<PAGE>
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 30, 1997 COMMISSION FILE NO. 1-6651
HILLENBRAND INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1160484
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 STATE ROUTE 46 EAST
BATESVILLE, INDIANA 47006-8835
(Address of principal executive offices) (Zip Code)
(812) 934-7000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former
fiscal year, if changed since last report)
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 ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
Common Stock, without par value - 68,801,564 as of October 3, 1997.
- -------------------------------------------------------------------------------
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1
<PAGE>
HILLENBRAND INDUSTRIES, INC.
INDEX TO FORM 10-Q
Page
----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited)
Consolidated Income for the Three Months and Nine 3
Months Ended 8/30/97 and 8/31/96
Consolidated Balance Sheets, 4
8/30/97 and 11/30/96
Consolidated Cash Flows for the Nine Months 5
Ended 8/30/97 and 8/31/96
Notes to Consolidated Financial Statements 6-8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
PART II - OTHER INFORMATION
Item 5 - Other Information 11
Item 6 - Exhibits and Reports on Form 8-K 11
SIGNATURES 11
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Hillenbrand Industries, Inc. and Subsidiaries
Consolidated Income
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
08/30/97 08/31/96 08/30/97 08/31/96
-------- ---------- ---------- ----------
(In Millions Except Per Share Data)
<S> <C> <C> <C> <C>
Net revenues:
Health Care sales . . . . . . . . . $ 143 $ 135 $ 415 $ 428
Health Care rentals . . . . . . . . 92 91 281 280
Funeral Services. . . . . . . . . . 125 123 407 393
Insurance . . . . . . . . . . . . . 69 55 198 161
-------- ---------- ---------- ----------
Total revenues. . . . . . . . . . . 429 404 1,301 1,262
Cost of revenues:
Health Care cost of goods sold. . . 79 80 233 255
Health Care rental expenses . . . . 59 57 175 176
Funeral Services. . . . . . . . . . 64 66 210 210
Insurance . . . . . . . . . . . . . 48 38 143 119
-------- ---------- ---------- ----------
Total cost of revenues. . . . . . . 250 241 761 760
Other operating expenses . . . . . . . . 121 107 353 327
-------- ---------- ---------- ----------
Operating profit . . . . . . . . . . . . 58 56 187 175
Interest expense . . . . . . . . . . . . (6) (7) (17) (19)
Other income, net. . . . . . . . . . . . 6 8 13 13
-------- ---------- ---------- ----------
Income before income taxes . . . . . . . 58 57 183 169
Income taxes . . . . . . . . . . . . . . 23 23 72 68
-------- ---------- ---------- ----------
Net income . . . . . . . . . . . . . . . $ 35 $ 34 $ 111 $ 101
-------- ---------- ---------- ----------
-------- ---------- ---------- ----------
Net income per common share. . . . . . . $ .51 $ .50 $ 1.61 $ 1.46
-------- ---------- ---------- ----------
-------- ---------- ---------- ----------
Dividends per common share . . . . . . . $ .165 $ .155 $ .495 $ .465
-------- ---------- ---------- ----------
-------- ---------- ---------- ----------
Average shares outstanding (thousands) . 68,801 69,197 68,797 69,704
-------- ---------- ---------- ----------
-------- ---------- ---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
Hillenbrand Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
ASSETS 08/30/97 11/30/96
-------- --------
(In Millions)
Current assets:
Cash and cash equivalents. . . . . . . . . . . . $ 330 $ 266
Trade receivables. . . . . . . . . . . . . . . . 295 287
Inventories. . . . . . . . . . . . . . . . . . . 87 96
Other. . . . . . . . . . . . . . . . . . . . . . 45 45
-------- --------
Total current assets. . . . . . . . . . . . . . 757 694
Equipment leased to others, net. . . . . . . . . . 90 93
Property, net. . . . . . . . . . . . . . . . . . . 236 253
Other assets:
Intangible assets, net . . . . . . . . . . . . . 122 149
Other assets . . . . . . . . . . . . . . . . . . 51 50
-------- --------
Total other assets. . . . . . . . . . . . . . . 173 199
Insurance assets:
Investments. . . . . . . . . . . . . . . . . . . 1,839 1,663
Deferred policy acquisition costs . . . . . . . 457 406
Deferred income taxes. . . . . . . . . . . . . . 53 44
Other. . . . . . . . . . . . . . . . . . . . . . 48 44
-------- --------
Total insurance assets. . . . . . . . . . . . . 2,397 2,157
-------- --------
Total assets . . . . . . . . . . . . . . . . . . . $ 3,653 $ 3,396
-------- --------
-------- --------
LIABILITIES
Current liabilities:
Short-term debt. . . . . . . . . . . . . . . . . $ 59 $ 74
Current portion of long-term debt. . . . . . . . 1 1
Trade accounts payable . . . . . . . . . . . . . 48 50
Other. . . . . . . . . . . . . . . . . . . . . . 183 195
-------- --------
Total current liabilities . . . . . . . . . . . 291 320
Other liabilities:
Long-term debt . . . . . . . . . . . . . . . . . 204 204
Other long-term liabilities. . . . . . . . . . . 73 74
Deferred income taxes. . . . . . . . . . . . . . 11 13
-------- --------
Total other liabilities . . . . . . . . . . . . 288 291
Insurance liabilities:
Benefit reserves . . . . . . . . . . . . . . . . 1,613 1,449
Unearned revenue . . . . . . . . . . . . . . . . 587 528
Other . . . . . . . . . . . . . . . . . . . . . 35 21
-------- --------
Total insurance liabilities . . . . . . . . . . 2,235 1,998
-------- --------
Total liabilities. . . . . . . . . . . . . . . . . 2,814 2,609
-------- --------
Commitments and contingencies (Note 5)
SHAREHOLDERS' EQUITY
Common stock . . . . . . . . . . . . . . . . . . 4 4
Additional paid-in capital . . . . . . . . . . . 14 14
Retained earnings. . . . . . . . . . . . . . . . 1,050 973
Accumulated unrealized gain on
investments . . . . . . . . . . . . . . . . . . 14 21
Foreign currency translation adjustment. . . . . (8) 10
Treasury stock . . . . . . . . . . . . . . . . . (235) (235)
-------- --------
Total shareholders' equity. . . . . . . . . . . 839 787
-------- --------
Total liabilities and
shareholders' equity. . . . . . . . . . . . . . . $ 3,653 $ 3,396
-------- --------
-------- --------
See Notes to Consolidated Financial Statements
4
<PAGE>
Hillenbrand Industries, Inc. and Subsidiaries
Consolidated Cash Flows
Nine Months Ended
08/30/97 08/31/96
-------- --------
(In Millions)
Operating activities:
Net income . . . . . . . . . . . . . . . . . . . $ 111 $ 101
Adjustments to reconcile net income
to net cash flows from operating activities:
Depreciation and amortization . . . . . . . . 79 78
Change in noncurrent deferred
income taxes. . . . . . . . . . . . . . . . . (6) (3)
Gain on sale of business . . . . . . . . . . . - (2)
Change in net working capital
excluding cash, current debt,
acquisitions and dispositions. . . . . . . . (12) (4)
Change in insurance items:
Deferred policy acquisition costs . . . . . . (51) (48)
Other, net. . . . . . . . . . . . . . . . . . 31 35
Other, net . . . . . . . . . . . . . . . . . . 6 3
-------- --------
Net cash provided by operating activities. . . . . 158 160
-------- --------
Investing activities:
Capital expenditures, net. . . . . . . . . . . . (63) (71)
Acquisitions of businesses . . . . . . . . . . . - (2)
Other investments. . . . . . . . . . . . . . . . (5) (3)
Proceeds on sale of business . . . . . . . . . . - 15
Insurance investments:
Purchases. . . . . . . . . . . . . . . . . . . (578) (342)
Proceeds on maturities . . . . . . . . . . . . 73 59
Proceeds on sales prior to maturity. . . . . . 323 113
-------- --------
Net cash used in investing
activities. . . . . . . . . . . . . . . . . . . . (250) (231)
-------- --------
Financing activities:
Additions (reductions) to debt, net. . . . . . . (5) 28
Payment of cash dividends. . . . . . . . . . . . (34) (32)
Treasury stock acquisitions. . . . . . . . . . . - (51)
Insurance premiums received. . . . . . . . . . . 388 338
Insurance benefits paid. . . . . . . . . . . . . (193) (170)
-------- --------
Net cash provided by financing
activities. . . . . . . . . . . . . . . . . . . . 156 113
-------- --------
Total cash flows . . . . . . . . . . . . . . . . . 64 42
Cash and cash equivalents:
At beginning of period. . . . . . . . . . . . . . 266 171
-------- --------
At end of period. . . . . . . . . . . . . . . . . $ 330 $ 213
-------- --------
-------- --------
See Notes to Consolidated Financial Statements
5
<PAGE>
Hillenbrand Industries, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in millions)
1. Basis of Presentation
The unaudited, condensed consolidated financial statements appearing in
this quarterly report on Form 10-Q should be read in conjunction with the
financial statements and notes thereto included in the Company's latest
annual report. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The
statements herein have been prepared in accordance with the Company's
understanding of the instructions to Form 10-Q. In the opinion of
management, such financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary to present fairly the
financial position, results of operations, and cash flows, for the interim
periods.
2. Supplementary Income Statement Information
Other income, net, is comprised of the following:
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ ------------------
08/30/97 08/31/96 08/30/97 08/31/96
-------- -------- -------- --------
Investment income--non-insurance 5 5 14 13
Gain on sale of assets of Block
Medical before income taxes -- 3 -- 3
Other, net 1 -- (1) (3)
-------- -------- -------- --------
6 8 13 13
-------- -------- -------- --------
-------- -------- -------- --------
3. Supplementary Balance Sheet Information
The following information pertains to non-insurance assets and consolidated
shareholders' equity:
08/30/97 11/30/96
-------- --------
Allowance for possible losses and
discounts on trade receivables . . . . . $ 19 $ 19
Accumulated depreciation of equipment
leased to others and property. . . . . . $617 $588
Accumulated amortization of intangible
assets . . . . . . . . . . . . . . . . . $151 $145
Capital Stock:
Preferred stock, without par value:
Authorized 1,000,000 shares;
Shares issued. . . . . . . . . . None None
Common stock, without par value:
Authorized 199,000,000 shares;
Shares issued. . . . . . . . . . 80,323,912 80,323,912
6
<PAGE>
4. Earnings per Common Share
Earnings per common share were computed by dividing net income ($35,165
thousand for the three months of 1997; $110,622 thousand for the nine
months of 1997; $34,684 thousand for the three months of 1996; and
$101,660 thousand for the nine months of 1996) by the average number of
common shares outstanding during each period (68,800,958 for the three
months of 1997; 68,796,858 for the nine months of 1997; 69,196,739 for
the three months of 1996; and 69,703,595 for the nine months of 1996).
Under a program begun in 1983, the Company has acquired to date
13,008,672 shares of common stock of which 1,568,061 shares have been
reissued for general corporate purposes. The remaining treasury stock
has been excluded in determining the average number of shares
outstanding during each period. Common share equivalents arising from
shares awarded under the Senior Executive Compensation Program which was
initiated in fiscal year 1978 and various deferred share equivalents
have also been excluded from the computation because of their
insignificant dilutive effect.
5. Contingencies
As discussed under Item 3 of the Company's Annual Report on Form 10-K
for the fiscal year ended November 30, 1996, Hillenbrand Industries,
Inc., and its subsidiary Hill-Rom Company, Inc., are the subject of an
antitrust suit brought by a competitor in the health care equipment
market. The plaintiff seeks monetary damages totaling in excess of $269
million, trebling of any damages that may be allowed by the court, and
injunctions to prevent further alleged unlawful activities. The Company
believes that the claims are without merit and is aggressively defending
itself against all allegations. Accordingly, it has not recorded any
loss provision relative to damages sought by the plaintiffs. There was
no material change in the status of this litigation during the quarter
ended August 30, 1997.
On November 20, 1996, the Company filed a Counterclaim to the above
action against Kinetic Concepts, Inc. (KCI) in the U.S. District Court
in San Antonio, Texas. The Counterclaim alleges that KCI has attempted
to monopolize the therapeutic bed market and to interfere with the
Company's and Hill-Rom's business relationships by conducting a campaign
of anticompetitive conduct. It further alleges that KCI abused the
legal process for its own advantage, interfered with existing Hill-Rom
contractual relationships, interfered with Hill-Rom's prospective
contractual and business relationships, commercially disparaged the
Company and Hill-Rom by uttering and publishing false statements to
customers and prospective customers not to do business with the Company
and Hill-Rom, and committed libel and slander in statements made both
orally and published by KCI that the Company and Hill-Rom were providing
illegal discounts. The Company alleges that KCI's intent is to
eliminate legal competitive marketplace activity. There was no material
change in the status of this litigation during the quarter ended
August 30, 1997.
7
<PAGE>
The Company has voluntarily entered into remediation agreements with
environmental authorities, and has been issued Notices of Violation
alleging violations of certain permit conditions. Accordingly, the
Company is in the process of implementing plans of abatement in
compliance with agreements and regulations. The Company has also been
notified as a potentially responsible party in investigations of certain
offsite disposal facilities. The cost of all plans of abatement and
waste site cleanups in which the Company is currently involved is not
expected to exceed $10 million. The Company has provided adequate
reserves in its financial statements for these matters. Changes in
environmental law might affect the Company's future operations, capital
expenditures and earnings. The cost of complying with these provisions
is not known.
The Company is subject to various other claims and contingencies arising
out of the normal course of business, including those relating to
commercial transactions, product liability, safety, health, taxes,
environmental and other matters. Management believes that the ultimate
liability, if any, in excess of amounts already provided or covered by
insurance, is not likely to have a material adverse effect on the
Company's financial condition, results of operations or cash flows.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THIRD QUARTER 1997 COMPARED WITH THIRD QUARTER 1996
Consolidated net revenues of $429 million were up $25 million or 6%. Health
Care sales grew $8 million or 6% due to increased shipments and improved
product mix in the acute care, nurse communications and long-term care
markets in North America. These gains were partially offset by lower sales in
Europe (primarily Germany), unfavorable currency adjustments and the
disposition of Block Medical, the revenues of which were included in third
quarter 1996 results. Sales at Medeco Security Locks were up due to
increased shipments in door security and, to a lesser extent, route
management. Health Care rental revenue was essentially flat as higher units
in use in the North America acute care, long-term care and home care markets
was mostly offset by lower rates in all markets (due to a mix down in product
utilization and pricing pressures) and unfavorable currency adjustments in
Europe. Funeral Services sales increased $2 million or 2%. Growth in casket
unit volume (despite a lower death rate) was partially offset by a shift down
in product mix. Cremation product sales continued to grow at double digit
rates. Insurance revenues were up $14 million or 25%. Earned premium
revenue increased due to the greater number of policies in force year over
year. Investment income increased on the strength of the larger investment
portfolio and higher yields.
8
<PAGE>
Gross profit on Health Care sales of $64 million increased $9 million or 16%
and as a percentage of sales improved from 41% to 45%. This improvement was
due to higher product mix in North America, reduced sales of lower-margin
European products, the favorable effect of higher sales on the fixed
manufacturing cost base, and cost and productivity improvements in all
operations. Gross profit on rental revenues declined $1 million or 3% and as
a percentage of revenues was down slightly from 37% to 36%. This change
reflects the aforementioned downward shift in product mix and pricing
pressures, largely offset by improved therapy unit service costs. Gross
profit on Funeral Services sales was up $4 million or 7% and as a percentage
of sales was 49% versus 46% in last year's third quarter. Productivity
improvements more than offset the negative effect of lower product mix on the
gross profit margin.
Insurance operating profit (which is net of other operating expenses)
increased 22% from $9 million in 1996 to $11 million in 1997 due to increased
levels of insurance in force, higher investment income and control of
operating expenses.
Other operating expenses (including those associated with insurance
operations) increased $14 million or 13% and as a percentage of revenues were
28% versus 26% in 1996. Higher incentive compensation expense (reflecting
improved performance), costs associated with Medeco's direct distribution
system (implemented in the fourth quarter of 1996) and increased new product
development costs were partially offset by lower fixed costs in Europe and
process improvements in all operations.
The consolidated effective income tax rate was 40% in both 1997 and 1996. In
1996, the income tax benefit of approximately $6 million generated by the
book and tax differences in the basis of Block Medical was offset by an
increase in the provision resulting from higher operating losses in Europe.
NINE MONTHS ENDED AUGUST 30, 1997 COMPARED WITH NINE MONTHS ENDED
AUGUST 31, 1996
Except as noted below, the factors affecting third quarter comparisons also
affected year to date comparisons.
Consolidated net revenues were up $39 million or 3%. Health Care sales
declined $13 million or 3% due to lower sales in Europe (primarily Germany),
unfavorable currency adjustments and the disposition of Block Medical. These
items were partially offset by higher shipments in the acute care, nurse
communications and long-term care markets in North America. Product mix in
the acute care market, which was unfavorable in the first and second
quarters, began trending positive in the third quarter. Sales at Medeco were
up marginally, with higher door security shipments being mostly offset by
lower route management shipments in the first and second quarters. Health
Care rental revenue was essentially unchanged as increased units in use in
all North America markets was mostly offset by lower rates in North America,
and lower revenue in Europe. Funeral Services sales increased $14 million or
4% due to higher casket unit volume (reflecting increased market share
against lower deaths) and an increase in cremation
9
<PAGE>
product sales. These gains were partially offset by a shift down in casket
product mix. Insurance revenue growth of $37 million or 23% was generated by
higher earned premium revenue and investment income.
Gross profit on Health Care sales of $182 million was up $9 million or 5% and
as a percentage of sales improved from 40% to 44%. The gross profit dollar
growth was generated primarily in the third quarter as lower acute care
shipments in the second quarter offset modest first quarter growth. The
margin improvement reflects reduced sales of lower-margin European products,
the favorable effect of higher sales on the fixed manufacturing cost base and
various cost and productivity improvements. Gross profit on rental revenues
was up $2 million or 2% and as a percentage of revenues improved from 37% to
38%. The pricing pressures and negative trend in product mix became more
prevalent in the third quarter but were more than offset by the improvements
realized in therapy unit service costs. Gross profit on Funeral Services
sales increased $14 million or 8% and as a percentage of sales improved from
47% to 48%.
Other operating expenses increased $26 million or 8% and as a percentage of
revenues were 27% versus 26% in 1996. Most of this growth occurred in the
third quarter and reflects higher incentive compensation, Medeco's direct
distribution system and new product development.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flows from operating activities and selected borrowings represent
the Company's primary sources of funds for growth of the business, including
capital expenditures and acquisitions. Cash and cash equivalents (excluding
the investments of insurance operations) increased from $266 million at the
end of 1996 to $330 million at the end of the third quarter. Cash flows from
operating activities of $158 million were down $2 million versus the first
nine months of 1996 due to a greater increase in working capital from year
end, mostly offset by higher earnings. Higher accounts receivable (primarily
reflecting lower prepayments and higher Medicare receivables at Hill-Rom) and
lower accrued expenses were partially offset by lower inventories at Hill-Rom
and Batesville Casket. Accounts receivable days sales outstanding were 73 at
the end of the third quarter compared with 72 at the end of 1996. Annualized
inventory turns improved to 12.7 from 11.4 in fiscal 1996 due primarily to
strong first quarter shipments at Batesville Casket and strong third quarter
shipments at Hill-Rom.
Capital spending of $63 million was down $8 million due to lower therapy
rental unit production and avoidance of expenditures on improvement of
European operations in 1996. The Forethought Group continues to liquidate
and redeploy portions of its investment portfolio in order to match
maturities with expected benefit payments and maximize yields within
statutory and management constraints.
FACTORS THAT MAY AFFECT FUTURE RESULTS
While the Company has managed to reduce the losses on its operations in
Europe year over year through consolidation of operations and other process
improvements, there has not yet been a measurable improvement in the European
health care capital sales or therapy rental markets. The Company believes it
is well positioned to succeed in these markets when they do improve.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
This report contains certain forward-looking statements which are based on
management's current views and assumptions regarding future events and
financial performance. These statements are qualified by reference to
"Disclosure Regarding Forward-Looking Statements" in Part II of the Company's
Annual Report on Form 10-K for the fiscal year ended November 30, 1996 which
lists important factors that could cause actual results to differ materially
from those discussed in this report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
Exhibit 27 Financial Data Schedule
B. Reports on Form 8-K
There were no reports filed on Form 8-K during the third quarter
ended August 30, 1997.
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.
HILLENBRAND INDUSTRIES, INC.
DATE: October 10, 1997 BY: /S/ Tom E. Brewer
------------------------------------
Tom E. Brewer
Chief Financial Officer
DATE: October 10, 1997 BY: /S/ James D. Van De Velde
------------------------------------
James D. Van De Velde
Controller
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS INCLUDED UNDER ITEM 1 OF THE COMPANY'S
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED AUGUST 30, 1997, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-29-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> AUG-30-1997
<CASH> 330
<SECURITIES> 0
<RECEIVABLES> 314
<ALLOWANCES> 19
<INVENTORY> 87
<CURRENT-ASSETS> 757
<PP&E> 943
<DEPRECIATION> 617
<TOTAL-ASSETS> 3,653
<CURRENT-LIABILITIES> 291
<BONDS> 204
0
0
<COMMON> 4
<OTHER-SE> 835
<TOTAL-LIABILITY-AND-EQUITY> 3,653
<SALES> 822
<TOTAL-REVENUES> 1,301
<CGS> 443
<TOTAL-COSTS> 761
<OTHER-EXPENSES> 353
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 17
<INCOME-PRETAX> 183
<INCOME-TAX> 72
<INCOME-CONTINUING> 111
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111
<EPS-PRIMARY> 1.61
<EPS-DILUTED> 1.61
</TABLE>