-----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, TG9fWGz560xrkjnsbaX/XJkGdXFMm8mNnlrszAlCcmZ9vQJlq1bzDV3liTCGiJUO EUlPzJrSNJAoNbAr+uL3hw== 0000074303-94-000014.txt : 19940815 0000074303-94-000014.hdr.sgml : 19940815 ACCESSION NUMBER: 0000074303-94-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OLIN CORP CENTRAL INDEX KEY: 0000074303 STANDARD INDUSTRIAL CLASSIFICATION: 2800 IRS NUMBER: 131872319 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01070 FILM NUMBER: 94542552 BUSINESS ADDRESS: STREET 1: 120 LONG RIDGE RD CITY: STAMFORD STATE: CT ZIP: 06904-1355 BUSINESS PHONE: 2033562000 FORMER COMPANY: FORMER CONFORMED NAME: OLIN MATHIESON CHEMICAL CORP DATE OF NAME CHANGE: 19691008 10-Q 1 10-Q Part I - Financial Information Item 1. Financial Statements. OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Balance Sheets (In millions) June 30, December 31, 1994 1993 ASSETS Cash $6.0 $3.3 Accounts receivable, net 445.8 344.9 Inventories 345.5 328.8 Other current assets 61.2 62.8 Total current assets 858.5 739.8 Investments and advances 115.7 121.1 Property, plant and equipment (less accumulated depreciation of $1,670.4 and $1,623.9) 873.6 885.1 Goodwill 111.4 113.8 Other assets 58.7 70.6 Total assets $2,017.9 $1,930.4 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term borrowings and current installments of long-term debt $120.6 $121.2 Accounts payable 178.9 231.9 Other current liabilities 298.3 251.1 Total current liabilities 597.8 604.2 Long-term senior debt 308.2 323.9 Long-term subordinated debt 125.0 125.0 Other noncurrent liabilities 266.8 281.7 Shareholders' equity: Preferred stock, par value $1 per share: Authorized 10.0 shares. Series A Conversion Preferred Stock Issued 2.76 shares 2.8 2.8 ESOP Preferred Stock Issued 1.2 shares 88.6 92.0 Guaranteed ESOP obligations (34.0) (44.0) Common stock, par value $1 per share: Authorized 60.0 shares. Issued 21.4 shares (19.1 in 1993) 21.4 19.1 Additional paid-in capital 395.4 297.0 Cumulative translation adjustment (6.3) (9.4) Retained earnings 252.2 238.1 Total shareholders' equity 720.1 595.6 Total liabilities and shareholders' equity $2,017.9 $1,930.4 ___________________________________ The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements. OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Statements of Income (In millions, except per share amounts) Three Months Six Months Ended June 30, Ended June 30, 1994 1993 1994 1993 Sales $708.1 $625.5 $1,313.0 $1,217.4 Operating expenses: Cost of goods sold 567.2 506.9 1,054.7 991.0 Selling and administration 81.4 79.3 158.2 152.5 Research and development 8.8 10.3 17.3 19.6 Operating income 50.7 29.0 82.8 54.3 Interest expense 10.1 9.6 19.5 19.2 Interest and other income 2.0 2.8 3.2 5.0 Income before taxes 42.6 22.2 66.5 40.1 Income taxes 15.0 7.9 23.6 14.1 Net income 27.6 14.3 42.9 26.0 Preferred dividends 1.8 1.8 3.5 3.7 Net income available to common shareholders $25.8 $12.5 $39.4 $22.3 Per share of common stock: Primary $1.16 $0.57 $1.78 $1.02 Fully diluted $1.10 $0.57 $1.72 $1.02 Dividends $0.55 $0.55 $1.10 $1.10 Average common shares outs. 20.3 19.1 19.8 19.1 ___________________________________ The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements. OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Statements of Cash Flows (In millions) Six Months Ended June 30, 1994 1993 Operating activities Net income $42.9 $26.0 Depreciation and amortization 69.4 67.1 Changes in: Receivables (93.5) (50.8) Inventories (4.7) (1.5) Other current assets 1.8 (1.6) Current liabilities other than borrowings (31.1) (77.8) Noncurrent liabilities 9.0 (0.6) Deferred taxes 5.6 9.4 Net operating activities (0.6) (29.8) Investing activities Capital expenditures (44.2) (64.7) Proceeds from sales of businesses - 12.4 Business acquired in purchase transaction (25.4) - Other investments (0.8) (6.8) Other transactions 11.5 (0.3) Net investing activities (58.9) (59.4) Financing activities Long-term debt repayments (15.5) (17.2) Short-term (repayments) borrowings (0.8) 127.6 Issuance of common stock 98.0 - Repayment from ESOP 10.0 10.0 Dividends paid (29.5) (29.7) Net financing activities 62.2 90.7 Net increase in cash 2.7 1.5 Cash, beginning of period 3.3 3.6 Cash, end of period $6.0 $5.1 ___________________________________ The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements. OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS 1. The condensed financial statements included herein have been prepared by the company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and, in the opinion of the company, reflect all adjustments (consisting only of normal accruals) which are necessary to present fairly the results for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, the company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements, accounting policies and the notes thereto and management's discussion and analysis of financial condition and results of operations included in the company's Annual Report on Form 10-K for the year ended December 31, 1993. 2. Inventories are valued principally by the dollar value last- in, first-out (LIFO) method of inventory accounting. It is not practicable, therefore, to separate the inventory into its components (raw materials, work-in-process and finished products). Inventories under the LIFO method are based on annual determination of quantities and costs as of the year- end; therefore, the consolidated financial statements at June 30, 1994, reflect certain estimates relating to inventory quantities and costs at December 31, 1994. 3. An Employee Stock Ownership Plan (ESOP) was established in June 1989. The ESOP purchased from the company approximately 1.3 million shares ($100 million) of a newly- authorized 1.75 million share series of the company's ESOP preferred stock, financed by $60 million of notes guaranteed by the company, and $40 million of borrowings from the company. The company's loan to the ESOP has been repaid in full as of December 31, 1992. Such loan was financed by the company through a long-term credit facility which is classified on the June 30, 1994 balance sheet as long-term debt. At June 30, 1994 there were approximately 1.2 million shares of ESOP preferred stock outstanding at a value of $76.00 per share. The quarterly fixed dividend rate is $1.4925 per share. The ESOP preferred stock is convertible by the holder into the company's common stock on a one-for-one basis, subject to anti-dilutive adjustments and may be redeemed at the option of the company after July 1, 1994, or at the option of the Plan under certain circumstances (including upon payment of withdrawing ESOP participant accounts or if required to meet ESOP debt payments). The ESOP preferred stock is included in shareholders' equity because the company intends to redeem the ESOP preferred stock solely with shares of the company's common stock, and has the ability to do so. 4. Primary earnings per share are computed by dividing net income less the ESOP preferred dividend requirement by the weighted average number of common shares outstanding, plus an equivalent number (one-for-one) of common shares, assuming the conversion of the Series A Stock. Fully diluted earnings per share reflect the dilutive effect of stock options and assume the conversion of outstanding ESOP preferred stock into an equivalent number of common shares. Net income was reduced by an additional ESOP contribution (differential between the common and the ESOP preferred dividend rates under an assumed conversion) necessary to satisfy the debt service requirement. 5. In April 1994, the company acquired for approximately $25 million the medium caliber ammunition business(Aerojet)of GenCorp's Aerojet Ordnance Division, with relevant annual sales approximating $100 million. The acquisition expands Olin's medium caliber ammunition family and positions the company with a complete line of improved 20MM, 25MM, and 30MM ammunition as well as air-dispensed munition products. 6. In May 1994, the company issued 2,213,750 shares of common stock at a price of $46.00. Proceeds from the offering were used to reduce short-term, floating rate debt incurred for the Aerojet acquisition and working capital requirements. 7. In September 1993, the company entered into an unsecured revolving credit agreement with a group of banks, which replaced a prior $200 million credit agreement. That agreement provided a maximum borrowing of $250 million and unless extended, expires on October 15, 1997. The company may select various borrowing options at varying rates. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Segment operating data for the 1994 second quarter and year-to- date period compared with corresponding prior year periods are set forth in the following table: Three Months Six Months Ended June 30, Ended June 30, (In millions) 1994 1993 1994 1993 Sales: Chemicals $338.4 $309.9 $623.6 $590.0 Metals 186.5 163.5 366.0 339.9 Defense and Ammunition 183.2 152.1 323.4 287.5 Total $708.1 $625.5 $1,313.0 $1,217.4 Net Income: Chemicals $14.9 $9.8 $22.7 $17.0 Metals 9.4 5.5 18.3 11.5 Defense and Ammunition 9.0 4.8 13.2 9.1 Corporate and Other (5.7) (5.8) (11.3) (11.6) Total $27.6 $14.3 $42.9 $26.0 Chemicals sales for the 1994 quarter and year-to-date period increased 9% and 6%, respectively, while net income increased significantly from 1993's levels. Strong demand for caustic and chlorine and higher chlorine pricing contributed to Chlor- Alkali's improved 1994 financial performance. For the total year, Chlor-Alkali's results are expected to be significantly ahead of 1993's performance. An improving economy has diminished the over-supply position of caustic and brought about increased demand and pricing. These factors along with profit improvement programs are expected to be the main contributors to Chlor- Alkali's improved operating results. Higher volumes due to increased demand in the paper and textile markets contributed to Reductone(R) sodium hydrosulfite's 1994 sales and profit improvements. Increased market share and excellent manufacturing operating rates contributed to increased sales and profits from swimming pool chemicals. In flexible urethanes lower domestic prices and higher raw material costs more than offset the effect of improved international prices, resulting in lower operating results. Sales and profits from electronic materials and chemicals were ahead of the prior year periods due to higher sales volumes for most of its products and services. In 1994's first half, the company signed a letter of intent to sell its conductive materials business. Although Metals segment sales increased moderately over 1993's comparable periods, segment net income was significantly ahead of the same periods last year. Additional volumes to the automotive, housing and electronics industries and increased demand for cupping for the commercial ammunition market contributed to the strong profit performance. Lower metal values in this year's first quarter partially offset the year-to-date sales increase from these additional volumes. The 1993 periods included losses from the German joint venture, which was sold in October 1993. For the total 1994 year, excess capacity has lowered industry operating rates and has created a very competitive pricing environment. Continued strong customer demand is expected to contribute to 1994's increased improvement in segment sales and net income. Defense and Ammunition 1994 segment sales increased 20% for the quarter and 12% for the six-month period while net income in both periods increased substantially. The sales from the Aerojet acquisition and higher commercial ammunition sales were the contributing factors to the 1994 sales improvements. Commercial ammunition volume increases were created by heavy consumer demand (caused by an apprehension of restrictive legislation and taxation) and by new dealer-distributor marketing programs. The profits from the additional sales were offset in part by lower management fees resulting from the production decline at the Lake City Army Ammunition plant. In 1994's second quarter, the profit contribution from higher Ball Powder(R) propellant sales more than offset the lower tank ammunition volumes. Sales and profits from key rocket engine programs, a new electronic commercial aircraft product and royalty income were the main contributors to the 1994 increase in Aerospace's financial performance. In the revised outlook for total 1994, Defense and Ammunition sales and profits are expected to increase from 1993 levels. In Winchester, domestic commercial and military ammunition sales are anticipated to exceed 1993's level and more than offset an expected delay in military export ammunition shipments. New commercial awards are expected to increase Aerospace's sales. The profit contribution from the Aerojet acquisition and the income associated with the Winchester sales improvement are expected to increase segment net income, which was previously anticipated to be slightly lower than in 1993. Continuing reductions in the levels of defense procurement continue to adversely affect the Defense and Ammunition segment's performance and may continue to do so in future periods. Consequently, these reductions may also adversely affect, to a lesser extent, the company's financial performance in future years, including its income, liquidity, capital resources and financial condition. In addition, changes in the strategic direction of defense spending and the timing of defense procurement may also adversely affect this segment and the company. The precise impact of defense spending cutbacks will depend on the level of cutbacks, the extent to which these cutbacks are in the conventional ammunition area and the company's ability to mitigate the impact of the cutbacks with new business or by business consolidations. The company currently provides services to the U.S. Government in facilities management and is pursuing other business areas such as ordnance demilitarization. In view of continuing spending cutbacks of the Department of Defense, the historical financial information of the Defense and Ammunition segment, and to a lesser extent, of the company, may not be indicative of future performance. Although selling and administration expenses as a percent of sales in 1994 decreased from the comparable 1993 periods, higher levels of expenditures existed in 1994. This increase was attributable primarily to additional brand promotional expenses for pool chemicals, increased market development expenses for certain specialty chemicals product-line expansions and the inclusion of the Aerojet acquisition in 1994's operating results. Interest and other income decreased in both 1994 periods from the prior year levels due primarily to the unfavorable performance of nonconsolidated affiliates, particularly in Latin America. In 1994, cash flow from operations, proceeds from the common stock offering and the use of credit facilities financed the company's seasonal working capital requirements, capital expenditures, dividends and the acquisition of the medium caliber ammunition business. At June 30, 1994, the company maintained committed credit facilities with banks of $368 million of which $213 million was available. The company believes that these credit facilities are adequate to satisfy its liquidity needs for the near future. In 1994, cash flow from operations improved significantly from 1993's level. In the first six months of 1993 cash flow was used to significantly reduce December 31, 1992 accounts payable balances and to support increased environmental spending. The unusually high level of capital spending in the 1992 fourth quarter and the timing of payment of invoices relating to various purchase commitments resulted in the increased level of accounts payable at year-end 1992 as compared to year-end 1993. In addition, 1993 expenditures for environmental remediation were approximately 35% higher than 1994's amount. Capital spending of $44.2 million in 1994 was 32% lower than 1993 due to higher levels of spending in 1993 for additional brass strip capacity and a sulfuric acid regeneration plant. Total year capital spending, including environmental capital spending of $10 million, is estimated to increase 10% from 1993 mainly to support the consolidation of some electronic materials businesses and provide additional capacity for selected product lines, including a multi-year investment of $75 million for integration and expansion of toluene diisocyanate (TDI) capacity at Lake Charles, LA. Historically, the company has funded its environmental capital spending through cash flow from operations and expects to do so in the future. Investment spending in 1993 was attributed, in part, to the new ethylene oxide facility which is a Venezuelan joint venture in which the company has an investment of $20 million at June 30, 1994. Through the first half of 1994, this venture continued to experience liquidity difficulties due to high leverage. During the 1994 second quarter, one of the company's partners in this joint venture delayed payment of an advance to this venture, causing it to default on a third-party loan payment. Since then, this loan payment has been made. Additionally, in Venezuela general economic conditions have become unstable in light of new governmental actions. The government recently imposed currency exchange controls in order to control capital flight and manage inflation. The company and its joint venture partners are working to address these financial and economic issues. On April 30, 1994, the company purchased certain assets of the medium caliber ordnance business of Aerojet for approximately $25 million. This acquisition provides the company with a complete line of improved medium caliber ammunition products as well as air-dispensed munition products. During the first half of 1993 the company sold the facility and assets of its contract integrated circuit assembly operation and its brake fluid and certain formulated functional fluid product lines. These divestitures generated proceeds of $12.4 million. In May 1994, the company issued 2,213,750 shares of common stock at a price of $46.00. The proceeds were used to reduce outstanding short-term floating rate debt($25 million of which was incurred for the acquisition of the medium caliber ammunition business with the remainder incurred for working capital requirements). At June 30, 1994, the percent of total debt to total capitalization (excluding the reduction in equity for the Contributing Employee Ownership Plan) was 42.3%, down from 47.1% at year-end 1993 and 46.3% at June 30, 1993. In the 1994 year-to-date period, the company spent approximately $15 million for investigatory and clean-up activities associated with former waste sites and past operations. Spending for environmental investigatory and remedial efforts for the full year 1994 is estimated to be $40 million, compared to $44 million in 1993. The amounts spent were not charged to income but instead were charged to reserves established for such costs identified and expensed to income in prior years. Associated costs of investigatory and remedial activities are provided for in accordance with generally accepted accounting principles governing probability and the ability to reasonably estimate future costs. Charges to income for investigatory and remedial efforts were material to operating results in 1991, 1992 and 1993 and are expected to be material to net income in 1994 and future years. Annual environmental-related cash outlays for capital projects, site investigation and remediation, and normal plant operations are expected to range from $90-$105 million over the next several years. While the company does not anticipate a material increase in the projected annual level of its environmental- related costs, there is always the possibility that such increases may occur in the future in view of the uncertainties associated with environmental exposures. Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and the financial capability of other potentially responsible parties and the company's ability to obtain contributions from other parties and the time periods (sometimes lengthy) over which site remediation occurs. It is possible that some of these matters (the outcome of which is subject to various uncertainties) may be decided unfavorably against the company. The company's consolidated balance sheets include reserves for future environmental expenditures to investigate and remediate known sites amounting to $124 million at June 30, 1994 and $131 million at December 31, 1993, of which $84 million and $91 million were classified as other noncurrent liabilities, respectively. Included in the reserve at June 30, 1994 and December 31, 1993, were liabilities anticipated to be shared with a third party, with whom the company is currently in litigation. Those reserves did not take into account any discounting of future expenditures or any consideration of insurance recoveries or advances in technology. Environmental liabilities are reassessed periodically to determine if environmental circumstances have changed and/or remediation efforts and their costs can be better estimated. As a result of these reassessments, future charges to income may be made for additional liabilities. There are a variety of legal proceedings pending or threatened against the company. It is possible that some of these matters (the outcome of which is subject to various uncertainties) may be decided unfavorably against the company. Certain of these matters are discussed in Item 3, Legal Proceedings of the 1993 Form 10-K Annual Report and in other filings of the company with the Securities and Exchange Commission, which filings are available upon request from the company. Part II - Other Information Item 3. Legal Proceedings. As reported in Item 3(d) of Olin's 1993 Form 10-K, in late 1991, the Environmental Protection Agency ("EPA") brought a civil action in the U.S. District Court in Tennessee against Olin alleging violations of the Clean Air Act and regulations thereunder with respect to mercury emissions at Olin's Charleston, Tennessee plant. The complaint alleged, among other things, that Olin failed to maintain a mercury cell in a manner to minimize leakage of mercury and mercury contaminated material for a period of approximately 17 months. EPA claimed civil penalties of $25,000 per day for each alleged violation. Olin and EPA reached a settlement in principle in this matter pursuant to which Olin will pay $1 million in penalties. Subsequently, Olin and the EPA entered into a Consent Decree to settle this matter and Olin paid $1 million in penalties. Item 4. Submission of Matters to a Vote of Security Holders. The Company held its Annual Meeting of Shareholders on April 29, 1994. Of the 20,289,521 shares of Common Stock and ESOP Preferred Stock entitled to vote at such meeting, 17,624,315 shares were present for purposes of a quorum. At the meeting, shareholders elected Robert R. Frederick, William W. Higgins, and John P. Schaefer to the Board of Directors as Class III Directors with terms expiring in 1997, and H. William Lichtenberger as a Class II Director with a term expiring in 1996. Votes cast for and votes withheld in the election of Directors were as follows: Votes For Votes Withheld Robert R. Frederick 16,870,116 754,199 William W. Higgins 16,857,260 767,055 John P. Schaefer 16,872,867 751,448 H. William Lichtenberger 16,863,941 760,374 There were no abstentions or broker non-votes. The shareholders also voted on and approved the Olin Corporation 1994 Stock Plan for Non-employee Directors, which is a plan designed to pay non-employee directors most of their compensation in the form of Olin Common Stock. Voting for this resolution approving such plan were 14,816,274 shares, 2,369,216 shares were voted against and 438,825 shares abstained from voting. There were no broker non-votes. The shareholders also voted on and approved an amendment to Article III of the By-laws of the Corporation. The amendment related to indemnification of officers, Directors and employees. Voting for this resolution approving the amendment were 15,592,917 shares, 1,531,207 shares were voted against and 500,191 shares abstained from voting. There were no broker non-votes. The shareholders also voted on and approved the Olin Senior Management Incentive Compensation Plan, a plan which seeks to avoid certain tax limitations on the deductibility of compensation. Voting for the resolution approving this plan were 14,571,215 shares, 2,637,157 shares were voted against and 415,943 shares abstained from voting. There were no broker non-votes. The shareholders also voted on and approved amendments to the Olin 1991 Long Term Incentive Plan. These amendments seek to avoid certain tax limitations on the deductibility of compensation. Voting for the resolution approving these amendments were 15,091,357 shares, 2,104,955 shares were voted against and 428,003 shares abstained from voting. There were no broker non-votes. The shareholders also ratified the appointment of KPMG Peat Marwick as independent auditors for 1994. Voting for the resolution ratifying the appointment were 17,167,499 shares, 290,729 shares were voted against and 166,087 shares abstained from voting. There were no broker non-votes. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 11. Computation of Per Share Earnings (Unaudited). 12(a). Computation of Ratio of Earnings to Fixed Charges (Unaudited). 12(b). Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Unaudited). (b) Reports on Form 8-K Except for Current Report on Form 8-K, dated May 4, 1994, with respect to item 5 thereof, which was filed on May 4, 1994, no reports on Form 8-K were filed during the quarter ended June 30, 1994. 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. OLIN CORPORATION (Registrant) By: J. A. Riggs J. A. Riggs Senior Vice President and Chief Financial Officer (Duly authorized signatory and Chief Financial Officer) Date: August 9, 1994 EXHIBIT INDEX Exhibit No. Description 11 Computation of Per Share Earnings (Unaudited). 12(a) Computation of Ratio of Earnings to Fixed Charges (Unaudited). 12(b) Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Unaudited). EX-11 2 EXHIBIT 11 Exhibit 11 OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Per Share Earnings (Unaudited) (In millions) Six Months Ended June 30, Primary earnings per share 1994 1993 Primary earnings: Net income $42.9 $26.0 Less ESOP preferred dividend (3.5) (3.7) Net income $39.4 $22.3 Primary shares: Weighted average shares outstanding 19.8 19.1 Weighted average common share equivalents assuming the conversion of Series A Conversion Preferred Stock at the date of issuance 2.7 2.7 Primary shares 22.5 21.8 Primary net income per common share $1.78 $1.02 Fully diluted earnings per share Fully diluted earnings: Net income $42.9 $26.0 Less additional ESOP contribution (1.5) (1.8) Net income $41.4 $24.2 Fully diluted shares: Weighted average number of common shares outstanding and common stock equivalents (primary) 22.5 21.8 Dilutive effect of ESOP preferred stock 1.5 1.7 Fully diluted shares 24.0 23.5 Fully diluted net income per common share $1.72 $1.03 EX-12 3 EXHIBITS 12(A) AND 12(B) Exhibit 12(a) OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges (Unaudited) (In millions) Six Months Ended June 30, 1994 1993 Earnings: Income before taxes $66.5 $40.1 Add (deduct): Income taxes of 50% owned affiliates 2.0 1.0 Equity in (earnings) losses of less than 50% owned affiliates 3.7 2.4 Dividends received from less than 50% owned affiliates 0.1 0.3 Interest capitalized, net of amortization (0.1) (0.9) Fixed charges as described below 28.7 27.7 Total $100.9 $70.6 Fixed Charges: Interest expense $20.2 $20.8 Estimated interest factor in rent expense 8.5 6.9 Total $28.7 $27.7 Ratio of earnings to fixed charges 3.5 2.6 Exhibit 12(b) OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends (Unaudited) (In millions) Six Months Ended June 30, 1994 1993 Earnings: Income before taxes $66.5 $40.1 Add (deduct): Income taxes of 50% owned affiliates 2.0 1.0 Equity in (earnings) losses of less than 50% owned affiliates 3.7 2.4 Dividends received from less than 50% owned affiliates 0.1 0.3 Interest capitalized, net of amortization (0.1) (0.9) Fixed charges as described below 28.7 27.7 Total $100.9 $70.6 Fixed Charges: Interest expense $20.2 $20.8 Estimated interest factor in rent expense 8.5 6.9 Preferred stock dividend requirement 13.2 13.3 Total $41.9 $41.0 Ratio of earnings to fixed charges 2.4 1.7 -----END PRIVACY-ENHANCED MESSAGE-----