-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NDXr8FGsrpDdFVQD9DDp+QtTpuOf3gQcjE/wXqp9Zm1pP3kqfjdXILbE133DZ1RM BNX/qViGfTdJeNHjppckBA== 0000950152-95-002534.txt : 19951118 0000950152-95-002534.hdr.sgml : 19951118 ACCESSION NUMBER: 0000950152-95-002534 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951109 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: 95588694 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 INC. 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 September 30, 1995 ------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number 1-2384 ------------------------------------------- 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 November 3, 1995, there were 65,572,158 shares of TRW Common Stock, $0.625 par value, outstanding. This is page one of a total of 17 pages. The Exhibit Index is on page 14 of this filing. 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements Statements of Earnings (unaudited) TRW Inc. and subsidiaries - -----------------------------------------------------------------------------
Third quarter ended Nine months ended September 30 September 30 In millions except per share data 1995 1994 1995 1994 - ----------------------------------------------------------------------------- Sales $2,401 $2,165 $7,709 $6,641 Cost of sales 1,942 1,714 6,199 5,280 - ----------------------------------------------------------------------------- Gross profit 459 451 1,510 1,361 Administrative and selling 207 188 592 540 expenses Research and development 88 100 314 318 expenses Interest expense 28 24 76 80 Other (income) expense-net (7) 6 (2) 44 - ----------------------------------------------------------------------------- Earnings before income taxes 143 133 530 379 Income taxes 50 51 199 146 - ----------------------------------------------------------------------------- Net earnings $ 93 $ 82 $ 331 $ 233 - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- PER SHARE OF COMMON STOCK Fully diluted $ 1.41 $ 1.24 $ 4.94 $ 3.52 Primary 1.39 1.26 4.97 3.56 Dividends declared .50 .50 1.00 .97 - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Shares used in computing per share amounts Fully diluted 66.7 65.9 67.2 66.0 Primary 67.0 64.9 66.6 65.2 - -----------------------------------------------------------------------------
3 Statements of Cash Flows (unaudited) TRW Inc. and subsidiaries - ------------------------------------------------------------------------
Nine months ended September 30 In millions 1995 1994 - ------------------------------------------------------------------------ Operating activities: Net earnings $331 $233 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 383 353 Restructuring - (18) Deferred income taxes 18 43 Other-net 21 41 Changes in assets and liabilities, net of effects of businesses acquired or sold: Accounts receivable (75) (175) Inventories and prepaid expenses (75) (64) Accounts payable and other accruals (38) 65 Other-net (4) 41 - ------------------------------------------------------------------------ Net cash provided by operating activities 561 519 - ------------------------------------------------------------------------ Investing activities: Capital expenditures (314) (311) Proceeds from divestitures 9 10 Investments in other assets (55) (50) Other-net (2) (20) - ------------------------------------------------------------------------ Net cash used in investing activities (362) (371) - ------------------------------------------------------------------------ Financing activities: Increase(decrease) in short-term debt 22 (80) Proceeds from debt in excess of 90 days 27 165 Principal payments on debt in excess of 90 days (161) (121) Dividends paid (98) (93) Other-net 7 11 - ------------------------------------------------------------------------ Net cash used in financing activities (203) (118) - ------------------------------------------------------------------------ Effect of exchange rate changes on cash (24) (37) - ------------------------------------------------------------------------ Decrease in cash and cash equivalents (28) (7) Cash and cash equivalents at beginning of period 109 79 - ------------------------------------------------------------------------ Cash and cash equivalents at end of period $ 81 $ 72 - ------------------------------------------------------------------------
4 Balance Sheets (unaudited) TRW Inc. and subsidiaries - --------------------------------------------------------------------------
September 30 December 31 In millions 1995 1994 - -------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents $ 81 $ 109 Accounts receivable 1,428 1,338 Inventories 535 470 Prepaid expenses 81 59 Deferred income taxes 231 239 - -------------------------------------------------------------------------- Total current assets 2,356 2,215 Property, plant and equipment-on the basis of cost 5,805 5,556 Less accumulated depreciation and amortization 3,284 3,067 - -------------------------------------------------------------------------- Total property, plant and equipment-net 2,521 2,489 Intangible assets Intangibles arising from acquisitions 479 477 Capitalized data files 473 441 Other 84 69 - -------------------------------------------------------------------------- 1,036 987 Less accumulated amortization 386 331 - -------------------------------------------------------------------------- Total intangible assets-net 650 656 Other assets 286 276 - -------------------------------------------------------------------------- $5,813 $5,636 - -------------------------------------------------------------------------- Liabilities and shareholders' investment Current liabilities Short-term debt $ 196 $ 122 Accounts payable 677 737 Current portion of long-term debt 98 157 Other current liabilities 1,003 970 - -------------------------------------------------------------------------- Total current liabilities 1,974 1,986 Long-term liabilities 790 796 Long-term debt 568 694 Deferred income taxes 278 269 Minority interests in subsidiaries 70 69 Capital stock 41 41 Other capital 396 354 Retained earnings 1,649 1,383 Cumulative translation adjustments 78 66 Treasury shares-cost in excess of par value (31) (22) - -------------------------------------------------------------------------- Total shareholders' investment 2,133 1,822 - -------------------------------------------------------------------------- $5,813 $5,636 - --------------------------------------------------------------------------
5 Results by Business Segments (unaudited) TRW Inc. and subsidiaries - -------------------------------------------------------------------------------
Third quarter ended Nine months ended September 30 September 30 In millions 1995 1994 1995 1994 - ------------------------------------------------------------------------------- Sales Automotive $1,422 $1,331 $4,882 $4,115 Space & Defense 827 682 2,375 2,070 Information Systems & Services 152 152 452 456 - ------------------------------------------------------------------------------- Sales $2,401 $2,165 $7,709 $6,641 - ------------------------------------------------------------------------------- Operating profit Automotive $ 116 $ 113 $ 461 $ 327 Space & Defense 54 47 153 138 Information Systems & Services 26 27 69 75 - ------------------------------------------------------------------------------- Operating profit 196 187 683 540 Company Staff and other (25) (31) (77) (84) Interest expense (28) (24) (76) (80) Earnings from affiliates - 1 - 3 - ------------------------------------------------------------------------------- Earnings before income taxes $ 143 $ 133 $ 530 $ 379 - -------------------------------------------------------------------------------
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)
September 30 December 31 1995 1994 ---- ---- Finished products and work in process $296 $246 Raw materials and supplies 239 224 ---- ---- $535 $470 ---- ----
Long-Term Liabilities - --------------------- For balance sheet purposes, long-term liabilities at September 30, 1995, and December 31, 1994, included $684 million and $682 million, respectively, relating to postretirement benefits other than pensions. Other (Income) Expense-Net - ------------------------- Other (income) expense included the following: (In millions)
Third quarter ended Nine months ended September 30 September 30 1995 1994 1995 1994 ------------------- ----------------- Other income $(15) $(11) $(43) $(41) Other expense 7 13 32 45 Foreign currency translation 1 4 9 40 ---- ---- ---- ---- $ (7) $ 6 $ (2) $ 44 ---- ---- ---- ----
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. Primary earnings per share for the third quarter of 1995 of $1.39 is lower than the fully diluted earnings per share amount of $1.41 due to the use of the treasury stock method for calculating share repurchase. The September 1995 calculation of fully diluted earnings per share uses the average market price. Supplemental Cash Flow Information - ----------------------------------
Nine months ended September 30 ------------------- (In millions) 1995 1994 ---- ---- Interest paid (net of amount capitalized) $ 74 $85 Income taxes paid (net of refunds) $191 $47
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)
Nine Months Ended Third Quarter September 30 -------------------------- ------------------------- Percent Percent 1995 1994 Inc (Dec) 1995 1994 Inc (Dec) ---- ---- -------- ---- ---- -------- Sales $2,401 $2,165 11% $7,709 $6,641 16% Operating Profit $ 196 $ 187 4% $ 683 $ 540 27% Net Earnings $ 93 $ 82 14% $ 331 $ 233 43% Fully Diluted Earnings Per Share $ 1.41 $ 1.24 14% $ 4.94 $ 3.52 40% Effective Tax Rate 34.8% 38.7% 37.5% 38.7%
The increase in sales for the third quarter and first nine months of 1995 resulted from higher volume in the Automotive segment, primarily in the North American airbag business and all European businesses, as well as increased volume in the Space & Defense segment. Operating profit for the third quarter and first nine months of 1995 increased primarily as a result of the higher sales volume. The increase in net earnings for the third quarter and first nine months of 1995 resulted from the higher operating profit noted above. Net earnings also benefited from a lower effective tax rate. The lower effective tax rate was primarily due to the utilization of tax loss carryforwards resulting from the legal reorganization of certain German operations as well as the favorable effect of certain prior period adjustments, including an adjustment to the prior year's actual tax liability. Interest expense was $76 million for the first nine months of 1995 compared to $80 million in 1994. The decrease in interest expense was due primarily to lower debt levels partially offset by higher interest rates. 9 Automotive (In millions)
Nine Months Ended Third Quarter September 30 -------------------------- ------------------------- Percent Percent 1995 1994 Inc (Dec) 1995 1994 Inc (Dec) ---- ---- -------- ---- ---- -------- Sales $1,422 $1,331 7% $4,882 $4,115 19% Operating Profit $ 116 $ 113 3% $ 461 $ 327 41%
The increase in sales for the third quarter and first nine months of 1995 resulted from higher volume in all European automotive businesses, the effect of favorable exchange rates and higher volume in the North American airbag business. The increase in sales for the third quarter 1995 was partially offset by lower volume in the North American seatbelt business. Operating profit increased for the third quarter and first nine months of 1995 due to the higher volume in all European businesses. The increase in third quarter 1995 operating profit was partially offset by the effect of lower sales in certain North American operations. Space & Defense (In millions)
Nine Months Ended Third Quarter September 30 -------------------------- ------------------------- Percent Percent 1995 1994 Inc (Dec) 1995 1994 Inc (Dec) ---- ---- -------- ---- ---- -------- Sales $827 $682 22% $2,375 $2,070 15% Operating Profit $ 54 $ 47 15% $ 153 $ 138 11%
Sales for the third quarter and first nine months of 1995 increased due to new business volume and improvements in ongoing program performance. The increase in sales for the first nine months of 1995 was partially offset by the effect of contracts nearing completion. The increase in operating profit for the third quarter and first nine months of 1995 resulted from the increased sales volume and the absence of investments related to diversification into commercial markets, partially offset by program profit adjustments. Operating profit for the third quarter of 1995 included a program reserve which was offset by the benefit of a franchise tax settlement. Information Systems & Services (In millions)
Nine Months Ended Third Quarter September 30 -------------------------- ------------------------- Percent Percent 1995 1994 Inc (Dec) 1995 1994 Inc (Dec) ---- ---- -------- ---- ---- -------- Sales $152 $152 - % $452 $456 (1)% Operating Profit $ 26 $ 27 (8)% $ 69 $ 75 (9)%
Sales and operating profit amounts for the third quarter and first nine months of 1995 were comparable to those of the third quarter and first nine months of 1994. 10 LIQUIDITY AND FINANCIAL POSITION In the first nine months of 1995, cash flow provided by operating activities of $561 million was used primarily for capital expenditures of $314 million, a net decrease in debt of $112 million, dividend payments of $98 million and $41 million in other items. In addition, the effect of exchange rates reduced cash flow by $24 million. As a result, cash and cash equivalents decreased by $28 million. Total debt (short-term debt, the current portion of long-term debt and long-term debt) was $862 million at September 30, 1995, compared to $973 million at December 31, 1994. The ratio of total debt to total capital (total debt, total deferred income taxes, minority interests and shareholders' investment) at September 30, 1995 was 28 percent compared to 34 percent at December 31, 1994. During the third quarter of 1995, the Company filed a $224.5 million debt shelf registration statement. After this filing, a total of $500 million is available for borrowing under the Company's shelf registration statements. During the first nine months of 1995, the Company's committed U.S. 364-day revolving credit agreement, which allowed the Company to borrow up to $150 million, expired. Also during the first nine months, 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 nine months of 1995, the Company renegotiated the terms of its committed multi-currency revolving credit 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. The Company is subject to inherent risks attributed to operating in a global economy. It is the Company's policy to utilize derivative financial instruments to manage its interest rate and foreign currency exchange risks. The effect of these derivative transactions on the Company's net earnings is not material. 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 dividends payments to shareholders. 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings. ------------------ On February 15, 1994, TRW filed suit in the United States District Court for the District of Arizona against Talley Industries, Inc. and certain Talley subsidiary companies. The suit relates to TRW's 1989 purchase of Talley's air bag business. In the complaint, TRW claimed that, among other violations of TRW's rights, Talley breached the non-compete provision contained in the purchase agreement by providing products and services to competitors of TRW. As a result of the breach, TRW exercised its rights under the agreement and the license from Talley to TRW to make a one-time payment of $26.5 million to Talley for a paid-up royalty-free license to use Talley's air bag patents and technology. On March 1, 1994, Talley filed an answer and counterclaims against TRW alleging that TRW had acted improperly in making the $26.5 million payment and requesting that TRW be ordered to pay immediately to Talley the value of all anticipated royalties, claimed by Talley to be not less than $250 million. On May 19, 1994, the court granted Talley's motion for an injunction requiring TRW to continue to make quarterly royalty payments pursuant to the 1989 asset purchase agreement and ancillary agreements pending trial of TRW's claims. On April 5, 1995, trial began before a jury on TRW's claims and Talley's counterclaims. On May 30, 1995, at the close of all the evidence, the trial judge directed a verdict against TRW on TRW's claims against Talley, ruling that there was not sufficient evidence to send TRW's claims to the jury. However, the judge allowed Talley's counterclaims to go to the jury. On June 6, 1995, the jury entered its verdict that Talley was entitled to the present value of the future royalty stream in the sum of $138 million on the contract claim, but that TRW had not acted in bad faith and that the technology on which royalties were due was limited to that in existence when TRW purchased Talley's air bag business. Judgment was entered against TRW on June 27, 1995 and TRW timely filed a notice of appeal on July 12, 1995. On July 26, 1995, the trial judge entered an order requiring that TRW continue to pay quarterly royalty payments to Talley as they become due, notwithstanding the fact it filed an appropriate bond in connection with its notice of appeal. TRW immediately appealed the judge's ruling requiring that TRW continue to pay the royalties pending appeal; however, the 9th Circuit U.S. Court of Appeals denied TRW's appeal without prejudice and accelerated the schedule for the appeal on the judge's decision directing a verdict against TRW in connection with TRW's claims against Talley. The judgment against TRW is not expected to have a material financial effect on the Company. Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) Exhibits: 11 Computation of Earnings Per Share -- Unaudited. 27 Financial Data Schedule. 11 12 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, No. 33-42870, filed September 20, 1991, and No. 33-61711, filed September 15, 1995). (b) Reports on Form 8-K: No report on Form 8-K was filed during the quarter for which this report is filed. 12 13 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: November 9, 1995 By: /s/ Martin A. Coyle -------------------- Martin A. Coyle Executive Vice President and Secretary Date: November 9, 1995 By: /s/ Ronald D. Sugar -------------------- Ronald D. Sugar Executive Vice President and Chief Financial Officer 13 14 FORM 10-Q Quarterly Report for Quarter Ended September 30, 1995 Exhibit Index
Exhibit No. Description Page No. - ----------- ----------- -------- 11 Computation of Earnings Per Share -- Unaudited. 15 27 Financial Data Schedule. 16 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, No. 33-42870, filed September 20, 1991, and No. 33-61711, filed September 15, 1975). 17
14 EX-11 2 EXHIBIT 11 1 Exhibit 11 TRW Inc. and Subsidiaries -------------------------- COMPUTATION OF EARNINGS PER SHARE - UNAUDITED --------------------------------------------- (In Millions Except Per Share Amounts)
Nine Months Ended September 30 ------------------------------ PRIMARY 1995 1994 - ------- ------ ------ Net earnings $331.4 $232.5 Less preference dividend requirements 0.5 0.5 ------ ------ Net earnings applicable to common shares and common share equivalents $330.9 $232.0 ====== ====== Average common shares outstanding 65.2 64.5 Stock options and performance share rights, based on the treasury stock method using average market price 1.4 0.7 ------ ------ Average common shares and common share equivalents 66.6 65.2 ====== ====== Primary earnings per share $ 4.97 $ 3.56 ====== ====== FULLY DILUTED - ------------- Net earnings applicable to common shares and common share equivalents $330.9 $232.0 Dividends assuming conversion of other dilutive securities: (A) Dilutive preference dividends 0.5 0.5 ------ ------ Net earnings applicable to fully diluted shares $331.4 $232.5 ====== ====== Average common shares outstanding 65.2 64.5 Common shares assuming conversion of other dilutive securities: (A) Dilutive preference shares 0.6 0.7 Stock options and performance share rights, based on the treasury stock method using closing market price if higher than average market price 1.4 0.8 ------ ------ Average fully diluted shares 67.2 66.0 ====== ====== Fully diluted earnings per share $ 4.94 $ 3.52 ====== ======
(A) Assuming the conversion of the Serial Preference Stock II - Series 1 and Series 3. EX-27 3 EXHIBIT 27
5 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 81 0 1,428 0 535 2,356 5,805 3,284 5,813 1,974 568 41 0 0 2,092 5,813 7,709 7,709 6,199 6,199 0 0 76 530 199 331 0 0 0 331 4.97 4.94
EX-99 4 EXHIBIT 99 1 Exhibit 99 TRW Inc. and Subsidiaries Computation of Ratio of Earnings to Fixed Charges - Unaudited (In millions except ratio data)
Nine Months Years Ended December 31 ended --------------------------------------------------- September 30, 1995 1994 1993 1992 1991 1990 ------------------ ------ ------ ------ ------- ------ Earnings(loss) before income taxes $530.3 $534.5 $359.1 $347.6 $(129.4)(A) $343.1 Unconsolidated affiliates 1.8 (0.6) 0.7 (0.9) (1.0) (13.2) Minority earnings 7.5 5.2 5.7 2.6 (7.8) (0.5) Fixed charges excluding capitalized interest 120.1 160.9 194.0 227.1 254.3 252.0 ------ ------ ------ ------ ------- ------ Earnings $659.7 $700.0 $559.5 $576.4 $116.1 $581.4 ------ ------ ------ ------ ------- ------ Fixed Charges: Interest expense $76.2 $104.8 $137.8 $162.9 $189.6 $186.9 Capitalized interest 3.8 6.6 7.9 12.7 10.1 7.6 Portion of rents representative of interest factor 43.1 54.7 54.0 64.0 64.4 64.6 Interest expense of unconsolidated affiliates 0.8 1.4 2.2 0.2 0.3 0.5 ------ ------ ------ ------ ------- ------ Total fixed charges $123.9 $167.5 $201.9 $239.8 $264.4 $259.6 ------ ------ ------ ------ ------- ------ Ratio of earnings to fixed charges 5.3x 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-----