<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended 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 0-2908
GTE NORTHWEST INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
WASHINGTON 91-0466810
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
600 Hidden Ridge, 75038
Irving, Texas
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code 972-718-5600
(Former name, former address and former fiscal year, if
changed since last report)
The registrant, a wholly owned subsidiary of GTE Corporation, meets the
conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is
therefore filing this form with reduced disclosure format pursuant to General
Instruction (H)(2).
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
The Company had 17,920,000 shares of no par value common stock outstanding at
July 31, 1998. The Company's common stock is 100% owned by GTE Corporation.
<PAGE> 2
PART I. FINANCIAL INFORMATION
GTE Northwest Incorporated and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
REVENUES AND SALES
Local services $ 115,087 $ 107,775 $ 229,975 $ 215,427
Network access services 112,531 105,545 235,882 203,100
Toll services 13,787 27,806 29,089 55,977
Other services and sales 34,088 28,355 69,307 58,726
--------- --------- --------- ---------
Total revenues and sales 275,493 269,481 564,253 533,230
--------- --------- --------- ---------
OPERATING COSTS AND EXPENSES
Cost of services and sales 85,929 86,851 183,817 176,182
Selling, general and administrative 45,325 38,005 86,072 75,568
Depreciation and amortization 53,718 52,919 105,108 106,638
--------- --------- --------- ---------
Total operating costs and expenses 184,972 177,775 374,997 358,388
--------- --------- --------- ---------
OPERATING INCOME 90,521 91,706 189,256 174,842
OTHER (INCOME) EXPENSE
Interest - net 12,833 13,615 26,758 27,112
Gain on disposition of assets -- -- -- (5,101)
Other - net 1 226 1 226
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 77,687 77,865 162,497 152,605
Income taxes 26,070 27,852 59,597 54,525
--------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY CHARGE 51,617 50,013 102,900 98,080
Extraordinary charge -- -- (3,100) --
--------- --------- --------- ---------
NET INCOME $ 51,617 $ 50,013 $ 99,800 $ 98,080
========= ========= ========= =========
</TABLE>
Per share data is omitted since the Company's common stock is 100% owned by GTE
Corporation (GTE).
See Notes to Condensed Consolidated Financial Statements.
1
<PAGE> 3
GTE Northwest Incorporated and Subsidiary
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Dollars in Millions)
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
Net income $ 99.8 $ 98.1
</TABLE>
Net income includes an extraordinary after-tax charge of $3.1 related to the
early retirement of debt. Excluding this charge, net income increased 5% or $4.8
for the six months ended June 30, 1998, compared to the same period in 1997. The
increase is largely the result of higher revenues from local and network access
services, partially offset by lower toll service revenues and higher operating
expenses.
REVENUES AND SALES
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1998 1997
--------- ---------
<S> <C> <C>
Local services $ 230.0 $ 215.4
Network access services 235.9 203.1
Toll services 29.1 56.0
Other services and sales 69.3 58.7
--------- ---------
Total revenues and sales $ 564.3 $ 533.2
</TABLE>
Total revenues and sales increased 6% or $31.1 during the first half of 1998,
compared to the same period in 1997.
Local service revenues increased 7% or $14.6 through the first six months of
1998, compared to the same period in 1997. The number of access lines increased
7% which generated $6.3 of additional revenues from basic local services, $3.3
from CentraNet(R) and $2 from Integrated Services Digital Network (ISDN) and
Digital Channel Services (DCS).
Network access service revenues increased 16% or $32.8 for the six months ended
June 30, 1998, compared to the same period in 1997. Minutes of use increased
13%, which generated $15.3 of additional revenues. Special access revenues grew
$11.6 due to greater demand for increased bandwidth by Internet Service
Providers (ISPs) and other high-capacity users. Additionally, the effect of
reserves established in the first quarter of 1997 for the sharing provisions of
the Federal Communications Commission's (FCC's) 1996 and 1997 price caps
contributed $7.2 to the year-to-date increase. Offsetting these increases was a
decrease of $2.6 resulting from the impact of interstate access rate reductions
from the 1997 FCC price cap. Also, in 1997 the FCC ordered significant changes
that altered the structure of access charges
2
<PAGE> 4
GTE Northwest Incorporated and Subsidiary
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
collected by the Company. These changes, effective January 1, 1998, resulted in
a $6.4 decrease in network access revenues during the first six months of 1998.
Toll service revenues decreased 48% or $26.9 for the six months ended June 30,
1998, compared to the same period in 1997. The decrease is primarily due to
lower toll volumes resulting from the expansion of local calling areas and
intraLATA (local access transport area) toll competition, including 10XXX and 1+
presubscription. Additionally, the impacts of optional discount calling plans
and peak/off-peak tariff reductions contributed to the decline.
Other services and sales increased 18% or $10.6 through the first six months of
1998, compared to the same period in 1997. The increase is primarily
attributable to a $5.5 increase in equipment sales, a $2 increase in revenues
resulting from the FCC's order increasing payphone compensation from
interexchange carriers and a $1.5 increase in voice messaging services.
OPERATING COSTS AND EXPENSES
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1998 1997
--------- ---------
<S> <C> <C>
Cost of services and sales $ 183.8 $ 176.2
Selling, general and administrative 86.1 75.6
Depreciation and amortization 105.1 106.6
--------- ---------
Total operating costs and expenses $ 375.0 $ 358.4
</TABLE>
Total operating costs and expenses increased 5% or $16.6 through the first half
of 1998, compared to the same period in 1997. The increase is primarily
attributable to increased labor and benefit costs of $6.8. Additional factors
include an increase of $3.8 in switch software right-to-use fees and increased
selling costs of $3.3 resulting from increased sales and marketing efforts aimed
at stimulating sales of enhanced services and preserving market share in an
increasingly competitive environment. These increases were partially offset by a
$1.5 decrease in depreciation expense, primarily due to a reduction in
depreciation rates to reflect higher net salvage values, which became effective
in the fourth quarter of 1997, related to certain telephone plant and equipment.
3
<PAGE> 5
GTE Northwest Incorporated and Subsidiary
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
OTHER (INCOME) EXPENSE
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1998 1997
--------- ---------
<S> <C> <C>
Gain on disposition of assets $ -- $ (5.1)
Income taxes 59.6 54.5
Extraordinary charge 3.1 --
</TABLE>
In the first quarter of 1997, the Company recorded a $5.1 pre-tax gain on the
sale of three telephone exchanges in the state of Washington (representing 1,800
access lines).
Income taxes increased 9% or $5.1 for the six months ended June 30, 1998,
compared to the same period in 1997, primarily due to a corresponding increase
in pre-tax income.
During the first quarter of 1998, the Company recorded an after-tax
extraordinary charge of $3.1, reflecting premiums paid on the redemption of
high-coupon debt prior to stated maturity.
OTHER MATTERS
Federal Regulatory Developments
The Company filed interstate access revisions during 1997 that became effective
June 3, 1997 and July 1, 1997. Overall, these filings resulted in a net annual
price reduction of $6. In 1997, the FCC issued an order to file revised access
rates effective January 1, 1998, which resulted in additional interstate access
charge reductions of approximately $2.1 annually. In 1997, the FCC also ordered
significant changes that altered the structure of access charges collected by
the Company, effective January 1, 1998. Generally, the FCC reduced and
restructured the per minute charges paid by long distance carriers and
implemented new per line charges. The FCC also created an access charge
structure that resulted in different access charges for residential primary and
secondary lines and single line and multi-line business access lines. In
aggregate, the annual reductions in usage sensitive access charges of $11.1 paid
by long distance carriers were offset by $9.5 of new per line charges and the
charges paid by end-users. Effective July 1, 1998, access charges were increased
by $4.3 annually in compliance with FCC requirements to restate the impacts of
access charge reform.
In May 1997, the FCC released a major decision relating to implementation of the
Telecommunications Act's provision on universal service. The Company's parent,
GTE, and numerous other parties have challenged the FCC's decision before the
U.S.
4
<PAGE> 6
GTE Northwest Incorporated and Subsidiary
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
Court of Appeals for the Fifth Circuit on the grounds that the FCC did not
follow the requirements of the Telecommunications Act to develop a sufficient,
explicit and competitively neutral universal service program. Oral argument is
not expected until mid-September 1998 at the earliest, with a final decision to
be issued by mid-1999.
On March 9, 1998, the FCC adopted a Memorandum Opinion and Order (MO&O)
clarifying the payphone-specific coding digit requirements set forth in the
previous payphone orders and granting limited waivers of the requirement that
local exchange carriers (LECs) provide payphone-specific coding digits to
payphone service providers (PSPs), and that PSPs provide payphone-specific
coding digits from their payphones to interexchange carriers (IXCs), before PSPs
can receive per-call compensation from IXCs for subscriber 800 and access code
calls. GTE was granted waivers through 1998 in this order for Flex-ANI (Flexible
Automatic Number Identification) implementation due to technical problems
associated with switch conversions.
On April 3, 1998, the FCC issued another MO&O which granted the IXCs a waiver of
the per-call compensation requirement so that they may pay per-phone instead of
per-call compensation for the payphones for which the FCC had granted technology
waivers. GTE will receive per-phone compensation under this waiver until the
Flex-ANI capable offices are activated. Qualifying payphone calls from Flex-ANI
capable switches will then be eligible for per-call compensation rather than
per-phone.
In a related court case between MCI and the FCC, the U.S. Court of Appeals,
District of Columbia Circuit, upheld the fundamental premise underlying the
FCC's approach to setting the per-call compensation rate for uncompensated
payphone calls, thereby supporting the ordered per-call compensation rate noted
in the March 9th order. At the same time, however, the Court held that the FCC
had failed to clearly explain its methodology on the development of that same
per-call compensation rate. The Court remanded this portion back to the FCC.
The FCC order for permanent local number portability implementation was
postponed in the Seattle, Washington area to August 1998 and in the Portland,
Oregon area to October 1998.
5
<PAGE> 7
GTE Northwest Incorporated and Subsidiary
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
State Regulatory Developments
A settlement agreement was reached with the Oregon Public Utilities Commission
(OPUC) on the September 30, 1997 earnings investigation docket which will
reduce rates $25 annually. The agreement is expected to be approved by the OPUC
by September 1, 1998. The rate reductions, if approved, will be effective
October 1, 1998 and will impact all customer classes.
The Company has received approval from the Washington Utility and Transportation
Commission (WUTC) on interconnection agreements with nineteen competitive
local-exchange carriers and wireless carriers. The approval of one other carrier
is pending. The interim discount rates for the Company's resold services will be
replaced by the permanent rates that result from the WUTC's Phase II proceeding
in its generic cost docket.
The WUTC issued a decision on the generic cost docket on April 16, 1998, but a
model was not chosen. Instead, costs were adopted to establish price floors for
unbundled network elements (UNEs). The Company filed an avoided cost study and a
non-recurring cost study in May 1998. A decision on the pricing aspect of the
Phase II proceeding is expected in the first quarter of 1999.
RECENT DEVELOPMENTS
On July 27, 1998, GTE and Bell Atlantic entered into a merger agreement
providing for the combination of the two companies in a merger of equals
transaction. Under terms of the definitive agreement, which was unanimously
approved by the board of directors of both companies, GTE shareholders will
receive 1.22 shares of Bell Atlantic stock for each GTE share they own. The
merger is expected to be accounted for as a pooling of interests, is subject to
shareholder and regulatory approval, and is expected to be completed during the
second half of 1999. For additional information regarding the merger, refer to
the Form 8-K filed by GTE dated July 27, 1998.
In April 1998, GTE announced a series of actions designed to further sharpen its
strategic focus and improve its competitive position by repositioning
non-strategic properties and reducing costs. GTE expects to generate after-tax
proceeds of $2,000 to $3,000 by selling non-strategic or under-performing
operations and plans to reduce annual costs by more than $500 through improved
efficiencies and productivity while it continues to invest in new high-growth
opportunities. The impact of this announcement on the Company is unknown at this
time. GTE's management is currently assessing its options and, as decisions are
finalized regarding the sale of non-strategic operations and cost reductions,
the Company could be affected.
In its April 2, 1998 filing on Form 8-K, GTE stated that because the MCI
shareholders had accepted a competing offer, GTE's offer for MCI was no longer
outstanding. As a result, the Company and GTE were removed from "Credit Watch"
by all rating agencies. The Company believes that its present investment grade
credit rating provides ready access to the capital markets at reasonable rates
and provides the Company with the financial flexibility necessary to pursue
growth opportunities as they arise.
6
<PAGE> 8
GTE Northwest Incorporated and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
----------- -----------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 454 $ 1,479
Receivables, less allowances of $12,875 and $14,515 193,418 266,422
Inventories and supplies 19,095 19,570
Prepaid insurance and other 8,482 7,833
----------- -----------
Total current assets 221,449 295,304
----------- -----------
Property, plant and equipment, at cost 3,546,098 3,419,072
Accumulated depreciation (2,198,661) (2,127,092)
----------- -----------
Total property, plant and equipment, net 1,347,437 1,291,980
----------- -----------
Prepaid pension costs and other assets 118,495 106,830
----------- -----------
Total assets $ 1,687,381 $ 1,694,114
=========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Short-term obligations, including current maturities $ 125,882 $ 882
Notes payable to affiliates 71,395 110,478
Accounts payable 86,907 100,825
Taxes payable 61,374 53,741
Accrued interest 7,751 9,245
Accrued payroll costs 17,071 19,738
Dividends payable 56,196 44,689
Other 69,402 68,916
----------- -----------
Total current liabilities 495,978 408,514
----------- -----------
Long-term debt 591,139 683,066
Deferred income taxes 67,762 50,346
Employee benefit plans 50,971 58,791
Other liabilities 8,478 7,425
----------- -----------
Total liabilities 1,214,328 1,208,142
----------- -----------
Shareholder's equity:
Common stock (17,920,000 shares issued) 448,000 448,000
Additional paid-in capital 57,671 57,671
Retained deficit (32,618) (19,699)
----------- -----------
Total shareholder's equity 473,053 485,972
----------- -----------
Total liabilities and shareholder's equity $ 1,687,381 $ 1,694,114
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
7
<PAGE> 9
GTE Northwest Incorporated and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1998 1997
--------- ---------
(Thousands of Dollars)
<S> <C> <C>
OPERATIONS
Income before extraordinary charge $ 102,900 $ 98,080
Adjustments to reconcile income before extraordinary
charge to net cash from operations:
Depreciation and amortization 105,108 106,638
Deferred income taxes 20,788 6,033
Gain on disposition of assets -- (5,101)
Provision for uncollectible accounts 9,442 7,770
Changes in current assets and current liabilities 47,356 43,046
Other - net (18,810) (23,813)
--------- ---------
Net cash from operations 266,784 232,653
--------- ---------
INVESTING
Capital expenditures (156,214) (113,972)
Proceeds from disposition of assets -- 9,901
Other - net (574) --
--------- ---------
Net cash used in investing (156,788) (104,071)
--------- ---------
FINANCING
Long-term debt issued 173,874 --
Long-term debt retired, including premiums paid
on early retirement (144,600) (20,223)
Dividends (101,212) (77,753)
Increase (decrease) in short-term obligations,
excluding current maturities (39,083) 31,752
--------- ---------
Net cash used in financing (111,021) (66,224)
--------- ---------
Increase (decrease) in cash and cash equivalents (1,025) 62,358
Cash and cash equivalents
Beginning of period 1,479 2,074
--------- ---------
End of period $ 454 $ 64,432
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
8
<PAGE> 10
GTE Northwest Incorporated and Subsidiary
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION:
The unaudited condensed consolidated financial statements included
herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. However, in the opinion of management of the Company, the
condensed consolidated financial statements include all adjustments,
which consist only of normal recurring accruals, necessary to present
fairly the financial information for such period. These condensed
consolidated financial statements should be read in conjunction with
the consolidated financial statements and the notes thereto included in
the Company's 1997 Annual Report on Form 10-K.
Reclassifications of prior year data have been made, where appropriate,
to conform to the 1998 presentation.
(2) EXTRAORDINARY CHARGE:
During the first quarter of 1998, the Company recorded an after-tax
extraordinary charge of $3.1 million, reflecting premiums paid on the
redemption of high-coupon debt prior to stated maturity.
(3) DEBT:
In compliance with Financial Accounting Standards No. 6,
"Classification of Short-Term Obligations Expected to Be Refinanced"
(FAS 6), long-term debt as of June 30, 1998 includes $20 million of
short-term borrowings in the form of affiliate notes payable. These
affiliate notes payable represent notes payable to GTE Funding
Incorporated, an affiliate company that provides short-term financing
and investment vehicles and cash management services for the Company
and six of its affiliates.
In May 1998, the Company issued $175 million of 6.30% Series C
Debentures, due 2010. The net proceeds were applied toward the
repayment of short-term borrowings in connection with the redemption of
long-term debt in the first quarter of 1998 prior to stated maturity.
Net proceeds were also used to finance the Company's construction
program and for general corporate purposes.
9
<PAGE> 11
GTE Northwest Incorporated and Subsidiary
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(4) RECENT ACCOUNTING PRONOUNCEMENTS:
Computer Software
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" (SOP 98-1).
SOP 98-1 defines internal-use software and establishes accounting
standards for the costs of such software. The Company is currently
assessing the impact of adopting SOP 98-1, and intends to implement as
of January 1, 1999.
Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FAS 133). FAS 133 establishes
accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts,
and for hedging activities. The Company has not yet assessed the impact
of adopting FAS 133.
10
<PAGE> 12
GTE Northwest Incorporated and Subsidiary
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required by Item 601 of Regulation S-K.
12 Statement re: Calculation of the Consolidated Ratio of Earnings to
Fixed Charges
27 Financial Data Schedule
(b) The Company filed a report on Form 8-K, dated May 19, 1998, under Item
7 "Financial Statements and Exhibits". No financial statements were
filed with this report.
11
<PAGE> 13
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GTE Northwest Incorporated
---------------------------------------
(Registrant)
Date: August 13, 1998 /s/ Stephen L. Shore
--------------------- ---------------------------------------
Stephen L. Shore
Controller
(Principal Accounting Officer)
12
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- --------- -------------------------------------------------------------------
<S> <C>
12 Statement re: Calculation of the Consolidated Ratio of Earnings to
Fixed Charges
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 12
GTE Northwest Incorporated and Subsidiary
STATEMENT OF THE CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1998
----------------
<S> <C>
Net earnings available for fixed charges:
Income before extraordinary charge $ 102,900
Add - Income taxes 59,597
- Fixed charges 27,324
------------
Adjusted earnings $ 189,821
============
Fixed charges:
Interest expense $ 25,145
Portion of rent expense
representing interest 2,179
------------
Adjusted fixed charges $ 27,324
============
RATIO OF EARNINGS TO FIXED CHARGES 6.95
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 454
<SECURITIES> 0
<RECEIVABLES> 206,293
<ALLOWANCES> 12,875
<INVENTORY> 19,095
<CURRENT-ASSETS> 221,449
<PP&E> 3,546,098
<DEPRECIATION> 2,198,661
<TOTAL-ASSETS> 1,687,381
<CURRENT-LIABILITIES> 495,978
<BONDS> 591,139
0
0
<COMMON> 448,000
<OTHER-SE> 25,053
<TOTAL-LIABILITY-AND-EQUITY> 1,687,381
<SALES> 564,253
<TOTAL-REVENUES> 564,253
<CGS> 183,817
<TOTAL-COSTS> 374,997
<OTHER-EXPENSES> 1
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,758
<INCOME-PRETAX> 162,497
<INCOME-TAX> 59,597
<INCOME-CONTINUING> 102,900
<DISCONTINUED> 0
<EXTRAORDINARY> 3,100
<CHANGES> 0
<NET-INCOME> 99,800
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
