-----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, phEZHJvw8e2wvRV25N4Cp6Qu2eD5eI1noxeLMZVIUQb3740phLsHuznGnolBYwH3 0J5kDKuIMBrDJfl+go+DCA== 0000109758-94-000002.txt : 19940513 0000109758-94-000002.hdr.sgml : 19940513 ACCESSION NUMBER: 0000109758-94-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CERIDIAN CORP CENTRAL INDEX KEY: 0000109758 STANDARD INDUSTRIAL CLASSIFICATION: 3570 IRS NUMBER: 520278528 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01969 FILM NUMBER: 94527520 BUSINESS ADDRESS: STREET 1: 8100 34TH AVE S CITY: MINNEAPOLIS STATE: MN ZIP: 55425 BUSINESS PHONE: 6128538100 FORMER COMPANY: FORMER CONFORMED NAME: CONTROL DATA CORP /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCIAL CREDIT CO DATE OF NAME CHANGE: 19680910 10-Q 1 10-Q 03/31/94 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C., 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1994 Commission file number 1-1969 CERIDIAN CORPORATION (Exact name of registrant as specified in its charter) Delaware 52-0278528 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8100 34th Avenue South, Minneapolis, Minnesota 55425 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (612)853-8100 (Former name, former address and former fiscal year if changed from last report) 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 The number of shares of registrant's Common Stock, par value $.50 per share, outstanding as of April 30, 1994, was 44,466,968. - 1 - CERIDIAN CORPORATION AND SUBSIDIARIES FORM 10-Q INDEX Pages Part I. Financial Information Item 1. Financial Statements Consolidated Statements of Operations for the three month periods ended March 31, 1994 and 1993 ................................. 3 Consolidated Balance Sheets as of March 31, 1994 and December 31, 1993 .................... 4 Consolidated Statements of Cash Flows for the three month periods ended March 31, 1994 and 1993 ............. 5 Notes to Consolidated Financial Statements .............. 6- 7 In the opinion of the Company, the unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals, except as set forth in the notes to consolidated financial statements) necessary to present fairly the financial position as of March 31, 1994, and results of operations and cash flows for the three month periods ended March 31, 1994 and 1993. The results of operations for the three month period ended March 31, 1994, are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements should be read in conjunction with the notes to consolidated financial statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ................. 8-13 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K .................... 14 Signature ......................................................... 15 Exhibit 11. Statement re computation of per share earnings ........ 16 - 2 - FORM 10-Q PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS Ceridian Corporation (Unaudited) and Subsidiaries For Periods Ended March 31, Three Months 1994 1993 (Dollars in millions, except per share data) Revenue Product sales $ 112.5 $ 109.7 Services 108.8 114.7 Total 221.3 224.4 Cost of revenue Product sales 90.3 88.5 Services 48.3 63.8 Total 138.6 152.3 Gross profit 82.7 72.1 Operating expenses Selling, general and administrative 46.9 43.0 Technical expense 12.8 12.2 Other expense (income) 0.4 -- Earnings before interest and taxes 22.6 16.9 Interest income 1.9 1.6 Interest expense (0.4) (4.0) Earnings before income taxes 24.1 14.5 Income tax provision 1.9 1.6 Net earnings $ 22.2 $ 12.9 Preferred stock dividends 3.2 -- Net earnings available to common stockholders $ 19.0 $ 12.9 Primary earnings per share $ 0.42 $ 0.30 Fully-diluted earnings per share $ 0.40 $ 0.30 Weighted average common shares and equivalents outstanding (000's) Primary 45,584 42,833 Fully-diluted 55,968 42,833 See notes to consolidated financial statements.
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FORM 10-Q CONSOLIDATED Ceridian Corporation BALANCE SHEETS (Unaudited) and Subsidiaries March 31, December 31, Assets 1994 1993 (In Millions) Cash and equivalents $ 120.0 $ 112.4 Short-term investments 78.8 103.4 Trade and other receivables, net 128.7 133.0 Inventories 26.4 30.9 Other current assets 6.3 7.5 Total current assets 360.2 387.2 Investments and advances 28.3 28.2 Property, plant and equipment, net 90.1 88.7 Other noncurrent assets 112.7 111.6 Total assets $ 591.3 $ 615.7 Liabilities And Stockholders' Equity Short-term debt and current portion of long-term obligations $ 1.7 $ 3.1 Accounts payable 33.3 40.0 Customer advances 27.7 47.6 Deferred income 26.2 22.9 Accrued taxes 54.1 54.2 Employee compensation and benefits 38.2 44.4 Restructure reserves, current portion 35.5 44.8 Other accrued expenses 65.9 59.4 Total current liabilities 282.6 316.4 Long-term obligations, less current portion 16.2 16.3 Deferred income taxes 7.2 6.4 Restructure reserves, less current portion 51.1 63.2 Other noncurrent liabilities 101.7 102.1 Stockholders' equity 132.5 111.3 Total liabilities and stockholders' equity $ 591.3 $ 615.7 See notes to consolidated financial statements.
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FORM 10-Q CONSOLIDATED STATEMENTS OF Ceridian Corporation CASH FLOWS (Unaudited) and Subsidiaries For Periods Ended March 31, Three Months 1994 1993 (In Millions) CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 22.2 $ 12.9 Adjustments to reconcile earnings (loss) to net cash provided by (used for) operating activities: Depreciation 6.6 6.6 Amortization of deferred assets 0.9 0.8 Restructure reserves: Reserves utilized (22.2) (30.5) Net change in working capital items: Trade and other receivables (11.9) 12.1 Inventories 4.5 3.2 Other current assets 1.2 (1.9) Accounts payable (6.7) 5.9 Customer advances and deferred income (16.7) (0.2) Other current liabilities 0.4 (5.7) Other (2.4) 1.2 Net cash provided by (used for) operating activities (24.1) 4.4 CASH FLOWS FROM INVESTING ACTIVITIES Expended for capital assets and software (7.7) (6.3) Short-term investments 24.6 18.4 Proceeds from sales of businesses, investments and capital assets 2.0 0.1 Other 0.1 -- Net cash provided by (used for) investing activities 19.0 12.2 CASH FLOWS FROM FINANCING ACTIVITIES Short-term debt, net (1.6) -- Reduction of long-term debt -- (1.8) Proceeds from sale of 5-1/2% Preferred Stock 15.0 -- Preferred stock dividends (3.2) -- Exercise of stock options and other 2.5 0.4 Net cash provided by (used for) financing activities 12.7 (1.4) NET CASH PROVIDED (USED) 7.6 15.2 Cash and equivalents at beginning of period 112.4 88.4 Cash and equivalents at end of period $ 120.0 $ 103.6 See notes to consolidated financial statements.
- 5 - FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements March 31, 1994 (Dollars in millions) (Unaudited) CASH AND SHORT-TERM INVESTMENTS The Company has an arrangement with an independent investment manager to invest its cash in excess of estimated current requirements in investment-grade fixed income securities which may have final maturities of up to two years. Investments which are readily convertible to cash within three months of purchase are classified in the balance sheet as cash equivalents. Investments with longer maturities are considered available- for-sale under FAS 115, adopted January 1994, and reported in the balance sheet as short-term investments. The fair value of short-term investments is not materially different from their amortized cost, and the amount of investments expected to be held more than one year beyond the balance sheet date is not considered material. Net changes in short-term investments, which are shown as investing cash flows in the Statements of Cash Flows, may relate to investment decisions by the independent investment manager as well as to changes in the cash needs of the Company.
STOCKHOLDERS' EQUITY March 31, December 31, 1994 1993 5-1/2% Cumulative Convertible Exchangeable Preferred Stock, $100 par value (liquidation preference of $236.0) Shares issued and outstanding 47,200 $ 4.7 $ 4.7 Common Stock Par value - $.50 Shares authorized - 100,000,000 Shares issued - 44,487,266 and 44,263,369 22.2 22.1 Shares outstanding - 44,403,028 and 44,181,631 Additional paid-in capital 826.2 824.2 Accumulated deficit (710.8) (729.8) Foreign currency translation adjustments (2.0) (2.0) Restricted stock awards (2.1) (2.2) Pension liability adjustment (4.1) (4.1) Treasury stock, at cost (84,238 and 81,738 (1.6) (1.6) common shares) Total stockholders' equity $ 132.5 $ 111.3
- 6 - FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements March 31, 1994 (Dollars in millions) (Unaudited) RECEIVABLES March 31, December 31, 1994 1993 Trade, less allowance $ 66.5 $ 69.2 Unbilled 54.4 45.5 Other 7.8 18.3 Total $128.7 $133.0 The decrease in other receivables is due principally to the collection in January 1994 of a $15.5 receivable representing a commitment by the underwriters of the Company's December 1993 offering of 5 1/2% Preferred Stock to exercise their overallotment option to the extent of an additional 320,000 Depositary Shares. This amount, less certain expenses related to that offering, is presented as a $15.0 financing cash inflow in the accompanying Consolidated Statements of Cash Flows. - 7 - CERIDIAN CORPORATION AND SUBSIDIARIES FORM 10-Q March 31, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations For the quarter ended March 31, 1994, Ceridian Corporation (the "Company") reported net earnings after preferred stock dividends of $19.0 million, or $.40 per fully-diluted share of common stock, on revenue of $221.3 million, compared to net earnings of $12.9 million, or $.30 per common share, on revenue of $224.4 million for the first quarter 1993. The following table sets forth revenue for the Company, its two industry segments and the businesses that comprise those segments for the three month periods ended March 31, 1994 and March 31, 1993, respectively: Periods Ended March 31, Three Months (Dollars in millions) 1994 1993 Information Services Segment Arbitron Company $ 28.3 $ 42.8 Ceridian Employer Services 77.5 61.2 Other Services(1) 4.6 5.2 Total Information Services 110.4 109.2 Defense Electronics Segment Computing Devices International(2) 110.9 115.2 Total Revenue $ 221.3 $ 224.4 _____________________ (1) Primarily consists of revenue from TeleMoney Services and the Company's related computer and network operations, which were sold in May 1994. (2) Responsibility for the Company's Business Information Services operation ("BIS") was transferred to Computing Devices effective January 1, 1994. BIS' results for the 1993 and 1994 periods are included in Computing Devices' results. - 8 - CERIDIAN CORPORATION AND SUBSIDIARIES FORM 10-Q March 31, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations (cont.) The following table sets forth the percentage of the Company's total revenue by industry segment, the gross profit of each of the Company's industry segments as a percentage of that segment's revenue, and certain items in the consolidated statements of operations as a percentage of total revenue, for the periods indicated. Quarter Ended March 31, 1994 1993 Revenue: Information Services 49.9% 48.7% Defense Electronics 50.1% 51.3% Total revenue 100.0% 100.0% Gross profit: Information Services 55.3% 47.3% Defense Electronics 19.4% 17.7% Total gross profit 37.3% 32.1% Operating expenses Selling, general & administrative 21.1% 19.2% Technical 5.8% 5.4% Other expense (income) 0.2% -- Total operating expenses 27.1% 24.6% Earnings before interest & taxes 10.2% 7.5% Interest income (expense) 0.7% (1.1%) Earnings before income taxes 10.9% 6.4% Income tax provision 0.9% 0.7% Preferred stock dividends 1.4% -- Net earnings available to common stockholders 8.6% 5.7% - 9 - CERIDIAN CORPORATION AND SUBSIDIARIES FORM 10-Q March 31, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations (cont.) Revenue. The slight increase in Information Services' revenue from the first quarter 1993 to the first quarter 1994 reflected revenue growth in Employer Services that was almost entirely offset by a revenue decrease in Arbitron. The largest portion of the revenue growth in Employer Services related to its payroll tax filing operations, reflecting the October 1993 acquisition of the Systems Tax Service ("STS") tax filing business and a higher percentage of Employer Services' payroll processing customers electing to also utilize its tax filing service, thereby resulting in increased fees and increased interest income due to larger average balances of payroll tax filing deposits in the 1994 quarter. Revenue from Employer Services' payroll processing operations increased approximately 10%, benefitting from new customer installations and an increased retention rate for existing customers. Employer Services' revenue and profitability tend to be the greatest in the first and fourth quarters of each year because of customers' year-end reporting requirements and greater tax filing deposit balances in the first quarter. The acquisition of STS has increased the first quarter orientation of this seasonality. The revenue decrease in Arbitron was principally due to the discontinuance of Arbitron's television ratings service, which had provided $13.3 million of revenue in the first quarter 1993, effective the end of 1993. Also contributing to the decrease was the year-end 1993 transfer of contracts with certain advertising agencies for commercial monitoring services from Arbitron to the Competitive Media Reporting joint venture ("CMR"), which decreased Arbitron's revenue in the quarterly comparison by about $3 million. Revenue from the other aspects of Arbitron's business, principally its radio ratings service, increased approximately 7% in the quarterly comparison. The decrease in Computing Devices' revenue in the quarterly comparison was due to the near completion at year-end 1993 of a contract to manufacture equipment for Control Data Systems, Inc. and the July 1993 sale of the Company's Barrios Technology subsidiary, activities which together had provided $15.1 million of revenue in the first quarter 1993. Partially offsetting this decrease were increased billings under the Iris contract to provide a communications system to the Canadian defense department. Gross Margin. The most significant factor in the gross margin improvement in Information Services was the discontinuance of Arbitron's unprofitable television ratings service at the end of 1993. Employer Services' gross margin increased modestly in the quarterly comparison, primarily reflecting the gross margin improvement in its tax filing operations as a result of the acquisition of STS, the successful consolidation of tax filing activity on STS' more highly automated system and generally higher business volume. - 10 - CERIDIAN CORPORATION AND SUBSIDIARIES FORM 10-Q March 31, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations (cont.) The improvement in Computing Devices' gross margin in the quarterly comparison was primarily due to reduced revenue from the manufacture of equipment for Control Data Systems, which had lower gross margins than most other aspects of Computing Devices' business, increased gross margins on the Iris contract as certain developmental milestones have been achieved beginning in the second half of 1993, and actions taken in 1993 to reduce employment levels in Computing Devices' U.S. operations. Partially offsetting these improvements was the gross margin decrease in Computing Devices' U.K. operations, due largely to decreased demand for the production of an avionics computer for the Hawk aircraft. Operating Expenses. The Company-wide increase in selling, general and administrative ("SG&A") expenses, both in dollars and as a percentage of revenue, reflected increases in both industry segments. In Information Services, SG&A expenses increased from 30.7% of revenue in the first quarter 1993 to 33.3% of revenue in the first quarter 1994. The primary factor in this percentage increase was the sizeable decrease in Arbitron's revenue as a result of the discontinuance of its television ratings service, and the proportionately smaller decrease in SG&A expenses. To a significant degree, this reflects the past dependence of the radio and television services on a common support structure and the need to continue much of that structure for the radio ratings service. Although the dollar amount of SG&A expenses, particularly selling expense, increased in Employer Services in the quarterly comparison, these expenses decreased as a percentage of revenue. SG&A expenses were reduced in both dollars and as a percentage of revenue in Other Services, reflecting actions affecting the Company's network operations. Computing Devices' SG&A expenses increased from 7.5% to 8.0% of revenue in the quarterly comparison, primarily due to increased selling expense in its Business Information Services operation. Technical expense for the Company, which includes research and development, product improvement and bid and proposal costs, increased from 5.4% of revenue in the first quarter 1993 to 5.8% of revenue in the first quarter 1994. Contributing to this increase was the rise in research and development expenses in Computing Devices, which increased from 4.6% of revenue in the first quarter 1993 to 5.3% of revenue in the first quarter 1994. Other expense in the first quarter 1994 primarily consisted of the Company's share of the loss of the CMR joint venture. Earnings Before Interest and Taxes. The increase in the Company's earnings before interest and taxes ("EBIT") from the first quarter 1993 to the first quarter 1994 was primarily due to increased EBIT in the Information Services segment, reflecting increased EBIT in both Employer Services and Arbitron, and reduced losses in Other Services. Information - 11 - CERIDIAN CORPORATION AND SUBSIDIARIES FORM 10-Q March 31, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations (cont.) Services' EBIT increased from 10.2% of revenue in the first quarter 1993 to 17.1% in the first quarter 1994. Over the same period, Computing Devices' EBIT increased from 5.7% to 6.1% of revenue. Interest Income and Expense and Taxes. The decrease in interest expense from the first quarter 1993 to the first quarter 1994 reflected the redemption at the end of 1993 of $163.5 million in principal amount of the Company's 8 1/2% Convertible Subordinated Debentures with the majority of the proceeds of the sale of the Company's 5 1/2% Cumulative Convertible Exchangeable Preferred Stock ("5 1/2% Preferred Stock"). The increase in interest income in the quarterly comparison reflected the higher balances of cash, cash equivalents and short-term investments in the first quarter 1994 as a result of the 5 1/2% Preferred Stock offering. The provisions for income taxes for the first quarter of 1993 and 1994 primarily represent tax charges related to the Company's international operations. Financial Condition The Company's cash, cash equivalents and short-term investments decreased from $215.8 million at December 31, 1993 to $198.8 million at March 31, 1994. The portion of the December 31 balance that represented amounts subject to restrictions was $22.7 million, while the comparable March 31 figure was $3.1 million. The majority of the restricted cash at year-end 1993 represented the remaining portion of a customer advance received in connection with Computing Devices' Iris contract, while the restricted cash at March 31 represented amounts pledged in connection with Employer Services' interest rate swap agreements and in connection with letters of credit required by Computing Devices' Canadian subsidiary. In April 1994, the Company received $34 million as the last scheduled customer advance in connection with the Iris contract, and in May 1994 received $24.7 million from the sale of its TeleMoney business. In connection with that sale, the Company has agreed to pay various costs associated with the transaction and the business, and to purchase future services from the business on a take-or-pay basis. During the first three months of 1994, operating cash flows, consisting for the most part of net earnings adjusted to a cash basis, restructuring payments and the net change in working capital items utilized $24.1 million of cash, after having provided $4.4 million of cash in the first quarter 1993. Net earnings adjusted to a cash basis provided cash of $27.3 million in the first quarter 1994 and $21.5 million in the first quarter 1993. An increase in working capital utilized $29.2 million of cash in the 1994 period, while a reduction in working capital provided $13.4 million of cash in the 1993 period. Reflected in the first quarter 1994 cash utilized in connection with working capital items was a $19.9 million reduction in customer advances and an $11.9 million increase in trade and other receivables. Both of these changes principally related to Computing Devices' Iris contract, as the most recent in a series of semiannual - 12 - CERIDIAN CORPORATION AND SUBSIDIARIES FORM 10-Q March 31, 1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition (cont.) customer advances in connection with that contract was utilized. Payments of restructure liabilities were $22.2 million and $30.5 million in the first quarters of 1994 and 1993, respectively. The first quarter 1994 restructure payments included amounts attributable to the discontinuance of Arbitron's television ratings service, amounts payable in connection with excess facilities, and amounts paid in connection with the Company's disposition of its remaining interests in Business and Technology Centers ("BTCs") and BTC partnerships. At March 31, 1994, the Company reported accrued restructure liabilities of $86.6 million. The portion of these liabilities estimated to require cash outlays during the remainder of 1994 is approximately $25 million. Investing activities provided $19.0 million of cash during the first quarter 1994 and $12.2 million in the first quarter 1993. Cash provided from the of short-term investments totalled $24.6 million and $18.4 million in the 1994 and 1993 first quarter, respectively, as the Company's independent investment manager reduced average maturities in both periods. Amounts expended for capital assets and software in those periods totalled $7.7 million and $6.3 million, in the respective periods. Cash flows from financing activities produced $12.7 million in cash during the first quarter 1994, primarily due to the receipt of an additional $15.0 million in net cash proceeds from the closing of the sale by the Company of additional shares of 5 1/2% Preferred Stock, as a result of the underwriters' exercise of their overallotment option. During the first quarter 1993, financing activities used $1.4 million of cash. Under the Iris contract, Computing Devices has received semiannual advance payments from the Canadian Government, generally in April and October of each year, each such payment covering a substantial portion of the expected contract billings prior to the next scheduled advance payment. As noted, the last of these advance payments was received in April 1994. Computing Devices is now receiving monthly progress payments under that contract, each of which will be subject to a percentage holdback. On the achievement of each quarterly milestone, 50% of the cumulative holdback will be released. This change in the contractual payment mechanism during 1994 will substantially increase the working capital requirements of Computing Devices in 1994 and future years as compared to 1993. During May 1994, the Company expects to conclude a one year extension of its $35 million domestic revolving credit facility which was otherwise scheduled to expire on May 31, 1994. Under the expected terms of the extension, the Company would be provided with credit availability equal to the lesser of $35 million or 75% of the amount of its eligible accounts receivable until May 30, 1995, all of which may be used to obtain revolving loans or standby letters of credit which may not have a final expiration date later than May 30, 1996. The Company expects that the credit facility as extended will be unsecured. At April 30, 1994, there were $4.5 million in letters of credit and no revolving loans outstanding under the facility. - 13 - CERIDIAN CORPORATION AND SUBSIDIARIES FORM 10-Q March 31, 1994 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. Exhibit Description 11 Statement re computation of per share earnings - 14 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q for the period ended March 31, 1994, to be signed on its behalf by the undersigned thereunto duly authorized. CERIDIAN CORPORATION Registrant Date: May 12, 1994 /s/L. D. Gross L. D. Gross Vice President and Corporate Controller (Principal Accounting Officer) - 15 - EXHIBIT INDEX Exhibit No. Description Code 11. Statement re computation of earnings (loss) per share E Legend: (E) Electronic Filing EX-11 2 EXHIBIT 11 Exhibit 11 CERIDIAN CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS (LOSS) PER SHARE (Amounts in millions, except per share data) Three Months For the periods ended March 31, 1994 1993 Net earnings available to common 19.0 $ $ 12.9 stockholders - primary Restore dividends on convertible preferred stock (a) 3.2 0.0 Net earnings 22.2 12.9 Restore interest expense on convertible debentures (a) (b) 0.0 3.5 Net earnings for fully-diluted earnings 22.2 $ $ 16.4 per share Weighted average common shares 44.4 42.8 outstanding Common share equivalents from stock options (c) 1.2 0.7 Weighted average common shares and 45.6 43.5 equivalents outstanding - primary Shares issuable assuming conversion of 10.4 0.0 preferred stock (a) Shares issuable assuming conversion of debentures (a) 0.0 6.8 Weighted average common shares and equivalents outstanding - adjusted for full dilution 56.0 50.3 Net earnings available to common stockholders - primary 19.0 $ $ 12.9 Weighted average common shares and equivalents outstanding - primary (c) 45.6 43.5 Primary earnings per share $ $ 0.42 0.30 Net earnings for fully-diluted earnings per share $ 22.2 $ 16.4 Weighted average common shares and equivalents outstanding - adjusted for full dilution 56.0 50.3 Fully-diluted earnings per share (c) $ 0.40 $ 0.33 (a) Convertible preferred stock issued and convertible debentures redeemed in December 1993. (b) Net of income tax effect which is nil. (c) Common stock equivalents and shares issuable assuming conversion of convertible debentures not reported in 1993 because the result is anti-dilutive or additional dilution is less than 3% as prescribed by APBO No. 15. This calculation is submitted in accordance with Regulation S-X item 601(b)(11). - 1 - -----END PRIVACY-ENHANCED MESSAGE-----