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 September 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 September 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
Sept. 30, Dec. 31,
1995 1994
CASH AND EQUIVALENTS $ 134,075 $ 99,749
RECEIVABLES, less allowance for
doubtful accounts: 1995, $8,588;
1994, $10,026 820,604 641,595
DUE FROM AFFILIATES 296,196 371,599
INVENTORIES, at lower of cost or market 17,077 35,092
PREPAID EXPENSES AND OTHER ASSETS (Note 1) 95,877 94,880
REVENUE EARNING VEHICLES AND OTHER
EQUIPMENT, at cost, less accumulated
depreciation: 1995 $471,848; 1994,
$550,816 4,808,725 4,260,364
PROPERTY AND EQUIPMENT, at cost,
less accumulated depreciation:
1995, $479,200; 1994, $427,859 487,688 439,677
FRANCHISES, CONCESSIONS, CONTRACT COSTS
AND LEASEHOLDS, net of amortization 6,457 6,708
COST IN EXCESS OF NET ASSETS OF PURCHASED
BUSINESSES, net of amortization 552,611 571,182
$7,219,310 $6,520,846
LIABILITIES AND SHAREHOLDERS' EQUITY
ACCOUNTS PAYABLE $ 584,597 $ 417,619
ACCRUED LIABILITIES 480,228 517,879
ACCRUED TAXES 82,310 81,862
DEBT (Note 4) 4,824,173 4,413,915
PUBLIC LIABILITY AND PROPERTY DAMAGE 321,880 304,328
DEFERRED TAXES ON INCOME 83,300 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 280,891 196,527
Translation adjustment 16,990 (5,271)
Unrealized holding gains (losses) for
available-for-sale securities (Note 1) 32 (222)
Total shareholders' equity 842,822 735,943
$7,219,310 $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 September 30,
1995 1994
REVENUES $989,756 $958,189
EXPENSES:
Direct operating 460,693 477,994
Depreciation of revenue earning
equipment (Note 3) 231,869 191,570
Selling, general and administrative 103,124 104,574
Interest, net of interest income
of $6,727 and $1,440 84,486 75,667
880,172 849,805
INCOME BEFORE INCOME TAXES 109,584 108,384
PROVISION FOR TAXES ON INCOME
(Note 2) 44,492 46,902
NET INCOME $ 65,092 $ 61,482
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
Nine Months
Ended September 30,
1995 1994
REVENUES $2,583,990 $2,478,904
EXPENSES:
Direct operating 1,293,696 1,324,337
Depreciation of revenue earning
equipment (Note 3) 610,596 513,193
Selling, general and administrative 300,834 283,891
Interest, net of interest income
of $12,748 and $5,427 235,411 204,618
2,440,537 2,326,039
INCOME BEFORE INCOME TAXES 143,453 152,865
PROVISION FOR TAXES ON INCOME
(Note 2) 59,089 66,088
NET INCOME $ 84,364 $ 86,777
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
Nine Months
Ended September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 84,364 $ 86,777
Non-cash expenses:
Depreciation of revenue earning
equipment 610,596 513,193
Depreciation of property and
equipment 56,684 50,358
Amortization of intangibles 14,327 14,514
Provision for public liability
and property damage 111,762 143,193
Provision for losses for doubtful
accounts 3,772 5,051
Write-off of interest on Park Ridge
Limited Partnership promissory
note - 8,586
Deferred income taxes 34,000 29,200
Revenue earning equipment
expenditures (5,979,585) (5,184,006)
Proceeds from sales of revenue
earning equipment 4,450,711 2,968,952
Changes in assets and liabilities,
net of effects from sale of the
European car leasing and car
dealership operations -
Receivables (206,663) (69,903)
Due from affiliates 75,403 124,989
Inventories and prepaid expenses
and other assets (12,575) 29,363
Accounts payable 308,767 82,365
Accrued liabilities 17,047 44,703
Accrued taxes 13,021 27,329
Payments of public liability and
property damage claims and expenses (94,515) (100,266)
Net cash flows used for
operating activities (512,884) (1,225,602)
The accompanying notes are an integral part of this statement.
THE HERTZ CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands of Dollars)
Unaudited
Nine Months
Ended September 30,
1995 1994
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures $ (136,459) $ (117,531)
Proceeds from sales of property and
equipment 24,174 27,775
Available-for-sale securities -
Purchases (3,356) (5,998)
Sales 3,745 3,242
Proceeds from sale of the European car
leasing and car dealership operations,
net of cash and equivalents in 1995;
and purchase of additional interest in
a foreign subsidiary in 1994 (see
supplemental disclosure below) 56,560 (2,044)
Net cash flows used for investing
activities (55,336) (94,556)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term
debt 320,016 454,116
Repayment of long-term debt (291,329) (173,484)
Short-term borrowings:
Proceeds 823,821 626,151
Repayments (689,115) (319,988)
Ninety day term or less, net 439,084 898,968
Payment for the redemption of
common and preferred stock and
related expenses - (145,043)
Net cash flows provided from
financing activities 602,477 1,340,720
EFFECT OF FOREIGN EXCHANGE RATE CHANGES
ON CASH 69 3,110
NET INCREASE IN CASH AND EQUIVALENTS
DURING THE PERIOD 34,326 23,672
CASH AND EQUIVALENTS AT BEGINNING OF
YEAR 99,749 88,557
CASH AND EQUIVALENTS AT END OF PERIOD $ 134,075 $ 112,229
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for -
Interest (net of amount capitalized) $ 248,091 $ 194,644
Income taxes 26,505 18,995
In connection with an acquisition made during the nine months
ended September 30, 1994, liabilities assumed were $27 million.
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 September 30, 1995, Prepaid Expenses and Other Assets
in the condensed consolidated balance sheet include available-
for-sale securities (in thousands): at fair value of $5,523 (cost
$5,488). 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 September 30,
1995 (in thousands): fair value $283 (cost $297) in 1996; fair
value $2,430 (cost $2,393) 1997 through 2000; fair value $2,810
(cost $2,798) 2001 through 2014. For the nine months ended
September 30, 1995, proceeds of $3.7 million from the sale of
available-for-sale securities were received, and a net gain of
$64,100 was realized. At September 30, 1995, unrealized holding
gains and losses, net of taxes, included in Shareholders' Equity
were $82,145 and $50,620, 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 September 30
Depreciation of revenue earning equipment $212,578 $169,032
Less adjustment of depreciation upon
disposal of the equipment 5,813 (3,084)
Rents paid for vehicles leased 13,478 25,622
Total $231,869 $191,570
Nine months Ended September 30
Depreciation of revenue earning equipment $544,145 $459,755
Less adjustment of depreciation upon
disposal of the equipment 10,653 (22,559)
Rents paid for vehicles leased 55,798 75,997
Total $610,596 $513,193
<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 nine
months ended September 30, 1995 was decreased by $12.0 million.
The adjustment of depreciation upon disposal of revenue
earning equipment for the three months ended September 30, 1995
and 1994 included net gains of $1.3 million and net losses of $.2
million, respectively, on the sale of equipment in the
construction equipment rental operations in the United States;
and net losses of $7.1 million and net gains of $3.3 million,
respectively, in the car rental and car leasing operations.
The adjustment of depreciation upon disposal of revenue
earning equipment for the nine months ended September 30, 1995
and 1994 included net gains of $1.4 million and $12.5 million,
respectively, on the sale of equipment in the construction
equipment rental operations in the United States; and net losses
of $12.1 million and net gains of $10.1 million, respectively, in
the car rental and car leasing operations.
During the nine months ended September 30, 1995, the
registrant purchased Ford Motor Company ("Ford") vehicles at a
cost of approximately $3.5 billion, and sold Ford vehicles to
Ford or its affiliates under various repurchase programs for
approximately $2.2 billion.
<PAGE>
THE HERTZ CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Debt
Debt at September 30, 1995 and December 31, 1994 consists of
the following (in thousands of dollars):
Unaudited
Sept. 30, Dec. 31,
1995 1994
Notes payable, including commercial paper,
average interest rate: 1995, 5.7%;
1994, 6.0% $1,237,155 $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, $3,183; 1994, $3,254; due 1996
to 2005 1,694,477 1,574,406
Swiss Franc bonds, fixed U.S. dollar
obligation 11.1% (effective interest
rate 9.7%); including unamortized
premium: 1995, $33; 1994, $132; due
1995 46,165 46,264
Property and equipment lease obligations,
average interest rate: 1995, 8.2%; 1994
8.7%; due 1995 to 1998 4,240 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 1996 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, $350; 1994,
$461; due 1996 to 1998 249,650 249,539
Junior subordinated promissory notes,
average interest rate 6.9%; net of
unamortized discount: 1995, $297;
1994, $329; due 2000 to 2003 399,703 399,671
Subsidiaries' short-term debt in millions
(1995, $1,033.0; 1994, $757.1) and other
borrowings; average interest rate in
domestic and foreign currencies: 1995,
6.0%; 1994, 6.6%; including unamortized
discount: 1995, $34; 1994, $47 1,073,608 930,356
Total $4,824,173 $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 September 30, 1995 are as follows (in
millions): 1996, $2,541.7 (including $2,270.2 of commercial paper
and short-term borrowings); 1997, $214.9; 1998, $369.8; 1999,
$99.7; 2000, $499.7; after 2000, $1,098.4.
At September 30, 1995, approximately $148 million of the
registrant's consolidated shareholders' equity was free of
dividend limitations pursuant to its existing debt agreements.
At September 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 September 30, 1995 of the swap agreements is to
give the registrant an overall effective weighted-average rate on
debt of 6.94%, with 38% of debt effectively subject to variable
interest rates, compared to a weighted-average interest rate on
debt of 6.89%, with 47% of debt subject to variable interest
rates when not considering the swap agreements. At September 30,
1995, these agreements expressed in notional amounts aggregated
(in millions) $397.2 swaps and $52.8 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 September 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 $2.1
million on the swaps and a net payable of $.2 million 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 $397.2 swaps
maturing $4.9, $149.7, $226.6, $14.3 and $1.7 in 1995, 1996,
1997, 1998 and 1999, respectively; and of notional principal
scheduled to start after September 30, 1995 (in millions) of
$21.4 swaps maturing $1.5, $.7, $.4 and $18.8 in 1996, 1997, 1998
and 1999, respectively; and $32.0 FRAs maturing in 1996.
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 has received
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.
Third Quarter 1995 vs. Third Quarter 1994
Revenues in the third quarter of 1995 of $990 million
increased by $32 million as compared to the third quarter of
1994. This increase was primarily attributable to increases in
the car rental operations resulting from a greater number of
transactions 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 $30 million to $880 million in the
third quarter of 1995 as compared to $850 million in the third
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, higher prices for automobiles,
and lower net proceeds received on disposal of revenue earning
equipment in excess of book value due to a softness in the
domestic vehicle resale markets; these increases were partly
offset by lower depreciation relating to the sale of the European
car leasing operation in 1995. Selling, general and
administrative expense decreased primarily due to lower
advertising costs. 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.
The tax provision of $44 million in the third quarter of 1995
was lower than the tax provision of $47 million in the third
quarter of 1994, primarily due to a lower effective tax rate 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).
Nine Months Ended September 30, 1995 vs.September 30, 1994
Revenues in the nine months of 1995 of $2,584 million
increased by $105 million as compared to the nine months 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 $115 million to $2,441 million in
the nine months of 1995 as compared to $2,326 million in the nine
months 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, higher prices for automobiles,
and lower net proceeds received on disposal of revenue earning
equipment in excess of book value due to a softness in the
domestic vehicle resale markets; 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 $59 million in the nine months of 1995
was lower than the tax provision of $66 million in the nine
months of 1994, primarily due to the lower income before income
taxes and a lower effective tax rate in 1995. See Note 2 to the
Notes to Condensed Consolidated Financial Statements.
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 September 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
nine months ended September 30, 1995, and 1994.
(27) Financial Data Schedule for the nine months ended
September 30, 1995.
(b) Reports on Form 8-K:
The registrant did not file any reports on Form 8-K
during the quarter ended September 30, 1995.
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: October 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
September 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 nine months
ended September 30, 1995 and 1994. 18
27 Financial Data Schedule for the nine
months ended September 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
Nine Months
Ended September 30,
1995 1994
Income before income taxes $143,453 $152,865
Interest expense 248,159 201,459
Portion of rent estimated to represent
the interest factor 59,676 67,512
Earnings before income taxes and fixed
charges $451,288 $421,836
Interest expense (including capitalized
interest) $249,061 $201,812
Portion of rent estimated to represent
the interest factor 59,676 67,512
Fixed charges $308,737 $269,324
Ratio of earnings to fixed charges 1.5 1.6
<TABLE> <S> <C>
<ARTICLE> 5
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1,000
<CASH> 13,280
<SECURITIES> 120,795
<RECEIVABLES> 829,192
<ALLOWANCES> (8,588)
<INVENTORY> 17,077
<CURRENT-ASSETS> 0
<PP&E> 6,247,461
<DEPRECIATION> (951,048)
<TOTAL-ASSETS> 7,219,310
<CURRENT-LIABILITIES> 0
<BONDS> 4,824,173
<COMMON> 1
0
485,900
<OTHER-SE> 356,921
<TOTAL-LIABILITY-AND-EQUITY> 7,219,310
<SALES> 0
<TOTAL-REVENUES> 2,583,990
<CGS> 0
<TOTAL-COSTS> 2,201,354
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,772
<INTEREST-EXPENSE> 235,411
<INCOME-PRETAX> 143,453
<INCOME-TAX> 59,089
<INCOME-CONTINUING> 84,364
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84,364
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
