-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QWjPXS6hIFk6uBZcVOD4a1cEpgCdrmnT6gv3jjnuLO3z2lSPDrIivk7z4gj6NQf/ o7YTdiei9ZkyYQG+nhwF7g== /in/edgar/work/20000814/0000796038-00-000037/0000796038-00-000037.txt : 20000921 0000796038-00-000037.hdr.sgml : 20000921 ACCESSION NUMBER: 0000796038-00-000037 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000701 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THERMO ELECTRON CORP CENTRAL INDEX KEY: 0000097745 STANDARD INDUSTRIAL CLASSIFICATION: [3829 ] IRS NUMBER: 042209186 STATE OF INCORPORATION: DE FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08002 FILM NUMBER: 700932 BUSINESS ADDRESS: STREET 1: 81 WYMAN ST STREET 2: P O BOX 9046 CITY: WALTHAM STATE: MA ZIP: 02454-9046 BUSINESS PHONE: 7816221000 10-Q 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 Quarter Ended July 1, 2000 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 1-8002 THERMO ELECTRON CORPORATION (Exact name of Registrant as specified in its charter) Delaware (State or other jurisdiction of 04-2209186 incorporation or organization) (I.R.S. Employer Identification No.) 81 Wyman Street, P.O. Box 9046 Waltham, Massachusetts 02454-9046 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (781) 622-1000 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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Class Outstanding at July 28, 2000 ----------------------------- ---------------------------- Common Stock, $1.00 par value 173,410,341 PART I - FINANCIAL INFORMATION Item 1 - Financial Statements - ----------------------------- THERMO ELECTRON CORPORATION Consolidated Balance Sheet (Unaudited) Assets
July 1, January 1, (In thousands) 2000 2000 - -------------------------------------------------------------------------------- ---------- ---------- Current Assets: Cash and cash equivalents $ 281,174 $ 281,760 Short-term available-for-sale investments at quoted market value (amortized cost of $292,799 and $545,639) 298,093 555,501 Accounts receivable, less allowances of $32,378 and $33,699 525,142 574,126 Inventories: Raw materials and supplies 191,499 177,153 Work in process 72,106 66,746 Finished goods 144,823 129,242 Deferred tax asset 160,013 160,959 Other current assets 70,628 54,370 Net assets of discontinued operations (Note 9) 519,465 517,350 ---------- ---------- 2,262,943 2,517,207 ---------- ---------- Property, Plant, and Equipment, at Cost 645,008 756,443 Less: Accumulated depreciation and amortization 212,655 245,796 ---------- ---------- 432,353 510,647 ---------- ---------- Long-term Available-for-sale Investments, at Quoted Market Value (amortized cost of $35,850 and $38,064) 42,598 40,165 ---------- ---------- Other Assets 175,893 207,732 ---------- ---------- Cost in Excess of Net Assets of Acquired Companies (Note 9) 1,583,985 1,227,335 ---------- ---------- Long-term Net Assets of Discontinued Operations (Note 9) 648,747 678,756 ---------- ---------- $5,146,519 $5,181,842 ========== ========== 2 THERMO ELECTRON CORPORATION Consolidated Balance Sheet (continued) (Unaudited) Liabilities and Shareholders' Investment July 1, January 1, (In thousands except share amounts) 2000 2000 - -------------------------------------------------------------------------------- ---------- ---------- Current Liabilities: Short-term obligations and current maturities of long-term obligations $ 145,896 $ 302,962 Advance payable to affiliates 162,162 115,009 Accounts payable 135,655 156,573 Accrued payroll and employee benefits 86,014 89,184 Accrued income taxes 55,769 85,407 Deferred revenue 51,574 47,440 Other accrued expenses (Notes 7 and 8) 254,870 269,774 ---------- ---------- 891,940 1,066,349 ---------- ---------- Deferred Income Taxes and Other Deferred Items 159,781 163,063 ---------- ---------- Long-term Obligations: Senior convertible obligations 172,500 172,500 Senior notes 150,000 150,000 Subordinated convertible obligations (Note 4) 1,184,033 1,209,305 Other 65,055 34,169 ---------- ---------- 1,571,588 1,565,974 ---------- ---------- Minority Interest (Note 9) 40,562 364,278 ---------- ---------- Common Stock of Subsidiary Subject to Redemption (at redemption value) 7,692 7,692 ---------- ---------- Shareholders' Investment: Preferred stock, $100 par value, 50,000 shares authorized; none issued Common stock, $1 par value, 350,000,000 shares authorized; 185,626,868 and 167,432,776 shares issued 185,627 167,433 Capital in excess of par value 1,523,884 1,052,837 Retained earnings 1,083,052 1,041,968 Treasury stock at cost, 12,611,369 and 10,955,798 shares (217,797) (189,646) Deferred compensation (6,779) (3,190) Accumulated other comprehensive items (Note 2) (93,031) (54,916) ---------- ---------- 2,474,956 2,014,486 ---------- ---------- $5,146,519 $5,181,842 ========== ========== The accompanying notes are an integral part of these consolidated financial statements. 3 THERMO ELECTRON CORPORATION Consolidated Statement of Operations (Unaudited) Three Months Ended ---------------------- July 1, July 3, (In thousands except per share amounts) 2000 1999 - -------------------------------------------------------------------------------- --------- --------- Revenues $ 609,482 $ 632,166 --------- --------- Costs and Operating Expenses: Cost of revenues 333,763 350,983 Selling, general, and administrative expenses 172,016 176,401 Research and development expenses 46,105 44,445 Restructuring and other unusual costs (income), net (Note 8) (3,685) 154,942 --------- --------- 548,199 726,771 --------- --------- Operating Income (Loss) 61,283 (94,605) Other Expense, Net (Note 3) (10,306) (29,196) --------- --------- Income (Loss) from Continuing Operations Before Income Taxes and Minority Interest 50,977 (123,801) Income Tax (Provision) Benefit (20,612) 35,460 Minority Interest (Expense) Income (5,104) 1,990 --------- --------- Income (Loss) from Continuing Operations 25,261 (86,351) Loss from Discontinued Operations (net of income taxes and minority interest of $97,700; Note 9) - (148,837) --------- --------- Net Income (Loss) $ 25,261 $(235,188) ========= ========= Earnings (Loss) per Share from Continuing Operations (Note 5): Basic $ .16 $ (.55) ========= ========= Diluted $ .16 $ (.55) ========= ========= Earnings (Loss) per Share (Note 5): Basic $ .16 $ (1.49) ========= ========= Diluted $ .16 $ (1.49) ========= ========= Weighted Average Shares (Note 5): Basic 156,018 158,010 ========= ========= Diluted 157,767 158,010 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. 4 THERMO ELECTRON CORPORATION Consolidated Statement of Operations (Unaudited) Six Months Ended ----------------------- July 1, July 3, (In thousands except per share amounts) 2000 1999 - -------------------------------------------------------------------------------- ---------- ---------- Revenues $1,208,411 $1,187,916 ---------- ---------- Costs and Operating Expenses: Cost of revenues 658,946 663,095 Selling, general, and administrative expenses 345,698 330,593 Research and development expenses 94,551 82,477 Restructuring and other unusual costs (income), net (Note 8) (11,385) 156,480 ---------- ---------- 1,087,810 1,232,645 ---------- ---------- Operating Income (Loss) 120,601 (44,729) Other Expense, Net (Note 3) (31,478) (37,252) ---------- ---------- Income (Loss) from Continuing Operations Before Income Taxes, Minority Interest, and Extraordinary Item 89,123 (81,981) Income Tax (Provision) Benefit (37,340) 18,025 Minority Interest Expense (11,231) (4,326) ---------- ---------- Income (Loss) from Continuing Operations Before Extraordinary Item 40,552 (68,282) Loss from Discontinued Operations (net of income taxes and minority interest of $86,432; Note 9) - (138,607) ---------- ---------- Income (Loss) Before Extraordinary Item 40,552 (206,889) Extraordinary Item (net of provision for income taxes of $333; Note 4) 532 - ---------- ---------- Net Income (Loss) $ 41,084 $ (206,889) ========== ========== Earnings (Loss) per Share from Continuing Operations Before Extraordinary Item (Note 5): Basic $ .26 $ (.43) ========== ========== Diluted $ .25 $ (.44) ========== ========== Earnings (Loss) per Share (Note 5): Basic $ .26 $ (1.31) ========== ========== Diluted $ .25 $ (1.32) ========== ========== Weighted Average Shares (Note 5): Basic 156,416 158,028 ========== ========== Diluted 157,616 158,028 ========== ========== The accompanying notes are an integral part of these consolidated financial statements. 5 THERMO ELECTRON CORPORATION Consolidated Statement of Cash Flows (Unaudited) Six Months Ended ---------------------- July 1, July 3, (In thousands) 2000 1999 - -------------------------------------------------------------------------------- --------- --------- Operating Activities: Net income (loss) $ 41,084 $(206,889) Loss from discontinued operations (Note 9) - 138,607 --------- --------- Income (loss) from continuing operations 41,084 (68,282) Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities: Depreciation and amortization 49,923 56,309 Noncash restructuring and other unusual costs, net (Note 8) 2,342 147,319 Provision for losses on accounts receivable 2,461 3,076 Minority interest expense 11,231 4,326 Equity in losses of unconsolidated subsidiaries (Note 8) 15,062 10,751 Change in deferred income taxes 806 (52,572) Gain on sale of businesses (Note 8) (12,480) - (Gain) loss on investments, net (6,372) 699 Extraordinary item, net of income taxes (Note 4) (532) - Other noncash items, net 3,793 9,259 Other unusual income (9,291) - Changes in current accounts, excluding the effects of acquisitions and dispositions: Accounts receivable 26,611 (12,655) Inventories (52,723) (9,777) Other current assets (5,189) 1,350 Accounts payable (15,063) 8,856 Other current liabilities (44,225) (36,791) --------- --------- Net cash provided by continuing operations 7,438 61,868 Net cash provided by discontinued operations 45,048 28,266 --------- --------- Net cash provided by operating activities 52,486 90,134 --------- --------- Investing Activities: Acquisition of minority interests of subsidiaries (Note 9) (295,714) (20,482) Proceeds from sale of businesses, net of cash divested (Note 8) 44,917 - Acquisitions, net of cash acquired (10,117) (331,374) Refund of acquisition purchase price - 4,074 Purchases of available-for-sale investments (175,636) (378,151) Proceeds from sale of available-for-sale investments 96,759 275,486 Proceeds from maturities of available-for-sale investments 334,021 595,009 6 THERMO ELECTRON CORPORATION Consolidated Statement of Cash Flows (continued) (Unaudited) Six Months Ended ---------------------- July 1, July 3, (In thousands) 2000 1999 - --------------------------------------------------------------------------------- --------- --------- Investing Activities (continued): Purchases of property, plant, and equipment $ (52,590) $ (34,473) Proceeds from sale of property, plant, and equipment 19,583 10,169 Proceeds from termination of power-sales agreement 69,573 - Advance from affiliates 47,153 4,139 (Increase) decrease in other assets (1,213) 10,828 Other 7,593 (5,650) --------- --------- Net cash provided by continuing operations 84,329 129,575 Net cash provided by (used in) discontinued operations 16,783 (46,357) --------- --------- Net cash provided by investing activities 101,112 83,218 --------- --------- Financing Activities: Net proceeds from issuance of long-term obligations 18,850 14,586 Repayment of long-term obligations (147,937) (10,671) Net proceeds from issuance of Company and subsidiary common stock 12,328 5,516 Purchases of Company and subsidiary common stock and subordinated convertible debentures (43,787) (105,448) Increase (decrease) in short-term obligations 7,195 (10,384) Other 609 (4,116) --------- --------- Net cash used in continuing operations (152,742) (110,517) Net cash provided by (used in) discontinued operations 3,826 (56,489) --------- --------- Net cash used in financing activities (148,916) (167,006) --------- --------- Exchange Rate Effect on Cash of Continuing Operations (8,792) (12,759) Exchange Rate Effect on Cash of Discontinued Operations (4,212) (3,393) --------- --------- Decrease in Cash and Cash Equivalents (8,322) (9,806) Cash and Cash Equivalents at Beginning of Period 357,215 396,670 --------- --------- 348,893 386,864 Cash and Cash Equivalents of Discontinued Operations at End of Period (67,719) (92,640) --------- --------- Cash and Cash Equivalents at End of Period $ 281,174 $ 294,224 ========= ========= Noncash Activities: Fair value of assets of acquired companies $ 13,512 $ 571,741 Cash paid for acquired companies (10,117) (331,374) --------- --------- Liabilities assumed of acquired companies $ 3,395 $ 240,367 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. 7 THERMO ELECTRON CORPORATION Notes to Consolidated Financial Statements 1. General The interim consolidated financial statements presented have been prepared by Thermo Electron Corporation (the Company) without audit and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the financial position at July 1, 2000, the results of operations for the three- and six-month periods ended July 1, 2000, and July 3, 1999, and the cash flows for the six-month periods ended July 1, 2000, and July 3, 1999. Certain prior-period amounts have been reclassified to conform to the presentation in the current financial statements. Interim results are not necessarily indicative of results for a full year. Historical financial results have been restated to reflect a decision to sell several of the Company's businesses, which have been presented as discontinued operations in the accompanying financial statements (Note 9). The consolidated balance sheet presented as of January 1, 2000, has been derived from the consolidated financial statements that have been audited by the Company's independent public accountants. The consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in the annual financial statements and notes of the Company. The consolidated financial statements and notes included herein should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 1, 2000, filed with the Securities and Exchange Commission (SEC). 2. Comprehensive Income Comprehensive income combines net income and "other comprehensive items," which represents certain amounts that are reported as components of shareholders' investment in the accompanying balance sheet, including foreign currency translation adjustments and unrealized net of tax gains and losses on available-for-sale investments. During the second quarter of 2000 and 1999, the Company had comprehensive income of $6.8 million and a comprehensive loss of $267.5 million, respectively. During the first six months of 2000 and 1999, the Company had comprehensive income of $8.2 million and a comprehensive loss of $268.9 million, respectively.
3. Other Expense, Net The components of other expense, net, in the accompanying statement of operations are as follows:
Three Months Ended Six Months Ended ------------------- ------------------- July 1, July 3, July 1, July 3, (In thousands) 2000 1999 2000 1999 - ------------------------------------------------------------ -------- -------- -------- -------- Interest Income $ 8,280 $ 10,048 $ 18,455 $ 24,221 Interest Expense (21,638) (24,655) (44,678) (49,112) Equity in Losses of Unconsolidated Subsidiaries (Note 8) (1,726) (10,734) (15,062) (10,751) Gain (Loss) on Investments, Net 2,907 (3,469) 6,372 (699) Other Income (Expense), Net (Note 8) 1,871 (386) 3,435 (911) -------- ------- -------- -------- $(10,306) $(29,196) $(31,478) $(37,252) ======== ======== ======== ======== 4. Extraordinary Item During the first quarter of 2000, the Company repurchased $7.3 million principal amount of its 4 1/4% subordinated convertible debentures for $6.4 million in cash, resulting in an extraordinary gain of $0.5 million, net of taxes of $0.3 million. 8 THERMO ELECTRON CORPORATION 5. Earnings (Loss) per Share Basic and diluted earnings (loss) per share were calculated as follows: Three Months Ended Six Months Ended --------------------- --------------------- July 1, July 3, July 1, July 3, (In thousands except per share amounts) 2000 1999 2000 1999 - --------------------------------------------------------- --------- --------- --------- --------- Basic Income (Loss) from Continuing Operations Before Extraordinary Item $ 25,261 $ (86,351) $ 40,552 $ (68,282) Loss from Discontinued Operations - (148,837) - (138,607) Extraordinary Item - - 532 - --------- --------- --------- --------- Net Income (Loss) $ 25,261 $(235,188) $ 41,084 $(206,889) --------- --------- --------- --------- Weighted Average Shares 156,018 158,010 156,416 158,028 --------- --------- --------- --------- Basic Earnings (Loss) per Share: Continuing operations before extraordinary item $ .16 $ (.55) $ .26 $ (.43) Discontinued operations - (.94) - (.88) Extraordinary item - - - - --------- --------- --------- --------- $ .16 $ (1.49) $ .26 $ (1.31) ========= ========= ========= ========= Diluted Income (Loss) from Continuing Operations Before Extraordinary Item $ 25,261 $ (86,351) $ 40,552 $ (68,282) Effect of Majority-owned Subsidiaries' Dilutive Securities - Continuing Operations (480) (651) (1,358) (1,209) --------- --------- --------- --------- Income (Loss) from Continuing Operations Before Extraordinary Item Available to Common Shareholders, as Adjusted 24,781 (87,002) 39,194 (69,491) Loss from Discontinued Operations - (148,837) - (138,607) Effect of Majority-owned Subsidiaries' Dilutive Securities - Discontinued Operations - (28) - (279) Extraordinary Item - - 532 - --------- --------- --------- --------- Income (Loss) Available to Common Shareholders, as Adjusted $ 24,781 $(235,867) $ 39,726 $(208,377) --------- --------- --------- --------- Weighted Average Shares 156,018 158,010 156,416 158,028 Effect of Stock Options 1,749 - 1,200 - --------- --------- --------- --------- Weighted Average Shares, as Adjusted 157,767 158,010 157,616 158,028 --------- --------- --------- --------- Diluted Earnings (Loss) per Share: Continuing operations before extraordinary item $ .16 $ (.55) $ .25 $ (.44) Discontinued operations - (.94) - (.88) Extraordinary item - - - - --------- --------- --------- --------- $ .16 $ (1.49) $ .25 $ (1.32) ========= ========= ========= ========= 9 THERMO ELECTRON CORPORATION 5. Earnings (Loss) per Share (continued) Options to purchase 5,642,000 and 11,952,000 shares of common stock for the second quarter of 2000 and 1999, respectively, and 6,024,000 and 10,780,000 shares of common stock for the first six months of 2000 and 1999, respectively, were not included in the computation of diluted earnings per share because the options' exercise prices were greater than the average market price for the common stock and their effect would have been antidilutive. The computation of diluted earnings per share for all periods presented excludes the effect of assuming the conversion of the Company's $562 million principal amount 4 1/4% subordinated convertible debentures, convertible at $37.80 per share, because the effect would be antidilutive. 6. Business Segment Information Three Months Ended Six Months Ended ---------------------- ----------------------- July 1, July 3, July 1, July 3, (In thousands) 2000 1999 2000 1999 - -------------------------------------------------------- ---------- ---------- ---------- ---------- Revenues: Life Sciences $ 187,047 $ 192,141 $ 377,877 $ 374,273 Optical Technologies 204,637 195,961 401,442 372,782 Measurement and Control 194,550 202,139 382,594 362,637 Power Generation 26,367 45,403 52,316 86,439 Intersegment (a) (3,119) (3,478) (5,818) (8,215) ---------- ---------- ---------- ---------- $ 609,482 $ 632,166 $1,208,411 $1,187,916 ========== ========== ========== ========== Income (Loss) from Continuing Operations Before Income Taxes, Minority Interest, and Extraordinary Item: Life Sciences $ 23,259 $ 29,092 $ 52,266 $ 56,331 Optical Technologies (b) 20,382 18,738 50,747 35,687 Measurement and Control (c) 19,384 (18,324) 30,123 (8,751) Power Generation (d) 4,878 (115,249) 7,421 (111,184) ---------- ---------- ---------- ---------- Total segment income (loss) (e) 67,903 (85,743) 140,557 (27,917) Corporate and Other (f) (16,926) (38,058) (51,434) (54,064) ---------- ---------- ---------- ---------- $ 50,977 $ (123,801) $ 89,123 $ (81,981) ========== ========== ========== ========== (a) Intersegment sales are accounted for at prices that are representative of transactions with unaffiliated parties. (b) Includes restructuring and other unusual income of $12.4 million in the first six months of 2000 and restructuring and other unusual costs of $0.1 million, $0.2 million, and $1.5 million in the second quarter of 2000 and 1999 and first six months of 1999, respectively. Also includes charges of $1.8 million and $3.2 million in the second quarter and first six months of 1999, respectively, for the sale of inventories revalued in connection with an acquisition. (c) Includes restructuring and other unusual income, net, of $0.6 million and $0.4 million in the second quarter and first six months of 2000, respectively, and restructuring and other unusual costs of $30.1 million in the second quarter and first six months of 1999. Also includes charges of $1.2 million and $4.4 million in the second quarter and first six months of 1999, respectively, for the sale of inventories revalued in connection with an acquisition and inventory provisions. (d) Includes restructuring and other unusual income, net, of $2.1 million and $2.4 million in the second quarter and first six months of 2000, respectively, and restructuring and other unusual costs of $124.3 million in the second quarter and first six months of 1999. 10 THERMO ELECTRON CORPORATION 6. Business Segment Information (continued) (e) Segment income is operating income before corporate charges. (f) Includes corporate general and administrative expenses, other income and expense, and restructuring and other unusual costs, net, of $0.3 million, $3.8 million, and $0.6 million in the second quarter of 1999 and the first six months of 2000 and 1999, respectively. The results for the second quarter of 2000 include restructuring and other unusual income, net, of $1.1 million. 7. Accrued Acquisition Expenses The Company has undertaken restructuring activities at certain acquired businesses. The Company's restructuring activities, which were accounted for in accordance with Emerging Issues Task Force Pronouncement (EITF) 95-3, primarily have included reductions in staffing levels and the abandonment of excess facilities. In connection with these restructuring activities, as part of the cost of acquisitions, the Company established reserves, primarily for severance and excess facilities. In accordance with EITF 95-3, the Company finalizes its restructuring plans no later than one year from the respective dates of the acquisitions. Accrued acquisition expenses are included in other accrued expenses in the accompanying balance sheet.
A summary of the changes in accrued acquisition expenses for acquisitions completed before and during 1997 is as follows:
1997 Acquisitions --------------------------------------- Abandonment Other of Excess Pre-1997 (In thousands) Severance Facilities Acquisitions Total - ---------------------------------- --------- ----------- ------ ------------ ------ Balance at January 1, 2000 $ 23 $1,420 $ 248 $7,437 $9,128 Usage (7) (30) - (571) (608) Currency translation (5) (79) (15) (440) (539) ------ ------ ------ ------ ------ Balance at July 1, 2000 $ 11 $1,311 $ 233 $6,426 $7,981 ====== ====== ====== ====== ====== The remaining accrued acquisition expenses for pre-1997 acquisitions primarily represent lease obligations for a building in Uxbridge, England, and an operating facility in Hayworth, England, with obligations through 2007. The remaining accrued acquisition expenses for 1997 acquisitions primarily represent lease obligations for an operating location in Runcorn, England, with an obligation through 2014. The amounts captioned as "other" in 1997 primarily represent costs to exit certain joint venture arrangements. 11 THERMO ELECTRON CORPORATION 7. Accrued Acquisition Expenses (continued)
A summary of the changes in accrued acquisition expenses for acquisitions completed during 1998 is as follows:
Abandonment of Excess (In thousands) Severance Facilities Other Total - ------------------------------------------------- --------- ----------- ------ ------ Balance at January 1, 2000 $ 281 $1,185 $ 83 $1,549 Usage (52) (281) (44) (377) Decrease recorded to cost in excess of net (1) (94) (39) (134) assets of acquired companies Currency translation (10) (64) - (74) ------ ------ ------ ------ Balance at July 1, 2000 $ 218 $ 746 $ - $ 964 ====== ====== ====== ====== The remaining accrued acquisition expenses for 1998 acquisitions primarily represent lease obligations for two operating facilities in North America with leases expiring in 2001 and severance payable primarily in 2000. A summary of the changes in accrued acquisition expenses for acquisitions completed during 1999 is as follows: Abandonment of Excess (In thousands) Severance Facilities Other Total - ------------------------------------------------- --------- ----------- ------ ------ Balance at January 1, 2000 $ 5,262 $ 1,173 $ 2,333 $ 8,768 Reserves established 101 55 - 156 Usage (1,621) (169) (484) (2,274) Decrease due to finalization of (404) - (20) (424) restructuring plans, recorded as a decrease to cost in excess of net assets of acquired companies Currency translation (96) (64) (41) (201) ------- ------- ------- ------- Balance at July 1, 2000 $ 3,242 $ 995 $ 1,788 $ 6,025 ======= ======= ======= ======= The principal accrued acquisition expenses for 1999 acquisitions are severance for approximately 175 employees across all functions and for abandoned facilities, primarily at Spectra-Physics AB. The abandoned facilities at Spectra-Physics include operating facilities in Sweden, Germany, and France with obligations through 2000. The amounts captioned as "other" primarily represent relocation, contract termination, and other exit costs. The Company expects to pay amounts accrued for severance and other through 2001 and amounts accrued for abandoned facilities over the respective lease terms. Of the total reserves at July 1, 2000, $1.9 million relates to the Spectra Precision businesses and will not be paid as a result of the sale of these businesses (Note 11). The Company finalized its restructuring plans for Spectra-Physics in 1999. Unresolved matters at July 1, 2000, included completion of planned severances and abandonment of excess facilities for other acquisitions completed in 1999. Such matters will be resolved no later than one year from the respective acquisition dates. 12 THERMO ELECTRON CORPORATION 7. Accrued Acquisition Expenses (continued)
A summary of the changes in accrued acquisition expenses for acquisitions completed during 2000 is as follows:
Abandonment of Excess (In thousands) Severance Facilities Total - ---------------------------------------------------------------- --------- ----------- ----- Reserves established $ 80 $ 45 $125 ---- ---- ---- Balance at July 1, 2000 $ 80 $ 45 $125 ==== ==== ==== 8. Restructuring and Other Unusual Costs (Income), Net
The Company's continuing operations recorded charges (income) by segment for the second quarter of 2000 as follows:
(In thousands) Optical Measurement Power Technologies and Control Generation Corporate Total - --------------------------------- ------------ ----------- ---------- --------- ------- Restructuring and Other Unusual Costs (Income), Net $ 53 $ (584) $(2,091) $(1,063) $(3,685) Equity in Losses of Unconsolidated Subsidiaries 1,838 - - - 1,838 Other Income, Net (1,757) - - - (1,757) ------- ------- ------- ------- ------- $ 134 $ (584) $(2,091) $(1,063) $(3,604) ======= ======= ======= ======= ======= The Company's continuing operations recorded charges (income) by segment for the first six months of 2000 as follows: (In thousands) Optical Measurement Power Technologies and Control Generation Corporate Total - -------------------------------- ------------- ----------- ---------- --------- -------- Restructuring and Other Unusual Costs (Income), Net $(12,423) $ (361) $ (2,403) $ 3,802 $(11,385) Equity in Losses of Unconsolidated Subsidiaries 15,232 - - - 15,232 Other Income, Net (3,470) - - - (3,470) -------- -------- -------- -------- -------- $ (661) $ (361) $ (2,403) $ 3,802 $ 377 ======== ======== ======== ======== ======== 13 THERMO ELECTRON CORPORATION 8. Restructuring and Other Unusual Costs (Income), Net (continued) The components of restructuring and related costs by segment are as follows: Optical Technologies - -------------------- The Optical Technologies segment recorded $0.1 million of restructuring costs in the second quarter of 2000 related to an abandoned facility. In the first quarter of 2000, this segment recorded $12.4 million of unusual income resulting from the sale of Thermo Instrument Systems Inc.'s Nicolet Imaging Systems (NIS) and Sierra Research and Technology, Inc. (SRT) subsidiaries. The businesses manufacture products that include imaging systems used in assembling complex printed circuit boards and in airbag manufacturing. NIS and SRT were sold for aggregate proceeds of $40.0 million and had aggregate revenues and operating income of $28.3 million and $2.2 million, respectively, in 1999. These units were sold due to a consolidation trend among manufacturers of test equipment in the markets these businesses serve. The Company has decided to focus on growth in other sectors of the instruments market. The segment also recorded noncash charges of $13.4 million and $1.8 million in the first and second quarters of 2000, respectively, associated with its equity method investment in FLIR Systems, Inc., acquired as part of the February 1999 acquisition of Spectra-Physics. The segment records FLIR's results on a one-quarter lag. FLIR recorded significant charges in its fourth quarter of 1999 and an operating loss in the first quarter of 2000. The charges represent the Company's pro rata share of FLIR's loss and were recorded to equity in losses of unconsolidated subsidiaries, a component of other expense, in the accompanying statement of operations. In addition, the Optical Technologies segment recorded other noncash income of $1.7 million and $1.8 million in the first and second quarters of 2000, respectively, related to hedging transactions of its majority-owned Spectra-Physics Lasers, Inc. (SPLI) subsidiary, which elected early adoption of Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." The segment also reversed $0.1 million of previously established restructuring reserves during the first quarter of 2000. Measurement and Control - ----------------------- The Measurement and Control segment had unusual income of $0.7 million in the second quarter of 2000, primarily representing a gain on the termination of a lease, and $0.1 million of restructuring costs for employee retention. In the first quarter of 2000, the Measurement and Control segment recorded $0.2 million of restructuring and unusual costs for employee retention costs for a business unit that was sold. The unit was part of the power electronics and test equipment business that is held for sale. The segment expects to complete the sale of the remaining units of this business during the second half of 2000. Power Generation - ---------------- The Power Generation segment recorded restructuring and unusual income, net, of $2.1 million in the second quarter of 2000. Thermo Ecotek Corporation had a gain of $2.7 million from factoring a portion of a stream of payments it was to have received from a utility in connection with the 1999 termination of the power-sales agreement for its Delano plants. In 1999, when Thermo Ecotek decided to terminate the agreement, it recorded a $47.5 million charge for impairment of the facility. The factoring gain represents a revision to the estimate of impairment recorded in 1999. Thermo Ecotek also recorded a gain of $0.2 million in the second quarter of 2000 related to the sale of its coal-beneficiation plant and termination of its relationship with its former partner in the plant. This unusual income was offset in part by a charge of $0.5 million for contract obligations that arose as a result of the closure of Thermo Ecotek's gas marketing business, discussed below, and $0.3 million of employee retention and severance costs. The Power Generation segment recorded unusual income of $2.0 million in the first quarter of 2000, representing a gain on the sale of Thermo Ecotek's Gorbell facility in Maine. This segment also had restructuring costs of $1.7 million in the first quarter of 2000. This amount included $1.0 million of severance for 45 employees, 8 14 THERMO ELECTRON CORPORATION 8. Restructuring and Other Unusual Costs (Income), Net (continued) of whom were terminated in the first six months of 2000, $0.6 million of noncash charges associated with the closing of Thermo Ecotek's gas marketing business, and $0.1 million for employee retention costs. The gas marketing costs include a write-off of $0.3 million of cost in excess of net assets of acquired companies and $0.3 million of capitalized development costs. Thermo Ecotek determined that its gas marketing business was a noncore business. Corporate - --------- The Company recorded $1.1 million of restructuring and unusual income, net, at its corporate office in the second quarter of 2000. This amount includes a gain of $3.8 million from the sale of an office building adjacent to the Company's corporate headquarters. In addition, the Company had $1.9 million of investment banking, legal, and consulting fees associated with its reorganization plan. The Company also recorded $0.1 million of severance for 2 employees and $0.7 million of employee retention costs that are being accrued ratably over the period through which the employees must work to qualify for a payment. The Company also recorded $4.9 million of restructuring and unusual costs in its corporate office during the first quarter of 2000. These costs included $2.8 million of investment banking, consulting, and legal fees associated with the Company's reorganization plan, a $1.2 million noncash charge primarily related to modification of the term of certain stock options of the Company's former chairman, and $0.9 million of employee retention costs. General - ------- During 1998 and 1999, the Company announced restructuring actions that included plans for the termination of 729 employees. As of January 1, 2000, the Company had terminated 717 employees. The restructuring actions in 2000 included plans for the termination of an additional 47 employees. During the first six months of 2000, the Company terminated 20 employees. The following tables summarize the cash components of the Company's restructuring plans. The noncash components and other amounts reported as restructuring and other unusual costs (income), net in the accompanying statement of operations have been summarized in the notes to the tables. Accrued restructuring costs for the Company's continuing operations are included in other accrued expenses in the accompanying balance sheet. 15 THERMO ELECTRON CORPORATION 8. Restructuring and Other Unusual Costs (Income), Net (continued) Continuing Operations Abandonment Employee of Excess (In thousands) Severance Retention Facilities Other Total - ----------------------------------- --------- --------- ----------- ------- ------- 1998 Restructuring Plans Balance at January 1, 2000 $ 893 $ - $ 224 $ 565 $ 1,682 Costs incurred in 2000 - - 54 - 54 Usage (634) - (54) - (688) Reserves reversed - - (84) - (84) Currency translation (29) - (2) (32) (63) ------- -------- ------- ------- ------- Balance at July 1, 2000 $ 230 $ - $ 138 $ 533 $ 901 ======= ======== ======= ======= ======= 1999 Restructuring Plans Balance at January 1, 2000 $ 3,840 $ - $ 324 $ 6,348 $10,512 Usage (2,628) - - (950) (3,578) Reserves reversed (6) - - - (6) Reserves of businesses sold - - (324) (3,345) (3,669) ------- -------- ------- ------- ------- Balance at July 1, 2000 $ 1,206 $ - $ - $ 2,053 $ 3,259 ======= ======== ======= ======= ======= 2000 Restructuring Plans Costs incurred in 2000 (a) $ 1,135 $ 2,277 $ - $ 4,667 $ 8,079 Usage (476) (264) - (4,667) (5,407) Currency translation - (1) - - (1) ------- -------- ------- ------- ------- Balance at July 1, 2000 $ 659 $ 2,012 $ - $ - $ 2,671 ======= ======== ======= ======= ======= (a) Reflects restructuring costs of $0.3 million, $1.4 million, and $6.4 million in the Measurement and Control and Power Generation segments and the corporate headquarters, respectively. Excludes noncash charges of $1.2 million in the corporate headquarters. Also excludes unusual income of $12.4 million, $0.7 million, $3.8 million, and $3.8 million in the Optical Technologies, Measurement and Control, and Power Generation segments and the corporate headquarters, respectively. The Company's continuing operations expect to pay accrued restructuring costs as follows: severance, primarily in 2000; employee retention obligations, primarily in 2001 and January 2002; abandoned-facility payments, over lease terms expiring through 2000; and other costs, which represent fuel contract cancellation and pension termination costs, through 2001. 16 THERMO ELECTRON CORPORATION 8. Restructuring and Other Unusual Costs (Income), Net (continued) Discontinued Operations Abandonment Employee of Excess (In thousands) Severance Retention Facilities Other Total - ----------------------------------- --------- --------- ----------- ------- ------- 1998 Restructuring Plans Balance at January 1, 2000 $ 198 $ - $ 1,580 $ - $ 1,778 Usage (113) - (59) - (172) Reserves of businesses sold (34) - (666) - (700) Currency translation (8) - - - (8) ------- ------- ------- ------- ------- Balance at July 1, 2000 $ 43 $ - $ 855 $ - $ 898 ======= ======= ======= ======= ======= 1999 Restructuring Plans Balance at January 1, 2000 $ 2,682 $ - $19,000 $ 9,743 $31,425 Costs incurred in 2000 by discontinued operations 2,097 54 411 680 3,242 Usage (1,317) (54) (635) (2,357) (4,363) Reserves reversed (11) - (7,116) - (7,127) Reserves of businesses sold (62) - (1,650) - (1,712) Currency translation (80) - (134) (191) (405) ------- ------- ------- ------- ------- Balance at July 1, 2000 $ 3,309 $ - $ 9,876 $ 7,875 $21,060 ======= ======= ======= ======= ======= 2000 Restructuring Plans Costs incurred in 2000 by discontinued operations $ 99 $ 2,710 $ - $ 77 $ 2,886 Usage (99) (25) - (77) (201) ------- ------- ------- ------- ------- Balance at July 1, 2000 $ - $ 2,685 $ - $ - $ 2,685 ======= ======= ======= ======= ======= The Company's ThermoLase Corporation subsidiary negotiated a favorable resolution of certain lease obligations during the first six months of 2000 and reversed $7.1 million of reserves related to such obligations. The reversal did not affect the Company's results of operations due to its treatment of ThermoLase as a discontinued operation. The Company's discontinued operations expect to pay accrued restructuring costs as follows: severance, primarily in 2000; employee retention obligations, in 2000 and 2001; abandoned-facility payments, over lease terms expiring through 2014; and other costs, which principally include land reclamation liabilities and contract termination costs, primarily in 2000. 9. Reorganization and Discontinued Operations Reorganization In January 2000, the Company announced a proposed reorganization involving the Company and certain of its subsidiaries. The reorganization would split the Company into three independent public entities. The Company's continuing operations will focus on its core business of measurement and detection instruments. This business will consist of Thermo Instrument and its subsidiaries, as well as Thermedics Detection Inc. and Thermo Sentron Inc. The Company's plans also include spinning off as a dividend to Company shareholders Thermo Fibertek Inc. and a medical products company that focuses on patient monitoring and respiratory equipment. 17 THERMO ELECTRON CORPORATION 9. Reorganization and Discontinued Operations (continued) Continuing Operations In addition to the majority-owned subsidiaries the Company had previously announced its intention to repurchase, the Company announced its intention to repurchase the publicly traded shares it did not already own in Thermo Optek Corporation, ThermoQuest Corporation, Thermo BioAnalysis Corporation, Metrika Systems Corporation, ONIX Systems Inc., Thermo Instrument, and Thermedics Inc. The Company also announced the terms of its previously announced repurchases of Thermo Sentron, Thermedics Detection, and Thermo Ecotek. During the second quarter of 2000, Thermo Instrument successfully completed cash tender offers of $28.00 per share for Thermo BioAnalysis, $9.00 per share for Metrika Systems, and $9.00 per share for ONIX Systems in order to bring its and the Company's collective ownership of these businesses to at least 90%. Subsequently, Thermo Instrument completed the acquisition of the outstanding minority interest in each of these companies through short-form mergers at the same prices as the tender offers, and their common stock has ceased to be publicly traded. Because Thermo Instrument owned more than 90% of the outstanding shares of Thermo Optek and ThermoQuest common stock, each of these companies were repurchased through short-form mergers at $15.00 and $17.00 per share, respectively, during the second quarter of 2000, and their common stock has ceased to be publicly traded. Thermedics has successfully completed cash tender offers of $8.00 and $15.50 per share for Thermedics Detection and Thermo Sentron, respectively, in order to bring its and the Company's collective ownership of these companies to at least 90%. Subsequently, Thermedics completed the acquisition of the outstanding minority interest in each of these companies through short-form mergers at the same prices as the tender offers and their common stock has ceased to be publicly traded. On June 30, 2000, the Company completed exchange offers for Thermo Instrument and Thermedics in which shares of Company common stock were offered to Thermo Instrument and Thermedics shareholders in exchange for their shares in order to bring the Company's ownership in each of these subsidiaries to at least 90%. The exchange ratio for Thermo Instrument was 0.85 shares of Company common stock for each share of Thermo Instrument common stock, and the exchange ratio for Thermedics was 0.45 shares of Company common stock for each share of Thermedics common stock. Subsequently, Thermo Instrument and Thermedics were spun into the Company through short-form mergers at the same exchange ratios that were offered in the exchange offers and their common stock has ceased to be publicly traded. In connection with these transactions, the Company issued approximately 17.3 million shares of its common stock valued at $363.7 million. The Company expects to issue an additional 5.2 million shares of its common stock for the mergers of Thermo Ecotek, Thermo TerraTech Inc., ThermoTrex Corporation, and ThermoLase, described below. Because the Company owned more than 90% of the outstanding shares of Thermo Ecotek, the Company repurchased Thermo Ecotek through a short-form merger. Thermo Ecotek shareholders received 0.431 shares of Company common stock for each share of Thermo Ecotek common stock held. This transaction was completed on August 10, 2000. Following the merger, the common stock of Thermo Ecotek ceased to be publicly traded. Although it is no longer a core business under the reorganization plan, Thermo Ecotek will remain within the Company while the Company continues to evaluate how to best exit the business while maximizing shareholder value. As a result of the completion of the repurchases and exchange offers described above, the Company has recorded an increase in cost in excess of net assets of acquired companies of approximately $400 million as of July 1, 2000. This asset is being amortized principally over 40 years. In addition, the stock options of the subsidiaries were converted into stock options that are exercisable into 13.3 million shares of Company common stock. As a result of the completion of the exchange offers for Thermo Instrument and Thermedics, $466.9 million principal amount of subordinated convertible obligations of these subsidiaries became subordinated obligations convertible into common stock of the Company. 18 THERMO ELECTRON CORPORATION 9. Reorganization and Discontinued Operations (continued) Discontinued Operations In October 1999, Thermo TerraTech entered into a definitive agreement and plan of merger with the Company pursuant to which the Company would acquire all of Thermo TerraTech's outstanding shares of common stock not already owned by the Company in exchange for a number of shares of the Company's common stock to be determined based upon the average closing price of the Company's common stock during the 20 trading days ending five days prior to the effective date of the merger. Under the agreement, as amended, Thermo TerraTech shareholders would receive Company common stock valued between $7.50 and $9.25 per share of Thermo TerraTech common stock. However, the Company may elect to terminate the agreement if it is required to issue more than 1.8 million shares of its common stock in this transaction. Following this merger, Thermo TerraTech's common stock would cease to be publicly traded. The merger of Thermo TerraTech is expected to be completed during the third quarter of 2000. The Company successfully completed its mergers with ThermoRetec Corporation and The Randers Killam Group Inc., pursuant to which the Company acquired, for $7.00 and $4.50 per share in cash, respectively, all of the outstanding shares of common stock of ThermoRetec and Randers Killam not already owned by Thermo TerraTech or the Company. The common stock of ThermoRetec and Randers Killam has ceased to be publicly traded. On August 14, 2000, the Company completed its merger with ThermoLase pursuant to which the Company acquired all of ThermoLase's outstanding shares of common stock not already owned by ThermoTrex or the Company in exchange for Company common stock at a ratio of 0.132 shares of Company common stock for each share of ThermoLase common stock. Following the merger, the common stock of ThermoLase ceased to be publicly traded. In addition, under the agreement, units of ThermoLase were modified so that each unit consists of a fractional share of Company common stock, which is redeemable in April 2001 for $20.25. On August 14, 2000, the Company completed its merger with ThermoTrex pursuant to which the Company acquired all of ThermoTrex's outstanding shares of common stock not already owned by the Company in exchange for Company common stock at a ratio of 0.5503 shares of Company common stock for each share of ThermoTrex common stock. Following the merger, the common stock of ThermoTrex ceased to be publicly traded. The spinoffs of Thermo Fibertek and the medical products company will require a favorable ruling by the Internal Revenue Service regarding tax treatment of the transactions, review by the SEC of necessary filings related to the medical products company, final Company Board of Directors actions, and other customary conditions. Discontinued Operations The Company has also announced its intention to sell several of its businesses. These businesses, together with certain businesses to be spun off, constitute the Company's former Biomedical and Emerging Technologies and Resource Recovery segments as well as the Company's environmental businesses and Thermo Power Corporation. In accordance with the provisions of Accounting Principles Board (APB) Opinion No. 30 concerning reporting the effects of disposal of a segment of a business, the Company has classified the results of these businesses, as well as the results of the businesses being spun off as dividends (collectively, "the discontinued businesses"), as discontinued in the accompanying statement of operations. In addition, the net assets of the discontinued businesses were classified as net assets of discontinued operations in the accompanying balance sheet. Current net assets of discontinued operations primarily consist of cash, inventories, and accounts receivable net of certain liabilities, primarily accrued expenses and accounts payable. Long-term net assets of discontinued operations primarily consist of machinery and equipment and cost in excess of net assets of acquired companies. In addition, long-term net assets of discontinued operations reflect subordinated convertible debentures of Thermo Cardiosystems Inc. and Thermo Fibertek. 19 THERMO ELECTRON CORPORATION 9. Reorganization and Discontinued Operations (continued)
Summary operating results of the discontinued businesses were as follows:
Three Six Months Months Ended Ended (In thousands) July 3,1999 July 3,1999 - ------------------------------------------------------------------------------ ------------ ----------- Revenues $ 460,174 $ 913,962 Costs and Expenses 706,711 1,139,001 ---------- ---------- Loss from Discontinued Operations Before Income Taxes and Minority Interest (246,537) (225,039) Income Tax Benefit 52,172 38,708 Minority Interest Income 45,528 47,724 ---------- ---------- Loss from Discontinued Operations $ (148,837) $ (138,607) ========== ========== During the second quarter and first six months of 2000, the Company's discontinued operations had revenues of $405.0 million and $805.7 million, respectively, and net income of $12.9 million and $37.0 million, respectively. During the second quarter and first six months of 2000, the discontinued operations received proceeds of $16.6 million and $105.7 million, respectively, net of cash divested, from the sale of businesses. While there can be no assurance as to the timing of the sale of any particular business, the Company expects to complete the sale of the remaining businesses by the end of 2000. The Company expects to complete the spinoffs of Thermo Fibertek and the medical products company by early 2001. 10. Recent Accounting Pronouncement In December 1999, the SEC issued Staff Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements." SAB 101 includes requirements for when shipments may be recorded as revenue when the terms of the sale include customer acceptance provisions or an obligation of the seller to install the product. In such instances, SAB 101 generally requires that revenue recognition occur at completion of installation and/or upon customer acceptance. SAB 101 requires that companies conform their revenue recognition practices to the requirements therein no later than the fourth quarter of calendar 2000 through recording a cumulative net of tax effect of the change in accounting as of January 2, 2000. The Company has not yet completed the analysis to determine the effect that SAB 101 will have on its financial statements. 11. Subsequent Event On July 14, 2000, Thermo Instrument completed the sale of its wholly owned Spectra Precision businesses to Trimble Navigation Limited for approximately $214 million in cash and $80 million in seller debt financing, subject to a post-closing adjustment. The note from the buyer calls for repayment in two equal annual installments beginning in July 2001 and carries interest at 10%. The note has provisions that require earlier repayment under certain conditions. Spectra Precision, part of the Measurement and Control segment, was acquired in February 1999 as part of Spectra-Physics and provides the construction, surveying, and heavy machine industries with precision positioning equipment. These businesses were sold as part of an effort to focus on potentially higher-growth opportunities in the Life Sciences and Optical Technologies segments. 20 THERMO ELECTRON CORPORATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - ---------------------------------------------------------------------------------------------- Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, are made throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including those detailed under the heading "Risk Factors" in the Company's Amendment No. 2 to Registration Statement on Form S-4 [Reg. No. 333-35478], filed with the Securities and Exchange Commission on June 27, 2000. Results of Operations Second Quarter 2000 Compared With Second Quarter 1999 - ----------------------------------------------------- Continuing Operations Sales in the second quarter of 2000 were $609.5 million, a decrease of $22.7 million, or 4%, from the second quarter of 1999. Excluding the results of the Power Generation segment, for which the Company is evaluating alternatives for exiting this business, revenues decreased $3.6 million. Excluding the effect of acquisitions, divestitures, foreign currency, and the results of the Power Generation segment, revenues increased $22.7 million, or 4%. Operating income was $61.3 million in 2000, compared with a loss of $94.6 million in 1999. Income from continuing operations was $25.3 million in 2000, compared with a loss of $86.4 million in 1999. The 1999 period included significant restructuring costs. Segment income is operating income before corporate charges. Segment income increased to $67.9 million in 2000 from a loss of $85.7 million in 1999. Segment income decreased to $65.3 million in 2000 from $71.9 million in 1999, excluding restructuring and unusual income, net, of $2.6 million in 2000, restructuring and related costs of $154.7 million in 1999, and a charge for the sale of inventories revalued at the date of acquisition and inventory provisions of $3.0 million, also in 1999. The restructuring costs and unusual items in both periods are discussed below. Excluding the results of the Power Generation segment and these unusual items, segment income was relatively flat at $62.5 million in 2000 and $62.8 million in 1999 and segment income margin was unchanged at 10.7%. Life Sciences - ------------- Sales from the Life Sciences segment decreased $5.1 million to $187.0 million in the second quarter of 2000. The unfavorable effects of currency translation, due to the strengthening of the U.S. dollar relative to foreign currencies in countries in which the segment operates, decreased revenues by $7.8 million in 2000. Sales increased $1.2 million due to acquisitions. Excluding the effect of acquisitions and currency translation, revenues increased by $1.5 million. Sales of biosciences products increased $4.1 million, reflecting higher demand for immunoassay testing and Multiblock deoxyribonucleic acid (DNA) amplification products. This increase was offset in part by lower revenues from laboratory information management systems. Revenues from laboratory information management systems decreased due to lower demand that the Company believes is attributable in part to completion of year-2000 compliance projects in 1999. Segment income margin (segment income divided by revenues) decreased to 12.4% in 2000 from 15.1% in 1999. Approximately half of the decrease in segment income margin was due to a decrease in sales of laboratory information management systems, which have a higher profit margin than the segment's other products. In addition, segment income margin was negatively affected by expansion of the sales and service organization and consolidation of the principal operating units of the segment's biosciences products, as well as completion of research and development and production startup costs in connection with the launch of an automated clinical sample transportation system. 21 THERMO ELECTRON CORPORATION Second Quarter 2000 Compared With Second Quarter 1999 (continued) - ----------------------------------------------------- Optical Technologies - -------------------- Sales from the Optical Technologies segment increased $8.7 million to $204.6 million in the second quarter of 2000. Sales decreased $6.6 million due to dispositions, net of acquisitions. The dispositions primarily included the segment's Nicolet Imaging Systems (NIS) and Sierra Research and Technology, Inc. (SRT) businesses that were sold in March 2000. These units were sold due to a consolidation trend among manufacturers of test equipment in the markets these businesses serve. The Company has decided to focus on growth in other sectors of the instruments market. The unfavorable effects of currency translation, due to the strengthening of the U.S. dollar relative to foreign currencies in countries in which the segment operates, decreased revenues by $5.7 million in 2000. Excluding the effect of acquisitions, dispositions, and currency translation, revenues increased $21.0 million. The increase in revenues was due in part to $7.4 million of increased demand from original equipment manufacturers (OEM) customers for semiconductor-based lasers as well as $4.9 million of higher sales of physical properties products due to an increase in demand from the semiconductor industry, which is experiencing renewed growth after a downturn in the first half of 1999. Revenues from photonics products increased $5.5 million, primarily due to strong demand for gratings and other optical components used in systems for semiconductor manufacturers and in telecommunications. In addition, higher demand for spectroscopy products was offset in part by lower sales of test and measurement products due to competitive pressures. The Company is considering divestiture of its test and measurement business. Segment income margin was 10.0% in 2000 and 9.6% in 1999. Excluding restructuring costs of $0.1 million in 2000 and restructuring and unusual charges of $2.0 million in 1999, segment income margin decreased to 10.0% in 2000 from 10.6% in 1999. The decrease resulted from lower profitability from spectroscopy instruments due to price competition at certain of the segment's elemental analysis businesses. The decrease in segment income margin was offset in part by higher profitability from increased sales of photonics and physical properties products. The segment's spectroscopy businesses reduced headcount by 32 permanent employees and 11 temporary employees in July 2000 in an effort to lower operating costs. This segment will incur approximately $0.4 million of severance costs in the third quarter of 2000 as a result of this action. The restructuring costs of $0.1 million in 2000 represents abandoned-facility costs. The unusual charges in 1999 included a charge of $1.8 million for the sale of inventories revalued at the date of acquisition and $0.2 million of facility closing costs and severance associated with a restructuring plan undertaken in 1998 and completed in 1999. Measurement and Control - ----------------------- Sales decreased $7.6 million to $194.6 million in the Measurement and Control segment in the second quarter of 2000. The unfavorable effects of currency translation, due to the strengthening of the U.S. dollar relative to foreign currencies in countries in which the segment operates, caused revenues to decrease by $7.2 million in 2000. Sales decreased $0.2 million due to divestitures, net of acquisitions. Excluding the effect of acquisitions, divestitures, and currency translation, revenues were relatively flat, decreasing by $0.1 million. Revenues from the sale of weighing and inspection equipment decreased $4.8 million, primarily due to lower demand from the global packaged food industry. This industry is in a period of consolidation and restructuring and the Company believes that a decrease in capital spending has resulted from uncertainty in the marketplace. This decrease was offset in part by increases in revenues at other businesses. Higher demand resulted in increases in revenues of environmental monitoring and compliance products of $2.2 million and process control products of $1.3 million. In addition, revenues from industrial products rose due to an increase in U.S. government sales during the period at Spectra Precision. In July 2000, the Company sold its Spectra Precision businesses (Note 11), which had been acquired in February 1999 as part of the acquisition of Spectra-Physics AB. Spectra Precision was sold as part of an effort to focus on potentially higher-growth opportunities in the Life Sciences and Optical Technologies segments. In 1999, Spectra Precision had revenues of $198.1 million and segment income of $16.8 million from the date of its acquisition. In addition, this segment is holding its power electronics and test equipment businesses for sale as cyclical, noncore units, and expects the divestitures to be completed during the second half of 2000. In 1999, these businesses had revenues of $28.2 million and a segment loss before restructuring and unusual charges of $0.3 million. 22 THERMO ELECTRON CORPORATION Second Quarter 2000 Compared With Second Quarter 1999 (continued) - ----------------------------------------------------- Segment income margin was 10.0% in 2000 and negative 9.1% in 1999, primarily due to restructuring and unusual charges in 1999, discussed below. Segment income margin, excluding restructuring and unusual income, net, of $0.6 million in 2000, restructuring costs of $30.1 million in 1999, and a charge for the sale of inventories revalued at the date of acquisition and inventory provisions of $1.2 million, also in 1999, increased to 9.7% in 2000 from 6.4% in 1999. The increase in margin resulted primarily from improved profitability at Spectra Precision as well as higher revenues at certain of the businesses discussed above. Spectra Precision's results reflect the benefit of cost reduction measures and the incremental margin on a large order that was shipped during the second quarter. Excluding restructuring and unusual items and the results of Spectra Precision in both periods, segment income margin was 6.8% in 2000 and 4.7% in 1999. The unusual income, net, in 2000 primarily represents a gain on terminating a lease agreement. The restructuring costs in 1999 primarily relate to the planned disposition of the power electronics and test equipment businesses and were taken to adjust the carrying value of these units to estimated disposal value. Power Generation - ---------------- Sales from the Power Generation segment, which consists of the Company's Thermo Ecotek subsidiary, decreased $19.0 million to $26.4 million in the second quarter of 2000. Revenues decreased $23.8 million due to the expiration or negotiated termination of fixed-price contracts for the sale of power at Thermo Ecotek's principal California plants and a facility in Maine. This decrease was offset in part by $5.6 million of higher revenues from 1999 acquisitions. As noted below, the periods during which Thermo Ecotek received fixed rates for power at its four principal California facilities ended in 1999. The expiration or negotiated termination of fixed-price power-sales agreements has had and will continue to have a significant adverse effect on Thermo Ecotek's revenues and profitability, as discussed below. Segment income margin was 18.5% in 2000, compared with a negative amount in 1999, primarily as a result of restructuring charges in 1999, discussed below. Excluding restructuring and unusual income, net, of $2.1 million in 2000, and restructuring costs of $124.3 million in 1999, segment income margin was 10.6% in 2000 and 20.0% in 1999. The decrease in segment income margin resulted in part from lower segment income of $10.1 million at Thermo Ecotek's Mendota and Delano plants in California due to the expiration or termination of fixed-price contract periods. This decrease was offset in part by a $1.4 million reduction in operating losses as a result of the closure of Thermo Ecotek's coal-beneficiation facility in mid-1999. In addition, Thermo Ecotek's natural gas operations operated profitably in 2000, compared with a loss in 1999. In 2000, Thermo Ecotek factored a portion of a stream of payments it was to have received from a utility in connection with the termination of a power-sales agreement for its Delano plants in 1999. Thermo Ecotek realized a gain of $2.7 million on the factoring transaction, which represents a revision to the estimate of impairment of the Delano plants recorded in 1999. In addition, Thermo Ecotek realized a gain of $0.2 million related to the sale of its coal-beneficiation plant and termination of its relationship with its former partner in the plant. This unusual income was offset in part by a charge of $0.5 million for contract obligations associated with the closure of its gas marketing business, and $0.3 million of employee retention and severance costs. In 1999, Thermo Ecotek incurred restructuring charges primarily associated with the termination of the power-sales agreement for the Delano plants and closure of its coal-beneficiation plant. The power-sales agreements for Thermo Ecotek's Mendota, Woodland, and Delano plants in California are so-called standard offer #4 (SO#4) contracts, which required Pacific Gas & Electric (PG&E), in the case of Mendota and Woodland, and Southern California Edison (SCE), in the case of the Delano facilities, to purchase the power output of the projects at fixed rates through specified periods. Thereafter, the utility pays a rate based upon the costs that would have otherwise been incurred by the purchasing utilities in generating their own electricity or in purchasing it from other sources (avoided cost). Avoided cost rates are currently substantially lower than the rates Thermo Ecotek received under the fixed-rate portions of its contracts and are expected to remain so for the foreseeable future. PG&E commenced paying for power purchased from the Mendota and Woodland facilities at avoided cost rates effective in July and August 1999, respectively. The power-sales agreement with SCE for the Delano facilities called for fixed 23 THERMO ELECTRON CORPORATION Second Quarter 2000 Compared With Second Quarter 1999 (continued) - ----------------------------------------------------- contract rates through September 2000. In expectation of a decline in rates at its Delano facilities, Thermo Ecotek reached an agreement in May 1999 to terminate its power-sales agreement, effective December 31, 1999. During the first quarter of 2000, Thermo Ecotek decided that it was uneconomical to operate the Delano facilities in nonpeak periods following the termination of their power-sales agreement, and the plants suspended operations in March 2000 and commenced operations again in June 2000. The California facilities affected by the change from fixed contract to avoided cost rates had aggregate revenues and operating income in 1999 of $105.6 million and $30.4 million, respectively. If Thermo Ecotek had been paid avoided cost rates for all of 1999 at its four principal California plants, revenues would have been reduced by approximately $64 million. In response to these declines in revenues and operating income, Thermo Ecotek may continue to explore other options for its biomass facilities, including disposal. Other Expense, Net - ------------------ The Company reported other expense, net, of $10.3 million and $29.2 million in the second quarter of 2000 and 1999, respectively (Note 3). Other expense, net includes interest income, interest expense, equity in losses of unconsolidated subsidiaries, gain (loss) on investments, net, and other income (expense), net. Interest income decreased to $8.3 million in 2000 from $10.0 million in 1999. The decrease resulted primarily from the use of cash for the purchase of securities of the Company's majority-owned subsidiaries. Interest expense decreased to $21.6 million in 2000 from $24.7 million in 1999, as a result of the maturity and repurchase of Company and subsidiary debentures in 1999 and the first quarter of 2000. The Company incurred a loss of $1.7 million in 2000 from its equity in the results of unconsolidated subsidiaries, primarily $1.8 million related to its investment in FLIR Systems, Inc. In 1999, the Company recorded $11.1 million of charges in equity in earnings of unconsolidated subsidiaries related to FLIR. The Company reports its pro rata share of FLIR's results on a one-quarter lag. During 2000, gain on investments, net was $2.9 million, compared with a loss of $3.5 million in 1999. The 1999 loss on investments includes $5.7 million of charges for impairments that were deemed other than temporary. In 2000, other expense, net also includes $1.9 million of currency gains, including $1.7 million resulting from hedging activities at SPLI, which elected early adoption of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." Income Taxes - ------------ The Company's effective tax rate was a provision of 40% and a benefit of 29% in the second quarter of 2000 and 1999, respectively. The effective tax rate varies from the statutory federal income tax rate in 2000 primarily due to state income taxes and nondeductible expenses, including amortization of cost in excess of net assets of acquired companies. The tax benefit in 1999 was below the statutory federal income tax rate primarily due to the write-off of nondeductible cost in excess of net assets of acquired companies. Minority Interest Expense - ------------------------- The Company recorded minority interest expense of $5.1 million and minority interest income of $2.0 million in the second quarter of 2000 and 1999, respectively, representing minority shareholders' allocable share of subsidiary earnings or losses. Litigation - ---------- The Company has recently been named a defendant, along with many other companies, in a patent infringement lawsuit brought by the Lemelson Medical, Education & Research Foundation, L.P. The suit asserts that products manufactured, used, or sold by the defendants infringe one or more patents related to methods of machine vision or computer image analysis. Also, SPLI has been sued for patent infringement by Rockwell International Corp. The suit 24 THERMO ELECTRON CORPORATION Second Quarter 2000 Compared With Second Quarter 1999 (continued) - ----------------------------------------------------- claims that SPLI infringes a patent for the manufacture of a film used in semiconductor applications. The Company intends to vigorously defend against these claims. While the Company can give no assurance that it will prevail in these lawsuits, it believes that resolution of this litigation will not have a material adverse effect on the Company's financial position, although unfavorable outcomes could have a material adverse effect on the Company's results of operations or cash flow in the quarter or annual period in which the resolution occurs. Discontinued Operations The Company's discontinued operations had a loss of $148.8 million in the second quarter of 1999, net of taxes and minority interest. While the Company is not currently aware of any known trends, events, or uncertainties involving discontinued operations, it is reasonably possible that expected proceeds from the sale of businesses could differ materially from the amounts estimated. Any difference from the amounts recorded would be reported as an adjustment to the loss on disposal of discontinued operations that was recorded in 1999. First Six Months 2000 Compared With First Six Months 1999 - --------------------------------------------------------- Continuing Operations Sales in the first six months of 2000 were $1.21 billion, an increase of $20.5 million over the first six months of 1999. Excluding the results of the Power Generation segment, for which the Company is evaluating alternatives for exiting this business, revenues increased $54.6 million. Excluding the effect of acquisitions, divestitures, foreign currency, and the results of the Power Generation segment, revenues increased $43.9 million, or 4%. Operating income was $120.6 million in 2000, compared with a loss of $44.7 million in 1999. Income from continuing operations was $40.6 million in 2000, compared with a loss of $68.3 million in 1999. Segment income increased to $140.6 million in 2000 from a loss of $27.9 million in 1999. The 1999 period included significant restructuring and unusual charges. Segment income decreased to $125.4 million in 2000 from $135.6 million in 1999, excluding restructuring and unusual income, net, of $15.2 million in 2000, restructuring and related costs of $156.0 million in 1999, and a charge for the sale of inventories revalued at the date of acquisition and inventory provisions of $7.6 million, also in 1999. The restructuring costs and unusual items in both periods are discussed below. Excluding the results of the Power Generation segment and these unusual items, segment income decreased to $120.4 million in 2000 from $122.5 million in 1999. Life Sciences - ------------- Sales from the Life Sciences segment increased $3.6 million to $377.9 million in the first six months of 2000. Sales increased $8.8 million due to acquisitions. The unfavorable effects of currency translation, due to the strengthening of the U.S. dollar relative to foreign currencies in countries in which the segment operates, decreased revenues by $15.2 million in 2000. Excluding the effect of acquisitions and currency translation, revenues increased $10.0 million. Revenues from biosciences products increased $4.8 million due to higher demand for the segment's immunoassay testing and Multiblock DNA amplification products. Revenues from analytical instruments increased $2.7 million due to higher sales of mass spectrometers in Europe and Asia. In addition, revenues increased $2.3 million due to higher demand for controlled-environment laboratory equipment. These increases in revenues were offset in part by lower revenues from laboratory information management systems due to lower demand. Segment income margin decreased to 13.8% in 2000 from 15.1% in 1999. The segment's margin decreased primarily as a result of the reasons discussed in the results for the second quarter. 25 THERMO ELECTRON CORPORATION First Six Months 2000 Compared With First Six Months 1999 (continued) - --------------------------------------------------------- Optical Technologies - -------------------- Sales from the Optical Technologies segment increased $28.7 million to $401.4 million in the first six months of 2000. Sales increased $7.2 million due to acquisitions, net of dispositions, primarily the acquisition of SPLI, in which the segment acquired a majority interest on February 22, 1999. The dispositions primarily included the segment's NIS and SRT businesses that were sold in March 2000. The unfavorable effects of currency translation, due to the strengthening of the U.S. dollar relative to foreign currencies in countries in which the segment operates, decreased revenues by $11.1 million in 2000. Excluding the effect of acquisitions, dispositions, and currency translation, revenues increased $32.6 million, or 10%. The segment's physical properties businesses had $9.6 million of higher revenues in 2000 due to strong demand from the semiconductor industry. Revenues from the sale of photonics products increased $8.5 million as a result of strong demand for gratings and other optical components used in systems for semiconductor manufacturers and in telecommunications. While revenues at the segment's spectroscopy businesses increased by $7.8 million for the six month period, price competition at certain spectroscopy businesses caused growth to slow in the second quarter of 2000 and the segment took restructuring actions in July 2000, as discussed in the results for the second quarter. An increase in sales of semiconductor-based lasers of $7.4 million also contributed to higher sales. These increases were offset in part by continuing lower sales from test and measurement products due to reduced demand. Segment income margin was 12.6% in 2000 and 9.6% in 1999 and improved as a result of a gain recorded in 2000 from the sale of businesses. Excluding unusual income of $12.4 million in 2000 and restructuring costs of $1.5 million and a charge for the sale of inventories revalued at the date of acquisition of $3.2 million in 1999, segment income margin decreased to 9.5% in 2000 from 10.8% in 1999. Segment income margin decreased primarily due to the reasons discussed in the results for the second quarter. In addition, the 1999 period was favorably affected by a high level of sales and profitability at SPLI for the six weeks of the 1999 first quarter that it was included in the segment's results. SPLI also increased its research and development expenses to 15% of its revenues in 2000 from 11% in the 1999 period, primarily for products in the telecommunications market. The segment income margin for SPLI was 1.8% and 8.4% in 2000 and 1999, respectively, excluding a charge for revalued inventories in 1999. Excluding restructuring and unusual items and the results of SPLI from both periods, segment income margin increased to 11.5% in 2000 from 11.2% in 1999. The unusual income in 2000 primarily represents a gain of $12.4 million on the sale of NIS and SRT. The restructuring costs in 1999 were primarily facility closing costs and severance associated with a restructuring plan undertaken in 1998 and completed in 1999. Measurement and Control - ----------------------- Sales increased $20.0 million to $382.6 million in the Measurement and Control segment in the first six months of 2000. Sales increased $31.4 million due to acquisitions, net of divestitures. The unfavorable effects of currency translation, due to the strengthening of the U.S. dollar relative to foreign currencies in countries in which the segment operates, caused revenues to decrease by $10.2 million in 2000. Excluding the effect of acquisitions and currency translation, revenues decreased by $1.2 million. Revenues from the sale of weighing and inspection equipment decreased $6.5 million, primarily due to the reason discussed in the results for the second quarter. Revenues from industrial products and quality control systems decreased $1.8 million due to lower demand. These decreases in revenues were offset in part by $3.8 million of higher revenues from the sale of environmental monitoring and compliance products due to stronger demand, and $3.3 million from the sale of process control products following depressed results in the 1999 period. Segment income margin was 7.9% in 2000 and negative 2.4% in 1999. Segment income margin, excluding restructuring and unusual income, net, of $0.4 million in 2000 and restructuring costs of $30.1 million and a charge of $4.4 million for the sale of inventories revalued at the date of acquisition and inventory provisions in 1999, increased to 7.8% in 2000 from 7.1% in 1999. The increase in segment income margin resulted primarily from improved 26 THERMO ELECTRON CORPORATION First Six Months 2000 Compared With First Six Months 1999 (continued) - --------------------------------------------------------- profitability at Spectra Precision as well as higher sales at certain businesses described above. Spectra Precision's results reflect cost reduction measures and the incremental margin on a large order that was shipped during the period. Excluding restructuring and unusual items and the results of Spectra Precision from both periods, segment income margin increased to 6.3% in 2000 from 4.7% in 1999, primarily due to higher sales at certain operating units discussed above. Restructuring costs and unusual income, net, in 2000 represents a gain on the termination of a lease agreement, offset in part by employee retention costs for the power electronics and test equipment businesses. The restructuring costs in 1999 primarily represent a charge to reduce the carrying value of the power electronics and test equipment businesses to estimated disposal value. Power Generation - ---------------- Sales from the Power Generation segment, which consists of the Company's Thermo Ecotek subsidiary, decreased $34.1 million to $52.3 million in the first six months of 2000. Revenues decreased $46.8 million due to the expiration or negotiated termination of fixed-price contracts for the sale of power at Thermo Ecotek's principal California plants and a facility in Maine. This decrease was offset in part by $13.1 million of higher revenues from the 1999 acquisitions of a plant in Germany and a gas gathering and two gas storage facilities in the United States, as well as the expansion of a facility in the Czech Republic. As noted in the results for the second quarter, the periods during which Thermo Ecotek received fixed rates for power at its four principal California facilities ended in 1999. The expiration or negotiated termination of fixed-price power-sales agreements has had and will continue to have a significant adverse effect on Thermo Ecotek's revenues and profitability. Segment income margin was 14.2% in 2000 and a negative amount in 1999. Excluding restructuring and unusual income, net, of $2.4 million in 2000 and restructuring costs of $124.3 million in 1999, segment income margin was 9.6% in 2000 and 15.2% in 1999. The decrease in segment income margin resulted in part from lower segment income of $18.7 million in 2000 at Thermo Ecotek's Mendota and Delano plants due to the expiration or termination of fixed-price contract periods. This decrease was offset in part by a $5.4 million reduction in operating losses as a result of the closure of Thermo Ecotek's coal-beneficiation facility in mid-1999. In addition, new or expanded operations in Europe as well as the addition of gas gathering and storage facilities reduced the decline in segment income. In 2000, Thermo Ecotek recorded $2.4 million of restructuring and unusual income, net, including $2.1 million as discussed in the results for the second quarter as well as a $2.0 million gain on the sale of its Gorbell plant in Maine, offset by $1.1 million of employee severance and retention costs and $0.6 million of costs associated with the closure of a business. The restructuring costs in 1999 were discussed in the results for the second quarter. Other Expense, Net - ------------------ The Company reported other expense, net, of $31.5 million and $37.3 million in the first six months of 2000 and 1999, respectively (Note 3). Other expense, net includes interest income, interest expense, equity in losses of unconsolidated subsidiaries, gain (loss) on investments, net, and other income (expense), net. Interest income decreased to $18.5 million in 2000 from $24.2 million in 1999. The decrease resulted primarily from the use of cash for acquisitions, principally Spectra-Physics, and the purchases of securities of the Company's majority-owned subsidiaries. Interest expense decreased to $44.7 million in 2000 from $49.1 million in 1999, as a result of the maturity and repurchase of Company and subsidiary debentures in 1999 and the first quarter of 2000. The Company incurred a loss of $15.1 million in 2000 from its equity in the results of unconsolidated subsidiaries, primarily $15.2 million at FLIR, which recorded significant charges in its fourth quarter of 1999 and operating losses in the first quarter of 2000. The Company reports its pro rata share of FLIR's results on a one-quarter lag. During 2000, gain on investments, net was $6.4 million, compared with a loss of $0.7 million in 1999. The 1999 loss on investments includes $5.7 million of charges for impairment that were deemed other than temporary. In 2000, other expense, net also includes $3.5 million of currency gains, primarily resulting from hedging activities at SPLI, which elected early adoption of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." 27 THERMO ELECTRON CORPORATION First Six Months 2000 Compared With First Six Months 1999 (continued) - --------------------------------------------------------- Income Taxes - ------------ The Company's effective tax rate was a provision of 42% and a benefit of 22% in the first six months of 2000 and 1999, respectively. The effective tax rate varies from the statutory federal income tax rate in 2000 primarily due to state income taxes and nondeductible expenses, including amortization of cost in excess of net assets of acquired companies. The tax benefit in 1999 was below the statutory federal income tax rate due primarily to the write-off of nondeductible cost in excess of net assets of acquired companies. Minority Interest Expense - ------------------------- The Company recorded minority interest expense of $11.2 million and $4.3 million in the first six months of 2000 and 1999, respectively. Minority interest expense increased in 2000 as a result of higher subsidiary profitability due to the absence of significant restructuring charges in 2000. Discontinued Operations The Company's discontinued operations had a loss of $138.6 million in the first six months of 1999, net of taxes and minority interest. Liquidity and Capital Resources Consolidated working capital was $1.37 billion at July 1, 2000, compared with $1.45 billion at January 1, 2000. Included in working capital were cash, cash equivalents, and short-term available-for-sale investments of $579.3 million at July 1, 2000, compared with $837.3 million at January 1, 2000. In addition, the Company had $42.6 million of long-term available-for-sale investments at July 1, 2000, compared with $40.2 million at January 1, 2000. Of the total $621.9 million of cash, cash equivalents, and short- and long-term available-for-sale investments at July 1, 2000, $472.3 million was held by the Company's majority-owned subsidiaries, and the balance was held by the Company and its wholly owned subsidiaries. Cash provided by operating activities was $52.5 million during the first six months of 2000, including $7.4 million from continuing operations. Cash of $52.7 million was used to fund an increase in inventories, primarily in the Optical Technologies and Life Sciences segments. The Company expects to focus renewed attention to inventory management in the second half of 2000. A decrease in accounts receivable provided $26.6 million in cash, primarily in the Power Generation, Optical Technologies, and Life Sciences segments due to lower sales volume in the first six months of 2000, compared with the fourth quarter of 1999. A decrease in other current liabilities used $44.2 million of cash, including $43 million for federal income tax payments. In connection with certain restructuring actions undertaken by the Company's continuing operations, the Company had accrued $6.8 million for restructuring and unusual costs at July 1, 2000, which the Company expects to pay through January 2002. In addition, at July 1, 2000, the Company had accrued $15.1 million for acquisition expenses. Accrued acquisition expenses includes $3.6 million of severance obligations, which the Company expects to pay through 2001. The balance, which primarily represents abandoned-facility payments, will be paid over the remaining terms of the leases through 2014. During the first six months of 2000, the primary investing activities of the Company's continuing operations, excluding available-for-sale investment activities, included the acquisition of minority interests of subsidiaries, the sale of businesses, and the purchase of property, plant, and equipment. The Company's continuing operations expended an aggregate of $295.7 million to acquire the minority interest of certain majority-owned subsidiaries (Note 9). In the first six months of 2000, the Company's majority-owned subsidiaries sold businesses for aggregate proceeds, net of cash divested, of $44.9 million, including Thermo Instrument's sale of NIS and SRT. On July 14, 2000, the 28 THERMO ELECTRON CORPORATION Liquidity and Capital Resources (continued) Company's Measurement and Control segment sold its Spectra Precision businesses for $294 million, including $214 million in cash, subject to a post-closing adjustment (Note 11). The Company's continuing operations expended $52.6 million for purchases of property, plant, and equipment and $10.1 million, net of cash acquired, for acquisitions during the first six months of 2000. In addition, Thermo Ecotek entered into an agreement with a bank group to factor a portion of the payments to be received from the termination of the power-sales agreement at its Delano facilities. Proceeds from this arrangement, together with termination payments received prior to the factoring agreement, totaled $69.6 million. During the first six months of 2000, investing activities of the Company's discontinued operations provided $16.8 million of cash, primarily representing proceeds, net of cash divested, of $105.7 million from the sale of businesses, including Thermo Power Corporation's sale of its FES division and ThermoTrex Corporation's sale of its Trex Communications subsidiary. In addition, the Company's discontinued operations used $42.7 million to acquire the minority interest of certain majority-owned subsidiaries, $19.7 million for the purchase of property, plant, and equipment, and $3.0 million for acquisitions. The Company's financing activities used $148.9 million of cash during the first six months of 2000, including $152.7 million for continuing operations. During the first six months of 2000, the Company expended $147.9 million for the repayment of long-term obligations, $29.2 million to purchase shares of its common stock and debentures, and $14.6 million to purchase debentures of certain of the Company's majority-owned subsidiaries. As discussed above, a significant percentage of the Company's consolidated cash and investments is held by subsidiaries that are not wholly owned by the Company. The Company's ability to access assets held by its majority-owned subsidiaries through dividends, loans, or other transactions is subject in each instance to a fiduciary duty owed to the minority shareholders of the relevant subsidiary. In addition, dividends received by Thermo Electron from a subsidiary that does not consolidate with Thermo Electron for tax purposes are subject to tax. Therefore, under certain circumstances, a portion of the Company's consolidated cash and short-term investments may not be readily available to Thermo Electron or certain of its subsidiaries. The Company expects significant additional cash proceeds from the sale of discontinued operations in 2000. The Company has received cash proceeds of $446 million for businesses sold in 2000 through August 11, 2000. The Company has no material commitments for purchases of property, plant, and equipment and expects that for the remainder of 2000, such expenditures will approximate the current level of expenditures. The Company believes that its existing resources are sufficient to meet the working capital requirements of its existing businesses for the foreseeable future, including at least the next 24 months. 29 THERMO ELECTRON CORPORATION Item 3 - Quantitative and Qualitative Disclosures About Market Risk - ------------------------------------------------------------------- The Company's exposure to market risk from changes in interest rates, foreign currency exchange rates, and equity prices has not changed materially from its exposure at year-end 1999. Item 4 - Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ On May 17, 2000, at the Annual Meeting of Shareholders, the shareholders elected three incumbent directors to a three-year term expiring in 2003. The Directors elected at the meeting were: Dr. Samuel W. Bodman III, Mr. Peter O. Crisp, and Mr. Jim P. Manzi. Dr. Bodman received 139,597,448 shares voted in favor of his election and 1,801,204 shares voted against. Mr. Crisp received 139,563,252 shares voted in favor of his election and 1,835,400 shares voted against. Mr. Manzi received 138,684,789 shares voted in favor of his election and 2,713,863 shares voted against. No abstentions or broker nonvotes were recorded on the election of directors. At the Annual Meeting, the shareholders also approved a proposal to amend the Company's equity incentive plan to restate the limitation on the potential size of awards to any recipient in a year provided by Section 162(m) of the Internal Revenue Code, as amended, as follows: 124,402,735 shares were voted in favor of the proposal, 16,409,330 shares were voted against, 586,587 shares abstained, and no broker nonvotes were recorded on the proposal. The shareholders did not approve a shareholder proposal that the Company endorse the CERES Principles as follows: 9,224,137 shares were voted in favor of the proposal, 105,315,892 shares were voted against, 8,413,461 shares abstained, and 18,445,162 broker nonvotes were recorded on the proposal. PART II - OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits See Exhibit Index on page immediately preceding exhibits. (b) Reports on Form 8-K On May 2, 2000, the Company filed a Current Report on Form 8-K with respect to the Company's financial results for the quarter ended April 1, 2000. The Company filed a Current Report on Form 8-K on June 14, 2000, to include the Company's previously issued press release with respect to the Company's financial results for the fiscal year and quarter ended January 1, 2000. On June 30, 2000, the Company filed a Current Report on Form 8-K with respect to the completion of the Company's exchange offers for its subsidiaries, Thermo Instrument Systems Inc. and Thermedics Inc. 30 THERMO ELECTRON CORPORATION 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 as of the 14th day of August 2000. THERMO ELECTRON CORPORATION /s/ Theo Melas-Kyriazi -------------------------------------------- Theo Melas-Kyriazi Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 31 THERMO ELECTRON CORPORATION EXHIBIT INDEX Exhibit Number Description of Exhibit - -------------------------------------------------------------------------------- 10.1 Letter agreement dated July 10, 2000, between the Registrant and Earl R. Lewis pertaining to his resignation. 10.2 Executive Severance Agreement dated as of January 27, 2000, by and between the Registrant and Brian D. Holt. 27.1 Financial Data Schedule for the quarter ended July 1, 2000. 27.2 Restated Financial Data Schedule for the quarter ended July 3, 1999.
EX-10.1 2 0002.txt Exhibit 10.1 July 10, 2000 Mr. Earl R. Lewis 58 Ford Road Sudbury, MA 01776 Dear Earl: This letter confirms our arrangement regarding your resignation as an officer and director of Thermo Electron Corporation and any of its subsidiaries and affiliates (collectively, the "Company"), other than your directorships in Spectra-Physics Lasers, Inc. ("SPLI") and FLIR Systems, Inc. ("FLIR") and your position as President of Spectra-Physics Holdings USA, Inc. The following is our agreement related to your resignation from the Company: 1. Termination of Employment: Your employment with the Company will terminate effective as of October 31, 2000 (the "Employment Termination Date"). You will be paid your regular salary through the Employment Termination Date. In your role as an employee, your title will be Special Assistant to the Chairman and you will assist the Company in the transition of management responsibilities from you to your successor and in representing the Company in certain of its investments. 2. 2000 Bonus: You will be entitled to receive a $400,000 bonus for your performance in 2000, which bonus shall be payable on October 31, 2000. 3. Severance Payments: You will be entitled to receive a lump sum severance payment of $1,365,000 payable within 10 days after you countersign this letter, representing the sum of two times (i) your current annual base salary, (ii) your annual executive automobile and supplemental medical reimbursement amounts and (iii) your 1999 bonus. 4. Accrued Vacation: You will be paid for any accrued but unused vacation time which you had earned through the Employment Termination Date. You will not continue to earn vacation or other paid time off after the Employment Termination Date. 5. Full Payment: You agree that all payments provided to you under paragraphs 1, 2 and 4 of this Agreement are in complete satisfaction of any and all compensation due to you from the Company through the Employment Termination Date. You agree to reimburse the Company for all personal expenses due and owing to the Company as of the Employment Termination Date. Mr. Earl R. Lewis July 10, 2000 Page 2 6. Employee Benefit Programs: Your participation in all employee benefit programs of the Company will cease effective as of the Employment Termination Date in accordance with the terms of those programs. You will have the option to elect to continue your health care coverage under COBRA beginning on the day after the Employment Termination Date for a period of up to 18 months, in which case the Company will pay the full monthly premium cost of your coverage under the applicable health care plan. Detailed information will be provided to you under separate cover. You will also have the option, at your sole expense, of converting your basic (not supplemental) life insurance coverage to an individual plan through Prudential. If interested, please let us know by September 1, 2000 and conversion information will be furnished to you. A conversion option is not available for long term disability coverage. 7. Money Match Plus Plan: Your active participation in the Money Match Plus Plan shall end on the Employment Termination Date. Information will be provided to you regarding various election options available to you regarding your account. 8. Stock Options: No further vesting of your stock options in the Company (other than SPLI and FLIR) and no further lapsing of the Company's repurchase rights will occur after the Employment Termination Date. If you do not exercise your vested options by the date that is 90 days after the Employment Termination Date (in the case of options identified with an asterisk next to the grant ID number on the attached schedule) or the second anniversary of the Employment Termination Date (in the case of all other options identified on the attached schedule), your options will expire and be canceled, and you will have no further rights with respect to your options. Your stock options in SPLI and FLIR will continue to vest in accordance with their terms as long as you remain a director of these two companies. Thermo Electron Corporation consents to your continuing to serve as a director of these companies; however, after the Employment Termination Date such service will no longer be at the request of Thermo Electron Corporation or its subsidiaries or affiliates (other than SPLI or FLIR) for purposes of indemnification of you by Thermo Electron Corporation or its subsidiaries or affiliates (other than SPLI or FLIR) for your service as a director. Coverage of you under the Thermo Electron Corporation director and officer insurance policies also will cease with respect to actions or inactions by you after the Employment Termination Date as a director of SPLI or FLIR. 9. Taxes: All payments by the Company under this Agreement will be reduced by all taxes and other amounts that the Company is required to withhold under applicable law and all other deductions authorized by you. Mr. Earl R. Lewis July 10, 2000 Page 3 10. Company Property: You will return to the Company any and all documents, materials and information related to the Company, or its subsidiaries, affiliates or businesses, and all other property of the Company, including, without limitation, equipment, files and personal computers in your possession or control, on or before the Employment Termination Date. Further, you agree that on and after the date hereof you will not for any purpose attempt to access or use any Company computer or computer network or system, including without limitation its electronic mail system. 11. Loan: You have an outstanding loan from Thermo Optek Corporation under its Stock Holding Assistance Plan with a current principal outstanding balance of $155,223. This remaining loan balance will be deducted from the severance payment set forth in paragraph 3 above. 12. Restricted Stock: Your 5,280 restricted shares of the Company's common stock shall vest as of the Employment Termination Date. 13. Outplacement: The Company shall provide outplacement services through one or more outside firms of your choosing up to an aggregate of $20,000, with such services to extend until the earlier of (i) 12 months following the Employment Termination Date or (ii) the date you secure employment elsewhere. You may direct that this amount also be applied to legal fees. 14. Release: In exchange for the consideration described in paragraphs 3, 11 and 12 hereof, you hereby irrevocably and unconditionally waive, release, acquit and forever discharge the Company and each of its respective current, former or future officers, directors, employees, agents, representatives, shareholders and legal predecessors and successors from any and all claims, liabilities, damages, actions, causes of action and suits, whether known or unknown, which you now have, own or hold, or claim to have, own or hold, or which at any time heretofore, had owned or held, or claimed to have owned or held, or which you at any time hereafter may have, own or hold, or claim to have owned or held against them, based upon, arising out of or in connection with any circumstance, matter or state of fact up to the date of this agreement, including without limitation those based upon or arising out of the termination of your employment and other relationships with the Company, your service as an officer or director of the Company, your compensation while employed by the Company, your stock options or any terms thereof or relating thereto and any of the Company's policies, procedures or requirements. You hereby agree not to file any lawsuit to assert such claims, which include, but are not limited to, any claims for breach of contract, wrongful termination, or age, sex, race, disability or other discrimination under the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967 or other federal, state or local laws prohibiting such discrimination or under any other federal, state or local employment laws. Mr. Earl R. Lewis July 10, 2000 Page 4 YOU UNDERSTAND AND ACKNOWLEDGE THAT YOU HAVE BEEN ADVISED TO SEEK THE ADVICE OF AN ATTORNEY, IF YOU SO CHOOSE, PRIOR TO SIGNING THIS RELEASE AND TO THE EXTENT DESCRIBED HEREIN YOU ARE GIVING UP ANY LEGAL CLAIMS YOU HAVE AGAINST THE COMPANY AND EACH OF ITS RESPECTIVE CURRENT, FORMER OR FUTURE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, REPRESENTATIVES, SHAREHOLDERS, LEGAL PREDECESSORS AND SUCCESSORS BY SIGNING THIS RELEASE. YOU FURTHER UNDERSTAND THAT YOU MAY HAVE 21 DAYS TO CONSIDER THIS AGREEMENT, THAT YOU MAY REVOKE IT AT ANY TIME DURING THE SEVEN DAYS AFTER YOU SIGN IT, AND THAT IT WILL NOT BECOME EFFECTIVE UNTIL THE 7-DAY REVOCATION PERIOD HAS PASSED WITHOUT REVOCATION. YOU FULLY UNDERSTAND YOUR RIGHT TO TAKE 21 DAYS TO CONSIDER SIGNING THIS RELEASE AND, AFTER HAVING SUFFICIENT TIME TO CONSIDER YOUR OPTIONS, YOU HEREBY WAIVE YOUR RIGHT TO TAKE THE FULL 21-DAY PERIOD. YOU ACKNOWLEDGE THAT YOU ARE SIGNING THIS RELEASE KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE CONSIDERATION DESCRIBED IN PARAGRAPHS 3, 11 AND 12 HEREOF. The Company hereby irrevocably and unconditionally waives, releases, acquits and forever discharges you from any and all claims, liabilities, damages, actions, causes of action and suits, of any nature known to one or more officers or directors of Thermo Electron Corporation (other than you) as of the date of this agreement, which the Company now has, owns or holds, or claims to have, own or hold, or which at any time heretofore, had owned or held, or claimed to have owned or held, or which the Company at any time hereafter may have, own or hold, or claim to have owned or held against you, based upon, arising out of or in connection with any circumstance, matter or state of fact, known to one or more officers or directors of Thermo Electron Corporation (other than you) as of the date of this agreement. 15. Restriction on Purchase or Sale of Common Stock: You understand that you will no longer be a "Reporting Person," for purposes of Section 16 of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, except as to SPLI and FLIR. However, you understand that for a period of six months following the date hereof you are required to report certain transactions pursuant to such rules and regulations on Forms 4 and 5. You are also urged to contact the Corporate Secretary of the Company, Ms. Sandra L. Lambert, should you have any questions regarding compliance with the insider trading regulations under the federal securities laws. Mr. Earl R. Lewis July 10, 2000 Page 5 16. Non-Compete. For the period beginning on the Employment Termination Date and ending on the second anniversary thereof (the "Non-Compete Period"), you shall not, either directly or indirectly as a stockholder, investor, partner, director, officer, employee or consultant, compete or engage in any business that competes, anywhere in the world, with the business of the Company (including SPLI or FLIR). Notwithstanding the foregoing, you may own, solely as an investor, up to 1% of the common stock of any publicly-traded competitor. The parties acknowledge and agree that competitors of the Company as of the date hereof include, without limitation, Agilent, Perkin Elmer, Varian, Waters, Hitachi, Shimadzu, Bio-Rad, Oxford Instruments, Bruker, JEOL and Beckman. Any other business with both annual sales of less than $25,000,000 and a market value of less than $25,000,000 shall be presumed not to compete with the Company. You agree that the duration and geographic scope of this non-competition provision are reasonable. In the event that any court determines that the duration or geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, the parties agree that the provision shall remain in full force and effect for the greatest time period and in the greatest geographic area that would not render it unenforceable. The parties intend that this non-competition provision shall be deemed a series of separate covenants, one for each and every county of each and every state of the U.S. and each and every political subdivision of each and every country outside of the U.S. Further, during the Non-Compete Period, you hereby agree you shall not, either directly or indirectly as a stockholder, investor, partner, director, officer, employee or otherwise, attempt to induce any employee of the Company to terminate his or her employment with the Company, or hire or caused to be hired any such employee, or attempt to induce any customer or supplier of the Company to terminate its relationship with the Company. 17. Resignation. You hereby resign effective as of today all of your positions as an officer and director of the Company, except that (i) you may remain a director of SPLI and FLIR and (ii) your resignation as President of Spectra-Physics Holdings USA, Inc. shall be effective July 14, 2000. Notwithstanding the foregoing, you shall remain an employee until October 31, 2000 in accordance with the terms of paragraph 1 above. 18. Non-Disparagement: You agree that you will continue to support and promote the interests of the Company and that you will not criticize, disparage, defame or in any way comment negatively to anyone about the Company or any of the people or organizations connected with them, or do or say anything that could disrupt the good morale of the employees of the Company or otherwise harm the interests or reputation of the Company and any of the organizations or people connected with them. The Company agrees that it will cause the officers of the Company not to criticize, disparage or defame you or otherwise do or say anything that harms your reputation and that the Company shall be solely responsible for any breach of the provisions in this paragraph 18 by any such officers. Nothing in this provision shall prevent the parties from (i) complying with compulsory Mr. Earl R. Lewis July 10, 2000 Page 6 legal process or otherwise making disclosures in connection with litigation or administrative proceedings, (ii) making such disclosures as are necessary to obtain legal advice, (iii) making disclosures as are required by federal, state or local regulatory authorities, and (iv) making disclosures which by law are required or cannot be prohibited. 19. Cooperation: You agree to reasonably cooperate with the Company with respect to all matters arising during or related to your employment, including but not limited to cooperation in connection with any governmental investigation, litigation or regulatory or other proceeding which may have arisen or which may arise following the signing of this Agreement. 20. Waiver of Jury Trial: Each of the parties hereby expressly, knowingly and voluntarily waives all benefit and advantage of any right to a trial by jury, and each agrees that he or it will not at any time insist upon, or plead or in any manner whatsoever claim or take the benefit or advantage of, a trial by jury in any action arising in connection with this Agreement. 21. Company Information and Invention Agreement. You agree to comply with the terms of a Thermo Electron Company Information and Invention Agreement, a copy of which is attached hereto. Such agreement supersedes any prior agreement covering the same subject matter which you may have signed with the Company previously. 22. Entire Agreement: This letter contains the entire Agreement between you and the Company and supersedes all prior and contemporaneous agreements, communications and understandings, whether written or oral, relating to the subject matter of this letter, including your Executive Retention Agreement, except that your Indemnification Agreement with the Company shall survive in accordance with its terms. This Agreement will be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts without regard to choice of law provisions. 23. Severability: If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and replaced with a provision which is enforceable and comes closest to the intent of the parties underlying the unenforceable provision. 24. Relief: In the event of breach of the provisions of this Agreement by any party, in addition to any other rights that the other parties may have under law or in equity, each party shall have the right to specific performance and injunctive relief, it being acknowledged and agreed that money damages will not provide an adequate remedy. In the event litigation is brought with respect to this Agreement, the prevailing party shall be entitled to recover from the losing party his or its reasonable attorney's fees and expenses. Mr. Earl R. Lewis July 10, 2000 Page 7 25. Successors and Assigns: This Agreement shall be bending upon and inure to the benefit of the parties hereto and their respective successors and assigns, including corporations with which, or into which, the Company may be merged or which may succeed to its respective assets or business; provided, however, that your obligations are personal and may not be assigned. 26. Amendment: This Agreement may be amended or modified only by a written instrument executed by you and the Company. 27. Voluntary Agreement: In signing this Agreement, you give the Company assurance that you have signed it voluntarily and with a full understanding of its terms and that you have had sufficient opportunity to consider this Agreement and to consult with anyone of your choosing before signing it. If the terms of this Agreement are acceptable to you, please sign and return it to the undersigned. At the time you sign and return this Agreement, it will take effect as a legally-binding agreement between you and the Company on the basis set forth above. Date Received by Addressee: August 9, 2000. THERMO ELECTRON CORPORATION By: /s. Anne Pol -------------------------------- Title: Senior Vice President Accepted and Agreed to: /s. Earl R. Lewis - ---------------------- July 12, 2000 Page 1 Stock Option Grant (Outstanding Options) EARL R LEWIS 58 FORD RD SUDBURY, MA 01776 SS NUMBER:###-##-#### DIVISION: TMO/ OFFICERS - THI
YEAR GRANT GRANTED DATE OPT. VEST. $ # # # # UN-EX $ UN-EX # OUT- ID # BY TYPE GRANTED EXP. SCHED PRICE GRANTED VESTED EXERCISE VESTED VESTED STANDING Thermo Electron Corporation 21-0045 * TMO A(B)NQ-R/10 09/25/92 2002 20.02 $12.06 6,750 6,750 0 6,750 $ 81,405.00 6,750 21-0047 * TMO A(B)NQ-R/10 01/02/93 2003 20.02 $13.91 6,750 6,750 0 6,750 $ 93,892.50 6,750 21-0049 * TMO A(B)NQ-R/10 04/03/93 2003 20.02 $16.47 6,750 6,750 0 6,750 $ 111,172.50 6,750 21-0061 * TMO A.NQ/12 12/14/93 2005 10.01 $18.39 22,500 13,500 9,000 4,500 $ 82,755.00 13,500 21-0067 TMO A.NQ/12 11/28/94 2006 10.01 $20.05 67,500 33,750 20,250 13,500 $ 270,675.00 47,250 21-0152 TMO A.NQ/5 08/11/98 2003 100.01 $22.46 20,000 20,000 0 20,000 $ 449,200.00 20,000 21-0161 * TMO A.NQ/7 10/27/98 2005 20.01 $17.56 100,000 20,000 0 20,000 $ 351,200.00 100,000 SUBTOTAL 230,250 107,500 29,250 78,250 $1,440,300.00 201,000 Thermo Electron Corporation ( formerly Metrika Systems Corporation converted on May 2 2000 @ a ratio of 0.465 ) 149-0001 MKA A.NQ/12 05/23/97 2009 10.01 $32.30 9,290 2,787 0 2,787 $ 90,020.10 9,290 Thermo Electron Corporation ( formerly ONIX Systems converted on Apr 12 2000 @ a ratio of 0.436 ) 179-0001 ONX A.NQ/7 01/21/98 2005 20.01 $32.66 14,545 5,818 0 5,818 $ 190,015.88 14,545 Thermo Electron Corporation ( formerly Randers Killam Group Inc. converted on May 15 2000 @ a ratio of 0.241 ) 165-0002 TMO A.NQ/7 01/21/98 2005 20.01 $16.62 963 385 0 385 $ 6,398.70 963 Thermo Electron Corporation ( formerly Thermedics Detection Inc. converted on Apr 12 2000 @ a ratio of 0.388 ) 158-0003 TMO A.NQ/7 01/21/98 2005 20.01 $24.65 775 310 0 310 $ 7,641.50 775 Thermo Electron Corporation ( formerly Thermo BioAnalysis Corporation converted on Apr 19 2000 @ a ratio of 1.469 ) 89-0002 * THI A.NQ/12 09/21/95 2007 10.01 $6.81 11,016 4,406 4,406 0 $ 0.00 6,610 89-0005 * THI A.NQ/12 06/21/96 2008 10.01 $8.17 62,424 24,970 24,970 0 $ 0.00 37,454 SUBTOTAL 73,440 29,376 29,376 0 $ 0.00 44,064
July 12, 2000 Page 2 Stock Option Grant (Outstanding Options) EARL R LEWIS 58 FORD RD SUDBURY, MA 01776 SS NUMBER:###-##-#### DIVISION: TMO/ OFFICERS - THI
YEAR GRANT GRANTED DATE OPT. VEST. $ # # # # UN-EX $ UN-EX # OUT- ID # BY TYPE GRANTED EXP. SCHED PRICE GRANTED VESTED EXERCISE VESTED VESTED STANDING Thermo Electron Corporation ( formerly Thermo Information Solutions Inc. converted on Sep 23 1999 @ a ratio of 0.699 ) 154-0005 * TMO A.NQ/5 01/21/98 2008 20.01 $14.32 698 279 0 279 $ 3,995.28 698 Thermo Electron Corporation ( formerly Thermo Instrument Systems Inc. ( formerly Thermo V converted on Jun 30 2000 @ a ratio of 0.850 ) 170-0002 * VIZ A.NQ/7 12/05/97 2004 20.01 $13.25 14,166 5,666 0 5,666 $ 75,074.50 14,166 Thermo Electron Corporation ( formerly Thermo Instrument Systems Inc. ( formerly ThermoSp converted on Jun 30 2000 @ a ratio of 0.850 ) 60-0002 * THS A.NQ/12 10/26/94 2006 10.01 $8.37 59,779 29,890 0 29,890 $ 250,179.30 59,779 Thermo Electron Corporation ( formerly Thermo Instrument Systems Inc. converted on Jun 30 2000 @ a ratio of 0.850 ) 63-0003 * THI A.NQ/12 12/16/93 2005 10.01 $15.70 119,531 71,719 26,384 45,335 $ 711,759.50 93,147 63-0011 THI B1.NQ/12 07/11/97 2009 100.10 $30.93 53,125 0 0 0 $ 0.00 53,125 63-0017 THI A.NQ/7 01/06/99 2006 20.01 $17.37 127,500 25,500 0 25,500 $ 442,935.00 127,500 SUBTOTAL 300,156 97,219 26,384 70,835 $1,154,694.50 273,772 Thermo Electron Corporation ( formerly Thermo Optek Corporation converted on May 11 2000 @ a ratio of 0.830 ) 104-0008 TOC A1.NQ/12 04/11/96 2008 100.11 $12.61 83,042 0 0 0 $ 0.00 83,042 104-0009 TOC A.NQ/12 04/11/96 2008 18.01 $12.61 103,803 46,711 46,711 0 $ 0.00 57,092 SUBTOTAL 186,845 46,711 46,711 0 $ 0.00 140,134 Thermo Electron Corporation ( formerly Thermo Power Corporation converted on Oct 28 1999 @ a ratio of 0.923 ) 62-0012 * THP A.NQ/7 05/27/98 2005 20.01 $12.28 9,230 3,692 0 3,692 $ 45,337.76 9,230 Thermo Electron Corporation ( formerly Thermo Sentron Inc. converted on Apr 4 2000 @ a ratio of 0.775 ) 120-0001 TMO A.NQ/12 03/11/96 2008 10.01 $18.07 1,550 620 0 620 $ 11,203.40 1,550 Thermo Electron Corporation ( formerly ThermoQuest Corporation converted on May 11 2000 @ a ratio of 0.941 )
July 12, 2000 Page 3 Stock Option Grant (Outstanding Options) EARL R LEWIS 58 FORD RD SUDBURY, MA 01776 SS NUMBER:###-##-#### DIVISION: TMO/ OFFICERS - THI
YEAR GRANT GRANTED DATE OPT. VEST. $ # # # # UN-EX $ UN-EX # OUT- ID # BY TYPE GRANTED EXP. SCHED PRICE GRANTED VESTED EXERCISE VESTED VESTED STANDING 36-0001 THI A.N/12 02/08/96 2008 10.01 $13.82 47,057 18,823 18,823 0 $ 0.00 28,234 34-0007 TMQ A.NQ/12 07/14/97 2009 10.01 $16.73 70,586 14,117 0 14,117 $ 236,177.41 70,586 SUBTOTAL 117,643 32,940 18,823 14,117 $ 236,177.41 98,820 Thermo Fibergen Inc. 136-0003 * TMO A.NQ/12 09/12/96 2008 10.01 $10.00 2,000 600 0 600 $ 6,000.00 2,000 Thermo Trilogy Corporation 130-0001 * TMO A.NQ-R/5 01/21/98 2003 100.04 $8.25 2,000 0 0 0 $ 0.00 2,000 ThermoLase Corporation 94-0002 TMO A.NQ/12 11/28/95 2007 10.01 $22.75 5,000 2,000 0 2,000 $ 45,500.00 5,000 ThermoLyte Corporation 91-0003 * TMO A.NQ-R/12 03/11/96 2008 100.09 $10.00 2,000 0 0 0 $ 0.00 2,000 ThermoTrex Corporation 163-0001 * TMO A.NQ/10 01/21/98 2003 25.01 $7.82 1,023 512 0 512 $ 4,003.84 1,023 Trex Medical Corporation 110-0001 TXM A.NQ/12 03/26/96 2008 10.01 $11.00 40,000 16,000 8,000 8,000 $ 88,000.00 32,000
COMPANY INFORMATION AND INVENTION AGREEMENT In consideration and as a condition of my employment, or if now employed, the continuation of my employment by Thermo Electron Corporation or a subsidiary thereof (hereinafter collectively called the "Company") and the compensation paid therefor: 1. I agree not to disclose to others or use for my own benefit during my employment by the Company or thereafter any trade secrets or Company private information pertaining to any of the actual or anticipated business of the Company or any of its customers, consultants, or licensees acquired by me during the period of my employment, except to such an extent as may be necessary in the ordinary course of performing my particular duties as an employee of the Company. 2. I agree not to disclose to the Company, or to induce the Company to use, any confidential information or material belonging to others. 3. I understand that the making of inventions, improvements, and discoveries is one of the incidents of my employment, or that if not I may nonetheless make inventions while employed by the Company, and I agree to assign to Thermo Electron Corporation or its nominee my entire right, title, and interest in any invention, idea, device, or process, whether patentable or not, hereafter made or conceived by me solely or jointly with others during the period of my employment by the Company in an executive, managerial, planning, technical, research, engineering, or other capacity and which relates in any manner to the business of the Company, or relates to its actual or planned research or development, or is suggested or results from any task assigned to me or work performed by me for or in behalf of the Company, except any invention or idea which cannot be assigned by the Company because of a prior agreement with NONE effective until __________________________ (give name and date or write "none"). 4. I agree, in connection with any invention, idea, device, or process covered by paragraph 3: a) To disclose it promptly in writing to the proper officers or attorney of the Company. b) To execute promptly, on request, patent applications and assignments thereof to Thermo Electron or its nominees and to assist the Company in any reasonable manner to enable it to secure a patent therefor in the United States and any foreign countries, all without further compensation except as provided herein. 5. I further agree that all papers and records of every kind relating to any invention or improvement included with the terms of the Agreement, which shall at any time come into my possession shall be the sole and exclusive property of the Company and shall be surrendered to the Company or upon request at any other time either during or after the termination of such employment. 6. I further agree that the obligations and undertakings stated above in paragraph 4b shall continue beyond the termination of my employment by the Company, but if I am called upon to render such assistance after the termination of my employment, then I shall be entitled to a fair and reasonable per diem in addition to reimbursement of any expenses incurred at the request of the Company. 7. I agree to identify in an attachment to this Agreement all inventions or ideas related to the business or actual or planned research or development of the Company in which I have right, title, or interest, and which were conceived either wholly or in part by me prior to my employment by the Company but neither published nor filed in the U.S. Patent and Trademark Office. 8. I understand that this Agreement supersedes any agreement previously executed by me relating to the disclosure, assignment and patenting of inventions, improvements, and discoveries made during my employment by the Company. This Agreement shall inure to the benefits of the successors and assigns of the Company and shall be binding upon my heirs, assigns, administrators, and representatives. 9. I understand that this Agreement does not apply to an invention which qualifies fully under the provisions of any statute or regulation which renders unenforceable the required assignment or transfer of certain inventions made by an employee such as, but not limited to, Section 2870 of the California Labor Code. /s/ Earl R. Lewis ----------------------------------- Employee August 9, 2000 _______________________ ----------------------------------- Witness Date THERMO ELECTRON CORPORATION By: /s/ Seth H. Hoogasian _______________________ ----------------------------------- Witness Vice President and General Counsel August 9, 2000 ----------------------------------- Date EX-10.2 3 0003.txt THERMO ELECTRON CORPORATION EXECUTIVE SEVERANCE AGREEMENT THIS AGREEMENT by and between THERMO ELECTRON CORPORATION, a Delaware corporation (the "Company"), and Brian D. Holt (the "Executive") is made as of January 27, 2000 (the "Effective Date"). WHEREAS, the Company recognizes that the uncertainty regarding the future employment prospects for key personnel may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders; WHEREAS, the Board of Directors of the Company (the "Board") has determined that appropriate steps should be taken to reinforce and encourage the continued employment and dedication of the Company's key personnel without distraction from such uncertainty and related events and circumstances; and NOW, THEREFORE, as an inducement for and in consideration of the Executive remaining in its employ, the Company agrees that the Executive shall receive the severance benefits set forth in this Agreement in the event the Executive's employment with the Company is terminated under the circumstances described below. 1. Key Definitions. As used herein, the following terms shall have the following respective meanings: 1.1 "Change in Control" means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection): (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (i) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by the Company, (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iii) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this Section 1.1; or (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term "Continuing Director" means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company in one or a series of transactions (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors; or (d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company. 1.2 "Cause" means the Executive's willful engagement in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company. For purposes of this Section 1.2, no act or failure to act by the Executive shall be considered "willful" unless it is done, or omitted to be done, in bad faith and without reasonable belief that the Executive's action or omission was in the best interests of the Company. 2. Term of Agreement. This Agreement, and all rights and obligations of the parties hereunder, shall take effect upon the Effective Date and shall expire upon the first to occur of (a) the expiration of the Term (as defined below) or (b) the fulfillment by the Company of all of its obligations under Sections 4 and 5.2 if the Executive's employment with the Company terminates prior to the expiration of the Term. "Term" shall mean the period commencing as of the Effective Date and continuing in effect through December 31, 2002. 3. Not an Employment Contract. The Executive acknowledges that this Agreement does not constitute a contract of employment or impose on the Company any obligation to retain the Executive as an employee and that this Agreement does not prevent the Executive from terminating employment at any time. 4. Benefits to Executive. 4.1 Compensation. (a) Termination Without Cause. If the Executive's employment with the Company is terminated by the Company (other than for Cause) then the Executive shall be entitled to the following benefits: (i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the date of termination the aggregate of the following amounts: (1) the sum of (A) two times the Executive's annual base salary as in effect immediately prior to the date of termination, and (B) the amount of any cash compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not previously paid; and (ii) for two years after the date of termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue to provide benefits to the Executive and the Executive's family at least equal to those which would have been provided to them if the Executive's employment had not been terminated, in accordance with the applicable benefit plans in effect on the date of termination or, if more favorable to the Executive and the Executive's family, in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies; provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive a particular type of benefits (e.g., health insurance benefits) from such employer on terms at least as favorable to the Executive and the Executive's family as those being provided by the Company, then the Company shall no longer be required to provide those particular benefits to the Executive and the Executive's family; (iii) to the extent not previously paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive following the Executive's termination of employment under any plan, program, policy, practice, contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits"); and (iv) for purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits to which the Executive is entitled, the Executive shall be considered to have remained employed by the Company until two years after the date of termination. (b) Termination for Cause. If the Company terminates the Executive's employment with the Company for Cause, then the Company shall (i) pay the Executive, in a lump sum in cash within 30 days after the date of termination, the sum of (A) the Executive's base salary through the date of termination and (B) the amount of any cash compensation previously deferred by the Executive, in each case to the extent not previously paid and (ii) timely pay or provide to the Executive the Other Benefits. 4.2 Mitigation. The Executive shall not be required to mitigate the amount of any payment or benefits provided for in this Section 4 by seeking other employment or otherwise. Further, except as provided in Section 4.1(a)(ii), the amount of any payment or benefits provided for in this Section 4 shall not be reduced by any compensation earned by the Executive as a result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company or otherwise. 5. Disputes. 5.1 Settlement of Disputes; Arbitration. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board of Directors of the Company and shall be in writing. Any denial by the Board of Directors of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board of Directors shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. 5.2 Expenses. The Company agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees and expenses which the Executive may reasonably incur as a result of any claim or contest (regardless of the outcome thereof) by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive regarding the amount of any payment or benefits pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code. 6. Successors. 6.1 Successor to Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as defined above and any successor to its business or assets as aforesaid which assumes and agrees to perform this Agreement, by operation of law or otherwise. 6.2 Successor to Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amount would still be payable to the Executive or the Executive's family hereunder if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate. 7. Notice. All notices, instructions and other communications given hereunder or in connection herewith shall be in writing. Any such notice, instruction or communication shall be sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable nationwide overnight courier service, in each case addressed to the Company, at 81 Wyman Street, Waltham, Massachusetts and to the Executive at the Executive's principal residence as currently reflected on the Company's records (or to such other address as either the Company or the Executive may have furnished to the other in writing in accordance herewith). Any such notice, instruction or communication shall be deemed to have been delivered five business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide overnight courier service. Either party may give any notice, instruction or other communication hereunder using any other means, but no such notice, instruction or other communication shall be deemed to have been duly delivered unless and until it actually is received by the party for whom it is intended. 8. Miscellaneous. 8.1 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 8.2 Injunctive Relief. The Company and the Executive agree that any breach of this Agreement by the Company is likely to cause the Executive substantial and irrevocable damage and therefore, in the event of any such breach, in addition to such other remedies which may be available, the Executive shall have the right to specific performance and injunctive relief. 8.3 Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflicts of law principles. 8.4 Waivers. No waiver by the Executive at any time of any breach of, or compliance with, any provision of this Agreement to be performed by the Company shall be deemed a waiver of that or any other provision at any subsequent time. 8.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but both of which together shall constitute one and the same instrument. 8.6 Tax Withholding. Any payments provided for hereunder shall be paid net of any applicable tax withholding required under federal, state or local law. 8.7 Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of the subject matter contained herein, and any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and cancelled, except as provided in the next sentence. Notwithstanding the foregoing sentence, if the Executive is party to an agreement with the Company providing for the payment of benefits in the event employment is terminated after a Change in Control (a "Change in Control Agreement"), such Change in Control Agreement shall not be terminated or cance lled by this Agreement and such Change in Control Agreement shall survive and remain in effect in accordance with its own terms. In the event the Executive actually receives benefits under the Change in Control Agreement, the Executive shall not also be entitled to receive benefits under this Agreement. 8.8 Amendments. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above. THERMO ELECTRON CORPORATION By:________________________________ Anne Pol Senior Vice President, Human Resources EXECUTIVE: ___________________________________ Brian D. Holt HOLT EXEC SEV AGMT [2] 1/27/00 DOC 7669 EX-27.1 4 0004.txt
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO ELECTRON CORPORATION'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JULY 1, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-30-2000 JUL-01-2000 281,174 298,093 557,520 32,378 408,428 2,262,943 645,008 212,655 5,146,519 891,940 1,571,588 0 0 185,627 2,289,329 5,146,519 1,208,411 1,208,411 658,946 658,946 83,166 2,461 44,678 89,123 37,340 40,552 0 532 0 41,084 .26 .25
EX-27.2 5 0005.txt
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMO ELECTRON CORPORATION'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JULY 3, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JAN-2-2000 JUL-03-1999 294,224 569,458 594,294 35,997 396,809 2,598,105 707,593 221,049 5,135,435 895,884 1,766,454 0 0 167,253 1,809,840 5,135,435 1,187,916 1,187,916 663,095 663,095 238,957 3,076 49,112 (81,981) 18,025 (68,282) (138,607) 0 0 (206,889) (1.31) (1.32)
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