-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, rzcg5iF267QG//STnkODUuBclUe8BtPz6X9/hiBlZZEtbS026xrfPx5J/diPhT7A CP9ee4smVxmli3GuEPpB5g== 0000950152-95-000908.txt : 19950511 0000950152-95-000908.hdr.sgml : 19950511 ACCESSION NUMBER: 0000950152-95-000908 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950509 SROS: CBOE SROS: NYSE SROS: PHLX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRW INC CENTRAL INDEX KEY: 0000100030 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 340575430 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02384 FILM NUMBER: 95535829 BUSINESS ADDRESS: STREET 1: 1900 RICHMOND RD CITY: CLEVELAND STATE: OH ZIP: 44124 BUSINESS PHONE: 2162917000 MAIL ADDRESS: STREET 1: 1900 RICHMOND ROAD CITY: CLEVELAND STATE: OH ZIP: 44124 10-Q 1 TRW 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 -------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------- --------- Commission file number 1-2384 ------ TRW Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Ohio 34-0575430 - --------------------------------------------- ----------------------- (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 1900 Richmond Road, Cleveland, Ohio 44124 ----------------------------------------- (Address of principal executive offices) (Zip Code) (216) 291-7000 --------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -------- ------- As of May 5, 1995, there were 65,085,367 shares of TRW Common Stock, $0.625 par value, outstanding. This is page one of a total of 16 pages. The Exhibit Index is on page 13 of this filing. 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements --------------------
Statements of Earnings (unaudited) TRW Inc. and subsidiaries - ------------------------------------------------------------------------------------------------------------------------ Quarter ended March 31 In millions except per share data 1995 1994 - ------------------------------------------------------------------------------------------------------------------------ Sales $ 2,596 $ 2,159 Cost of sales 2,073 1,720 - ------------------------------------------------------------------------------------------------------------------------ Gross profit 523 439 Administrative and selling expenses 201 176 Research and development expenses 103 106 Interest expense 24 29 Other (income)expense-net 5 21 - ------------------------------------------------------------------------------------------------------------------------ Earnings before income taxes 190 107 Income taxes 75 43 - ------------------------------------------------------------------------------------------------------------------------ Net earnings $ 115 $ 64 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ PER SHARE OF COMMON STOCK Fully diluted $ 1.72 $ .97 Primary $ 1.74 $ .97 Dividends declared $ .00 $ .00 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ Shares used in computing per share amounts Fully diluted 66.7 66.4 Primary 65.9 65.8 - ------------------------------------------------------------------------------------------------------------------------
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Statements of Cash Flows (unaudited) TRW Inc. and subsidiaries - ------------------------------------------------------------------------------------------------------------------------ Quarter ended March 31 In millions 1995 1994 - ------------------------------------------------------------------------------------------------------------------------ Operating activities Net earnings $ 115 $ 64 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation and amortization 128 116 Restructuring - (7) Deferred income taxes 4 31 Other-net 3 23 Changes in assets and liabilities, net of effects of businesses acquired or sold: Accounts receivable (205) (209) Inventories and prepaid expenses (22) (29) Accounts payable and other accruals 73 (36) Other-net 3 29 - ------------------------------------------------------------------------------------------------------------------------ Net cash provided by (used in) operating activities 99 (18) - ------------------------------------------------------------------------------------------------------------------------ Investing activities Capital expenditures (100) (85) Proceeds from divestitures - 15 Investments in other assets (14) (16) Other-net (7) (8) - ------------------------------------------------------------------------------------------------------------------------ Net cash used in investing activities (121) (94) - ------------------------------------------------------------------------------------------------------------------------ Financing activities Increase in short-term debt 75 95 Proceeds from debt in excess of 90 days 15 64 Principal payments on debt in excess of 90 days (39) (41) Dividends paid (33) (30) Other-net (15) 8 - ------------------------------------------------------------------------------------------------------------------------ Net cash provided by financing activities 3 96 - ------------------------------------------------------------------------------------------------------------------------ Effect of exchange rate changes on cash (19) (9) - ------------------------------------------------------------------------------------------------------------------------ Decrease in cash and cash equivalents (38) (25) Cash and cash equivalents at beginning of quarter 109 79 - ------------------------------------------------------------------------------------------------------------------------ Cash and cash equivalents at end of quarter $ 71 $ 54 - ------------------------------------------------------------------------------------------------------------------------
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Balance Sheets (unaudited) TRW Inc. and subsidiaries - ------------------------------------------------------------------------------------------------------------------------ March 31 December 31 In millions 1995 1994 - ------------------------------------------------------------------------------------------------------------------------ Assets Current assets Cash and cash equivalents $ 71 $ 109 Accounts receivable 1,562 1,338 Inventories 498 470 Prepaid expenses 69 59 Deferred income taxes 239 239 - ------------------------------------------------------------------------------------------------------------------------ Total current assets 2,439 2,215 Property, plant and equipment-on the basis of cost 5,740 5,556 Less accumulated depreciation and amortization 3,197 3,067 - ------------------------------------------------------------------------------------------------------------------------ Total property, plant and equipment-net 2,543 2,489 Intangible assets Intangibles arising from acquisitions 479 477 Capitalized data files 451 441 Other 68 69 - ------------------------------------------------------------------------------------------------------------------------ 998 987 Less accumulated amortization 345 331 - ------------------------------------------------------------------------------------------------------------------------ Total intangible assets-net 653 656 Other assets 277 276 - ------------------------------------------------------------------------------------------------------------------------ $ 5,912 $ 5,636 - ------------------------------------------------------------------------------------------------------------------------ Liabilities and shareholders' investment Current liabilities Short-term debt $ 147 $ 122 Accounts payable 729 737 Current portion of long-term debt 167 157 Other current liabilities 1,064 970 - ------------------------------------------------------------------------------------------------------------------------ Total current liabilities 2,107 1,986 Long-term liabilities 794 796 Long-term debt 709 694 Deferred income taxes 274 269 Minority interests in subsidiaries 65 69 Capital stock 41 41 Other capital 366 354 Retained earnings 1,498 1,383 Cumulative translation adjustments 94 66 Treasury shares-cost in excess of par value (36) (22) - ------------------------------------------------------------------------------------------------------------------------ Total shareholders' investment 1,963 1,822 - ------------------------------------------------------------------------------------------------------------------------ $ 5,912 $ 5,636 - ------------------------------------------------------------------------------------------------------------------------
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Results by Business Segments (unaudited) TRW Inc. and subsidiaries - ------------------------------------------------------------------------------------------------------------------------ Quarter ended March 31 In millions 1995 1994 - ------------------------------------------------------------------------------------------------------------------------ Sales Automotive $ 1,741 $ 1,331 Space & Defense 706 680 Information Systems & Services 149 148 - ------------------------------------------------------------------------------------------------------------------------ Sales $ 2,596 $ 2,159 - ------------------------------------------------------------------------------------------------------------------------ Operating profit Automotive $ 173 $ 95 Space & Defense 45 46 Information Systems & Services 21 20 - ------------------------------------------------------------------------------------------------------------------------ Operating profit 239 161 Company Staff and other (25) (26) Interest expense (24) (29) Earnings from affiliates - 1 - ------------------------------------------------------------------------------------------------------------------------ Earnings before income taxes $ 190 $ 107 - ------------------------------------------------------------------------------------------------------------------------
6 NOTES TO FINANCIAL STATEMENTS (unaudited) Principles of Consolidation - --------------------------- The financial statements include the accounts of the Company and its subsidiaries except for an insurance subsidiary. The wholly-owned insurance subsidiary and the majority of investments in affiliated companies, which are not significant individually or in the aggregate, are accounted for by the equity method. Inventories - ----------- Inventories consist of the following: (In millions)
March 31 December 31 1995 1994 ---- ---- Finished products and work in process $264 $246 Raw materials and supplies 234 224 ---- ---- $498 $470 ---- ----
Long-Term Liabilities - --------------------- For balance sheet purposes, long-term liabilities at March 31, 1995, and December 31, 1994, include $682 million relating to postretirement benefits other than pensions. Other (Income) Expense-Net - ------------------------- Other (income) expense included the following: (In millions)
Quarter ended March 31 ----------------------------- 1995 1994 ---- ---- Other income $(19) $(10) Other expense 14 14 Foreign currency translation 10 17 ---- ---- $ 5 $ 21 ---- ----
7 Earnings Per Share - ------------------ Fully diluted earnings per share have been computed based on the weighted average number of shares of Common Stock outstanding during each period, including common stock equivalents and assuming the conversion of the Serial Preference Stock II--Series 1 and 3. Primary earnings per share have been computed based on the weighted average number of shares of Common Stock outstanding during each period including common stock equivalents. Supplemental Cash Flow Information - ----------------------------------
Quarter ended (In millions) March 31 ---------------------------- 1995 1994 ---- ---- Interest paid (net of amount capitalized) $24 $37 Income taxes paid (net of refunds) $29 $(7)
For purposes of the statements of cash flows, the Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Interim Statements - ------------------ The financial statements are based in part on approximations and are subject to adjustments that may develop, such as unsettled contract and renegotiation matters and matters that arise in connection with the annual audit of the financial statements; however, in the opinion of management, all adjustments (which consist of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented have been included. Results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. 8 Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- RESULTS OF OPERATIONS (In millions except per share data)
First Quarter ------------------------------------ Percent 1995 1994 Inc(Dec) ---------- ---------- --------- Sales $2,596 $2,159 20% Operating Profit 239 161 49% Net Earnings 115 64 79% Fully Diluted Earnings Per Share 1.72 .97 77% Effective Tax Rate 39.5% 40.2%
The increase in sales resulted from higher volume in the Automotive segment, primarily North American and European occupant restraints and steering systems businesses. The increase in net earnings was due primarily to the higher volume in the Company's North American and European air bag and steering systems businesses and lower interest expense. Interest expense was $24 million for the first quarter of 1995 compared to $29 million for the first quarter of 1994. The decrease was due primarily to lower average domestic and foreign debt levels. Automotive (In millions)
First Quarter ------------------------------------ Percent 1995 1994 Inc(Dec) ---------- ---------- --------- Sales $1,741 $1,331 31% Operating Profit $ 173 $ 95 83%
The increase in sales resulted primarily from increased North American and European volume in the steering systems, air bags, and seatbelt businesses and in European automotive electronics. Favorable exchange rates also contributed to the sales increase. The increase in operating profit was primarily due to the increased volume in the North American and European steering systems and air bag businesses. 9 Space & Defense (In millions)
First Quarter ------------------------------------ Percent 1995 1994 Inc(Dec) ---------- ---------- --------- Sales $706 $680 4% Operating Profit $ 45 $ 46 (2%)
The increase in sales resulted primarily from increased volume from new and existing contracts, partially offset by the effect of several contracts nearing completion. Operating profit decreased slightly due to the low profit accruals in the early period of new programs. Information Systems & Services (In millions)
First Quarter ------------------------------------ Percent 1995 1994 Inc(Dec) ---------- ---------- --------- Sales $149 $148 1% Operating Profit $ 21 $ 20 5%
The sales increase resulted from increased volume in the Information Services and Business Credit businesses, partially offset by lower revenue in the Information Systems and Real Estate Information Services businesses. The operating profit increase was due to the higher revenues and cost reduction efforts. LIQUIDITY AND FINANCIAL POSITION In the first quarter of 1995, cash flow provided by operating activities of $99 million, and a net increase in debt of $51 million were used to fund capital expenditures of $100 million, dividend payments of $33 million and other items of $36 million. In addition, the effect of exchange rate changes reduced cash flow by $19 million. As a result, cash and cash equivalents decreased by $38 million. Total debt (short-term debt, the current portion of long-term debt and long-term debt) was $1,023 million at March 31, 1995, compared to $973 million at December 31, 1994. The ratio of total debt to total capital (total debt, total deferred income taxes, minority interest and shareholders' investment) at March 31, 1995, was 33 percent compared to 34 percent at December 31, 1994. 10 During the first quarter of 1995, the Company's committed 364-day U.S. revolving credit agreement which allowed the Company to borrow up to $150 million expired. Also during the first quarter, the Company renegotiated the terms of its multi-year U.S. revolving credit agreement. The credit agreement, which previously allowed the Company to borrow up to $400 million, has been revised to allow the Company to borrow up to $550 million. The revised agreement now extends through February 2000 and contains lower commitment fees and borrowing rates. Also during the first quarter of 1995, the Company renegotiated the terms of its committed multi-currency revolving agreement. The agreement, which previously consisted of two tranches with 13 banks and allowed the Company to borrow up to $200 million, now consists of one tranche and allows the Company to borrow up to $200 million. The revised agreement now extends through February 2000 and contains lower commitment fees and borrowing rates. Management believes that funds generated from operations and existing borrowing capacity will be adequate to support and finance planned growth, capital expenditures, company-sponsored research and development programs and dividend payments to shareholders. 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings. ------------------ On April 25, 1995 the Cuyahoga County Court of Common Pleas signed a judgment entry approving the settlement reached in two shareholder derivative actions initiated in 1991 on behalf of the Company, against the Company, as a nominal defendant, the Company's current Directors (other than M. H. Armacost, R. B. Cheney, R. M. Gates, C. H. Hahn, G. H. Heilmeier, P. S. Hellman, J. T. Lynn and R. W. Pogue), certain former Directors, D. V. Skilling, Executive Vice President and General Manager, Information Systems & Services, and two other current or former employees. The complaints, which were filed on July 12, 1991 and July 30, 1991, respectively, were virtually identical and alleged that the individual defendants acted with negligence, gross negligence, recklessness and in breach of their fiduciary duties by failing to manage properly TRW's Information Systems & Services business. The Court approved TRW's indemnification of the director and employee defendants, and granted plaintiffs' application for attorneys' fees and costs in the amount of $561,395.03. The judgment becomes final on May 26, 1995. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: 11 Computation of Earnings Per Share -- Unaudited. 27 Financial Data Schedule. 99 Computation of Ratio of Earnings to Fixed Charges -- Unaudited (Supplement to Exhibit 12 of the following Form S-3 Registration Statements of the Company: No. 33-30350, filed August 4, 1989, and No. 33-42870 filed September 20, 1991). (b) Reports on Form 8-K: No report on Form 8-K was filed during the quarter for which this report is filed. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TRW Inc. Date: May 9, 1995 By: /s/ Martin A. Coyle ------------------- Martin A. Coyle Executive Vice President and Secretary Date: May 9, 1995 By: /s/ Ronald D. Sugar ------------------- Ronald D. Sugar Executive Vice President and Chief Financial Officer 13 FORM 10-Q Quarterly Report for Quarter Ended March 31, 1995 EXHIBIT INDEX ------------- Exhibit No. Description Page No. - ----------- ----------- -------- 11 Computation of Earnings Per Share -- Unaudited. 14 27 Financial Data Schedule 15 99 Computation of Ratio of Earnings to Fixed Charges -- Unaudited (Supplement to Exhibit 12 of the following Form S-3 Registration Statements of the Company: No. 33-30350, filed August 4, 1989, and No. 33-42870 filed September 20, 1991). 16
EX-11 2 TRW 10-Q EX-11 1 Exhibit 11 TRW Inc. and Subsidiaries COMPUTATION OF EARNINGS PER SHARE - UNAUDITED (In Millions Except Per Share Amounts)
Three Months Ended March 31 --------------------------------- 1995 1994 ---- ---- PRIMARY - ------- Net earnings $ 114.7 $ 64.1 Less preference dividend requirements 0.2 0.2 Net earnings applicable to common shares and -------- -------- common share equivalents $ 114.5 $ 63.9 ======== ======== Average common shares outstanding 64.9 64.3 Stock options and performance share rights, based on the treasury stock method using average market price 1.0 1.5 Average common shares and common share -------- -------- equivalents 65.9 65.8 ======== ======== Primary earnings per share $ 1.74 $ 0.97 ======== ======== FULLY DILUTED - ------------- Net earnings applicable to common shares and common share equivalents $ 114.5 $ 63.9 Dividends assuming conversion of other dilutive securities: (A) Dilutive preference dividends 0.2 0.2 -------- -------- Net earnings applicable to fully diluted shares $ 114.7 $ 64.1 ======== ======== Average common shares outstanding 64.9 64.3 Common shares assuming conversion of other dilutive securities: (A) Dilutive preference shares 0.6 0.6 Stock options and performance share rights, based on the treasury stock method using closing market price if higher than average market price 1.2 1.5 -------- -------- Average fully diluted shares 66.7 66.4 ======== ======== Fully diluted earnings per share $ 1.72 $ 0.97 ======== ========
(A) Assuming the conversion of the Serial Preference Stock II - Series 1 and Series 3. EX-27 3 TRW 10Q EX-27
5 1,000,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 71 0 1,562 0 498 2,439 5,740 3,197 5,912 2,107 709 41 0 0 1,922 5,912 2,596 2,596 2,073 2,073 0 0 24 190 75 115 0 0 0 115 1.74 1.72
EX-99 4 TRW 10Q EX-99 1 Exhibit 99 TRW Inc. and Subsidiaries Computation of Ratio of Earnings to Fixed Charges - Unaudited (In millions except ratio data)
Three Months Years Ended December 31 ended --------------------------------------------------------------- March 31, 1995 1994 1993 1992 1991 1990 -------------- ------ ------ ------ ------ ------ Earnings(loss) before income taxes $189.5 $534.5 $359.1 $347.6 $(129.4)(A) $343.1 Unconsolidated affiliates 0.9 (0.6) 0.7 (0.9) (1.0) (13.2) Minority earnings 2.7 5.2 5.7 2.6 (7.8) (0.5) Fixed charges excluding capitalized interest 38.8 160.9 194.0 227.1 254.3 252.0 ------ ------ ------ ------ ------- ------ Earnings $231.9 $700.0 $559.5 $576.4 $ 116.1 $581.4 ------ ------ ------ ------ ------- ------ Fixed Charges: Interest expense $ 24.0 $104.8 $137.8 $162.9 $ 189.6 $186.9 Capitalized interest 1.0 6.6 7.9 12.7 10.1 7.6 Portion of rents representa- tive of interest factor 14.6 54.7 54.0 64.0 64.4 64.6 Interest expense of uncon- solidated affiliates 0.2 1.4 2.2 0.2 0.3 0.5 ------ ------ ------ ------ ------- ------ Total fixed charges $ 39.8 $167.5 $201.9 $239.8 $ 264.4 $259.6 ------ ------ ------ ------ ------- ------ Ratio of earnings to fixed charges 5.8x 4.2x 2.8x 2.4x 0.4x(A) 2.2x --- ------ --- --- ------- ------
(A) The 1991 loss before income taxes of $129.4 million includes a charge of $343 million to cover costs associated with divestment and restructuring activities. Excluding this charge, the ratio of earnings to fixed charges would have been 1.7x. -----END PRIVACY-ENHANCED MESSAGE-----