-----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, ogVMybuDkj5GmKSFOChNTdKJrnJYxnC3JcSBxf1wyL5LS59niMO65yuP8JwX7FlH rCXRvGJsUTUmFARoI7y6eA== 0000063917-94-000002.txt : 19940210 0000063917-94-000002.hdr.sgml : 19940210 ACCESSION NUMBER: 0000063917-94-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940209 ITEM INFORMATION: 5 FILED AS OF DATE: 19940209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCDONNELL DOUGLAS CORP CENTRAL INDEX KEY: 0000063917 STANDARD INDUSTRIAL CLASSIFICATION: 3721 IRS NUMBER: 430400674 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 34 SEC FILE NUMBER: 001-03685 FILM NUMBER: 94505328 BUSINESS ADDRESS: STREET 1: P O BOX 516 STREET 2: MCDONNELL BLVD AT AIRPORT RD CITY: ST LOUIS STATE: MO ZIP: 63166-0516 BUSINESS PHONE: 3142320232 FORMER COMPANY: FORMER CONFORMED NAME: MCDONNELL CO DATE OF NAME CHANGE: 19670601 8-K 1 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 8-K PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): McDonnell Douglas Corporation - ----------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Maryland - ----------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-3685 43-0400674 - ---------------------------- ------------------------------ Commission File Number (IRS Employer Identification No.) Post Office Box 516, St. Louis, Missouri 63166-0516 - ---------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (314) 232-0232 ----------------------------- Registrant's Telephone Number INFORMATION TO BE INCLUDED IN THE REPORT 2 Item 5. Other Events. On February 9, 1994 Registrant released the data associated with its earnings filed as an exhibit hereto, which is incorporated herein in accordance with General Instruction F to Form 8-K. EXHIBITS Exhibit No. 99 Earnings Data 3 SIGNATURE 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, hereunto duly authorized. Dated: February 9, 1994 MCDONNELL DOUGLAS CORPORATION By: /s/F. Mark Kuhlmann --------------------------------- Name: F. Mark Kuhlmann Title: Senior Vice President-Administration General Counsel and Secretary 4 EX-99 2 EXHIBIT McDonnell Douglas had 1993 earnings of $396 million, or $10.10 per share. That compares with 1992 earnings of $79 million, or $2.03 per share, excluding unusual items related to the company's adoption of a new retiree health care accounting standard. The increase in earnings was achieved despite a 17 percent decline in revenues caused by continued softness in commercial and military markets for aerospace products. Highlights for the year included strong performance across most government aerospace programs, continued profitability in the commercial aircraft business, and a 41 percent reduction in aerospace debt -- from $2.767 billion at the outset of the year to a six-year low of $1.625 billion at year end. Aerospace debt fell by $349 million in the fourth quarter, following debt reductions in each of the first three quarters. The 1993 results were reduced by a fourth quarter pre-tax charge of $450 million, or $275 million after-tax ($6.99 per share). The charge covered both an overall settlement of a range of issues related to the C-17 military aircraft program and increased cost on the C-17 development and initial production contracts, which was in part interrelated to the overall settlement. Partially offsetting the C-17 charge, McDonnell Douglas had unusual gains in 1993 from the sale of McDonnell Douglas Information Systems International, the reversal of part of the one-time charge taken in 1992 from the new retiree health care accounting standard, and the successful resolution of tax issues. These gains totaled $220 million, or $5.61 per share. 5 The charge in the C-17 program resulted in a fourth quarter loss for the corporation of $132 million, or $3.36 per share. Excluding the C-17 charge, McDonnell Douglas' earnings for the fourth quarter totaled $143 million, or $3.63 per share, compared with $86 million, or $2.20 per share, in 1992's fourth quarter, prior to a retiree health care curtailment gain. Interest expense for the aerospace segments in the fourth quarter of 1993 was $51 million, down from $86 million in 1992's fourth quarter. Interest expense for all of 1993 was $89 million, which included the reversal of $135 million in previously accrued interest expense associated with the favorable resolution of tax issues with the Internal Revenue Service. Excluding the reversal, interest expense for 1993 was $224 million, down from $309 million in the prior year. The lower interest expense reflects reduced debt levels and reduced interest rates. Both 1993 and 1992 amounts for interest expense reflect a $25 million reclassification of expenses in an executive life insurance program from interest to general expenses. This reclassification reduced segment operating earnings but had no impact on net earnings. Excluding C-17 charges in both years, operating earnings in the military aircraft segment were $533 million for 1993, compared with $391 million in 1992, a gain of 36 percent. Excluding the C-17 charge in 1993's fourth quarter, fourth quarter earnings were $180 million, up 61 percent from $112 million in 1992's fourth quarter. Revenues for 1993 in this segment were 5 percent lower than in 1992, largely due to reduced volume in the F-15 program. 6 The commercial aircraft segment had its third consecutive profitable year, with operating earnings of $40 million in 1993, down from $102 million in 1992. Operating earnings in 1993's fourth quarter were $2 million, compared with $34 million in the year-ago quarter. There was a 28 percent reduction in revenues for the year and 21 percent during the quarter due to reduced MD-80 twin jet and MD- 11 trijet deliveries. Operating earnings for the commercial aircraft segment in 1993's fourth quarter included a $41 million pre-tax gain from the sale of McDonnell Douglas' 25 percent interest in Irish Aerospace and offsetting charges of $37 million related to a commercial lease guarantee, a product enhancement associated with a commercial customer, and other items. Margins in the MD80/90 program have continued to improve. But total earnings have declined due to the sharp reduction in deliveries caused by the continuing slump in the commercial aircraft market. McDonnell Douglas delivered four twin jets in 1993's fourth quarter, compared with 12 twin jets in 1992's fourth quarter. There were 42 twin jet deliveries for the year 1993 (including eight under lease arrangements), compared with 84 in 1992. In addition, there were 36 MD-11 trijet deliveries in 1993 (including three under lease arrangements), compared with 42 trijet deliveries in 1992. There were 11 trijet deliveries in 1993's fourth quarter (including two under lease arrangements), compared with 13 trijet deliveries in 1992's fourth quarter. 7 The corporation received two new firm orders for MD80/90 twin jets and entered into leases for two MD-11 trijets in the fourth quarter. On Dec. 31, 1993, the MD80/90 program included 1,089 deliveries, 143 aircraft on firm order, and 185 options and reserves. On the same date, the MD-11 program included 112 deliveries, 60 aircraft on firm order, and 101 options and reserves representing potential future orders. The missiles, space and electronic systems segment had record operating earnings of $338 million in 1993, up 77 percent from $191 million in 1992. There were strongly improved earnings from the Harpoon, SLAM, Tomahawk, and Delta programs. Revenues for this segment fell by 19 percent, largely as a result of the winding down of the Advanced Cruise Missile program and reduced Delta space launches. Earnings for the 1993 fourth quarter totaled $78 million, despite $19 million in write-offs in several programs, including a laser crosslink program and a plant closure and relocation. 1992 fourth quarter earnings were $47 million, and included $29 million in pre-tax write-offs primarily in the laser crosslink program. Operating earnings in the financial services and other segment were $31 million in 1993, compared with $20 million in 1992. Revenues for this segment were 18 percent lower than in 1992, reflecting a decision made in 1991 to streamline the finance subsidiary, refocusing its efforts on only two markets -- aircraft and commercial equipment leasing. Operating earnings in the 1993 fourth quarter were $22 million, compared with $10 million in the year earlier quarter. Most of the increase in 1993's fourth quarter earnings was due to used aircraft and commercial equipment leasing sales. 8 Excluding curtailment gains, after-tax retiree health care costs associated with a new accounting standard (SFAS No. 106) were $11 million lower in the fourth quarter of 1993 than in 1992's fourth quarter and $117 million lower in 1993 compared with the same period in 1992. The reduction reflects the elimination of company-paid health care for many current and future retirees. The fourth quarter of 1992 results include an after-tax curtailment gain of $676 million ($1,090 million pretax). The corporation's firm backlog on Dec. 31, 1993, was $19.379 billion, compared with $24.052 billion on Dec. 31, 1992. Total backlog at Dec. 31, 1993, was $35.698 billion, compared with $41.806 billion on Dec. 31, 1992. The decline in backlog reflects deliveries and a softening of commercial aircraft orders worldwide. Total employment of McDonnell Douglas was 70,016 on Dec. 31, 1993, compared with 87,377 a year earlier. A fifth of the total reduction in McDonnell Douglas employment was due to the sale of non- core businesses or outsourcing of certain support services. Employment was further affected by lower production rates in a number of programs and reductions in force aimed at achieving greater efficiencies. 9 MCDONNELL DOUGLAS CORPORATION CONSOLIDATED RESULTS OF OPERATIONS (Millions of dollars, except share data)
Three Months Ended December 31 1993 1992 -------- -------- Unaudited STATEMENT OF OPERATIONS Revenues (A) $3,632 $4,620 Costs and expenses: Cost of products, services and rentals 3,475 4,047 General and administrative expenses (A) 216 220 Research and development 85 114 Postretirement benefit curtailment - (1,090) Interest expense: Aerospace segments (A) 51 86 Financial services and other segment 29 34 ------- ------- Total costs and expenses 3,856 3,411 ------- ------- Earnings (Loss) From Continuing Operations Before Income Taxes (224) 1,209 Income taxes (benefit) (92) 453 ------- ------- Earnings (Loss) From Continuing Operations (132) 756 Earnings from discontinued operations, net of income taxes - 6 ------- ------- Net Earnings (Loss) $ (132) $ 762 ======= ======= Earnings (Loss) Per Share: Continuing operations $(3.36) $19.30 Discontinued operations - .16 ------- ------- $(3.36) $19.46 ======= ======= Dividends Declared Per Share $ .35 $ .35
======= ======= (A) Prior year and first nine months of 1993 data has been restated for reclassification of certain revenues and expenses related to an executive life insurance program. 10 MCDONNELL DOUGLAS CORPORATION CONSOLIDATED RESULTS OF OPERATIONS (Millions of dollars, except share data)
Years Ended December 31 1993 1992 -------- -------- STATEMENT OF OPERATIONS Revenues (A) $14,487 $17,365 Costs and expenses: Cost of products, services and rentals 12,822 15,567 General and administrative expenses (A) 720 825 Research and development 341 509 Postretirement benefit curtailment (70) (1,090) Interest expense: Aerospace segments (A) 89 309 Financial services and other segment 126 159 -------- -------- Total costs and expenses 14,028 16,279 -------- -------- Earnings From Continuing Operations Before Income Taxes and Cumulative Effect of Accounting Change 459 1,086 Income taxes 100 388 -------- -------- Earnings From Continuing Operations Before Cumulative Effect of Accounting Change 359 698 Earnings from discontinued operations, net of income taxes 37 57 -------- -------- Earnings Before Cumulative Effect of Accounting Change 396 755 Cumulative effect of initial application of new accounting standard for postretirement benefits - (1,536) -------- -------- Net Earnings (Loss) $ 396 $ (781) ======== ======== Earnings (Loss) Per Share: Continuing operations $ 9.17 $ 17.97 Discontinued operations .93 1.46 Cumulative effect of accounting change - (39.53) -------- -------- $ 10.10 $(20.10) ======== ======== Dividends Declared Per Share $ 1.40 $ 1.40 ======== ========
(A) Prior year and first nine months of 1993 data has been restated for reclassification of certain revenues and expenses related to an executive life insurance program. 11 MCDONNELL DOUGLAS CORPORATION BUSINESS SEGMENT DATA (Millions of dollars)
Three Months Ended December 31 1993 1992 -------- -------- Unaudited BUSINESS SEGMENT DATA Revenues Military aircraft $ 1,622 $ 2,068 Commercial aircraft 1,291 1,639 Missiles, space and electronic systems 628 817 Financial services and other 88 91 -------- -------- Operating revenues 3,629 4,615 Non-operating income 3 5 -------- -------- Total Revenues $ 3,632 $ 4,620 ======== ======== Earnings Military aircraft $ (270) $ 112 Commercial aircraft 2 34 Missiles, space and electronic systems 78 47 Financial services and other 22 10 -------- -------- Operating earnings (loss) from continuing operations (168) 203 Discontinued operations, net of income taxes - 6 Corporate and other (5) 2 Postretirement benefit curtailment - 1,090 Interest expense (51) (86) Income tax benefit (expense) 92 (453) -------- -------- Net Earnings (Loss) $ (132) $ 762 ======== =======
12 MCDONNELL DOUGLAS CORPORATION BUSINESS SEGMENT DATA (Millions of dollars)
Years Ended December 31 1993 1992 -------- -------- BUSINESS SEGMENT DATA Revenues Military aircraft $ 6,852 $ 7,238 Commercial aircraft 4,760 6,595 Missiles, space and electronic systems 2,575 3,169 Financial services and other 287 352 -------- -------- Operating revenues 14,474 17,354 Non-operating income 13 11 -------- -------- Total Revenues $14,487 $17,365 ======== ======== Earnings Military aircraft $ 83 $ 8 Commercial aircraft 40 102 Missiles, space and electronic systems 338 191 Financial services and other 31 20 -------- -------- Operating earnings from continuing operations 492 321 Discontinued operations, net of income taxes 37 57 Corporate and other (14) (16) Postretirement benefit curtailment 70 1,090 Interest expense (89) (309) Income taxes (100) (388) Cumulative effect of accounting change - (1,536) -------- -------- Net Earnings (Loss) $ 396 $ (781) ======== ========
Operating earnings of the financial services and other segment have been reduced by interest expense, an operating expense of that segment. 13 MCDONNELL DOUGLAS CORPORATION CONSOLIDATED BALANCE SHEET (Millions of dollars)
December 31 December 31 1993 1992 --------- --------- ASSETS Cash and cash equivalents $ 86 $ 82 Accounts receivable 555 604 Finance receivables and property on lease 2,357 2,262 Contracts in process and inventories 5,774 7,230 Property, plant and equipment 1,750 1,991 Other assets 1,504 1,612 -------- -------- TOTAL ASSETS $12,026 $13,781 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Accounts payable and accrued expenses $ 2,190 $ 3,018 Accrued retiree benefits 1,388 1,544 Income taxes 574 572 Advances and billings in excess of related costs 1,251 1,384 Notes payable and long-term debt: Aerospace segments 1,625 2,767 Financial services and other segment 1,513 1,474 -------- -------- 8,541 10,759 Minority Interest 72 - Shareholders' Equity 3,413 3,022 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,026 $13,781 ======== ========
14 CAPITAL STRUCTURE (Millions of dollars)
December 31, 1993 ------------------------------------- Financial Services Aerospace and Other Segments Segment Total --------- --------- --------- Debt $1,625 $1,513 $3,138 Equity 3,123 290 3,413 ------- ------- ------- $4,748 $1,803 $6,551 ======= ======= ======= Debt-to-equity ratio .52 5.22 ======= ======= December 31, 1992 ------------------------------------- Financial Services Aerospace and Other Segments Segment Total --------- --------- --------- Debt $2,767 $1,474 $4,241 Equity 2,750 272 3,022 ------- ------- ------- $5,517 $1,746 $7,263 ======= ======= ======= Debt-to-equity ratio 1.01 5.42 ======= =======
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