<PAGE>
<PAGE> 1
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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
For the transition period from to
------------------------------
COMMISSION FILE NUMBER 1-13340
------------------------------
MID ATLANTIC MEDICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
52-1481661
(IRS Employer Identification Number)
4 TAFT COURT, ROCKVILLE, MARYLAND
(Address of principal executive offices)
20850
(Zip code)
(301) 294-5140
(Registrant's telephone number, including area code)
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
The number of shares outstanding of each of the issuer's classes of
common stock was 46,435,712 shares of common stock, par value $.01,
outstanding as of September 30, 1995.
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<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (Note 1)
(in thousands except share amounts)
<TABLE>
<CAPTION>
(Unaudited) (Note)
September 30, 1995 December 31, 1994
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,379 $ 17,054
Short-term investments 187,394 136,901
Accounts receivable, net of allowance of $3,607 and $3,591 56,101 37,031
Prepaid expenses, advances and other 7,324 5,743
Deferred income taxes 9,012 15,540
----------- -----------
Total current assets 273,210 212,269
Property and equipment, net of accumulated
depreciation of $13,638 and $10,622 37,196 33,668
Statutory deposits 10,549 9,877
Other assets 11,862 12,708
---------- -----------
Total assets $ 332,817 $ 268,522
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 360 $ 726
Short-term borrowings 1,217 1,048
Accounts payable 17,359 17,565
Income taxes payable 4,704 2,589
Medical claims payable 98,171 85,014
Deferred premium revenue 9,566 13,344
----------- -----------
Total current liabilities 131,377 120,286
Notes payable (Note 4) 211 5,331
Deferred income taxes 854 1,579
----------- -----------
Total liabilities 132,442 127,196
----------- -----------
Stockholders' equity (Notes 2 and 3)
Common stock, $.01 par, 100,000,000 shares authorized; 46,481,652 issued
and 46,435,712 outstanding at September 30, 1995; 45,663,527 issued and
45,617,587 outstanding at December 31, 1994 465 456
Additional paid-in capital 39,170 29,431
Treasury stock (33) (33)
Unrealized gains and (losses) on investments, net of tax of $1,231 and $(1,490) 1,881 (2,278)
Retained earnings 158,892 113,750
----------- -----------
Total stockholders' equity 200,375 141,326
----------- -----------
Total liabilities and stockholders' equity $ 332,817 $ 268,522
=========== ===========
</TABLE>
Note: The balance sheet at December 31, 1994 has been extracted from the
audited financial statements at that date.
See accompanying notes to these financial statements.<PAGE>
<PAGE> 3
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30, September 30,
1995 1994
------------ ------------
<S> <C> <C>
Revenue
Premium $ 231,625 $ 185,157
Fee and other 3,916 2,666
Home health services 4,162
Investment 3,577 1,111
----------- -----------
Total revenue 243,280 188,934
----------- -----------
Expense
Medical 191,317 151,556
Home health patient services 2,671
Administrative (including interest expense of $368 and $161) 26,100 16,510
----------- -----------
Total expense 220,088 168,066
----------- -----------
Income before income taxes 23,192 20,868
Provision for income taxes (8,793) (7,313)
----------- -----------
Net income $ 14,399 $ 13,555
=========== ===========
Income per common and common equivalent share:
Net income $ .30 $ .28
=========== ===========
Weighted average common and common equivalent shares outstanding 47,955,851 47,720,880
=========== ===========
</TABLE>
See accompanying notes to these financial statements.<PAGE>
<PAGE> 4
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
1995 1994
------------ ------------
<S> <C> <C>
Revenue
Premium $ 666,826 $ 540,007
Fee and other 11,616 7,085
Home health services 13,628
Investment 7,714 3,415
----------- -----------
Total revenue 699,784 550,507
----------- -----------
Expense
Medical 543,804 440,187
Home health patient services 9,447
Administrative (including interest expense of $910 and $520) 74,037 48,580
----------- -----------
Total expense 627,288 488,767
----------- -----------
Income before income taxes 72,496 61,740
Provision for income taxes (27,354) (22,844)
----------- -----------
Net income $ 45,142 $ 38,896
=========== ===========
Income per common and common equivalent share:
Net income $ .95 $ .82
=========== ===========
Weighted average common and common equivalent shares outstanding 47,731,721 47,360,741
=========== ===========
</TABLE>
See accompanying notes to these financial statements.<PAGE>
<PAGE> 5
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ending
September 30, 1995
------------
<S> <C> <C>
Cash flows provided by operating activities:
Net income $ 45,142
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization $ 4,326
Provision for bad debts 16
Provision for deferred income taxes 3,081
Loss on sale and disposal of assets 78
Increase in accounts receivable (19,086)
Increase in prepaid expenses, advances, and other (1,581)
Decrease in accounts payable (37)
Increase in medical claims payable 13,157
Decrease in deferred premium revenue (3,778)
Increase in income taxes payable 2,115
-----------
Total adjustments (1,709)
-----------
Net cash provided by operating activities 43,433
Cash flows used in investing activities:
Purchases of short-term investments (313,267)
Sales of short-term investments 269,655
Purchases of property and equipment (7,078)
Purchases of statutory deposits (807)
Sales of statutory deposits 135
Purchases of other assets (690)
Proceeds from sale of assets 682
-----------
Net cash used in investing activities (51,370)
Cash flows provided by financing activities:
Proceeds from notes payable 300
Principal payments on notes payable (5,786)
Exercise of stock options 4,065
Stock option tax benefit 5,683
-----------
Net cash provided by financing activities 4,262
-----------
Net decrease in cash and cash equivalents (3,675)
Cash and cash equivalents at beginning of period 17,054
-----------
Cash and cash equivalents at end of period $ 13,379
===========
</TABLE>
See accompanying notes to these financial statements.<PAGE>
<PAGE> 6
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months
Ending
September 30, 1994
------------
<S> <C> <C>
Cash flows provided by operating activities:
Net income $ 38,896
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization $ 2,889
Provision for bad debts 309
Loss on sale and disposal of assets 1,126
Increase in accounts receivable (10,387)
Increase in prepaid expenses, advances, and other (5,718)
Increase in accounts payable 4,598
Increase in medical claims payable 590
Increase in deferred premium revenue 2,373
Decrease in income taxes payable (3,054)
-----------
Total adjustments (7,274)
-----------
Net cash provided by operating activities 31,622
Cash flows used in investing activities:
Purchases of short-term investments (139,167)
Sales of short-term investments 120,356
Purchases of property and equipment (6,473)
Purchases of statutory deposits (5,219)
Sales of statutory deposits 2,399
Purchases of other assets (2,305)
Proceeds from sale of assets 1,264
-----------
Net cash used in investing activities (29,145)
Cash flows provided by financing activities:
Principal payments on notes payable (490)
Exercise of stock options 5,902
Stock option tax benefit 10,552
Purchase of treasury stock (3)
-----------
Net cash provided by financing activities 15,961
-----------
Net increase in cash and cash equivalents 18,438
Cash and cash equivalents at beginning of period 973
-----------
Cash and cash equivalents at end of period $ 19,411
===========
</TABLE>
See accompanying notes to these financial statements.<PAGE>
<PAGE> 7
MID ATLANTIC MEDICAL SERVICES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
INTRODUCTION
Mid Atlantic Medical Services, Inc. (MAMSI) is a holding company whose
subsidiaries are active in managed health care and other health
insurance related activities. MAMSI delivers health care services
principally through health maintenance organizations (HMOs). The HMOs,
MD-Individual Practice Association, Inc. (M.D. IPA), Optimum Choice,
Inc. (OCI) and Optimum Choice, Inc. of the Carolinas (OCIC), arrange for
health care services to be provided to a voluntarily enrolled population
generally on a predetermined, prepaid fee basis, regardless of the
extent or nature of services provided to the enrollees. The HMOs offer
a full complement of health benefits, including physician, hospital and
prescription drug services.
Other MAMSI subsidiaries include Alliance PPO, Inc., a preferred
provider organization marketing non-risk products to self-insured
employers, indemnity carriers and other health care purchasing groups,
and Mid Atlantic Psychiatric Services, Inc., which provides specialized
non-risk mental health services. MAMSI Life and Health Insurance
Company develops and markets indemnity health and group life products to
support MAMSI's managed care products and also provides ancillary
products to MAMSI's customers. HomeCall, Inc., FirstCall, Inc., and
HomeCall Infusion Services, Inc. provide in-home medical care including
skilled nursing, infusion and therapy to both MAMSI's HMO members and
other payors.
NOTE 1 - FINANCIAL STATEMENTS
The consolidated balance sheet of MAMSI and its subsidiaries (the
Company) as of September 30, 1995, the consolidated statements of
operations for the three and nine months ended September 30, 1995 and
1994, and the consolidated statements of cash flows for the nine months
ended September 30, 1995 and 1994 have been prepared by MAMSI without
audit. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation
have been included.
Certain information and disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's December 31, 1994 audited consolidated
financial statements. The results of operations for the three and nine
month periods ended September 30 are not necessarily indicative of the
operating results for the full year.
Certain balances in the 1994 financial statements have been reclassified
to conform to the 1995 presentation.
NOTE 2 - STOCK OPTION PLANS
In 1995, the stockholders of MAMSI ratified the 1995 Non-Qualified Stock
Option Plan whereby options for the purchase of up to 3,000,000 shares
may be granted to officers and employees of the Company. Options under
this plan are exercisable at 100% of the fair market value per share on
the date the options are granted.<PAGE>
<PAGE> 8
NOTE 3 - COMMON STOCK
On April 17, 1995, the stockholders of MAMSI approved an increase in the
number of authorized shares of common stock from 60,000,000 to
100,000,000.
NOTE 4 - NOTES PAYABLE
On September 1, 1995, the Company paid off in full, from available cash,
its mortgage note payable amounting to approximately $5.0 million.
NOTE 5 - OTHER MATTERS
In October 1995, MAMSI announced a stock repurchase program. Under this
program, MAMSI may expend up to $40 million (including brokerage
commissions) to repurchase shares of its common stock over a twelve
month period at prices not to exceed $24.00 per share. Repurchased
shares will be reflected as treasury shares and will be available for
general corporate purposes.<PAGE>
<PAGE> 9
MID ATLANTIC MEDICAL SERVICES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THE THREE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED WITH THE THREE MONTHS
ENDED SEPTEMBER 30, 1994
Consolidated net income of the Company was $14,399,000 and $13,555,000
for the third quarter of 1995 and 1994, respectively, an increase of 6
percent. Earnings per share on net income increased from $.28 in the
third quarter of 1994 to $.30 in the third quarter of 1995. The
increase in earnings is primarily attributable to an increase in
membership, increased investment income from higher invested balances
and realized gains, and a reduction in per member per month medical
expenses, offset by a reduction in premiums per enrollee and an increase
in administrative expenses principally due to additions to the Company's
internal sales force and expansion into new geographic territories.
Revenue for the three months ended September 30, 1995 increased
approximately $54.3 million or 29 percent over the three months ended
September 30, 1994. Premium revenue increased approximately $46.5
million or 25 percent over the same period in 1994. A 33 percent
increase in average HMO and indemnity enrollment (approximately 155,600
additional average members per month) resulted in an increase of
approximately $61.2 million in premium revenue and a 6 percent decrease
in average premiums per HMO and indemnity enrollee reduced premium
revenue by approximately $14.7 million. Premiums per enrollee have
declined due to the combined effects of an increasing relative
percentage of Virginia Medicaid HMO members with lower per enrollee
revenues, the volatility of revenues from groups with hybrid funding
arrangements (i.e., revenues vary in a more direct way with medical
expense) and the competitiveness of the marketplace coupled with
management's plan to price its commercial products competitively.
Although premiums per member declined in the current period as compared
to the prior year period, management does not believe that future
periods will necessarily follow this pattern.
Fee and other revenue increased $1.3 million or 47 percent primarily due
to membership increases in preferred provider organization (PPO) and
administrative services only (ASO) products. Total PPO and ASO
membership grew from 678,000 at September 30, 1994 to 843,200 at
September 30, 1995, an increase of 24 percent. Service revenue from the
Company's new home health care subsidiaries contributed $4.2 million in
revenue in the third quarter of 1995.
The Company currently has one of the largest HMO and managed care
enrollment in its service area, and also the largest network of contract
providers of medical care. Because of the full range of managed care
products, service reputation, strong provider delivery system, trained
sales force, and competitive premiums, management believes that the
Company will continue to increase its membership during the remainder of
1995.<PAGE>
<PAGE> 10
In 1993, MAMSI invited the National Committee for Quality Assurance
(NCQA) to evaluate the Company's methodologies in an effort to receive
NCQA accreditation. NCQA accreditation is a voluntary process. The
Company did not meet certain of NCQA's criteria and, therefore, did not
receive NCQA accreditation. MAMSI believes that it has adopted
methodologies and programs designed to respond to the concerns and
questions raised in NCQA's assessment. The Company believes that, based
on its success with large group sales since the denial of accreditation,
the failure to receive NCQA accreditation should not have an adverse
effect on its business or financial condition.
Medical expenses as a percentage of premium revenue (medical loss ratio)
increased to 82.6 percent for the third quarter of 1995 as compared to
81.9 percent for the comparable period of 1994, principally due to a
decrease in average premiums per enrollee and also higher than
anticipated medical expenses in the Company's Medicare risk product. On
a per member per month basis, medical expenses declined approximately 5
percent. Although medical costs on a per member per month basis
declined in the current period compared to the prior year period,
management does not believe that this necessarily represents a
sustainable trend. Total medical costs may increase in future periods
due to inflationary pressures and/or the Company may experience
increased utilization by its membership.
Administrative expenses as a percentage of revenue (administrative
expense ratio) increased from 8.7 percent in the third quarter of 1994
to 10.7 percent in the third quarter of 1995. Administrative expenses
increased 58 percent, from $16.5 million to $26.1 million from the third
quarter of 1994 to the third quarter of 1995. The increase in the
administrative expense ratio is primarily attributable to expenses of
the Company's home health care subsidiaries, which were not present in
1994, the Company's territorial expansion into additional service areas
within currently served states as well as into the new states of North
Carolina (approved), South Carolina (pending), and Pennsylvania
(pending), the continued implementation of its plan to significantly
increase its employee sales force and the higher costs of administering
the Medicaid product which has become a more significant line of
business for the Company in 1995. The Company plans to continue to
reduce the percentage of new sales made by insurance brokers by
continuing to increase its internal sales force.
Investment income increased $2.5 million or 222 percent, primarily due
to significantly greater invested balances and an increase in realized
gains on sales of marketable equity securities.
The net margin rate decreased from 7.2 percent in the third quarter of
1994 to 5.9 percent in the current quarter. This decrease is primarily
due to slightly lower premium rates on certain products, slightly higher
than anticipated medical expenses and increased administrative expenses.<PAGE>
<PAGE> 11
THE NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO THE NINE MONTHS
ENDED SEPTEMBER 30, 1994
The Company's consolidated net income for the nine months ended
September 30, 1995 increased 16 percent to $45,142,000 from $38,896,000
for the nine months ended September 30, 1994. Earnings per share on net
income rose from $.82 in the first nine months of 1994 to $.95 for the
same period in 1995. The increase in earnings is primarily attributable
to an increase in membership and a reduction in per member per month
medical expenses, offset by a reduction in average premiums per enrollee
and an increase in administrative expenses due to the reasons described
above.
Revenue for the nine months ended September 30, 1995 increased
approximately $149.3 million or 27 percent over the nine months ended
September 30, 1994. Premium revenue increased approximately $126.8
million over the same period in 1994. A 27 percent increase in average
HMO and indemnity enrollment resulted in an increase of approximately
$143.2 million in premium revenue and a 2 percent decrease in average
premiums per HMO and indemnity enrollee reduced premium revenue by
approximately $16.4 million. Fee and other revenue increased $4.5
million or 64 percent primarily due to increases in fee revenue from PPO
and ASO only products. Service revenue from the Company's new home
health care subsidiaries contributed $13.6 million in revenue in the
first nine months of 1995.
The medical loss ratio remained relatively stable and increased from
81.5 percent in the first nine months of 1994 to 81.6 percent for the
same period in 1995. Medical expenses on a per member per month basis
decreased 2 percent over the comparable period.
Over the past two years, the Company has achieved significant year over
year reductions in per member per month medical expenses. These results
reflect the efficacy of managed care cost controls and state of the art
utilization management programs developed and expanded by the Company.
In order to continue to reimburse providers at a fair level in a manner
consistent with the current medical environment, the Company implemented
the Medicare Resource Based Relative Value Scale methodology of provider
reimbursement effective July 1, 1995. This methodology, which applies
generally to specialist health claims, has resulted in the lowering of
some reimbursement levels, mainly those having to do with office and
hospital-based procedures, while increasing payments for many evaluation
and management tasks. Management believes that this change will allow
the Company to continue to be competitive within its marketplace.
The administrative expense ratio for the first nine months of 1995
increased to 10.6 percent as compared to 8.8 percent for the comparable
period in 1994. The reasons for this increase are consistent with the
items discussed in the quarterly analysis.
The net margin rate declined to 6.5 percent for the first nine months of
1995 as compared to 7.1 percent for the comparable period in 1994,
principally due to increased administrative expenses.<PAGE>
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
The Company's business is not capital intensive and the majority of the
Company's expenses are payments to health care providers, which
generally vary in direct proportion to the premium revenues received by
the Company. Although medical utilization rates vary by season, the
payments for such expenses lag behind cash inflow from premiums because
of the lag in provider billing procedures. In the past, the Company's
cash requirements have been met principally from operating cash flow and
it is anticipated that this source will continue to be sufficient in the
future.
Cash and short-term investments increased from $154.0 million at
December 31, 1994 to $200.8 million at September 30, 1995, primarily due
to operating profits and proceeds from the exercise of employee stock
options. Accounts receivable increased from $37.0 million at December
31, 1994 to $56.1 million at September 30, 1995, primarily due to the
significant increase in membership during the first nine months of 1995.
Medical claims payable increased from $85.0 million at December 31, 1994
to $98.2 million at September 30, 1995, primarily due to the significant
increase in membership and related claim volume during the first nine
months of 1995.
Long-term debt decreased from $5.3 million at December 31, 1994 to $.2
million at September 30, 1995, primarily due to the payoff of the
Company's mortgage note payable without prepayment penalty. The Company
has access to total revolving credit facilities of $9.5 million, which
is used to provide short-term capital resources for routine cash flow
fluctuations. At September 30, 1995, approximately $1.2 million was
drawn against the lines-of-credit.
Following is a schedule of the short-term capital resources available to
the Company (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Cash and cash equivalents $ 13,379 $ 17,054
Short-term investments 187,394 136,901
Working capital advances to Maryland hospitals 4,053 3,982
----------- -----------
Total available liquid assets 204,826 157,937
Credit line availability 8,283 8,452
----------- -----------
Total short-term capital resources $ 213,109 $ 166,389
=========== ===========
/TABLE
<PAGE>
<PAGE> 13
The Company believes that the cash flow generated from operations along
with its current liquidity and borrowing capabilities are adequate for
both current and planned expanded operations. In October 1995, MAMSI
announced the approval of a stock repurchase program. Under this
program, MAMSI may expend up to $40 million (including brokerage
commissions) to repurchase shares of its common stock over a twelve
month period at prices not to exceed $24.00 per share. This program
will be financed through cash flow from the Company's operations. Other
capital expenditures may be made during 1995 to enhance the Company's
computer systems, establish additional sales offices and purchase an
additional office building for operational expansion in the future.<PAGE>
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material legal proceedings were commenced during the quarter ended
September 30, 1995 and no material developments occurred in any of the
previously disclosed proceedings during such quarter except as discussed
below.
During the third quarter of 1995, shareholders of MAMSI filed lawsuits
in the United States District Court for the District of Maryland against
MAMSI and certain current and former directors and officers. These
actions have been consolidated and, on November 1, 1995, a consolidated
Amended Class Action Complaint was filed on behalf of all plaintiffs.
The amended complaint alleges that MAMSI failed to disclose in a timely
fashion that it had been denied accreditation by the National Committee
for Quality Assurance (NCQA) and that the officers and directors named
as defendants are liable, directly and as controlling persons of MAMSI,
for the failure to disclose. Plaintiffs seek to represent a class of
all persons who purchased the common stock of MAMSI from March 1, 1995
through June 15, 1995. MAMSI believes it has meritorious defenses to
the claims raised in the Amended Complaint and intends to defend the
action vigorously.
The staff of the Securities and Exchange Commission has asked MAMSI to
provide certain information relating to the denial of accreditation by
the NCQA and to sales of stock by certain officers and directors prior
to the announcement of the NCQA's action. MAMSI has complied
voluntarily with the Commission's requests.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See the Exhibit Index on page 16 of the Form 10-Q.
(b) There were no reports filed on Form 8-K during the quarter ended
September 30, 1995.<PAGE>
<PAGE> 15
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
undersigned thereto duly authorized.
MID ATLANTIC MEDICAL SERVICES, INC.
--------------------------------------------
(Registrant)
Date: November 13, 1995 Robert E. Foss
--------------------------------------------
Robert E. Foss
Executive Vice President and
Chief Financial Officer<PAGE>
<PAGE> 16
6(a) List of Exhibits.
EXHIBIT INDEX
Location of Exhibit
Exhibit in Sequential
Number Description of Document Numbering System
27 Financial Data Schedule . . . . . . . . . . . . .<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1995 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-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> $13,379
<SECURITIES> 187,394
<RECEIVABLES> 56,101
<ALLOWANCES> 3,607
<INVENTORY> 0
<CURRENT-ASSETS> 273,210
<PP&E> 37,196
<DEPRECIATION> 13,638
<TOTAL-ASSETS> $332,817
<CURRENT-LIABILITIES> $131,377
<BONDS> 211
<COMMON> 465
0
0
<OTHER-SE> 199,910
<TOTAL-LIABILITY-AND-EQUITY> $332,817
<SALES> $0
<TOTAL-REVENUES> 699,784
<CGS> 0
<TOTAL-COSTS> 627,288
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 16
<INTEREST-EXPENSE> 910
<INCOME-PRETAX> 72,496
<INCOME-TAX> 27,354
<INCOME-CONTINUING> 45,142
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $45,142
<EPS-PRIMARY> $.95
<EPS-DILUTED> $.95
</TABLE>
