-----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, TM5J2kvzCJd0X/k5GqBKMJMeTiA66Ya4Id9w1wk447BbfBJUnLW4Gx3dupFQ29LL uE2ZtM+wKUnyaPV0tFukpw== 0000023675-95-000011.txt : 19951119 0000023675-95-000011.hdr.sgml : 19951119 ACCESSION NUMBER: 0000023675-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED FREIGHTWAYS INC CENTRAL INDEX KEY: 0000023675 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 941444798 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05046 FILM NUMBER: 95589483 BUSINESS ADDRESS: STREET 1: 3240 HILLVIEW AVE CITY: PALO A LTO STATE: CA ZIP: 94304 BUSINESS PHONE: 4154942900 10-Q 1 PAGE 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from N/A to N/A COMMISSION FILE NUMBER 132-3 CONSOLIDATED FREIGHTWAYS, INC. Incorporated in the State of Delaware I.R.S. Employer Identification No. 94-1444798 3240 Hillview Avenue, Palo Alto, California 94304 Telephone Number (415) 494-2900 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 and (2) has been subject to such filing requirements for the past 90 days. Yes xx No Number of shares of Common Stock, $.625 par value, outstanding as of October 31, 1995 : 43,535,593 PAGE 2 CONSOLIDATED FREIGHTWAYS, INC. FORM 10-Q Quarter Ended September 30, 1995 ___________________________________________________________________________ ___________________________________________________________________________ INDEX PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Balance Sheets - September 30, 1995 and December 31, 1994 3 Statements of Consolidated Income - Three and Nine Months Ended September 30, 1995 and 1994 5 Statements of Consolidated Cash Flows - Nine Months Ended September 30, 1995 and 1994 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings 11 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 PAGE 3 PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, December 31, 1995 1994 (Dollars in thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ 101,955 $ 95,711 Trade accounts receivable, net of allowances 760,358 659,191 Other accounts receivable 69,649 37,021 Operating supplies, at lower of average cost or market 50,201 41,719 Prepaid expenses 77,482 71,277 Deferred income taxes 128,807 126,546 Total Current Assets 1,188,452 1,031,465 PROPERTY, PLANT AND EQUIPMENT, at cost Land 178,340 163,965 Buildings and improvements 543,289 510,568 Revenue equipment 1,065,304 979,002 Other equipment and leasehold improvements 389,036 368,809 2,175,969 2,022,344 Accumulated depreciation and amortization (1,118,923) (1,077,752) 1,057,046 944,592 OTHER ASSETS Restricted funds 14,213 12,861 Deposits and other assets 75,165 80,626 Unamortized aircraft maintenance, net 113,799 81,010 Costs in excess of net assets of businesses acquired, net of accumulated amortization 315,159 322,169 518,336 496,666 TOTAL ASSETS $2,763,834 $2,472,723 The accompanying notes are an integral part of these statements. PAGE 4 CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, December 31, 1995 1994 (Dollars in thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 273,524 $ 253,584 Accrued liabilities 571,871 542,797 Accrued claims costs 140,933 138,800 Current maturities of long-term debt and capital leases 4,015 3,712 Short-term borrowings 80,000 -- Federal and other income taxes 11,465 6,275 Total Current Liabilities 1,081,808 945,168 LONG-TERM LIABILITIES Long-term debt and guarantees 384,522 286,833 Long-term obligations under capital leases 110,981 111,024 Accrued claims costs 164,945 163,849 Deferred income taxes 45,093 38,034 Other liabilities and deferred credits 251,253 254,186 Total Liabilities 2,038,602 1,799,094 SHAREHOLDERS' EQUITY Preferred stock, no par value; authorized 5,000,000 shares: Series A, designated 600,000 shares; none issued -- -- Series B, 8.5% cumulative, convertible, $.01 stated value; designated 1,100,000 shares; issued 956,011 and 962,748 shares, respectively 10 10 Series C, 8.738% cumulative, convertible, $.01 stated value; designated and issued none and 690,000 shares, respectively -- 7 Additional paid-in capital, preferred stock 145,400 264,284 Deferred TASP compensation (116,208) (120,646) Total Preferred Shareholders' Equity 29,202 143,655 Common stock, $.625 par value; authorized 100,000,000 shares; issued 51,088,547 and 43,955,510 shares, respectively 31,930 27,472 Additional paid-in capital, common stock 232,738 116,209 Cumulative translation adjustment (1,722) (1,170) Retained earnings 619,475 574,885 Cost of repurchased common stock (7,559,593 and 7,601,382 shares, respectively) (186,391) (187,422) Total Common Shareholders' Equity 696,030 529,974 Total Shareholders' Equity 725,232 673,629 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,763,834 $2,472,723 The accompanying notes are an integral part of these statements.
PAGE 5 CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED INCOME (Dollars in thousands except per share amounts) Three Months Ended Nine Months Ended September 30 September 30 1995 1994 1995 1994 REVENUES CF MotorFreight $ 593,710 $ 584,398 $ 1,801,227 $ 1,512,894 Con-Way Transportation Services 294,751 259,444 857,763 763,765 Emery Worldwide 434,318 392,641 1,280,462 1,122,820 1,322,779 1,236,483 3,939,452 3,399,479 COSTS AND EXPENSES CF MotorFreight Operating Expenses 523,770 500,745 1,565,465 1,312,732 Selling and Administrative Expenses 58,661 65,406 178,802 181,582 Depreciation 16,899 17,988 50,129 56,552 599,330 584,139 1,794,396 1,550,866 Con-Way Transportation Services Operating Expenses 227,916 191,948 647,794 562,140 Selling and Administrative Expenses 33,207 30,633 100,267 90,546 Depreciation 10,500 9,288 29,488 25,831 271,623 231,869 777,549 678,517 Emery Worldwide Operating Expenses 349,745 313,975 1,042,379 894,935 Selling and Administrative Expenses 57,898 51,748 167,384 154,290 Depreciation 6,939 6,387 20,247 19,050 414,582 372,110 1,230,010 1,068,275 1,285,535 1,188,118 3,801,955 3,297,658 OPERATING INCOME (LOSS) CF MotorFreight (5,620) 259 6,831 (37,972) Con-Way Transportation Services 23,128 27,575 80,214 85,248 Emery Worldwide 19,736 20,531 50,452 54,545 37,244 48,365 137,497 101,821 OTHER INCOME (EXPENSE) Investment income 158 661 680 1,882 Interest expense (9,342) (7,206) (24,760) (20,865) Miscellaneous, net 1,443 93 1,999 (1,362) (7,741) (6,452) (22,081) (20,345) Income Before Income Taxes and Extraordinary Charge 29,503 41,913 115,416 81,476 Income Taxes 13,988 21,632 53,508 40,732 Net Income Before Extraordinary Charge 15,515 20,281 61,908 40,744 Extraordinary charge from write off of intrastate operating rights, net of tax benefits of $4,056 5,522 5,522 NET INCOME 15,515 14,759 61,908 35,222 Preferred Stock Dividends 2,155 4,768 8,620 14,265 NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 13,360 $ 9,991 $ 53,288 $ 20,957 Primary average shares outstanding (1) 44,561,758 37,218,928 44,362,108 37,261,289 PRIMARY EARNINGS PER SHARE Net Income Before Extraordinary charge $ 0.30 $ 0.42 $ 1.25 $ 0.71 Extraordinary charge (0.15) (0.15) Net income $ 0.30 $ 0.27 $ 1.25 $ 0.56 FULLY DILUTED EARNINGS PER SHARE Net Income Before Extraordinary charge $ 0.28 $ 0.37 $ 1.17 $ 0.63 Extraordinary charge (0.13) (0.13) Net income $ 0.28 $ 0.24 $ 1.17 $ 0.50 (1) Includes the dilutive effect of stock options. The three and nine months ended September 30, 1995 also reflect the conversion of Series C Preferred stock to Common stock. The accompanying notes are an integral part of these statements.
PAGE 6 CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS Nine Months Ended September 30, 1995 1994 (Dollars in thousands) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 95,711 $ 139,044 CASH FLOWS FROM OPERATING ACTIVITIES Net income before extraordinary charge 61,908 40,744 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 108,963 109,313 Increase (decrease) in deferred income taxes 5,218 (5,523) (Gains) losses from property disposals, net (2,423) 772 Changes in assets and liabilities: Trade receivables (101,167) (90,663) Other receivables (32,628) (36,147) Prepaid expenses (6,205) (14,171) Accrued claims costs 3,229 (4,473) Accounts payable 19,940 48,931 Accrued liabilities 29,074 118,721 Federal and other income taxes 5,190 14,299 Other (31,432) (37,016) Net Cash Provided by Operating Activities 59,667 144,787 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (219,340) (138,768) Purchases of marketable securities -- (292) Proceeds from sales of property 8,704 5,493 Net Cash Used by Investing Activities (210,636) (133,567) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of long-term debt 98,890 -- Repayment of long-term debt and capital lease obligations (942) (795) Net borrowings under revolving line of credit 80,000 -- Proceeds from issuance of common stock 3,126 8,438 Payments of common dividends (12,332) -- Payments of preferred dividends (11,529) (17,333) Net Cash Provided (Used) by Financing Activities 157,213 (9,690) Increase in Cash and Cash Equivalents 6,244 1,530 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 101,955 $ 140,574 The accompanying notes are an integral part of these statements. PAGE 7 CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The accompanying consolidated financial statements of Consolidated Freightways, Inc. and subsidiaries (the Company) have been prepared by the Company, without audit by independent public accountants, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, should be read in conjunction with the consolidated financial statements included in the Company's 1994 Annual Report to Shareholders. There have been no significant changes in the accounting policies of the Company. There were no significant changes in the Company's commitments and contingencies as previously described in the 1994 Annual Report to Shareholders and related annual report to the Securities and Exchange Commission on Form 10-K other than that described in Note 3 below. 2. On March 15, 1995, the Company's 6,900,000 depository shares, each representing one-tenth of a share of Series C Conversion Preferred stock, were converted to 6,900,000 shares of the Company's Common stock. 3. On June 27, 1995, the Company filed a registration statement with the Securities and Exchange Commission to register $100 million of unsecured, unsubordinated notes which on September 11, 1995, were exchanged for $100 million of privately placed notes which were issue on June 1, 1995. The registered notes bear interest at 7.35% per annum, payable semiannually, and are due June 1, 2005. The proceeds of the private placement notes were used to retire short-term debt, for capital expenditures and other general corporate purposes. 4. Also on June 27, 1995, the Company filed a shelf registration statement with the Securities and Exchange Commission covering $150 million of debt and equity securities for future issuance with terms to be decided at time of issuance. The $150 million of securities includes $45 million of securities registered under a prior registration statement and $105 million of newly registered securities. 5. On November 7, 1995, the Company redeemed its preferred stock purchase rights. Under certain conditions, each right enabled the holder, upon exercise of the right, a specified number of shares of common stock. 6. The Company and its subsidiaries are defendants in various lawsuits incidental to their businesses. It is the opinion of management that the ultimate outcome of these actions will not have a material impact on the Company's financial position or results of operations. PAGE 8 CONSOLIDATED FREIGHTWAYS, INC. AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company's third quarter and nine-month revenues increased 7.0% and 15.9%, respectively, over the comparable periods in 1994. Con-Way Transportation Services (Con-Way) increased revenues through, among other things, geographic expansion and by offering more second-day service with a longer length of haul. Emery Worldwide (Emery) continued to gain business internationally, while CF MotorFreight (CFMF) was able to offset declines in its domestic long-haul revenues with increased revenues from non-carrier logistics operations. All of the Company's operations were affected by price discounting throughout the industry. Year-to-date comparative results were affected by a 24-day strike against CFMF and other unionized LTL carriers in April 1994. Operating income in the third quarter 1995 decreased 23.0% from the same period last year while year-to-date operating income increased 35.0% or $35.7 million to $137.5 million. The quarterly decline is attributable to price discounting affecting all operations, lower business levels at CFMF and the lower margins Emery earned on its increased international business. Operating income for the first nine months of 1994 included second quarter operating losses of $42.1 million at CFMF from the strike in April 1994. The 1994 quarterly and year-to-date results include a non-cash, extraordinary charge of $5.5 million net of income tax benefits. This represents the write-off of intrastate operating rights as a result of the passage of the Federal Aviation Administration Authorization Act of 1994. Significant variations in segment revenues and operating income are as follows: CF MOTORFREIGHT CFMF revenues for the third quarter 1995 increased 1.6% despite a total tonnage decline of 4.1%. This increase is attributable to a significant growth in revenues from the non-carrier logistics operation, partial retention of the recent August 1, 1995 rate increase and because the higher rated LTL tonnage was virtually unchanged from the prior period. Year-to- date, revenues increased 19.1% over the same period last year on total and LTL tonnage increases of 13.2% and 17.4%, respectively. The 1994 results include the impact of the strike against CFMF and other unionized LTL carriers. CFMF's third quarter operating loss of $5.6 million compares to operating income of $259,000 in the comparable period in 1994. The loss underscores the need for CFMF to balance its freight system capacity to current business levels and is a result of the previously mentioned rate discounting. Included in CFMF's third quarter results for 1995 and 1994 is approximately $4 million and $2 million, respectively, of income from its Canadian subsidiary and non-carrier logistics operations. The year-to-date operating income of $6.8 million is a $44.8 million improvement over PAGE 9 the prior year and reflects the absence of losses incurred during the 1994 strike and increased income from non-carrier logistics operations. Included in CFMF's nine-month operating results for 1995 and 1994 is approximately $10 million and $5 million, respectively, of income related to its Canadian subsidiary and non-carrier logistics operations. Management analysis has indicated that customer expectations have increased and competition has intensified as the historical market segmentation has been less well defined between regional LTL, national LTL, truckload and parcel. While management believes that customers desire fast, flexible, consistent and reliable service, utilizing CFMF's traditional hub-and-spoke network limited service flexibility while increasing transit times and handling, thereby increasing costs. In an effort to improve its competitive position and thereby improve margins, management has initiated an operational re-engineering plan named Business Accelerator System (BAS). BAS replaces CFMF's traditional hub-and-spoke network in favor of one that moves freight directionally from point-to-point and streamlines the freight network. This is expected to reduce miles and handling and rationalize system capacity, thereby reducing transit times and costs. With an improved service offering, management believes it will be able to re- invigorate its sales and marketing efforts and recapture market share. BAS was implemented on October 16, 1995 following approval by representatives of the International Brotherhood of Teamsters. In the short-term, management expects to incur additional losses due to the costs associated with maintaining timely service while assimilating the significant changes required to implement BAS. However, in the long-term, management believes that implementing BAS will significantly reduce operating expenses. CON-WAY TRANSPORTATION SERVICES Con-Way's third quarter 1995 revenues increased 13.6% over the same period last year on LTL and total tonnage increases of 7.5% and 6.6%, respectively. For the nine months ended September 30, 1995, revenues increased 12.3% on total tonnage improvements of 6.0%, with LTL tonnage growth of 5.2%. Both the quarterly and year-to-date revenue increases reflect Con-Way's continued expansion into new markets and the increased proportion of second-day freight. Second-day freight, as compared to same- day freight, has a higher average revenue per pound associated with a longer length of haul. The nine months ended September 30, 1994 included incremental business obtained during the April 1994 Teamster strike against CFMF and other unionized LTL carriers. Third quarter operating income was down 16.1% compared with the same period in 1994. Operating income for the nine-month period was down 5.9% compared with the strike benefited 1994 period. The quarterly and nine-month income declines reflect the industry wide rate discounting, lower margins earned on business gained during Con-Way's expansion into new geographic regions, truckload and second-day markets as well as labor cost increases. As Con-Way increases business levels in these new markets, utilization of the infrastructure will increase and, consequently, Con-Way should realize improved margins in these markets. Management will continue emphasizing cost efficiency measures throughout the organization and enhancement of its services. PAGE 10 EMERY WORLDWIDE Emery revenues for the third quarter and nine months ended September 30, 1995, increased 10.6% and 14.0%, respectively. Domestic business in the comparable nine-month period in 1994 was favorably impacted by the strike against CFMF and other unionized LTL carriers. Emery's revenue improvement in 1995 was driven primarily by strong tonnage gains in the international markets with international revenue up 31.1% on a tonnage increase of 32.0% during the quarter. Domestically, commercial revenue increased 1.2% on a tonnage increase of 5.0% during the quarter. For the nine months ended September 30, 1995, domestic revenue decreased 1.0% on a tonnage increase of 1.0%, while international revenue and tonnage increased 47.0% and 46.4%, respectively. Third quarter and year-to-date operating income declined 3.9% and 7.5%, respectively, compared to the same periods in 1994. Despite revenue increases, operating income declined as margins on increased international tonnage were lower than margins on the slower-growing domestic tonnage. Emery's margins on international freight are generally lower than domestic freight as Emery primarily utilizes commercial lift internationally versus a dedicated fleet for domestic volumes. The 1994 operating income also reflects the benefits of enhanced utilization of the domestic dedicated system associated with the business gained during the April 1994 strike. Emery management is increasing its marketing efforts to gain additional domestic business while continuing the programs that have been successful in the international arena. Cost controls are still at the forefront as Emery management seeks to further reduce costs associated with the international airhaul and agency relationships. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1995, the Company had $102.0 million in cash and cash equivalents. Net cash flow from operations during the first nine months of 1995 of $59.7 million was primarily the result of income from operations, depreciation and amortization offset in part by increased accounts receivable levels. Since 1994, the Company has been experiencing a deterioration in the timeliness of receivables collection resulting in an increase in its working capital investment. To address this, the Company has initiated several programs to streamline its collection efforts and enhance communication with its customers. Included in other receivables at September 30, 1995, was approximately $43 million of refundable deposits on equipment to be financed through leasing arrangements. Capital expenditures for the nine months ended September 30, 1995, were $219.3 million, an increase of $80.6 million over the same period in 1994. The increase was due primarily to purchases of revenue equipment and real property by CFMF and Con-Way. Capital expenditures were financed by cash from operations and a portion of the proceeds from the issuance of long- term debt and short-term borrowings. The Company intends to finance the remaining capital requirements for the year with financing arrangements supplemented by cash from operations. The Company issued $100 million of notes in June 1995 and subsequently, in September 1995, exchanged this privately placed debt with registered debt with essentially the same terms. Separately, the Company increased borrowings under PAGE 11 its $300 million unsecured credit facility to $80 million as of September 30, 1995. The net proceeds from both sources was used for capital expenditures and general corporate purposes. Also in June 1995, the Company filed a shelf registration statement with the Securities and Exchange Commission covering $150 million of debt and equity securities for future issuance with terms to be decided at time of issuance. The $150 million of securities includes $45 million of securities registered under a prior registration statement and $105 million of newly registered securities. Proceeds will be used for general corporate purposes which may include repayment of indebtedness, capital expenditures and working capital needs. At September 30, 1995, $111.0 million of letters of credit were issued under the Company's $300 million unsecured credit facility. In addition, $79.9 million of letters of credit were issued and secured with Emery receivables under the $100 million Emery receivables sale facility. Also at September 30, 1995, $40.4 million of letters of credit were issued under several unsecured letter of credit facilities. OTHER The Company's operations necessitate the storage of fuel in underground tanks as well as the disposal of substances regulated by various federal and state laws. The Company adheres to a stringent site-by- site tank testing and maintenance program performed by a qualified independent party to protect the environment and comply with regulations. Where the need for clean-up is necessary, the Company takes appropriate action. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings As previously reported, the Company has been designated a Potentially Responsible Party (PRP) by the Environmental Protection Agency (EPA) with respect to the disposal of hazardous substances at various sites. The Company expects its share of the total cleanup costs of all sites to be immaterial. Certain legal matters are discussed in Note 6 in the Notes to Consolidated Financial Statements in Part I of this form. PAGE 12 ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits (11) Computation of Per Share Earnings (12) Computation of Ratio of Earnings to Fixed Charges (27) Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended September 30, 1995. PAGE 13 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company (Registrant) has duly caused this Form 10-Q Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized. Consolidated Freightways, Inc. (Registrant) November 13, 1995 /s/Gregory L. Quesnel Gregory L. Quesnel Executive Vice President and Chief Financial Officer November 13, 1995 /s/Gary D. Taliaferro Gary D. Taliaferro Vice President and Controller EX-11 2 Exhibit 11 COMPUTATION OF PER SHARE EARNINGS The following is the computation of fully-diluted earnings per share: Three Months Ended Nine Months Ended September 30 September 30 1995 1994 1995 1994 (Dollars in thousands except per share data) Earnings: Net income before extraordinary charge $ 15,515 $ 20,281 $ 61,908 $ 40,744 Preferred dividends 2,155 4,768 8,620 14,265 13,360 15,513 53,288 26,479 Extraordinary charge - 5,522 - 5,522 Net income available to common shareholders 13,360 9,991 53,288 20,957 Non-discretionary adjustments under the if-converted method: Addback: Series C, preferred dividends - - 2,207 - Addback: Series B, preferred dividends, net of tax benefits 2,131 2,120 6,413 6,304 Less: Replacement of funding adjustment, net of tax benefits (1) (1,662) (2,120) (5,008) (6,304) Net income available to common shareholders $ 13,829 $ 9,991 $ 56,900 $ 20,957 WEIGHTED AVERAGE SHARES OUTSTANDING: Common shares (2) 43,508,226 36,255,334 43,400,950 36,144,907 Equivalents - stock options 1,053,533 963,594 1,041,316 1,116,382 Series B, Preferred stock if-converted method 4,229,925 4,315,273 4,229,925 4,315,273 48,791,684 41,534,201 48,672,191 41,576,562 FULLY DILUTED EARNINGS PER SHARE Net income before extraordinary charge $ 0.28 $ 0.37 $ 1.17 $ 0.63 Extraordinary charge (0.13) (0.13) Net income available to common shareholders $ 0.28 $ 0.24 $ 1.17 $ 0.50 (1) Additional payment to the TASP to replace the funding lost under the if-converted method. (2) The three and nine months ended September 30, 1995 reflect the conversion of Series C Preferred stock to Common stock.
EX-12 3
Exhibit 12 COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES Nine Months Ended September 30, Year Ended December 31, 1995 1994 1994 1993 1992 1991 1990 (dollars in thousands) Fixed Charges: Interest Expense $24,760 $20,865 $27,945 $30,333 $38,893 $46,703 $40,178 Capitalized Interest 678 912 1,042 1,224 543 1,703 2,470 Preferred Dividends 9,617 9,682 12,475 12,551 12,618 12,691 12,746 Total Interest 35,055 31,459 41,462 44,108 52,054 61,097 55,394 Interest Component of Rental Expense 53,560 46,800 62,304 57,585 55,773 58,052 54,016 Fixed Charges 88,615 78,259 103,766 101,693 107,827 119,149 109,410 Less: Capitalized Interest 678 912 1,042 1,224 543 1,703 2,470 Preferred Dividends 9,617 9,682 12,475 12,551 12,618 12,691 12,746 Net Fixed Charges $78,320 $67,665 $90,249 $87,918 $94,666 $104,755 $94,194 Earnings: Income (Loss) Before Taxes $115,416 $81,476 $111,920 $91,441 $(10,733) $(43,337) $(32,678) Add: Net Fixed Charges 78,320 67,665 90,249 87,918 94,666 104,755 94,194 Total Earnings $193,736 $149,141 $202,169 $179,359 $83,933 $61,418 $61,516 Ratio of Earnings to Fixed Charges: Total Earnings $193,736 $149,141 $202,169 $179,359 $83,933 $61,418 $61,516 Fixed Charges (1) 88,615 78,259 103,766 101,693 107,827 119,149 109,410 Ratio 2.2 x 1.9 x 1.9 x 1.8 x 0.8 x(2) 0.5 x(2) 0.6 x(2) (1) Fixed Charges represents interest on capital leases and short-term and long-term debt, capitalized interest, dividends on shares of the Series B Cumulative Convertible Preferred Stock used to pay debt service on notes issued by the Company's Thrift and Stock Plan (the "TASP"), and the applicable portion of the consolidated rent expense which approximates the interest portion of lease payments. (2) Earnings were inadequate to cover fixed charges for the periods shown; the deficiency was $23.9 million, $57.7 million and $47.9 million for the years ended December 31, 1992, 1991 and 1990, respectively.
EX-27 4
5 9-MOS DEC-31-1995 SEP-30-1995 101,955 0 760,358 (25,194) 50,201 1,188,452 2,175,969 (1,118,923) 2,763,834 1,081,808 495,503 264,668 0 145,410 315,154 2,763,834 0 3,939,452 0 3,801,955 22,081 7,713 24,760 115,416 53,508 61,908 0 0 0 53,288 1.25 1.17
-----END PRIVACY-ENHANCED MESSAGE-----