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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

For the quarterly period ended September 30, 2002

OR

For the transition period from _____________ to _____________

Commission File Number 1-4923

                    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

                    Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

                    Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  5,058,429

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

WESTMINSTER CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION AS OF
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001 (UNAUDITED)

See accompanying notes to consolidated financial statements.

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WESTMINSTER CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

See accompanying notes to consolidated financial statements.

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WESTMINSTER CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

See accompanying notes to consolidated financial statements.

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WESTMINSTER CAPITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

See accompanying notes to consolidated financial statements.

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WESTMINSTER CAPITAL, INC.  AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2002

1.     BASIS OF PRESENTATION

In the opinion of Westminster Capital, Inc. and consolidated entities (the "Corporation"), the accompanying unaudited consolidated financial statements, prepared from the Corporation’s books and records, contain all adjustments (consisting of only normal recurring accruals) necessary for a fair presentation of the Corporation’s financial condition as of September 30, 2002 and December 31, 2001, and the results of operations, cash flows and comprehensive income for the three and nine-month periods ended September 30, 2002 and 2001.

The consolidated financial statements include the accounts of Westminster Capital, Inc. and its subsidiaries, including a 100% interest in Westland Associates, Inc. (“Westland”), an 80% interest in One Source Industries, LLC (“One Source”), a 70% interest in Physician Advantage, LLC (“Physician Advantage”) and a 74% interest in Logic Technology Group, Inc., dba Matrix Visual Solutions (“Matrix”) from February 3, 2002 and a 68% interest in Matrix from acquisition on November 11, 1999 to February 2, 2002.

In April 2002, the Corporation repurchased 2,966,178 shares of its common stock, $1 par value for an aggregate consideration of  $8,585,298 under two separate transactions – (see Note 11). 

Physician Advantage ceased operations in October 2002.  At September 30, 2002, Physician Advantage was considered a discontinued operation under accounting principles generally accepted in the United States of America.  As such, the financial statements as of and for the period ended September 30, 2002 reflect the operations as a discontinued operation.  The 2001 statements of consolidated income, cash flows, and related notes to the consolidated financial statements have been restated to conform to the discontinued operations presentation - (see Note 8).

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary to present the financial position, results of operations, statements of cash flows and statements of comprehensive income in conformity with accounting principles generally accepted in the United States of America.  The material set forth below under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations" is written with the presumption that the users of the interim financial statements have read or have access to the most recent report on Form 10-K for the year ended December 31, 2001, which contains the latest audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations as of December 31, 2001 and for the year then ended.

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2.     SECURITIES AVAILABLE-FOR-SALE

Securities available-for-sale are carried at estimated fair value.  The amortized cost and estimated fair value of securities available for sale at September 30, 2002 and December 31, 2001 are as follows (dollars in thousands):

Maturities of U.S. Treasury and Agency Securities were as follows at September 30, 2002 (dollars in thousands):

At September 30, 2002, certain U.S. Treasury investments with a fair market value of $4,278,000 were held at a financial institution in Canada as security for a margin loan owed by the Corporation – (see Note 5).

3.     LOANS RECEIVABLE

The Corporation’s loans receivable outstanding at September 30, 2002 and December 31, 2001 were comprised of the following (dollars in thousands):

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On July 17, 2002, the Corporation purchased for $1,350,000 ($2,004,000 Canadian) a 31% interest in a promissory note in the principal amount of $6,500,000 Canadian secured by a first mortgage on approximately 256 acres of land zoned for industrial development located in Alberta, Canada (“Secured Loan”) from Paragon Capital Corporation Limited (“Paragon”), an Alberta, Canada loan broker, in connection with the acquisition of the Secured Loan from the original lender. The Secured Loan accrues interest at 12% per annum, with accrued interest and principal due at payoff.  The Secured Loan was in default at the time of loan purchase and foreclosure proceedings have commenced.

On September 27, 2002, the Corporation purchased for $2,925,000 ($4,500,000 Canadian) a 36% interest in a promissory note with an outstanding balance of $12,500,000 Canadian secured by first mortgages on 188 condominium units located in Calgary, Alberta, Canada, an assignment of rents, sales proceeds from the condominiums, and a personal guarantee from a shareholder of the borrower.  The Corporation purchased the interest in the loan from Paragon in connection with the purchase of the loan from the original lender and restructuring of terms of the loan with the borrower by Paragon.  The loan accrues interest at 14% per annum, compounded monthly with interest payable monthly and principal due on April 1, 2003, with one six-month renewal option upon payment of a 2.5% renewal fee and provided the loan has not been in default.

The Corporation deposited $4,275,000 in U.S. dollars into an account at a Canadian financial institution, which have been invested in U.S Treasuries, and has used these funds and the U.S. Treasuries to secure a margin loan in Canadian dollars to fund the loans described above - (see Note 5).

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4.     GOODWILL

The Corporation’s investments in operating businesses include purchased goodwill recorded as follows (dollars in thousands):

Effective January 1, 2002, the Corporation adopted Statement of Financial Accounting Standards (“SFAS”) No. 141 and SFAS No. 142 relating to the treatment of purchased goodwill and other intangibles.  In accordance with SFAS No. 142, accounting for goodwill has been changed from an amortization approach to an impairment-only approach.  Accordingly, amortization of goodwill, including goodwill recorded in past business combinations, has ceased effective January 1, 2002.

The Corporation has completed the transitional fair value based impairment test and determined that as of January 1, 2002, none of the recorded goodwill was impaired.  SFAS No. 142 requires that intangible assets that do not meet the criteria for recognition apart from goodwill be reclassified and that intangibles with indefinite lives cease to be amortized in favor of periodic impairment testing.  The Corporation determined that as of January 1, 2002, no change was necessary to the classification and useful lives of identifiable intangible assets.

Had the Corporation adopted SFAS No. 142 in the three and nine-month period ended September 30, 2001, reported net loss would have been decreased to the pro forma amounts indicated below (dollars in thousands, except per share date):

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5.     OTHER BORROWINGS

Other borrowings consisted of the following at September 30, 2002 and December 30, 2001 (dollars in thousands):

At September 30, 2002, other borrowings included bank credit facilities comprised of a line of credit provided to Matrix and a line of credit provided to One Source.  A revolving line of credit for working capital purposes previously provided to Matrix of $500,000 with accrued interest at the prime rate plus 1% matured in July 2002.  There was no amount outstanding on this line of credit when it matured.

The revolving line of credit for equipment purchases provided to Matrix in the nominal amount of $2,200,000 was established in April 2000, has a maturity date of April 2005, required monthly payments of interest only through March 2001, and thereafter amortizes in 48 equal monthly payments of principal plus accrued interest computed at the prime rate (4.75% per annum at September 30, 2002). At September 30, 2002, the outstanding principal balance on the equipment line of credit was $1,304,000. 

The assets of Matrix serve as collateral for the outstanding line of credit.  Under the credit facility, Matrix is required to meet two covenants, one of which was not in compliance at September 30, 2002.  Matrix is seeking a waiver for this non-compliance for the quarter ended September 30, 2002. If the bank does not grant a waiver for the non-compliance the loan could be declared in default, which may, among other possible consequences, result in the commencement of foreclosure proceedings against assets of Matrix and in an increase in the interest rate on the loan from prime to the default rate of prime plus 5% per annum.

The line of credit provided to One Source in the nominal amount of $1,000,000 had an outstanding balance of $130,000 at September 30, 2002.  The maximum amount outstanding on this line was $180,000 during the year to date period ended September 30, 2002.  This credit facility is in the process of renewal.

The margin loan of $4,109,000 ($6,518,000 Canadian) was established to fund interests in two real estate mortgage loans purchased in Canada - (see Note 3).  This loan facility accrues interest at the Bank of Canada prime rate minus ½% (4% per annum at September 30, 2002), and is secured by U.S. Treasury investments of $4,278,000 held at the same institution.  The amount outstanding under this margin facility includes accrued interest of $9,000 through September 30, 2002.

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6.     INCOME TAXES

For the nine months ended September 30, 2002, the tax benefit includes a $333,000 benefit related to the carryback of a net operating loss incurred by Matrix in 2001.  This benefit arose upon enactment of the Job Creation and Worker Assistance Act of 2002 on March 9, 2002.

On April 12, 2002, the Corporation received a report from the Internal Revenue Service (“IRS”) proposing an increase in tax for the 1998 tax year of $2,872,075 plus interest. The Corporation believes it has paid the proper amount of tax and has therefore filed an appeal of this finding with the IRS. However, there can be no assurances as to the ultimate outcome of such appeal, which could result in future tax payments relating to prior periods of approximately $4 million, inclusive of estimated interest that would apply. Management believes that they have sufficient reserves established to cover any tax and related interest that may result from final resolution of the proposed changes.

7.     SUPPLEMENTAL CASH FLOW INFORMATION

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8.     DISCONTINUED OPERATIONS

On June 14, 2002, Physician Advantage received notice from Broadlane, a subsidiary of Tenet Healthcare, Inc., of its election not to renew the contract scheduled to expire on September 29, 2002, pursuant to which Physician Advantage provided customer management services for Tenet’s program for medical and surgical supply sales to physicians.  Revenues generated under the contract represented substantially all of Physician Advantage’s revenues.  Physician Advantage believes the terms of the contract provide for continuing payment to it of fees derived from purchases made by physicians in the program prior to the September 2002 expiration of the contract.  Tenet has advised Physician Advantage that it disputes this interpretation of the contract. 

Accordingly, the operations of Physician Advantage have ceased and the results of the operations for this business are reported as a discontinued operation for all periods presented.  The 2001 statements of consolidated income, cash flows, and related notes to consolidated financial statements have been restated to conform to the discontinued operations presentation.

The discontinued operations earned net income for the nine months and three months ended September 30, 2002 of $484,000 and $421,000, respectively, net of income taxes and minority interests.  This net income from the discontinued operation includes tax benefits related to the unamortized goodwill for tax purposes at the date of business discontinuation of approximately $370,000 for both the three and nine months ended September 31, 2002.

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9.     SEGMENT INFORMATION

Revenues, gross profit and other financial data for continuing operations of the Corporation’s industry segments for the three and nine months ended September 30, 2002 and 2001 are set forth below.  Substantially all revenues are earned in the United States of America (dollars in thousands).