-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, i4ctNfBW+7Tmp/oUYN/nSVkzqNO8KAP/4y+T0DnKaeIdfcvDneTIHr/HXQGRn+/u 2o2GQKV92dMuQCfcIr0fzQ== 0000059198-94-000010.txt : 19940805 0000059198-94-000010.hdr.sgml : 19940805 ACCESSION NUMBER: 0000059198-94-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRINOVA CORP CENTRAL INDEX KEY: 0000059198 STANDARD INDUSTRIAL CLASSIFICATION: 3490 IRS NUMBER: 344288310 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00924 FILM NUMBER: 94541710 BUSINESS ADDRESS: STREET 1: 3000 STRAYER CITY: MAUMEE STATE: OH ZIP: 43537 BUSINESS PHONE: 4198672200 FORMER COMPANY: FORMER CONFORMED NAME: LIBBEY OWENS FORD CO DATE OF NAME CHANGE: 19860814 FORMER COMPANY: FORMER CONFORMED NAME: LIBBEY OWENS FORD GLASS CO DATE OF NAME CHANGE: 19681004 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1994 Commission file number 1-924 TRINOVA CORPORATION (Exact name of registrant as specified in its charter) Ohio 34-4288310 (State of Incorporation) (I.R.S. Employer Identification No.) 3000 Strayer, Maumee, OH 43537-0050 (Address of principal executive office) Registrant's telephone number, including area code: (419) 867-2200 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 X No The number of Common Shares, $5 Par Value, outstanding as of July 29, 1994, was 28,767,149. This document, including exhibits, contains 22 pages. The cover page consists of 1 page. The Exhibit Index is located on page 18. SECURITIES AND EXCHANGE COMMISSION FORM 10-Q FOR QUARTER ENDED JUNE 30, 1994 INDEX TO INFORMATION IN REPORT TRINOVA CORPORATION Page Number PART I - FINANCIAL INFORMATION Item 1. Financial Statements Statement of Financial Position - June 30, 1994 and December 31, 1993 3 Condensed Statement of Operations - Three Months and Six Months Ended June 30, 1994 and 1993 4 Condensed Statement of Cash Flows - Six Months Ended June 30, 1994 and 1993 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II - OTHER INFORMATION Item 1. Legal Proceedings 13 Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 17 EXHIBIT INDEX 18 EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS 22 -2- PART I - FINANCIAL INFORMATION Item 1. - Financial Statements STATEMENT OF FINANCIAL POSITION TRINOVA CORPORATION (Dollars in thousands, except per share data)
June 30 December 31 1994 1993 ---------- ---------- (Unaudited) ASSETS CURRENT ASSETS Cash $ 12,996 $ 20,534 Receivables 242,411 200,340 Inventories: In-process and finished products 166,817 172,964 Raw materials and manufacturing supplies 42,477 39,382 ---------- ---------- 209,294 212,346 Other current assets 48,012 54,011 ---------- ---------- TOTAL CURRENT ASSETS 512,713 487,231 Plants and properties 852,525 826,100 Less accumulated depreciation 468,824 439,281 ---------- ---------- 383,701 386,819 Other assets 102,123 98,151 ---------- ---------- TOTAL ASSETS $ 998,537 $ 972,201 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 15,049 $ 60,539 Accounts payable 96,978 81,133 Income taxes 34,891 27,364 Other current liabilities 151,436 151,469 Current maturities of long-term debt 13,472 4,257 ---------- ---------- TOTAL CURRENT LIABILITIES 311,826 324,762 Long-term debt 236,207 246,214 Postretirement benefits other than pensions 121,670 120,058 Deferred credits and other liabilities 26,290 22,558 Deferred income taxes 5,927 5,377 SHAREHOLDERS' EQUITY Common stock; par value $5 a share Authorized - 100,000,000 shares Outstanding - 28,752,149 and 28,405,880 shares, respectively (after deducting 5,457,747 and 5,804,016 shares, respectively, in treasury) 143,760 142,029 Additional paid-in capital 9,407 2,157 Retained earnings 161,461 138,628 Currency translation adjustments (18,011) (29,582) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 296,617 253,232 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 998,537 $ 972,201 ========== ========== The Notes to Financial Statements are an integral part of this statement.
-3- CONDENSED STATEMENT OF OPERATIONS TRINOVA CORPORATION (In thousands, except per share data) (Unaudited)
Three Months Ended Six Months Ended June 30 June 30 ------------------------ ------------------------ 1994 1993 1994 1993 ---------- ---------- ---------- ---------- Net sales $ 460,863 $ 419,748 $ 900,694 $ 848,917 Cost of products sold 345,437 317,829 676,803 648,767 ---------- ---------- ---------- ---------- MANUFACTURING INCOME 115,426 101,919 223,891 200,150 Selling and general admin. expenses 62,195 62,742 124,242 127,414 Engineering, research and development expenses 13,740 13,740 27,766 28,793 Special charge - 26,000 - 26,000 ---------- ---------- ---------- ---------- OPERATING INCOME (LOSS) 39,491 (563) 71,883 17,943 Interest expense (5,475) (6,729) (11,216) (13,459) Other-net (4,292) (3,629) (10,469) (6,071) ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 29,724 (10,921) 50,198 (1,587) Income taxes (credit) 10,400 (1,800) 17,600 1,900 ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 19,324 (9,121) 32,598 (3,487) Cumulative effect to January 1, 1993, of accounting change, net of income tax benefit - - - (70,229) ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ 19,324 $ (9,121) $ 32,598 $ (73,716) ========== ========== ========== ========== INCOME (LOSS) PER SHARE Income (loss) before cumulative effect of accounting change $ .66 $ (.32) $ 1.12 $ (.12) Cumulative effect of accounting change, net of income tax benefit - - - (2.48) ---------- ---------- ---------- ---------- NET INCOME (LOSS) PER SHARE $ .66 $ (.32) $ 1.12 $ (2.60) ========== ========== ========== ========== Cash dividends per common share $ .17 $ .17 $ .34 $ .34 ========== ========== ========== ========== Average shares outstanding 30,866 28,345 30,780 28,326 ========== ========== ========== ========== The Notes to Financial Statements are an integral part of this statement.
-4- CONDENSED STATEMENT OF CASH FLOWS TRINOVA CORPORATION (In thousands) (Unaudited)
Six Months Ended June 30 -------------------- 1994 1993 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 32,598 $ (73,716) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Cumulative effect of accounting change net of income tax benefit - 70,229 Special charge - 26,000 Depreciation 30,287 30,884 Changes in working capital elements, other than debt (374) (1,004) Restructuring payments (1,908) (10,660) Other 6,138 9,163 ---------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 66,741 50,896 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (26,617) (26,313) Other 1,149 298 ---------- ---------- NET CASH USED BY INVESTING ACTIVITIES (25,468) (26,015) CASH FLOWS FROM FINANCING ACTIVITIES Net decrease in short-and long-term debt (45,696) (17,876) Cash dividends (9,765) (9,607) Stock issuance 8,981 1,173 ---------- ---------- NET CASH USED BY FINANCING ACTIVITIES (46,480) (26,310) Effect of exchange rate changes on cash (2,331) (3,438) ---------- ---------- DECREASE IN CASH (7,538) (4,867) Cash at beginning of period 20,534 26,269 ---------- ---------- CASH AT END OF PERIOD $ 12,996 $ 21,402 ========== ========== The Notes to Financial Statements are an integral part of this statement.
-5- NOTES TO FINANCIAL STATEMENTS TRINOVA CORPORATION Note 1 - Basis of Presentation The accompanying financial statements for the interim periods are unaudited. In the opinion of management, all adjustments necessary for a fair statement of the results for the interim periods included herein have been made. It is suggested that these financial statements be read in conjunction with the audited 1993 financial statements and notes thereto included in TRINOVA Corporation's most recent annual report. Note 2 - Special Charge In the 1993 second quarter, the Company recorded a $26 million provision before income taxes for the estimated costs for severance and other personnel- related costs associated with worldwide work force reductions, primarily focusing on the Company's industrial operations in Europe. This charge reduced net income for the 1993 second quarter and income before cumulative effect of accounting change for the 1993 six-month period by $18.2 million, or $.64 per share. Note 3 - Postretirement Benefits Other than Pensions The Company adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," in the 1993 first quarter and recognized the transition obligation as the cumulative effect of a change in accounting principle resulting in a non-cash charge to income of $113.2 million pretax, $70.2 million after tax, or $2.48 per share. Note 4 - Income (Loss) per Share Income (loss) per share is computed using the average number of common shares outstanding, including common stock equivalents. The assumed conversion of the Company's 6 percent convertible debentures was included in average shares outstanding for the three- and six-month periods ended June 30, 1994, increasing the average number of shares outstanding by 1,904,762 shares. For purposes of computing net income per share for the three- and six-month periods ended June 30, 1994, net income was increased for the after-tax equivalent of interest expense on the 6 percent convertible debentures. The assumed conversion of the 6 percent convertible debentures was not included in average shares outstanding for the three- and six-month periods ended June 30, 1993, because the effect of the inclusion would have been anti-dilutive. -6- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL REVIEW AND ANALYSIS OF OPERATIONS Analysis of Operations Second Quarter 1994 Compared with Second Quarter 1993 The following data provide highlights for the 1994 second quarter compared with the 1993 second quarter.
Percent (dollars in thousands, Second Quarter Increase except per share data) 1994 1993 (Decrease) CONSOLIDATED Net sales $ 460,863 $ 419,748 9.8% Manufacturing income 115,426 101,919 13.3 Manufacturing margin 25.0% 24.3% Special charge - 26,000 Operating income (loss) 39,491 (563)* Operating margin 8.6% - * Net income (loss) 19,324 (9,121)* Net income (loss) per share .66 (.32)* INDUSTRIAL Net sales 247,474 222,189 11.4 Special charge - 19,200 Operating income (loss) 24,939 (9,351)* Operating margin 10.1% - * Order backlog at June 30 179,397 149,757 19.8 AUTOMOTIVE Net sales 135,058 114,781 17.7 Special charge - 2,600 Operating income 14,144 9,845 * 43.7 Operating margin 10.5% 8.6% * AEROSPACE & DEFENSE Net sales 78,331 82,778 (5.4) Special charge - 3,600 Operating income 6,120 4,194 * 45.9 Operating margin 7.8% 5.1% * Order backlog at June 30 269,976 291,893 (7.5) * After deducting the special charge.
-7- Analysis of Operations - Continued Second-quarter 1994 sales increased $41.1 million, or 9.8 percent, over the 1993 second quarter. Industrial and automotive sales increased 11.4 percent and 17.7 percent, respectively, while aerospace & defense sales declined 5.4 percent. U.S. sales increased $30.6 million, and non-U.S. sales, principally Europe, increased $10.5 million. Industrial sales increased $25.3 million, or 11.4 percent, over the 1993 second quarter. U.S. industrial sales, which account for nearly two-thirds of the Company's industrial sales, increased 15 percent over the 1993 second- quarter sales. Marking a significant change in the trend of recent quarters and principally the result of improving business conditions in Europe, non- U.S. industrial sales exceeded 1993 second-quarter sales by nearly 6 percent. Non-U.S. industrial sales include sales in Brazil, which were flat compared with the prior year, and improved sales in the Asia/Pacific region. Second- quarter 1994 industrial order intake in the U.S. and Europe continued to strengthen, resulting in order backlog at June 30, 1994, of $179.4 million which was $29.6 million, or 19.8 percent, greater than the prior year. Second-quarter 1994 automotive sales increased $20.3 million, or 17.7 percent, over the 1993 second quarter. Second-quarter 1994 sales to U.S. automotive markets were flat compared with the 1994 first quarter but increased nearly 25 percent compared with the 1993 second quarter. The Company's second-quarter 1994 sales in the European automotive markets improved nearly 11 percent compared with both the 1994 first quarter and the 1993 second quarter. Aerospace & defense sales for the 1994 second quarter were at first-quarter 1994 levels but $4.5 million lower than the 1993 second quarter, reflecting the continued depressed conditions in the worldwide aerospace and military markets. Accordingly, order backlog of $270 million was $21.9 million, or 7.5 percent, lower than at June 30, 1993. Consolidated manufacturing income and margin improved over the 1993 second quarter. Manufacturing margin for the industrial and aerospace & defense segments improved, while manufacturing margin for the automotive segment declined slightly. As a result, consolidated manufacturing margin increased to 25 percent in the 1994 second quarter compared with 24.3 percent in the 1993 second quarter. This margin improvement reflects the benefits of the Company's continued commitment to cost reduction through improvements to manufacturing and distribution processes and through reductions in personnel. In addition, manufacturing margin benefited from increased sales, both from higher volume and selective price increases. Liquidation of LIFO inventory quantities increased manufacturing income, principally benefiting the industrial segment, by $580,000 in the 1994 second quarter, compared with $2.3 million in the 1993 second quarter. Selling and general administrative and engineering, research and development expenses (operating expenses) were $547,000 lower in the 1994 second quarter than in the 1993 second quarter. Operating expenses as a percent of sales were 16.5 percent in the 1994 second quarter, compared with 18.2 percent in the 1993 second quarter, reflecting the impact of increased volume and the -8- Analysis of Operations - Continued benefits of initiatives which were aggressively pursued throughout 1993 and the first half of 1994 to contain operating expenses. In the 1993 second quarter, the Company recorded a $26 million provision for the estimated costs for severance and other personnel-related costs resulting from planned work force reductions, primarily focusing on the Company's industrial operations in Europe. Operating income for the 1994 second quarter amounted to $39.5 million, compared with an operating loss in the 1993 second quarter of $563,000. Before the special charge, operating income for the 1993 second quarter amounted to $25.4 million. Net income for the 1994 second quarter amounted to $19.3 million, or 66 cents per share, compared with a net loss of $9.1 million, or 32 cents per share, in the 1993 second quarter. Exclusive of the special charge which amounted to $18.2 million after tax, or 64 cents per share, second-quarter 1993 net income was $9.1 million, or 32 cents per share. The tax benefits associated with the special charge were lower than the Company's normal rates primarily because charges in certain non-U.S. locations were not subject to tax benefits due to accumulated loss carry-forwards. -9- Analysis of Operations - Continued Six Months 1994 Compared with Six Months 1993 The following data provide highlights for the first six months of 1994 compared with the first six months of 1993.
Six Months Ended Percent (dollars in thousands, June 30 Increase except per share data) 1994 1993 (Decrease) CONSOLIDATED Net sales $ 900,694 $ 848,917 6.1% Manufacturing income 223,891 200,150 11.9 Manufacturing margin 24.9% 23.6% Special charge -- 26,000 Operating income 71,883 17,943 * Operating margin 8.0% 2.1% * Income (loss) before cumulative effect of accounting change 32,598 (3,487)* Cumulative effect to January 1, 1993, of accounting change, net of income tax benefit -- (70,229) Net income (loss) 32,598 (73,716) * Income (Loss) per Share Income (loss) before cumulative effect of accounting change 1.12 (.12)* Cumulative effect of accounting change, net of income tax benefit -- (2.48) Net income (loss) per share 1.12 (2.60))* INDUSTRIAL Net sales 480,242 443,959 8.2 Special charge -- 19,200 Operating income (loss) 41,711 (4,997)* Operating margin 8.7% -- * Order backlog at June 30 179,397 149,757 19.8 AUTOMOTIVE Net sales 263,622 232,387 13.4 Special charge -- 2,600 Operating income 28,089 21,681 * 29.6 Operating margin 10.7% 9.3% * AEROSPACE & DEFENSE Net sales 156,830 172,571 (9.1) Special charge -- 3,600 Operating income 12,621 11,200 * 12.7 Operating margin 8.0% 6.5% * Order backlog at June 30 269,976 291,893 (7.5) * After deducting the special charge.
-10- Analysis of Operations - Continued Sales for the first six months of 1994 increased $51.8 million, or 6.1 percent, over the first six months of 1993. U.S. sales increased $49.5 million, or 9.2 percent, over the comparable 1993 period, while non-U.S. sales, which included flat European sales, increased $2.3 million. The effects of exchange rate changes and dispositions of certain product lines reduced sales for the first six months of 1994 by nearly $16.3 million. Industrial sales in 1994 were $36.3 million, or 8.2 percent, higher than the comparable 1993 period. Industrial sales in the U.S., Brazil and Asia/Pacific region showed good growth while European sales for the 1994 six-month period were 4 percent lower than the 1993 six-month period. The effects of exchange rate changes and dispositions of certain product lines reduced the industrial segment sales by $8.6 million. The Company expects the trend of industrial sales and orders to continue to improve for the remainder of the year compared with the prior year, although the annual seasonal shutdowns that occur in the third quarter in Europe may affect comparisons with the first half of 1994. Automotive sales increased $31.2 million, or 13.4 percent, over the comparable 1993 period. Strong sales of light trucks, vans and small cars have driven improved sales for the North American car manufacturers and contributed to the Company's higher U.S. sales in these markets during the first six months of 1994. European sales increased $3.0 million for the six-month period and are net of the effects of exchange rate changes which lowered sales by $3.3 million. Automotive sales are expected to be lower in the last half of 1994 compared with the first half of the year due to seasonality and the phase out of certain contracts. Aerospace & defense sales for the first six months of 1994 were $15.7 million, or 9.1 percent, lower than the comparable 1993 period. Sales in both the first and second quarters of 1994 were below the comparable 1993 periods, reflecting the continued depressed condition of worldwide aerospace and defense markets. Dispositions and the effects of exchange rate changes reduced 1994 aerospace & defense sales by $4.4 million, compared with 1993. Consolidated manufacturing income and manufacturing margin improved over the 1993 first six-month period. Manufacturing margins for the industrial and aerospace & defense segments improved, while manufacturing margin for the automotive segment nearly equaled that of the prior year. Liquidation of LIFO inventory quantities increased manufacturing income in the 1994 six-month period by $1.3 million, while liquidation of LIFO inventories in the 1993 six- month period increased manufacturing income by $4.2 million. Selling and general administrative and engineering, research and development expenses were $4.2 million lower than in the first six months of 1993. Overhead expenses as a percent of sales were 16.9 percent for 1994, compared with 18.4 percent in the first six months of 1993. Operating income amounted to $71.9 million for the 1994 six-month period, compared with $17.9 million for the comparable 1993 period. Before the $26 million special charge, operating income for the 1993 period was $43.9 million. -11- Analysis of Operations - Continued Interest expense in 1994 was $2.2 million lower than in the first six months of 1993, reflecting the effect of lower average debt levels in 1994. Other- net deductions were $4.4 million higher in 1994 due, in part, to higher exchange losses and minority interest in earnings adjustment for a consolidated affiliate. Net income for the first six months of 1994 amounted to $32.6 million, or $1.12 per share. The Company adopted Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," in the 1993 first quarter and recognized the transition obligation as the cumulative effect of a change in accounting principle, resulting in a charge to income of $113.2 million pretax, $70.2 million after tax, or $2.48 per share. As a result, the net loss for the first six months of 1993 amounted to $73.7 million, or $2.60 per share. Before the special charge and cumulative effect adjustment, net income for the first six months of 1993 amounted to $14.7 million. Liquidity, Working Capital and Capital Investment Cash provided by operating activities for the first six months of 1994 totaled $66.7 million, compared with $50.9 million for the six months ended June 30, 1993. The increased cash flow was principally the result of stronger earnings in 1994. Net working capital requirements for the two periods were nearly the same, but with significantly different components. The increase in receivables was greater in 1994, while 1993 inventory reductions were greater than in 1994. Conversely, increased payables, taxes and other accruals required less working capital in 1994. Net restructuring payments included proceeds from the 1994 first-quarter sales of businesses totaling $9 million. Dividend payments in the 1994 second quarter remained unchanged at 17 cents per share for the quarter. Debt payments totaled $45.7 million for the 1994 six-month period, contributing to the improvement in the debt-to- capitalization ratio (debt divided by debt plus equity) which was reduced from 55.1 percent at December 31, 1993, to 47.2 percent at June 30, 1994. Under terms of its revolving credit agreements with several U.S. and non-U.S. banks, the Company may borrow up to $155 million. These agreements are renewable annually, are intended to support the Company's commercial paper borrowings and, to the extent not so utilized, provide domestic borrowings. The remaining borrowing capacity under these arrangements at June 30, 1994, was $145 million. In addition, the Company has uncommitted arrangements with various banks to provide short-term financing as necessary. The Company expects that cash flow from operating activities and available short-term financing arrangements will be sufficient to meet normal operating requirements over the near term. -12- PART II - OTHER INFORMATION TRINOVA CORPORATION Item 1. Legal Proceedings. As previously reported, on March 26, 1992, the United States Environmental Protection Agency ("USEPA") issued an Administrative Order ("Order") under Section 106 of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") to TRINOVA's subsidiary, Aeroquip Corporation ("Aeroquip"), and five other Potentially Responsible Parties ("PRPs") relative to the San Fernando Valley Burbank Operable Unit ("BOU"), involving groundwater contamination. (Reference is made to Part I, Item 3, of TRINOVA's Annual Report on Form 10-K for the year ended December 31, 1993.) The Order requires the six PRPs to design and construct a water blending facility at a cost now estimated to be approximately $4.8 million. TRINOVA's portion of any such cost is estimated to be 18.33 percent based on a cost-sharing agreement among the six PRPs which was executed by TRINOVA on July 6, 1992. Also related to the BOU, on May 15, 1994, USEPA issued to Lockheed Corporation ("Lockheed"), Aeroquip and other PRPs a Special Notice of Liability under CERCLA for the remaining eighteen years of operation and maintenance (O&M) costs associated with the blending facility, as well as a water treatment facility constructed by Lockheed under its BOU Consent Decree with USEPA. The Special Notice of Liability also covers USEPA's past response costs. The cost of the O&M phase which the USEPA is seeking to recover from the PRPs is not known at this time; USEPA past costs claimed against the PRPs are estimated at $12 million for the entire San Fernando Site, which includes other operable units in addition to the BOU. Negotiations are under way among PRPs and USEPA to arrive at an equitable and reasonable allocation of shares with respect to the foregoing costs. On April 26, 1994, Lockheed filed a complaint against Aeroquip and 105 other PRPs seeking contribution toward costs Lockheed incurred to construct the water treatment facility. Aeroquip has not been served with the complaint. Aeroquip intends to vigorously defend this action. Recovery by Lockheed, if any, against Aeroquip is not expected to be significant. TRINOVA and certain subsidiaries are defendants in various lawsuits. While the ultimate outcome of these lawsuits and the above environmental matter cannot now be predicted, management is of the opinion, based on the facts now known to it, that the liability, if any, in these lawsuits (to the extent not provided for by insurance or otherwise) and the above environmental matter will not have a material adverse effect upon TRINOVA's consolidated financial position. -13- Item 6. Exhibits and Reports on Form 8-K (a) The following exhibit is filed as part of Part I: Exhibit (11) - Statement re: Computation of Per Share Earnings The following exhibits are filed as part of Part II and are incorporated by reference hereunder: Exhibit (4)-1 First Supplemental Indenture, dated as of May 4, 1992, between TRINOVA Corporation and NBD Bank, N.A., with respect to the issuance of $75,000,000 aggregate principal amount of TRINOVA Corporation 7.95% Notes Due 1997, filed as Exhibit (4)-1 to Form SE filed on May 6, 1992 Exhibit (4)-2 7.95% Notes Due 1997, issued pursuant to the Indenture, dated as of January 28, 1988, between TRINOVA Corporation and NBD Bank, N.A. (formerly National Bank of Detroit), as supplemented by the First Supplemental Indenture, dated as of May 4, 1992, between TRINOVA Corporation and NBD Bank, N.A., filed as Exhibit (4)-2 to Form SE filed on May 6, 1992 Exhibit (4)-3 Officers' Certificate of TRINOVA Corporation, dated May 4, 1992, pursuant to Section 2.01 of the Indenture, dated as of January 28, 1988, between TRINOVA Corporation and NBD Bank, N.A. (formerly National Bank of Detroit), as supplemented by the First Supplemental Indenture, dated as of May 4, 1992, between TRINOVA Corporation and NBD Bank, N.A., filed as Exhibit (4)-3 to Form SE filed on May 6, 1992 Exhibit (4)-4 Rights Agreement, dated January 26, 1989, between TRINOVA Corporation and First Chicago Trust Company of New York filed as Exhibit (2) to Form 8-A filed on January 27, 1989, as amended by the First Amendment to Rights Agreement filed as Exhibit (5) to Form 8 filed on July 1, 1992 Exhibit (4)-5 Form of Share Certificate for Common Shares, $5 par value, of TRINOVA Corporation, filed as Exhibit (4)- 2 to Form SE filed on July 1, 1992 -14- Item 6. Exhibits and Reports on Form 8-K - Continued Exhibit (4)-6 Fiscal Agency Agreement, dated as of October 26, 1987, between TRINOVA Corporation, as Issuer, and Bankers Trust Company, as Fiscal Agent, with respect to $100,000,000 aggregate principal amount of TRINOVA Corporation 6% Convertible Subordinated Debentures Due 2002, filed as Exhibit (4)-1 to Form SE filed on March 18, 1993 Exhibit (4)-7 Indenture, dated as of January 28, 1988, between TRINOVA Corporation and NBD Bank, N.A. (formerly National Bank of Detroit), with respect to the issuance of $50,000,000 aggregate principal amount of TRINOVA Corporation 9.55% Senior Sinking Fund Debentures Due 2018, and the issuance of $75,000,000 aggregate principal amount of TRINOVA Corporation 7.95% Notes Due 1997, filed as Exhibit (4)-2 to Form SE filed on March 18, 1993 Exhibit (10)-1 TRINOVA Corporation Plan for Optional Deferment of Directors' Fees (Restated January 25, 1990), filed as Exhibit (10)-2 to Form SE filed on March 20, 1990 Exhibit (10)-2 TRINOVA Corporation Directors' Retirement Plan (Restated January 1, 1990), filed as Exhibit (10)-3 to Form SE filed on March 20, 1990 Exhibit (10)-3 Aeroquip Corporation Incentive Compensation Plan, filed as Exhibit (10)-4 to Form SE filed on March 20, 1990 Exhibit (10)-4 Vickers, Incorporated Incentive Compensation Plan, filed as Exhibit (10)-5 to Form SE filed on March 20, 1990 Exhibit (10)-5 TRINOVA Corporation Supplemental Benefit Plan (Restated January 1, 1989), filed as Exhibit (19)-1 to Form SE filed on November 6, 1992 Exhibit (10)-6 TRINOVA Corporation 1982 Stock Option Plan, filed as Exhibit (10)-1 to Form SE filed on March 18, 1993 Exhibit (10)-7 TRINOVA Corporation 1984 Incentive Compensation Plan, filed as Exhibit (10)-2 to Form SE filed on March 18, 1993 Exhibit (10)-8 TRINOVA Corporation 1987 Stock Option Plan, filed as Exhibit (10)-3 to Form SE filed on March 18, 1993 -15- Item 6. Exhibits and Reports on Form 8-K - Continued Exhibit (10)-9 Change in Control Agreement for Officers, filed as Exhibit (10)-4 to Form SE filed on March 18, 1993 (the Agreements executed by the Company and various executive officers of the Company are identical in all respects to the form of Agreement filed as an Exhibit to Form SE except as to differences in the identity of the officers and the dates of execution, and as to other variations directly necessitated by said differences) Exhibit (10)-10 Change in Control Agreement for Non-officers, filed as Exhibit (10)-5 to Form SE filed on March 18, 1993 (the Agreements executed by the Company and various non-officer employees of the Company are identical in all respects to the form of Agreement filed as an Exhibit to Form SE except as to differences in the identity of the employees and the dates of execution, and as to other variations directly necessitated by said differences) Exhibit (10)-11 TRINOVA Corporation 1994 Stock Incentive Plan, filed as Appendix A to the proxy statement for the annual meeting held on April 21, 1994 Exhibit (10)-12 TRINOVA Corporation 1989 Non-Employee Directors' Equity Plan, filed as Exhibit (10)-12 to Form 10-K filed on March 18, 1994 Exhibit (99(i))-1 Revolving Credit Agreements, dated as of September 30, 1992, between TRINOVA Corporation and The Bank of Tokyo Trust Company, Chemical Bank, Citicorp U.S.A, Dresdner Bank AG, The First National Bank of Chicago, Morgan Guaranty Trust Company of New York, J. P. Morgan Delaware, NBD Bank, N.A. and Union Bank of Switzerland, filed as Exhibit (4)-1 to Form SE filed on November 6, 1992 (The Agreements executed by the Company and the various banks are identical in all respects to the form of Agreement filed as an Exhibit to Form SE except as to differences in the identity of the bank and the amount of the commitment [each as indicated in Exhibit A to the Agreement filed with Form SE] and other variations directly necessitated by said differences) Exhibit (99(i))-2 TRINOVA Corporation Directors' Charitable Award Program, filed as Exhibit (99(i))-2 to Form 10-K filed on March 18, 1994 (b) There were no reports on Form 8-K filed for the quarter ended June 30, 1994. -16- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TRINOVA CORPORATION By /S/ DARRYL F. ALLEN ----------------------------------------- August 4, 1994 Darryl F. Allen Chairman, President and Chief Executive Officer (Principal Executive Officer) By /S/ DAVID M. RISLEY August 4, 1994 ----------------------------------------- David M. Risley Vice President - Finance and Chief Financial Officer (Principal Financial Officer) -17- EX-99 2 EXHIBIT INDEX EXHIBIT INDEX Exhibit No. Page No. (4)-1 First Supplemental Indenture, dated as of May 4, Incorporated 1992, between TRINOVA Corporation and NBD Bank, by Reference N.A., with respect to the issuance of $75,000,000 aggregate principal amount of TRINOVA Corporation 7.95% Notes Due 1997, filed as Exhibit (4)-1 to Form SE filed on May 6, 1992 (4)-2 7.95% Notes Due 1997, issued pursuant to the Incorporated Indenture, dated as of January 28, 1988, between by Reference TRINOVA Corporation and NBD Bank, N.A. (formerly National Bank of Detroit), as supplemented by the First Supplemental Indenture, dated as of May 4, 1992, between TRINOVA Corporation and NBD Bank, N.A., filed as Exhibit (4)-2 to Form SE filed on May 6, 1992 (4)-3 Officers' Certificate of TRINOVA Corporation, Incorporated dated May 4, 1992, pursuant to Section 2.01 of by Reference the Indenture, dated as of January 28, 1988, between TRINOVA Corporation and NBD Bank, N.A. (formerly National Bank of Detroit), as supplemented by the First Supplemental Indenture, dated as of May 4, 1992, between TRINOVA Corporation and NBD Bank, N.A., filed as Exhibit (4)-3 to Form SE filed on May 6, 1992 (4)-4 Rights Agreement, dated January 26, 1989, Incorporated between TRINOVA Corporation and First Chicago by Reference Trust Company of New York filed as Exhibit (2) to Form 8-A filed on January 27, 1989, as amended by the First Amendment to Rights Agreement filed as Exhibit (5) to Form 8 filed on July 1, 1992 (4)-5 Form of Share Certificate for Common Shares, $5 Incorporated par value, of TRINOVA Corporation, filed as by Reference Exhibit (4)-2 to Form SE filed on July 1, 1992 (4)-6 Fiscal Agency Agreement, dated as of October 26, Incorporated 1987, between TRINOVA Corporation, as Issuer, by Reference and Bankers Trust Company, as Fiscal Agent, with respect to $100,000,000 aggregate principal amount of TRINOVA Corporation 6% Convertible Subordinated Debentures Due 2002, filed as Exhibit (4)-1 to Form SE filed on March 18, 1993 -18- EXHIBIT INDEX - Continued Exhibit No. Page No. (4)-7 Indenture, dated as of January 28, 1988, between Incorporated TRINOVA Corporation and NBD Bank, N.A. (formerly by Reference National Bank of Detroit), with respect to the issuance of $50,000,000 aggregate principal amount of TRINOVA Corporation 9.55% Senior Sinking Fund Debentures Due 2018, and the issuance of $75,000,000 aggregate principal amount of TRINOVA Corporation 7.95% Notes Due 1997, filed as Exhibit (4)-2 to Form SE filed on March 18, 1993 (10)-1 TRINOVA Corporation Plan for Optional Deferment Incorporated of Directors' Fees (Restated January 25, 1990), by Reference filed as Exhibit (10)-2 to Form SE filed on March 20, 1990 (10)-2 TRINOVA Corporation Directors' Retirement Plan Incorporated (Restated January 1, 1990), filed as Exhibit by Reference (10)-3 to Form SE filed on March 20, 1990 (10)-3 Aeroquip Corporation Incentive Compensation Incorporated Plan, filed as Exhibit (10)-4 to Form SE filed by Reference on March 20, 1990 (10)-4 Vickers, Incorporated Incentive Compensation Incorporated Plan, filed as Exhibit (10)-5 to Form SE filed by Reference on March 20, 1990 (10)-5 TRINOVA Corporation Supplemental Benefit Plan Incorporated (Restated January 1, 1989), filed as Exhibit by Reference (19)-1 to Form SE filed on November 6, 1992 (10)-6 TRINOVA Corporation 1982 Stock Option Plan, Incorporated filed as Exhibit (10)-1 to Form SE filed on by Reference March 18, 1993 (10)-7 TRINOVA Corporation 1984 Incentive Compensation Incorporated Plan, filed as Exhibit (10)-2 to Form SE filed by Reference on March 18, 1993 (10)-8 TRINOVA Corporation 1987 Stock Option Plan, Incorporated filed as Exhibit (10)-3 to Form SE filed on by Reference March 18, 1993 -19- EXHIBIT INDEX - Continued Exhibit No. Page No. (10)-9 Change in Control Agreement for Officers, Incorporated filed as Exhibit (10)-4 to Form SE filed on by Reference March 18, 1993 (the Agreements executed by the Company and various executive officers of the Company are identical in all respects to the form of Agreement filed as an Exhibit to Form SE except as to differences in the identity of the officers and the dates of execution, and as to other variations directly necessitated by said differences) (10)-10 Change in Control Agreement for Non-officers, Incorporated filed as Exhibit (10)-5 to Form SE filed on by Reference March 18, 1993 (the Agreements executed by the Company and various non-officer employees of the Company are identical in all respects to the form of Agreement filed as an Exhibit to Form SE except as to differences in the identity of the employees and the dates of execution, and as to other variations directly necessitated by said differences) (10)-11 TRINOVA Corporation 1994 Stock Incentive Plan, Incorporated filed as Appendix A to the proxy statement for by Reference the annual meeting held on April 21, 1994 (10)-12 TRINOVA Corporation 1989 Non-Employee Directors' Incorporated Equity Plan, filed as Exhibit (10)-12 to by Reference Form 10-K filed on March 18, 1994 (11) Statement re: Computation of Per Share Earnings 22 (99(i))-1 Revolving Credit Agreements, dated as of Incorporated September 30, 1992, between TRINOVA Corporation by Reference and The Bank of Tokyo Trust Company, Chemical Bank, Citicorp U.S.A, Dresdner Bank AG, The First National Bank of Chicago, Morgan Guaranty Trust Company of New York, J. P. Morgan Delaware, NBD Bank, N.A. and Union Bank of Switzerland, filed as Exhibit (4)-1 to Form SE filed on November 6, 1992 (The Agreements executed by the Company and the various banks are identical in all respects to the form of Agreement filed as an Exhibit to Form SE except as to differences in the identity of the bank and the amount of the commitment [each as indicated in Exhibit A to the Agreement filed with Form SE] and other variations directly necessitated by said differences) -20- EXHIBIT INDEX - Continued Exhibit No. Page No. (99(i))-2 TRINOVA Corporation Directors' Charitable Award Incorporated Program, filed as Exhibit (99(i))-2 to by Reference Form 10-K filed on March 18, 1994 -21- EX-11 3 EXHIBIT 11 EXHIBIT 11 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS TRINOVA CORPORATION (In thousands, except per share data)
Three Months Ended Six Months Ended June 30 June 30 1994 1993 1994 1993 AVERAGE SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS OUTSTANDING (NOTE A) Average shares outstanding 28,745 28,288 28,659 28,269 Assumed conversion of the 6 percent convertible debentures 1,905 - 1,905 - Net effect of dilutive stock options based upon treasury stock method using average market price 216 57 216 57 --------- ---------- ---------- ---------- Average shares of common stock and common stock equivalents outstanding 30,866 28,345 30,780 28,326 ========== ========== ========== ========== INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK (NOTE A) Income (loss) before cumulative effect of change in accounting principle $ 19,324 $ (9,121) $ 32,598 $ (3,487) After-tax equivalent of interest expense on the 6 percent convertible debentures 930 - 1,860 - Cumulative effect of change in accounting for postretirement benefits other than pensions, net of income tax benefit - - - (70,229) ---------- ---------- ---------- ---------- Income (loss) attributable to common stock $ 20,254 $ (9,121) $ 34,458 $ (73,716) ========== ========== ========== ========== Income (loss) per share Income (loss) before cumulative effect of change in accounting principle $ .66 $ (.32) $ 1.12 $ (.12) Cumulative effect of change in accounting for postretirement benefits other than pensions - - - (2.48) ---------- ---------- ---------- ---------- Net Income (Loss) per Share $ .66 $ (.32) $ 1.12 $ (2.60) ========== ========== ========== ========== Note A - Net income (loss) per share was computed on the average number of common shares outstanding, including common stock equivalents. In the 1994 second quarter and six month period, common stock equivalents included the assumed conversion of the Company's 6 percent convertible debentures and income used in computing income per share was increased for the after-tax equivalent of interest expense on the 6 percent convertible debentures. For the 1993 second quarter and six month period, the assumed conversion of the 6 percent convertible debentures was not included in average shares outstanding or in income used in computing income per share because the effect of the inclusion would have been anti- dilutive.
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