-1-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-7898
LOWE'S COMPANIES, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0578072
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. BOX 1111, NORTH WILKESBORO, N.C. 28656
(Address of principal executive offices)
(Zip Code)
(910) 651-4000
(Registrant's telephone number, including area code)
NONE
(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.
Class Outstanding at November 30, 1996
Common Stock, $.50 par value 173,030,089
13
TOTAL PAGES
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LOWE'S COMPANIES, INC.
- INDEX -
PART I - Financial Information: Page No.
Consolidated Balance Sheets - October 31, 1996
and January 31, 1996. 3
Consolidated Statements of Current and
Retained Earnings - three months and nine months
ended October 31, 1996 and 1995. 4
Consolidated Statements of Cash Flows - nine
months ended October 31, 1996 and 1995. 5
Notes to Consolidated Financial Statements. 6-7
Management's Discussion and Analysis of Results
of Operations and Financial Condition. 8-10
Independent Accountants' Report. 11
PART II - Other Information 12
Item 6 (a) - Exhibits.
Item 6 (b) - Reports on Form 8-K.
EXHIBIT INDEX
Exhibit 11 Computation of per share earnings 13
<TABLE>
-3-
Consolidated Balance Sheets
Lowe's Companies, Inc. and Subsidiary Companies
Dollars in thousands
<CAPTION>
October 31, January 31,
1996 1996
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $36,389 $63,868
Short-term investments 41,706 107,429
Accounts receivable - net 143,742 113,483
Merchandise inventory 1,572,956 1,267,077
Other assets 70,034 51,827
Total current assets 1,864,827 1,603,684
Property, less accumulated depreciation 2,301,584 1,858,274
Long-term investments 23,192 41,059
Other assets 50,211 53,369
Total assets $4,239,814 $3,556,386
Liabilities and Shareholders' Equity
Current liabilities:
Short-term notes payable $66,854 $16,617
Current maturities of long-term debt 10,719 14,127
Accounts payable 833,004 655,399
Employee retirement plans 41,457 44,924
Accrued salaries and wages 77,551 67,370
Other current liabilities 203,780 151,494
Total current liabilities 1,233,365 949,931
Long-term debt, excluding current maturities 740,760 866,183
Deferred income taxes 94,853 83,557
Total liabilities 2,068,978 1,899,671
Shareholders' equity
Common stock - $.50 par value;
Issued and Outstanding
October 31, 1996 173,030,089
January 31, 1996 160,918,046 86,515 80,459
Capital in excess of par 891,487 596,828
Retained earnings 1,199,763 988,447
Unearned compensation-restricted stock awards (6,429) (8,076)
Unrealized loss on available-for-sale securities (500) (943)
Total shareholders' equity 2,170,836 1,656,715
Total liabilities
shareholders' equity $4,239,814 $3,556,386
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
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Consolidated Statements of Current and Retained Earnings
Lowe's Companies, Inc. and Subsidiary Companies
Dollars In Thousands, Except Per Share Data
<CAPTION>
Quarter Ended Nine Months Ended
October 31, 1996 October 31, 1995 October 31, 1996 October 31, 1995
Current Earnings Amount Percent Amount Percent Amount Percent Amount Percent
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $2,193,239 100.00 $1,765,992 100.00 $6,558,745 100.00 $5,378,740 100.00
Cost of sales 1,627,073 74.19 1,337,049 75.71 4,887,287 74.52 4,034,115 75.00
Gross margin 566,166 25.81 428,943 24.29 1,671,458 25.48 1,344,625 25.00
Expenses:
Selling, general
and administrative 356,074 16.24 284,828 16.13 1,036,967 15.80 840,969 15.63
Store opening costs 15,995 0.73 16,322 0.92 41,048 0.63 36,351 0.68
Depreciation 50,744 2.30 38,867 2.20 143,146 2.17 107,648 2.00
Employee retirement plans 16,254 0.74 11,574 0.66 46,976 0.72 38,301 0.71
Interest 10,540 0.48 9,145 0.52 35,844 0.55 27,404 0.51
Total expenses 449,607 20.49 360,736 20.43 1,303,981 19.87 1,050,673 19.53
Pre-tax earnings 116,559 5.32 68,207 3.86 367,477 5.61 293,952 5.47
Income tax provision 41,376 1.89 24,288 1.37 130,953 2.00 106,100 1.98
Net earnings $75,183 3.43 $43,919 2.49 $236,524 3.61 $187,852 3.49
Shares outstanding
(weighted average) 172,954 160,766 165,853 160,308
Earnings per common & common
equivalent share $ 0.43 $ 0.27 $ 1.43 $ 1.17
Earnings per common share -
assuming full dilution $ 0.43 $ 0.27 $ 1.39 $ 1.13
Retained earnings
Balance at beginning
of period $1,133,216 $ 922,416 $ 988,447 $792,891
Net earnings 75,183 43,919 236,524 187,852
Cash dividends (8,636) (8,031) (25,208) (22,439)
Balance at end
of period $1,199,763 $ 958,304 $1,199,763 $958,304
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
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Consolidated Statements of Cash Flows
Lowe's Companies, Inc. and Subsidiary Companies
Dollars in Thousands
<CAPTION>
For the nine months ended October 31,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities:
Net Earnings $236,524 $187,852
Adjustments to Reconcile Net Earnings to Net Cash
Provided By Operating Activities:
Depreciation 143,146 107,648
Amortization of Original Issue Discount 1,643 2,756
Increase in Deferred Income Taxes 4,900 15,130
Gain on Disposition/Writedown of
Fixed and Other Assets (1,588) (1,389)
Increase in Operating Assets:
Accounts Receivable - Net (30,259) (35,103)
Merchandise Inventory (305,879) (232,262)
Other Operating Assets (11,874) (5,377)
Increase (Decrease) in Operating Liabilities:
Accounts Payable 177,605 38,509
Employee Retirement Plans 40,423 32,048
Accrued Store Restructuring (7,180)
Other Operating Liabilities 64,140 26,828
Net Cash Provided by Operating Activities 318,781 129,460
Cash Flows from Investing Activities:
Decrease (Increase) in Investment Assets:
Short-Term Investments 84,232 30,763
Purchases of Long-Term Investments (11,648) (24,388)
Proceeds from Sale/Maturity of
Long-Term Investments 11,688 58,065
Other Long-Term Assets 803 (1,092)
Fixed Assets Acquired (458,473) (359,394)
Proceeds from the Sale of Fixed and
Other Long-Term Assets 17,168 19,222
Net Cash Used in Investing Activities (356,230) (276,824)
Cash Flows from Financing Activities:
Sources:
Long-Term Debt Borrowings 89,950
Net Increase in Short-Term Borrowings 50,237
Stock Options Exercised 44
Total Financing Sources 50,237 89,994
Uses:
Repayment of Long-term Debt (15,059) (23,331)
Cash Dividend Payments (25,208) (22,439)
Total Financing Uses (40,267) (45,770)
Net Cash Provided by Financing Activities 9,970 44,224
Net Decrease in Cash and Cash Equivalents (27,479) (103,140)
Cash and Cash Equivalents, Beginning of Period 63,868 150,319
Cash and Cash Equivalents, End of Period $36,389 $47,179
See accompanying notes to consolidated financial statements.
</TABLE>
-6-
Lowe's Companies, Inc. and Subsidiary Companies
Notes to Consolidated Financial Statements
Note 1: The accompanying Consolidated Financial Statements (unaudited) have
been reviewed by an independent certified public accountant, and in the
opinion of management, they contain all adjustments necessary to present
fairly the financial position as of October 31, 1996, and the results of
operations for the three-month and nine-month periods ended October 31, 1996
and 1995, and the cash flows for the nine-month periods ended October 31, 1996
and 1995.
Note 2: The results of operations for the nine-month periods ended October
31, 1996 and 1995 are not necessarily indicative of the results to be expected
for the full year.
Note 3: The Company has a cash management program which provides for the
investment of excess cash balances in financial instruments which have
maturities of up to three years. Investments that are readily convertible to
cash within three months of purchase are classified as cash equivalents.
Investments with a maturity of between three months and one year are
classified as short-term investments. Investments with maturities greater than
one year are classified as long-term.
Note 4: Net interest expense is composed of the following:
Quarter ended Nine Months ended
October 31, October 31,
1996 1995 1996 1995
Long-term debt $6,211 $8,841 $24,881 $26,351
Capitalized leases 7,822 4,277 20,151 11,339
Short-term debt 915 892 2,617 1,500
Amortization of loan cost 114 70 314 211
Short-term interest income (2,141) (2,891) (6,866) (8,056)
Interest capitalized on
construction in progress (2,381) (2,044) (5,253) (3,941)
Net interest expense $10,540 $9,145 $35,844 $27,404
Note 5: If the FIFO method of inventory accounting had been used,
inventories would have been $83,676,000 higher at October 31, 1996 and
$73,226,000 higher at January 31, 1996.
Note 6: There were no stock options exercised during the nine-month period
ended October 31, 1996. Stock options exercised in the nine-month period
ended October 31, 1995 consisted of 4,000 shares resulting in proceeds of
$44,000. There were no stock options exercised in the three-month period
ended October 31, 1995.
Note 7: Property is shown net of accumulated depreciation of $575,751,000
at October 31, 1996 and $459,622,000 at January 31, 1996.
-7-
Note 8: Supplemental disclosures of cash flow information:
Nine months ended October 31 1996 1995
Cash paid for interest (net of capitalized) $ 50,337,000 $ 42,502,000
Cash paid for income taxes 119,131,000 76,373,000
Non-cash investing and financing activities:
Common stock issued to ESOP 43,907,000 37,219,000
Fixed assets acquired under capital lease 141,677,000 77,232,000
Conversion of debt to common stock 256,798,000 2,231,000
Note 9: In January 1996, the Board of Directors authorized the funding of
the Fiscal 1995 ESOP contribution primarily with the issuance of new shares of
the Company's common stock. During the first three quarters of Fiscal 1996,
the Company issued 1,214,383 shares with a market value of $43.9 million.
Note 10: The Company's 3% Convertible Subordinated Notes were called for
redemption on July 22, 1996. Most bond holders opted to convert prior to the
redemption date and only $20,000 principal were redeemed at $910.78 per
$1,000. During the first three quarters of Fiscal 1996 and 1995, $284,724,000
and $2,532,000 principal of the Company's 3% Convertible Subordinated Notes
were converted into 10,896,910 and 96,904 shares of the Company's common
stock, respectively.
Note 11: Costs associated with the relocation and closing of stores during
the three months and nine months ended October 31, 1995, which were recognized
through the restructuring charge established in Fiscal 1991, totaled
$3,462,000 and $12,771,000, respectively. All costs associated with
relocations and closings during the three and nine months ended October 31,
1996 were included in selling, general and administrative expenses since
the store restructuring accrual was depleted as of January 31, 1996.
Note 12: Earnings per common and common equivalent share is computed based
upon the weighted average number of common shares outstanding during the
period plus the dilutive effect of common shares contingently issuable from
stock options. Earnings per common share - assuming full dilution reflects
the potential dilutive effect of dilutive common share equivalents and the
Company's 3% Convertible Subordinated Notes issued July 22, 1993.
-8-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
This discussion should be read in conjunction with the financial statements
and the financial statement footnotes included in this Form 10-Q.
For the quarter ended October 31, 1996, the Company reported third quarter
sales growth of 24% to $2.193 billion and an earnings increase of 71% to $75
million. Earnings per share (fully diluted) were $.43 compared to $.27 in the
comparable quarter last year. Comparable store sales were up 10%. For the
nine months ended October 31, 1996, sales grew 22% to $6.559 billion, net
earnings increased 26% to $236.5 million and earnings per share (fully
diluted) were $1.39 compared to $1.13 in the comparable period of last year.
Comparable store sales increased 7% year to date.
Sales in the third quarter were enhanced by the addition of 5.7 million
square feet of retail selling space at new and existing locations since last
year's third quarter. Significant sales gains came in tools, heating/cooling,
kitchen cabinets and appliances, home decor, yard, patio and garden, and home
care/safety. Average inflation in sales prices was 2%. This inflation was
primarily attributed to slightly higher prices in lumber and outdoor
products.
Gross margin was 25.81% of sales for the quarter ended October 31, 1996,
versus 24.29% in last year's quarter. Of the 152 basis point improvement, 18
points were due to a favorable LIFO comparison with last year's third quarter.
Currently projections indicate lower inflation in inventory costs than
anticipated last year. The remaining increase in the gross margin rate
continues to reflect the shift in business from contractor to retail,
favorable changes in product mix and ennhanced price management processes.
Gross margin for the nine months ended October 31, 1996, was 25.48%
versus 25.00% last year.
Selling, general and administrative expenses (SG&A) were 16.24% of sales
in the third quarter versus 16.13% in last year's quarter. SG&A increased 25%
compared to a 24% sales gain in the quarter. This 11 basis point increase is
related to several off-setting changes from last year's third quarter. The
most notable change relates to a $4.05 million expense for the Company's
ongoing store relocation program and the closing of underperforming stores
that had a negative 19 basis point impact. In third quarter 1995, these costs
($3.5 million) were charged against the restructuring reserve which was
depleted as of January 31, 1996. Also, as a result of the Company's improved
performance levels versus last year, annual bonus accruals provided an
unfavorable variance of 19 basis points in 1996 as compared to 1995.
Comparable store salaries increased 8% in the third quarter versus a 10% sales
gain resulting in a 16 basis point favorable variance. For the nine months
ended October 31, 1996, SG&A was 15.80% of sales versus 15.63% for the
comparable period last year.
-9-
For the quarter ended October 31, 1996, store opening costs were $16.0
million versus $16.3 million last year, representing costs associated with the
opening of 17 stores this quarter (12 new and 5 relocated) compared to 16
stores in last year's third quarter (10 new and 6 relocated). Charges in the
third quarter of 1996 for future openings were $2.3 million compared to $2.8
million in last year's third quarter. Also, charges for prior openings were
$831,000 compared to $1.6 million in 1995. For the nine months ended October
31, 1996, store opening costs were $41.0 million versus $36.4 million last
year, representing costs associated with the opening of 48 stores this year
(34 new retail stores, 13 relocated and 1 contractor yard) compared to 42
stores in the comparable period last year (27 new and 15 relocated).
Depreciation was $50.7 million for the quarter ended October 31, 1996 and
$143.1 million for the nine months ended October 31, 1996, increases of 31%
and 33%, respectively, over the comparable periods last year. The increases
are due primarily to buildings, fixtures, displays, computer equipment and
store equipment related to the Company's expansion program.
Employee retirement plans expense was $16.3 million for the three months
ended October 31, 1996, a 40% increase compared to last year's quarter. For
the nine months ended October 31, 1996, employee retirement plans expense
was up by 23% to $47.0 million. These increases are a result of increased
eligibility rates in 1996 and the recognition of the benefit of certain plan
changes in the third quarter of 1995.
Interest expense increased $8.4 million to $35.8 million for the nine
months ended October 31, 1996. This is the result of an increase of $3.9
million in the first quarter, an increase of $3.1 million in the second
quarter and an increase of $1.4 million in the third quarter. The increase is
primarily due to interest on capitalized building leases.
The Company's effective income tax rate was 35.50% for the three months
ended October 31, 1996, compared to 35.61% for the comparable three months
last year. The effective rate was 35.64% versus 36.09% for the nine months
ended October 31, 1996 and 1995, respectively. The fiscal 1996 rate has
decreased primarily due to a lower effective state tax rate.
LIQUIDITY AND CAPITAL RESOURCES
The uses of cash in the first nine months have continued to lay the
groundwork for successfully implementing our strategic plan. Merchandise
inventory has increased $305.9 million, about 57% due to our new and relocated
stores and 43% due to seasonal increases in inventory and increased
merchandise assortments. Real property has increased in line with the
Company's strategic plan to continue expansion of retail sales floor square
footage by expanding into new markets and relocating from older, smaller
stores to larger stores. The Company is in line to meet its 1996 capital
budget targeted at $1 billion, inclusive of $240 million in operating leases.
-10-
The Company ended the third quarter with 391 stores and 28.5 million square
feet of retail selling space, a 25% increase over last October's selling
space. The Company's expansion plans for the remainder of 1996 include 13 new
stores in new markets and 7 relocations, weather permitting. Approximately
half the 1996 projects have been or will be leased and the other half owned.
Expansion in the first nine months of fiscal 1996 included 34 new retail
stores, 12 relocated and 2 contractor yards representing 4.5 million square
feet of new incremental retail space. The Company also closed or consolidated
10 older, smaller stores during the first nine months of fiscal 1996.
Current plans are to continue to finance the expansion through cash flows
from operations, operating leases, issuance of about $44 million in common
stock to our ESOP (see Note 9) and external financing. Financing in the first
nine months came from normal operating activities. In October 1996, the
Company filed a shelf registration statement covering $275 million of
unallocated debt or equity securities with the Securities and Exchange
Commission. When combined with the $75 million of securities remaining
unissued under a previous shelf, this new registration enables the Company to
sell or place up to $350 million in securities. Any net proceeds are expected
to be used for the acquisition of land, buildings and equipment for new and
existing stores, repayment of indebtedness and other general corporate
purposes. Funds not immediately required for these purposes may be invested
temporarily in short-term marketable securities. While the Company has no
immediate need for long-term external financing, the securities are registered
to allow sufficient flexibility to take advantage of favorable conditions in
the capital markets in the future.
In addition to these sources, the Company has available agreements for up
to $200 million in lines of credit for issuing documentary and standby letters
of credit. The Company has a $300 million revolving credit facility with a
syndicate of thirteen banks to provide alternate liquidity for the Company's
commercial paper program and for general corporate purposes. A $60 million
revolving credit and security agreement, expiring in September 1997, is
available from a financial institution. Another $75 million is available for
the purpose of short-term borrowings on a bid basis from various banks.
IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" beginning February 1, 1996. There was no material
effect on the Company's financial statements from the initial adoption of SFAS
No. 121.
In October 1995, SFAS No. 123, "Accounting for Stock-Based Compensation,"
was issued and is effective for the Company beginning February 1, 1996. As
permitted by No. 123, the Company will continue to apply APB Opinion No. 25,
which recognizes compensation cost based on the intrinsic value of the equity
instrument awarded, to its stock based compensation awards to employees and
will disclose the required pro forma effect on net income and earnings per
share in the Company's annual report.
-11-
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
Lowe's Companies, Inc.:
We have reviewed the accompanying consolidated balance sheet of Lowe's
Companies, Inc. and subsidiary companies as of October 31, 1996, and the
related consolidated statements of current and retained earnings for the
three-month and nine-month periods ended October 31, 1996 and 1995, and cash
flows for the nine-month periods ended October 31, 1996 and 1995. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Lowe's Companies, Inc. and
subsidiary companies as of January 31, 1996, and the related consolidated
statements of current and retained earnings and cash flows for the year then
ended (not presented herein); and in our report dated February 20, 1996 (March
4, 1996 as to the fourth paragraph of Note 14), we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying consolidated balance sheet as of
January 31, 1996 is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
/s/ Deloitte & Touche LLP
Charlotte, North Carolina
November 11, 1996
-12-
Part II - OTHER INFORMATION
Item 6 (a) - Exhibits
Exhibit 10 - Form of Subordinated Indenture between the Company
and The Bank of New York, Trustee (filed as Exhibit
4.2 to the Company's Registration Statement on Form
S-3 (No. 333-14257) and incorporated by reference
herein).
Exhibit 11 - Computation of per share earnings.
Item 6 (b) - Reports on Form 8-K
There were no reports filed on Form 8-K during the quarter ended
October 31, 1996.
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.
LOWE'S COMPANIES, INC.
December 13, 1996 \s\ Richard D. Elledge
Date
Richard D. Elledge,
Senior Vice President and Chief
Accounting Officer
-13-
Exhibit 11 - Computation of per share earnings
Three Months Ended Nine Months Ended
October 31 October 31
1996 1995 1996 1995
Earnings per Common & Common Equivalent Share:
Net Earnings $75,183 $43,919 $236,524 $187,852
Weighted Average Shares
Outstanding 172,874 160,690 165,776 160,233
Dilutive Effect of Common
Stock Equivalents 80 76 77 75
Weighted Average Shares,
as Adjusted 172,954 160,766 165,853 160,308
Earnings per Common &
Common Equivalent Share $.43 $.27 $1.43 $1.17
Earnings per Common Share - Assuming Full Dilution:
Net Earnings $75,183 $43,919 $236,524 $187,852
Interest (After Taxes) on
Convertible Debt - 1,907 3,618 5,661
Net Earnings, as Adjusted $75,183 $45,826 $240,142 $193,513
Weighted Average Shares
Outstanding 172,874 160,690 165,776 160,233
Dilutive Effect of Common
Stock Equivalents 99 75 98 75
Shares Added if All Debt
Converted - 10,898 6,688 10,898
Weighted Average Shares,
as Adjusted 172,973 171,663 172,562 171,206
Earnings per Common Share
- Assuming Full Dilution $.43 $.27 $1.39 $1.13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> OCT-31-1996
<CASH> 36,389
<SECURITIES> 41,706
<RECEIVABLES> 143,742
<ALLOWANCES> 0
<INVENTORY> 1,572,956
<CURRENT-ASSETS> 1,864,827
<PP&E> 2,301,584
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,239,814
<CURRENT-LIABILITIES> 1,233,365
<BONDS> 0
0
0
<COMMON> 86,515
<OTHER-SE> 2,084,321
<TOTAL-LIABILITY-AND-EQUITY> 4,239,814
<SALES> 6,558,745
<TOTAL-REVENUES> 6,558,745
<CGS> 4,887,287
<TOTAL-COSTS> 4,887,287
<OTHER-EXPENSES> 1,268,137
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35,844
<INCOME-PRETAX> 367,477
<INCOME-TAX> 130,953
<INCOME-CONTINUING> 236,524
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 236,524
<EPS-PRIMARY> 1.43
<EPS-DILUTED> 1.39
</TABLE>
