<PAGE>
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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 [FEE REQUIRED]
FOR THE PERIOD ENDED JUNE 30, 1995 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
Commission File Number 1-9215
-----------------------------------------
UNITED ASSET MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-2714625
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 330-8900
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. X Yes No
--- ---
The number of shares of common stock outstanding as of July 27, 1995 was
30,322,936.
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements. (F-1 to F-4)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. (F-5 to F-7)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Certain of the Company's subsidiaries are subject to legal proceedings
arising in the ordinary course of business. On the basis of
information presently available and advice received from counsel, it
is the opinion of management that the disposition or ultimate
determination of such legal proceedings will not have a material
adverse effect on the financial position of the Company.
Item 2. Changes in Securities. Not Applicable
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. Not Applicable
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 2 - Not Applicable
Exhibit 4 - Not Applicable
Exhibit 11 - Calculation of Earnings Per Share (F-8)
Exhibit 15 - Not Applicable
Exhibit 18 - Not Applicable
Exhibit 19 - Not Applicable
Exhibit 20 - Not Applicable
Exhibit 23 - Not Applicable
Exhibit 24 - Not Applicable
Exhibit 25 - Not Applicable
Exhibit 28 - Not Applicable
(b) There have been no reports on Form 8-K filed by the Company for
the quarter ended June 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.
UNITED ASSET MANAGEMENT CORPORATION
August 11, 1995 /s/ William H. Park
---------------------------------- -------------------------------------
(Date) William H. Park
Executive Vice President and
Chief Financial Officer
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
UNITED ASSET MANAGEMENT CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ -------------------------------
1995 1994 1995 1994
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . $170,987,000 $115,525,000 $322,089,000 $236,865,000
------------ ------------ ------------ ------------
Operating expenses:
Compensation and related
expenses. . . . . . . . . . . . . . . . . . . . . . . . . 80,457,000 54,577,000 151,732,000 114,143,000
Amortization of cost assigned
to contracts acquired . . . . . . . . . . . . . . . . . . 23,794,000 13,308,000 43,862,000 26,649,000
Other operating expenses . . . . . . . . . . . . . . . . . 26,012,000 19,715,000 49,802,000 38,783,000
------------ ------------ ------------ ------------
130,263,000 87,600,000 245,396,000 179,575,000
------------ ------------ ------------ ------------
Operating income . . . . . . . . . . . . . . . . . . . . . . 40,724,000 27,925,000 76,693,000 57,290,000
------------ ------------ ------------ ------------
Non-operating expenses:
Interest expense, net. . . . . . . . . . . . . . . . . . . 11,017,000 2,608,000 19,336,000 5,495,000
Other amortization . . . . . . . . . . . . . . . . . . . . 390,000 300,000 763,000 630,000
------------ ------------ ------------ ------------
11,407,000 2,908,000 20,099,000 6,125,000
------------ ------------ ------------ ------------
Income before income tax expense . . . . . . . . . . . . . . 29,317,000 25,017,000 56,594,000 51,165,000
Income tax expense . . . . . . . . . . . . . . . . . . . . . 12,548,000 10,723,000 24,220,000 21,967,000
------------ ------------ ------------ ------------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,769,000 $ 14,294,000 $ 32,374,000 $ 29,198,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings per share:
Primary and fully diluted
earnings per share . . . . . . . . . . . . . . . . . . $0.53 $0.49 $1.04 $0.99
Dividends per share. . . . . . . . . . . . . . . . . . . . . $0.28 $0.24 $0.56 $0.48
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-1
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
(Unaudited)
---------------------------------------------------------------------------------------------------
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . $ 81,979,000 $ 89,050,000
Investment advisory fees receivable. . . . . . . . . . . . 106,297,000 77,292,000
Other current assets . . . . . . . . . . . . . . . . . . . 13,594,000 12,922,000
-------------- ------------
Total current assets . . . . . . . . . . . . . . . . . . . . 201,870,000 179,264,000
Fixed assets, net. . . . . . . . . . . . . . . . . . . . . . 22,335,000 19,351,000
Cost assigned to contracts acquired, net . . . . . . . . . . 1,077,475,000 656,130,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 65,169,000 60,882,000
-------------- ------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $1,366,849,000 $915,627,000
-------------- ------------
-------------- ------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses. . . . . . . . . . . $ 75,461,000 $ 65,032,000
Accrued compensation . . . . . . . . . . . . . . . . . . . 54,197,000 48,048,000
Current portion of notes payable . . . . . . . . . . . . . 2,159,000 1,009,000
-------------- ------------
Total current liabilities. . . . . . . . . . . . . . . . . . 131,817,000 114,089,000
Senior notes payable . . . . . . . . . . . . . . . . . . . . 179,500,000 172,000,000
Subordinated notes payable . . . . . . . . . . . . . . . . . 523,631,000 192,330,000
Deferred income taxes. . . . . . . . . . . . . . . . . . . . 41,925,000 37,367,000
-------------- ------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . 876,873,000 515,786,000
-------------- ------------
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01 per share . . . . . . . . . . 308,000 283,000
Capital in excess of par value . . . . . . . . . . . . . . 341,577,000 255,162,000
Retained earnings. . . . . . . . . . . . . . . . . . . . . 162,300,000 150,951,000
-------------- ------------
504,185,000 406,396,000
Less treasury shares at cost . . . . . . . . . . . . . . . (14,209,000) (6,555,000)
-------------- ------------
Total stockholders' equity . . . . . . . . . . . . . . . . . 489,976,000 399,841,000
-------------- ------------
Total liabilities and stockholders'
equity . . . . . . . . . . . . . . . . . . . . . . . . . . $1,366,849,000 $915,627,000
-------------- ------------
-------------- ------------
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-2
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ------------------------------
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Cash flow from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 16,769,000 $ 14,294,000 $ 32,374,000 $ 29,198,000
Adjustments to reconcile net
income to net cash flow
from operating activities:
Amortization of cost assigned
to contracts acquired. . . . . . . . . . . . . . . . . 23,794,000 13,308,000 43,862,000 26,649,000
Depreciation . . . . . . . . . . . . . . . . . . . . . . 1,551,000 1,005,000 2,757,000 2,053,000
Other amortization . . . . . . . . . . . . . . . . . . . 390,000 300,000 763,000 630,000
------------ ------------ ------------ -------------
Net income plus amortization and
depreciation . . . . . . . . . . . . . . . . . . . . . . 42,504,000 28,907,000 79,756,000 58,530,000
Changes in assets and liabilities:
(Increase) decrease in
investment advisory fees
receivable . . . . . . . . . . . . . . . . . . . . . . (20,136,000) 9,207,000 (28,816,000) 3,123,000
Increase in other current
assets . . . . . . . . . . . . . . . . . . . . . . . . (1,278,000) (1,472,000) (662,000) (1,847,000)
Increase (decrease) in
accounts payable and
accrued expenses . . . . . . . . . . . . . . . . . . . 3,774,000 (12,639,000) 10,313,000 (4,304,000)
Increase in accrued
compensation . . . . . . . . . . . . . . . . . . . . . 19,691,000 6,768,000 6,088,000 19,768,000
Increase in deferred income
taxes. . . . . . . . . . . . . . . . . . . . . . . . . 3,015,000 75,000 4,558,000 500,000
------------ ------------ ------------ -------------
Net cash flow from operating
activities. . . . . . . . . . . . . . . . . . . . . . . . 47,570,000 30,846,000 71,237,000 75,770,000
------------ ------------ ------------ -------------
Cash flow used in investing activities:
Cash additions to cost assigned
to contracts acquired. . . . . . . . . . . . . . . . . . (29,102,000) (2,070,000) (40,661,000) (9,542,000)
Change in other assets . . . . . . . . . . . . . . . . . . (4,551,000) (3,462,000) (10,579,000) (5,620,000)
------------ ------------ ------------ -------------
Net cash flow used in investing
activities . . . . . . . . . . . . . . . . . . . . . . . . (33,653,000) (5,532,000) (51,240,000) (15,162,000)
------------ ------------ ------------ -------------
Cash flow from (used in) financing
activities:
Purchase of treasury shares. . . . . . . . . . . . . . . . (16,482,000) (10,700,000) (19,806,000) (10,700,000)
Additions to (reductions in)
long-term debt, net. . . . . . . . . . . . . . . . . . . 7,759,000 3,375,000 2,641,000 (25,605,000)
Issuance or reissuance of equity
securities . . . . . . . . . . . . . . . . . . . . . . . 4,178,000 1,431,000 6,709,000 5,992,000
Dividends declared . . . . . . . . . . . . . . . . . . . . (8,519,000) (6,734,000) (17,124,000) (13,512,000)
------------ ------------ ------------ -------------
Net cash flow used in financing
activities . . . . . . . . . . . . . . . . . . . . . . . . (13,064,000) (12,628,000) (27,580,000) (43,825,000)
------------ ------------ ------------ -------------
Effect of foreign exchange rate
changes on cash flow . . . . . . . . . . . . . . . . . . . (327,000) 1,334,000 512,000 1,239,000
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . . . . . . . . . . 526,000 14,020,000 (7,071,000) 18,022,000
Cash and cash equivalents at beginning
of period. . . . . . . . . . . . . . . . . . . . . . . . . 81,453,000 66,809,000 89,050,000 62,807,000
------------ ------------ ------------ -------------
Cash and cash equivalents at end of
period . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,979,000 $ 80,829,000 $ 81,979,000 $ 80,829,000
------------ ------------ ------------ -------------
------------ ------------ ------------ -------------
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-3
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1
In the opinion of management, the accompanying unaudited Condensed
Consolidated Financial Statements contain all adjustments, consisting only of
normal recurring accruals, necessary to present fairly the financial position of
the Company and its subsidiaries at June 30, 1995 and their results of
operations and cash flows for the three and six-month periods ended June 30,
1995 and 1994. These Financial Statements should be read in conjunction with
the Company's Annual Report on Form 10-K for the year ended December 31, 1994.
Note 2
Accumulated depreciation of fixed assets was $30,530,000 and $27,773,000 at
June 30, 1995 and December 31, 1994, respectively. The accumulated amortization
of cost assigned to contracts acquired was $316,306,000 and $272,444,000 at June
30, 1995 and December 31, 1994, respectively.
Note 3
The Company has a systematic program to repurchase shares of its common
stock to meet the requirements for future issuance of shares upon the exercise
of stock options and warrants. During the three month period ended June 30,
1995, the Company repurchased 445,000 shares of its common stock at a cost of
$16,482,000. For the six months ended June 30, 1995, common stock repurchases
totaled 535,000 shares at a cost of $19,806,000. During the three and six-month
periods ended June 30, 1995, exercises of warrants and stock options resulted in
the Company extinguishing subordinated notes, receiving cash proceeds and
issuing stock as follows:
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
June 30, 1995 June 30, 1995
------------- --------------
<S> <C> <C>
Subordinated notes extinguished -- $17,611,000
Cash proceeds received $2,621,000 $5,708,000
Shares issued 1,739 659,426
Treasury shares reissued 138,769 336,146
</TABLE>
As of June 30, 1995, the Company held 388,580 treasury shares.
As of June 30, 1995, 5,810,000 warrants and 3,716,000 stock options were
outstanding at average exercise prices of $38.80 and $30.23, respectively.
Note 4
The Company acquired Pilgrim Baxter and Associates on April 28, 1995 in a
transaction that is being accounted for as a purchase. This transaction is not
material to the Company's Condensed Consolidated Financial Statements.
F-4
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The revenues of UAM's affiliated firms are derived from fees for investment
advisory services provided to institutional and other clients. Investment
advisory fees are generally a function of the overall fee rate charged to each
account and the level of assets under management by the affiliated firms.
Assets under management can be affected by the addition of new client accounts
or client contributions to existing accounts, withdrawals of assets from or
terminations of client accounts and investment performance, which may depend on
general market conditions.
During the second quarter of 1995, UAM experienced a net increase in assets
under management of $10.1 billion to a total of $133.6 billion as of June 30,
1995. Acquisitions and performance added $4.8 billion and $8.2 billion,
respectively. These increases were partially offset by negative net client cash
flow of $2.9 billion.
AMORTIZATION OF COST ASSIGNED TO CONTRACTS ACQUIRED AND OPERATING CASH FLOW (NET
INCOME PLUS AMORTIZATION AND DEPRECIATION)
Cost assigned to contracts acquired, net of accumulated amortization,
represented 79% of the Company's total assets as of June 30, 1995. Amortization
of cost assigned to contracts acquired, which is a non-cash charge, represented
18% of the Company's operating expenses for both the three and six-month periods
ended June 30, 1995. Recording the cost assigned to contracts acquired as an
asset, with the resulting amortization as an operating expense, reflects the
application of generally accepted accounting principles to acquisitions by UAM
of investment management firms in transactions accounted for as purchases, where
the principal assets acquired are the contracts which evidence the firms'
ongoing relationships with their clients.
Although the contracts acquired are typically terminable on 30 days notice,
analyses conducted by independent consultants retained by UAM to assist the
Company in allocating the purchase price among the assets acquired and the
experience of UAM's firms to date have indicated that: 1) contracts are usually
relatively long-lived; 2) the duration of contracts can be reasonably estimated;
and 3) the value of the cost assigned to contracts acquired can be estimated
based on the present value of its projected income stream.
The cost assigned to contracts acquired is amortized on a straight-line
basis over the estimated weighted average useful life of the contracts of
individual firms acquired. These lives are estimated through statistical
analysis of historical patterns of terminations and the size and age of the
contracts acquired as of the acquisition date.
When actual terminations differ from the statistical patterns developed or
upon the occurrence of certain other events, the Company updates the lifing
analyses discussed above. If the update indicates that any of the estimates of
the average remaining lives should be shortened, the remaining cost assigned to
contracts acquired will be amortized over the shorter life commencing in the
year in which the new estimate is determined. There has been no material effect
on the Company's financial position or results of operations as a result of
these updates.
Cost assigned to contracts acquired is amortized as an operating expense.
It does not, however, require the use of cash and therefore, management believes
that it is important to distinguish this expense from other operating expenses
in order to evaluate the performance of the Company. Amortization of cost
assigned to contracts acquired per share referred to below has been calculated
by dividing total amortization by the same number of shares used in the fully
diluted earnings per share calculation.
For purposes of this discussion, "Operating Cash Flow" is defined as net
income plus amortization and depreciation, as reflected in the Company's
Condensed Consolidated Statement of Cash Flows. Management uses Operating Cash
Flow not to the exclusion of net income, but rather as an additional important
measure of the Company's performance.
F-5
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
OPERATING RESULTS
SIX MONTHS ENDED JUNE 30, 1995
COMPARED TO
SIX MONTHS ENDED JUNE 30, 1994
Revenues increased 36% to $322,089,000 for the six months ended June 30,
1995, from $236,865,000 for the first six months of 1994, due to several
factors. This increase is the result of acquisitions, as well as the impact of
favorable portfolio performance achieved by UAM's affiliated firms partially
offset by the effect of net client cash outflows. The revenues of Suffolk
Capital Management and JMB Institutional Realty acquired July 14, 1994 and
December 2, 1994, respectively, have been included in the first six months of
1995. In addition, the revenues of Provident Investment Counsel and Pilgrim
Baxter and Associates, acquired February 15, 1995 and April 28, 1995,
respectively, have been included since their acquisition dates.
Compensation and related expenses together with other operating expenses
increased 32% from $152,926,000 to $201,534,000 primarily reflecting the
acquisitions described in the preceding paragraph and higher compensation earned
at existing affiliates. The amortization of cost assigned to contracts acquired
increased 65% to $43,862,000 from $26,649,000 as a result of the acquisitions
discussed above.
Interest expense, net increased to $19,336,000 from $5,495,000, reflecting
the cost of financing the acquisitions discussed above.
Income before income tax expense increased 11% to $56,594,000 from
$51,165,000, reflecting the net result of the circumstances discussed above.
The Company's estimated annual effective tax rate approximates 43% for both the
six months ended June 30, 1995 and 1994.
Net income increased 11% to $32,374,000 from $29,198,000 again
reflecting the net result of the circumstances described above. Fully
diluted earnings per share increased 5% to $1.04 from $0.99, reflecting the
higher net income and the effect of the Company's common stock repurchased,
partially offset by the impact of the Company's higher common stock price,
the issuance of shares of common stock, and the exercise of warrants and
stock options on the calculation of earnings per share under the modified
treasury stock method. Amortization of cost assigned to contracts acquired on
a per share basis increased to $1.34 from $0.90 primarily as a result of the
acquisitions described above.
THREE MONTHS ENDED JUNE 30, 1995
COMPARED TO
THREE MONTHS ENDED JUNE 30, 1994
Revenues increased 48% to $170,987,000 for the three months ended June 30,
1995, from $115,525,000 for the second quarter of 1994 due to several factors.
The revenues of Suffolk Capital management, JMB Institutional Realty and
Provident Investment Counsel acquired July 14, 1994, December 2, 1994, and
February 15, 1995, respectively, have been included in the three months ended
June 30, 1995. In addition, the revenues of Pilgrim Baxter and Associates,
acquired April 28, 1995, have been included since its acquisition date. The
portfolio performance achieved by UAM's affiliated firms, partially offset by
the effect of net client cash outflows, added to assets under management and
thus higher revenues.
Compensation and related expenses together with other operating expenses
increased 43% to $106,469,000 from $74,292,000 primarily reflecting the activity
described above and higher compensation earned at existing affiliates. The
amortization of cost assigned to contracts acquired increased 79% to $23,794,000
from $13,308,000 as a result of the acquisitions discussed above.
F-6
<PAGE>
Interest expense, net increased to $11,017,000 from $2,608,000, reflecting
the cost of financing the acquisitions discussed above.
Income before income tax expense increased 17% to $29,317,000 from
$25,017,000, reflecting the net result of the circumstances described above. The
Company's estimated annual effective tax rate approximates 43% for both the
three months ended June 30, 1995 and 1994.
Net income increased 17% to $16,769,000 from $14,294,000 again
reflecting the net result of the circumstances described above. Fully
diluted earnings per share increased 8% to $0.53 for the second quarter of
1995 from $0.49 in the second quarter of 1994, reflecting the higher net
income and the effect of the Company's common stock repurchased, partially
offset by the impact of the Company's higher common stock price, the issuance
of shares of common stock, and the exercise of warrants and stock options on
the calculation of earnings per share under the modified treasury stock
method. Amortization of cost assigned to contracts acquired on a per share
basis increased to $0.70 from $0.45 primarily as a result of the acquisitions
described above.
CHANGES IN FINANCIAL CONDITION AND LIQUIDITY
The Company generated $79,756,000 and $42,504,000 in Operating Cash Flow
(net income plus amortization and depreciation) for the six and three-month
periods ended June 30, 1995, respectively. The primary use of this Operating
Cash Flow was to fund the cash portions of acquisitions, to repurchase shares
of the Company's common stock and to pay dividends to shareholders. There was
$179,500,000 in borrowings outstanding under the Company's $500,000,000
revolving credit facility at June 30, 1995.
Management believes that the Company's existing capital, together with
Operating Cash Flow and borrowings available under its revolving line of credit,
will provide the Company with sufficient resources to meet its present and
reasonably foreseeable future cash needs. Management expects that the principal
need for financial resources will be to acquire additional investment management
firms, to fund commitments related to acquisitions of investment management
firms, to fund shareholder dividends and to repurchase shares of the Company's
common stock, which will require cash, the issuance of additional UAM
securities, or some combination thereof. Whether the Company ultimately
completes any such additional acquisitions or the timing of such acquisitions is
not certain.
F-7
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
Exhibit 11
CALCULATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- --------------------
1995 1994 1995 1994
------- ------- ------- ------
<S> <C> <C> <C> <C>
Common and common equivalent shares:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,769 $14,294 $32,374 $29,198
Adjustments thereto (1) . . . . . . . . . . . . . . . . . . . . . . 1,045 99 1,693 --
------- ------- ------- -------
Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . $17,814 $14,393 $34,067 $29,198
------- ------- ------- -------
------- ------- ------- -------
Average shares outstanding. . . . . . . . . . . . . . . . . . . . . 30,671 28,142 30,138 28,109
Adjustments thereto (2) . . . . . . . . . . . . . . . . . . . . . . 3,130 1,248 2,709 1,524
------- ------- ------- -------
Shares used in computation. . . . . . . . . . . . . . . . . . . . . 33,801 29,390 32,847 29,633
------- ------- ------- -------
------- ------- ------- -------
Per Share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.53 $ 0.49 $ 1.04 $ 0.99
------- ------- ------- -------
------- ------- ------- -------
Common shares -- assuming full dilution:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,769 $14,294 $32,374 $29,198
Adjustments thereto (1) . . . . . . . . . . . . . . . . . . . . . . 1,045 99 1,693 --
------- ------- ------- -------
Adjusted net income . . . . . . . . . . . . . . . . . . . . . . . . $17,814 $14,393 $34,067 $29,198
------- ------- ------- -------
------- ------- ------- -------
Average shares outstanding. . . . . . . . . . . . . . . . . . . . . 30,671 28,142 30,138 28,109
Adjustments thereto (2) . . . . . . . . . . . . . . . . . . . . . . 3,130 1,248 2,709 1,524
------- ------- ------- -------
Shares used in computation. . . . . . . . . . . . . . . . . . . . . 33,801 29,390 32,847 29,633
------- ------- ------- -------
------- ------- ------- -------
Per Share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.53 $ 0.49 $ 1.04 $ 0.99
------- ------- ------- -------
------- ------- ------- -------
<FN>
----------------------------
(1) The proceeds from the exercise of stock options and warrants in accordance
with the modified treasury stock method are first used to buy back up to
20% of the Company's common stock at the average price for the period in
the primary calculation and at the higher of the average or closing price
in the fully diluted calculation. Any remaining proceeds are used to
retire debt, and this adjusts income for interest assumed to be saved net
of income tax from the use of such proceeds.
(2) Adjusts shares for stock options and warrants under the modified treasury
stock method and contingently issuable shares based on the probability of
issuance, after adjusting for the stock assumed repurchased in accordance
with (1) above.
</TABLE>
F-8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This financial data schedule contains summary financial information extracted
from the Company's six month ended June 30, 1995 consolidated statement of
Income and the Condensed Balance Sheet. This information is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 81,979
<SECURITIES> 0
<RECEIVABLES> 106,297
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 201,870
<PP&E> 52,865
<DEPRECIATION> 30,530
<TOTAL-ASSETS> 1,366,849<F1>
<CURRENT-LIABILITIES> 131,817
<BONDS> 703,131<F2>
<COMMON> 308
0
0
<OTHER-SE> 489,668
<TOTAL-LIABILITY-AND-EQUITY> 1,366,849
<SALES> 0
<TOTAL-REVENUES> 322,089
<CGS> 0
<TOTAL-COSTS> 201,534
<OTHER-EXPENSES> 43,862<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,099
<INCOME-PRETAX> 56,594
<INCOME-TAX> 24,220
<INCOME-CONTINUING> 32,374
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,374
<EPS-PRIMARY> 1.04
<EPS-DILUTED> 1.04
<FN>
<F1>Includes $1,077,475,000 of cost assigned to contracts acquired, net.
<F2>Includes $179,500,000 in senior notes payable and $523,631,000 in subordinated
notes payable.
<F3>Represents amortization of cost assigned to contracts acquired for the six
months ended June 30, 1995.
</FN>
</TABLE>
