-----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, DOfy+qFKBFKX5nSFOiud8Oy2kqMq9FH21mPe8fY7ofL0F6AIO+fVZkl19x4rjjPD T/43O6HKiCKYvtZs1qgONA== 0000731939-94-000004.txt : 19940602 0000731939-94-000004.hdr.sgml : 19940602 ACCESSION NUMBER: 0000731939-94-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940402 FILED AS OF DATE: 19940511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLE INLAND INC CENTRAL INDEX KEY: 0000731939 STANDARD INDUSTRIAL CLASSIFICATION: 2631 IRS NUMBER: 751903917 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-87570 FILM NUMBER: 94527075 BUSINESS ADDRESS: STREET 1: 303 S TEMPLE DR STREET 2: PO DRAWER N CITY: DIBOLL STATE: TX ZIP: 75941 BUSINESS PHONE: 4098292211 MAIL ADDRESS: STREET 1: 303 SOUTH TEMPLE DIRVE CITY: DIBOLL STATE: TX ZIP: 75941 10-Q 1 10-Q FOR QUARTER ENDED APRIL 2, 1994 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended April 2, 1994 OR Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period From ___________________________ to ____________________________ Commission File Number 1-8634 Temple-Inland Inc. (Exact name of registrant as specified in its charter) Delaware 75-1903917 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 303 South Temple Drive, Diboll, Texas 75941 (Address of principal executive offices) (Zip Code) (409) 829-2211 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report.) Indicate 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 the filing requirements for the past 90 days. Yes X No_____ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Number of common shares outstanding Class as of April 2, 1994 Common Stock (par value $1.00 per share) 55,634,396 The Exhibit Index appears on page 19 of this report. 2 PART I. FINANCIAL INFORMATION FINANCIAL STATEMENTS Summarized Statements of Income Parent Company (Temple-Inland Inc.) Unaudited First Quarter 1994 1993 (in millions) Revenues Net sales $ 541.8 $ 536.7 Financial services earnings 17.0 17.0 558.8 553.7 Costs and Expenses Cost of sales 462.0 449.1 Selling and administrative 47.4 47.6 509.4 496.7 Operating Income 49.4 57.0 Interest - net ( 15.9) ( 17.5) Other .2 .5 Income Before Taxes and Accounting Changes 33.7 40.0 Taxes on income 10.8 12.0 Income Before Accounting Changes 22.9 28.0 Cumulative effect of accounting changes - 50.0 Net Income $ 22.9 $ 78.0 See notes to consolidated financial statements. 3 Summarized Balance Sheets Parent Company (Temple-Inland Inc.) Unaudited April 2, January 1, 1994 1994 (in millions) ASSETS Current Assets Cash $ 9.1 $ 8.6 Receivables, less allowances of $7.9 million in 1994 and $7.4 million in 1993 223.7 198.5 Inventories: Work in process and finished goods 81.1 77.7 Raw materials 182.3 180.4 263.4 258.1 Prepaid expenses 12.1 12.5 Total current assets 508.3 477.7 Investment in Financial Services 556.8 487.6 Property and Equipment Buildings 380.0 376.3 Machinery and equipment 2,740.3 2,723.3 Less allowances for depreciation and amortization (1,472.9) (1,437.0) 1,647.4 1,662.6 Construction in progress 340.2 238.7 1,987.6 1,901.3 Timber and timberlands--less depletion 421.9 411.0 Land 33.8 33.8 Total property and equipment 2,443.3 2,346.1 Other Assets 92.6 92.4 Total Assets $ 3,601.0 $ 3,403.8 See notes to consolidated financial statements. 4 Summarized Balance Sheets - Continued Parent Company (Temple-Inland Inc.) Unaudited April 2, January 1, 1994 1994 (in millions) LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued expenses $ 263.1 $ 244.8 Federal income taxes payable ( .9) 43.9 Employee compensation and benefits 15.4 19.5 Short-term borrowings 3.4 3.3 Current portion of long-term debt 22.2 24.1 Total current liabilities 303.2 335.6 Long-Term Debt 1,242.6 1,044.8 Deferred Income Taxes 199.2 175.9 Postretirement Benefits 123.5 122.0 Other Liabilities 19.4 25.3 Shareholders' Equity 1,713.1 1,700.2 Total Liabilities and Shareholders' Equity $ 3,601.0 $ 3,403.8 See notes to consolidated financial statements. 5 Summarized Statements of Cash Flows Parent Company (Temple-Inland Inc.) Unaudited First Quarter 1994 1993 (in millions) Cash Provided by (Used for) Operations Net income $ 22.9 $ 78.0 Adjustments to reconcile net income to net cash: Cumulative effect of accounting changes - ( 50.0) Depreciation and depletion 48.9 47.8 Deferred taxes 2.3 3.1 Unremitted earnings of affiliates ( 12.2) ( 12.6) Receivables ( 25.1) ( 21.5) Inventories ( 5.3) ( 7.4) Prepaid expenses .3 ( 1.9) Accounts payable and accrued expenses ( 69.8) ( 20.2) Other ( 10.4) 4.3 ( 48.4) 19.6 Cash Provided by (Used for) Investments Capital expenditures ( 135.5) ( 119.8) Sale of property and equipment, net 1.6 4.4 Acquisitions, net ( 3.3) - ( 137.2) ( 115.4) Cash Provided by (Used for) Financing Change in debt 196.0 103.2 Construction funds held by trustee - 5.1 Issuance of common stock for stock plans 5.5 1.7 Purchase of stock for treasury ( 1.5) ( 1.3) Cash dividends paid to shareholders ( 13.9) ( 13.8) 186.1 94.9 Net (decrease) in cash and cash equivalents .5 ( .9) Cash and cash equivalents at beginning of period 8.6 7.1 Cash and cash equivalents at end of period $ 9.1 $ 6.2 See notes to consolidated financial statements. 6 Summarized Statements of Income Temple-Inland Financial Services Unaudited First Quarter 1994 1993 (in millions) Interest income Mortgage-backed and investment securities $ 48.7 $ 67.6 Loans receivable and mortgage loans held for sale 55.4 36.7 Assisted assets 8.6 7.2 Other earning assets 14.8 6.0 Total interest income 127.5 117.5 Interest expense Deposits 59.3 61.2 Borrowed funds 25.6 18.5 Total interest expense 84.9 79.7 Net interest income 42.6 37.8 Provision for loan losses .9 .5 Net interest income after provision for loan losses 41.7 37.3 Noninterest income Loan servicing fees 7.8 6.9 Loan origination and marketing 7.9 7.1 Other 21.3 14.6 37.0 28.6 Noninterest expense Compensation and benefits 30.5 23.1 Other 31.2 25.8 Total noninterest expense 61.7 48.9 Income before taxes and accounting changes 17.0 17.0 Taxes on income 4.8 4.4 Income before accounting changes 12.2 12.6 Cumulative effect of accounting changes - 52.3 Net Income $ 12.2 $ 64.9 See notes to consolidated financial statements. 7 Summarized Balance Sheets Temple-Inland Financial Services Unaudited March 31, December 31, 1994 1993 (in millions) ASSETS Cash and cash equivalents $ 678.8 $ 156.3 Mortgage loans held for sale 462.1 630.1 Mortgage-backed and investment securities 4,288.5 4,407.3 Loans receivable 2,613.6 2,755.3 Covered assets 566.2 664.3 Other assets 518.1 520.0 TOTAL ASSETS $ 9,127.3 $ 9,133.3 LIABILITIES Deposits $ 6,301.4 $ 6,362.3 Securities sold under repurchase agreements 1,662.1 1,570.7 Federal Home Loan Bank advances 154.2 154.1 Other borrowings 66.5 76.2 Other liabilities 398.3 458.3 TOTAL LIABILITIES 8,582.5 8,621.6 SHAREHOLDER'S EQUITY 544.8 511.7 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 9,127.3 $ 9,133.3 See notes to consolidated financial statements. 8 Summarized Statements of Cash Flows Temple-Inland Financial Services Unaudited First Quarter 1994 1993 (in millions) Cash Provided by (Used for) Operations Net income $ 12.2 $ 64.9 Adjustments to reconcile net income to net cash: Cumulative effect of accounting changes - ( 52.3) Amortization, accretion and depreciation 4.3 5.6 Provision for loan losses 1.0 .5 Receivable from FSLIC 24.8 4.7 Mortgage loans held for sale 167.9 5.8 Gain on sale of investments ( .4) ( .1) Other ( 34.8) 82.3 175.0 111.4 Cash Provided by (Used for) Investments Maturities of mortgage-backed and investment securities 250.7 278.8 Purchase of mortgage-backed and investment securities (135.6) (265.7) Loans originated net of principal collected 139.8 ( 79.0) Proceeds from sales of loans and mortgage- backed securities .5 1.0 Reduction in covered assets 29.8 25.5 Other 1.7 ( 6.5) 286.9 ( 45.9) Cash Provided by (Used for) Financing Net decrease in deposits ( 58.2) (136.5) Net increase in short-term borrowings 91.4 573.6 Change in debt ( 9.8) ( 26.5) Other 37.2 31.3 60.6 441.9 Net increase in cash and cash equivalents 522.5 507.4 Cash and cash equivalents at beginning of period 156.3 117.7 Cash and cash equivalents at end of period $ 678.8 $ 625.1 See notes to consolidated financial statements. 9 Consolidated Statements of Income Temple-Inland Inc. and Subsidiaries Unaudited First Quarter 1994 1993 (in millions) Revenues Manufacturing net sales $ 541.8 $ 536.7 Financial services revenues 164.5 146.1 706.3 682.8 Costs and Expenses Manufacturing costs and expenses 509.4 496.7 Financial services expenses 147.5 129.1 656.9 625.8 Operating Income 49.4 57.0 Parent company interest - net ( 15.9) ( 17.5) Other .2 .5 Income Before Taxes and Accounting Changes 33.7 40.0 Taxes on income 10.8 12.0 Income Before Accounting Changes 22.9 28.0 Cumulative effect of accounting changes - 50.0 Net Income $ 22.9 $ 78.0 Earnings Per Share: Before accounting changes $ .41 $ .50 Effect of accounting changes - .90 Earnings per share $ .41 $ 1.40 Dividends Paid Per Share of Common Stock $ .25 $ .25 Weighted Average Shares Outstanding 55.8 55.6 See notes to consolidated financial statements. 10 Consolidated Balance Sheets Temple-Inland Inc. and Subsidiaries April 2, 1994 Unaudited Parent Financial Company Services Consolidated (in millions) ASSETS Cash and cash equivalents $ 9.1 $ 678.8 $ 687.9 Investments - 4,288.5 4,288.5 Loans receivable - 2,613.6 2,613.6 Covered assets - 566.2 566.2 Receivable from FSLIC - 77.1 77.1 Trade and other receivables 223.7 - 223.7 Inventories 263.4 462.1 725.5 Property & equipment 2,443.3 39.6 2,482.9 Other assets 104.7 401.4 430.8 Investment in affiliates 556.8 - - TOTAL ASSETS $ 3,601.0 $ 9,127.3 $12,096.2 LIABILITIES Deposits $ - $ 6,301.4 $ 6,301.4 Securities sold under repurchase agreements and Federal Home Loan Bank advances - 1,816.3 1,816.3 Advances from borrowers for taxes and insurance - 96.5 96.5 Other liabilities 322.6 301.8 612.5 Long-term debt 1,242.6 66.5 1,309.1 Deferred income taxes 199.2 - 123.8 Postretirement benefits 123.5 - 123.5 TOTAL LIABILITIES $ 1,887.9 $ 8,582.5 10,383.1 SHAREHOLDERS' EQUITY Preferred stock - par value $1 per share: authorized 25,000,000 shares; none issued - Common stock - par value $1 per share: authorized 200,000,000 shares; issued 61,389,552 shares including shares held in the treasury 61.4 Additional paid-in capital 297.9 Retained earnings 1,491.1 1,850.4 Cost of shares held in the treasury: 5,755,156 shares ( 137.3) TOTAL SHAREHOLDERS' EQUITY 1,713.1 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,096.2 See the notes to the consolidated financial statements. 11 Consolidated Balance Sheets Temple-Inland Inc. and Subsidiaries January 1, 1994 Unaudited Parent Financial Company Services Consolidated (in millions) ASSETS Cash $ 8.6 $ 156.3 $ 164.9 Investments - 4,407.3 4,407.3 Loans receivable - 2,755.3 2,755.3 Covered assets - 664.3 664.3 Receivable from FSLIC - 34.2 34.2 Trade and other receivables 198.5 - 198.5 Inventories 258.1 630.1 888.2 Property & equipment 2,346.1 37.4 2,383.5 Other assets 104.9 448.4 463.1 Investment in affiliates 487.6 - - TOTAL ASSETS $ 3,403.8 $ 9,133.3 $11,959.3 LIABILITIES Deposits $ - $ 6,362.3 $ 6,362.3 Securities sold under repurchase agreements and Federal Home Loan Bank advances - 1,724.8 1,724.8 Advances from borrowers for taxes and insurance - 59.2 59.2 Other liabilities 360.9 399.1 753.0 Long-term debt 1,044.8 76.2 1,121.0 Deferred income taxes 175.9 - 116.8 Postretirement benefits 122.0 - 122.0 TOTAL LIABILITIES $ 1,703.6 $ 8,621.6 10,259.1 SHAREHOLDERS' EQUITY Preferred stock - par value $1 per share: authorized 25,000,000 shares; none issued - Common stock - par value $1 per share: authorized 200,000,000 shares; issued 61,389,552 shares including shares held in the treasury 61.4 Additional paid-in capital 296.9 Retained earnings 1,482.1 1,840.4 Cost of shares held in the treasury: 5,908,173 shares ( 140.2) TOTAL SHAREHOLDERS' EQUITY 1,700.2 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $11,959.3 See the notes to the consolidated financial statements. 12 Consolidated Statements of Cash Flows Temple-Inland Inc. and Subsidiaries Unaudited First Quarter 1994 1993 (in millions) Cash Provided by (Used for) Operations Net income $ 22.9 $ 78.0 Adjustments to reconcile net income to net cash: Cumulative effect of accounting changes - ( 50.0) Depreciation and depletion 50.8 49.0 Amortization and accretion 2.4 4.4 Deferred taxes 7.1 3.1 Receivable from FSLIC 24.8 4.7 Trade and other receivables ( 25.1) ( 21.5) Inventories 162.6 ( 1.6) Other (118.9) 65.0 126.6 131.1 Cash Provided by (Used for) Investments Capital expenditures (139.7) (123.1) Sale of property and equipment, net 1.6 4.4 Purchase of investments (135.6) (265.7) Maturities of investments 250.7 278.8 Proceeds from sale of loans and investments .5 1.0 Loans originated net of principal collected 139.8 ( 79.0) Reduction in covered assets 29.8 25.5 Manufacturing acquisitions, net ( 3.3) - Other 5.9 ( 3.2) 149.7 (161.3) Cash Provided by (Used for) Financing Additions to debt 196.6 104.5 Payments of debt ( 10.4) ( 27.8) Net increase in repurchase agreements 91.4 573.6 Cash dividends paid to shareholders ( 13.9) ( 13.8) Net decrease in deposits ( 58.2) (136.5) Other 41.2 36.8 246.7 536.8 Net increase (decrease) in cash 523.0 506.6 Cash at beginning of period 164.9 124.7 Cash at end of period $ 687.9 $ 631.3 See notes to consolidated financial statements. 13 TEMPLE-INLAND INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A - BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. However, because certain assets and liabilities are in separate corporate entities, the consolidated assets are not available to satisfy all consolidated liabilities. In the opinion of management, all adjustments (consisting only of normal accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes included in, or incorporated into, Temple-Inland Inc.'s (the "Company") Annual Report on Form 10-K for the fiscal year ended January 2, 1994. The consolidated financial statements include the accounts of Temple-Inland Inc. and all subsidiaries in which the Company has more than a 50 percent equity ownership. All material intercompany amounts and transactions have been eliminated. Included as an integral part of the consolidated financial statements are separate summarized financial statements for the Company's primary business groups. The Parent Company (Temple-Inland Inc.) summarized financial statements include the accounts of Temple-Inland Inc. and its manufacturing subsidiaries with the Financial Services subsidiaries and the 20 percent to 50 percent owned companies being reflected in the financial statements on the equity basis. The Temple-Inland Financial Services Group summarized financial statements include savings bank, mortgage banking and real estate development activities and insurance operations. NOTE B - CONTINGENCIES There are pending against the Company and its subsidiaries lawsuits and claims arising in the regular course of business. In the opinion of management, recoveries, if any, by plaintiffs or claimants that may result from the foregoing litigation and claims will not be material in relation to the consolidated financial position of the Company and its subsidiaries. 14 MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations Results of operations, including information regarding the Company's principal business segments, are shown below: First Quarter 1994 1993 (in millions) Revenues Corrugated container $ 326.9 $ 318.5 Bleached paperboard 69.7 88.8 Building products 139.6 118.0 Other activities 5.6 11.4 Manufacturing net sales 541.8 536.7 Financial services 164.5 146.1 Total revenues $ 706.3 $ 682.8 Income Corrugated container $ 9.1 $ 16.5 Bleached paperboard ( 10.2) .1 Building products 36.2 26.4 Other activities .4 - Operating profit 35.5 43.0 Financial services 17.0 17.0 52.5 60.0 Corporate expenses ( 3.1) ( 3.0) Parent company interest - net ( 15.9) ( 17.5) Other - net .2 .5 Income before taxes and accounting changes 33.7 40.0 Taxes on income 10.8 12.0 Income before accounting changes 22.9 28.0 Cumulative effect of accounting changes - 50.0 Net income $ 22.9 $ 78.0 15 First Quarter 1994 vs. First Quarter 1993 First quarter earnings of $22.9 million, or $.41 per share were 18 percent below the $28.0 million, or $.50 per share (before the cumulative effect of accounting changes), earned in the first quarter of 1993. Revenues increased to $706 million, from $683 million in the comparable 1993 quarter. The corrugated container group (formerly the container and containerboard group) earned $9.1 million, down from $16.5 million in last year's first quarter, but a marked improvement from a loss of $9.1 million in the fourth quarter. Demand for containerboard and corrugated boxes was very strong in the quarter, and pricing showed improvement in the quarter. Further price improvement should be realized as the year progresses, and the demand for our linerboard remains strong. The bleached paperboard group lost $10.2 million in the quarter compared with break-even in the first quarter last year. Earnings for our bleached paperboard group continue to suffer from weak demand, lower selling prices and increased costs due to poor product mix. The building products group achieved another record quarter, earning $36.2 million, up from $26.4 million in the first quarter last year. Business activity for most of the quarter remained brisk, continuing the momentum of the fourth quarter. Demand for solid wood products (lumber and plywood) moderated during the quarter and pricing declined, but panel products (gypsum, particleboard and fiber products) were in strong demand. The financial services group earned $17 million, equal to the first quarter of last year but up from $15.5 million in the fourth quarter. Mortgage originations totaled $865 million during the first quarter compared to $757 million in the first quarter last year and $1.5 billion in the fourth quarter last year. Net interest expense decreased to $15.9 million in the first quarter of 1994 compared with $17.5 million in the first quarter of last year. Although interest expense increased due to higher levels of debt outstanding, that increase was more than offset by an increase in capitalized interest due to the Company's continuing spending for the bleached paperboard group's modernization projects which are expected to be operational in mid-1995. 16 Financial Condition The Company's financial condition continues to be strong. Internally generated funds, existing credit facilities and the capacity to issue long- term debt are sufficient to fund projected capital expenditures, to service existing debt, to pay dividends and to meet normal working capital requirements. During the first quarter of 1993, the Company's debt increased $196 million mainly through issuance of commercial paper and bank debt to fund the planned capital projects for our bleached paperboard group. Our savings bank continues to meet all three regulatory requirement formulae set out under the Financial Institution Reform, Recovery and Enforcement Act of 1989 ("FIRREA"). 17 PART II. OTHER INFORMATION Item 1. Legal Proceedings. The information set forth in Note B to Notes to Consolidated Financial Statements in Part I of this report is incorporated by reference thereto. Item 2. Changes in Securities. Not Applicable. Item 3. Defaults Upon Senior Securities. Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders. The Company held its annual meeting of stockholders on May 6, 1994, at which a quorum was present. The table below sets forth the number of votes cast for, against or withheld, as well as the number of abstentions and broker non-votes for each matter voted upon at that meeting. Abstentions Against or or Broker Matter For Withheld Non-votes (in millions) 1. Election of five Directors (a) Charlotte Temple 52.0 .6 - (b) Paul M. Anderson 52.3 .3 - (c) Robert Cizik 52.3 .3 - (d) Arthur Temple III 52.3 .3 - (e) Larry E. Temple 52.3 .3 - 2. Ratification of appointment of Ernst & Young 51.9 .1 .7 Item 5. Other Information. Not Applicable. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Regulation S-K Exhibit Number (11) Statement re computation of per share earnings. (b) Reports on Form 8-K. During the three months ended April 2, 1994, the Company did not file any reports on Form 8-K. 18 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. TEMPLE-INLAND INC. (Registrant) Date: May 17, 1994 By /s/ David H. Dolben David H. Dolben, Vice President and Chief Accounting Officer 19 EXHIBIT INDEX The following is an index of the exhibits filed herewith. The page reference set forth opposite the description of exhibits included in such index refer to the pages under the sequential numbering system prescribed by Rule 0-3(b) under the Securities Exchange Act of 1934. Regulation S-K Exhibit Sequential Number Page Number (11) Statement re computation of 20 per share earnings. 20 EXHIBIT (11) TEMPLE-INLAND INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (in thousands, except for per share data) 13 Weeks Ended April 2, April 3, 1994 1993 Primary Average common shares outstanding 55,586 55,274 Net effect of dilutive stock options based on treasury stock method using average market price 206 345 Weighted average shares outstanding 55,792 55,619 Net income: Income before accounting changes $ 22,914 $ 28,006 Cumulative effect of accounting changes - 50,000 Net income $ 22,914 $ 78,006 Earnings per share: Before accounting changes $ .41 $ .50 Effect of accounting changes - .90 Earnings per share $ .41 $ 1.40 Fully Diluted Average common shares outstanding 55,586 55,274 Net effect of dilutive stock options based on treasury stock method using the closing market price, if higher than average market price 206 345 Weighted average shares outstanding 55,792 55,619 Net income: Income before accounting changes $ 22,914 $ 28,006 Cumulative effect of accounting changes - 50,000 Net income $ 22,914 $ 78,006 Earnings per share: Before accounting changes $ .41 $ .50 Effect of accounting changes - .90 Earnings per share $ .41 $ 1.40 -----END PRIVACY-ENHANCED MESSAGE-----