-----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, INJmzTehOiBl/rHxcFdU56jLusJ+Y3OlqAkv8jYCQKybAYlHKlX3+kFUquUHEywN c8YWcqek/sNRw7dkavWgug== 0000950128-96-000597.txt : 19961115 0000950128-96-000597.hdr.sgml : 19961115 ACCESSION NUMBER: 0000950128-96-000597 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19961113 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTINGHOUSE ELECTRIC CORP CENTRAL INDEX KEY: 0000106413 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 250877540 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00977 FILM NUMBER: 96662403 BUSINESS ADDRESS: STREET 1: WESTINGHOUSE BLDG STREET 2: 11 STANWIX STREET CITY: PITTSBURGH STATE: PA ZIP: 15222 BUSINESS PHONE: 4122442000 FORMER COMPANY: FORMER CONFORMED NAME: WESTINGHOUSE ELECTRIC & MANUFACTURING CO DATE OF NAME CHANGE: 19710510 8-K 1 WESTINGHOUSE ELECTRIC 1 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 (Date of earliest event reported): November 13, 1996 WESTINGHOUSE ELECTRIC CORPORATION --------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 1-977 25-0877540 - ------------------------- ---------------- ---------------------- (State or other juris- (Commission File (IRS Employer diction of incorporation) Number) Identification Number) Westinghouse Bldg.; 11 Stanwix St., Pittsburgh, PA. 15222-1384 - --------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (412) 244-2000 -------------- Page 1 of 14 Pages Exhibit Index on Page 4 2 Item 5. Other Events ------------ On November 13, 1996, the registrant issued two press releases, copies of which are attached hereto as Exhibit 99.1 and 99.2 and are incorporated in their entirety. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits ------------------------------------------------------------------ (c) Exhibits A press release issued by the registrant on November 13, 1996 announcing the spin-off of its industrial business, is filed as Exhibit 99.1 to this Report. A press release issued by the registrant on November 13, 1996 announcing the elimination of 1,100 positions and a charge of approximately $125 million to cover severance programs, is filed as Exhibit 99.2 to this Report. Page 2 of 14 Pages 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WESTINGHOUSE ELECTRIC CORPORATION (Registrant) By: /s/ LOUIS J. BRISKMAN ----------------------------- Louis J. Briskman Senior Vice President and General Counsel Date: November 13, 1996 Page 3 of 14 Pages 4 EXHIBIT INDEX
Exhibit No. Description Sequential Page No. 99.1 A press release issued by the Company on November 13, 1996 announcing the spin-off of its industrial business. 5 99.2 A press release issued by the Company on November 13, 1996 announcing the elimination of 1,100 positions and a charge of approximately $125 million. 11
Page 4 of 14 Pages EX-99.1 2 WESTINGHOUSE ELECTRIC 1 Exhibit 99.1 Contact: Mimi Limbach Kevin Ramundo Gil Schwartz Westinghouse Westinghouse CBS Trade Press (212) 975-2081 (212) 975-5418 (212) 975-2121 Vaughn Gilbert Roy Morrow Westinghouse Westinghouse Industrial Trade Press Pittsburgh & Communities Press (412) 642-5564 (412) 642-3005 WESTINGHOUSE ANNOUNCES SPIN-OFF OF INDUSTRIAL BUSINESS PITTSBURGH, Nov. 13--Westinghouse Electric Corporation (NYSE:WX) reported today that its Board of Directors approved a plan to separate its $4.6 billion industrial business by way of a tax-free spin-off to shareholders, forming a new publicly-traded company to be called Westinghouse Electric Company (for brevity, hereafter referred to as WELCO). It also plans a public offering by Thermo King of up to 20 percent of the stock of Thermo King, its transport temperature control company, which will become a majority-owned subsidiary of WELCO. Commenting on the WELCO spin-off, Michael H. Jordan, Chairman and Chief Executive Officer of Westinghouse Electric Corporation, said: "We will create a company with several significant advantages. The new company will focus on two major technologies: transport temperature control and power generation, including nuclear. Well capitalized and with strong investment programs for each of its businesses, WELCO will be a reliable, high-performing supplier to its customers. With historical obligations now clearly defined and a rapidly declining cost base, WELCO will be particularly attractive to investors." 2 2 The remaining business of Westinghouse Electric Corporation will consist of its $4.2 billion broadcasting company which has major holdings in radio, television broadcasting and syndication, and cable. Headquarters for WELCO will be Pittsburgh, Pennsylvania, the current home of Westinghouse Electric Corporation. The broadcasting company will be headquartered in New York. After the spin-off, each company will have its own board of directors, officers, and publicly-traded stock. THE SEPARATION PLAN Commenting on the separation decision, Mr. Jordan said, "We will create for our shareholders two companies with solid market positions and first-rate operations. They will be structured and financed to compete and win in their respective markets, with the management talent and investment potential to provide maximum value and return to all of our shareholders." For the past several months, the Westinghouse management team has been addressing various options with the objective of: 1. Maximizing the value to shareholders of each of its major businesses: broadcasting, power systems, and Thermo King. 2. Rationalizing the structure to recognize that Westinghouse's broadcasting and industrial businesses are operating in vastly different environments and are being managed as two separate companies today. 3 3 3. Discharging obligations of the past in the most economically favorable manner. 4. Optimizing the approximate $1.8 billion tax net operating loss carry forward (NOL). After reviewing a number of options, the management team recommended, and the Board of Directors approved, a plan that is expected to maximize the long-term after-tax value for Westinghouse shareholders. The plan capitalizes each business appropriately to reflect respective business opportunities and risks. Specifically, the broadcast company will retain all debt obligations of the current Westinghouse Electric Corporation as well as the tax NOL. WELCO will assume most of the unfunded pension obligations and other non-debt obligations ("legacies") generated by Westinghouse's industrial companies in earlier years. The proceeds of the Thermo King public offering will provide initial cash funding for WELCO. Commenting on the benefits of the proposed transaction, Fredric Reynolds, Westinghouse's Executive Vice President and Chief Financial Officer, said, "This is a pragmatic structure that creates real strategic and operational advantages for the two companies, while maximizing benefits for our shareholders. For our broadcast company, it creates a very attractive pure-play media stock that maximizes the value of the NOL. For our industrial company, it launches WELCO with a strong balance sheet and illuminates the significant value of Thermo King to both our existing shareholders and new investors." Completion of the separation is subject to a number of conditions, including a favorable ruling from the Internal Revenue Service that the transaction will not be taxable to Westinghouse's shareholders or to Westinghouse and registration of the WELCO stock with the Securities & Exchange Commission. The company anticipates it will take approximately nine months to formally separate the two companies, with the planned Thermo King public offering taking place prior to the formal separation. 4 4 THE BROADCASTING COMPANY After the spin-off, Westinghouse Electric Corporation (the current parent company) will consist of CBS Inc., the largest television and radio broadcaster; Group W Satellite Communications Company, a leading cable television marketing and distribution company; and Infinity Broadcasting when this previously-announced acquisition is completed. With approval of the U.S. Department of Justice announced yesterday, closing of the Infinity transaction is expected by end of this year, subject to FCC approval and the approval of Westinghouse and Infinity Shareholders. Mr. Jordan said, "We believe that our Broadcasting Company is superbly positioned to provide attractive long-term growth. Under the leadership of Peter Lund, CEO of CBS, and his management team, our TV network and station business is well on the way to a major turnaround. In radio, one of the fastest growing broadcast media, CBS and Infinity each continues to outpace the industry's revenue growth and operating margins. With Mel Karmazin, CEO of Infinity Broadcasting, at the helm of our radio operations after the acquisition is completed, we are confident that excellent performance will continue." THE NEW WESTINGHOUSE ELECTRIC COMPANY (WELCO) WELCO will consist of four business units, each with significant market positions and strong technology leadership in its respective industries: Thermo King, Power Generation, Energy Systems and Government Operations. Thermo King is the world leader in mobile transport temperature control equipment for trucks and trailers and is a strong participant in the related markets for bus air-conditioning and seagoing containers. Thermo King's product quality, outstanding service support and global presence are expected to continue its outstanding revenue and profit growth over the next decade. 5 5 Westinghouse Power Generation holds market and technology leadership positions for steam and combustion turbines in a global market expected to experience 60% growth in new capacity additions over the next ten years. Its technology represents 25 percent of the world's installed power generation capacity--the second largest worldwide. Although it faces a difficult domestic market, Westinghouse Power Generation maintains its strong positions in the high-growth markets of Asia and Latin America that are expected to yield sustained profitable growth. Westinghouse Energy Systems helped pioneer the commercial nuclear power business and today holds the premier position for nuclear fuel, services and technology in the $9 billion annual global market. The unit has an unparalleled record of supporting the nuclear utility industry to achieve high levels of safety, operating, and cost performance. It has translated its strong global franchise into performance and market leadership. Westinghouse Government Operations manages Department of Energy sites and Army chemical de-militarization operations as well as provides development and support services for the Navy's nuclear powered vessels. The unit's strong nuclear technology base and its experience in handling, stabilizing and safety storing nuclear waste have resulted in contracts that extend beyond the turn of the century and position it for a significant share of this growing business. Concurrent with the separation plans, Westinghouse announced that it is divesting its Security Systems businesses and restructuring its Pittsburgh corporate headquarters and other industrial businesses to significantly reduce WELCO's overhead and operating costs. The staffs of the corporate and industrial group headquarters and a number of administrative functions in the business units will be consolidated. Several operations and processes in the Energy Systems business unit have also been reengineered to improve productivity and to 6 6 address changing market conditions in the power industry. Total personnel reductions will be approximately 1100, about five percent of WELCO's workforce, excluding its government operations employees. A one-time restructuring charge of approximately $125 million will be taken in the 4th quarter to cover severance and related costs. MANAGEMENT Michael H. Jordan will be Chairman and CEO of the broadcasting company and non-executive Chairman of WELCO for a transition period. A successor to Mr. Jordan as chief executive officer of WELCO will be chosen prior to the separation. Until the separation, Mr. Jordan will continue to serve as Chief Executive Officer of both WELCO and the broadcast company. He will be assisted by the current operating management of the two companies. The Westinghouse Board of Directors has appointed Gary M. Clark, President of Westinghouse, to the additional post of Vice Chairman. Mr. Clark will work closely with Mr. Jordan and Francis J. Harvey, Chief Operating Officer of WELCO, to ensure a smooth transition and to further our strong partnership with our customers and host communities. Editor's Note: Westinghouse will hold a news conference at 2:00 P.M. EST at CBS Headquarters at 51 West 52nd Street, 19th Floor in Studio 19. The news conference will also be available by teleconference. Reporters can call 1-800-255-5050 in the United States or 1-312-864-5041 from outside the U.S. The news conference will be transmitted by satellite: Telstar 402, Transponder 14, C-band, Reference Number ATT 1107-0013. ##1000-1079## 11/13/96 EX-99.2 3 WESTINGHOUSE ELECTRIC 1 Exhibit 99.2 Contact: Mimi Limbach Kevin Ramundo Telephone: (212) 975-2081 (212) 975-5418 FOR USE: IMMEDIATE WESTINGHOUSE STREAMLINES INDUSTRIES & TECHNOLOGY BUSINESS - - Approximately 1,100 positions to be eliminated - - Staff support functions reorganized consistent with smaller, more focused business portfolio - - Reductions in Power Systems reflect impact of deregulation and competitive conditions PITTSBURGH, Nov. 13 - Westinghouse Electric Corporation today announced it will streamline its Industries and Technology Group by reorganizing staff support functions and reducing the number of employees in its Energy Systems and Power Generation units. In total, approximately 1,100 positions, including approximately 300 from this fall's voluntary separation program, will be eliminated, a figure equal to five percent of employees, excluding those in our government operations. The workforce reduction is in response to the Group's smaller size following divestitures earlier this year, the current softness in the demand for power plant services, and the need to strengthen its competitive position. Westinghouse expects to take a charge of approximately $125 million in this year's fourth quarter to cover the cost of the severance programs. 2 2 These actions will reduce the organization's cost structure by approximately $80 million on an annual basis and will generate important efficiency gains which will strengthen the Industries and Technology Group as a stand-alone company. Westinghouse announced today its plans to separate its industrial and broadcasting units by creating separate public companies, each with its own management team, board of directors, and publicly traded stock. In announcing its separation plans, Michael H. Jordan, the company's chairman and chief executive officer, reaffirmed the company's commitment to it industrial portfolio. "The Westinghouse Electric Company, as our industrial and technology businesses will be called, is solid, well-focused, and has excellent growth potential. Today's announcement demonstrates our commitment to these businesses and our customers. Our management team is aggressively working to improve performance and become as even more valuable supplier." The reorganization of the staff support functions follows an extensive three-month study to determine the most efficient and effective way to provide support functions to a smaller, but more focused, portfolio of industrial businesses following the divestiture of the company's defense electronics and office furnishings units earlier this year. The functions included: legal and environment affairs, human resources, finance, information systems, communications, and strategic management. 3 3 According to Francis J. Harvey, the Industries and Technology Group executive vice president and chief operating officer, "Our actions to streamline the Group will provide an even stronger foundation for success as a stand-alone, self-sufficient, and more collaborative organization. We will be more efficient, better able to provide our customers with the best value in technologies, products and services. We are reviewing, rethinking, reshaping, and revitalizing every aspect of our business. When we are finished, we will be a more entrepreneurial company which takes the best of Westinghouse and produces winning results for our employees, customers, and our shareholders." Regarding the Energy Systems unit where many of the job cuts will occur, Mr. Harvey added, "This is a very important business to us. Westinghouse is the leader in serving the nuclear utility industry in the United States and throughout the world. The quality of our products, services, and technology is unmatched. But like our customers, we need to adjust our costs in light of deregulation and increased competition, and we will do so without affecting our ability to serve our customers." Westinghouse will provide severance benefits that include cash based on years of service, extended health care, outplacement services and retaining assistance. The majority of the eliminations are expected to occur by the end of 1996, and the balance by 1997. 4 4 "As necessary as these actions are, the decision to lay-off employees is very difficult. We will provide for those employees directly affected, and help our remaining 40,000 employees understand the unique opportunity we have to create and build a new Westinghouse," Mr. Harvey said. ##1000-1078## 11/13/96 -----END PRIVACY-ENHANCED MESSAGE-----