UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997.
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 1-8957
ALASKA AIRLINES, INC.
(Exact name of registrant as specified in its charter)
Alaska 92-0009235
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19300 Pacific Highway South, Seattle, Washington 98188
(Address of principal executive offices)
Registrant's telephone number, including area code: (206) 431-7079
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
The registrant has 500 common shares, par value $1.00, outstanding at
September 30, 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Attached are the following Alaska Airlines, Inc. (the Company or Alaska)
unaudited financial statements: (i) balance sheets as of September 30, 1997
and December 31, 1996; (ii) statements of income for the quarters and nine
months ended September 30, 1997 and 1996; (iii) statement of shareholder's
equity for the nine months ended September 30, 1997; and, (iv) statements
of cash flows for the nine months ended September 30, 1997 and 1996. Also
attached are the accompanying notes to the Company's financial statements
that have changed significantly during the nine months ended September 30,
1997. These statements, which should be read in conjunction with the
financial statements in the Company's annual report on Form 10-K for the
year ended December 31, 1996, include all adjustments that are, in the
opinion of management, necessary for a fair presentation of the results for
the interim periods. The adjustments made were of a normal recurring
nature.
The Company is a wholly owned subsidiary of Alaska Air Group, Inc. (Air
Group) whose principal subsidiaries are Alaska Airlines, Inc. and Horizon
Air Industries, Inc.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
Third Quarter 1997 Compared with Third Quarter
Net income for the third quarter of 1997 was $40.2 million compared with a
net income of $31.5 million in 1996. Operating income for the third
quarter of 1997 was $69.3 million compared to $57.0 million for 1996. The
larger operating income reflects higher passenger yields and lower fuel
prices. Airline financial and statistical data is shown following the
financial statements. A discussion of this data follows.
Operating income increased 21.6% to $69.3 million, resulting in a 16.5%
operating margin as compared to a 14.9% margin in 1996. Operating revenue
per available seat mile (ASM) increased 7.7% to 10.06 cents while operating
expenses per ASM increased 5.7% to 8.40 cents.
The increase in revenue per ASM was due to a 9.0% increase in system
passenger yield, offset by a modest decrease in passenger load factor.
Most markets experienced increases in yields, including the three largest
(Southern California, Seattle-Anchorage and Northern California). The
higher load factor in 1996 was due to extremely low fares available in
certain markets during 1996.
Other-net revenues increased 6.3% primarily due to increased revenues from
Alaska's frequent flyer program.
The table below shows the major operating expense elements on a cost per
ASM basis for Alaska for the third quarters of 1996 and 1997.
Alaska Airlines Operating Expenses Per ASM (In Cents)
1996 1997 Change % Change
Wages and benefits 2.44 2.67 .23 9
Employee profit sharing .19 .16 (.03) NM
Contracted services .22 .26 .04 18
Aircraft fuel 1.38 1.18 (.20) (14)
Aircraft maintenance .32 .43 .11 34
Aircraft rent .88 .90 .02 2
Food and beverage service .30 .31 .01 3
Commissions .63 .72 .09 14
Other selling expenses .46 .49 .03 7
Depreciation and amortization .35 .35 -- --
Gain on sale of assets (.09) (.01) .08 NM
Landing fees and other rentals .32 .34 .02 6
Other .55 .60 .05 9
Alaska Airlines Total 7.95 8.40 .45 6
NM = Not Meaningful
Alaska's higher unit costs were primarily due to increased labor and
aircraft maintenance costs. Significant unit cost changes are discussed
below.
Employees increased 8.3% (primarily in reservations and customer service
positions) to improve on-time performance, which improved from 73% on-time
in 1996 to 78% on-time in 1997. Excluding profit sharing, average wages
and benefits per employee were up 2.8% primarily due to higher pilot wage
rates and higher health insurance costs. The net effect was that wages and
benefits expense increased more than the ASM growth, resulting in a 9%
increase in cost per ASM.
Effective for 1997, Alaska changed its profit sharing program so that
eligible employees will receive their pro rata share of 10% of Alaska's
adjusted pre-tax profits. Actual profit sharing is based on full year
results and will be calculated and paid in early 1998.
Fuel expense per ASM decreased 14%, due to a 14% decrease in the price of
fuel.
Maintenance expense per ASM increased 34% because Alaska performed more
repair work that is expensed currently and less major airframe and engine
overhaul work which is capitalized.
Commission expense per ASM increased 14%, in line with the 11% increase in
passenger revenues.
Other expense per ASM increased 9%. The increase is primarily due to
higher costs related to property taxes, flight crew hotels, employee hiring
and communications.
Other Income (Expense) Non-operating expense decreased $2.4 million to
$1.7 million primarily due to smaller average debt balances and lower
interest rates on variable interest rate debt.
Nine Months 1997 Compared with Nine Months 1996
Net income for the nine months ended September 30, 1997 was $61.5 million,
compared with a net income of $45.3 million in 1996. Operating income for
the first nine months of 1997 increased 20.8% to $109.9 million, resulting
in a 10.0% operating margin as compared to a 9.1% margin in 1996.
Operating revenue per ASM increased 7.6% to 9.47 cents while operating
expenses per ASM increased 6.4% to 8.53 cents. The increase in revenue per
ASM was due to a 2.2 point improvement in system passenger load factor
combined with a 5.1% increase in system passenger yield.
Unit costs increased 6.4% due to a 9.0% increase in employees, increased
pilot wage rates, $2.1 million more profit sharing expense, higher ground
handling and security costs, increased aircraft maintenance expense and
costs associated with higher load factors.
Income Tax Expense Accounting standards require the Company to provide for
income taxes each quarter based on its estimate of the effective tax rate
for the full year. The volatility of air fares and the seasonality of the
Company's business make it very difficult to estimate full-year pretax
results. In addition, a relatively small change in pretax results can
cause a significant change in the effective tax rate due to the magnitude
of nondeductible expenses, such as goodwill amortization and employee per
diem costs. In estimating the 40.7% tax rate for the first nine months of
1997, the Company considered a variety of factors, including the U.S.
federal rate of 35%, estimates of nondeductible expenses and state income
taxes, and the 38.8% tax rate used for full year 1996. This rate is
evaluated each quarter and adjustments are made if necessary.
Liquidity and Capital Resources
The table below presents the major indicators of financial condition and
liquidity.
Dec 31, 1996 Sep 30, 1997 Change
(In millions, except debt-to-equity)
Cash and marketable securities $101.6 $191.5 $89.9
Working capital (deficit) (152.0) (97.1) 54.9
Long-term debt and
capital lease obligations 217.8 225.3 7.5
Shareholders' equity 357.0 418.5 61.5
Debt-to-equity 38%:62% 35%:65% NA
The Company's cash and marketable securities portfolio increased by $90
million during the first nine months of 1997. Operating activities
provided $227 million of cash during this period. Additional cash was
provided by the sale and leaseback of four B737-400 aircraft ($124 million)
and issuance of long-term debt ($28 million). Cash was used for $225
million of capital expenditures including the purchase of two new MD-83
aircraft, three new B737-400 aircraft, a previously leased B737-200C
aircraft, flight equipment deposits and airframe and engine overhauls, net
repayment of short-term borrowings ($47 million) and the repayment of debt
($16 million).
In June 1997, Standard & Poors revised its outlook on Alaska to positive
from stable, citing a stabilized competitive position and improving
financial profile.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
In October 1991, Alaska gave notice of termination of its code sharing and
frequent flyer relationship with MarkAir, an airline based in the state of
Alaska. Both companies have filed suit against one another in connection
with that termination alleging breach of contract and other causes of
action under state law. In June 1992, MarkAir filed for protection under
Chapter 11 of the U.S. Bankruptcy Code and ceased operations in 1995. In
June 1997 MarkAir claimed damages of $57 million (later revised to $70
million) in connection with Alaska's actions. If MarkAir were to prevail,
the after-tax effect would be to reduce shareholders' equity by
approximately $42 million or 10%. However, the Company believes that it
has adequate defenses and is vigorously defending itself against the
lawsuit.
ITEM 5. Other Information
The U.S. 10% passenger ticket tax, the 6.25% cargo waybill tax and the $6
per passenger international departure tax expired on December 31, 1996, and
were all reinstated for the period March 7, 1997 through September 30,
1997. As part of the Taxpayer Relief Act, the cargo waybill tax was
extended in its current form and the other taxes in revised forms through
September 30, 2007. The passenger ticket tax was replaced with a new
system that combines a percentage tax with a per passenger segment fee.
For sales and travel beginning October 1, 1997, the ticket tax is 9% plus
$1 per segment. The percentage tax is scheduled to decrease over time and
the segment fee is scheduled to increase. The $6 international departure
tax has increased to $12 and a new $12 international arrival tax has been
added. However, the Act retains the $6 rate for travel between Alaska and
the U.S. mainland. This tax and the international taxes will be indexed to
the CPI beginning January 1, 1999.
The Taxpayer Relief Act also included these items that will affect the
Company and the airline industry: (a) a new tax of 7.5% on payments to air
carriers for the sale of miles in frequent flyer programs; (b) a phased-in
increase from 50% to 80% for the deductible percentage of per diems paid to
flight crews; and (c) faster cost recovery for alternative minimum tax
purposes of aircraft purchased in 1999 and later years.
In September 1997, the union contract governing approximately 1,800
Mechanic, Rampservice and related classifications at Alaska Airlines became
amendable. The union and Alaska have begun negotiating a new contract.
During October 1997, the Airline Pilots Association and Alaska agreed on a
new 5 and 1/2 year contract (amendable in May 2002) covering Alaska's 1,075
pilots.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial data schedule.
(b) No reports on Form 8-K were filed during the third quarter of 1997.
Signatures
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ALASKA AIRLINES, INC.
Registrant
Date: October 27, 1997
/s/ John F. Kelly
John F. Kelly
Chairman, President and Chief Executive Officer
/s/ Harry G. Lehr
Harry G. Lehr
Senior Vice President/Finance
(Principal Financial Officer)
<PAGE>
<TABLE>
BALANCE SHEET
Alaska Airlines, Inc.
<CAPTION>
ASSETS
Dec. 31, Sept. 30,
(In Millions) 1996 1997
<S> <C> <C>
Current Assets
Cash and cash equivalents $49.2 $98.2
Marketable securities 52.4 93.3
Receivables from related companies 100.1 78.1
Receivables - net 59.8 82.9
Inventories and supplies 28.6 25.6
Prepaid expenses and other assets 76.8 59.0
Total Current Assets 366.9 437.1
Property and Equipment
Flight equipment 753.1 808.2
Other property and equipment 236.0 259.7
Deposits for future flight equipment 59.0 62.6
1,048.1 1,130.5
Less accumulated depreciation and amortization 282.4 312.0
765.7 818.5
Capital leases
Flight and other equipment 44.4 44.4
Less accumulated amortization 25.4 27.0
19.0 17.4
Total Property and Equipment - Net 784.7 835.9
Intangible Assets - Subsidiaries 15.0 14.6
Other Assets 81.3 79.0
Total Assets $1,247.9 $1,366.6
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
BALANCE SHEET
Alaska Airlines, Inc.
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
Dec. 31, Sept. 30,
(In Millions) 1996 1997
<S> <C> <C>
Current Liabilities
Accounts payable $71.0 $68.8
Accrued aircraft rent 42.4 47.0
Accrued wages, vacation and payroll taxes 44.1 54.5
Other accrued liabilities 74.3 97.7
Short-term borrowings
(Interest rate: 1996 - 5.6%) 47.0 -
Air traffic liability 162.0 183.4
Note payable to related company 54.0 54.0
Current portion of long-term debt and
capital lease obligations 24.1 28.8
Total Current Liabilities 518.9 534.2
Long-Term Debt and Capital Lease Obligations 217.8 225.3
Other Liabilities and Credits
Deferred income taxes 65.6 88.0
Deferred income 11.1 16.1
Other liabilities 77.5 84.5
154.2 188.6
Shareholder's Equity 0.0 0.0
Common stock, $1 par value 0.0 0.0
Authorized: 1,000 shares
Issued: 1996 and 1997 - 500 shares 0.0 0.0
Capital in excess of par value 225.8 225.8
Retained earnings 131.2 192.7
357.0 418.5
Total Liabilities and Shareholder's Equity $1,247.9 $1,366.6
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF INCOME
Alaska Airlines, Inc.
<CAPTION>
Three Months Ended September 30
(In Millions except Per share Amounts) 1996 1997
<S> <C> <C>
Operating Revenues
Passenger $344.3 $380.5
Freight and mail 22.6 22.9
Other - net 15.9 16.9
Total Operating Revenues 382.8 420.3
Operating Expenses
Wages and benefits 108.0 118.5
Contracted services 9.1 11.0
Aircraft fuel 56.7 49.4
Aircraft maintenance 12.9 17.8
Aircraft rent 36.2 37.7
Food and beverage service 12.2 12.7
Commissions 25.6 30.1
Other selling expenses 18.9 20.3
Depreciation and amortization 14.3 14.4
Gain on sale of assets (3.8) (0.4)
Landing fees and other rentals 13.0 14.1
Other 22.7 25.4
Total Operating Expenses 325.8 351.0
Operating Income 57.0 69.3
Other Income (Expense)
Interest income 2.7 3.3
Interest expense (7.1) (6.4)
Interest capitalized 0.1 0.8
Other - net 0.2 0.6
(4.1) (1.7)
Income before income tax 52.9 67.6
Income tax expense 21.4 27.4
Net Income $31.5 $40.2
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF INCOME
Alaska Airlines, Inc.
<CAPTION>
Nine Months Ended September 30
(In Millions) 1996 1997
<S> <C> <C>
Operating Revenues
Passenger $892.1 $984.0
Freight and mail 63.4 62.3
Other - net 49.3 51.6
Total Operating Revenues 1,004.8 1,097.9
Operating Expenses
Wages and benefits 294.3 327.4
Contracted services 26.7 30.9
Aircraft fuel 148.9 150.4
Aircraft maintenance 40.8 48.8
Aircraft rent 108.4 110.2
Food and beverage service 33.6 34.9
Commissions 69.0 77.9
Other selling expenses 49.8 52.2
Depreciation and amortization 42.4 42.1
Gain on sale of assets (3.6) (0.3)
Landing fees and other rentals 37.5 40.4
Other 66.0 73.1
Total Operating Expenses 913.8 988.0
Operating Income 91.0 109.9
Other Income (Expense)
Interest income 8.4 8.4
Interest expense (23.6) (19.1)
Interest capitalized 0.1 2.4
Other - net 0.7 2.1
(14.4) (6.2)
Income before income tax 76.6 103.7
Income tax expense 31.3 42.2
Net Income $45.3 $61.5
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF SHAREHOLDER'S EQUITY
Alaska Airlines, Inc.
<CAPTION>
Capital in
Common Excess of Retained
(In Millions) Stock Par Value Earnings Total
<S> <C> <C> <C> <C>
Balances at December 31, 1996 $ - $225.8 $131.2 $357.0
Net income for the nine months
ended September 30, 1997 61.5 61.5
Balances at September 30, 1997 $ - $225.8 $192.7 $418.5
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CASH FLOWS
Alaska Airlines, Inc.
<CAPTION>
Nine Months Ended September 30 (In Millions) 1996 1997
<S> <C> <C>
Cash flows from operating activities:
Net income $45.4 $61.5
Adjustments to reconcile net income to cash:
Depreciation and amortization 42.4 42.1
Amortization of airframe and engine overhauls 20.9 21.6
Gain on sale of assets (3.6) (0.3)
Increase in deferred income taxes 27.1 22.4
Decrease (increase) in accounts receivable 6.1 (1.1)
Decrease in other current assets 0.6 20.9
Increase in air traffic liability 43.0 21.3
Increase in other current liabilities 17.6 36.4
Other-net 5.6 2.4
Net cash provided by operating activities 205.1 227.2
Cash flows from investing activities:
Proceeds from disposition of assets 18.6 0.5
Purchases of marketable securities (45.6) (236.2)
Sales and maturities of marketable securities 75.4 195.2
Restricted deposits 0.3 (2.0)
Additions to flight equipment deposits (33.2) (38.9)
Additions to property and equipment (141.4) (186.2)
Net cash used in investing activities (125.9) (267.6)
Cash flows from financing activities:
Proceeds from short-term borrowings - 56.4
Repayment of short-term borrowings (65.9) (103.4)
Proceeds from sale and leaseback transactions 85.6 124.3
Proceeds from issuance of long-term debt - 28.0
Long-term debt and capital lease payments (72.7) (15.9)
Net cash used in financing activities (53.0) 89.4
Net increase in cash and cash equivalents 26.2 49.0
Cash and cash equivalents at beginning of period 25.6 49.2
Cash and cash equivalents at end of period $51.8 $98.2
Supplemental disclosure of cash paid during the period for:
Interest (net of amount capitalized) $23.7 $16.6
Income taxes 7.5 6.0
Noncash investing and financing activities:
1997 - None
1996 - Alaska Airlines transferred an MD-83 aircraft to Alaska Air Group
in exchange for a $36 million receivable.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS THAT HAVE CHANGED SIGNIFICANTLY DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1997
Alaska Airlines, Inc.
Note 1. Summary of Significant Policies (See Note 1 to Financial
Statements at December 31, 1996)
Basis of presentation
Effective with the second quarter 1997, three new line items have been
added to the statement of income to provide more details of operating
expenses. Contracted services includes the expenses for aircraft ground
handling, security, temporary employees and similar outside services.
Other selling expenses includes computerized reservations systems (CRS)
charges, credit card commissions, advertising and promotional costs.
Property, Equipment and Depreciation
Effective January 1, 1997, the estimated salvage value of B737-400 flight
equipment was changed to 10% from 20%. The new estimate was adopted to
recognize the lower expected salvage values for this aircraft type. The
annual effect of the change will be to increase depreciation expense $0.5
million and decrease net income $0.3 million.
Note 2. Commitments (See Note 6 to Financial Statements at December 31,
1996)
During the first nine months of 1997, Alaska's lease commitments increased
approximately $200 million due to the sale and leaseback of four B737-400
aircraft under 18-year operating leases.
<TABLE>
<CAPTION> Alaska Airlines Financial and Statistical Data
Quarter Ended September 30 Nine Months Ended Sept. 30
Financial Data (in millions): 1996 1997 % Change 1996 1997 % Change
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues:
Passenger $344.3 $380.5 10.5 $892.1 $984.0 10.3
Freight and mail 22.6 22.9 1.3 63.4 62.3 (1.7)
Other - net 15.9 16.9 6.3 49.3 51.6 4.7
Total Operating Revenues 382.8 420.3 9.8 1,004.8 1,097.9 9.3
Operating Expenses:
Wages and benefits 100.4 111.8 11.4 286.7 317.7 10.8
Employee profit sharing 7.6 6.7 NM 7.6 9.7 NM
Contracted services 9.1 11.0 20.9 26.7 30.9 15.7
Aircraft fuel 56.7 49.4 (12.9) 148.9 150.4 1.0
Aircraft maintenance 12.9 17.8 38.0 40.8 48.8 19.6
Aircraft rent 36.2 37.7 4.1 108.4 110.2 1.7
Food and beverage service 12.2 12.7 4.1 33.6 34.9 3.9
Commissions 25.6 30.1 17.6 69.0 77.9 12.9
Other selling expenses 18.9 20.3 7.4 49.8 52.2 4.8
Depreciation and amortization 14.3 14.4 0.7 42.4 42.1 (0.7)
Gain on sale of assets (3.8) (0.4) NM (3.6) (0.3) NM
Landing fees and other rentals 13.0 14.1 8.5 37.5 40.4 7.7
Other 22.7 25.4 11.9 66.0 73.1 10.8
Total Operating Expenses 325.8 351.0 7.7 913.8 988.0 8.1
Operating Income 57.0 69.3 21.6 91.0 109.9 20.8
Interest income 2.7 3.3 8.4 8.4
Interest expense (7.1) (6.4) (23.6) (19.1)
Interest capitalized 0.1 0.8 0.1 2.4
Other - net 0.2 0.6 0.7 2.1
(4.1) (1.7) (14.4) (6.2)
Income Before Income Tax $52.9 $67.6 $76.6 $103.7
Operating Statistics:
Revenue passengers (000) 3,420 3,441 0.6 9,001 9,325 3.6
RPMs (000,000) 2,893 2,933 1.4 7,524 7,896 4.9
ASMs (000,000) 4,100 4,179 1.9 11,409 11,589 1.6
Passenger load factor 70.6% 70.2% (0.4)pts 65.9% 68.1% 2.2 pts
Breakeven load factor 59.7% 56.6% (3.1)pts 60.4% 60.5% 0.1 pts
Yield per passenger mile 11.90c 12.97c 9.0 11.86c 12.46c 5.1
Operating revenue per ASM 9.34c 10.06c 7.7 8.81c 9.47c 7.6
Operating expenses per ASM 7.95c 8.40c 5.7 8.01c 8.53c 6.4
Fuel cost per gallon 77.6c 66.9c (13.8) 73.5c 72.8c (0.9)
Fuel gallons (000,000) 73.1 73.9 1.1 202.7 206.4 1.8
Average number of employees 7,877 8,534 8.3 7,562 8,240 9.0
Aircraft utilization (block hours) 11.9 11.9 0.0 11.4 11.5 0.9
Operating fleet at period-end 75 78 4.0 75 78 4.0
NM = Not Meaningful
c=cents
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALASKA
AIRLINES INC THIRD QUARTER 1997 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 98200
<SECURITIES> 93300
<RECEIVABLES> 161000
<ALLOWANCES> 0
<INVENTORY> 25600
<CURRENT-ASSETS> 59000
<PP&E> 1174900
<DEPRECIATION> 339000
<TOTAL-ASSETS> 1366600
<CURRENT-LIABILITIES> 534200
<BONDS> 225300
0
0
<COMMON> 1
<OTHER-SE> 418499
<TOTAL-LIABILITY-AND-EQUITY> 1366600
<SALES> 1097900
<TOTAL-REVENUES> 1097900
<CGS> 988000
<TOTAL-COSTS> 988000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19100
<INCOME-PRETAX> 103700
<INCOME-TAX> 42200
<INCOME-CONTINUING> 61500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61500
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
