Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 7
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. The condensed financial statements included herein have been prepared by
the Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. 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 rules and regulations. These condensed financial statements
should be read in conjunction with the financial statements and related notes
contained in the Registrant's annual report on Form 10-K for the fiscal year
ended December 31, 1997.
In the opinion of management, the condensed financial statements included
herein contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position of the Registrant as of
June 30, 1998, the results of its operations for the three- and six-month
periods ended June 30, 1998 and 1997, and its cash flows for the six-month
periods then ended.
2. The results of operations for the three- and six-month period ended
June 30, 1998, are not necessarily indicative of the results to be expected
during the balance of the year ending December 31, 1998.
3. In June 1998, the Company acquired the Swiss Reinsurance Group's forty
percent (40%) minority interest in Crawford-THG in exchange for 1.9 million
restricted shares of Crawford & Company Class A Common Stock. Crawford-THG,
now a wholly owned subsidiary of Crawford & Company, provides all of Crawford's
services outside of the United States. This transaction was accounted for by
the purchase method of accounting. The restricted shares were valued at $33.1
million, which approximated the minority interest book value. Accordingly, no
goodwill was recorded related to this transaction.
On July 31, 1998, the Company also acquired all of the outstanding shares
of A.C.I. Adjusters Canada Incorporated ("ACI") for $16.1 million. The Company
acquired assets with a fair value of $28.8 million and assumed liabilities of
approximately $12.7 million. This transaction will be accounted for by the
purchase method of accounting. Since the transaction closed subsequent to
June 30, 1998, the accompanying financial statements do not reflect the
financial position or any revenues and expenses of ACI. Goodwill related to
the purchase will approximate $9.0 million. The initial purchase price may be
increased based on future earnings.
4. The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 128 effective December 31, 1997. Basic earnings per share is computed
based on the weighted average number of total common shares outstanding of
Class A and Class B Common Stock during the respective years. Diluted earnings
per share is computed based on the weighted average number of total common
shares outstanding of Class A and Class B Common Stock,
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 8
adjusted for dilutive common stock equivalents. All prior period earnings
per share amounts have been restated to comply with SFAS No. 128.
The following reconciliation illustrates the numerators and denominators
of the basic and diluted net income per share computations shown on the
consolidated statements of income for the six-months ended June 30, 1998:
1998 1997
(In thousands of dollars, except per share data)
Basic net income per share computation
Numerator
Income available to common shareholders $23,434 $19,747
Denominator
Weighted-average common shares outstanding 49,617 49,883
Basic net income per share $ 0.47 $ 0.40
Diluted net income per share computation
Numerator
Income available to common shareholders $23,434 $19,747
Denominator
Weighted-average common shares outstanding 49,617 49,883
Option shares outstanding 702 606
Shares issuable under convertible debt --- 800
50,319 51,289
Diluted net income per share $ 0.47 $ 0.39
Options to purchase 1,033,000 shares of Class A Common Stock at $19.00,
$19.125 and $19.50 per share were outstanding at June 30, 1998 but were not
included in the computation of diluted net income per share because the
options' exercise price was greater than the average market price of the
common shares; to include them would have been antidilutive.
5. The Company has adopted SFAS No. 130, "Reporting Comprehensive Income",
which establishes standards for reporting and display of "comprehensive
income" and its components. Comprehensive income for the Company consists
of net income and foreign currency translation adjustments. Total comprehensive
income (in thousands of dollars) was $15,316 and $11,998 for
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 9
the three-month periods ended June 30, 1998 and 1997, respectively. Total
comprehensive income (in thousands of dollars) was $25,267 and $14,972 for
the six-month periods ended June 30, 1998 and 1997, respectively.
6. In July 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information". SFAS
No. 131 supersedes SFAS Nos. 14, 18, 24 and 30 and establishes new standards
for segment reporting, using the "management approach," in which reportable
segments are based on the same criteria on which management disaggregates a
business for making operating decisions and assessing performance. SFAS
No. 131 is effective for fiscal years beginning after December 15, 1997.
Financial statement disclosures for prior periods are required to be restated.
The company is in the process of evaluating the reporting and disclosure
requirements, and will adopt the standard for its 1998 fiscal year.
Management does not anticipate that the adoption of SFAS No. 131 will have an
impact on the Company's consolidated results of operations, financial position
or cash flows.
In February 1998, the Financial Accounting Standards Board issued SFAS
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits." SFAS No. 132 supersedes the disclosure requirements in SFAS
Nos. 87, 88 and 106 and is effective for fiscal years beginning after December
15, 1997. Financial statement disclosures for prior periods are required to
be restated. The Company is in the process of evaluating the reporting and
disclosure requirements, and will adopt the standard for its 1998 fiscal year.
Management does not anticipate that the adoption of SFAS No. 132 will have an
impact on the Company's consolidated results of operations, financial position
or cash flows.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133
amends the disclosure requirements in SFAS Nos. 52 and 107, and supersedes the
disclosure requirements in SFAS Nos. 80, 105 and 119 and is effective for all
fiscal quarters beginning after June 15, 1999. Financial statement disclosures
for prior periods are not to be restated. The Company is in the process of
evaluating the reporting and disclosure requirements, and will adopt the
standard for the third quarter of 1999. Management does not anticiate that
the adoption of SFAS No. 133 will have an impact on the Company's consolidated
results of operations, financial position or cash flows.
7. The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents for purposes of the
statements of cash flows.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Financial Condition
At June 30, 1998, current assets exceeded current liabilities by approximately
$140.5 million, a decrease of $8.8 million from the working capital balance at
December 31, 1997. Cash and cash equivalents at June 30, 1998 totaled $41.9
million, decreasing $13.5 million from the balance at the end of 1997. The
Company held no short-term investments at June 30, 1998 or December 31, 1997.
Cash was generated primarily from operating activities, while the principal
uses of cash were for repurchases of common stock, dividends paid to
shareholders, acquisitions of property and equipment, pre-payment of
professional liability insurance, Year 2000 information system costs and the
initial design and development of the Company's new claims management system.
At June 30, 1998, the ratio of current assets to current liabilities was 2.1
to 1 compared with 2.2 to 1 at the end of 1997.
During 1997, the Company announced a share repurchase program to acquire up to
an aggregate of 3,000,000 shares of its Class A or Class B Common Stock through
open market purchases. Through June 30, 1998, the Company has reacquired
1,030,600 shares of its Class A Common Stock and 192,700 shares of its Class B
Common Stock at an average cost of $19.58 and $19.13 per share, respectively.
The Company maintains credit lines with banks in order to meet seasonal working
capital requirements of its foreign subsidiaries or other financing needs that
may arise. Short-term borrowings outstanding as of June 30, 1998 totaled $22.1
million, as compared to $19.8 million at the end of 1997. The Company believes
that its current financial resources, together with funds generated from
operations and existing and potential long-term borrowing capabilities, will
be sufficient to maintain its current operations.
The Company does not engage in any hedging activities to compensate for the
effect of exchange rate fluctuations on the operating results of its foreign
subsidiaries. Foreign currency denominated debt is maintained primarily to
hedge the currency exposure of the Company's net investment in foreign
operations.
Shareholders' investment at June 30, 1998 was $255.7 million, compared with
$215.0 million at the end of 1997. Long-term debt totaled $0.7 million at
June 30, 1998, or approximately 0.3% of shareholders' investment.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 11
Results of Operations
Operating results for the Company's domestic and international operations for
the six- and three-month periods ended June 30, 1998 and 1997 are as follows:
Six-month Periods Ended June 30, 1998 and 1997
Domestic International Total
1998 1997 1998 1997 1998 1997
(In thousands of dollars, except percentages)
Revenues $256,561 $280,939 $ 79,600 $ 67,581 $336,161 $348,520
Compensation &
Benefits 158,579 176,404 50,921 43,056 209,500 219,460
% of Revenues 61.8% 62.8% 62.8% 64.0% 62.3% 63.0%
Expenses Other
than Compensation
& Benefits 55,986 64,938 30,456 22,177 86,442 87,115
% of Revenues 21.8% 23.1% 38.3% 32.8% 25.7% 25.0%
Pretax Income Before
Year 2000 Expenses,
Restructuring Charge
and Minority
Interest $ 41,997 $ 39,597 ($ 1,778) $ 2,348 $ 40,219 $ 41,945
% of Revenues 16.4% 14.1% (2.2%) 3.5% 12.0% 12.0%
Three-month Periods Ended June 30, 1998 and 1997
Domestic International Total
1998 1997 1998 1997 1998 1997
(In thousands of dollars, except percentages)
Revenues $129,304 $141,032 $ 40,724 $ 41,537 $170,028 $182,569
Compensation &
Benefits 78,385 86,971 25,654 26,632 104,039 113,603
% of Revenues 60.6% 61.7% 63.0% 64.1% 61.2% 62.2%
Expenses Other
than Compensation
& Benefits 28,431 33,285 16,887 13,018 45,318 46,303
% of Revenues 22.0% 23.6% 41.5% 31.3% 26.7% 25.4%
Pretax Income Before
Year 2000 Expenses,
Restructuring Charge
and Minority
Interest $ 22,489 $ 20,776 ($ 1,818) $ 1,887 $ 20,671 $ 22,663
% of Revenues 17.4% 14.7% (4.5%) 4.5% 12.2% 12.4%
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 12
Revenues for the first six months and second quarter of 1998 were $336.2
million and $170.0 million, respectively, decreasing 3.5% and 6.9% from the
$348.5 million and $182.6 million for the same periods in 1997. Consolidated
pretax income before restructuring charge, Year 2000 expenses, and minority
interest decreased 4.1% and 8.8%, to $40.2 and $20.7 in the first six months
and second quarter of 1998 compared to the same periods in 1997.
DOMESTIC OPERATIONS
Revenues
Domestic revenues from insurance companies and self-insured entities totaled
$256.6 million for the six months ended June 30, 1998, decreasing 8.7% from
the $280.9 million for the same period in 1997. Second quarter 1998 revenues
totaled $129.3 million, a decrease of 8.3% from related 1997 revenues of $141.0
million.
Domestic unit volume, measured principally by chargeable hours and excluding
acquisitions, decreased approximately 14.0% and 13.5% in the first six months
and second quarter of 1998, respectively, compared to the same periods in 1997.
These declines were partially offset by changes in the mix of services provided
and in the rates charged for those services, the combined effects of which
increased revenues by approximately 5.3% and 5.2% in the first six months and
second quarter of 1998, respectively, compared to the comparable periods in
1997.
Revenues from domestic operations include $14.9 million in revenue from
services provided by the Company's catastrophe adjusters during the first six
months of 1998, principally to clients affected by natural or man-made
disasters, including hurricanes, floods, hail storms and oil spills. During
the same period in 1997, such revenue approximated $13.2 million. These
increases are due to an increase in weather-related claims. In the second
quarter of 1998, revenues produced by the Company's catastrophe adjusters
totaled $8.7 million, as compared to $6.5 million in the second quarter of
1997.
Compensation and Fringe Benefits
The Company's most significant expense is the compensation of its employees,
including related payroll taxes and fringe benefits. Domestic compensation
expense decreased as a percent of revenues from 62.8% in the six months ended
June 30, 1997 to 62.0% for the same period in 1998, and from 61.7% for the
second quarter of 1997 to 60.8% in the current quarter. These decreases are
due primarily to a decline in full-time equivalent employees and a reduction
in retirement expense, resulting from favorable investment returns.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 13
Domestic salaries and wages of personnel other than contract managers decreased
by 7.6% and 7.2%, from $127.1 million and $63.6 million in the first half and
second quarter of 1997, respectively, to $117.5 million and $59.0 million in
the comparable periods in 1998. Contract managers' compensation is based on
the operating income of the offices that they manage. Compensation of these
managers totaled $18.1 million and $9.6 million in the six- and three-month
periods ended June 30, 1998, decreasing 13.8% and 9.4% from related 1997 costs
of $21.0 million and $10.6 million, due primarily to an increase in branches
headed by non-contract managers. All contract managers will convert to a more
traditional compensation structure, comprised of a base salary plus
performance-based incentive bonus, during the third quarter of 1998.
Payroll taxes and fringe benefits for domestic operations totaled $23.3 million
and $10.1 million in the first half and second quarter of 1998, respectively,
decreasing 17.7% and 21.1% from 1997 costs of $28.3 million and $12.8 million
for the comparable periods in 1997. These declines are due primarily to fewer
full-time equivalent employees and the reduction in retirement expense.
Expenses Other than Compensation and Fringe Benefits
Domestic expenses other than compensation and related payroll taxes and fringe
benefits approximated 22.8% and 23.3% of revenues for the six- and three-month
periods ended June 30, 1998, respectively, down slightly from 23.1% and 23.6%
of revenues for the same periods in 1997.
INTERNATIONAL OPERATIONS
Revenues
Revenues from the Company's international operations totaled $79.6 million for
the first half of 1998, a 17.8% increase from $67.6 million in the first half
of 1997. This increase is primarily due to the acquisition of THG, with only
four months' results included in the first six months of 1998, due to an
acquisition effective date of January 1, 1997, and a two-month delay in
reporting international results. Second quarter revenues declined slightly
from $41.5 million in 1997 to $40.7 million in 1998. Revenues in 1998 are net
of approximately 5.6% and 5.1% declines, respectively, for the quarter and
year-to-date periods due to the negative effect of a relatively strong U.S.
dollar.
Compensation and Fringe Benefits
As a percent of revenues, compensation expense, including related payroll taxes
and fringe benefits, increased as a percentage of revenues, from 63.7% for the
six months ended June 30, 1997 to 64.0% for the comparable period in 1998.
For the three months ended June 30, 1998,
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 14
compensation and fringe benefits decreased as a percentage of revenues, to
63.0% from 64.1% in the prior period. Salaries and wages of international
personnel increased from 54.0% percent of revenue in 1997 to 54.6% for the
first half of 1998. Salaries and wages decreased in the quarter to 53.4% of
revenue from 54.1% for the comparable period in 1997. Payroll taxes and
fringe benefits also decreased as a percent of revenues, from 9.8% and 10.0%
in the six- and three-month periods ended June 30, 1997, to 9.4% and 9.6% for
the same periods in 1998.
Expenses Other than Compensation and Fringe Benefits
Expenses other than compensation and related payroll taxes and fringe benefits
approximated 38.3% of international revenues for the first six months of 1998,
compared to 32.8% of revenues for the same period in 1997. Second quarter
amounts were 41.5% and 31.3% of international revenues for 1998 and 1997,
respectively. These expenses comprise a higher percentage of revenues than the
Company's domestic operations due primarily to amortization of intangible
assets and higher automobile, occupancy and interest costs. Increases in these
expenses as a percent of revenues for the six- and three-month periods were due
to higher professional fees associated with a planned restructuring of the
Company's United Kingdom operations and increased bad debt expenses.
Restructuring Charges
In connection with the acquisition of Thomas Howell Group, the Company recorded
a pretax charge of $13 million in the first quarter of 1997 for personnel,
facilities and other costs associated with integration of the Company's
international businesses. An integration management plan was developed by
teams from both companies with an advisory board, steering committee and
integration teams for each geographic territory. The teams developed a
timeline and a communications program, identified specific leases to be
terminated and redundant positions to be eliminated. After reflecting income
tax benefits of $4.3 million and minority interest share of $3.5 million,
this charge reduced Crawford's net income for the six months ended June 30,
1997, by $5.2 million, or $0.10 per share.
In July 1998, the Company announced a plan to restructure its United Kingdom
operations, to be initiated in the third quarter of 1998. This restructuring
program is designed to streamline the claims handling process by centralizing
the intake and channeling of claims, and provide for cost-effective, telephonic
claims handling of personal lines claims. A restructuring charge of
approximately $5 to $6 million ($0.10 to $0.12 per share), net of income tax
benefits, will be taken in the third quarter to cover the cost of this
restructuring.
Additionally, in connection with the July 1998 acquisition of A.C.I. Adjusters
Canada Incorporated, a restructuring charge of $1.2 million ($0.02 per share),
net of income tax benefits,
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 15
will be taken in the third quarter of 1998 to cover the cost of integrating the
operations of ACI and Crawford's Canadian operations.
Minority Interest
Minority interest benefit of $0.5 million was recorded in the first half of
1998, compared to a benefit of $2.5 million recorded for the same period in
1997. In the current quarter, a benefit of $0.5 million was recorded, compared
to an expense of $0.7 million in the second quarter of 1997. The minority
interest expense or benefit reflects Swiss Re's 40% minority interest in
Crawford-THG Limited.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company expects to incur significant costs to address the impact of the
so-called Year 2000 problem on its information systems. The Year 2000 problem,
which is common to most organizations, concerns the inability of information
systems, primarily computer software programs, to properly recognize and
process date sensitive information as the year 2000 approaches. The Company
believes it will be able to modify or replace its affected systems in time to
minimize any detrimental effects on operations. The Company estimates this
cost to be approximately $15 million, with approximately $1 million incurred
in 1997 and approximately $8 million expected to be incurred in 1998. Through
June 30, 1998, the Company has incurred $4 million in Year 2000 costs,
including $1 million in 1997. Although this cost may be material to the
Company's results of operations in one or more fiscal quarters or years, the
Company does not believe it will have a material adverse impact on the long-
term results of operations, liquidity or consolidated financial position of
the Company.
Certain information presented in Management's Discussion and Analysis of
Financial Condition and Results of Operations may include forward-looking
statements, the accuracy of which is subject to a number of risks and
assumptions. The Company's Form 10-K for the year ended December 31, 1997,
discusses such risks and assumptions and other key factors that could cause
actual results to differ materially from those expressed in such forward-
looking statements. An additional risk factor is the Company's ability to
timely and efficiently address the Year 2000 problem.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 16
Review by Independent Public Accountants.
Arthur Andersen LLP, independent public accountants, has performed a review of
the interim financial information contained herein in accordance with
established professional standards and procedures for such a review and has
issued its report with respect thereto (see page 17).
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 17
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and
Board of Directors of
Crawford & Company:
We have made a review of the accompanying condensed consolidated balance sheet
of CRAWFORD & COMPANY (a Georgia corporation) AND SUBSIDIARIES as of June 30,
1998 and the related condensed consolidated statements of income for the six-
and three-month periods ended June 30, 1998 and 1997 and the related condensed
consolidated statements of cash flows for the six-month periods ended June 30,
1998 and 1997. 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 obtaining an understanding of
the system for the preparation of interim financial information, applying
analytical procedures to financial data and 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 the financial statements referred to above 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 Crawford & Company and
subsidiaries as of December 31, 1997 (not presented separately herein), and in
our report dated January 30, 1998, we expressed an unqualified opinion on that
balance sheet. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1997 is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
Arthur Andersen LLP
Atlanta, Georgia
August 7, 1998
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 18
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
On June 5, 1998, the Registrant issued one million, nine hundred
thousand (1,900,000) shares of Class A Common Stock to THG Holding
Limited ("Holding"), a subsidiary of Swiss Reinsurance Company, in
exchange for all of the capital stock Holding held in Crawford-THG
Limited. After the transaction, Registrant owned, directly or
indirectly, all of the capital stock of Crawford-THG Limited. The
Class A Common Stock issued to Holdings was not registered under the
Securities Act of 1933 in reliance on the exemption from such
registration under Section 4(2) of that Act for transactions by an
issuer not involving any public offering. Holding and its parent,
Swiss Reinsurance Company, are sophisticated investors, who were
advised by Securitas Capital LLC in the transaction. Additionally,
Holdings represented it was acquiring Registrant's Class A Common
Stock for investment, and not for distribution, and further agreed
not to sell or otherwise transfer the shares unless, in the opinion of
counsel reasonably satisfactory to Registrant, registration under the
Securities Act of 1933 is not required or the shares are so
registered. Finally, the certificates representing the shares are
legended and the Registrant has placed a stop-transfer order with its
transfer agent. The Registrant received no cash proceeds from this
transaction and did not employ any underwriters.
Item 4. Submission of Matters to a Vote of Security Holders
On April 23, 1998, the Registrant held its Annual Meeting of
Shareholders. At the Annual Meeting, the Class B Shareholders, the
only class entitled to vote at the meeting, voted on (i) the election
of eight (8) directors for a one year term; and (ii) ratification of
the selection of Arthur Andersen LLP as the Registrant's auditor for
the year ending December 31, 1998. The results of that voting are as
follows:
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 19
Election of Directors
Name Votes For Votes Withheld
Dennis A. Smith 24,914,554 13,269
J. Hicks Lanier 24,915,945 11,878
Charles Flather 24,917,842 9,981
Linda K. Crawford 24,914,791 13,032
Jesse C. Crawford 24,917,841 9,982
Larry L. Prince 24,915,945 11,878
John A. Williams 24,916,145 11,678
E. Jenner Wood, III 24,916,145 11,678
Ratification of Appointment of Auditors
Votes For Votes Against Abstain
24,910,173 2,749 14,901
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 20
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10.1 Supplemental Executive Retirement Plan, as amended
15.1 Letter from Arthur Andersen LLP
27.1 Financial Data Schedule
(b) Reports on Form 8-K
Registrant filed no reports on Form 8-K during the period
covered by this report.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 21
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.
Crawford & Company
(Registrant)
Date: 08/07/98 /s/D. A. Smith
D. A. Smith
Chairman of the Board, President and
Chief Executive Officer
Date: 08/07/98 /s/J. F. Giblin
J. F. Giblin
Executive Vice President - Finance
(Principal Financial Officer and
Principal Accounting Officer)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1998 Page 22
INDEX TO EXHIBITS
Exhibit No. Description Sequential Page No.
10.1 Supplemental Executive Retirement Plan,
as amended 23
15.1 Letter from Arthur Andersen LLP 28
27.1 Financial Data Schedule (for SEC use only)