<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6781
THE OHIO BELL TELEPHONE COMPANY
(Incorporated under the laws of the State of Ohio)
45 Erieview Plaza, Cleveland, Ohio 44114
I.R.S. Employer Identification Number 34-0436390
Telephone Number - (216) 822-9700
THE REGISTRANT, A WHOLLY OWNED SUBSIDIARY OF AMERITECH CORPORATION, MEETS
THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM
10-Q AND IS THEREFORE FILING THIS FORM WITH REDUCED DISCLOSURE FORMAT
PURSUANT TO GENERAL INSTRUCTION H(2).
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X . No .
----- -----
At October 31, 1995, one common share was outstanding.
<PAGE>2
Form 10-Q Part I The Ohio Bell Telephone Company
Part I - Financial Information
------------------------------
The following condensed financial statements have been prepared by The Ohio
Bell Telephone Company (the Company) pursuant to the rules and regulations
of the Securities and Exchange Commission (SEC) and, in the opinion of the
Company, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair statement of results for each period
shown. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such SEC
rules and regulations. The Company believes that the disclosures made are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's latest Annual Report on Form 10-K
and the quarterly reports on Form 10-Q previously filed in the current
year.
CONDENSED STATEMENTS OF INCOME AND REINVESTED EARNINGS (DEFICIT)
(Dollars in Millions)
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
1995 1994 1995 1994
---- ---- ---- ----
Revenues............................ $ 555.0 $ 546.5 $1,640.6 $1,633.4
-------- -------- -------- --------
Operating Expenses
Employee-related expenses ........ 112.7 127.9 340.4 373.7
Depreciation and amortization .... 93.0 95.6 270.2 287.0
Other operating expenses ......... 171.1 163.6 500.1 458.3
Restructuring (credit) charge .... (12.4) 54.6 (49.8) 187.1
Taxes other than income taxes .... 56.4 57.5 168.8 172.6
-------- -------- -------- --------
420.8 499.2 1,229.7 1,478.7
-------- -------- -------- --------
Operating income.................... 134.2 47.3 410.9 154.7
Interest expense.................... 15.6 15.4 44.3 44.3
Other income, net................... (1.2) (1.6) (3.3) (7.0)
-------- -------- -------- --------
Income before income taxes.......... 119.8 33.5 369.9 117.4
Income taxes........................ 39.9 8.2 123.5 31.4
-------- -------- -------- --------
Net income.......................... 79.9 25.3 246.4 86.0
Reinvested earnings (deficit)
beginning of period .............. (167.2) 162.1 (242.0) 236.8
Less, dividends ................ 53.8 22.4 145.5 157.8
-------- -------- -------- --------
Reinvested earnings (deficit),
end of period .................... $ (141.1) $ 165.0 $ (141.1) $ 165.0
======== ======== ======== ========
See Notes to Condensed Financial Statements.
<PAGE>3
Form 10-Q Part I The Ohio Bell Telephone Company
CONDENSED BALANCE SHEETS
(Dollars in Millions)
Sept. 30, 1995 Dec. 31, 1994
-------------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
ASSETS
Current assets
Cash and temporary cash investments ........ $ -- $ --
Investment in Ameritech funding pool ....... 38.6 60.5
--------- ---------
38.6 60.5
Receivables, net
Customers ................................ 408.7 350.1
Ameritech and affiliates ................. 26.3 25.6
Other .................................... 17.6 17.3
Material and supplies ...................... 6.7 3.3
Prepaid and other .......................... 77.0 82.2
--------- ---------
574.9 539.0
--------- ---------
Property, plant and equipment................ 5,752.9 5,572.5
Less, accumulated depreciation............... 3,445.1 3,213.8
--------- ---------
2,307.8 2,358.7
--------- ---------
Investments, primarily in affiliates......... 62.4 65.8
Other assets and deferred charges............ 164.2 88.0
--------- ---------
Total assets................................. $ 3,109.3 $ 3,051.5
========= =========
See Notes to Condensed Financial Statements.
<PAGE>4
Form 10-Q Part I The Ohio Bell Telephone Company
CONDENSED BALANCE SHEETS
(Dollars in Millions)
Sept. 30, 1995 Dec. 31, 1994
-------------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
LIABILITIES AND SHAREOWNER'S EQUITY
Current liabilities
Debt maturing within one year ............ $ 0.5 $ 0.4
Accounts payable
Ameritech Services, Inc. (ASI) .......... 118.2 126.2
Ameritech and affiliates ................ 50.1 38.3
Other ................................... 134.6 167.3
Other current liabilities ................ 336.2 355.9
--------- ---------
639.6 688.1
--------- ---------
Long-term debt............................. 834.9 834.9
--------- ---------
Deferred credits and other long-term liabilities
Accumulated deferred income taxes......... 97.9 77.2
Unamortized investment tax credits........ 45.1 51.9
Postretirement benefits other than pensions 547.8 547.2
Long-term payable to ASI.................. 17.4 18.5
Other..................................... 57.6 65.6
--------- ---------
765.8 760.4
--------- ---------
Shareowner's equity
Common shares - (one share issued
and outstanding without par value) ..... 1,010.1 1,010.1
Reinvested deficit........................ (141.1) (242.0)
--------- ---------
869.0 768.1
--------- ---------
Total liabilities and shareowner's equity.. $ 3,109.3 $ 3,051.5
========= =========
See Notes to Condensed Financial Statements.
<PAGE>5
Form 10-Q Part I The Ohio Bell Telephone Company
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
Nine Months Ended
September 30
------------
1995 1994
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income....................................... $ 246.4 $ 86.0
Adjustments to net income
Restructuring (credit) charge, net of tax ...... (32.4) 121.6
Depreciation and amortization .................. 270.2 287.0
Deferred income taxes, net ..................... 4.8 (23.3)
Investment tax credits, net .................... (6.8) (8.2)
Interest during construction ................... (2.6) (3.0)
Provision for uncollectibles ................... 12.9 13.4
Change in accounts receivable .................. (72.5) (58.9)
Change in material and supplies ................ (4.4) (3.1)
Change in certain other current assets ......... (30.0) 5.6
Change in accounts payable ..................... (28.9) 14.0
Change in certain other current liabilities .... (25.9) (47.2)
Change in certain other noncurrent
assets and liabilities........................ (21.2) (18.9)
Other .......................................... 3.5 0.6
-------- --------
Net cash from operating activities............... 313.1 365.6
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................. (216.9) (204.7)
Proceeds from (cost of) disposals of
property, plant and equipment ................. 1.1 (0.2)
Other investments................................ 0.4 --
-------- --------
Net cash from investing activities............... (215.4) (204.9)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Intercompany financing, net...................... -- 40.9
Change in other short-term debt.................. 0.1 --
Retirements of long-term debt.................... (0.4) (0.5)
Dividend payments................................ (119.3) (201.1)
-------- --------
Net cash from financing activities............... 119.6 (160.7)
-------- --------
Net decrease in cash and
temporary cash investments .................... (21.9) --
Cash and temporary cash investments
at beginning of period ........................ 60.5 --
-------- --------
Cash and temporary cash investments
at end of period .............................. $ 38.6 $ --
======== ========
See Notes to Condensed Financial Statements.
<PAGE>6
Form 10-Q Part I The Ohio Bell Telephone Company
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
SEPTEMBER 30, 1995
NOTE 1: Work Force Restructuring
During March 1994, the Company's parent, Ameritech Corporation, announced
its plan to reduce its existing nonmanagement work force. As of September
30, 1995, 2,576 employees have left the Company as a result of the
restructuring. Under terms of agreements between Ameritech, the
Communications Workers of America (CWA) and the International Brotherhood
of Electrical Workers (IBEW), Ameritech implemented an enhancement to the
Ameritech Pension Plan by adding three years to both the age and the net
credited service of eligible nonmanagement employees who left the business
during a designated period which expired in the third quarter of 1995. In
addition, certain business units offered financial incentives to selected
nonmanagement employees. See additional discussion in Management's
Discussion and Analysis below.
As a result of the restructuring, a pretax charge of $187.1, or $121.6
after-tax, was recorded in the first nine months of 1994. In the first
nine months of 1995, a gain of $49.8, or $32.4 after-tax, was recorded
resulting primarily from settlement gains from lump sum pension payments
from the Ameritech pension plan to former employees. The cumulative gross
program cost through September 30, 1995 totaled $266.6, partially offset by
settlement gains of $143.3 for an aggregate pretax net program cost of
$123.4, or $80.2 after-tax. At September 30, 1995, the remaining severance
accrual was $5.5.
NOTE 2: Discontinuation of FAS 71 and Reclassifications
As discussed more fully in the 1994 Annual Report on Form 10-K, during the
fourth quarter of 1994 the Company incurred an extraordinary noncash
after-tax charge of $445.2 as a result of its decision to discontinue the
application of Statement of Financial Accounting Standards No. 71 (FAS 71),
"Accounting for the Effects of Certain Types of Regulation."
The principal component of the above charge related to a determination that
telephone plant asset lives prescribed by regulators were too long and
analog switches were obsolete. The net effect of this determination is
causing 1995 depreciation expense to decrease. Long-term, depreciation
expense will likely increase as the effects of shorter lives on plant
assets and future plant additions offset the discontinuation of
depreciation of analog switches.
Certain additional financial statement impacts occurred as a result of the
discontinuation of FAS 71, including the reclassification of the provision
for uncollectibles, previously shown as a reduction in other revenues, to
other operating expenses.
<PAGE>7
Form 10-Q Part I The Ohio Bell Telephone Company
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
(Dollars in Millions)
The following is a discussion and analysis of the changes in revenues,
operating expenses and other income and expenses for the first nine months
of 1995 as compared with the first nine months of 1994:
Results of Operations
- ---------------------
Revenues
- --------
Total revenues in the first nine months of 1995 were $1,640.6 and were
$1,633.4 for the same period in 1994. The following paragraphs explain the
components of that change.
- ---------------------------------------------------------------------------
Local Service
- -------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 921.9 $ 897.8 $ 24.1 2.7
The increase in local service revenues in the first nine months of 1995 was
primarily attributable to higher network usage volumes, resulting
principally from growth in the number of access lines, which increased 3.9
percent to 3,720,071 as of September 30, 1995 as compared with 3,579,452 at
September 30, 1994, and greater sales of special calling features, such as
Call Forwarding and Caller ID. These increases were partially offset by
rate reductions of $34.4 resulting from regulatory proceedings which
adopted price regulation in place of rate-of-return regulation and removed
limits on intrastate earnings.
<PAGE>8
Form 10-Q Part I The Ohio Bell Telephone Company
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Network access
- --------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Interstate
- ----------
Nine Months Ended $ 336.3 $ 332.3 $ 4.0 1.2
Intrastate
- ----------
Nine Months Ended $ 92.0 $ 103.5 $ (11.5) (11.1)
The increase in interstate network access revenues for the nine months
ended September 30, 1995 was primarily due to higher network usage, which
resulted in additional revenues of $23.6, and a reduction in National
Exchange Carrier Association common line pool support payments of $4.5.
Partially offsetting these revenue increases were net rate reductions of
$15.0, as well as revenue decreases for one-time adjustments with
interexchange carriers. Minutes of use related to interstate calls
increased 6.2 percent in 1995. See additional discussion below regarding
Ameritech's interstate access rate reduction.
The decrease in intrastate network access revenues for the nine months
ended September 30, 1995 was primarily due to rate reductions of $11.1,
partially resulting from regulatory proceedings which adopted certain
regulatory freedoms as previously discussed. Also contributing to the
decrease were settlements with other telecommunications companies. Higher
network usage resulted in additional revenues of $8.3 which partially
offset these decreases. Minutes of use related to intrastate calls
increased 9.3 percent in 1995.
- ---------------------------------------------------------------------------
Long distance service
- ---------------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 125.7 $ 139.0 $ (13.3) (9.6)
The decrease in long distance service revenues for the nine months ended
September 30, 1995 was due to a decrease in intrastate network usage.
- ---------------------------------------------------------------------------
Other
- -----
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 164.7 $ 160.8 $ 3.9 2.4
Other revenues include revenues derived from directory advertising, billing
and collection services, inside wire installation and maintenance services
<PAGE>9
Form 10-Q Part I The Ohio Bell Telephone Company
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Other (cont'd.)
- ---------------
and other miscellaneous services. The increase in other revenues was
primarily due to an increase in nonregulated revenues of $11.9, largely due
to increased voice mail volumes, as well as inside wire installation and
maintenance revenues of $3.6, resulting from rate increases. Partially
offsetting the increases was a decrease in rent revenues of $9.6 from a
change in methodology in the way the Company accounts for these revenues.
In 1995, these revenues were reflected as credits to expense, whereas in
1994, such amounts were included in other revenues. Also contributing to
the decrease was decreased revenues from billing and collection services of
$3.2.
- ---------------------------------------------------------------------------
Operating expenses
- ------------------
Total operating expenses for the nine months ended September 30, 1995
decreased by $249.0 or 16.8 percent to $1,229.7. The decrease was almost
entirely attributable to the 1994 work force restructuring, which resulted
in a credit of $49.8 in the first nine months of 1995 related primarily to
the net settlement gains previously discussed in Note 1, compared with a
charge of $187.1 in the first nine months of 1994.
- ---------------------------------------------------------------------------
Employee-related expenses
- -------------------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 340.4 $ 373.7 $ (33.3) (8.9)
The decrease in employee-related expenses for the nine months ended
September 30, 1995 was attributable primarily to the effect of work force
reductions over the past year of $37.0, as well as reduced bonus accruals
and other benefits of $13.5. Partially offsetting these decreases were the
effects of increased overtime payments and medical, dental and
postretirement benefits of $17.2.
During September, 1995, a union agreement was ratified by the
Communications Workers of America (CWA). The new contract and wage increases
were retroactive to August 6, 1995. The contract includes basic wage increases
of 10.9 percent (compounded) over three years. In addition, the
contracts provided for a signing bonus of $500 to each eligible employee
upon ratification. The contract addresses wages, benefits, pensions,
employment security, training and retraining and other conditions of
employment. Most of the Company's nonmanagement work force (about 85
percent of total employees) is represented by the union.
There were 8,189 employees at September 30, 1995, compared with 9,428 at
September 30, 1994.
<PAGE>10
Form 10-Q Part I The Ohio Bell Telephone Company
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Depreciation and
amortization
- ----------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 270.2 $ 287.0 $ (16.8) (5.9)
The decrease in depreciation and amortization expense for the nine months
ended September 30, 1995 was primarily due to the cessation of depreciation
of analog switches determined to be obsolete in connection with the
discontinuance of Statement of Financial Accounting Standards No. 71 (FAS
71), "Accounting for the Effects of Certain Types of Regulation," in the
fourth quarter of 1994. This decrease was partially offset by the change
in depreciation rates as a result of shortening telephone plant lives
following the discontinuation of FAS 71. See Note 2 for further details.
- ---------------------------------------------------------------------------
Other operating expenses
- ------------------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 500.1 $ 458.3 $ 41.8 9.1
The increase in other operating expenses for the nine months ended
September 30, 1995 was primarily attributable to higher affiliate services
expenses of $48.4, resulting from increased project billings from Ameritech
Services, Inc. (ASI), as well as increased advertising and other expenses
of $20.0, resulting from increased marketing efforts. These increases were
partially offset by a net decrease of $26.6 in switching system software
charges, access charges, as a result of renegotiated contracts, and
expenses for contract and professional services.
<PAGE>11
Form 10-Q Part I The Ohio Bell Telephone Company
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Restructuring (credit) charge
- -----------------------------
September 30
------------ Percent
1995 1994 Change Change
---- ---- ------ ------
Nine Months Ended $ (49.8)$ 187.1 $ (236.9) n/a
As discussed in Note 1, Ameritech announced in March 1994 that it intended
to significantly reduce its nonmanagement work force by the end of 1995.
Reduction of the work force results from the Company's implementation of
technological improvements, consolidations and initiatives to balance the
Company's cost structure with emerging competition. Pretax charges of
$187.1 related to the then anticipated work force reduction were recorded
in the first nine months of 1994. Noncash net settlement gains of $49.8 was
recorded in the first nine months of 1995 primarily associated with
lump-sum pension payments to former employees. Future settlement gains
(estimated at $1.3) are anticipated.
Actual employee reductions by quarter were: 365 in the second quarter of
1994, 358 in the third quarter of 1994, 1,362 in the fourth quarter of
1994, 74 in the first quarter of 1995, 121 in the second quarter of 1995,
and 296 in the third quarter of 1995, for a total of 2,576. Cash
requirements to fund the financial incentives (principally contractual
termination payments totaling approximately $75.5) are being met as
prescribed by applicable collective bargaining agreements. Certain of
these collective bargaining agreements required contractual termination
payments to be paid in a manner other than lump-sum, thus requiring cash
payments beyond an employee's termination date.
This program reduced annual employee-related costs by approximately $50
thousand per departing employee. The savings are being partially offset by
the hiring of new employees with better matched skills to accommodate
growth, ensure high quality customer service and meet staffing requirements
for new business opportunities.
- ---------------------------------------------------------------------------
Taxes other than income taxes
- -----------------------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 168.8 $ 172.6 $ (3.8) (2.2)
The decrease in taxes other than income taxes for the nine months ended
September 30, 1995 is primarily attributable to lower sales and use taxes
resulting from a change in the method of assessing these taxes.
<PAGE>12
Form 10-Q Part I The Ohio Bell Telephone Company
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Other Income and Expenses
- -------------------------
Interest expense
- ----------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 44.3 $ 44.3 $ -- --
Interest expense remained constant for the nine months ended September 30,
1995 as compared with the prior year period. Lower short-term interest
expense on borrowings from the Ameritech short-term funding pool resulted
from lower average debt balances, partially offset by higher short-term
interest rates. This decrease was offset by increased miscellaneous
interest expense items of $0.9, corporate-owned life and other insurance
programs, and a reduction in capitalized interest during construction.
- ---------------------------------------------------------------------------
Other income, net
- -----------------
September 30 Change
------------ (Income) Percent
1995 1994 Expense Change
---- ---- ------- ------
Nine Months Ended $ (3.3)$ (7.0) $ 3.7 (52.9)
Other income, net includes equity earnings in affiliates, interest income
and other nonoperating items. The change in other income, net results
primarily from decreased equity earnings from ASI.
- ---------------------------------------------------------------------------
Income taxes
- ------------
September 30
------------ Increase Percent
1995 1994 (Decrease) Change
---- ---- ---------- ------
Nine Months Ended $ 123.5 $ 31.4 $ 92.1 293.3
The increase in income taxes for the nine months ended September 30, 1995
was due primarily to the change in pretax income as a result of the work
force restructuring credit of $49.8 ($32.4 after-tax) in the first nine
months of 1995 as compared to the work force restructuring charge of $187.1
($121.6 after-tax) in the first nine months of 1994. Excluding these
items, income taxes changed in line with the earnings of the business.
<PAGE>13
Form 10-Q Part I The Ohio Bell Telephone Company
Management's Discussion and Analysis
of Results of Operations (cont'd.)
Interstate access rate reduction
- --------------------------------
On July 18, 1995, the Federal Communications Commission (FCC) approved
Ameritech's request for price regulation without sharing of earnings
effective January 1, 1995. As a result, the total annual reduction in
prices that the Company charges long distance companies for local
connections increased to $19.4 effective August 1, 1995. The current year
impact is expected to be a reduction in interstate access revenues of $8.2,
which represents an increase of $2.9 over the 1995 reduction otherwise
required under the FCC's interim price cap rules.
<PAGE>14
Form 10-Q Part II The Ohio Bell Telephone Company
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits
--------
27 Financial Data Schedule.
(b) Reports on Form 8-K
--------------------
No Form 8-K was filed by the registrant during the quarter which
this report is filed.
<PAGE>14
Form 10-Q Part II The Ohio Bell Telephone Company
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 OHIO BELL TELEPHONE COMPANY
-------------------------------
(Registrant)
Date: November 13, 1995 /s/ Cheryl K. Wooley
--------------------
Cheryl K. Wooley
Vice President
State Finance Organizations
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
OHIO BELL TELEPHONE COMPANY'S SEPTEMBER 30, 1995 FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 0
<SECURITIES> 0<F1>
<RECEIVABLES> 480,300
<ALLOWANCES> 27,700
<INVENTORY> 6,700
<CURRENT-ASSETS> 574,900
<PP&E> 5,752,900
<DEPRECIATION> 3,445,100
<TOTAL-ASSETS> 3,109,300
<CURRENT-LIABILITIES> 639,600
<BONDS> 834,900
<COMMON> 1,010,100
0
0
<OTHER-SE> (141,100)
<TOTAL-LIABILITY-AND-EQUITY> 3,109,300
<SALES> 0<F2>
<TOTAL-REVENUES> 1,640,600
<CGS> 0<F3>
<TOTAL-COSTS> 1,229,700
<OTHER-EXPENSES> (3,300)
<LOSS-PROVISION> 12,900
<INTEREST-EXPENSE> 44,300
<INCOME-PRETAX> 369,900
<INCOME-TAX> 123,500
<INCOME-CONTINUING> 246,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 246,400
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>SECURITIES ARE NOT MATERIAL AND THEREFORE HAVE NOT BEEN STATED SEPARATELY
IN THE FINANCIAL STATEMENTS. THIS AMOUNT IS INCLUDED IN THE CASH TAG.
<F2>NET SALES OF TANGIBLE PRODUCTS IS NOT MORE THAN 10% OF TOTAL OPERATING
REVENUES AND THEREFORE HAS NOT BEEN STATED SEPARATELY IN THE FINANCIAL
STATEMENTS PURSUANT TO REGULATION S-X, RULE 5-03(B). THIS AMOUNT IS
INCLUDED IN THE "TOTAL REVENUES" TAG.
<F3>COST OF TANGIBLE GOODS SOLD IS INCLUDED IN COST OF SERVICE AND PRODUCTS
IN THE FINANCIAL STATEMENTS AND THE "TOTAL COST" TAG, PURSUANT TO
REGULATION S-X, RULE 5-03(B).
</FN>
</TABLE>
