-----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, O3OdgXOVB1Q69HWXnswcjlkKnuWCrBZ9AdKdGicYrWa7nbzENcrfvoHnXLqt/Nd2 HVqx4bV2AAUZCVcHbP+YxA== 0001047469-98-029584.txt : 19980807 0001047469-98-029584.hdr.sgml : 19980807 ACCESSION NUMBER: 0001047469-98-029584 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980806 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CERIDIAN CORP CENTRAL INDEX KEY: 0000109758 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 520278528 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01969 FILM NUMBER: 98678100 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 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 ------------------------------------------------ Commission file number 1-1969 -------------------------------------------------------- - -------------------------------------------------------------------------------- CERIDIAN CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 52-0278528 - -------------------------------------------------------------------------------- (State or other jurisdiction of (IRS 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 July 31, 1998, was 72,548,741. 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 and six month periods ended June 30, 1998 and 1997 .............................. 3 Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997 ................. 4 Consolidated Statements of Cash Flows for the six month periods ended June 30, 1998 and 1997 .......... 5 Notes to Consolidated Financial Statements ............... 6 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 June 30, 1998, and results of operations for the three and six month periods and cash flows for the six month periods ended June 30, 1998 and 1997. The results of operations for the six month period ended June 30, 1998, 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 ................ 11 Part II. Other Information ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 15 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ................... 16 Signature ........................................................ 17 2 FORM 10-Q PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS Ceridian Corporation (Unaudited) and Subsidiaries - --------------------------------------------------------------------------------------------------------------- For Periods Ended June 30, Three Months Six Months 1998 1997 1998 1997 - --------------------------------------------------------------------------------------------------------------- (Dollars in millions, except per share data) Revenue $ 284.1 $ 261.8 $ 566.4 $ 525.7 Cost of revenue 135.0 130.2 263.9 256.3 --------- --------- --------- --------- Gross profit 149.1 131.6 302.5 269.4 Operating expenses Selling, general and administrative 79.3 79.2 159.8 154.7 Research and development 20.3 11.9 37.7 26.1 Other expense (income) 1.2 1.0 1.8 14.5 --------- --------- --------- --------- Earnings before interest and taxes 48.3 39.5 103.2 74.1 Interest income 2.5 0.5 5.2 1.0 Interest expense (1.5) (2.0) (2.2) (4.1) --------- --------- --------- --------- Earnings before income taxes 49.3 38.0 106.2 71.0 Income tax provision 18.0 1.0 39.1 1.6 --------- --------- --------- --------- Earnings from continuing operations 31.3 37.0 67.1 69.4 Discontinued operations - 11.5 - 22.9 --------- --------- --------- --------- Net earnings $ 31.3 $ 48.5 $ 67.1 $ 92.3 --------- --------- --------- --------- --------- --------- --------- --------- Basic earnings per share Continuing operations $ 0.43 $ 0.46 $ 0.93 $ 0.87 Net earnings $ 0.43 $ 0.60 $ 0.93 $ 1.16 Diluted earnings per share Continuing operations $ 0.42 $ 0.45 $ 0.91 $ 0.85 Net earnings $ 0.42 $ 0.60 $ 0.91 $ 1.14 Shares used in calculations (in thousands) Basic 72,466 80,192 72,260 79,895 Diluted 74,301 81,450 73,965 81,231 - --------------------------------------------------------------------------------------------------------------- See notes to consolidated financial statements.
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FORM 10-Q CONSOLIDATED Ceridian Corporation BALANCE SHEETS (Unaudited) and Subsidiaries - ------------------------------------------------------------------------------ June 30, December 31, Assets 1998 1997 - ------------------------------------------------------------------------------ (In Millions) Cash and equivalents $ 202.4 $ 268.0 Trade and other receivables, net 374.5 317.5 Current portion of deferred income taxes 129.1 117.6 Other current assets 17.1 17.0 ---------- ---------- Total current assets 723.1 720.1 Investments and advances 2.8 8.7 Property, plant and equipment, net 85.0 79.6 Goodwill and other intangibles, net 329.2 244.3 Software and development costs, net 11.0 9.7 Prepaid pension cost 99.9 96.7 Deferred income taxes, less current portion 47.1 81.9 Other noncurrent assets 6.9 2.3 ---------- ---------- Total assets $ 1,305.0 $ 1,243.3 ---------- ---------- ---------- ---------- - ------------------------------------------------------------------------------ Liabilities and Stockholders' Equity - ------------------------------------------------------------------------------ Short-term debt and current portion of long-term obligations $ 12.0 $ 2.2 Accounts payable 53.1 57.8 Drafts and settlements payable 144.4 111.9 Customer advances 13.5 9.9 Deferred income 34.7 35.9 Accrued taxes 79.8 79.8 Employee compensation and benefits 54.9 66.1 Other accrued expenses 93.1 115.2 ---------- ---------- Total current liabilities 485.5 478.8 Long-term obligations, less current portion 68.2 0.8 Restructure reserves, less current portion 31.7 30.8 Employee benefit plans 71.6 69.1 Other noncurrent liabilities 69.2 75.5 Stockholders' equity 578.8 588.3 ---------- ---------- Total liabilities and stockholders' equity $ 1,305.0 $ 1,243.3 ---------- ---------- ---------- ---------- - ------------------------------------------------------------------------------ See notes to consolidated financial statements.
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FORM 10-Q CONSOLIDATED Ceridian Corporation STATEMENT OF CASH FLOWS (Unaudited) and Subsidiaries - ----------------------------------------------------------------------------- For Periods Ended June 30, Six Months 1998 1997 - ----------------------------------------------------------------------------- (In millions) CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 67.1 $ 92.3 Adjustments to reconcile net earnings to net cash provided by (used for) operating activities: Earnings from discontinued operations - (22.9) Deferred income tax provision 33.3 - Depreciation and amortization 24.9 29.8 Restructure reserves utilized 0.4 (17.9) Other (1.4) 2.4 Net change in working capital items: Trade and other receivables (19.7) (53.8) Accounts payable (10.6) 1.8 Drafts and settlements payable 32.6 (1.8) Employee compensation and benefits (11.2) (12.5) Accrued taxes (13.3) 5.9 Net assets of discontinued operations - 21.8 Other current assets and liabilities (9.2) 3.4 ----------- ----------- Net cash provided by (used for) operating activities 92.9 48.5 - ----------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Expended for property, plant and equipment (22.5) (17.7) Expended for software and development costs (10.4) (21.4) Expended for investments in and advances to businesses, less cash acquired (154.6) (23.8) Proceeds from sales of businesses and assets 38.1 - ----------- ----------- Net cash provided by (used for) investing activities (149.4) (62.9) - ----------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Revolving credit and overdrafts, net 80.0 (25.0) Repayment of other debt (2.8) (2.4) Repurchase of stock (113.3) (11.9) Exercise of stock options and other 27.0 9.7 ----------- ----------- Net cash provided by (used for) financing activities (9.1) (29.6) - ----------------------------------------------------------------------------- NET CASH PROVIDED (USED) (65.6) (44.0) Cash and equivalents at beginning of period 268.0 71.1 ----------- ----------- Cash and equivalents at end of period $ 202.4 $ 27.1 ----------- ----------- ----------- ----------- - ----------------------------------------------------------------------------- See notes to consolidated financial statements.
5 FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements June 30, 1998 (Dollars in millions) (Unaudited) COMPREHENSIVE INCOME FAS 130, "Reporting Comprehensive Income," requires that the sum of net earnings and the change in certain other equity accounts, namely foreign currency translation adjustment and pension liability adjustment, be disclosed as "comprehensive income" in 1998 and for the corresponding 1997 period. The new disclosure requirement has no effect on the accounting for the elements which comprise comprehensive income.
Ending Beginning Balance Balance Net Second Quarter 1998 Change in accumulated other comprehensive income: Foreign currency translation $ 0.4 $ 0.6 Pension liability adjustment (9.5) (9.5) ------------------------------ Total $ (9.1) $ (8.9) $ (0.2) Net earnings 31.3 ------------ Comprehensive income $ 31.1 ------------ ------------ Second Quarter 1997 Change in accumulated other comprehensive income: Foreign currency translation $ (0.4) $ (0.4) Pension liability adjustment (6.3) (6.3) ------------------------------ Total $ (6.7) $ (6.7) $ - Net earnings 48.5 ------------ Comprehensive income $ 48.5 ------------ ------------ Year to Date 1998 Change in accumulated other comprehensive income: Foreign currency translation $ 0.4 $ 2.0 Pension liability adjustment (9.5) (9.5) ------------------------------ Total $ (9.1) $ (7.5) $ (1.6) Net earnings 67.1 ------------ Comprehensive income $ 65.5 ------------ ------------ Year to Date 1997 Change in accumulated other comprehensive income: Foreign currency translation $ (0.4) $ 0.4 Pension liability adjustment (6.3) (6.3) ------------------------------ Total $ (6.7) $ (5.9) $ (0.8) Net earnings 92.3 ------------ Comprehensive income $ 91.5 ------------ ------------
6 CERIDIAN CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements June 30, 1998 (Dollars in millions) (Unaudited)
EARNINGS PER SHARE (shares in thousands) For Periods Ended June 30, Three Months Six Months ----------------------------------------------------- 1998 1997 1998 1997 ----------------------------------------------------- BASIC EARNINGS PER SHARE Earnings from continuing operations applicable to common stock $ 31.3 $ 37.0 $ 67.1 $ 69.4 Weighted average shares 72,466 80,192 72,260 79,895 - -------------------------------------------------------------------------------------------------------------- Earnings per share from continuing operations $ 0.43 $ 0.46 $ 0.93 $ 0.87 - -------------------------------------------------------------------------------------------------------------- Net earnings applicable to common stock $ 31.3 $ 48.5 $ 67.1 $ 92.3 Weighted average shares 72,466 80,192 72,260 79,895 - -------------------------------------------------------------------------------------------------------------- Net earnings per share $ 0.43 $ 0.60 $ 0.93 $ 1.16 - -------------------------------------------------------------------------------------------------------------- DILUTED EARNINGS PER SHARE Earnings from continuing operations $ 31.3 $ 37.0 $ 67.1 $ 69.4 Weighted average shares 72,466 80,192 72,260 79,895 Stock options 1,835 1,258 1,705 1,336 -------- -------- -------- -------- Total dilutive shares 74,301 81,450 73,965 81,231 - -------------------------------------------------------------------------------------------------------------- Earnings per share from continuing operations $ 0.42 $ 0.45 $ 0.91 $ 0.85 - -------------------------------------------------------------------------------------------------------------- Net earnings $31.3 $48.5 $67.1 $92.3 Weighted average shares 72,466 80,192 72,260 79,895 Stock options 1,835 1,258 1,705 1,336 -------- -------- -------- -------- Total dilutive shares 74,301 81,450 73,965 81,231 - -------------------------------------------------------------------------------------------------------------- Net earnings per share $ 0.42 $ 0.60 $ 0.91 $ 1.14 - --------------------------------------------------------------------------------------------------------------
7 CERIDIAN CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements June 30, 1998 (Dollars in millions) (Unaudited)
STOCKHOLDERS' EQUITY June 30, December 31, 1998 1997 --------- -------- Common Stock Par value - $.50 Shares authorized - 200,000,000 Shares issued - 80,842,798 and 80,842,798 $ 40.4 $ 40.4 Shares outstanding - 72,586,763 and 73,941,872 Additional paid-in capital 1,149.0 1,153.0 Accumulated deficit (259.5) (326.6) Treasury stock, at cost (8,256,035 and 6,900,926 common shares) (342.0) (271.0) Accumulated other comprehensive income (9.1) (7.5) --------- -------- Total stockholders' equity $ 578.8 $ 588.3 --------- -------- --------- --------
The increase in the cost of treasury stock reflects the 1998 purchases of 2,076,100 Ceridian common shares for $96.0, or an average purchase price of $46.24 per share. In addition, in January 1998 Ceridian settled liabilities of $17.2 for shares purchased before December 31, 1997. FINANCING Financing for a portion of the purchase price for the acquisitions in the first quarter 1998 of the Canadian payroll services businesses was provided by revolving credit facilities with Canadian banks with terms ending July 31, 2002, current interest rates of approximately 5.5% and an aggregate outstanding principal amount of $67.6 at June 30, 1998. Comdata also maintains a credit facility under which $11.5 was outstanding at June 30, 1998, which represents the obligations to a charge card issuing bank for the amount of card-based purchases made by local transportation fleet customers.
RECEIVABLES June 30, December 31, 1998 1997 Trade and Other Receivables, Net: Trade, less allowance of $14.7 and $10.5 $ 336.4 $ 277.1 Other 38.1 40.4 --------- -------- Total $ 374.5 $ 317.5 --------- -------- --------- --------
8 CERIDIAN CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements June 30, 1998 (Dollars in millions) (Unaudited)
Capital Assets - ----------------------------------------------------------------------------- June 30, December 31, 1998 1997 - ----------------------------------------------------------------------------- Property, Plant and Equipment Land $ 1.4 $ 1.5 Machinery and equipment 187.5 190.0 Buildings and improvements 42.8 42.9 ----------- ----------- 231.7 234.4 Accumulated depreciation (146.7) (154.8) ----------- ----------- Property, plant and equipment, net $ 85.0 $ 79.6 ----------- ----------- ----------- ----------- - ----------------------------------------------------------------------------- Goodwill and Other Intangibles Goodwill $ 300.3 $ 228.7 Accumulated amortization (27.9) (38.7) ----------- ----------- Goodwill, net 272.4 190.0 ----------- ----------- Other intangible assets 69.0 64.5 Accumulated amortization (12.2) (10.2) ----------- ----------- Other intangibles, net 56.8 54.3 ----------- ----------- Goodwill and other intangibles, net $ 329.2 $ 244.3 ----------- ----------- ----------- ----------- - ----------------------------------------------------------------------------- Software and Development Costs Purchased software $ 30.6 $ 31.1 Other software development cost 15.3 15.5 ----------- ----------- 45.9 46.6 Accumulated amortization (34.9) (36.9) ----------- ----------- Software and development costs, net $ 11.0 $ 9.7 ----------- ----------- ----------- ----------- - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- For Periods Ended June 30, Six Months -------------------------- Depreciation and Amortization 1998 1997 - ----------------------------------------------------------------------------- Depreciation and amortization of property, plant and equipment $ 16.6 $ 16.4 Amortization of goodwill 7.6 6.5 Amortization of other intangibles 2.3 3.4 Amortization of software and development costs 2.4 5.1 Pension credit (4.0) (1.6) ----------- ----------- Total $ 24.9 $ 29.8 ----------- ----------- ----------- ----------- - -----------------------------------------------------------------------------
9 FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements June 30, 1998 (Dollars in millions) (Unaudited)
OTHER EXPENSE (INCOME) For Periods Ended June 30, Three Months Six Months 1998 1997 1998 1997 ----------- ----------- ----------- ----------- Foreign currency translation expense $ - $ - $ 0.1 $ 1.0 Loss on sale of assets - 0.1 - 0.1 Age discrimination settlement - - - 13.0 Minority interest and equity in operations of affiliates 1.3 1.0 1.8 1.6 Other expense (income) (0.1) (0.1) (0.1) (1.2) ----------- ----------- ----------- ----------- Total $ 1.2 $ 1.0 $ 1.8 $ 14.5 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
INVESTING ACTIVITY During first quarter 1998, Ceridian, through its Canadian subsidiary, acquired two payroll services businesses from Canadian banks. The acquisition of the payroll business of Toronto-Dominion Bank in January resulted in the payment of $35.0, of which $28.2 was borrowed from the seller. The acquisition of the payroll business of Canadian Imperial Bank of Commerce in March resulted in the payment of $105.4, of which $42.2 was borrowed from the seller. In January 1998, Ceridian's Comdata subsidiary sold its gaming services business to First Data Corporation in exchange for First Data's NTS transportation services business and $50.0 in cash. The net cash inflow from the exchange was $29.8 and the net reduction in goodwill was $22.1. 10 FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES June 30, 1998 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE STATEMENTS REGARDING CERIDIAN CORPORATION CONTAINED IN THIS REPORT ON FORM 10-Q THAT ARE NOT HISTORICAL IN NATURE, PARTICULARLY THOSE THAT UTILIZE TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "EXPECTS," "ANTICIPATES," "BELIEVES" OR "PLANS," ARE FORWARD-LOOKING STATEMENTS BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS, AND ENTAIL VARIOUS RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS KNOWN TO CERIDIAN THAT COULD CAUSE SUCH MATERIAL DIFFERENCES ARE DISCUSSED UNDER THE CAPTION "CAUTIONARY FACTORS THAT COULD AFFECT FUTURE RESULTS" BEGINNING ON PAGE 11 OF CERIDIAN'S 1997 ANNUAL REPORT TO STOCKHOLDERS, WHICH IS INCORPORATED BY REFERENCE INTO PART II, ITEM 7 OF CERIDIAN'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, WHICH DISCUSSION IS ALSO INCORPORATED HEREIN BY REFERENCE. RESULTS OF OPERATIONS For the second quarter 1998, Ceridian reported net earnings of $31.3 million, or $0.42 per diluted share of common stock, on revenue of $284.1 million, compared to net earnings in the second quarter 1997 of $48.5 million, or $0.60 per diluted share, on revenue of $261.8 million. For the first six months of 1998, Ceridian reported net earnings of $67.1 million, or $0.91 per diluted share of common stock, on revenue of $566.4 million, compared to net earnings in the first half of 1997 of $92.3 million, or $1.14 per diluted share, on revenue of $525.7 million. Included in net earnings in the 1997 periods were earnings from discontinued operations of $11.5 million in the second quarter and $22.9 million in the first six months, representing the net earnings of Computing Devices International (CDI), which was sold at the end of 1997. Ceridian's earnings from continuing operations in the 1997 periods were $37.0 million, or $0.45 per diluted share, in the second quarter and $69.4 million, or $0.85 per diluted share, in the first half. In the discussion that follows, the term "Ceridian" refers only to Ceridian's continuing operations unless the context clearly indicates otherwise. The comparison of Ceridian's earnings in the 1998 and 1997 periods is significantly affected by a first quarter 1997 charge of $13.0 million related to the settlement of certain litigation, and Ceridian's fourth quarter 1997 recognition under FAS 109 of the future tax benefits of its net operating loss carryforwards (NOLs). As a result of the recognition of the NOLs, Ceridian's operating results in the 1998 periods are reported on a fully taxed basis, in contrast to its 1997 results. In an effort to facilitate comparisons between its 1998 results and its 1997 results from continuing operations, Ceridian has utilized certain pro forma adjustments to calculate revised earnings figures for its continuing operations for 1997 that it believes may assist in making comparisons with its 1998 results. The most significant of these pro forma adjustments include (i) tax effecting 1997 earnings at an assumed rate of 37%, (ii) removing the 1997 litigation settlement charge discussed above, (iii) assuming that CDI was sold at the beginning of 1997 for $600 million, and (iv) investing at 5.5% per annum the $500 million difference between the CDI sale price and the amount of cash retained by a Canadian subsidiary included in the CDI sale. On this pro forma adjusted basis, Ceridian estimates that its earnings from continuing operations would have been $28.2 million, or $0.35 per diluted share, for the second quarter 1997, and $61.5 million, or $0.76 per diluted share, for the first half of 1997. 11 FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES June 30, 1998 REVENUE. The following table sets forth revenue for Ceridian's principal businesses for the periods shown.
-------------------------------------------------------------------------------------------- Three Months Ended June 30, Six Months Ended June 30, - -------------------------------------------------------------------------------------------- 1998 1997 1998 1997 - -------------------------------------------------------------------------------------------- (DOLLARS IN MILLIONS) change change - -------------------------------------------------------------------------------------------- Arbitron $49.0 17.4% $41.8 $90.3 15.2% $78.4 - -------------------------------------------------------------------------------------------- Human Resource Services 169.6 24.3% 136.3 343.0 20.0% 285.7 - -------------------------------------------------------------------------------------------- Comdata Transportation Services 65.5 31.8% 49.8 127.3 32.8% 95.9 - -------------------------------------------------------------------------------------------- Comdata Gaming Services (1) -- -- 33.9 5.8 (91.2%) 65.7 - -------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------- Total Revenue $284.1 8.5% $261.8 $566.4 7.7% $525.7 - --------------------------------------------------------------------------------------------
(1) Sold to First Data Corporation in exchange for the assets of NTS, Inc. and cash in January 1998. Almost two-thirds of the revenue growth in Human Resource Services (HRS) in the quarterly comparison and almost one-half of the revenue growth in the year-to-date comparison was due to the first quarter 1998 acquisitions of the payroll processing businesses of Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce. Apart from acquisitions, HRS' revenue growth largely reflected an effective price increase resulting from a revised pricing structure for payroll services, employment growth experienced by its payroll and tax filing customers, and the sale of add-on services to existing customers. Revenue growth was restrained somewhat by Ceridian's January 1, 1998 implementation of IRS electronic funds transfer regulations that reduce by one day the period of time certain tax filing deposits may be held. As a result, Ceridian's average investment balances were down slightly in the 1998 periods, and investment income was essentially unchanged from the 1997 periods. More than half of the revenue growth in Comdata's transportation services business in the quarterly and year-to-date comparisons was due to acquisitions, primarily the January 1998 acquisition of the NTS transportation services business. Apart from acquisitions, revenue growth in transportation services primarily reflected a 13.6% year-to-date increase in funds transfer transactions and increased sales of fuel desk automation systems, long-distance telecommunications services and newer products such as prepaid telephone debit cards. Somewhat more than 40% of Arbitron's revenue growth in the quarterly and year-to-date comparisons was due to the November 1997 acquisition of Continental Research and the May 1998 acquisition of the radio station, advertiser/agency and international assets of Tapscan, Inc., a developer of software for broadcasters, agencies and advertisers. Apart from acquisitions, Arbitron's revenue growth reflected price escalators in multi-year customer contracts, increased sales of analytical software and product and media usage reports, and an increased number of subscribers for ratings services. 12 FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES June 30, 1998 COSTS AND EXPENSES. Ceridian's gross margin increased in the quarterly comparison from 50.3% to 52.5%, and in the year-to-date comparison from 51.2% to 53.4%, reflecting quarterly and year-to-date increases in HRS, a second quarter increase in Comdata, and a change in overall revenue mix as a result of revenue growth in HRS and Arbitron and the sale of Comdata's gaming services business. The increase in HRS' gross margin largely reflected the revenue growth attributable to the revised pricing structure for payroll services, cost reduction and productivity initiatives in the payroll business and generally increased economies of scale. The increase in Comdata's gross margin in the quarterly comparison was due to sale of the gaming business, whose gross margin had begun to decline significantly in the second quarter 1997, and to revenue growth, lower telecommunications costs and staff reductions in the transportation business. Ceridian's selling, general and administrative (SG&A) expenses decreased from 30.2% to 27.9% of revenue in the quarterly comparison, and from 29.4% to 28.2% of revenue in the six month comparison. Decreases in general and administrative expenses as a percentage of revenue in both the three and six month comparisons were partially offset by increases in selling expense as a percentage of revenue. The decrease in general and administrative expenses was primarily attributable to Comdata and HRS, reflecting the sale of the gaming services business, proceeds from the temporary provision of processing services to the purchaser of that business which are accounted for as a reduction of administrative expense, and staff reductions. The increase in selling expense as a percentage of revenue was largely due to an increase in Comdata, reflecting customer acquisition expense in connection with its local fueling product, and the relatively greater revenue growth in HRS, whose selling expenses are higher as a percentage of revenue than those of Comdata or Arbitron. Ceridian's research and development expenses increased from 4.6% to 7.2% of revenue in the quarterly comparison, and from 5.0% to 6.7% of revenue in the six month comparison, reflecting development efforts directed toward both new applications and enhancements to existing applications, quality assurance programs in Employer Services, and year 2000 compliance efforts. As Ceridian has continued its assessment, planning and implementation of initiatives to address year 2000 needs, it has recognized that some remediation and replacement efforts will take longer and entail greater costs than originally anticipated. The additional costs reflect factors such as the increased utilization of outside resources and the increased scope of remediation efforts, due in part to recent acquisitions and the need to remediate certain additional systems as projects to replace those systems have been delayed. Ceridian's current estimate of year 2000 remediation and testing costs to be expensed during 1998 is $25 million, a figure that could increase as plans are further refined. Additional and potentially significant costs will be incurred during 1999 for completion of testing efforts with customers and suppliers and for implementing necessary changes across Ceridian's operations and customer base. These 1998 and 1999 costs are not expected to have a material effect on Ceridian's financial position or results of operations in any one period, in large measure because they represent the re-deployment of existing technology resources and the deferral of certain projects that had been planned. EARNINGS BEFORE INTEREST AND TAXES. Ceridian's earnings before interest and taxes ("EBIT") increased $8.8 million, or 21.8%, in the quarterly comparison, and increased $29.1 million, or 39.1%, in the six month comparison. As a percentage of revenue, Ceridian's EBIT increased from 15.1% to 17.0% in the quarterly comparison, and from 14.1% to 18.2% in the year-to-date comparison. Apart from the impact of the first quarter 1997 litigation settlement, Ceridian's EBIT increased $16.1 million in the year-to-date comparison, or 18.4%, from 16.6% of revenue to 18.2%. 13 FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES June 30, 1998 INTEREST INCOME AND EXPENSE AND TAXES. The decrease in interest expense and the increase in interest income in the quarterly comparison reflects the proceeds of Ceridian's sale of CDI, a portion of which were used to reduce debt and repurchase stock and the balance of which has increased cash and equivalents. The recognition of Ceridian's NOLs has resulted in a tax provision of 36.5% being applied to Ceridian's operating results in the second quarter 1998, a slight reduction from the 37% applied in the first quarter 1998, both in contrast to a first and second quarter 1997 tax provisions that reflected only a minor amount of state and foreign taxes. Despite the NOL recognition for financial statement purposes, Ceridian's remaining NOLs continue to reduce Ceridian's actual federal income tax liability, as noted below. FINANCIAL CONDITION During the first half of 1998, operating activities provided $92.9 million of cash, compared to $48.5 million in the first half of 1997. Cash flows from operations during the first half of 1998 were increased by the $33.3 million portion of the $39.1 million income tax provision which is not currently payable due to the benefit of the NOLs. Net changes in working capital items reduced operating cash flows in the first half of 1998 by $31.4 million, as payments of year-end 1997 accruals for compensation expense, income taxes and costs related to the CDI sale, along with an increase in Comdata receivables, more than offset an increase in transportation drafts and settlements payable. Comdata's receivables include trade accounts receivable purchased at a discount from selected trucking companies, primarily with recourse, and credit card obligations of trucking companies generated in connection with the local fueling service. The amount of these types of receivables has grown with the acquisition of NTS and the expansion of the local fueling service, and is expected to continue to increase. The average number of days outstanding for these types of receivables is significantly greater than for receivables generated by Comdata's other funds transfer activities, increasing Comdata's working capital needs. Ceridian's major investing activities during the first half of 1998 are described in the financial statement note entitled "Investing Activity." Cash utilized for financing activities during the first six months of 1998 involved Ceridian's repurchase of shares of its common stock, as described in the financial statement note entitled "Stockholders' Equity." At June 30, 1998, Ceridian had corporate authorizations remaining to purchase up to an additional 3.7 million shares of its stock. This utilization of cash was substantially offset during the first half of 1998 by a net increase in outstanding debt of $77.2 million, primarily to finance a portion of the purchase price of the Canadian payroll businesses, and the proceeds of stock option exercises. At June 30, 1998, there were no revolving loans and $2.9 million in letters of credit outstanding under Ceridian's $250 million U.S. revolving credit facility. Ceridian and its subsidiaries were in compliance with all covenants contained in applicable credit facilities on that date. 14 FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES June 30, 1998 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Ceridian's annual meeting of stockholders was held on May 22, 1998. Of the 72,551,293 shares of Ceridian's common stock entitled to vote at the meeting, 63,712,392 shares were present at the meeting in person or by proxy. The eleven people designated by Ceridian's Board of Directors as nominees for director were elected, with voting as follows:
NOMINEE TOTAL VOTES FOR TOTAL VOTES WITHHELD ------- --------------- -------------------- Ruth M. Davis 63,522,270 190,192 Robert H. Ewald 63,565,510 146,882 Richard G. Lareau 63,556,354 156,038 Ronald T. LeMay 63,565,863 146,529 George R. Lewis 63,563,126 149,266 Charles Marshall 63,557,914 154,478 Ronald A. Matricaria 63,285,230 427,162 Lawrence Perlman 63,563,300 149,092 Carole J. Uhrich 63,567,779 144,613 Richard W. Vieser 63,528,929 183,463 Paul S. Walsh 63,565,448 146,944
Stockholders also voted to approve the Company proposal to amend the Ceridian Employee Stock Purchase Plan to increase the number of shares of Ceridian common stock that may be issued pursuant to the Plan from 500,000 to 1,500,000. The number of shares voting FOR approval of this amendment was 62,841,229; the number of shares voting AGAINST was 629,764; and the number of shares ABSTAINING was 96,212. 15 FORM 10-Q CERIDIAN CORPORATION AND SUBSIDIARIES June 30, 1998 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits.
EXHIBIT DESCRIPTION CODE ------- ----------- ---- 3.01 Bylaws of Ceridian Corporation, as amended through July 23, 1998 E 27.01 Financial Data Schedule - June 30, 1998 E 27.02 Financial Data Schedule (Restated) - 1997 E 27.03 Financial Data Schedule (Restated) - 1996 E
Legend: (E) Electronic Filing (b) Reports on Form 8-K. None. 16 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 June 30, 1998, to be signed on its behalf by the undersigned thereunto duly authorized. CERIDIAN CORPORATION Registrant Date: August 6, 1998 /s/ L. D. Gross ------------------------------ L. D. Gross Vice President and Corporate Controller (Principal Accounting Officer) 17 EX-3.01 2 EXHIBIT 3.01 EXHIBIT 3.01 - ------------ BYLAWS OF CERIDIAN CORPORATION A DELAWARE CORPORATION (AS AMENDED THROUGH 7/23/98) ------------------ ARTICLE I OFFICES The registered office of Ceridian Corporation (the "Corporation") in the State of Delaware shall be located in the City of Wilmington, County of New Castle. The executive offices of the Corporation shall be located in the City of Bloomington, County of Hennepin, State of Minnesota. The Corporation may have such other offices, either within or without the States of Delaware and Minnesota, as the Board of Directors may designate or as the business of the Corporation may require from time to time. ARTICLE II STOCKHOLDERS SECTION 1. ANNUAL MEETING. An annual meeting of the stockholders shall be held for the purpose of electing directors at such date, time and place, either inside or outside of the State of Delaware, as may be designated by the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting. SECTION 2. SPECIAL MEETINGS. Special meetings of stockholders for any purpose or purposes may be called at any time by the Chairman, by the Board of Directors, or by a committee of the Board of Directors that has been duly designated by the Board of Directors and whose powers and authority, as expressly provided in a resolution of the Board of Directors, include the power to call such meetings, but such special meetings may not be called by any other person or persons. SECTION 3. PLACE OF MEETING. Meetings of stockholders shall be held at such place as may be designated by the person or persons calling the meeting. If no designation is so made, meetings of stockholders shall be held at the executive offices of the Corporation in Minnesota. SECTION 4. NOTICE OF MEETING. Written notice stating the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at the address that appears on the records of the Corporation. SECTION 5. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. (A) In order to determine the stockholders entitled to notice and to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action other than stockholder action by written consent, the Board of Directors may fix, in advance, a record date, which shall not be less than 10 nor more than 60 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of and to vote at a meeting of stockholders shall apply to any adjournment of the meeting unless the Board of Directors shall elect to fix a new record date for the adjourned meeting. (B) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary of the Corporation, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware or its executive offices, or to any officer or agent of the Corporation having custody of the book in which proceedings of stockholders meetings are recorded, and in each such case directed to the attention of the Secretary of the Corporation. Delivery shall be by hand or by certified mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. SECTION 6. VOTING LISTS. The officer or agent having charge of the stock transfer records for shares of the Corporation shall compile, at least ten days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each. This list, for a period of ten days prior to such meeting, shall be kept on file either at a place within the city where the meeting is to be held which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. Such list shall be subject to inspection by any stockholder for any purpose germane to the meeting at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. SECTION 7. QUORUM. A majority of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of stockholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice, except that no meeting shall be adjourned for more than thirty days without further written notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. SECTION 8. REQUIRED VOTE. At all meetings of stockholders for the election of directors, a plurality of the votes of shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by express provision of the Delaware General Corporation Law, the Corporation's certificate of incorporation or these bylaws, be decided by the affirmative vote of a majority of the shares of stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter in question. SECTION 9. PROXIES. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act on the stockholder's behalf by proxy, and such authority may be granted by any means authorized or permitted by express provisions of the Delaware General Corporation Law. No such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. SECTION 10. VOTING OF SHARES. Subject to Article IV of the Corporation's certificate of incorporation, each outstanding share entitled to vote shall be entitled to one vote (which shall not be divisible) upon each matter submitted to a vote at a meeting of stockholders. SECTION 11. NO CUMULATIVE VOTING. Every stockholder shall have the right to vote in person or by proxy for the number of shares of stock held by said stockholder for each director to be elected. No cumulative voting for directors shall be permitted. SECTION 12. BUSINESS TO BE CONDUCTED. (A) At any annual meeting of stockholders, only such business shall be conducted, and only such proposals shall be acted on, as are properly brought before the meeting. In order for business to be properly brought before the meeting, the business must be either (1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (2) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (3) otherwise properly brought before the meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not less than 90 days nor more than 120 days prior to the meeting; PROVIDED, HOWEVER, that in the event that less than 100 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made, whichever first occurs. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and record address of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. (B) Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section 12 of Article II, PROVIDED, HOWEVER, that nothing in this Section 12 of Article II shall be deemed to preclude discussion by any stockholder of any business properly brought before the annual meeting. (C) The chairman of the annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 12 of Article II, and if the chairman should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. (D) At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting by or at the direction of the Board of Directors. SECTION 13. STOCKHOLDER NOMINATION OF DIRECTORS. Not less than 90 days nor more than 120 days prior to the date of the annual meeting, any stockholder who intends to make a nomination at the annual meeting shall deliver a notice to the Secretary of the Corporation setting forth (A) as to each nominee whom the stockholder proposes to nominate for election or reelection as a director, (1) the name, age, business address and residence address of the nominee, (2) the principal occupation or employment of the nominee, (3) the class and number of shares of capital stock of the Corporation which are beneficially owned by the nominee and (4) any other information concerning the nominee that would be required, under the rules of the Securities and Exchange Commission, in a proxy statement soliciting proxies of the election of such nominee; and (B) as to the stockholder giving the notice, (1) the name and record address of the stockholder and (2) the class and number of shares of capital stock of the Corporation which are beneficially owned by the stockholder; PROVIDED, HOWEVER, that in the event that less than 100 days' notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder to be timely must be so delivered not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Such notice shall include a signed consent to serve as a director of the Corporation, if elected, of each such nominee. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation. ARTICLE III BOARD OF DIRECTORS SECTION 1. GENERAL POWERS. The affairs, property and business of the Corporation shall be managed by its Board of Directors. SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. Except as otherwise provided in the Corporation's certificate of incorporation, the number of directors of the Corporation shall be as determined from time to time by resolution of the Board of Directors. Each director shall hold office until the next annual meeting of stockholders and until his or her successor shall have been elected and qualified. Directors need not be residents of the State of Delaware or stockholders of the Corporation. SECTION 3. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held at such places inside or outside the State of Delaware and at such times as the Board of Directors may from time to time determine by resolution, and if so determined notices thereof need not be given. SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at any time or place inside or outside the State of Delaware whenever called by or at the request of the Chairman or any two directors. The person or persons who call or request a special meeting of the Board of Directors may fix the time and place for holding such special meeting. SECTION 5. NOTICE. Notice of any special meeting shall be delivered at least two hours previously thereto by written notice delivered personally or mailed to each director at his or her business address, or by telecopy, facsimile or electronic mail. If mailed, such notice shall be deemed to be delivered on the third business day after it is deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telecopy, facsimile or electronic mail, such notice shall be deemed to be delivered upon transmission by sender to the addressee's telecopier, facsimile machine or computer. Any director may waive notice of any meeting. The attendance of a director at a meeting, in person or by telephone as provided by law, shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. SECTION 6. QUORUM. At any meeting of the Board of Directors, a majority of the directors then in office shall constitute a quorum for the transaction of business, but if less than such majority is present at a meeting, in person or by telephone as provided by law, a majority of the directors present may adjourn the meeting from time to time without further notice. SECTION 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. SECTION 8. VACANCIES. Except as otherwise provided in the Corporation's certificate of incorporation, any vacancy occurring in the Board of Directors by reason of death, resignation, disqualification or other cause, or resulting from any increase in the authorized number of directors may be filled by the affirmative vote of a majority of the directors then in office, though less than a quorum, or by a sole remaining director. A director elected to fill a vacancy shall hold office until the next annual meeting of stockholders and until a successor shall have been elected and qualified. SECTION 9. The compensation of directors shall be fixed by resolution of the Board of Directors. Such resolution shall not preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. SECTION 10. PRESUMPTION OF ASSENT. A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her dissent shall be entered in the minutes of the meeting or unless he or she shall file a written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. SECTION 11. ACTION BY DIRECTORS IN LIEU OF MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors, or any committee thereof including the Executive Committee, may be taken without a meeting if all members of the Board or committee as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. SECTION 12. CHAIRMAN OF THE BOARD OF DIRECTORS. The Board of Directors may, in its discretion, elect a Chairman, who shall perform such duties as may be assigned by the Board of Directors from time to time, and shall, when present, preside at all meetings of the stockholders and of the Board of Directors. The Chairman shall serve in such capacity at the pleasure of the Board of Directors or until his or her earlier resignation or death. SECTION 13. CHAIRMAN EMERITUS. The Board of Directors may, in its discretion, appoint any person who has served as, but no longer is, a director of the Corporation to the position of director emeritus. A director emeritus shall serve at the pleasure of the Board of Directors, and shall provide such advice and counsel to the Board of Directors as may be requested by the Chairman. A director emeritus may attend meetings of the Board of Directors, but shall not vote at such meetings. Where such a person is also a former Chairman of the Board, he or she may also be named chairman emeritus. ARTICLE IV EXECUTIVE COMMITTEE The Board of Directors may elect an Executive Committee, to serve at the pleasure of the Board, consisting of at least three members of the Board of Directors. The Chairman of the Board of Directors and the Chief Executive Officer, if other than the Chairman, shall be members of the Executive Committee, and the Chairman of the Board of Directors shall be chairman of such committee. During the intervals between meetings of the Board of Directors, the Executive Committee shall possess and may exercise all of the powers of the Board of Directors, which may by law be exercised by the Executive Committee, to manage the business and affairs of the Corporation, including the power to authorize the issuance of capital stock of the Corporation, provided that the Executive Committee shall not have the power to authorize transactions it determines to involve consideration of more than fourteen million dollars. These limitations shall not apply to situations the Executive Committee, in its discretion, determines to be emergencies requiring its immediate action. The Executive Committee is specifically authorized to approve and adopt a certificate of ownership and merger on behalf of the Corporation pursuant to Section 253 of the Delaware General Corporation Law. All actions by the Executive Committee shall be reported to the Board of Directors at its meeting next succeeding such action, and shall be subject to revision and alteration by the Board, provided that no rights of third parties shall be affected by such revision or alteration. Vacancies in the Executive Committee shall be filled by the Board of Directors. A majority of the members of the Executive Committee shall be necessary to constitute a quorum and in every case the affirmative vote of a majority of the members of the Executive Committee shall be necessary for the taking of any action. The Executive Committee shall fix its own rules of procedure. It shall meet as provided by such rules or by resolution of the Board of Directors or by call of any member of the Committee. ARTICLE V OFFICERS SECTION 1. NUMBER. The officers of the corporation shall be a Chief Executive Officer, a President, and one or more Vice Presidents (the number and types thereof to be determined by the Board of Directors), a Secretary and a Treasurer, each of whom shall be elected by the Board of Directors. The Board of Directors or the Chief Executive Officer may also elect or appoint such other officers as it may deem necessary or desirable. Any person may hold more than one office at one time. SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the Corporation shall be elected at such times as the Board of Directors shall determine and shall hold office at the pleasure of the Board of Directors or until their earlier death or resignation. Removal of an officer by the Board of Directors shall be without prejudice to his or her contract rights, if any. SECTION 3. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer, subject to the provisions of these bylaws and to the direction of the Board of Directors, shall have ultimate authority for decisions relating to the general management and control of the business and affairs of the Corporation. The Chief Executive Officer shall perform such other duties as may be assigned by the Board of Directors from time to time and shall, in the absence of the Chairman of the Board of Directors, preside at all meetings of the stockholders and of the Board of Directors. SECTION 4. PRESIDENT. The President shall be the chief operating officer and, subject to the provisions of these bylaws and to the direction of the Board of Directors and the Chief Executive Officer, shall have such powers and shall perform such duties as may be assigned by the Board of Directors or by the Chief Executive Officer from time to time. SECTION 5. THE VICE PRESIDENTS. Each Vice President shall have such powers and shall perform such duties as may be assigned to the Vice President by the Board of Directors or by the Chief Executive Officer from time to time. SECTION 6. THE SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall keep the minutes of the stockholders' and Board of Directors' meetings; see that all notices are duly given in accordance with the provisions of law and of these bylaws; be custodian of the corporate records and of the seal of the Corporation; keep or cause to be kept a register of the mailing address of each stockholder; have general charge of the stock transfer records of the Corporation; and in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the Board of Directors or by the Chief Executive Officer. An Assistant Secretary shall have such powers and shall perform such duties as may be assigned by the Board of Directors, the Chief Executive Officer or the Secretary from time to time. SECTION 7. THE TREASURER AND ASSISTANT TREASURERS. The Treasurer shall have charge and custody of and be responsible for all funds and securities of the Corporation; receive and give receipts for monies due and payable to the Corporation from any source whatsoever; deposit all such monies in the name of the Corporation for safekeeping in appropriate banks, trust companies or other depositories; and in general perform all of the duties incident to the office of the Treasurer and such other duties as from time to time may be assigned by the Board of Directors or by the Chief Executive Officer. An Assistant Treasurer shall have such powers and shall perform such duties as may be assigned by the Board of Directors, the Chief Executive Officer or the Treasurer from time to time. ARTICLE VI INDEMNITY SECTION 1. INDEMNIFICATION RIGHTS. To the maximum extent permitted by law, the Company shall indemnify any Eligible Person (as defined below) (including such person's heirs, executors and personal representatives) against any and all Amounts (as defined below) incurred or imposed in connection with, or which result from, any Proceeding (as defined below) (other than a proceeding initiated by such person) in which such person is or may become involved by reason of being an Eligible Person. SECTION 2. ADVANCEMENT OF EXPENSES. In connection with any Proceeding, the Company may advance Expenses (as defined below) to any Eligible Person upon receipt of an undertaking by or on behalf of such person to repay such advance if it shall ultimately be determined that such person is not entitled to indemnification by the Company. SECTION 3. RIGHTS NOT EXCLUSIVE. The rights provided in this Article shall not be deemed exclusive of any other right or rights to which any Eligible Person may be entitled under any agreement, vote of stockholders, or otherwise. SECTION 4. DEFINITIONS. For purposes of this Article: (A) "Amounts" shall include judgments, penalties, fines, amounts paid in settlement, and Expenses. (B) "Company" shall mean the Corporation and any corporation at least a majority of whose voting securities having ordinary voting power for the election of directors (other than securities having such voting power only by reason of the occurrence of a contingency) which is, at the time of alleged events giving rise to the Proceeding, owned by the Corporation and/or one or more of its majority-owned subsidiaries. (C) "Eligible Person" shall mean: (1) A director, officer or employee of the Company; or (2) A director, officer or employee of the Company who at the specific written request or resolution of the Board of Directors of the Corporation is, at the time either of the Proceeding and/or of the alleged events giving rise to the Proceeding, serving as a director, officer or employee of any other company, partnership, joint venture, trust, employee benefit plan or other enterprise; or (3) A fiduciary or co-fiduciary of an employee benefit plan of the Company as those terms are defined in the Employee Retirement Income Security Act of 1974. (D) "Expenses" shall mean all reasonable attorneys' fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or preparing to be a witness in a Proceeding. (E) "Proceeding" shall include any actual, threatened or completed action, suit, arbitration, alternative dispute resolution mechanism, investigation, administrative hearing, or other formal claim that could result or has resulted in personal liability, whether civil, criminal, administrative or investigative. ARTICLE VII INDEMNIFICATION AGREEMENTS The Corporation shall have the express authority to enter into such agreements as the Board of Directors deems appropriate for the indemnification of present or future directors and officers of the Corporation in connection with their service to, or status with, the Corporation or any other corporation, entity or enterprise with whom such person is serving at the express written request of the Corporation. ARTICLE VIII CERTIFICATES FOR SHARES AND THEIR TRANSFER SECTION 1. CERTIFICATES FOR SHARES. Such certificates shall be signed by the Chairman or Chief Executive Officer and by the Treasurer or Secretary or by any other officers determined by the Board of Directors in accordance with law. SECTION 2. TRANSFER OF SHARES. Where shares of the Corporation are presented to the Corporation with a request to register transfer, the Corporation shall register the transfer as requested if the certificate representing such shares is endorsed by the appropriate person or persons, reasonable assurance is given that those endorsements are genuine, the Corporation has no duty to inquire into adverse claims or has discharged that duty, applicable law relating to the collection of taxes has been complied with, and the transfer is in fact rightful or is to a bona fide purchaser. ARTICLE IX FISCAL YEAR The fiscal year of the Corporation shall begin on the first day of January and end on the thirty-first day of December, next succeeding. ARTICLE X DIVIDENDS The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and the Corporation's certificate of incorporation. ARTICLE XI SEAL The Board of Directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the Corporation, the year of incorporation, 1912, the state of incorporation and the words, "Corporate Seal." ARTICLE XII WAIVER OF NOTICE Whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of these bylaws or under the provisions of the Corporation's certificate of incorporation, or under the provisions of the Delaware General Corporation Law, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XIII AMENDMENT These bylaws may be altered, amended or rescinded and new bylaws may be adopted by the Board of Directors at any regular or special meeting of the Board of Directors. EX-27.01 3 EXHIBIT 27.01
5 1,000 6-MOS DEC-31-1998 JUN-30-1998 202,400 0 389,200 14,700 0 723,100 231,600 146,700 1,305,000 485,500 68,100 0 0 40,400 538,400 1,305,000 0 566,400 0 263,900 1,800 0 2,200 106,200 39,100 67,100 0 0 0 67,100 0.93 0.91
EX-27.02 4 EXHIBIT 27.02
5 1,000 3-MOS 6-MOS 9-MOS DEC-31-1997 DEC-31-1997 DEC-31-1997 MAR-31-1997 JUN-30-1997 SEP-30-1997 64,400 27,100 47,400 0 0 0 298,700 315,900 308,800 12,500 13,000 13,200 0 0 0 490,800 472,000 483,800 215,800 226,500 232,100 140,800 148,900 148,700 1,051,300 1,079,500 999,100 422,800 397,700 469,300 116,300 111,000 165,900 0 0 0 0 0 0 40,200 40,400 40,400 353,300 413,600 209,100 1,051,300 1,079,500 999,100 0 0 0 263,900 261,800 266,600 0 0 0 126,100 130,200 132,400 13,500 1,000 150,400 0 0 0 2,100 2,000 2,000 33,000 38,000 (110,900) 600 1,000 (800) 32,400 37,000 (110,100) 11,400 11,500 16,400 0 0 0 0 0 0 43,800 48,500 (93,700) 0.55 0.60 (1.18) 0.54 0.60 (1.18)
EX-27.03 5 EXHIBIT 27.03
5 1,000 3-MOS 6-MOS 9-MOS DEC-31-1996 DEC-31-1996 DEC-31-1996 MAR-31-1996 JUN-30-1996 SEP-30-1996 38,800 32,100 29,800 0 0 0 294,300 299,000 286,900 11,200 11,300 10,900 0 0 0 425,100 432,300 427,900 194,400 197,300 203,300 120,100 121,900 127,800 924,300 944,500 975,100 413,400 423,700 405,100 162,100 136,800 146,800 0 0 0 4,700 4,700 4,700 34,000 34,400 34,400 168,700 211,600 254,200 924,300 944,500 975,100 0 0 0 234,200 226,200 230,900 0 0 0 111,900 111,000 114,400 700 900 (700) 0 0 0 2,900 2,300 2,300 38,200 31,800 32,000 1,300 1,400 500 36,900 30,400 31,500 10,500 10,400 12,900 0 0 0 0 0 0 47,400 40,800 44,400 0.66 0.55 0.61 0.59 0.50 0.55
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