SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report: December 1, 1994
---------------------------------

UNITED ASSET MANAGEMENT CORPORATION
-----------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 1-9215 04-2714625
- - --------------------------------- ------------ ---------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)

One International Place, Boston, MA 02110
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (617) 330-8900
--------------

Item 2. Acquisition or Disposition of Assets.
- - ------- -------------------------------------

(a) JMB Institutional Realty Corporation and JMB Properties Company.

On October 18, 1994, United Asset Management Corporation ("UAM") and its
wholly owned subsidiary Heitman Financial Ltd. ("HFL") entered into an
acquisition agreement in which they agreed to acquire and incorporate into HFL
and its subsidiaries the institutional real estate advisory and property
management assets and business of JMB Institutional Realty Corporation, JMB
Properties Company and their affiliates (the "Sellers"), other than the Seller's
retail property management business and certain other excluded assets (the
acquired assets and business are hereafter referred to as "JMB Institutional
Realty"). The closing of the acquisition is scheduled to take place in two
parts. The First Closing is scheduled to occur on December 2, 1994 at which
time all of the assets and business to be acquired will be transferred with the
exception of those assets relating to PRA Securities Advisors, LP ("PRA"). The
assets and business of PRA will be conveyed at a second closing early in 1995
after a mutual fund, advised by PRA, has held a meeting of stockholders called
to approve a new investment advisory agreement with a newly organized subsidiary
of HFL, as required by the Investment Company Act of 1940.

The institutional real estate advisory business of JMB Institutional Realty
currently manages approximately $5 billion in gross real estate assets. The
property management business to be acquired provides non-retail property
management services for the real estate holdings of the institutional real
estate advisory business to be acquired and for others. The transaction does
not affect or involve a number of the Seller's affiliates. The unaffected
affiliates include the Sellers' individual investor, private client, partnership
and development operations. Also unaffected are JMB Insurance Agency, JMB's
interest in Urban Shopping Centers, Inc., and its retail property management
subsidiary, JMB Retail Properties Company, land development activities at Amfac
and Arvida, and the investment advisory responsibilities in connection with
certain contracts including those related to Las Colinas, Catellus and Cadillac
Fairview.

Subject to certain adjustments and subject to the satisfaction of certain
conditions to the closing, the purchase price to be paid by UAM to the Sellers
will be $150,000,000 of short-term (three-day) notes, $70,000,000 in principal
amount of UAM Non-Negotiable 6-1/2% Subordinated Notes payable on the seventh
anniversary of their issuance and warrants, which expire on the seventh
anniversary of their issuance, to purchase an aggregate of 1,515,179 shares of
UAM Common Stock, 760,869 of which are exercisable at $46.00 per share and
754,310 of which are exercisable at $46.40 per share (subject to adjustment in
case of stock splits, etc.).

-2-

In negotiating the amount of consideration to be paid for the business, UAM
considered, among other things, the following factors with respect to JMB
Institutional Realty: the financial results, the value of assets under
management, the client history, the investment performance and quality of
management, and the prospects for growth.

There is no material relationship between UAM and the Sellers or any of
their respective officers, directors, or stockholders, other than the
Acquisition Agreement pursuant to which the acquisition will be made and the
other agreements relating thereto.

(b) Provident Investment Counsel

On November 10, 1994, UAM entered into an acquisition agreement in which
UAM agreed to purchase all of the assets of Provident Investment Counsel
("PIC"). The closing is presently scheduled for January 27, 1995. PIC, a
California corporation, is an investment management firm which had assets under
management as of September 30, 1994 of approximately $14.5 billion. At the
closing, UAM's wholly-owned subsidiary, PIC Newco, Inc., newly formed for
purposes of the acquisition, will assume PIC's name and continue its business.

Subject to certain adjustments and subject to the satisfaction of certain
conditions to the closing, the initial purchase price which UAM will pay to PIC
will be $264,554,550 in cash, $20,814,776 in principal amount of UAM Non-
Negotiable 6-1/2% Subordinated Notes payable on the seventh anniversary of
issuance, warrants to purchase an aggregate of 459,385 shares of UAM Common
Stock exercisable at $45.31 per share (subject to adjustment in case of stock
splits, etc.) and expiring on the seventh anniversary of their issuance, and
$67,370,074 in shares of UAM Common Stock. The number of shares of UAM Common
Stock to be issued is based on an average closing price for a twenty-day period
preceding the closing date, subject to a ceiling of $43.50 per share and a
floor of $29.00 per share.

The Acquisition Agreement also calls for a contingent payment to be made as
additional purchase price, dependent upon the growth of PIC's business from the
closing date of the transaction through 1997. The maximum total contingent
payment which may be earned is $125,000,000. The contingent payment, if earned,
will be payable in cash, UAM Common Stock, UAM Non-Negotiable 6-1/2%
Subordinated Notes and warrants to purchase shares of UAM Common Stock, all in
pro-rata amounts based on the relative amounts of such consideration paid at the
closing subject to PIC's right to increase the note and warrant portion and
decrease the cash portion by up to a maximum of $10,000,000. The Contingent
Notes and Warrants will be on substantially the same terms as the Notes and
Warrants issued at the closing, except that the due date and expiration date,
respectively, shall be seven (7) years from the date of their issuance. The per
share price of the UAM Common Stock to be used in calculating the number of
shares payable in connection with the contingent payment will be based on an
average closing price for a twenty-day period preceding the contingent closing
date,

-3-

provided, however, that if such price is less than the higher of $29.00 per
share or 80% of the average of the closing price of UAM's Common Stock over the
year preceding the contingent closing, UAM may opt to pay that portion of the
contingent payment in cash.

In negotiating the amount of consideration to be paid for PIC's assets, UAM
considered, among other things, the following factors with respect to PIC: the
financial results, the value of assets under management, the client history, the
investment performance and quality of management, and the prospects for growth.

There is no material relationship between UAM and PIC or any of their
respective officers, directors, or stockholders, other than the Acquisition
Agreement pursuant to which the acquisition will be made and the other
agreements relating thereto.

The principal sources of the cash portion of the purchase price for the
above described transactions will be cash generated by UAM's operations and
borrowings under UAM's Amended and Restated Reducing Credit Agreement dated as
of August 29, 1994 (filed as Exhibit 10 to UAM's report on Form 10-Q for the
quarter ended September 30, 1994, which exhibit indicates the identity of each
lending bank) and subsequently amended on November 18, 1994 as further discussed
in Item 5 within this Form 8-K.

-4-

Item 5. Other Events
- - ------- ------------

The Company amended and restated its Reducing Credit Agreement as of
November 18, 1994 whereby an additional $100,000,000 was made available,
bringing the Company's total line of credit to $500,000,000. In addition to the
pre-existing five year credit facility relating to the $400,000,000, the Company
may borrow the $100,000,000 through November 18, 1995. Any of the $100,000,000
principal amount outstanding at that time will be due. The Company plans to
refinance borrowings under this additional facility through placement of longer
term notes with institutional investors.

Interest rates available, at the Company's election, for amounts drawn on
this additional $100,000,000 are currently: prime, 100 basis points over LIBOR
or 112.5 basis points over certain certificate of deposit rates. In certain
circumstances, interest rate spreads may expand up to an additional 50 basis
points. Currently, a commitment fee of 37.5 basis points is payable on the daily
average unused portion of the $100,000,000 commitment.

The Company is required to meet certain financial covenants, including
covenants restricting dividends and repurchase of the Company's stock, and
requiring the Company to maintain a minimum net worth, as defined. The Company
must also continue to maintain certain minimum working capital, cash flow and
debt to equity ratios.

-5-

Item 7. Financial Statements and Exhibits.
- - ------- ----------------------------------

(a) Financial Statements of Businesses to be Acquired.
--------------------------------------------------

(i) JMB Institutional Realty (referred to as "JMB Business Group")
Combined Audited Balance Sheets for the Two Years Ended
December 31, 1993 and Combined Statements of Income and Cash
Flows for the Three Years Ended December 31, 1993.

(ii) JMB Institutional Realty Combined Unaudited Financial Statements
for the Nine Months Ended September 30, 1994.

(iii) Provident Investment Counsel Audited Financial Statements for
the Years Ended December 31, 1992 and 1991.

(iv) Provident Investment Counsel Audited Financial Statements for
the Years Ended December 31, 1993 and 1992.

(v) Provident Investment Counsel Unaudited Financial Statements for
the Nine Months Ended September 30, 1994.

(b) Pro Forma Financial Information.
--------------------------------

(i) Summary of Historical and Pro Forma Financial Highlights for the
Year Ended December 31, 1993 and the Nine Months Ended
September 30, 1994.

(ii) Unaudited Pro Forma Condensed Combined Balance Sheet of UAM as
of December 31, 1993.

(iii) Unaudited Pro Forma Condensed Combined Statement of Operations
of UAM for the Year Ended December 31, 1993.

(iv) Unaudited Pro Forma Condensed Combined Balance Sheet of UAM as
of September 30, 1994.

(v) Unaudited Pro Forma Condensed Combined Statement of Operations
of UAM for the Nine Months Ended September 30, 1994.

-6-

Exhibit Number Title
- - -------------- ------
2.1 Acquisition Agreement by and among United Asset Management
Corporation, Heitman Financial Ltd., JMB Institutional
Realty Corporation, JMB Realty Corporation and Certain
Affiliates of JMB Institutional Realty Corporation and JMB
Realty Corporation dated as of October 18, 1994.

2.2 Acquisition Agreement by and among United Asset Management
Corporation, Provident Investment Counsel, PIC Newco, Inc.
and the Stockholders of Provident Investment Counsel dated
as of November 10, 1994.

2.3 Agreement to Furnish Copies of Omitted Schedules and
Exhibits to Acquisition Agreements.

24 Consents of Independent Accountants.

-7-

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 hereunto duly authorized.

UNITED ASSET MANAGEMENT CORPORATION
-----------------------------------
Registrant

DATED: December 1, 1994 By: /s/ William H. Park
-----------------------------------
William H. Park
Executive Vice President
and Chief Financial Officer

-8-

Exhibit Index

Exhibit Number Title Page
- - -------------- ----- ----

2.1 Acquisition Agreement by and among United Asset
Management Corporation, Heitman Financial Ltd., JMB
Institutional Realty Corporation, JMB Realty
Corporation and Certain Affiliates of JMB Institutional
Realty Corporation and JMB Realty Corporation dated as
of October 18, 1994.

2.2 Acquisition Agreement by and among United Asset
Management Corporation, Provident Investment Counsel,
PIC Newco, Inc. and the Stockholders of Provident
Investment Counsel dated as of November 10, 1994.

2.3 Agreement to Furnish Copies of Omitted Schedules and
Exhibits to Acquisition Agreements.

24 Consents of Independent Accountants.

-9-

JMB BUSINESS GROUP

INDEPENDENT AUDITOR'S REPORT AND

FINANCIAL STATEMENTS

DATED: MAY 20, 1994

REPORT NO. 44830

JMB BUSINESS GROUP

TABLE OF CONTENTS

Page

INDEPENDENT AUDITORS' REPORT 2

ACCOUNTANTS' COMPILATION REPORT 3

FINANCIAL STATEMENTS:
Combined Balance Sheets, December 31, 1993
and 1992 4

Combined Statements of Income, Years Ended
December 31, 1993, 1992 and 1991 5

Combined Statements of Changes in Combined Equity,
Years Ended December 31, 1993, 1992 and 1991 6

Combined Statements of Cash Flows, Years Ended
December 31, 1993, 1992 and 1991 7

Notes to the Combined Financial Statements 8

INDEPENDENT AUDITOR'S REPORT

To the
JMB Business Group

We have audited the combined balance sheets of the JMB Business Group (Note 1)
as of December 31, 1993 and 1992, and the related combined statements of income,
changes in combined equity, and cash flows for each of the years in the three-
year period ended December 31, 1993. These financial statements are the
responsibility of the management of the JMB Business Group. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the JMB Business
Group as of December 31, 1993 and 1992, and the results of their operations and
their cash flows for each of the years in the three-year period ended December
31, 1993, in conformity with generally accepted accounting principles.

Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
May 20, 1994

JMB BUSINESS GROUP

Combined Balance Sheets
December 31, 1993 and 1992

December 31,
Assets 1993 1992
------------ ------------

Cash and Cash Equivalents (Note 2) $ 19,993,082 $ 14,471,712
Investments in U.S. Government and
Other Obligations (at cost, which
approximates market) 15,241,368 13,041,297
Accounts Receivable
(Notes 3 and 5) 9,465,107 9,927,653
Notes Receivable, Affiliates (Note 4) 14,219,675 10,043,930
Other Assets 3,837,438 1,325,935
Leasehold Improvements, Office
Furnishings and Equipment (net of
accumulated depreciation of
$1,607,434 and $1,201,538 at
December 31, 1993 and 1992,
respectively 3,138,684 3,315,863
------------ ------------

$ 65,895,354 $ 52,126,390
------------ ------------
------------ ------------

Liabilities and Combined Equity

Accounts Payable and Accrued
Expenses $ 3,302,908 $ 3,848,503
Deferred Rent Abatements
(Notes 2 and 5) 1,669,186 1,860,315
Contracts Payable to Former
Shareholders 476,000 997,000
Combined Equity 60,447,260 45,420,572
------------ ------------

$ 65,895,354 $ 52,126,390
------------ ------------
------------ ------------

The accompanying notes are an integral part of this statement.

JMB BUSINESS GROUP

Combined Statements of Income
Years Ended December 31, 1993, 1992 and 1991

Years Ended December 31,
1993 1992 1991
----------- ----------- -----------

Revenue:
Asset management fees (Notes 2 and 5) $47,342,920 $44,633,913 $55,287,093
Property management and leasing fees
(Notes 2 and 5) 23,125,220 24,852,025 24,050,443
Interest and sundry (Note 4) 2,404,188 1,796,690 3,337,756
----------- ----------- -----------
72,872,328 71,282,628 82,675,292
----------- ----------- -----------

Operating Expenses:
Payroll and related expenses (Note 5) 26,211,072 31,065,864 30,832,741
Administrative charges (Note 5) 7,431,182 6,715,754 7,180,263
Rent (Notes 2, 5 and 6) 3,498,840 4,276,268 3,978,420
Other operating expenses 9,235,276 10,055,263 9,781,245
----------- ----------- -----------
46,376,370 52,113,149 51,772,669
----------- ----------- -----------

Net Income $26,495,958 $19,169,479 $30,902,623
----------- ----------- -----------
----------- ----------- -----------

The accompanying notes are an integral part of this statement.

JMB BUSINESS GROUP

Combined Statements of Changes in Combined Equity
Years Ended December 31, 1993, 1992 and 1991

Balance, December 31, 1990 $54,395,453

Dividends Paid ( 3,019,522)
Purchase of 97,478 Shares of Common Stock ( 1,462,441)
Distributions (22,224,140)
Contributions 8,105,173
Net Income for Year 30,902,623
-----------

Balance, December 31, 1991 66,697,146

Dividends Paid (27,251,856)
Purchase of 53,190 Shares of Common Stock ( 4,593,916)
Distributions (20,670,493)
Contributions 12,070,212
Net Income for Year 19,169,479
-----------

Balance, December 31, 1992 45,420,572

Dividends Paid ( 5,093,523)
Purchase of 4,300 Shares of Common Stock ( 302,805)
Distributions (21,166,305)
Contributions 15,093,363
Net Income for Year 26,495,958
-----------

Balance, December 31, 1993 60,447,260
-----------
-----------

The accompanying notes are an integral part of this statement.

JMB BUSINESS GROUP

Combined Statements of Cash Flows
Years Ended December 31, 1993, 1992 and 1991

Years Ended December 31,
1993 1992 1991
------------ ------------ ------------

Cash Flows from Operating Activities:
Net income for year $ 26,495,958 $ 19,169,479 $ 30,902,623
------------ ------------ ------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 687,226 712,544 858,074
Decrease (Increase) in accounts receivable 462,546 67,568 (1,873,912)
(Increase) Decrease in other assets (2,735,430) 787,662 408,024
(Decrease) Increase in deferred rent abatements (191,129) (165,880) 278,765
(Decrease) Increase in accounts payable
and accrued expenses (545,595) 214,561 968,834
------------ ------------ ------------
Total Adjustments (2,322,382) 1,616,455 639,785
------------ ------------ ------------
Net cash provided by operating activities 24,173,576 20,785,934 31,542,408
------------ ------------ ------------
Cash Flows from Investing Activities:
Net (increase) decrease in investments in U.S.
government and other obligations (2,200,071) 22,266,411 (22,946,788)
Additions to leasehold improvements, office
furnishings and equipment (286,120) (489,181) (441,525)
------------ ------------ ------------

Net cash provided by (used in) investing activities (2,486,191) 21,777,230 (23,388,313)
------------ ------------ ------------
Cash Flows from Financing Activities:
(Increase) Decrease in notes receivable (4,175,745) (2,280,290) 1,933,248
Dividends paid (5,093,523) (27,251,856) (3,019,522)
Distributions (21,166,305) (20,670,493) (22,224,140)
Contributions 15,093,363 12,070,212 8,105,173
Purchase of treasury stock (823,805) (4,806,916) (1,282,441)
------------ ------------ ------------
Net cash flows used in financing activities (16,166,015) (42,939,343) (16,487,682)
------------ ------------ ------------
Net Increase (Decrease) in Cash and Cash Equivalents 5,521,370 (376,179) (8,333,587)

Cash and Cash Equivalents, Beginning of Period 14,471,712 14,847,891 23,181,478
------------ ------------ ------------
Cash and Cash Equivalents, End of Period $ 19,993,082 $ 14,471,712 $ 14,847,891
------------ ------------ ------------
------------ ------------ ------------

The accompanying notes are an integral part of this statement.

JMB BUSINESS GROUP

Notes to the Combined Financial Statements

NOTE 1--ORGANIZATION AND BASIS OF PRESENTATION:

The "JMB Business Group" is comprised of JMB Institutional Realty
Corporation and certain of its affiliates, JMB Properties Company and PRA
Securities Advisors, L.P.; exclusive of certain asset management and
property management contracts that are not part of a transaction
contemplated by the owners of the JMB Business Group. The accompanying
combined financial statements present the accounts of the (a) asset
management, and (b) office, residential and industrial property management
and leasing businesses of the JMB Business Group. The effects of all
significant intercompany balances and transactions have been eliminated in
the combined presentation.

Because of the common control and management of the asset management,
property management and leasing businesses of the JMB Business Group, the
accompanying combined financial statements have been accounted for as a
group of entities under common control, which is similar to the accounting
method used for a pooling of interests.

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:

GENERAL:

Cash and cash equivalents include deposits and United States Government
obligations with original maturities of three months or less.

No provision for federal income taxes has been made as the liability for
any such taxes is that of the owners of the respective combined entities
rather than the JMB Business Group.

Rental expense is recognized over the terms of the leases, inclusive of the
portion of the terms of the leases for which a rental concession has been
granted, with the amount of the concession comprising deferred rent
abatements in the accompanying combined balance sheets. Such amounts are
amortized over the portion of the terms of the leases during which actual
payments of rent are made.

Asset management fees and management and leasing fees are recognized as
revenue when the related services are provided and payment is made or
expected on a current basis.

Depreciation of office furnishings and equipment and amortization of
leasehold improvements are provided over the statutory recovery periods in
accordance with the applicable provisions of the Internal Revenue Code.
Such statutory periods approximate the estimated useful life of the assets.
Maintenance and repair expenses are charged to operations as incurred.

JMB BUSINESS GROUP

Notes to the Combined Financial Statements

NOTE 3--ACCOUNTS RECEIVABLE:

At December 31, 1993 and 1992, accounts receivable (Note 5) consist of the
following:

1993 1992
----------- -----------

Asset management $ 5,793,240 $ 6,872,377

Management and leasing 3,671,867 3,055,276
----------- -----------

Total accounts receivable $ 9,465,107 $ 9,927,653
----------- -----------
----------- -----------

NOTE 4--NOTES RECEIVABLE:

At December 31, 1993 and 1992, notes receivable consist of the following:

1993 1992
----------- -----------

Demand notes from affiliates $12,107,757 $ 7,254,072

Unsecured demand notes from
officers and employees 2,111,918 2,789,858
----------- -----------

Total notes receivable $14,219,675 $10,043,930
----------- -----------
----------- -----------

As of December 31, 1993 and 1992 notes receivable of $12,107,757 and
$7,254,072 were due from entities which are affiliated with the JMB
Business Group and are secured by the assets of the debtor affiliated
entities and the assets of other agreed-upon partnerships with overlapping
ownership structures. The aforementioned notes receivable provide for
interest at the "applicable federal rate."

Interest income earned on the aforementioned notes receivable for 1993,
1992 and 1991 amounted to $179,579, $274,285 and $608,892, respectively.

JMB BUSINESS GROUP

Notes to the Combined Financial Statements

NOTE 5--TRANSACTIONS WITH AFFILIATES:

The JMB Business Group provides asset management and office, residential
and industrial property management and leasing services to affiliated
entities not included in the JMB Business Group. Substantially all asset
management and office, residential and industrial property management and
leasing service revenues recognized in 1991 through 1993 and substantially
all related receivables outstanding at December 31, 1993 and 1992 resulted
from such services.

During 1993, 1992 and 1991, the JMB Business Group was charged, by an
affiliate, for their share of personnel and administrative costs incurred
by such affiliate. These costs were pooled and allocated based upon
employee ratios. In management's opinion, the allocation of these costs
has been made on a reasonable basis.

The JMB Business Group received reimbursements (at cost) of payroll and
other operating expenses from affiliated entities for activities performed
on their behalf. Such reimbursements aggregated $6,419,278, $3,830,128 and
$3,437,477 in 1993, 1992 and 1991, respectively and have been included as a
reduction of operating expenses in the accompanying combined statements of
income.

Costs and expenses of the JMB Business Group for insurance services
provided by an affiliated entity amounted to $1,334,906, $1,515,521 and
$1,304,143 in 1993, 1992 and 1991, respectively.

Employees of the Company are eligible to participate in a 401(k) Plan
sponsored by an affiliate, when they meet certain specified requirements.
Employer contributions to the 401(k) Plan, based upon 10% matching
requirements, included in the accompanying combined financial statements
were $65,626, $92,416 and $74,730 in 1993, 1992 and 1991, respectively.

During 1991, certain employees of the JMB Business Group participated in a
profit sharing retirement plan which provided benefits based primarily on
length of service and compensation levels (Prior Plan). Effective December
31, 1992, the Prior Plan was merged into the aforementioned 401(k) Plan.

In 1992, the JMB Business Group was admitted into a defined benefit pension
plan administered by an associated company. The associated company's
policy is to fund pension costs in accordance with the minimum funding
requirements under the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). Pursuant to the requirements
of the plan, the JMB Business Group funded benefit obligations in the
amounts of $552,560, $731,135 and $120,441 in 1993, 1992 and 1991,
respectively.

See Note 6 for other related-party transactions.

JMB BUSINESS GROUP

Notes to the Combined Financial Statements

NOTE 6--CONTINGENCIES AND COMMITMENTS:

The JMB Business Group is a party to various legal proceedings arising in
the ordinary course of their business. It is management's opinion that the
ultimate resolution of these matters will not have a material adverse
impact on the financial condition, results of operations or liquidity of
the JMB Business Group.

The JMB Business Group entered into certain operating leases (from
affiliates) primarily for office space for the period ending in August 2003
with an option to extend the lease terms for two consecutive periods of
five years each. Approximate minimum lease payments required under the
aforementioned leases (exclusive of escalation charges) are as follows:

Year Amount
---- ----------
1994 $2,901,555
1995 2,524,946
1996 1,966,740
1997 1,677,573
1998 1,742,516
Thereafter 6,771,287

Rent expense for 1993, 1992 and 1991 amounted to $3,498,840, $4,276,268 and
$3,978,420 (including reimbursement of common area maintenance charges of
$1,171,343, $1,589,601 and $1,006,718), respectively.

JMB BUSINESS GROUP
---------------------------------

REPORT
September 30, 1994

JMB BUSINESS GROUP

Combined Balance Sheets
December 31, 1993 and
(Unaudited) as of September 30, 1994

September 30, December 31,
1994 1993
ASSETS (Unaudited)
---------------- ------------

Cash and Cash Equivalents $ 13,226,801 $ 19,993,082
Investments in U.S. Government and
Other Obligations (at cost, which
approximates market) 12,930,609 15,241,368
Accounts Receivable 9,676,489 9,465,107
Notes Receivable, Affiliates 18,078,120 14,219,675
Other Assets 8,748,089 3,837,438
Leasehold Improvements, Office
Furnishings and Equipment (net of
accumulated depreciation of $1,607,434 and $1,987,508
at December 31, 1993 and (unaudited)
at September 30, 1994 respectively) 2,937,206 3,138,684
--------------- ------------
$ 65,597,314 $ 65,895,354
--------------- ------------
--------------- ------------

Liabilities and Combined Equity

Accounts Payable and Accrued
Expenses $ 5,122,109 $ 3,302,90
Deferred Rent Abatements 1,528,344 1,669,186
Contracts Payable to Former Shareholders 476,000
Combined Equity 58,946,861 60,447,260
--------------- -----------
$ 65,597,314 $ 65,895,354
--------------- -----------
--------------- -----------

JMB BUSINESS GROUP

Combined Statements of Income (Unaudited) for the
Nine Months Ended September 30, 1994 and 1993

Nine Months Ended September 30,
1994 1993
(Unaudited) (Unaudited)
----------------- ----------------

Revenue:
Asset management fees $ 36,483,037 $ 34,891,757
Property management and leasing fees 18,483,413 17,201,078
Interest and sundry 1,220,219 1,313,491
----------------- ----------------
56,186,659 53,406,326
----------------- ----------------

Operating Expenses:
Payroll and related expenses 21,494,138 19,736,541
Administrative charges 4,214,907 5,357,484
Rent 2,559,360 2,623,996
Other operating expenses 8,300,720 7,535,679
----------------- ----------------
36,569,125 35,253,700
----------------- ----------------
Net Income $ 19,617,534 $ 18,152,626
----------------- ----------------
----------------- ----------------

JMB BUSINESS GROUP

Combined Statement of Changes in Combined Equity
(Unaudited) for the Nine Months Ended September 30, 1994

Balance, December 31, 1993 $ 60,447,260

Dividends Paid (6,000,000)
Distributions (16,107,933)
Contributions 990,000
Net Income for Period 19,617,534
------------
Balance, September 30, 1994 $ 58,946,861
------------
------------

JMB BUSINESS GROUP

Combined Statements of Cash Flows
(Unaudited) for the Nine Months Ended September 30, 1994 and 1993

Nine Months Ended September 30, 1994
1994 1993
----------- -----------
(Unaudited) (Unaudited)

Cash Flows from Operating Activities:
Net income for year $ 19,617,534 $ 18,152,626
------------ ------------
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 571,553 525,286
(Increase) Decrease in accounts receivable (211,382) (1,609,696)
(Increase) Decrease in other assets (5,094,066) (2,151,511)
(Decrease) Increase in deferred rent abatements (140,842) (143,266)
Increase (Decrease) in accounts payable
and accrued expenses 1,879,201 2,435,011
------------ ------------

Total adjustments (2,995,536) (944,176)
------------ ------------

Net cash provided by operating activities 16,621,998 17,208,450
------------ ------------

Cash Flows from Investing Activities:
Net (increase) decrease in investments in U.S.
government and other obligations 2,310,759 (3,220,271)
Additions to leasehold improvements, office
furnishings and equipment (186,660) (150,367)
------------ ------------

Net cash provided by (used in) investing activities 2,124,099 (3,370,638)
------------ ------------

Cash Flows from Financing Activities:
(Increase) Decrease in notes receivable (3,918,445) (7,904,891)
Dividends paid (6,000,000) (10,237,429)
Distributions (16,107,933) (10,730,124)
Contributions 990,000 67,238,346
Purchase of treasury stock (476,000) (709,562)
------------ ------------

Net cash flows provided by (used in) financing
activities (25,512,378) 37,656,340
------------ ------------

Net Increase (Decrease) in Cash and Cash Equivalents (6,766,281) 51,494,152

Cash and Cash Equivalents, Beginning of Period 19,993,082 14,471,712
------------ ------------

Cash and Cash Equivalents, End of Period $ 13,226,801 $ 65,965,864
------------ ------------
------------ ------------

The accompanying notes are an integral part of this statement.

JMB BUSINESS GROUP

Notes to the Combined Financial Statements

NOTE 1--ORGANIZATION AND BASIS OF PRESENTATION:

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:

GENERAL:

Cash and cash equivalents include deposits and United States Government
obligations with original maturities of three months or less.

No provision for federal income taxes has been made as the liability for
any such taxes is that of the owners of the respective combined entities
rather than the JMB Business Group.

Asset management fees and management and leasing fees are recognized as
revenue when the related services are provided and payment is made or
expected on a current basis.

JMB BUSINESS GROUP

Notes to the Combined Financial Statements

NOTE 3 - ACCOUNTS RECEIVABLE:

Accounts receivable (Note 5) consist of the following:

December 31,
September 30, 1994 1993 1992
------------------ ---- ----
(unaudited)

Asset management $7,468,571 $5,793,240 $6,872,377

Management and leasing 2,207,918 3,671,867 3,055,276
---------- ---------- ----------

Total accounts receivable $9,676,489 $9,465,107 $9,927,653
---------- ---------- ----------
---------- ---------- ----------

NOTE 4 - NOTES RECEIVABLE:

Notes receivable consist of the following:

December 31,
September 30, 1994 1993 1992
------------------ ---- ----
(unaudited)

Demand notes from affiliates $15,953,236 $12,107,757 $ 7,254,072

Unsecured demand notes from
officers and employees 2,124,884 2,111,918 2,789,858
----------- ----------- -----------

Total notes receivable $18,078,120 $14,219,675 $10,043,930
----------- ----------- -----------
----------- ----------- -----------

JMB BUSINESS GROUP

Notes to the Combined Financial Statements

NOTE 5--TRANSACTIONS WITH AFFILIATES:

The JMB Business Group received reimbursements (at cost) of payroll and
other operating expenses from affiliated entities for activities performed
on their behalf. Such reimbursements aggregated $875,798, $6,419,278,
$3,830,128 and $3,437,477 for the nine months ended September 30, 1994 and
for the years ended 1993, 1992 and 1991, respectively and have been
included as a reduction of operating expenses in the accompanying combined
statements of income.

Costs and expenses of the JMB Business Group for insurance services
provided by an affiliated entity amounted to $812,962, $1,334,906,
$1,515,521 and $1,304,143 for the nine months ended September 30, 1994 and
for the years ended 1993, 1992 and 1991, respectively.

Employees of the Company are eligible to participate in a 401(k) Plan
sponsored by an affiliate, when they meet certain specified requirements.
Employer contributions to the 401(k) Plan, based upon 10% matching
requirements, included in the accompanying combined financial statements
were $34,948, $65,626, $92,416 and $74,730 for the nine months ended
September 30, 1994 and for the years ended 1993, 1992 and 1991
respectively.

During 1991, certain employees of the JMB Business Group participated in
a profit sharing retirement plan which provided benefits based primarily
on length of service and compensation levels (Prior Plan). Effective
December 31, 1992, the Prior Plan was merged into the aforementioned
401(k) Plan.

In 1992, the JMB Business Group was admitted into a defined benefit
pension plan administered by an associated company. The associated
company's policy is to fund pension costs in accordance with the minimum
funding requirements under the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Pursuant to the
requirements of the plan, the JMB Business Group funded benefit obligations
in the amounts of $552,560, $731,135 and $120,441 in 1993, 1992 and 1991
respectively. Included in accounts payable and accrued expenses at
September 30, 1994 is the estimated 1994 contribution for the nine months
ended September 30, 1994 in the amount of $464,075.

See Note 6 for other related-party transactions.

JMB BUSINESS GROUP

Notes to the Combined Financial Statements

NOTE 6--CONTINGENCIES AND COMMITMENTS:

Year Amount
---- ----------
1994 $2,901,555
1995 2,524,946
1996 1,966,740
1997 1,677,573
1998 1,742,516
Thereafter 6,771,287

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

FINANCIAL STATEMENTS

For the years ended December 31, 1992 and 1991

--------------------

MK&M [Logo] MAGINNIS, KNECHTEL & MCINTYRE
Certified Public Accountants

950 South Arroyo Parkway
Pasadena, CA 91105
818/449-3466
213/684-1327
Fax 818/577-936l

Gerald E. Cunha, C.P.A.
Kenneth R. Hemming, C.P.A.
Morgan B. Knechtel, C.P.A.
Karen A. Moy, C.P.A.
Elliot L. Shell, C.P.A.
Arthur J. Thielen, C.P.A.

INDEPENDENT AUDITORS' REPORT

Board of Directors
Provident Investment Counsel
Pasadena, California

We have audited the accompanying balance sheets of Provident Investment Counsel
(an S corporation) as of December 31, 1992 and 1991 and the related statements
of operations, stockholders' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Provident Investment Counsel as
of December 31, 1992 and 1991 and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

/s/ Maginnis, Knechtel & McIntyre

Pasadena, California
March 5, 1993

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

BALANCE SHEETS
December 31, 1992 and 1991

ASSETS

1992 1991
----------- -----------

Current assets
Cash and cash equivalents $ 2,735,092 $ 1,779,338
Accounts receivable 9,349,345 7,586,920
Prepaid expenses 147,404 82,638
----------- -----------

Total Current Assets 12,231,841 9,448,878

Advances to mutual funds for start-up costs 100,000 100,000

Investments (Note 2) 462,861 316,195

Notes receivable (Note 3) 265,099 395,146

Property and equipment
Office furniture and equipment 1,764,359 1,034,567
Leasehold improvements 798,279 390,366
Fine arts 89,874 84,208
----------- -----------

2,652,512 1,509,141

Less accumulated depreciation and amortization (1,006,166) (651,562)
----------- -----------

1,646,346 857,579

Deposits and other assets 1,921 1,921
----------- -----------

$14,708,068 $11,119,719
----------- -----------
----------- -----------

See accompanying notes to financial statements.

LIABILITIES AND STOCKHOLDERS'EQUITY

1992 1991
----------- ------------

Current liabilities
Accounts payable $ 582,416 $ 482,545
Accrued bonuses 2,700,875 2,077,411
Profit sharing and 401(k) savings plan (Note 5) 438,336 411,738
Dividends payable 1,501,000 --
Notes payable - stockholders (Note 4) 3,139,000 3,000,000
----------- -----------

Total current liabilities 8,307,627 5,971,694

Accrued rent (Note 8) 746,959 799,893
----------- -----------

Total liabilities 9,054,586 6,771,587

Commitments (Note 8)

Stockholders' equity
Capital stock (Note 8)
Authorized 1,000,000 shares par value $.01,
161,041 and 187,385 shares issued and outstanding,
1992 and 1991, respectively 1,610 1,874
Paid in capital 30,605 35,611
Retained earnings 5,621,267 4,310,647
----------- -----------

Total stockholders' equity 5,653,482 4,348,132
----------- -----------

$14,708,068 $11,119,719
----------- -----------
----------- -----------

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

STATEMENTS OF OPERATIONS

For the years ended December 31, 1992 and 1991

----------------------------

1992 1991
----------- -----------

Revenues
Fee income $59,871,610 $40,018,717
Interest income 759,670 541,872
Other 54,366 1,697
----------- -----------

60,685,646 40,562,286

Costs and expenses
Salaries and benefits 53,177,077 34,528,815
General and administrative expenses 3,603,688 3,307,192
Depreciation and amortization 420,598 246,738
----------- -----------

57,201,363 38,082,745
----------- -----------

Income before income taxes 3,484,283 2,479,541

Provision for income taxes (Note 6) 66,750 85,040
----------- -----------

Net income $ 3,417,533 $ 2,394,501
----------- -----------
----------- -----------

See accompanying notes to financial statements.

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

STATEMENTS OF STOCKHOLDERS'EQUITY

For the years ended December 31, 1992 and 1991

----------------------------

Accumulated Other
Capital Paid in adjustments adjustments Retained
stock capital account account earnings Total
------- -------- ----------- ----------- ----------- -----------

Balance, December 31, 1990 $ 2,460 $ 46,748 $ 236,025 $ (843,055) $ 3,038,405 $ 2,480,583

Reclassification (680,949) 627,696 53,253 --

Stock redemption (Note 7) (586) (11,137) (515,229) (526,952)

Net income:

Taxable income 2,301,706 2,301,706

Nontaxable interest income 321,875 321,875

Nondeductible expenses (13,580) (271,607) (285,187)

Book and tax timing differences 56,107 56,107
------- -------- ---------- ----------- ----------- -----------

Total net income 2,288,126 106,375 2,394,501

Balance, December 31, 1991 1,874 35,611 1,843,202 (108,984) 2,576,429 4,348,132

Stock redemption (Note 7) (264) (5,006) (605,913) (611,183)

Net income:

Taxable income 3,526,383 3,526,383

Nontaxable interest income 559,389 559,389

Nondeductible expenses (14,317) (397,675) (411,992)

Book and tax timing differences (256,247) (256,247)
---------- ----------- -----------

Total net income 3,512,066 (94,533) 3,417,533

Dividends declared (1,501,000) (1,501,000)
------- -------- ---------- ----------- ----------- -----------

Balance, December 31, 1992 $ 1,610 $ 30,605 $5,355,268 $(1,704,517) $ 1,970,516 $ 5,653,482
------- -------- ---------- ----------- ----------- -----------
------- -------- ---------- ----------- ----------- -----------

See accompanying notes to financial statements.

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

STATEMENTS OF CASH FLOWS

For the years ended December 31, 1992 and 1991

----------------------

1992 1991
----------- -----------

Cash flows from operating activities:
Net income $ 3,417,533 $ 2,394,501
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on disposal of property and
equipment 2,909 2,179
Loss on investments 38,192 20,655
Depreciation and amortization 420,598 246,738
(Increase) decrease in:
Accounts receivable (1,762,443) (2,645,977)
Prepaid expenses (64,766) (78,559)
Increase (decrease) in:
Accounts payable 45,871 (90,077)
Accrued bonuses 623,464 1,004,129
Profit sharing 29,598 20,353
Accrued rent (52,934) 46,409
----------- -----------

Total adjustments (722,511) (1,474,150)

Net cash provided by
operating activities 2,695,022 920,351

Cash flows from investing activities:
Proceeds from notes receivable - stockholders -- 369,767
Proceeds from notes receivable 130,047 69,215
Distributions from limited partnerships 15,142 18,429
Receipt of advances to mutual funds for start-up costs 100,000 --
Advances to mutual funds for start-up costs (100,000) (100,000)
Purchase of mutual funds (200,000) --
Purchase of property and equipment (1,212,274) (327,875)
Advances on notes receivable -- (412,767)
----------- -----------

Net cash used in investing
activities (1,267,085) (383,231)

See accompanying notes to financial statements.

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

STATEMENTS OF CASH FLOWS, CONTINUED

For the years ended December 31, 1992 and 1991

----------------------

1992 1991
----------- -----------

Cash flows from financing activities:
Proceeds from notes payable - stockholders $ 3,139,000 $ 3,000,000
Stock redemption (611,183) (526,952)
Payments on bank note payable -- (2,000,000)
Payments on notes payable - stockholders (3,000,000) --
----------- -----------
Net cash provided (used) in financing
activities (472,183) 473,048
----------- -----------

Net increase in cash 955,754 1,010,168

Cash and cash equivalents at beginning of year 1,779,338 769,170
----------- -----------

Cash and cash equivalents at end of year $2,735,092 $ 1,779,338
----------- -----------
----------- -----------

Supplemental disclosures
Taxes paid $ 93,750 $ 11,000
Interest paid 29,524 34,926

See accompanying notes to financial statements.

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

NOTES TO FINANCIAL STATEMENTS

December 31, 1992 and 1991

-----------------

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of the business

Provident Investment Counsel (the Company) acts as a discretionary
investment manager and is registered under the Investment Advisers Act of
1940.

Revenue recognition

Fee income is recognized in the period for which the Company provides
advisory services. Fees generally are based on a percentage of the market
values of the portfolios under management. Accounts receivable are
considered fully collectable as of December 31, 1992.

Investments

Investments are carried at the lower of cost or market.

Property and equipment

Property and equipment are stated at cost. Depreciation and amortization of
property and equipment are computed on the straight-line and declining
balance methods over the useful lives of the assets, or in the case of
leasehold improvements the life of the lease. These lives range from five
to ten years.

Income tax

The Company, with the consent of its stockholders, has elected under the
Internal Revenue Code to be an S corporation. In lieu of corporation income
taxes, the stockholders of an S corporation are taxed on their
proportionate share of the Company's taxable income. Under those
provisions, the Company does not pay federal corporate income taxes on its
taxable income. Instead, the stockholders are liable for individual federal
income taxes on the Company's taxable income.

The Company has also elected by consent of its stockholders to be taxed
under the California S corporation provisions. Under such regulations the
state corporate tax rate is 2-1/2%.

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

NOTES TO FINANCIAL STATEMENTS

December 31, 1992 and 1991

------------------

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Income tax, continued

Amounts provided for state income taxes are based on earnings reported for
financial statement purposes, adjusted for differences between reported
financial and taxable income.

Cash and cash equivalents

For the purpose of the statement of cash flows, the Company considers all
short-term highly liquid investments with original maturities of three
months or less to be cash equivalents.

The Company had uninsured cash balances of $3,107,537 and $1,633,318 at
December 31, 1992 and 1991, respectively.

2 INVESTMENTS

Investments at December 31 consist of:

1992 1991
-------- --------

Limited partnerships $216,672 $232,340
PIC Pinnacle Growth Fund 100,000 --
PIC Pinnacle Balanced Fund 100,000 --
Common stocks 46,189 83,855
-------- --------

$462,861 $316,195
-------- --------

The Company uses the equity method of accounting for investments in limited
partnerships. Under this method, investments are stated at cost, adjusted
for the equity in taxable earnings or losses and distributions as reported
by the general partners. These limited partnerships are for a specified
term at which time any cash or stock held by the partnerships will be
distributed to the partners. Management believes the recorded value is not
materially different from the fair market value of these investments.

At December 31, 1992 the aggregate cost of the PIC Pinnacle Funds and
common stocks approximated market.

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

NOTES TO FINANCIAL STATEMENTS

December 31, 1992 and 1991

------------------

3 NOTES RECEIVABLE

Notes receivable are due from:

1992 1991
-------- --------

Automobile leasing agent $265,099 $357,642
Other -- 37,504
-------- --------

$265,099 $295,146
-------- --------

During 1991 the Company established a program to fund the purchase of
automobiles leased by the Company. Amounts advanced to the leasing agent
are in the form of notes to be repaid over the life of the lease.

4 NOTES PAYABLE - STOCKHOLDERS

In December 1992 and 1991, certain stockholders made loans to the Company.
The 1992 notes required interest at prime plus 1% while the 1991 notes
required interest at 8% per annum. Principal and interest are due on
demand. The Company repaid these notes in the first quarter of each
subsequent year.

5 PROFIT SHARING AND 401(K) SAVINGS PLAN

All employees are eligible for the Company's qualified profit sharing and
401(k) plan after meeting certain age requirements and one year of
service. Employee contributions to the 401(k) plan are fully vested and
made through a payroll deduction plan. Company contributions to this plan
are made at the discretion of management, and are allocated on the basis of
employee plan participation and ERISA regulations. All Company
contributions are 1 00% vested after three years of service. The Company's
expense was $516,392 and $482,479 for 1992 and 1991, respectively.

6 PROVISION FOR TAXES

Tax expense consists of the following:

1992 1991
-------- --------

Current
State $ 66,750 $ 85,040
-------- --------

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

NOTES TO FINANCIAL STATEMENTS

December 31, 1992 and 1991

7 STOCK REDEMPTION

In January 1992 and 1991, the Company redeemed shares of its common
stock from certain stockholders as follows:

1992 1991
-------- --------

Shares redeemed 26,344 58,615
Purchase price $611,183 $526,952

8 COMMITMENTS

The Company leases its facilities in Pasadena, California under long-term
operating lease agreements. The leases expire in 1999 with two five-year
options to renew and in 1996. Rental payments on the first lease were not
required for several months. The Company recognizes rent expense ratably
over the period of the leases. Accrued rent amounted to $746,959 at
December 31, 1992, which is being amortized over the period in which rental
payments are made. Additionally, the Company leases automobiles for certain
officers and stockholders. Rent expense was $633,363 and $515,395 for the
year ended December 31, 1992 and 1991, respectively. Future minimum rental
payments required are as follows:

1993 $ 777,219
1994 812,116
1995 818,614
1996 690,990
1997 662,370
Thereafter 993,555
----------

$4,754,864
----------
----------

PROVIDENT INVESTMENT COUNSEL
(An S Corporation)

NOTES TO FINANCIAL STATEMENTS

December 31, 1992 and 1991

8 COMMITMENTS, CONTINUED

Stockholder agreements

An officer of the Company has an employment contract that requires a fixed
salary plus discretionary bonuses, and other benefits. This agreement
requires the officer not to compete with the Company for a period of five
years after retirement. Future minimum payments required under this
contract are as follows:

1993 $ 840,000
1994 840,000
1995 840,000
1996 840,000
1997 495,600
----------

$3,855,600
----------
----------

Other stockholders and officers of the Company have agreements which provide for
payments by the Company in the event of involuntary severance, death or
disability. The Company agrees to pay a percentage of annual revenues or three
years salary, beginning in the period subsequent to the involuntary severance,
death or disability. The Company is self insured for these benefits.

Provident Investment Counsel, Inc.

FINANCIAL STATEMENTS

December 31, 1993 and 1992

Board of Directors
Provident Investment Counsel, Inc.
Pasadena, California

INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying balance sheet of Provident Investment Counsel,
Inc. (an S Corporation) as of December 31, 1993, and the related statements of
income, stockholders' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Provident Investment Counsel, Inc. as of
December 31, 1992, were audited by other auditors whose report dated March 5,
1993, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Provident Investment Counsel,
Inc. as of December 31, 1993, and the results of their operations and their cash
flows for the year then ended in conformity with generally accepted accounting
principles.

Horsfall, Murphy & Pindroh
Pasadena, California
March 11, 1994

Provident Investment Counsel
BALANCE SHEETS
December 31, 1993 and 1992

ASSETS

1993 1992
----------- -----------

CURRENT ASSETS
Cash and cash equivalents $ 2,120,901 $ 2,735,092
Accounts receivable 11,238,999 9,349,345
Notes receivable 52,896 47,956
Prepaid expenses 239,665 149,325
Advances to stockholders 33,057
----------- -----------
Total current assets 13,685,518 12,281,718
----------- -----------

PROPERTY AND EQUIPMENT
Office furniture and equipment 2,342,318 1,764,359
Leasehold improvements 808,233 798,279
Fine arts 103,957 89,874
----------- -----------
3,254,508 2,652,512
Less, accumulated depreciation 1,454,584 1,006,166
----------- -----------
Total property and equipment 1,799,924 1,646,346
----------- -----------

OTHER ASSETS
Notes receivable, net of current portion 162,244 217,143
Advances to mutual funds 50,000 100,000
Investments 698,778 462,861
----------- -----------
Total other assets 911,022 780,004
----------- -----------
$ 16,396,464 $ 14,708,068
----------- -----------
----------- -----------

The accompanying notes are an integral part of this statement.

See Accountant's Audit Report

LIABILITIES AND STOCKHOLDERS' EQUITY

1993 1992
---------- ----------

CURRENT LIABILITIES
Accounts payable $ 640,311 $ 455,013
Notes payable - stockholders 6,448,000 3,139,000
Accrued payroll 914,646 2,700,875
Accrued pension plan contributions 634,536 438,336
Accrued rent 93,223 52,934
Income taxes payable 65,688 73,403
Dividends payable 2,500,000 1,501,000
---------- ----------
Total current liabilities 11,296,404 8,360,561
---------- ----------
LONG-TERM LIABILITIES
Accrued rent, net of current portion 600,803 694,025
---------- ----------
Total liabilities 11,897,207 9,054,586
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 1,000,000
shares authorized, 166,021 and 161,041
shares issued and outstanding, 1993
and 1992, respectively 1,660 1,610
Paid-in capital 141,858 30,605
Retained earnings 4,355,739 5,621,267
---------- ----------
Total stockholders' equity 4,499,257 5,653,482
---------- ----------
$ 16,396,464 $ 14,708,068
---------- ----------
---------- ----------

Provident Investment Counsel
STATEMENTS OF INCOME
For the Years Ended December 31, 1993 and 1992

1993 1992
----------- -----------

Fee income $ 78,844,737 $ 59,871,610

Operating expenses
Salaries and benefits 70,284,042 53,177,077
General and administrative 5,604,391 4,024,286
----------- -----------
75,888,433 57,201,363
----------- -----------
Operating income 2,956,304 2,670,247

Other income
Interest 273,298 759,670
Miscellaneous 39,914 54,366
----------- -----------
Income before taxes 3,269,516 3,484,283

Income tax expense 91,878 66,750
----------- -----------
Net income $ 3,177,638 $ 3,417,533
----------- -----------
----------- -----------

The accompanying notes are an integral part of this statement.

See Accountant's Audit Report

Provident Investment Counsel
STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1993 and 1992

Capital Paid-in Retained
Stock Capital Earnings Total
------- -------- ---------- -----------

Balance, December 31, 1991 $ 1,874 $ 35,611 $ 4,310,647 $ 4,348,132

Stock redemption (264) (5,006) (605,913) (611,183)

Net income,
December 31, 1992 3,417,533 3,417,533

Dividends declared (1,501,000) (1,501,000)
------- -------- ---------- ----------
Balance, December 31, 1992 1,610 30,605 5,621,267 5,653,482

Stock issuance 50 111,253 111,303

Net income,
December 31, 1993 3,177,638 3,177,638

Dividends declared (4,443,166) (4,443,166)
------- -------- ---------- ----------
Balance, December 31, 1993 $ 1,660 $ 141,858 $ 4,355,739 $ 4,499,257
------- -------- ---------- ----------
------- -------- ---------- ----------

The accompanying notes are an integral part of this statement.

See Accountant's Audit Report

Provident Investment Counsel
STATEMENT OF CASH FLOWS
For the Years Ended December 31, 1993 and 1992

1993 1992
----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,177,638 $ 3,417,533
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on disposal of assets 42,176 2,909
Loss on investments 38,192
Depreciation expense 605,347 420,598
(Increase) decrease in:
Accounts receivable (1,889,654) (1,762,443)
Prepaid expenses (90,340) (64,766)
Advances to stockholders (33,057)
Advances to mutual funds 50,000
Increase (decrease) in:
Accounts payable 185,298 45,871
Accrued payroll (1,786,229) 623,464
Accrued pension plan contributions 196,200 26,598
Accrued rent (52,933) (52,934)
Income taxes payable (7,715)
----------- -----------

Net cash provided by operating activities 396,731 2,695,022

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (804,701) (1,212,274)
Proceeds from sale of equipment 3,600
Proceeds from notes receivable 49,959 130,047
Distributions from limited partnerships 14,083 15,142
Investment in mutual fund (250,000) (200,000)
----------- -----------

Net cash used in investing activities (987,059) (1,267,085)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (3,444,166)
Payments on notes payable - stockholders (15,229,000) (3,000,000)
Proceeds from notes payable - stockholders 18,538,000 3,139,000
Proceeds from issuance of stock 111,303
Payments on stock redemption (611,183)
----------- -----------
Net cash used in financing activities (23,863) (472,183)
----------- -----------
Net decrease in cash (614,191) 955,754

Cash and cash equivalents, beginning of year 2,735,092 1,779,338
----------- -----------
Cash and cash equivalents, end of year $ 2,120,901 $ 2,735,092
----------- -----------
----------- -----------

The accompanying notes are an integral part of this statement.

See Accountant's Audit Report

Provident Investment Counsel
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS ACTIVITY

Provident Investment Counsel (the Company) acts as a discretionary investment
manager and is registered under the Investment Advisors Act of 1940.

REVENUE RECOGNITION

Investment management fees are a function of portfolio values under management.
Income is recognized in the period for which advisory services are provided.
Accounts receivable are considered fully collectable as of December 31, 1993.

INVESTMENTS

Investments are carried at the lower of aggregate cost or market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and depreciated using both declining
and straight-line methods over their estimated useful lives, which range from
three to ten years. Depreciation expense was $605,347 and $420,598 for the
years ended December 31, 1993 and 1992, respectively.

INCOME TAXES

In 1989, the Company elected to be treated as a Small Business Corporation for
both federal and California income tax purposes. Under this arrangement the
Corporation's stockholders are taxed directly on the Corporation's taxable
income for federal and state purposes. Therefore, a provision has been made
only for an additional California franchise tax imposed at the corporate level.

The Company provides for the income tax effect of transactions reported in the
financial statements. The provision includes only taxes currently due. The tax
effect of temporary differences between book and taxable income are immaterial
to the financial statements and therefore no deferred taxes have been
recognized.

A new method of computing deferred income taxes was adopted beginning with the
year ended December 31, 1993, as mandated by Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109). The cumulative
effect of this change on the year ended December 31, 1992 is not material to
these financial statements, and is included in net income for the year ended
December 31, 1993.

Provident Investment Counsel
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

CASH AND CASH EQUIVALENTS

For the statement of cash flows, the Company defines cash equivalents as
short-term, highly liquid investments that are both readily convertible to
cash,and so near to maturity that the risk of changes in value because of
interest rate fluctuations is insignificant.

RECLASSIFICATIONS

Certain amounts in 1992 have been reclassified to conform with the 1993
presentation.

2. INVESTMENTS

Investments for each year ending December 31, are as follows:

1993 1992
--------- ---------

Limited partnerships $ 193,748 $ 216,672
Hedge fund 250,000
Mutual fund 200,000 200,000
Common stocks 55,030 46,189
--------- ---------
$ 698,778 $ 462,861
--------- ---------
--------- ---------

The Company uses the equity method of accounting for investments in limited
partnerships. Under this method, investments are originally stated at cost and
adjusted for the Company's share of earnings or losses and distributions as
reported by the general partners. These limited partnerships are for a
specified term at which time any cash or stock held by the partnerships will be
distributed to the partners. Management believes the recorded value of the
partnership interests are not materially different from the fair market value of
these investments. The aggregate cost of the mutual funds, hedge fund and
common stock approximate fair market value.

3. NOTES RECEIVABLE

The Company has established a program to lease automobiles previously owned by
employees of the Company. The Company funded, through a leasing agent, the
purchase of the vehicles in exchange for notes receivable. The respective notes
are to be repaid by the agent over the terms of the leases.

Provident Investment Counsel
NOTES TO FINANCIAL STATEMENTS

4. NOTES PAYABLE - STOCKHOLDERS

In December 1993 and 1992, certain stockholders made loans to the Company. The
1993 notes required interest at prime while the 1992 notes required interest at
prime plus 1%, per annum. Principal and interest are due on demand.

5. PROFIT SHARING AND 401(k) SAVINGS PLAN

The Company provides a qualified profit sharing and 401(k) retirement plan
covering substantially all of its full time employees with one full year of
service. The Company's profit sharing contribution is based upon a percentage
of the participants' compensation, determined at the discretion of the Board of
Directors. The Company also matches 75% of employee elected salary
contributions to the plan up to a maximum 4% of annual salary. Participants
become 100% vested in their share of company contributions after three years of
service. Contributions to the plan for the years ended December 31, 1993 and
1992 were $702,042 and $516,392, respectively.

6. CASH AND CASH EQUIVALENTS

Cash balances held in banks are insured up to $100,000 by the Federal Depository
Insurance Corporation. Other funds of the Company, those described as cash
equivalents, are uninsured. In the aggregate the Company had uninsured cash
balances of $2,367,585 and $3,107,537 at December 31, 1993 and 1992,
respectively.

Supplemental disclosures of cash flow information are:

NONCASH FINANCING ACTIVITIES

The Company declared dividends of $2,500,000 and $1,501,000 for the years ended
December 31, 1993 and 1992, respectively.

INTEREST AND INCOME TAXES PAID

Cash paid for interest and income taxes was as follows for the years ended
December 31:

1993 1992
--------- ---------

Interest $ 203,444 $ 29,524
Income taxes $ 101,630 $ 93,750

Provident Investment Counsel
NOTES TO FINANCIAL STATEMENTS

7. STOCK REDEMPTION

In January 1992, the Company redeemed 26,344 shares of its common stock from
certain stockholders for $611,183.

8. STOCK ISSUANCE

In January 1993, the Company issued 4,980 shares of its common stock to certain
employees for $111,303.

9. COMMITMENTS

LEASES

The Company leases its facilities in Pasadena, California under a noncancellable
ten year operating lease agreement. The lease expires in 1999 with two
five-year options to renew. At the inception of the lease the Company was
granted an incentive of several months free rent. Rent expense is being
recognized on a straight-line basis over the lease term in accordance with
Statement of Financial Accounting Standards No. 13, "Accounting For Leases"
(SFAS 13). As of December 31, 1993 the difference between future minimum
rentals and future expense recognizable was $694,026 and has been recorded as
accrued rent. The Company also subleases additional space under a
noncancellable operating lease agreement which expires in 1996. Rent expense
under these agreements amounted to $742,970 and $633,367 for the years ended
December 31, 1993 and 1992, respectively.

The Company also leases automobiles for certain stockholders under various
operating lease agreements through 1997.

The following is a summary of future minimum lease commitments, excluding
property taxes, for the years ending December 31:

1994 $ 833,268
1995 847,857
1996 707,480
1997 663,214
1998 662,370
Subsequent 331,185
-----------
$ 4,045,374
-----------
-----------

Provident Investment Counsel
NOTES TO FINANCIAL STATEMENTS

9. COMMITMENTS (Continued)

STOCKHOLDER AGREEMENTS

The stockholders have entered into compensation agreements whereby the Company
has agreed to provide additional benefits to them in the event of involuntary
termination or disability. The Company has agreed to pay as additional
compensation, an amount equal to the stockholders annual compensation for the
calendar year immediately preceding the year of involuntary termination. The
stockholders will receive an amount equal to 150 percent of their annual
compensation, for the calendar year immediately preceding the year of
termination, due to disability. The Company has also executed an employment
agreement with one of its stockholders, which requires minimum annual salary
levels of $840,000 through July of 1997, in consideration for past, present and
future services along with a covenant not to compete for five years after July
of 1997.

Provident Investment Counsel, Inc.

FINANCIAL STATEMENTS

September 30, 1994 (Unaudited)
and
December 31, 1993 (Audited)

Provident Investment Counsel, Inc.
BALANCE SHEETS

ASSETS

September 30, December 31,
1994 1993
(Unaudited) (Audited)
--------------- ---------------

CURRENT ASSETS
Cash and cash equivalents $24,979,454 $ 2,120,901
Accounts receivable 10,210,934 11,238,999
Notes receivable 44,976 52,896
Prepaid expenses 264,413 239,665
Advances to stockholders 53,866 33,057
----------- -----------
Total current assets 35,553,643 13,685,518

PROPERTY AND EQUIPMENT
Office furniture and equipment 2,935,141 2,342,318
Leasehold improvements 892,483 808,233
Fine arts 103,957 103,957
---------- -----------
3,931,581 3,254,508
Less: accumulated depreciation 1,964,296 1,454,584
---------- -----------
Total property and equipment 1,967,285 1,799,924
---------- -----------
OTHER ASSETS
Notes receivable, net of current
portion 156,711 162,244
Other receivables 433,500
Advances to mutual funds 50,000
Investments 776,041 698,778
Deferred charges 59,904
----------- -----------

Total other assets 1,426,156 911,022
----------- -----------

$38,947,084 $16,396,464
----------- -----------
----------- -----------

The accompanying notes are an integral part of this statement.

LIABILITIES AND STOCKHOLDERS' EQUITY

September 30, December 31,
1994 1993
(Unaudited) (Audited)
--------------- ------------

CURRENT LIABILITIES
Accounts payable $ 124,647 $ 640,311
Notes payable - stockholders' 6,448,000
Accrued payroll 612,641 914,646
Accrued pension plan contributions 596,048 634,536
Lease incentive 133,512 93,223
Income taxes payable 493,973 65,688
Dividends payable 2,500,000
----------- -----------
Total current liabilities 1,960,821 11,296,404
----------- -----------
LONG-TERM LIABILITIES
Lease incentive, net of current
portion 520,813 600,803
----------- -----------
Total liabilities 2,481,634 11,897,207
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value,
1,000,000 shares authorized,
166,021 shares issued and
outstanding 1,660 1,660
Paid-in capital 141,858 141,858
Retained earnings 36,321,932 4,355,739
----------- -----------
Total stockholders' equity 36,465,450 4,499,257
----------- -----------
$38,947,084 $16,396,464
----------- -----------
----------- -----------

Provident Investment Counsel, Inc.
STATEMENTS OF INCOME

Nine Months Nine Months
Ended Ended
September 30, September 30,
1994 1993
(Unaudited) (Unaudited)
------------- -------------

Fee income $60,025,094 $56,234,629

Operating expenses
Salaries and benefits 22,764,999 38,094,457
General and administrative 4,958,208 6,179,043
----------- -----------

Total operating expense 27,723,207 44,273,500
----------- -----------

Net operating income 32,301,887 11,961,129

Other income
Interest 149,086 158,582
Miscellaneous 13,505 -
----------- -----------

Income before taxes 32,464,478 12,119,711

Income tax expense 498,285 43,630
----------- -----------

Net income $31,966,193 $12,076,081
----------- -----------
----------- -----------

The accompanying notes are an integral part of this statement.

Provident Investment Counsel, Inc.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the Nine Months Ended September 30, 1994 (Unaudited)
and the Year Ended December 31, 1993 (Audited)

Capital Paid-in Retained
Stock Capital Earnings Total
------- --------- ---------- ------------

Balance, December 31, 1992 $1,610 $30,605 $5,621,267 $5,653,482

Stock issuance 50 111,253 111,303

Net income, for the year ended
December 31, 1993 3,177,638 3,177,638

Dividends declared (4,443,166) (4,443,166)
------- --------- ---------- ----------
Balance, December 31, 1993 1,660 141,858 4,355,739 4,499,257

Net income, for the
nine months ended
September 30, 1994 31,966,193 31,966,193
------- --------- ---------- ----------
Balance, September 30, 1994 $1,660 $141,858 $36,321,932 $36,465,450
------- --------- ----------- -----------
------- --------- ----------- -----------

Provident Investment Counsel, Inc.
STATEMENTS OF CASH FLOWS

Nine Months Nine Months
Ended Ended
September 30, September 30,
1994 1993
(Unaudited) (Unaudited)
-------------- -------------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income $31,966,193 $12,716,082
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense 509,712 541,800
(Increase) decrease in:
Accounts receivable 1,028,065 152,236
Prepaid expenses (24,748) 73,356
Advances to stockholders (20,809) -
Advances to mutual funds 50,000 -
Deferred charges (59,904) 68,491
Other receivables (433,499) (1,921)
Increase (decrease) in:
Accounts payable (515,664) (114,217)
Accrued payroll (302,005) (2,646,321)
Accrued pension plan contribution (38,488) (438,336)
Lease incentive (39,701) (39,700)
Income taxes payable 428,285 (73,403)
Deferred income - 67,981
------------ -----------

Net cash provided by operating activities 32,547,437 10,306,048

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (677,074) (448,999)
Proceeds from notes receivable 13,453 31,379
Proceeds from sale of investments 2,962 -
Distributions from limited partnerships 24,401 -
Investment in mutual fund (100,000) -
Investment in stocks (4,626) -
Investment in partnerships - (240,450)
------------ -----------

Net cash used in investing activities (740,884) (658,070)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (2,500,000) (3,444,167)
Payments on notes payable - stockholders (6,448,000) (3,139,000)
Proceeds from issuance of common stock - 111,304
------------ -----------

Net cash used in financing activities (8,948,000) (6,471,863)
------------ -----------

Net increase in cash 22,858,553 3,176,115

Cash and cash equivalents, beginning of period 2,120,901 2,735,092
------------ -----------

Cash and cash equivalents, end of period $24,979,454 $ 5,911,207
------------ -----------
------------ -----------

The accompanying notes are an integral part of this statement.

Provident Investment Counsel, Inc.
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS ACTIVITY

Provident Investment Counsel (the Company) acts as a discretionary
investment manager and is registered under the Investment Advisors Act of
1940.

REVENUE RECOGNITION

Investment management fees are a function of portfolio values under
management. Income is recognized in the period for which advisory services
are provided. Accounts receivable are considered fully collectable as of
September 30, 1994.

INVESTMENTS

Investments are carried at the lower of aggregate cost or market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and depreciated using both
declining and straight-line methods over their estimated useful lives, which
range from three to ten years. Depreciation expense was $509,712
(unaudited) and $605,347 (audited) for the nine months ended September 30,
1994 and the year ended December 31, 1993, respectively.

INCOME TAXES

In 1989, the Company elected to be treated as a Small Business Corporation
for both federal and California income tax purposes. Under this arrangement
the Corporation's stockholders are taxed directly on the Corporation's
taxable income for federal and state purposes. Therefore, a provision has
been made only for an additional California franchise tax imposed at the
corporate level.

The Company provides for the income tax effect of transactions reported in
the financial statements. The provision includes only taxes currently due.
The tax effect of temporary differences between book and taxable income are
immaterial to the financial statements and therefore no deferred taxes have
been recognized.

A new method of computing deferred income taxes was adopted beginning with
the year ended December 31, 1993, as mandated by Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). The
cumulative effect of this change is included in net income for the year
ended December 31, 1993, and is not considered to be material to these
financial statements.

Provident Investment Counsel, Inc.
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

CASH AND CASH EQUIVALENTS

For the statement of cash flows, the Company defines cash equivalents as
short-term, highly liquid investments that are both readily convertible to
cash, and so near to maturity that the risk of changes in value because of
interest rate fluctuations is insignificant.

CURRENT ACCOUNTING PRONOUNCEMENTS

In May 1993, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" ("SFAS 115"). SFAS 115 requires
that investments be classified as "held to maturity", "available for sale"
or "trading securities". The statement defines investments in securities as
"held to maturity" based upon a positive intent and ability to hold those
securities to maturity. Investments held to maturity would be reported at
amortized cost. Debt and equity securities that are bought and held
principally for the purpose of selling them in the near term are classified
as "trading securities" and would be reported at fair value, with unrealized
gains and losses included in operations. Equity and debt securities not
classified as "held to maturity" or "trading securities" are classified as
"available for sale" and would be recorded at fair value, with unrealized
gains and losses excluded from operations and reported as a separate
component of stockholders' equity. SFAS 115 is effective for fiscal years
beginning after December 15, 1993. The Company does not believe that the
implementation of SFAS 115 will have a material effect on the financial
statements.

RECLASSIFICATIONS

Certain amounts in the December 31, 1993 financial statements have been
reclassified to conform with the September 30, 1994 presentation.

2. CASH AND CASH EQUIVALENTS

Cash balances held in banks are insured up to $100,000 by the Federal
Depository Insurance Corporation. Other funds of the Company, those
described as cash equivalents, are uninsured. In the aggregate, the Company
had uninsured cash balances of $25,244,734 (unaudited) and $2,367,585
(audited) at September 30, 1994 and December 31, 1993, respectively.

Supplemental disclosures of cash flow information are:

NONCASH FINANCING ACTIVITIES

During fiscal 1993, the Company declared a total of $4,443,166 (audited)
in dividends, of which $1,943,166 (audited) was paid as of December 31,
1993. No dividends have been declared for the nine months ended September
30, 1994.

Provident Investment Counsel, Inc.
NOTES TO FINANCIAL STATEMENTS

2. CASH AND CASH EQUIVALENTS (Continued)

INTEREST AND INCOME TAXES PAID

Cash paid for interest and income taxes was as follows for the periods
ended:

Nine Months Year
Ended Ended
September 30, December 31,
1994 1993
(Unaudited) (Audited)
------------- -------------

Interest $ 346,329 $ 203,444
Income taxes $ 70,000 $ 101,630

3. ACCOUNTS RECEIVABLE

The Company had accounts receivable that comprised more than 5% of the total
accounts receivable at September 30, 1994 and December 31, 1993 from the
following entities :

September 30, 1994 (unaudited) Accounts
------------------------------ Receivable
Entity Balance
------ ----------

Central States Pension $ 606,347
New York State Retirement 564,256

December 31, 1993 (audited)
---------------------------

GTE Corporation 704,641
Pennsylvania SERS 1,533,564

4. NOTES RECEIVABLE

The Company has established a program to lease automobiles previously owned
by employees of the Company. The Company funded, through a leasing agent,
the purchase of the vehicles in exchange for notes receivable. The
respective notes are to be repaid by the agent over the terms of the leases.

Provident Investment Counsel, Inc.
NOTES TO FINANCIAL STATEMENTS

5. INVESTMENTS

Investments at each period are as follows:

September 30, December 31,
1994 1993
(Unaudited) (Audited)
-------------- -------------

Limited partnerships $ 169,347 $ 193,748
Hedge fund 250,000 250,000
Mutual funds 300,000 200,000
Common stocks 56,694 55,030
------- -------
$ 776,041 $ 698,778
------- -------
------- -------

The Company uses the equity method of accounting for investments in limited
partnerships. Under this method, investments are originally stated at cost
and adjusted for the Company's share of earnings or losses and distributions
as reported by the general partners. These limited partnerships are for a
specified term at which time any cash or stock held by the partnerships will
be distributed to the partners. Management believes the recorded value of
the partnership interests are not materially different from the fair market
value of these investments. The aggregate cost of the mutual funds, hedge
fund and common stock approximate fair market value.

6. OTHER RECEIVABLES

At September 30, 1994, the Company had a receivable of $433,500 (unaudited)
from Arthur J. Gallagher for indemnification of an errors and omissions loss
in excess of its deductible. The Company's management believes that the
receivable is fully collectible as of September 30, 1994.

7. NOTES PAYABLE - STOCKHOLDERS'

At December 1993, certain stockholders made loans to the Company. The loans
required interest payment at prime rate. At September 30, 1994, the loans
have been paid-off.

8. PROFIT SHARING AND 401(k) SAVINGS PLAN

The Company provides a qualified profit sharing and 401(k) retirement plan
(the Plan) covering substantially all of its full time employees with one
full year of service. For fiscal 1994, the Company will match 92.41% of
employee elected salary contributions to the Plan up to a maximum 6% of
annual salary. The Company's profit sharing contribution to the Plan is
based upon a percentage of the participants' compensation, determined at the
discretion of the Board of Directors. Participants become 100% vested in
their share of company contributions after three years of service. Cost
recognized for the Plan for the nine months ended September 30, 1994 and the
year ended December 31, 1993 are $755,331 (unaudited) and $702,042
(audited), respectively.

Provident Investment Counsel, Inc.
NOTES TO FINANCIAL STATEMENTS

9. STOCK ISSUANCE

In January 1993, the Company issued 4,980 shares of its common stock to
certain employees for $111,303 (audited).

10. COMMITMENTS

LEASES

The Company leases its facilities in Pasadena, California under a
noncancellable ten year operating lease agreement. The lease expires in
1999 with two five-year options to renew. At the inception of the lease the
Company was granted an incentive of several months free rent. The lease
incentive is being recognized on a straight-line basis over the lease term
in accordance with Financial Accounting Standards Board Technical Bulletin
No. 88-1 "Issues relating to Accounting for Leases". As of
September 30, 1994, the difference between future minimum rentals and future
expense recognizable was $654,325 (unaudited) and has been recorded as a
lease incentive. The Company also subleases additional space under a
noncancellable operating lease agreements which expires in 1996. Rent
expense under these agreements amounted to $686,122 (unaudited) and $742,970
(audited) for the nine months ended September 30, 1994 and the year ended
December 31, 1993, respectively.

The Company also leases automobiles for certain stockholders under various
operating lease agreements through 1996.

The following is a summary of future minimum lease commitments, excluding
property taxes, for the years ending September 30 (unaudited):

1995 $ 985,666
1996 801,106
1997 666,493
1998 662,370
1999 496,778
---------
$3,612,413
----------
----------

STOCKHOLDER AGREEMENTS

The stockholders have entered into compensation agreements whereby the
Company has agreed to provide additional benefits to them in the event of
involuntary termination or disability. The Company has agreed to pay as
additional compensation, an amount equal to the stockholder's annual
compensation for the calendar year immediately preceding the year of
involuntary termination. The stockholders will receive an amount equal to
150 percent of their annual compensation, for the calendar year immediately
preceding the year of termination, due to disability. The Company has also
executed an employment agreement with one of its stockholders, which
requires minimum annual salary levels of $840,000 through July of 1997, in
consideration for past, present and future services along with a covenant
not to compete for five years after July of 1997.

Provident Investment Counsel, Inc.
NOTES TO FINANCIAL STATEMENTS

11. SUBSEQUENT EVENTS

At November 4, 1994, the Company anticipates selling its assets, except as
set forth in Schedule 8 to the Acquisition Agreement, and business to United
Asset Management Corporation (UAM) as of November 10, 1994. UAM will
immediately contribute the Company's assets and business to Newco (a wholly-
subsidiary of UAM) which will continue to conduct the business of the
Company. In exchange for the assets and business of the Company, the
Stockholders' will receive, subject to adjustment under the terms of the
Acquisition Agreement: $277.4 million dollars in cash; $20.8 million in UAM
Non-Negotiable Seven-Year 6 1/2% Subordinated Note; a Warrant Agreement and
a Warrant Certificate evidencing the right to purchase 459,385 shares of
UAM's Common Stock, $.01 par value (exercisable in accordance with the
Warrant Agreement at $45.31 per share); $71.6 million of UAM Common Stock,
$.01 par value; and a Contingent Payment whose value is still undetermined
as of November 4, 1994. The Stockholders' of the Company, concurrently with
the Acquisition Agreement, will execute Employment Agreements with UAM, will
agree to non-competition Acquisition Agreement covenants, and will become
key employees of Newco.

UNITED ASSET MANAGEMENT CORPORATION

SUMMARY OF HISTORICAL AND PRO FORMA FINANCIAL HIGHLIGHTS
(In thousands, except per share data)

Pro Forma Combined
UAM Historical (Unaudited)
------------------------------------- -----------------------------------
Nine Months Nine Months
Year Ended Ended Year Ended Ended
December 31, September 30, December 31, September 30,
1993 1994 1993 1994
-------------- --------------- ------------- --------------

Operating Results:

Revenues $449,858 $355,787 $601,395 $471,906

Amortization of Cost Assigned
to Contracts Acquired* $ 48,493 $ 40,200 $ 81,141 $ 66,803

Operating Income $109,705 $ 85,945 $147,598 $113,434

Net Income $ 53,287 $ 43,954 $ 60,469 $ 46,535

Primary Earnings per Share $1.85 $1.49 $1.96 $1.51

Fully Diluted Earnings per
Share $1.83 $1.48 $1.94 $1.51

Operating Cash Flow (Net
income plus amortization
and depreciation)** $107,397 $ 88,306 $148,519 $118,572

<FN>

* Amortization of Cost Assigned to Contracts Acquired on a Per Share Basis
------------------------------------------------------------------------
Amortization of cost assigned to contracts acquired on a per share
basis was $1.67 for the year ended December 31, 1993, $2.55 on a pro
forma combined basis for the year ended December 31, 1993, $1.35 for
the nine months ended September 30, 1994 and $2.06 based on a pro
forma combined basis for the nine months ended September 30, 1994.
These amounts have been calculated by dividing total amortization by
the same number of shares used in the fully diluted earnings per share
calculation.

** Operating Cash Flow
-------------------
Management uses Operating Cash Flow not to the exclusion of net
income, but rather as an additional important measure of UAM's
performance.

P-1

UNITED ASSET MANAGEMENT CORPORATION

PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)
December 31, 1993
(In thousands)

The following unaudited pro forma condensed combined balance sheet is based
upon the consolidated balance sheet of United Asset Management Corporation and
subsidiaries (UAM) as of December 31, 1993, and the balance sheets of JMB
Institutional Realty (JMB) and Provident Investment Counsel (PIC) as of
December 31, 1993, and has been prepared to reflect the pending acquisitions of
JMB and PIC by UAM as if they had been consummated as of December 31, 1993,
after giving effect to the pro forma adjustments described in Note 1.

This statement should be read in conjunction with the financial statements
and notes of the businesses pending acquisition as outlined in Item 7(a) in the
index of this Form 8-K and with UAM's consolidated financial statements and
notes thereto included in its report on Form 10-K for the year ended
December 31, 1993.

P-2

UNITED ASSET MANAGEMENT CORPORATION

PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)
December 31, 1993
(In thousands)

Pro Forma Adjustments
--------------------- Pro Forma
UAM JMB PIC JMB PIC Combined
--- --- --- --- --- --------

ASSETS

Current assets . . . . . . . . $143,421 $62,756 $13,686 $(60,884)(a) $ (5,584)(a) $ 153,395
Fixed assets, net. . . . . . . 14,994 3,139 1,800 19,933
Cost assigned to contracts
acquired, net. . . . . . . . 461,705 - - 203,540 (b) 316,558 (b) 981,803

Other assets . . . . . . . . . 55,680 - 911 (911)(a) 55,680
-------- ------- ------- ----------
Total assets . . . . . . . . . $675,800 $65,895 $16,397 $1,210,811
-------- ------- ------- ----------
-------- ------- ------- ----------

LIABILITIES AND STOCKHOLDERS'
EQUITY

Current liabilities. . . . . . $ 78,500 $ 3,637 $11,296 (3,637)(a) (11,296)(a) $ 78,500
Senior notes payable . . . . . 80,000 - - 140,429 (c) 244,276 (c) 464,705
Subordinated notes payable . . 130,551 - - 65,533 (d) 19,219 (d) 215,303
Deferred income taxes
and other. . . . . . . . . . 33,738 1,811 601 (1,811)(a) (601)(a) 33,738
-------- ------- ------- ----------
Total liabilities. . . . . . . 322,789 5,448 11,897 792,246

Stockholders' equity:
Total paid-in capital. . . . 234,029 - 144 2,589 (g) 62,821(e,f,g) 299,583
Retained earnings. . . . . . 118,982 60,447 4,356 (60,447)(e) (4,356)(e) 118,982
-------- ------- ------- ----------
Total stockholders' equity . . 353,011 60,447 4,500 418,565
-------- ------- ------- ----------
Total liabilities and
stockholders' equity . . . . $675,800 $65,895 $16,397 $1,210,811
-------- ------- ------- ----------
-------- ------- ------- ----------

See Note to Pro Forma Condensed Combined Balance Sheet.

P-3

UNITED ASSET MANAGEMENT CORPORATION

NOTE TO PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)
December 31, 1993

NOTE 1

The pro forma condensed combined balance sheet has been prepared to reflect
the pending acquisitions of JMB and PIC, which are being accounted for as
purchases. The actual purchase price of JMB and PIC will be based on an
annualized level of revenues as of each respective date of acquisition. For
purposes of the pro forma condensed combined balance sheet, the purchase prices
of JMB and PIC, as contemplated in each of the respective acquisition
agreements, have been adjusted to give effect to the level of annualized
revenues at December 31, 1993. The allocation of the purchase price to
identifiable assets and liabilities based on their fair values has not been
completed for either acquisition.

Pro forma adjustments have been made to reflect:

(a) the net assets to be acquired in connection with the acquisitions of JMB
and PIC.

(b) the purchase prices ascribed to the contracts acquired at JMB and PIC as of
the acquisition date. It is assumed that the historical carrying value of
all assets, other than the value of contracts acquired, is equal to the
fair value of those assets at the date of acquisitions.

(c) the assumed borrowing under UAM's Amended and Restated Reducing Credit
Agreement in an amount equal to the portion of the consideration paid in
cash for the businesses being acquired and to key employees for signing
long-term employment contracts.

(d) the issuance to JMB and PIC of 6.5% seven year subordinated notes.

(e) the elimination of JMB's and PIC's stockholders' equity in consolidation.

(f) the value of common stock to be issued in connection with the acquisition
of PIC.

(g) the estimated value of the UAM warrants to be issued to JMB and PIC.

P-4

UNITED ASSET MANAGEMENT CORPORATION

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)
For the Year Ended December 31, 1993
(In thousands, except per share data)

The following unaudited pro forma condensed combined statement of
operations is based upon the consolidated results of operations of United Asset
Management Corporation and subsidiaries (UAM) for the year ended December 31,
1993 and the results of operations of JMB Institutional Realty (JMB) and
Provident Investment Counsel (PIC) for the year ended December 31, 1993. To
reflect the pending acquisitions of JMB and PIC by UAM, this statement combines
the results of operations of UAM for the year ended December 31, 1993, with
those of JMB and PIC as if these companies had been acquired on January 1, 1993
and gives effect to the pro forma adjustments described in Notes 1 and 2.

This statement should be read in conjunction with the financial statements
and notes of the businesses pending acquisition as outlined in Item 7(a) in the
index to this Form 8-K and with UAM's consolidated financial statements and
notes thereto included in its report on Form 10-K for the year ended December
31, 1993.

P-5

UNITED ASSET MANAGEMENT CORPORATION

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)
For the Year Ended December 31, 1993
(In thousands, except per share data)

Pro Forma Adjustments
---------------------- Pro Forma
UAM JMB PIC JMB PIC Combined
-------- ------- ------- ------- -------- ---------

Revenues . . . . . . . . . . . . . $449,858 $72,692 $78,845 $601,395
-------- ------- ------- --------
Compensation . . . . . . . . . . . 218,617 26,211 70,284 $(4,959) (a) $(36,401) (a) 273,752
Amortization of cost assigned
to contracts acquired. . . . . . 48,493 -- -- 15,359 (b) 17,289 (b) 81,141
Other operating expenses . . . . . 73,043 20,165 5,696 98,904
-------- ------- ------- --------
340,153 46,376 75,980 453,797
-------- ------- ------- --------

Operating income . . . . . . . . . 109,705 26,316 2,865 147,598
-------- ------- ------- --------
Interest expense (income), net . . 13,790 (180) (313) 12,139 (c) 13,712 (c) 39,148
Other amortization . . . . . . . . 1,445 -- -- 1,445
-------- ------- ------- --------
Income before income taxes . . . . 94,470 26,496 3,178 107,005
Income tax expense . . . . . . . . 41,183 -- -- 1,690 (d) 3,663 (d) 46,536
-------- ------- ------- --------
Net income . . . . . . . . . . . . $ 53,287 $26,496 $ 3,178 $ 60,469
-------- ------- ------- --------
-------- ------- ------- --------

Earnings per common and
common equivalent share
(primary) Note 2 . . . . . . . . $1.85 $1.96
----- -----
----- -----

Earnings per share
assuming full dilution
Note 2 . . . . . . . . . . . . . $1.83 $1.94
----- -----
----- -----

See Notes to Pro Forma Condensed Combined Statement of Operations.

P-6

UNITED ASSET MANAGEMENT CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)
For the Year Ended December 31, 1993

NOTE 1

The pro forma condensed combined statement of operations has been prepared
to reflect the pending acquisitions of JMB and PIC, which are being accounted
for as purchases, as if the acquisitions were consummated on January 1, 1993.
The actual purchase price of JMB and PIC will be based on an annualized level of
revenues as of each respective date of acquisition. For purposes of the pro
forma condensed combined statement of operations, the purchase prices of JMB and
PIC, as contemplated in each of the respective acquisition agreements, have been
adjusted to give effect to the level of annualized revenues at January 1, 1993.
The allocation of the purchase price to identifiable assets and liabilities
based on their fair values has not been completed for either acquisition.

Pro forma adjustments have been made to reflect the following:

(a) Historical compensation expenses of JMB and PIC were adjusted to
reflect the terms of the Revenue Sharing Agreement that will be entered into by
UAM and JMB and by UAM, PIC and PIC's principal employees. These agreements
require the companies to remit a specified percentage of their revenues to UAM,
with the difference being retained to pay compensation and other operating
expenses.

(b) Historical amortization of cost assigned to contracts acquired was
adjusted to reflect the amortization of the incremental contract values of the
cost assigned to contracts to be acquired in the JMB and PIC acquisitions.
Amortization of the incremental values was based on estimated weighted average
lives of 13-16 years.

(c) Historical interest expense was adjusted to reflect the increased
level of borrowings associated with the pending acquisitions of JMB and PIC.
The actual rate of interest of 6.5% on the subordinated notes to be issued to
the sellers of JMB and PIC and an estimated rate of 6.25% on the senior notes
were used to calculate the pro forma adjustments.

(d) Historical income tax expense was adjusted to reflect the change in
pre-tax income on a pro forma basis resulting from the inclusion of the
businesses to be acquired in the consolidated income tax returns of UAM.

P-7

NOTE 2

Per share data are based upon the actual number of common and common
equivalent shares for the year ended December 31, 1993, plus the common stock
and common stock equivalents to be issued in connection with the pending
acquisitions of JMB and PIC. Pro forma net income has been adjusted in the
computation of earnings per share to give effect to the application of the
modified treasury stock method.

P-8

UNITED ASSET MANAGEMENT CORPORATION

PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)
September 30, 1994
(In thousands)

The following unaudited pro forma condensed combined balance sheet is based
upon the consolidated balance sheet of United Asset Management Corporation and
subsidiaries (UAM) as of September 30, 1994, and the balance sheets of JMB
Institutional Realty (JMB) and Provident Investment Counsel (PIC) as of
September 30, 1994, and has been prepared to reflect the pending acquisitions by
UAM in 1994 of JMB and PIC as if they had been consummated as of September 30,
1994, after giving effect to the pro forma adjustments described in Note 1.

This statement should be read in conjunction with the financial statements
and notes of the businesses pending acquisition as outlined in Item 7(a) in the
index of this Form 8-K and with UAM's condensed consolidated financial
statements and notes thereto included in its report on Form 10-Q for the nine
months ended September 30, 1994.

P-9

UNITED ASSET MANAGEMENT CORPORATION

PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)
September 30, 1994
(In thousands)

Pro Forma Adjustments
---------------------- Pro Forma
UAM JMB PIC JMB PIC Combined
--- --- --- --- --- ---------

ASSETS

Current assets . . . . . . . . . . $154,557 $62,660 $35,554 $(60,660) (a) $(26,779) (a) $ 165,332
Fixed assets, net. . . . . . . . . 16,649 2,937 1,967 21,553
Cost assigned to contracts
acquired, net. . . . . . . . . . 453,511 -- -- 218,093 (b) 342,917 (b) 1,014,521
Other assets . . . . . . . . . . . 57,245 -- 1,426 (1,426) (a) 57,245
-------- ------- ------- ----------
Total assets . . . . . . . . . . . $681,962 $65,597 $38,947 $1,258,651
-------- ------- ------- ----------
-------- ------- ------- ----------

LIABILITIES AND STOCKHOLDERS'
EQUITY

Current liabilities. . . . . . . . $ 97,465 $ 5,428 $ 1,961 (5,428) (a) (1,961) (a) $ 97,465
Senior notes payable . . . . . . . 41,000 -- -- 150,000 (c) 264,555 (c) 455,555
Subordinated notes payable . . . . 117,965 -- -- 70,000 (d) 20,815 (d) 208,780
Deferred income taxes and other. . 35,940 1,222 520 (1,222) (a) (520) (a) 35,940
-------- ------- ------- ----------
Total liabilities. . . . . . . . . 292,370 6,650 2,481 797,740

Stockholders' equity:
Total paid-in capital. . . . . . 252,204 -- 144 3,030 (g) 68,145 (e,f,g) 323,523
Retained earnings. . . . . . . . 144,269 58,947 36,322 (58,947) (e) (36,322) (e) 144,269
Treasury shares. . . . . . . . . (6,881) -- -- (6,881)
-------- ------- ------- ----------
Total stockholders' equity . . . . 389,592 58,947 36,466 460,911
-------- ------- ------- ----------
Total liabilities and
stockholders' equity . . . . . . $681,962 $65,597 $38,947 $1,258,651
-------- ------- ------- ----------
-------- ------- ------- ----------

See Note to Pro Forma Condensed Combined Balance Sheet.

P-10

UNITED ASSET MANAGEMENT CORPORATION

NOTE TO PRO FORMA CONDENSED COMBINED BALANCE SHEET

(Unaudited)
September 30, 1994

NOTE 1

The pro forma condensed combined balance sheet has been prepared to reflect
the pending acquisitions of JMB and PIC, which are being accounted for as
purchases. The agreed upon purchase price of JMB and PIC, which is based on an
annualized level of revenues as of each respective date of acquisition, was used
for the purpose of this pro forma statement. The allocation of the purchase
price to identifiable assets and liabilities based on their fair values has not
been completed for either acquisition.

Pro forma adjustments have been made to reflect:

(a) the net assets to be acquired in connection with the acquisitions of JMB
and PIC.

(d) the issuance to JMB and PIC of 6.5% seven year subordinated notes.

(e) the elimination of JMB's and PIC's stockholders' equity in consolidation.

(f) the value of common stock to be issued in connection with the acquisition
of PIC.

(g) the estimated value of the UAM warrants to be issued to JMB and PIC.

P-11

UNITED ASSET MANAGEMENT CORPORATION

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)
For the Nine Months Ended September 30, 1994
(In thousands, except per share data)

The following unaudited pro forma condensed combined statement of
operations is based upon the consolidated results of operations of United Asset
Management Corporation and subsidiaries (UAM) for the nine months ended
September 30, 1994 and the results of operations of JMB Institutional Realty
(JMB) and Provident Investment Counsel for the nine months ended September 30,
1994. To reflect the pending acquisitions of JMB and PIC by UAM, this statement
combines the results of operations of UAM for the nine months ended September
30, 1994, with those of JMB and PIC as if these companies had been acquired on
January 1, 1994 and gives effect to the pro forma adjustments described in Notes
1 and 2.

This statement should be read in conjunction with the financial statements
and notes of the businesses pending acquisition as outlined in Item 7(a) in the
index to this Form 8-K and with UAM's condensed consolidated financial
statements and notes thereto included in its report on Form 10-Q for the nine
months ended September 30, 1994.

P-12

UNITED ASSET MANAGEMENT CORPORATION

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)
For the Nine Months Ended September 30, 1994
(In thousands, except per share data)

Pro Forma Adjustments
---------------------- Pro Forma
UAM JMB PIC JMB PIC Combined
-------- ------- ------- ------- ------- ---------

Revenues . . . . . . . . . . . . . $355,787 $56,094 $60,025 $471,906
-------- ------- ------- --------
Compensation . . . . . . . . . . . 172,053 21,494 22,765 $(4,636) (a) $ 1,873 (a) 213,549
Amortization of cost assigned
to contracts acquired. . . . . . 40,200 -- -- 11,765 (b) 14,838 (b) 66,803
Other operating expenses . . . . . 57,589 15,075 5,456 78,120
-------- ------- ------- --------
269,842 36,569 28,221 358,472
-------- ------- ------- --------

Operating income . . . . . . . . . 85,945 19,525 31,804 113,434
-------- ------- ------- --------
Interest expense (income), net . . 8,094 (92) (163) 10,081 (c) 13,158 (c) 31,078
Other amortization . . . . . . . . 934 -- -- 934
-------- ------- ------- --------
Income before income taxes . . . . 76,917 19,617 31,967 81,422
Income tax expense . . . . . . . . 32,963 -- -- 1,028 (d) 896 (d) 34,887
-------- ------- ------- --------
Net income . . . . . . . . . . . . $ 43,954 $19,617 $31,967 $ 46,535
-------- ------- ------- --------
-------- ------- ------- --------

Earnings per common and
common equivalent share
(primary) Note 2 . . . . . . . . $1.49 $1.51
----- -----
----- -----

Earnings per share
assuming full dilution
Note 2 . . . . . . . . . . . . . $1.48 $1.51
----- -----
----- -----

See Notes to Pro Forma Condensed Combined Statement of Operations.

P-13

UNITED ASSET MANAGEMENT CORPORATION

NOTES TO PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(Unaudited)
For the Nine Months Ended September 30, 1994

NOTE 1

The pro forma condensed combined statement of operations has been prepared
to reflect the pending acquisitions of JMB and PIC, which are being accounted
for as purchases, as if the acquisitions were consummated on January 1, 1994.
The actual purchase price of JMB and PIC will be based on an annualized level of
revenues as of each respective date of acquisition. For purposes of the pro
forma condensed combined statement of operations, the purchase prices of JMB and
PIC, as contemplated in each of the respective acquisition agreements, have been
adjusted to give effect to the level of annualized revenues at January 1, 1994.
The allocation of the purchase price to identifiable assets and liabilities
based on their fair values has not been completed for either acquisition.

Pro forma adjustments have been made to reflect the following:

(c) Historical interest expense was adjusted to reflect the increased
level of borrowings associated with the pending acquisitions of JMB and PIC.
The actual rate of interest of 6.5% on the subordinated notes to be issued to
the sellers of JMB and PIC and an estimated rate of 7.0% on the senior notes
were used to calculate the pro forma adjustments.

P-14

NOTE 2

Per share data are based upon the actual number of common and common
equivalent shares for the nine months ended September 30, 1994, plus the common
stock and common stock equivalents to be issued in connection with the pending
acquisitions of JMB and PIC. Pro forma net income has been adjusted in the
computation of earnings per share to give effect to the application of the
modified treasury stock method.

P-15