FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-7541
THE HERTZ CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-1938568
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 Brae Boulevard, Park Ridge, New Jersey 07656-0713
(Address of principal executive offices)
(Zip Code)
(201) 307-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
The registrant meets the conditions set forth in General
Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing
this Form with the reduced disclosure format permitted by General
Instruction H(2) of Form 10-Q.
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
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of June 30, 1995: Common
Stock, $1 par value - Class A, 200 shares; Class B, 51 shares;
and Class C, 490 shares.
Page 1 of 20 pages
The Exhibit Index is on page 17
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM l. FINANCIAL STATEMENTS.
INTRODUCTORY STATEMENT
The summary of accounting policies set forth in Note 1 to the
consolidated financial statements contained in the Form 10-K for
the fiscal year ended December 31, 1994, filed by the registrant
with the Securities and Exchange Commission on March 13, 1995,
has been followed in preparing the accompanying condensed
consolidated financial statements.
The condensed consolidated financial statements for interim
periods included herein have not been audited by independent
public accountants. In the registrant's opinion, all adjustments
(which include only normal recurring adjustments) necessary for a
fair presentation of the results of operations for the interim
periods have been made. Results for interim periods are not
necessarily indicative of results for a full year.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In Thousands of Dollars)
A S S E T S
Unaudited
June 30, Dec. 31,
1995 1994
CASH AND EQUIVALENTS $ 120,254 $ 99,749
RECEIVABLES, less allowance for
doubtful accounts: 1995, $8,423;
1994, $10,026 695,831 641,595
DUE FROM AFFILIATES 358,978 371,599
INVENTORIES, at lower of cost or market 16,956 35,092
PREPAID EXPENSES AND OTHER ASSETS (Note 1) 107,525 94,880
REVENUE EARNING VEHICLES AND OTHER
EQUIPMENT, at cost, less accumulated
depreciation: 1995 $430,832; 1994,
$550,816 5,340,401 4,260,364
PROPERTY AND EQUIPMENT, at cost,
less accumulated depreciation:
1995, $464,034; 1994, $427,859 473,442 439,677
FRANCHISES, CONCESSIONS, CONTRACT COSTS
AND LEASEHOLDS, net of amortization 6,510 6,708
COST IN EXCESS OF NET ASSETS OF PURCHASED
BUSINESSES, net of amortization 557,331 571,182
$7,677,228 $6,520,846
LIABILITIES AND SHAREHOLDERS' EQUITY
ACCOUNTS PAYABLE $ 497,851 $ 417,619
ACCRUED LIABILITIES 484,641 517,879
ACCRUED TAXES 70,042 81,862
DEBT (Note 4) 5,480,394 4,413,915
PUBLIC LIABILITY AND PROPERTY DAMAGE 310,776 304,328
DEFERRED TAXES ON INCOME 53,800 49,300
SHAREHOLDERS' EQUITY:
Preferred stock -
Series A, 10% cumulative 236,000 236,000
Series B, various rates cumulative 249,900 249,900
Common stock 1 1
Additional capital paid-in 59,008 59,008
Reinvested earnings 215,799 196,527
Translation adjustment 18,881 (5,271)
Unrealized holding gains (losses) for
available-for-sale securities (Note 1) 135 (222)
Total shareholders' equity 779,724 735,943
$7,677,228 $6,520,846
The accompanying notes are an integral part of this statement.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In Thousands of Dollars)
Unaudited
Three Months
Ended June 30,
1995 1994
REVENUES $858,555 $825,912
EXPENSES:
Direct operating 432,608 439,634
Depreciation of revenue earning
equipment (Note 3) 208,610 172,800
Selling, general and administrative 102,248 94,682
Interest, net of interest income
of $3,479 and $2,831 80,574 72,429
824,040 779,545
INCOME BEFORE INCOME TAXES 34,515 46,367
PROVISION FOR TAXES ON INCOME
(Note 2) 14,878 20,006
NET INCOME $ 19,637 $ 26,361
The accompanying notes are an integral part of this statement.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In Thousands of Dollars)
Unaudited
Six Months
Ended June 30,
1995 1994
REVENUES $1,594,234 $1,520,715
EXPENSES:
Direct operating 833,003 846,343
Depreciation of revenue earning
equipment (Note 3) 378,727 321,623
Selling, general and administrative 197,710 179,317
Interest, net of interest income
of $6,021 and $3,987 150,925 128,951
1,560,365 1,476,234
INCOME BEFORE INCOME TAXES 33,869 44,481
PROVISION FOR TAXES ON INCOME
(Note 2) 14,597 19,186
NET INCOME $ 19,272 $ 25,295
The accompanying notes are an integral part of this statement.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands of Dollars)
Unaudited
Six Months
Ended June 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 19,272 $ 25,295
Non-cash expenses:
Depreciation of revenue earning
equipment 378,727 321,623
Depreciation of property and
equipment 37,262 31,856
Amortization of intangibles 9,497 9,660
Provision for public liability
and property damage 68,110 86,693
Provision for losses for doubtful
accounts 2,292 2,710
Write-off of interest on Park Ridge
Limited Partnership promissory
note - 8,586
Deferred income taxes 4,500 8,400
Revenue earning equipment
expenditures (4,659,215) (3,946,053)
Proceeds from sales of revenue
earning equipment 2,834,807 1,608,502
Changes in assets and liabilities,
net of effects from sale of the
European car leasing and car
dealership operations -
Receivables (78,387) (71,440)
Due from affiliates 12,621 119,468
Inventories and prepaid expenses
and other assets (24,048) 21,203
Accounts payable 220,736 186,174
Accrued liabilities 20,903 47,875
Accrued taxes 859 7,446
Payments of public liability and
property damage claims and expenses (61,802) (58,629)
Net cash flows used for
operating activities (1,213,866) (1,590,631)
The accompanying notes are an integral part of this statement.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands of Dollars)
Unaudited
Six Months
Ended June 30,
1995 1994
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures $ (96,946) $ (78,527)
Proceeds from sales of property and
equipment 19,099 19,995
Available-for-sale securities -
Purchases (1,688) (3,671)
Sales 2,201 514
Proceeds from sale of the European car
leasing and car dealership operations,
net of cash and equivalents 56,560 -
Net cash flows used for investing
activities (20,774) (61,689)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term
debt 319,805 429,496
Repayment of long-term debt (280,981) (152,986)
Short-term borrowings:
Proceeds 662,715 370,381
Repayments (330,976) (165,247)
Ninety day term or less, net 884,369 1,338,326
Payment for the redemption of
common and preferred stock and
related expenses - (145,043)
Net cash flows provided from
financing activities 1,254,932 1,674,927
EFFECT OF FOREIGN EXCHANGE RATE
CHANGES ON CASH 213 2,099
NET INCREASE IN CASH AND
EQUIVALENTS DURING THE PERIOD 20,505 24,706
CASH AND EQUIVALENTS AT BEGINNING OF
YEAR 99,749 88,557
CASH AND EQUIVALENTS AT END OF PERIOD $ 120,254 $ 113,263
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for -
Interest (net of amount capitalized) $ 153,384 $ 108,905
Income taxes 19,902 11,045
The accompanying notes are an integral part of this statement.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Available-for-Sale Securities
As of June 30, 1995, Prepaid Expenses and Other Assets in the
condensed consolidated balance sheet include available-for-sale
securities at fair value of $5.5 million (cost $5.3 million).
The fair value is calculated using information provided by
outside quotation services. These securities include various
governmental and corporate debt obligations, with the following
maturity dates for the twelve month period following June 30,
1995 (in millions): fair value $.3 (cost $.3) in 1996; fair
value $3.0 (cost $2.8) 1997 through 2000; fair value $2.2 (cost
$2.2) 2002 through 2014. For the six months ended June 30, 1995,
proceeds of $2.2 million from the sale of available-for-sale
securities were received, and a net gain of $2,224 was realized.
At June 30, 1995, unrealized holding gains and losses, net of
taxes, included in Shareholders' Equity were $170,647 and
$35,925, respectively.
Note 2 - Taxes on Income
The income tax provision is based upon the expected effective
tax rate applicable to the full year. The effective tax rate is
higher than the U.S. statutory rate of 35% due to higher tax
rates relating to foreign operations and adjustment for state
taxes net of federal benefit.
Note 3 - Depreciation of Revenue Earning Equipment
Depreciation of revenue earning equipment includes the
following (in thousands of dollars):
Unaudited
1995 1994
Three months Ended June 30
Depreciation of revenue earning equipment $186,751 $152,195
Less adjustment of depreciation upon
disposal of the equipment 4,497 (12,415)
Rents paid for vehicles leased 17,362 33,020
Total $208,610 $172,800
Six months Ended June 30
Depreciation of revenue earning equipment $331,567 $275,829
Less adjustment of depreciation upon
disposal of the equipment 4,840 (19,475)
Rents paid for vehicles leased 42,320 65,269
Total $378,727 $321,623
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Depreciation of Revenue Earning Equipment (continued)
Effective July 1, 1994, certain lives being used to compute
the provision for depreciation of revenue earning equipment were
increased to reflect changes in the estimated residual values to
be realized when the equipment is sold. As a result of this
change, depreciation of revenue earning equipment for the three
and six months ended June 30, 1995 was decreased by $1.2 million
and $12.0 million, respectively.
The adjustment of depreciation upon disposal of revenue
earning equipment for the three months ended June 30, 1995 and
1994 included net gains of $1.3 million and $5.0 million,
respectively, on the sale of equipment in the construction
equipment rental operations in the United States; and net losses
of $5.8 million and net gains of $7.4 million, respectively, in
the car rental and car leasing operations.
The adjustment of depreciation upon disposal of revenue
earning equipment for the six months ended June 30, 1995 and 1994
included net gains of $.2 million and $12.7 million,
respectively, on the sale of equipment in the construction
equipment rental operations in the United States; and net losses
of $5.0 million and net gains of $6.8 million, respectively, in
the car rental and car leasing operations.
During the six months ended June 30, 1995, the registrant
purchased Ford Motor Company ("Ford") vehicles at a cost of
approximately $2.7 billion, and sold Ford vehicles to Ford or its
affiliates under various repurchase programs for approximately
$1.3 billion.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Debt
Debt at June 30, 1995 and December 31, 1994 consists of the
following (in thousands of dollars):
Unaudited
June 30, Dec. 31,
1995 1994
Notes payable, including commercial paper,
average interest rate 6.0% $1,973,771 $1,018,443
Promissory notes, average interest rate:
1995, 7.6%; 1994, 7.8%; (effective
average interest rate: 1995, 7.7%; 1994,
7.9%); net of unamortized discount:
1995, $3,345; 1994, $3,254; due 1996
to 2005 1,694,315 1,574,406
Swiss Franc bonds, fixed U.S. dollar
obligation 11.1% (effective interest
rate 9.7%); including unamortized
premium: 1995, $66; 1994, $132; due
1995 46,198 46,264
Property and equipment lease obligations,
average interest rate: 1995, 8.4%; 1994
8.7%; due 1995 to 1998 4,846 6,847
Medium term notes, average interest rate:
1995, 9.4%; 1994, 9.3%; (effective
average interest rate: 1995, 9.4%; 1994,
9.6%); net of unamortized discount:
1994, $36; due 1995 to 1997 119,175 188,389
Senior subordinated promissory notes,
average interest rate 9.5% (effective
average interest rate 9.6%); net of
unamortized discount: 1995, $387; 1994,
$461; due 1996 to 1998 249,613 249,539
Junior subordinated promissory notes,
average interest rate 6.9%; net of
unamortized discount: 1995, $308;
1994, $329; due 2000 to 2003 399,692 399,671
Subsidiaries' short-term debt in millions
(1995, $942.1; 1994, $757.1) and other
borrowings; average interest rate in
domestic and foreign currencies: 1995,
6.4%; 1994, 6.6%; including unamortized
discount: 1995, $37; 1994, $47 992,784 930,356
Total $5,480,394 $4,413,915
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Debt (continued)
The aggregate amounts of maturities of debt for the twelve
month periods following June 30, 1995 are as follows (in
millions): 1996, $3,098.4 (including $2,915.9 of commercial paper
and short-term borrowings); 1997, $190.7; 1998, $475.4; 1999,
$117.9; 2000, $349.7; after 2000, $1,248.3.
At June 30, 1995, approximately $110 million of the
registrant's consolidated shareholders' equity was free of
dividend limitations pursuant to its existing debt agreements.
At June 30, 1995 the registrant had $268.9 million of
outstanding loans from Ford.
The registrant and its subsidiaries have entered into
arrangements to manage exposure to fluctuations in interest
rates. These arrangements are typically interest-rate swap
agreements ("swaps") and forward rate agreements ("FRAs"). The
differential paid or received on interest-rate swap agreements is
recognized as an adjustment to interest expense. The effect of
these agreements is to make the registrant less susceptible to
changes in interest rates by effectively converting certain
variable rate debt to fixed rate debt. Because of the
relationship of current market rates to historical fixed rates,
the effect at June 30, 1995 of the swap agreements is to give the
registrant an overall effective weighted-average rate on debt of
6.95%, with 45% of debt effectively subject to variable interest
rates, compared to a weighted-average interest rate on debt of
6.91%, with 54% of debt subject to variable interest rates when
not considering the swap agreements. At June 30, 1995, these
agreements expressed in notional amounts aggregated (in millions)
$396.9 swaps and $56.1 FRAs. Notional amounts are not reflective
of the registrant's obligations under these agreements because
the registrant is only obligated to pay the net amount of
interest rate differential between the fixed and variable rates
specified in the contracts. The registrant's exposure to any
credit loss in the event of non-performance by the counterparties
is further mitigated by the fact that all of these financial
instruments are with significant financial institutions that are
rated "A" or better by the major credit rating agencies. At June
30, 1995, the fair value of all outstanding contracts, which is
representative of the registrant's obligations under these
contracts, assuming the contracts were terminated at that date,
was a net payable of $1.4 million on the swaps and a net
receivable of $4,000 on the FRAs.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Debt (continued)
This relates to notional principal (in millions) of $396.9 swaps
maturing $14.8, $148.6, $224.0, $8.9 and $.6 in 1995, 1996, 1997,
1998 and 1999, respectively; and of notional principal scheduled
to start after June 30, 1995 (in millions) of $19.7 swaps
maturing $.8, $.7, $.3 and $17.9 in 1996, 1997, 1998 and 1999,
respectively; and $47.8 FRAs maturing $15.4 and $32.4 in 1995 and
1996, respectively.
Note 5 - Sale of European Car Leasing and Car Dealership
Operations
Effective January 1, 1995, the registrant sold its European
car leasing and car dealership operations to Hertz Leasing
International, Inc. ("HLI"), at an amount equal to its book value
of approximately $61 million. HLI is wholly owned by Ford. In
addition, except for Australia and New Zealand, Ford is to
receive the worldwide rights (subject to certain existing license
rights) to use and sublicense others to use the "Hertz" name in
the conduct of motor vehicle leasing businesses, and a subsidiary
of the registrant will receive a license fee from Ford payable
over five years. The unaudited total assets as of December 31,
1994 and unaudited total revenues and net income for the year
ended December 31, 1994 of the registrant's European car leasing
and car dealership operations were (in millions) $482, $295 and
$6, respectively. The registrant believes that this transaction
will not have a material effect on its financial position or
future operations.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Second Quarter 1995 vs. Second Quarter 1994
Revenues in the second quarter of 1995 of $859 million
increased by $33 million as compared to the second quarter of
1994. This increase was primarily attributable to increases in
the car rental operations resulting from a greater number of
transactions, rate increases and changes in foreign exchange
rates; and improvements in construction equipment rental and
sales in the United States due to increased volume. These
increases were partly offset by lower revenues in car leasing and
car dealerships resulting from the sale of these operations in
Europe effective January 1, 1995.
Total expenses increased $44 million to $824 million in the
second quarter of 1995 as compared to $780 million in the second
quarter of 1994. Direct operating expense decreased principally
due to lower expenses relating to the sale of the European car
leasing and car dealership operations in 1995 and lower cost in
the domestic car rental operations for public liability and
property damage claims, partly offset by higher costs relating to
the increase in the volume of business. Depreciation of revenue
earning equipment increased primarily due to an increase in
vehicles and equipment operated and higher prices for
automobiles; these increases were partly offset by lower
depreciation relating to the sale of the European car leasing
operation in 1995, and a reduction in depreciation of $1.2
million in 1995 due to changes made effective July 1, 1994
increasing certain lives being used to compute the provision for
depreciation to reflect changes in the estimated residual values
to be realized when the equipment is sold. Selling, general and
administrative expense increased primarily due to higher
advertising and sales promotion costs and changes in foreign
exchange rates. The increase in interest expense was primarily
due to higher debt levels and interest rates in 1995, partly
offset by higher interest income in 1995 and $8.6 million
included in 1994 relating to interest receivable from Park Ridge
Limited Partnership which was not collected.
The tax provision of $15 million in the second quarter of
1995 was lower than the tax provision of $20 million in the
second quarter of 1994, primarily due to the lower income before
income taxes in 1995. See Note 2 to the Notes to Condensed
Consolidated Financial Statements.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued).
First Half of 1995 vs. First Half of 1994
Revenues in the first half of 1995 of $1,594 million
increased by $74 million as compared to the first half of 1994.
This increase was primarily attributable to gains in the car
rental operations resulting from a greater number of
transactions, rate increases and changes in foreign exchange
rates; and improvements in construction equipment rental and
sales due to increased volume. These increases were partly
offset by lower revenues in car leasing and car dealerships
resulting from the sale of these operations in Europe effective
January 1, 1995.
Total expenses increased $84 million to $1,560 million in the
first half of 1995 as compared to $1,476 million in the first
half of 1994. Direct operating expense decreased principally due
to lower expenses relating to the sale of the European car
leasing and car dealership operations in 1995 and lower costs in
the domestic car rental operations for public liability and
property damage claims, partly offset by higher costs relating to
the increase in the volume of business. Depreciation of revenue
earning equipment increased primarily due to an increase in
vehicles and equipment operated and higher prices for
automobiles; these increases were partly offset by lower
depreciation relating to the sale of the European car leasing
operation in 1995, and a reduction in depreciation of $12.0
million in 1995 due to changes made effective July 1, 1994
increasing certain lives being used to compute the provision for
depreciation to reflect changes in the estimated residual values
to be realized when the equipment is sold. Selling, general and
administrative expense increased primarily due to higher
advertising and sales promotion costs and changes in foreign
exchange rates. The increase in interest expense was primarily
due to higher debt levels and interest rates in 1995, partly
offset by higher interest income in 1995 and $8.6 million
included in 1994 relating to interest receivable from Park Ridge
Limited Partnership which was not collected.
The tax provision of $15 million in the first half of 1995
was lower than the tax provision of $19 million in the first half
of 1994, primarily due to the lower income before income taxes in
1995. See Note 2 to the Notes to Condensed Consolidated
Financial Statements.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
(4) Instruments defining the rights of security
holders, including indentures. During the quarter
ended June 30, 1995, the registrant and its
subsidiaries ("Hertz") incurred various
obligations which could be considered as long-term
debt, none of which exceeded 10% of the total
assets of Hertz on a consolidated basis. Hertz
agrees to furnish to the Commission upon request a
copy of any instrument defining the rights of the
holders of such long-term debt.
(12) Computation of Ratio of Earnings to Fixed Charges for the
six months ended June 30, 1995, and 1994.
(27) Financial Data Schedule for the six months ended June 30,
1995.
(b) Reports on Form 8-K:
The registrant filed a Form 8-K dated June 30, 1995
reporting under Items 5 and 7 thereof, instruments
defining the rights of security holders, including
indentures, in connection with the Registration Statement
on Form S-3 (File No. 33-54183) filed by the registrant
with the Securities and Exchange Commission covering
Senior Debt Securities issuable under an Indenture dated
as of December 1, 1994.
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 thereunto duly authorized.
THE HERTZ CORPORATION
(Registrant)
Date: July 31, 1995 By: /s/ William Sider
William Sider
Executive Vice President and
Chief Financial Officer
(principal financial officer
and duly authorized officer)
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
filed with
FORM 10-Q
for the quarter ended
June 30, 1995
under
THE SECURITIES EXCHANGE ACT OF 1934
THE HERTZ CORPORATION
Commission file number 1-7541
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Page No.
12 Computation of Ratio of Earnings
to Fixed Charges for the six months
ended June 30, 1995 and 1994. 18
27 Financial Data Schedule for the six
months ended June 30, 1995. 19 - 20
<PAGE>
EXHIBIT 12
THE HERTZ CORPORATION AND SUBSIDIARIES
CONSOLIDATED COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Thousands of Dollars Except Ratios)
Unaudited
Six Months
Ended June 30,
1995 1994
Income before income taxes $ 33,869 $ 44,481
Interest expense 156,946 124,352
Portion of rent estimated to represent
the interest factor 40,134 43,590
Earnings before income taxes and fixed
charges $230,949 $212,423
Interest expense (including capitalized
interest) $157,481 $124,555
Portion of rent estimated to represent
the interest factor 40,134 43,590
Fixed charges $197,615 $168,145
Ratio of earnings to fixed charges 1.2 1.3
<TABLE> <S> <C>
<ARTICLE> 5
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1,000
<CASH> 9,295
<SECURITIES> 110,959
<RECEIVABLES> 704,254
<ALLOWANCES> (8,423)
<INVENTORY> 16,956
<CURRENT-ASSETS> 0
<PP&E> 6,708,709
<DEPRECIATION> (894,866)
<TOTAL-ASSETS> 7,677,228
<CURRENT-LIABILITIES> 0
<BONDS> 5,480,394
<COMMON> 1
0
485,900
<OTHER-SE> 293,823
<TOTAL-LIABILITY-AND-EQUITY> 7,677,228
<SALES> 0
<TOTAL-REVENUES> 1,594,234
<CGS> 0
<TOTAL-COSTS> 1,407,148
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,292
<INTEREST-EXPENSE> 150,925
<INCOME-PRETAX> 33,869
<INCOME-TAX> 14,597
<INCOME-CONTINUING> 19,272
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,272
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
