-----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, qSX/dxmcgCt7f/A0NlOG0Ok5sc40YAJAPKGiO7oUUfoy3tVMHlKFs89hxtK6W/qo NjSkhBPIvmICyvJTZo3a/Q== 0000084636-94-000008.txt : 19940519 0000084636-94-000008.hdr.sgml : 19940519 ACCESSION NUMBER: 0000084636-94-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROCKWELL INTERNATIONAL CORP CENTRAL INDEX KEY: 0000084636 STANDARD INDUSTRIAL CLASSIFICATION: 3760 IRS NUMBER: 951054708 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01035 FILM NUMBER: 94527487 BUSINESS ADDRESS: STREET 1: 2201 SEAL BEACH BOULEVARD CITY: SEAL BEACH STATE: CA ZIP: 90740 BUSINESS PHONE: 4125654004 MAIL ADDRESS: STREET 1: 2201 SEAL BEACH BOULEVARD CITY: SEAL BEACH STATE: CA ZIP: 90740 FORMER COMPANY: FORMER CONFORMED NAME: NORTH AMERICAN AVIATION INC DATE OF NAME CHANGE: 19671017 10-Q 1 FORM 10-Q FOR QUARTER ENDED MARCH 31, 1994 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1994 Commission file number 1-1035 Rockwell International Corporation (Exact name of registrant as specified in its charter) Delaware 95-1054708 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2201 Seal Beach Boulevard, Seal Beach, California 90740 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (412) 565-4004 (Office of the Corporate Secretary) 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 181,702,130 shares of registrant's Common Stock, $1.00 par value, and 38,927,520 shares of Class A Common Stock, $1.00 par value, were outstanding on April 30, 1994. ROCKWELL INTERNATIONAL CORPORATION INDEX PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: Page No. Condensed Consolidated Balance Sheet-- March 31, 1994 and September 30, 1993.......... 2 Statement of Consolidated Income--Three Months and Six Months Ended March 31, 1994 and 1993... 3 Statement of Consolidated Cash Flows-- Six Months Ended March 31, 1994 and 1993....... 4 Notes to Financial Statements.................. 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................. 8 Other Financial Information.................... 11 Exhibit 11 - Computation of Earnings Per Share........... 12 PART II. OTHER INFORMATION: Item 1. Legal Proceedings.............................. 13 Item 4. Submission of Matters to a Vote of Security Holders............................... 13 Item 5. Other Information.............................. 14 Item 6. Exhibits and Reports on Form 8-K............... 14 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ROCKWELL INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET March 31 September 30 1994 1993 (Unaudited) ASSETS (In millions) Current assets: Cash........................................... $ 546.1 $ 772.8 Receivables.................................... 2,190.2 2,209.1 Inventories.................................... 1,504.1 1,430.8 Other current assets........................... 584.2 533.7 Total current assets................... 4,824.6 4,946.4 Net property...................................... 2,313.7 2,325.8 Other assets...................................... 2,644.8 2,612.9 TOTAL.................... $9,783.1 $9,885.1 LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Short-term debt................................ $ 306.5 $ 166.4 Accounts payable - trade....................... 748.1 859.8 Accrued compensation and benefits.............. 636.9 710.1 Advance payments from customers................ 358.9 362.7 Accrued income taxes........................... 96.6 94.1 Other current liabilities...................... 799.2 797.8 Total current liabilities.............. 2,946.2 2,990.9 Long-term debt.................................... 842.2 1,028.2 Accrued retirement benefits....................... 2,705.4 2,731.2 Other liabilities................................. 180.8 178.8 Total liabilities............. 6,674.6 6,929.1 Shareowners' equity: Preferred stock ............................... 1.4 1.5 Common Stock (shares issued - 209.5 million)... 209.5 209.5 Class A Common Stock (shares issued: March 31, 1994, 39.9 million; September 30, 1993, 41.6 million)............ 39.9 41.6 Additional paid-in capital..................... 172.7 164.3 Retained earnings.............................. 3,621.0 3,471.9 Currency translation and pension adjustments... (213.5) (196.8) Common Stock in treasury, at cost (shares held: March 31, 1994, 28.5 million; September 30, 1993, 30.1 million).......... (722.5) (736.0) Total shareowners' equity..... 3,108.5 2,956.0 TOTAL.................... $9,783.1 $9,885.1 See Notes to Financial Statements. ROCKWELL INTERNATIONAL CORPORATION STATEMENT OF CONSOLIDATED INCOME (Unaudited) Three Months Ended Six Months Ended March 31 March 31 1994 1993 1994 1993 (In millions) Revenues: Sales.......................... $2,761.5 $2,694.1 $5,362.4 $ 5,182.7 Other income................... 14.1 22.1 29.7 39.8 Total revenues............... 2,775.6 2,716.2 5,392.1 5,222.5 Costs and expenses: Cost of sales.................. 2,157.9 2,132.5 4,186.1 4,110.1 Selling, general and administrative............... 335.4 328.1 648.9 619.4 Interest....................... 25.0 28.3 51.0 53.9 Total costs and expenses..... 2,518.3 2,488.9 4,886.0 4,783.4 Income before income taxes....... 257.3 227.3 506.1 439.1 Provision for income taxes....... 102.6 90.4 201.9 174.4 Net income ...................... $ 154.7 $ 136.9 $ 304.2 $ 264.7 (In dollars) Earnings per common share: Primary....................... $ .70 $ .63 $ 1.38 $ 1.21 Fully diluted................. $ .69 $ .62 $ 1.35 $ 1.19 Cash dividends per common share.. $ .25 $ .23 $ .50 $ .46 (In millions) Average common shares outstanding: Primary....................... 221.1 219.2 221.1 219.4 Fully diluted................. 225.8 222.3 225.7 222.7 See Notes to Financial Statements. ROCKWELL INTERNATIONAL CORPORATION STATEMENT OF CONSOLIDATED CASH FLOWS (Unaudited) Six Months Ended March 31 1994 1993 (In millions) OPERATING ACTIVITIES: Net income......................................... $ 304.2 $ 264.7 Adjustments to net income to arrive at cash provided by operating activities: Depreciation..................................... 211.0 213.4 Amortization of intangible assets................ 24.7 28.1 Deferred income taxes............................ 21.0 (15.4) Net pension income and contributions............. (33.2) (52.9) Changes in assets and liabilities: Receivables.................................... 16.5 124.1 Inventories.................................... (72.2) (64.0) Accounts payable - trade....................... (120.1) (167.7) Accrued compensation and benefits.............. (72.9) 17.3 Advance payments from customers................ (10.9) (72.6) Income taxes................................... 3.2 30.9 Other assets and liabilities................... (87.4) (23.8) Cash provided by operating activities....... 183.9 282.1 INVESTING ACTIVITIES: Property additions................................. (195.4) (157.3) Proceeds from disposition of property.............. 5.9 7.5 Acquisition of businesses.......................... (5.6) (122.6) Cash used for investing activities.......... (195.1) (272.4) FINANCING ACTIVITIES: Increase in short-term borrowings.................. 112.2 105.6 Increase in long-term debt......................... 17.7 0.1 Payments of long-term debt......................... (204.5) (8.1) Net (decrease) increase in debt.................. (74.6) 97.6 Purchase of treasury stock......................... (61.7) (56.1) Dividends.......................................... (110.7) (101.1) Reissuance of common stock......................... 31.5 24.2 Cash used for financing activities.......... (215.5) (35.4) DECREASE IN CASH................................... (226.7) (25.7) CASH AT BEGINNING OF PERIOD........................ 772.8 602.6 CASH AT END OF PERIOD.............................. $ 546.1 $ 576.9 Income tax payments were $172.5 million and $161.6 million in the six months ended March 31, 1994 and 1993, respectively. See Notes to Financial Statements. ROCKWELL INTERNATIONAL CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. In the opinion of the company the unaudited financial statements contain all adjustments, consisting solely of adjustments of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. These statements should be read in conjunction with the company's Annual Report for the fiscal year ended September 30, 1993. The results of operations for the three- and six-month periods ended March 31, 1994 and 1993 are not necessarily indicative of the results for the full year. It is the company's practice at the end of each interim reporting period to make an estimate of the effective tax rate expected to be applicable for the full fiscal year. The rate so determined is used in providing for income taxes on a year-to-date basis. 2. Receivables are summarized as follows (in millions): March 31 September 30 1994 1993 Accounts and notes receivable: Commercial, less allowance for doubtful accounts (March 31, 1994, $49.7; September 30, 1993, $47.3)............ $1,293.5 $1,258.2 United States Government................ 130.2 149.0 Unbilled costs and accrued profits, less related progress payments (March 31, 1994, $481.7; September 30, 1993, $550.5)............. 766.5 801.9 Receivables............................. $2,190.2 $2,209.1 3. Inventories are summarized as follows (in millions): March 31 September 30 1994 1993 Finished goods............................ $ 340.1 $ 330.3 Long-term contracts in process............ 280.2 338.2 Work in process........................... 570.4 508.7 Raw materials, parts and supplies......... 518.8 492.4 Total................................... 1,709.5 1,669.6 Less allowance to adjust the carrying value of certain inventories to a last-in, first-out (LIFO) basis.................. 74.7 67.2 Remainder................................. 1,634.8 1,602.4 Less related progress payments............ 130.7 171.6 Inventories............................. $1,504.1 $1,430.8 ROCKWELL INTERNATIONAL CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) 4. Other assets are summarized as follows (in millions): March 31 September 30 1994 1993 Goodwill................................. $ 574.5 $ 581.5 Patents, product technology and other intangibles...................... 178.0 175.2 Intangible pension asset................. 42.5 52.5 Prepaid pension costs.................... 1,237.0 1,187.4 Deferred income taxes.................... 348.8 374.6 Customer finance receivables............. 151.2 150.5 Investments and other assets............. 112.8 91.2 Other assets........................... $2,644.8 $2,612.9 5. Other current liabilities are summarized as follows (in millions): March 31 September 30 1994 1993 Accounts payable - other................... $223.3 $191.8 Accrued product warranties................. 171.8 165.6 Accrued taxes other than income taxes...... 86.3 80.7 Accrued restructuring costs................ 43.0 62.1 Other...................................... 274.8 297.6 Other current liabilities................ $799.2 $797.8 6. Long-term debt consisted of the following (in millions): March 31 September 30 1994 1993 7-1/2% notes, redeemed in March 1994..... $ 200.0 8-7/8% notes, payable in 1999............ $ 300.0 300.0 8-3/8% notes, payable in 2001............ 200.0 200.0 6-3/4% notes, payable in 2002............ 300.0 300.0 Other obligations, principally foreign... 66.5 35.6 Total.................................. 866.5 1,035.6 Less current portion..................... 24.3 7.4 Long-term debt......................... $ 842.2 $1,028.2 ROCKWELL INTERNATIONAL CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) 7. Accrued retirement benefits consisted of the following (in millions): March 31 September 30 1994 1993 Accrued retirement medical costs......... $2,540.4 $2,579.2 Accrued pension costs.................... 352.0 352.0 Total.................................. 2,892.4 2,931.2 Amount classified as current liability... 187.0 200.0 Accrued retirement benefits............ $2,705.4 $2,731.2 8. In the quarter ended March 31, 1994, the company purchased 1.3 million shares of Common Stock for $54.6 million. Since the company's Common Stock repurchase program began in 1984, the company has purchased 107.9 million shares of Common Stock for $2.4 billion. 9. Various lawsuits, claims and proceedings have been or may be instituted or asserted against the company relating to the conduct of its business, including those pertaining to product liability, environmental, safety and health, and employment matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to the company, management believes the disposition of matters which are pending or asserted will not have a material adverse effect on the company's financial statements. ROCKWELL INTERNATIONAL CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS 1994 Second Quarter Compared to 1993 Second Quarter The contributions to sales and earnings by business segment of the company for the second quarter of fiscal 1994 and 1993 are presented below. Sales Earnings 1994 1993 1994 1993 (in millions) Electronics...................... $1,257 $1,133 $ 178.5 $ 156.1 Aerospace........................ 658 769 93.6 92.5 Automotive....................... 714 631 29.2 27.2 Graphics......................... 132 161 5.2 5.0 Sales and operating earnings.. 2,761 2,694 306.5 280.8 General corporate - net.......... (24.1) (25.2) Interest expense................. (25.0) (28.3) Provision for income taxes....... (102.7) (90.4) Total......................... $2,761 $2,694 $ 154.7 $ 136.9 Sales in the 1994 second quarter increased two percent from the same period a year ago principally due to record quarterly sales in Automotive and the Electronics' Industrial Automation and Telecommunications businesses partially offset by a decline in Aerospace and Graphics sales. Net income for 1994's second quarter increased 13 percent from 1993's second quarter primarily due to record quarterly earnings of the company's largest business segment, Electronics. Automotive, Aerospace and Graphics earnings were also ahead of last year's comparable period. During the second quarter, the Automotive business identified and promptly took actions to correct a warranty-related issue in certain of its new transmission products. Accordingly, Automotive's earnings improvement was limited by a charge related to these actions (see below for further discussion). Earnings per share for the current year's second quarter increased 11 percent over last year's second quarter, marking the fifth consecutive quarter the company has recorded a double-digit earnings per share increase. Within the business segments, six of the nine business units, led by Telecommunications and Allen-Bradley Industrial Automation, achieved higher 1994 second quarter earnings. Electronics 1994 second quarter earnings were up 14 percent from 1993's second quarter due to substantial sales and earnings increases in the Telecommunications and Allen-Bradley Industrial Automation businesses. Telecommunications 1994 second quarter sales reached an all-time high as demand for high-speed data modems continued to grow. The Allen-Bradley Industrial Automation business achieved record quarterly sales and earnings in the 1994 second quarter as incoming orders reached $9 million per day, the highest in Allen-Bradley's history. The business continues to see strong demand for its ROCKWELL INTERNATIONAL CORPORATION RESULTS OF OPERATIONS (CONTINUED) products in all of its primary markets worldwide, particularly in North America where sales to distributors have increased 18 percent over 1993 in the United States and 31 percent in Canada. Second quarter earnings of Defense Electronics also were up from a year ago, while Avionics earnings, as expected, were down significantly from last year's second quarter due to continued depressed commercial air transport markets. Aerospace earnings in the 1994 second quarter were higher than a year ago, benefitting from cost containment programs and higher award fees, despite a 14 percent decline in sales. Space Systems recorded higher earnings for the quarter while Aircraft posted a slight decrease. Automotive's second quarter earnings were up seven percent compared to the same quarter in 1993. These results were adversely affected by a $25 million provision to recognize the costs of inspections and potential field modifications of certain transmission products. In Automotive's Heavy Vehicle business, significant gains in sales and profitability from the strong North American truck markets nearly offset the warranty-related charge. Earnings in the Light Vehicle area were significantly higher than the year earlier period resulting from increased North American sales and improved cost performance, offsetting weak international markets. Second quarter earnings of the Graphics business were up slightly from 1993's second quarter due to continuing cost containment actions. Graphics sales were down 18 percent from the year earlier quarter as the worldwide printing press markets remain depressed. Six Months Ended March 31, 1994 Compared to Six Months Ended March 31, 1993 The contributions to sales and earnings by business segment of the company for the six months ended March 31, 1994 and 1993 are presented below. Sales Earnings 1994 1993 1994 1993 (in millions) Electronics....................... $2,441 $2,211 $ 347.4 $ 296.0 Aerospace......................... 1,268 1,413 175.3 178.7 Automotive........................ 1,366 1,246 64.2 53.4 Graphics.......................... 287 313 14.1 8.9 Sales and operating earnings.... 5,362 5,183 601.0 537.0 General corporate - net........... (43.9) (44.0) Interest expense.................. (51.0) (53.9) Provision for income taxes........ (201.9) (174.4) Total........................... $5,362 $5,183 $ 304.2 $ 264.7 ROCKWELL INTERNATIONAL CORPORATION RESULTS OF OPERATIONS (CONTINUED) Sales for the first six months of 1994 increased three percent from the same period a year ago principally due to strong demand for the products of the company's Telecommunications and Allen-Bradley Industrial Automation businesses within the Electronics business segment. Automotive's Heavy Vehicle business also recorded increased sales in the first six months of 1994 due to the strong North American truck markets. Net income for the first six months of 1994 was up 15 percent over 1993's first half net income, while earnings per share for the current year's first six months increased 14 percent over 1993's first six months. Electronics earnings for the first six months of fiscal 1994 were up 17 percent from the same period a year ago primarily due to substantial earnings increases in the Telecommunications and Allen-Bradley Industrial Automation businesses resulting from strong worldwide demand for high-speed data modems and industrial automation products. Earnings of Defense Electronics were about the same while Avionics earnings were lower, as expected, due to depressed commercial air transport markets. Aerospace earnings for the first six months of 1994 were down two percent over the comparable 1993 period due to a first quarter cost adjustment on Aircraft's AC-130U Gunship program which offset the benefits of cost containment programs and higher award fees. Automotive's earnings for the first six months of 1994 increased 20 percent over 1993's first six months primarily due to the strong North American truck markets. These results were adversely affected by the second quarter $25 million provision to recognize the costs of inspections and potential field modifications of certain transmission products. Although worldwide printing press markets remain depressed, earnings of the company's Graphics business for the first half of 1994 improved significantly from the year earlier due to continuing cost containment actions and the benefits of its market leadership positions. FINANCIAL CONDITION On March 15, 1994, the company redeemed its $200 million 7-1/2% notes, which had been payable in 1997, utilizing available cash balances and short-term credit facilities. Information with respect to the effect on the company and its manufacturing operations of compliance with environmental protection requirements and resolution of environmental claims is contained under the caption Results of Operations, Environmental Issues in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, on pages 16 - 17 of the company's Annual Report on Form 10-K for the fiscal year ended September 30, 1993, and is incorporated herein by reference. Management believes that at March 31, 1994 there has been no material change to this information. ROCKWELL INTERNATIONAL CORPORATION Other Financial Information (a) The company's backlog on March 31, 1994 was $11.7 billion compared to $13.5 billion on March 31, 1993. The backlog includes $3.8 billion of commercial orders, $2.6 billion of funded government orders and $5.3 billion of unfunded government orders. Backlog by major business segment is as follows (in billions): March 31 March 31 1994 1993 Aerospace Space Systems $ 5.9 $ 7.8 Aircraft 1.6 1.9 7.5 9.7 Defense Electronics 1.4 1.3 Other 2.8 2.5 Total Backlog $11.7 $13.5 (b) Sales by major product lines are summarized as follows (in millions): Three Months Ended Six Months Ended March 31 March 31 1994 1993 1994 1993 Electronics Industrial Automation $ 512 $ 401 $ 973 $ 781 Avionics 311 320 607 609 Telecommunications 178 128 340 242 Defense Electronics 256 284 521 579 1,257 1,133 2,441 2,211 Aerospace Space Systems 511 585 1,004 1,080 Aircraft 147 184 264 333 658 769 1,268 1,413 Automotive Heavy Vehicles 441 354 832 688 Light Vehicles 273 277 534 558 714 631 1,366 1,246 Graphics 132 161 287 313 Total Sales $2,761 $2,694 $5,362 $5,183 EXHIBIT 11 ROCKWELL INTERNATIONAL CORPORATION COMPUTATION OF EARNINGS PER SHARE Three Months Ended Six Months Ended March 31 March 31 1994 1993 1994 1993 (In millions, except per share amounts) Primary earnings per share: Net income...................... $154.7 $136.9 $304.2 $264.7 Deduct dividend requirements on preferred stock............ 0.1 0.1 0.1 Total primary earnings.......... $154.6 $136.9 $304.1 $264.6 Average number of common shares outstanding during the period..................... 221.1 219.2 221.1 219.4 Primary earnings per share...... $ .70 $ .63 $ 1.38 $ 1.21 Fully diluted earnings per share: Net income...................... $154.7 $136.9 $304.2 $264.7 Average number of common shares outstanding during the period assuming full dilution: Common stock................ 221.1 219.2 221.1 219.4 Assumed issuance of stock under award plans and conversion of preferred stock..................... 4.7 3.1 4.6 3.3 Total fully diluted shares...... 225.8 222.3 225.7 222.7 Fully diluted earnings per share.................... $ .69 $ .62 $ 1.35 $ 1.19 PART II. OTHER INFORMATION Item 1. Legal Proceedings On April 26, 1994, the United States joined and filed an amended complaint in a civil suit under the Federal False Claims Act against the company previously filed under seal by David Vosoughkia, a former employee of a division of the company, in the United States District Court for the Central District of California. As amended, the complaint alleges that the company defrauded the National Aeronautics and Space Administration (NASA) by improperly charging certain employee time to NASA contracts and seeks monetary damages and civil penalties in an unspecified amount. Based on the limited information the company has been able to gather while the complaint was sealed, the company believes this action is without merit. Item 4. Submission of Matters to a Vote of Security Holders (a) The regular annual meeting of shareowners of the registrant was held February 2, 1994. (c) At the annual meeting, the shareowners: (i) voted to elect 13 directors of the company. Each nominee for director was elected by a vote of the shareowners as follows: Affirmative votes Votes withheld Lew Allen, Jr. 488,367,437 6,286,995 Donald R. Beall 488,171,296 6,483,136 Richard M. Bressler 488,407,094 6,247,338 John J. Creedon 487,975,765 6,678,667 Robin Chandler Duke 486,853,577 7,800,855 William H. Gray, III 486,771,887 7,882,545 J. Clayburn La Force, Jr. 488,225,183 6,429,249 William T. McCormick, Jr. 488,784,034 5,870,398 John D. Nichols 488,571,895 6,082,537 Bruce M. Rockwell 488,125,486 6,528,946 Ross D. Siragusa, Jr. 488,241,425 6,413,007 William S. Sneath 488,271,475 6,382,957 Joseph F. Toot, Jr. 488,562,229 6,092,203 (ii) voted upon a proposal to approve the selection by the Board of Directors of the firm of Deloitte & Touche as auditors of the company. The proposal was approved by a vote of the shareowners as follows: Affirmative votes 484,191,722 Negative votes 5,184,685 Abstentions 5,278,025 Item 5. Other Information The company's government contract operations are subject to U.S. Government investigations of business practices and audits of contract performance and cost classification from which claims have been or may be asserted against the company. Although such claims are usually resolved through fact-finding and negotiation, civil, criminal or administrative proceedings may result and a contractor can be fined, as well as be suspended or debarred from government contracts. Management believes there are no claims, audits or investigations currently pending against the company which will have a material adverse effect on either the company's business or its financial condition. The company's financial statements have been prepared on the basis of conservative estimates, supported by outside legal counsel, of the revenue expected to be recovered from the company's claims against the U.S. Government arising out of the government's termination of contracts for its convenience and certain contractual disputes. While management cannot reasonably estimate the length of time that will be required to resolve its claims or whether they will be resolved through negotiation or litigation, it believes their resolution will not have a material adverse effect on the company's financial statements. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 11 - Computation of Earnings Per Share (b) Reports on Form 8-K: There were no reports on Form 8-K filed during the quarter ended March 31, 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. ROCKWELL INTERNATIONAL CORPORATION (Registrant) Date May 12, 1994 By L. J. Komatz L. J. Komatz Vice President and Controller (Principal Accounting Officer) Date May 12, 1994 By C. H. Harff C. H. Harff Senior Vice President, General Counsel and Secretary -----END PRIVACY-ENHANCED MESSAGE-----