sales and advertising revenues.
Outlook
The corporation expects only moderate growth in revenues and
operating income in its International Communications segment for the
remainder of the year. Some of the International Communications
revenue gains will be offset by increased depreciation from
additional INTELSAT VII series satellites which are expected to be
launched later this year. The Mobile Communications business is
expected to continue to face increased competition and sluggish
demand due to a leveling in overall Inmarsat system traffic. Absent
unforeseen significant world events, 1994 revenues and operating
income are expected to improve only moderately over 1993. The Video
Enterprises segment expects growth in revenues and operating income
as additional hotel rooms are installed with the OCV system. The
corporation has introduced corporate-wide cost control measures such
as salary and hiring freezes to reduce operating expenses and to help
improve operating results in all operating segments for 1994.
The Denver Nuggets are expected to show improved operating
results for 1994 relative to prior years. In May 1994, the team
entered the second round of the National Basketball Association
playoffs. The corporation will benefit from the team s share of
additional game revenues in addition to anticipated higher ticket
sales and advertising revenues in the next season. The corporation
will also benefit from the team s share of NBA franchise expansion
revenues. Two expansion teams are expected to provide more than $4
million each to the corporation in 1995 and 1996.
The corporation expects to complete the planned merger with
Radiation Systems, Inc. in the second quarter of this year (see Note
6 to the accompanying financial statements). This is expected to
result in a significant boost to revenues, operating income, and net
income, absent the one-time merger costs. However, the transaction
is expected to have a slightly dilutive effect on earnings per share
because of the additional shares of COMSAT stock to be issued in the
merger.
Page 11
<PAGE>
In May 1994, Inmarsat announced that it will develop a prospectus
seeking investment for an affiliate company which will develop a new
intermediate orbit satellite system to provide global hand-held
communications services. The proposed $2.4 billion system, known as
Inmarsat-P, is planned to be in service by the end of the decade.
It is planned to provide hand-held telephone, fax, data and other
services to users anywhere in the world. Inmarsat expects that Inmarsat
and its signatories will own at least 70 percent of the planned
company. The corporation has not yet determined its desired level
of participation in the new company.
LIQUIDITY AND CAPITAL RESOURCES
The corporation reduced its ownership share of INTELSAT from
20.9% to 20.2% and of Inmarsat from 23.0% to 22.4% during the first
quarter of 1994. The corporation received $10.1 million cash
proceeds from these share reductions and the balance sheet includes
a $5.1 million receivable at March 31, 1994 for the balance due.
The corporation used the cash proceeds to repay commercial paper
debt.
The corporation made cash investments in property and equipment
of $85.3 million during the quarter. The amounts were invested
largely in the International Communications, Mobile Communications
and Video Enterprises divisions totalling $41.3, $16.1 and $27.1
million, respectively. These expenditures were primarily for
satellite construction programs and the installation of OCV systems.
The corporation also invested $11.6 million in new and existing
international ventures.
In March 1994, INTELSAT issued $200 million of 6.625% notes. The
corporation has recorded its $40.4 million share of the long-term
debt. Proceeds from the debt were primarily used to repay an
advance from INTELSAT which was included in amounts due from related
parties on the December 31, 1993 balance sheet.
The corporation s working capital deficit improved $21.7 million
from December 31, 1993 to March 31, 1994. This is attributable to
an increase in cash and other current assets of $12.0 million and a
decrease in current liabilities of $9.7 million. The decrease in
current liabilities is due, among other things, to the repayment of
advances from INTELSAT with the proceeds of long-term notes as
discussed above.
In April 1994, the corporation used commercial paper borrowings
to pay off the $70.0 million balance of its 9.55% notes. This
amount was classified as a current liability on the March 31, 1994
balance sheet.
Page 12
<PAGE>
The corporation has access to short- and long-term financing at
favorable rates with an A rating from Standard and Poor s and an A-2
from Moody s. The corporation s funding activities, as regulated by
the Federal Communications Commission, allow long-term financing up
to 45% of total capital and $200 million in short-term borrowings.
In March 1994, the corporation increased its commercial paper
program from $125 million to $200 million. The corporation
anticipates that it will issue additional long-term debt during 1994
which will reduce commercial paper obligations.
Page 13
<PAGE>
Part II
OTHER INFORMATION
Item 1. Legal Proceedings
See Note 3 on page 5 and Note 7 on pages 6 and 7 of this
Form 10-Q, incorporated herein by reference.
Item 2. Change in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. (a) Exhibits
No. 11 - Computation of per share earnings
(b) Reports on Form 8-K
(i) Report dated January 30, 1994, filing a press
release announcing COMSAT Corporation entering into
a definitive merger agreement for the acquisition of
Radiation Systems, Inc.
(ii) Report dated February 16, 1994, filing the
corporation s financial statements for the years
ended December 31, 1993, 1992 and 1991, together
with the Independent Auditors Report.
Page 14
<PAGE>
(iii) Report dated February 18, 1994, filing a
joint press release of the corporation and Radiation
Systems, Inc., describing purported shareholder
class action lawsuits filed in Nevada challenging
the corporation s definitive merger agreement for
the acquisition of Radiation Systems, Inc.
Page 15
<PAGE>
SIGNATURES
- - --------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
COMSAT Corporation
By /s/ Allen E. Flower
---------------------------
Allen E. Flower
Controller
Date: May 16, 1994
Page 16
<PAGE>
Exhibit 11
Computation of Earnings Per Share
Page 17
<PAGE>
Exhibit 11
COMSAT CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per-share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1994 1993
---- ----
<S> <C> <C>
PRIMARY
Earnings:
Income Before Cumulative Effect
of Accounting Change $18,293 $18,313
Cumulative Effect of Accounting Change - 1,238
------- -------
Net Income $18,293 $19,551
======= =======
Shares:
Weighted Average Number of Common
Shares Outstanding 40,261 39,677
Add - Shares Issuable from Assumed
Exercise of Options 776 669
------- -------
Weighted Average Shares 41,037 40,346
======= =======
Primary Earnings Per Share:
Before Cumulative Effect of Accounting
Change $0.45 $0.45
Cumulative Effect of Accounting Change - 0.03
----- -----
Net Income $0.45 $0.48
===== =====
ASSUMING FULL DILUTION
Earnings:
Income Before Cumulative Effect
of Accounting Change $18,293 $18,313
Cumulative Effect of Accounting Change - 1,238
------- -------
Net Income $18,293 $19,551
======= =======
Shares:
Weighted Average Number of Common Shares
Outstanding 40,261 39,677
Add - Shares Issuable from Assumed
Exercise of Options 788 764
------- -------
Weighted Average Shares 41,049 40,441
======= =======
Fully Diluted Earnings Per Share:
Before Cumulative Effect of Accounting
Change $0.45 $0.45
Cumulative Effect of Accounting Change - 0.03
----- -----
Net Income $0.45 $0.48
===== =====
</TABLE>