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 June 30, 1998.
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
June 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 June 30, 1998 and
December 31, 1997; (ii) statements of income for the quarters and six
months ended June 30, 1998 and 1997; (iii) statement of shareholder's
equity for the six months ended June 30, 1998; and, (iv) statements of cash
flows for the six months ended June 30, 1998 and 1997. Also attached are
the accompanying notes to the Company's financial statements that have
changed significantly during the six months ended June 30, 1998. 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, 1997, 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
Second Quarter 1998 Compared with Second Quarter 1997
Net income for the second quarter of 1998 was $36.5 million compared with a
net income of $23.4 million in 1997. Operating income for the second
quarter of 1998 was $57.7 million compared with $42.1 million for 1997.
Lower fuel prices, adjusted for profit sharing, accounted for $10.0 million
of the $15.6 million improvement in operating income. Airline financial and
statistical data is shown following the financial statements. A discussion
of this data follows.
Operating income increased 37.1% to $57.7 million, resulting in a 14.3%
operating margin as compared to a 11.5% margin in 1997. Operating revenue
per available seat mile (ASM) increased 1.2% to 9.67 cents while operating
expenses per ASM decreased 2.0% to 8.29 cents. The increase in revenue per
ASM was due to a 0.5 point improvement in system passenger load factor
combined with a 0.9% increase in system passenger yield. The higher load
factor and higher yield reflect a more stabilized competitive environment
in 1998.
Freight and mail revenues increased 4.1% due to higher freight volumes.
Other-net revenues increased 6.6% due to increased revenue from travel
partners in Alaska's frequent flyer program.
The table below shows the major operating expense elements on a cost per
ASM basis for Alaska for the second quarters of 1997 and 1998.
<TABLE>
<CAPTION>
Alaska Airlines Operating Expenses Per ASM (In Cents)
<S> <C> <C> <C> <C>
1997 1998 Change % Change
Wages and benefits 2.79 2.81 .02 1
Employee profit sharing .08 .14 .06 NM
Contracted services .26 .31 .05 19
Aircraft fuel 1.23 .96 (.27) (22)
Aircraft maintenance .42 .54 .12 29
Aircraft rent .94 .92 (.02) (2)
Food and beverage service .30 .29 (.01) (3)
Commissions .66 .57 (.09) (14)
Other selling expenses .41 .45 .04 10
Depreciation and amortization .36 .37 .01 3
Landing fees and other rentals .35 .37 .02 6
Other .66 .56 (.10) (15)
Alaska Airlines Total 8.46 8.29 (.17) (2)
NM = Not Meaningful
</TABLE>
Alaska's lower unit costs were primarily due to lower fuel prices, offset
by higher maintenance and profit sharing costs. Significant unit cost
changes are discussed below.
Contracted services per ASM increased 19%, primarily due to greater use of
temporary employees (particularly in computer systems development), higher
shipping charges incurred and increased navigation fees in Canada and
Mexico.
Fuel expense per ASM decreased 22%, due to a 22% decrease in the price of
fuel.
Maintenance expense per ASM increased 29%, primarily due to a B737-400
auxiliary power unit retrofit program, increased engine repairs, higher
cost of airframe materials and a greater number of annual aircraft
inspections (C checks) performed.
Commission expense per ASM decreased 14%, because the commission rate paid
to travel agents decreased from 10% to 8% for sales made October 1, 1997
and thereafter. As a percentage of passenger revenue, commissions expense
decreased 14%, from 7.7% to 6.6%
Other selling expenses per ASM increased 10%, primarily due to the timing
of recording advertising expenses. On a year-to-date basis, other selling
expenses per ASM is up 5%.
Other expense per ASM decreased 15%, primarily due to a $2.7 million
recovery of California property taxes that resulted from settlement of
industry litigation.
Nonoperating Income (Expense) The net of these items changed from $2.2
million expense to $3.0 million income due to more interest income earned
on higher cash balances and less intercompany interest expense incurred.
Six Months 1998 Compared with Six Months 1997
Net income for the six months ended June 30, 1998 was $51.1 million,
compared with a net income of $21.3 million in 1997. Operating income for
the first half of 1998 was $80.2 million compared to $40.6 million for
1997. Lower fuel prices, adjusted for profit sharing, accounted for $26.0
million of the $39.6 million improvement in operating income.
Operating income increased 97.5% to $80.2 million, resulting in a 10.7%
operating margin as compared to a 6.0% margin in 1997. Operating revenue
per ASM increased 2.6% to 9.38 cents while operating expenses per ASM
decreased 2.6% to 8.38 cents. The increase in revenue per ASM was due to a
3.4% increase in system passenger yield while the system passenger load
factor remained constant at 67.0%.
Unit costs decreased 2.6% due to lower fuel prices, partially offset by
higher maintenance and profit sharing costs.
Liquidity and Capital Resources
The table below presents the major indicators of financial condition and
liquidity.
<TABLE>
<CAPTION>
December 31, 1997 June 30, 1998 Change
(In millions, except debt-to-equity)
<S> <C> <C> <C>
Cash and marketable securities $212.4 $349.9 $137.5
Working capital (deficit) (151.4) (85.6) 65.8
Long-term debt and
capital lease obligations 215.3 183.3 (32.0)
Shareholders' equity 433.0 484.1 51.1
Debt-to-equity 33%:67% 27%:73% NA
</TABLE>
The Company's cash and marketable securities portfolio decreased by $138
million during the first six months of 1998. Operating activities provided
$193 million of cash during this period. Additional cash was provided by
the sale and leaseback of seven B737-400 aircraft ($224 million). Cash was
used for $249 million of capital expenditures, including the purchase of
eight new B737-400 aircraft, flight equipment deposits and airframe and
engine overhauls and the repayment of debt ($29 million).
Commitments During May 1998, Alaska ordered one Boeing 737-400 and two
Boeing 737-700 aircraft to be delivered in 1999, and three more B737-700s
to be delivered in 2000. At June 30, 1998, the Company had firm orders for
22 aircraft with a total cost of approximately $726 million as set forth
below.
<TABLE>
<CAPTION>
Delivery Period - Firm Orders
Aircraft 1998 1999 2000 2001 2002 Total
<S> <C> <C> <C> <C> <C> <C>
Boeing B737-400 1 3 -- -- -- 4
Boeing B737-700 -- 5 3 -- -- 8
Boeing B737-900 -- -- -- 5 5 10
Total 1 8 3 5 5 22
Cost (Millions) $32 $251 $93 $175 $175 $726
</TABLE>
Year 2000 Computer Issue The Company uses a significant number of computer
software programs and embedded operating systems that were not originally
designed to process dates beyond 1999. The Company has implemented a
project to ensure that the Company's systems will function properly in the
year 2000 and thereafter. The Company anticipates completing this project
for key systems in early 1999 and believes that, with modifications to its
existing software and systems and/or conversions to new software, the year
2000 issue will not pose significant operational problems. Most of the
Company's information technology projects in the last several years have
made the affected systems Year 2000 compliant. The direct costs of
projects solely intended to correct year 2000 problems are currently
estimated at less than $2 million. Additional systems currently under
review may require further resources. The Company does not expect any cost
increases to have a material effect on its results of operations.
The Company is also in contact with its significant suppliers and vendors
with which its systems interface and exchange data or upon which its
business depends. These efforts are designed to minimize the extent to
which its business will be vulnerable to their failure to remediate their
own year 2000 issues. The Company's business is also dependent upon
certain governmental organizations or entities such as the Federal Aviation
Administration (FAA) that provide essential aviation industry
infrastructure. The Company is working with the Airline Transport
Association to monitor the FAA's progress in making its systems year 2000
compliant. There can be no assurance that such third parties on which the
Company's business relies will successfully remediate their systems on a
timely basis. The Company's business, financial condition or results of
operations could be materially adversely affected by the failure of its
systems or those operated by other parties to operate properly beyond 1999.
Areas that could be adversely affected include flight operations,
maintenance, planning, reservations, sales, accounting and the frequent
flyer program. To the extent possible, the Company is developing and
executing contingency plans designed to allow continued operation in the
event of failure of third party systems or products.
New Accounting Standards During June 1998, the Financial Accounting
Standards Board issued FAS 133, Accounting for Derivative Instruments and
Hedging Activities The new standard requires companies to record
derivatives on the balance sheet as assets or liabilities, measured at fair
value. Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the derivative
and whether it qualifies for hedge accounting. Due to the Company's
minimal use of derivatives, the new standard is expected to have no
material impact on its financial position or results of operations. FAS
133 will be effective for the Company's fiscal year beginning January 1,
2000.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
In July 1998, the Company announced that it had reached an agreement in
principle with the trustee for creditors of the defunct MarkAir, Inc.
regarding a breach of contract lawsuit. A formal settlement agreement will
be executed if the agreement is approved by the bankruptcy court. If
approved, the $16.5 million settlement is expected to result in an after-
tax charge of $10.1 million in the third quarter of 1998.
ITEM 5. Other Information
During the first quarter of 1998, Alaska's mechanics, inspectors, cleaners,
janitors and fleet service employees voted to be represented by the
Aircraft Mechanics Fraternal Association (AMFA) rather than the
International Association of Machinists (IAM). The negotiation of an
initial contract began in July 1998. The IAM will continue to represent
Alaska's stock clerks and ramp service employees, whose contract became
amendable August 31, 1997. In July 1998, the Company and the IAM requested
mediation to help negotiate a new contract.
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 second quarter of 1998.
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: July 29, 1998
/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
December 31, June 30,
(In Millions) 1997 1998
<S> <C> <C>
Current Assets
Cash and cash equivalents $102.3 $152.5
Marketable securities 110.1 197.4
Receivables from related companies 4.3 4.2
Receivables - net 65.5 89.7
Inventories and supplies 26.5 23.6
Prepaid expenses and other assets 86.6 88.5
Total Current Assets 395.3 555.9
Property and Equipment
Flight equipment 886.4 923.7
Other property and equipment 222.8 229.0
Deposits for future flight equipment 80.0 63.3
1,189.2 1,216.0
Less accumulated depreciation and amortization 324.6 349.7
864.6 866.3
Capital leases:
Flight and other equipment 44.4 44.4
Less accumulated amortization 27.5 28.6
16.9 15.8
Total Property and Equipment - Net 881.5 882.1
Intangible Assets - Subsidiaries 14.5 14.2
Other Assets 79.4 79.0
Total Assets $1,370.7 $1,531.2
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
BALANCE SHEET
Alaska Airlines, Inc.
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
December 31, June 30,
(In Millions) 1997 1998
<S> <C> <C>
Current Liabilities
Accounts payable $55.8 $70.7
Payables to related companies 50.8 104.3
Accrued aircraft rent 47.7 54.9
Accrued wages, vacation and payroll taxes 60.5 55.3
Other accrued liabilities 83.0 95.2
Air traffic liability 166.2 229.6
Note payable to related company 54.0 -
Current portion of long-term debt and
capital lease obligations 28.7 31.5
Total Current Liabilities 546.7 641.5
Long-Term Debt and Capital Lease Obligations 215.3 183.3
Other Liabilities and Credits
Deferred income taxes 72.2 97.6
Deferred income 15.4 32.3
Other liabilities 88.1 92.4
175.7 222.3
Shareholder's Equity 0.0 0.0
Common stock, $1 par value 0.0 0.0
Authorized: 1,000 shares
Issued: 1997 and 1998 - 500 shares 0.0 0.0
Capital in excess of par value 225.8 225.8
Retained earnings 207.2 258.3
433.0 484.1
Total Liabilities and Shareholder's Equity $1,370.7 $1,531.2
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF INCOME
Alaska Airlines, Inc.
<CAPTION>
Three Months Ended June 30
(In Millions) 1997 1998
<S> <C> <C>
Operating Revenues
Passenger $326.0 $360.9
Freight and mail 21.9 22.8
Other - net 18.1 19.4
Total Operating Revenues 366.0 403.1
Operating Expenses
Wages and benefits 109.7 123.1
Contracted services 9.9 12.7
Aircraft fuel 47.3 39.8
Aircraft maintenance 16.2 22.4
Aircraft rent 36.2 38.3
Food and beverage service 11.6 12.1
Commissions 25.1 23.8
Other selling expenses 15.7 18.7
Depreciation and amortization 13.9 15.3
Loss on sale of assets 0.1 0.2
Landing fees and other rentals 13.6 15.4
Other 24.6 23.6
Total Operating Expenses 323.9 345.4
Operating Income 42.1 57.7
Nonoperating Income (Expense)
Interest income 2.7 5.5
Interest expense (6.5) (4.5)
Interest capitalized 0.8 1.5
Other - net 0.8 0.5
(2.2) 3.0
Income before income tax 39.9 60.7
Income tax expense 16.5 24.2
Net Income $23.4 $36.5
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF INCOME
Alaska Airlines, Inc.
<CAPTION>
Six Months Ended June 30
(In Millions) 1997 1998
<S> <C> <C>
Operating Revenues
Passenger $603.5 $670.7
Freight and mail 39.3 41.2
Other - net 34.8 35.3
Total Operating Revenues 677.6 747.2
Operating Expenses
Wages and benefits 208.9 235.8
Contracted services 19.9 24.7
Aircraft fuel 101.0 78.9
Aircraft maintenance 31.0 40.7
Aircraft rent 72.6 75.5
Food and beverage service 22.1 23.1
Commissions 47.7 45.4
Other selling expenses 31.8 35.9
Depreciation and amortization 27.7 30.4
Loss on disposition of assets 0.1 0.2
Landing fees and other rentals 26.3 28.7
Other 47.9 47.7
Total Operating Expenses 637.0 667.0
Operating Income 40.6 80.2
Nonoperating Income (Expense)
Interest income 5.1 9.9
Interest expense (12.7) (9.2)
Interest capitalized 1.5 2.6
Other - net 1.6 1.3
(4.5) 4.6
Income before income tax 36.1 84.8
Income tax expense 14.8 33.7
Net Income $21.3 $51.1
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, 1997 $ - $225.8 $207.2 $433.0
Net income for the six months
ended June 30, 1998 51.1 51.1
Balances at June 30, 1998 $ - $225.8 $258.3 $484.1
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CASH FLOWS
Alaska Airlines, Inc.
<CAPTION>
Six Months Ended June 30 (In Millions) 1997 1998
<S> <C> <C>
Cash flows from operating activities:
Net income $21.3 $51.1
Adjustments to reconcile net income to cash:
Depreciation and amortization 27.7 30.4
Amortization of airframe and engine overhauls 14.4 16.2
Loss on disposition of assets 0.1 0.2
Increase in deferred income taxes 14.7 25.4
Increase in accounts receivable (24.6) (24.1)
Decrease in other current assets 10.7 1.1
Increase in air traffic liability 56.3 63.5
Increase (decrease) in other current liabilities (18.7) 28.5
Other-net 1.0 0.5
Net cash provided by operating activities 102.9 192.8
Cash flows from investing activities:
Proceeds from disposition of assets - 0.4
Purchases of marketable securities (22.9) (123.2)
Sales and maturities of marketable securities 28.9 35.8
Restricted deposits (1.0) (1.0)
Additions to flight equipment deposits (21.3) (62.9)
Additions to property and equipment (115.3) (186.5)
Net cash used in investing activities (131.6) (337.4)
Cash flows from financing activities:
Proceeds from short-term borrowings 56.4 -
Repayment of short-term borrowings (75.0) -
Proceeds from sale and leaseback transactions 61.7 224.0
Proceeds from issuance of long-term debt 28.0 -
Long-term debt and capital lease payments (9.4) (29.2)
Net cash provided by financing activities 61.7 194.8
Net increase in cash and cash equivalents 33.0 50.2
Cash and cash equivalents at beginning of period 49.2 102.3
Cash and cash equivalents at end of period $82.2 $152.5
Supplemental disclosure of cash paid during the period for:
Interest (net of amount capitalized) $11.2 $7.7
Income taxes - $7.2
Noncash investing and financing activities:
1998 - A $54.0 million note payable to Alaska Air Group was exchanged
for a non-interest bearing payable.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS THAT HAVE CHANGED SIGNIFICANTLY DURING THE
SIX MONTHS ENDED JUNE 30, 1998
Alaska Airlines, Inc.
Note 1. Commitments (See Note 6 to Financial Statements at December 31,
1997)
During the first six months of 1998, Alaska's lease commitments increased
approximately $324 million due to the sale and leaseback of seven B737-400
aircraft under 18-year operating leases.
<PAGE>
<TABLE>
<CAPTION>
Alaska Airlines Financial and Statistical Data
Quarter Ended June 30 Six Months Ended June 30
Financial Data (in millions): 1997 1998 % Change 1997 1998 % Change
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues:
Passenger $326.0 $360.9 10.7 $603.5 $670.7 11.1
Freight and mail 21.9 22.8 4.1 39.3 41.2 4.8
Other - net 18.1 19.3 6.6 34.8 35.3 1.4
Total Operating Revenues 366.0 403.0 10.1 677.6 747.2 10.3
Operating Expenses:
Wages and benefits 106.7 117.1 9.7 205.9 227.8 10.6
Employee profit sharing 3.0 6.0 100.0 3.0 8.0 166.7
Contracted services 9.9 12.8 29.3 19.9 24.7 24.1
Aircraft fuel 47.3 39.8 (15.9) 101.0 78.9 (21.9)
Aircraft maintenance 16.2 22.4 38.3 31.0 40.7 31.3
Aircraft rent 36.2 38.3 5.8 72.6 75.5 4.0
Food and beverage service 11.6 12.2 5.2 22.1 23.1 4.5
Commissions 25.1 23.8 (5.2) 47.7 45.4 (4.8)
Other selling expenses 15.7 18.7 19.1 31.8 35.9 12.9
Depreciation and amortization 13.9 15.3 10.1 27.7 30.4 9.7
Loss on sale of assets 0.1 0.2 NM 0.1 0.2 NM
Landing fees and other rentals 13.6 15.4 13.2 26.3 28.7 9.1
Other 24.6 23.3 (5.3) 47.9 47.7 (0.4)
Total Operating Expenses 323.9 345.3 6.6 637.0 667.0 4.7
Operating Income 42.1 57.7 37.1 40.6 80.2 97.5
Interest income 2.7 5.6 5.1 9.9
Interest expense (6.5) (4.5) (12.7) (9.2)
Interest capitalized 0.8 1.5 1.5 2.6
Other - net 0.8 0.4 1.6 1.3
(2.2) 3.0 (4.5) 4.6
Income Before Income Tax $39.9 $60.7 $36.1 $84.8
Operating Statistics:
Revenue passengers (000) 3,114 3,321 6.6 5,884 6,183 5.1
RPMs (000,000) 2,621 2,876 9.7 4,963 5,335 7.5
ASMs (000,000) 3,829 4,166 8.8 7,410 7,964 7.5
Passenger load factor 68.5% 69.0% 0.5 pts 67.0% 67.0% 0.0 pts
Breakeven load factor 59.4% 57.0% (2.4)pts 63.0% 58.4% (4.6)pts
Yield per passenger mile 12.44c 12.55c 0.9 12.16c 12.57c 3.4
Operating revenue per ASM 9.56c 9.67c 1.2 9.14c 9.38c 2.6
Operating expenses per ASM 8.46c 8.29c (2.0) 8.60c 8.38c (2.6)
Fuel cost per gallon 69.5c 54.3c (21.9) 76.2c 55.9c (26.7)
Fuel gallons (000,000) 68.0 73.3 7.8 132.6 141.2 6.5
Average number of employees 8,265 8,639 4.5 8,093 8,496 5.0
Aircraft utilization (block hours) 11.5 11.5 0.0 11.3 11.4 0.9
Operating fleet at period-end 76 84 10.5 76 84 10.5
NM = Not Meaningful
c = cents
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALASKA
AIRLINES INC. SECOND QUARTER 1998 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 152500
<SECURITIES> 197400
<RECEIVABLES> 93900
<ALLOWANCES> 0
<INVENTORY> 23600
<CURRENT-ASSETS> 555900
<PP&E> 1260400
<DEPRECIATION> 378300
<TOTAL-ASSETS> 1531200
<CURRENT-LIABILITIES> 641500
<BONDS> 183300
0
0
<COMMON> 1
<OTHER-SE> 484099
<TOTAL-LIABILITY-AND-EQUITY> 1531200
<SALES> 747200
<TOTAL-REVENUES> 747200
<CGS> 667000
<TOTAL-COSTS> 667000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9200
<INCOME-PRETAX> 84800
<INCOME-TAX> 33700
<INCOME-CONTINUING> 51100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51100
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
