<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-2384
-------------------------------------------
TRW Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0575430
- --------------------------------------------- --------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
1900 Richmond Road, Cleveland, Ohio 44124
-----------------------------------------
(Address of principal executive offices)
(Zip Code)
(216) 291-7000
----------------------------------------------------
(Registrant's telephone number, including area code)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
As of November 3, 1995, there were 65,572,158 shares of
TRW Common Stock, $0.625 par value, outstanding.
This is page one of a total of 17 pages.
The Exhibit Index is on page 14 of this filing.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Earnings (unaudited)
TRW Inc. and subsidiaries
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Third quarter ended Nine months ended
September 30 September 30
In millions except per share data 1995 1994 1995 1994
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $2,401 $2,165 $7,709 $6,641
Cost of sales 1,942 1,714 6,199 5,280
- -----------------------------------------------------------------------------
Gross profit 459 451 1,510 1,361
Administrative and selling 207 188 592 540
expenses
Research and development 88 100 314 318
expenses
Interest expense 28 24 76 80
Other (income) expense-net (7) 6 (2) 44
- -----------------------------------------------------------------------------
Earnings before income taxes 143 133 530 379
Income taxes 50 51 199 146
- -----------------------------------------------------------------------------
Net earnings $ 93 $ 82 $ 331 $ 233
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
PER SHARE OF COMMON STOCK
Fully diluted $ 1.41 $ 1.24 $ 4.94 $ 3.52
Primary 1.39 1.26 4.97 3.56
Dividends declared .50 .50 1.00 .97
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Shares used in computing per
share amounts
Fully diluted 66.7 65.9 67.2 66.0
Primary 67.0 64.9 66.6 65.2
- -----------------------------------------------------------------------------
</TABLE>
<PAGE> 3
Statements of Cash Flows (unaudited)
TRW Inc. and subsidiaries
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine months ended
September 30
In millions 1995 1994
- ------------------------------------------------------------------------
<S> <C> <C>
Operating activities:
Net earnings $331 $233
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 383 353
Restructuring - (18)
Deferred income taxes 18 43
Other-net 21 41
Changes in assets and liabilities, net of effects
of businesses acquired or sold:
Accounts receivable (75) (175)
Inventories and prepaid expenses (75) (64)
Accounts payable and other accruals (38) 65
Other-net (4) 41
- ------------------------------------------------------------------------
Net cash provided by operating activities 561 519
- ------------------------------------------------------------------------
Investing activities:
Capital expenditures (314) (311)
Proceeds from divestitures 9 10
Investments in other assets (55) (50)
Other-net (2) (20)
- ------------------------------------------------------------------------
Net cash used in investing activities (362) (371)
- ------------------------------------------------------------------------
Financing activities:
Increase(decrease) in short-term debt 22 (80)
Proceeds from debt in excess of 90 days 27 165
Principal payments on debt in excess of 90 days (161) (121)
Dividends paid (98) (93)
Other-net 7 11
- ------------------------------------------------------------------------
Net cash used in financing activities (203) (118)
- ------------------------------------------------------------------------
Effect of exchange rate changes on cash (24) (37)
- ------------------------------------------------------------------------
Decrease in cash and cash equivalents (28) (7)
Cash and cash equivalents at beginning of period 109 79
- ------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 81 $ 72
- ------------------------------------------------------------------------
</TABLE>
<PAGE> 4
Balance Sheets (unaudited)
TRW Inc. and subsidiaries
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30 December 31
In millions 1995 1994
- --------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 81 $ 109
Accounts receivable 1,428 1,338
Inventories 535 470
Prepaid expenses 81 59
Deferred income taxes 231 239
- --------------------------------------------------------------------------
Total current assets 2,356 2,215
Property, plant and equipment-on
the basis of cost 5,805 5,556
Less accumulated depreciation
and amortization 3,284 3,067
- --------------------------------------------------------------------------
Total property, plant and equipment-net 2,521 2,489
Intangible assets
Intangibles arising from acquisitions 479 477
Capitalized data files 473 441
Other 84 69
- --------------------------------------------------------------------------
1,036 987
Less accumulated amortization 386 331
- --------------------------------------------------------------------------
Total intangible assets-net 650 656
Other assets 286 276
- --------------------------------------------------------------------------
$5,813 $5,636
- --------------------------------------------------------------------------
Liabilities and shareholders' investment
Current liabilities
Short-term debt $ 196 $ 122
Accounts payable 677 737
Current portion of long-term debt 98 157
Other current liabilities 1,003 970
- --------------------------------------------------------------------------
Total current liabilities 1,974 1,986
Long-term liabilities 790 796
Long-term debt 568 694
Deferred income taxes 278 269
Minority interests in subsidiaries 70 69
Capital stock 41 41
Other capital 396 354
Retained earnings 1,649 1,383
Cumulative translation adjustments 78 66
Treasury shares-cost in excess of par value (31) (22)
- --------------------------------------------------------------------------
Total shareholders' investment 2,133 1,822
- --------------------------------------------------------------------------
$5,813 $5,636
- --------------------------------------------------------------------------
</TABLE>
<PAGE> 5
Results by Business Segments (unaudited)
TRW Inc. and subsidiaries
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION> Third quarter ended Nine months ended
September 30 September 30
In millions 1995 1994 1995 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales
Automotive $1,422 $1,331 $4,882 $4,115
Space & Defense 827 682 2,375 2,070
Information Systems & Services 152 152 452 456
- -------------------------------------------------------------------------------
Sales $2,401 $2,165 $7,709 $6,641
- -------------------------------------------------------------------------------
Operating profit
Automotive $ 116 $ 113 $ 461 $ 327
Space & Defense 54 47 153 138
Information Systems & Services 26 27 69 75
- -------------------------------------------------------------------------------
Operating profit 196 187 683 540
Company Staff and other (25) (31) (77) (84)
Interest expense (28) (24) (76) (80)
Earnings from affiliates - 1 - 3
- -------------------------------------------------------------------------------
Earnings before income taxes $ 143 $ 133 $ 530 $ 379
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Principles of Consolidation
- ---------------------------
The financial statements include the accounts of the Company and
its subsidiaries except for an insurance subsidiary. The
wholly-owned insurance subsidiary and the majority of investments
in affiliated companies, which are not significant individually
or in the aggregate, are accounted for by the equity method.
Inventories
- -----------
Inventories consist of the following:
(In millions)
<TABLE>
<CAPTION>
September 30 December 31
1995 1994
---- ----
<S> <C> <C>
Finished products and
work in process $296 $246
Raw materials and supplies 239 224
---- ----
$535 $470
---- ----
</TABLE>
Long-Term Liabilities
- ---------------------
For balance sheet purposes, long-term liabilities at
September 30, 1995, and December 31, 1994, included $684 million
and $682 million, respectively, relating to postretirement
benefits other than pensions.
Other (Income) Expense-Net
- -------------------------
Other (income) expense included the following:
(In millions)
<TABLE>
<CAPTION>
Third quarter ended Nine months ended
September 30 September 30
1995 1994 1995 1994
------------------- -----------------
<S> <C> <C> <C> <C>
Other income $(15) $(11) $(43) $(41)
Other expense 7 13 32 45
Foreign currency translation 1 4 9 40
---- ---- ---- ----
$ (7) $ 6 $ (2) $ 44
---- ---- ---- ----
</TABLE>
<PAGE> 7
Earnings Per Share
- ------------------
Fully diluted earnings per share have been computed based on the
weighted average number of shares of Common Stock outstanding
during each period, including common stock equivalents and
assuming the conversion of the Serial Preference Stock II--Series
1 and 3. Primary earnings per share have been computed based on
the weighted average number of shares of Common Stock outstanding
during each period including common stock equivalents.
Primary earnings per share for the third quarter of 1995 of $1.39
is lower than the fully diluted earnings per share amount of
$1.41 due to the use of the treasury stock method for calculating
share repurchase. The September 1995 calculation of fully
diluted earnings per share uses the average market price.
Supplemental Cash Flow Information
- ----------------------------------
<TABLE>
<CAPTION>
Nine months ended
September 30
-------------------
(In millions) 1995 1994
---- ----
<S> <C> <C>
Interest paid (net of amount capitalized) $ 74 $85
Income taxes paid (net of refunds) $191 $47
</TABLE>
For purposes of the statements of cash flows, the Company considers all
highly liquid investments purchased with a maturity of three months or less to
be cash equivalents.
Interim Statements
- ------------------
The financial statements are based in part on approximations and
are subject to adjustments that may develop, such as unsettled
contract and renegotiation matters and matters that arise in
connection with the annual audit of the financial statements;
however, in the opinion of management, all adjustments (which
consist of normal recurring accruals) necessary for a fair
presentation of the results of operations for the periods
presented have been included. Results of operations for any
interim period are not necessarily indicative of the results to
be expected for the full year.
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations
-----------------------------------
RESULTS OF OPERATIONS
(In millions except per share data)
<TABLE>
<CAPTION>
Nine Months Ended
Third Quarter September 30
-------------------------- -------------------------
Percent Percent
1995 1994 Inc (Dec) 1995 1994 Inc (Dec)
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Sales $2,401 $2,165 11% $7,709 $6,641 16%
Operating Profit $ 196 $ 187 4% $ 683 $ 540 27%
Net Earnings $ 93 $ 82 14% $ 331 $ 233 43%
Fully Diluted Earnings
Per Share $ 1.41 $ 1.24 14% $ 4.94 $ 3.52 40%
Effective Tax Rate 34.8% 38.7% 37.5% 38.7%
</TABLE>
The increase in sales for the third quarter and first nine months
of 1995 resulted from higher volume in the Automotive segment,
primarily in the North American airbag business and all European
businesses, as well as increased volume in the Space & Defense
segment.
Operating profit for the third quarter and first nine months of
1995 increased primarily as a result of the higher sales volume.
The increase in net earnings for the third quarter and first nine
months of 1995 resulted from the higher operating profit noted
above. Net earnings also benefited from a lower effective tax
rate.
The lower effective tax rate was primarily due to the utilization
of tax loss carryforwards resulting from the legal reorganization of
certain German operations as well as the favorable effect of certain
prior period adjustments, including an adjustment to the prior
year's actual tax liability.
Interest expense was $76 million for the first nine months of
1995 compared to $80 million in 1994. The decrease in interest
expense was due primarily to lower debt levels partially offset
by higher interest rates.
<PAGE> 9
Automotive
(In millions)
<TABLE>
<CAPTION>
Nine Months Ended
Third Quarter September 30
-------------------------- -------------------------
Percent Percent
1995 1994 Inc (Dec) 1995 1994 Inc (Dec)
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Sales $1,422 $1,331 7% $4,882 $4,115 19%
Operating Profit $ 116 $ 113 3% $ 461 $ 327 41%
</TABLE>
The increase in sales for the third quarter and first nine months of
1995 resulted from higher volume in all European automotive
businesses, the effect of favorable exchange rates and higher volume
in the North American airbag business. The increase in sales for the
third quarter 1995 was partially offset by lower volume in the North
American seatbelt business.
Operating profit increased for the third quarter and first nine months
of 1995 due to the higher volume in all European businesses. The
increase in third quarter 1995 operating profit was partially offset
by the effect of lower sales in certain North American operations.
Space & Defense
(In millions)
<TABLE>
<CAPTION>
Nine Months Ended
Third Quarter September 30
-------------------------- -------------------------
Percent Percent
1995 1994 Inc (Dec) 1995 1994 Inc (Dec)
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Sales $827 $682 22% $2,375 $2,070 15%
Operating Profit $ 54 $ 47 15% $ 153 $ 138 11%
</TABLE>
Sales for the third quarter and first nine months of 1995 increased
due to new business volume and improvements in ongoing program
performance. The increase in sales for the first nine months of 1995
was partially offset by the effect of contracts nearing completion.
The increase in operating profit for the third quarter and first nine
months of 1995 resulted from the increased sales volume and the
absence of investments related to diversification into commercial
markets, partially offset by program profit adjustments. Operating
profit for the third quarter of 1995 included a program reserve which
was offset by the benefit of a franchise tax settlement.
Information Systems & Services
(In millions)
<TABLE>
<CAPTION>
Nine Months Ended
Third Quarter September 30
-------------------------- -------------------------
Percent Percent
1995 1994 Inc (Dec) 1995 1994 Inc (Dec)
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Sales $152 $152 - % $452 $456 (1)%
Operating Profit $ 26 $ 27 (8)% $ 69 $ 75 (9)%
</TABLE>
Sales and operating profit amounts for the third quarter and first nine months
of 1995 were comparable to those of the third quarter and first nine months of
1994.
<PAGE> 10
LIQUIDITY AND FINANCIAL POSITION
In the first nine months of 1995, cash flow provided by operating
activities of $561 million was used primarily for capital
expenditures of $314 million, a net decrease in debt of $112
million, dividend payments of $98 million and $41 million in
other items. In addition, the effect of exchange rates reduced
cash flow by $24 million. As a result, cash and cash equivalents
decreased by $28 million.
Total debt (short-term debt, the current portion of long-term
debt and long-term debt) was $862 million at September 30, 1995,
compared to $973 million at December 31, 1994. The ratio of
total debt to total capital (total debt, total deferred income
taxes, minority interests and shareholders' investment) at
September 30, 1995 was 28 percent compared to 34 percent at
December 31, 1994.
During the third quarter of 1995, the Company filed a
$224.5 million debt shelf registration statement. After this
filing, a total of $500 million is available for borrowing under
the Company's shelf registration statements.
During the first nine months of 1995, the Company's committed
U.S. 364-day revolving credit agreement, which allowed the
Company to borrow up to $150 million, expired. Also during the
first nine months, the Company renegotiated the terms of its
multi-year U.S. revolving credit agreement. The credit
agreement, which previously allowed the Company to borrow up to
$400 million, has been revised to allow the Company to borrow up
to $550 million. The revised agreement now extends through
February 2000 and contains lower commitment fees and borrowing
rates.
Also during the first nine months of 1995, the Company
renegotiated the terms of its committed multi-currency revolving
credit agreement. The agreement, which previously consisted of
two tranches with 13 banks and allowed the Company to borrow up
to $200 million, now consists of one tranche and allows the
Company to borrow up to $200 million. The revised agreement now
extends through February 2000 and contains lower commitment fees
and borrowing rates.
The Company is subject to inherent risks attributed to operating
in a global economy. It is the Company's policy to utilize
derivative financial instruments to manage its interest rate and
foreign currency exchange risks. The effect of these derivative
transactions on the Company's net earnings is not material.
Management believes that funds generated from operations and
existing borrowing capacity will be adequate to support and
finance planned growth, capital expenditures, company-sponsored
research and development programs and dividends payments to
shareholders.
<PAGE> 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
------------------
On February 15, 1994, TRW filed suit in the United States
District Court for the District of Arizona against Talley
Industries, Inc. and certain Talley subsidiary companies.
The suit relates to TRW's 1989 purchase of Talley's air bag
business. In the complaint, TRW claimed that, among other
violations of TRW's rights, Talley breached the non-compete
provision contained in the purchase agreement by providing
products and services to competitors of TRW. As a result of
the breach, TRW exercised its rights under the agreement and
the license from Talley to TRW to make a one-time payment of
$26.5 million to Talley for a paid-up royalty-free license
to use Talley's air bag patents and technology. On March 1,
1994, Talley filed an answer and counterclaims against TRW
alleging that TRW had acted improperly in making the
$26.5 million payment and requesting that TRW be ordered to
pay immediately to Talley the value of all anticipated
royalties, claimed by Talley to be not less than
$250 million. On May 19, 1994, the court granted Talley's
motion for an injunction requiring TRW to continue to make
quarterly royalty payments pursuant to the 1989 asset
purchase agreement and ancillary agreements pending trial of
TRW's claims. On April 5, 1995, trial began before a jury
on TRW's claims and Talley's counterclaims. On May 30,
1995, at the close of all the evidence, the trial judge
directed a verdict against TRW on TRW's claims against
Talley, ruling that there was not sufficient evidence to
send TRW's claims to the jury. However, the judge allowed
Talley's counterclaims to go to the jury. On June 6, 1995,
the jury entered its verdict that Talley was entitled to the
present value of the future royalty stream in the sum of
$138 million on the contract claim, but that TRW had not
acted in bad faith and that the technology on which
royalties were due was limited to that in existence when TRW
purchased Talley's air bag business.
Judgment was entered against TRW on June 27, 1995 and TRW
timely filed a notice of appeal on July 12, 1995. On
July 26, 1995, the trial judge entered an order requiring
that TRW continue to pay quarterly royalty payments to Talley
as they become due, notwithstanding the fact it filed an
appropriate bond in connection with its notice of appeal.
TRW immediately appealed the judge's ruling requiring that
TRW continue to pay the royalties pending appeal; however,
the 9th Circuit U.S. Court of Appeals denied TRW's appeal
without prejudice and accelerated the schedule for the
appeal on the judge's decision directing a verdict against
TRW in connection with TRW's claims against Talley. The
judgment against TRW is not expected to have a material
financial effect on the Company.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits:
11 Computation of Earnings Per Share -- Unaudited.
27 Financial Data Schedule.
11
<PAGE> 12
99 Computation of Ratio of Earnings to Fixed Charges -- Unaudited
(Supplement to Exhibit 12 of the following Form S-3
Registration Statements of the Company: No. 33-30350, filed
August 4, 1989, No. 33-42870, filed September 20, 1991, and No.
33-61711, filed September 15, 1995).
(b) Reports on Form 8-K:
No report on Form 8-K was filed during the quarter for which this
report is filed.
12
<PAGE> 13
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.
TRW Inc.
Date: November 9, 1995 By: /s/ Martin A. Coyle
--------------------
Martin A. Coyle
Executive Vice President
and Secretary
Date: November 9, 1995 By: /s/ Ronald D. Sugar
--------------------
Ronald D. Sugar
Executive Vice President
and Chief Financial Officer
13
<PAGE> 14
FORM 10-Q
Quarterly Report for Quarter Ended September 30, 1995
Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
- ----------- ----------- --------
<C> <S> <C>
11 Computation of Earnings Per Share -- Unaudited. 15
27 Financial Data Schedule. 16
99 Computation of Ratio of Earnings to Fixed Charges --
Unaudited (Supplement to Exhibit 12 of the following
Form S-3 Registration Statements of the Company:
No. 33-30350, filed August 4, 1989, No. 33-42870,
filed September 20, 1991, and No. 33-61711, filed
September 15, 1975). 17
</TABLE>
14
<PAGE> 1
Exhibit 11
TRW Inc. and Subsidiaries
--------------------------
COMPUTATION OF EARNINGS PER SHARE - UNAUDITED
---------------------------------------------
(In Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
PRIMARY 1995 1994
- ------- ------ ------
<S> <C> <C>
Net earnings $331.4 $232.5
Less preference dividend requirements 0.5 0.5
------ ------
Net earnings applicable to common shares
and common share equivalents $330.9 $232.0
====== ======
Average common shares outstanding 65.2 64.5
Stock options and performance share rights,
based on the treasury stock method using
average market price 1.4 0.7
------ ------
Average common shares and common share
equivalents 66.6 65.2
====== ======
Primary earnings per share $ 4.97 $ 3.56
====== ======
FULLY DILUTED
- -------------
Net earnings applicable to common
shares and common share equivalents $330.9 $232.0
Dividends assuming conversion of other
dilutive securities: (A)
Dilutive preference dividends 0.5 0.5
------ ------
Net earnings applicable to fully diluted shares $331.4 $232.5
====== ======
Average common shares outstanding 65.2 64.5
Common shares assuming conversion of
other dilutive securities: (A)
Dilutive preference shares 0.6 0.7
Stock options and performance share rights,
based on the treasury stock method using
closing market price if higher than
average market price 1.4 0.8
------ ------
Average fully diluted shares 67.2 66.0
====== ======
Fully diluted earnings per share $ 4.94 $ 3.52
====== ======
</TABLE>
(A) Assuming the conversion of the Serial Preference Stock II - Series 1 and
Series 3.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 81
<SECURITIES> 0
<RECEIVABLES> 1,428
<ALLOWANCES> 0
<INVENTORY> 535
<CURRENT-ASSETS> 2,356
<PP&E> 5,805
<DEPRECIATION> 3,284
<TOTAL-ASSETS> 5,813
<CURRENT-LIABILITIES> 1,974
<BONDS> 568
<COMMON> 41
0
0
<OTHER-SE> 2,092
<TOTAL-LIABILITY-AND-EQUITY> 5,813
<SALES> 7,709
<TOTAL-REVENUES> 7,709
<CGS> 6,199
<TOTAL-COSTS> 6,199
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76
<INCOME-PRETAX> 530
<INCOME-TAX> 199
<INCOME-CONTINUING> 331
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 331
<EPS-PRIMARY> 4.97
<EPS-DILUTED> 4.94
</TABLE>
<PAGE> 1
Exhibit 99
TRW Inc. and Subsidiaries
Computation of Ratio of Earnings
to Fixed Charges - Unaudited
(In millions except ratio data)
<TABLE>
<CAPTION>
Nine Months Years Ended December 31
ended ---------------------------------------------------
September 30, 1995 1994 1993 1992 1991 1990
------------------ ------ ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Earnings(loss) before income taxes $530.3 $534.5 $359.1 $347.6 $(129.4)(A) $343.1
Unconsolidated affiliates 1.8 (0.6) 0.7 (0.9) (1.0) (13.2)
Minority earnings 7.5 5.2 5.7 2.6 (7.8) (0.5)
Fixed charges excluding capitalized interest 120.1 160.9 194.0 227.1 254.3 252.0
------ ------ ------ ------ ------- ------
Earnings $659.7 $700.0 $559.5 $576.4 $116.1 $581.4
------ ------ ------ ------ ------- ------
Fixed Charges:
Interest expense $76.2 $104.8 $137.8 $162.9 $189.6 $186.9
Capitalized interest 3.8 6.6 7.9 12.7 10.1 7.6
Portion of rents representative of
interest factor 43.1 54.7 54.0 64.0 64.4 64.6
Interest expense of unconsolidated
affiliates 0.8 1.4 2.2 0.2 0.3 0.5
------ ------ ------ ------ ------- ------
Total fixed charges $123.9 $167.5 $201.9 $239.8 $264.4 $259.6
------ ------ ------ ------ ------- ------
Ratio of earnings to fixed charges 5.3x 4.2x 2.8x 2.4x 0.4x(A) 2.2x
------ ------ ------ ------ ------- ------
</TABLE>
(A) The 1991 loss before income taxes of $129.4 million includes a charge of
$343 million to cover costs associated with divestment and
restructuring activities. Excluding this charge, the ratio of earnings
to fixed charges would have been 1.7x.
