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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 19, 2000
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 1-12385
NEWPORT NEWS SHIPBUILDING INC.
(Exact name of registrant as specified in its charter)
Delaware 74-1541566
- -------- ----------
State or Other Jurisdiction of IRS Employer
Incorporation or Organization Identification No.
4101 Washington Avenue, Newport News, Virginia 23607-2770
- ---------------------------------------------- ----------
Address of Principal Executive Offices Zip Code
(757) 380-2000
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common Stock, par value $.01 per share: 30,982,298 shares outstanding and
associated preferred stock purchase rights as of April 18, 2000.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Part I--Financial Information
Newport News Shipbuilding Inc.
Consolidated Statements of Earnings ........................................................ 2
Consolidated Balance Sheets................................................................. 3
Consolidated Statements of Cash Flows....................................................... 4
Notes to Consolidated Financial Statements.................................................. 5
Management's Discussion and Analysis of Financial Condition and Results of Operations....... 9
Part II--Other Information
Item 1. Legal Proceedings....................................................................... 11
Item 2. Changes in Securities and Use of Proceeds............................................... *
Item 3. Defaults Upon Senior Securities......................................................... *
Item 4. Submission of Matters to a Vote of Security Holders..................................... *
Item 5. Other Matters........................................................................... 11
Item 6. Exhibits and Reports on Form 8-K........................................................ 11
</TABLE>
*No response to this item is included herein for the reason that it is
inapplicable or the answer to such item is negative.
THIS QUARTERLY REPORT ON FORM 10-Q SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999.
1
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PART I
FINANCIAL INFORMATION
NEWPORT NEWS SHIPBUILDING INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
-------------------------
March 19, March 21,
2000 1999
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<S> <C> <C>
Millions (Except Shares and Per Share Amounts)
Revenues ........................................... $ 469 $ 430
Operating Costs and Expenses ....................... (423) (386)
Other Income (Expense), net ........................ 1 --
------------ ------------
Operating Earnings ................................. 47 44
Interest Expense, net of interest capitalized ...... (11) (12)
------------ ------------
Earnings Before Income Taxes ....................... 36 32
Provision for Income Taxes ......................... (15) (14)
------------ ------------
Net Earnings ....................................... $ 21 $ 18
============ ============
Weighted Average Number of Common Shares Outstanding
Basic ......................................... 32,094,653 34,635,540
============ ============
Diluted ....................................... 33,184,413 35,948,639
============ ============
Net Earnings Per Common Share
Basic ......................................... $ .65 $ .52
============ ============
Diluted ....................................... $ .63 $ .50
============ ============
Dividends Declared Per Common Share ................ $ .04 $ .04
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated statements of
earnings.
2
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NEWPORT NEWS SHIPBUILDING INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 19, December 31,
2000 1999
----------------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Millions (Except Share Amounts)
ASSETS
Current Assets
Cash and Cash Equivalents.............................................. $ 2 $ 2
Accounts Receivable.................................................... 117 93
Contracts in Process................................................... 268 317
Inventory.............................................................. 55 55
Deferred Income Taxes.................................................. 113 108
Other Current Assets................................................... 19 17
--------- ---------
Total Current Assets................................................... 574 592
--------- ---------
Noncurrent Assets
Property, Plant and Equipment, net..................................... 703 716
Other Assets........................................................... 213 204
---- ---------
Total Noncurrent Assets................................................ 916 920
--------- ---------
$ 1,490 $ 1,512
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade Accounts Payable................................................. $ 60 $ 88
Short-Term Debt........................................................ 29 29
Postretirement Benefits................................................ 126 124
Other Accrued Liabilities ............................................. 252 205
--------- ---------
Total Current Liabilities.............................................. 467 446
--------- ---------
Noncurrent Liabilities
Long-Term Debt......................................................... 495 525
Deferred Income Taxes.................................................. 234 233
Other Long-Term Liabilities............................................ 34 35
--------- ---------
Total Noncurrent Liabilities........................................... 763 793
--------- ---------
Commitments and Contingencies (See Note 3)
Stockholders' Equity
Common Stock, $.01 par value -
authorized 70,000,000 shares; issued 35,363,269 shares at
March 19, 2000 and 35,290,652 shares at December 31, 1999......... 1 1
Paid-In Capital........................................................ 269 264
Retained Earnings...................................................... 104 84
Unearned/Deferred Compensation......................................... (2) (3)
Stock Employee Compensation Trust (SECT) - shares held of
3,915,226 and 2,661,926 at March 19, 2000 and
December 31, 1999, respectively .................................. (112) (73)
--------- ---------
Total Stockholders' Equity............................................. 260 273
--------- ---------
$ 1,490 $ 1,512
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
3
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NEWPORT NEWS SHIPBUILDING INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
---------------------------------
March 19, March 21,
2000 1999
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<S> <C> <C>
Millions
Cash Flows from Operating Activities:
Net Earnings ........................................................... $ 21 $ 18
Adjustments to Reconcile Net Earnings to
Net Cash Provided by Operating Activities -
Depreciation and Amortization................................... 14 15
Deferred Income Taxes........................................... (4) 14
Loss on Asset Disposition....................................... 1 -
(Gain) on Equity Investments.................................... (1) -
Changes in Components of Working Capital -
Decrease (Increase) in -
Accounts Receivable........................................ (24) 47
Contracts in Process....................................... 49 1
Inventory.................................................. - (1)
Other Current Assets....................................... (2) (2)
Increase (Decrease) in -
Trade Accounts Payable..................................... (30) (45)
Accrued Liabilities and Other.............................. 49 -
Other, net...................................................... (2) 6
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Net Cash Provided by Operating Activities................................ 71 53
------ -------
Cash Flows from Investing Activities:
Capital Expenditures..................................................... (2) (1)
Other.................................................................... (5) -
------ -------
Net Cash Used by Investing Activities.................................... (7) (1)
------ -------
Cash Flows from Financing Activities:
Decrease in Revolving Credit Facility.................................... (30) (66)
Payments on Short-Term Debt.............................................. - (10)
Issuance of SECT Shares/Common Stock..................................... - 24
Purchase of Common Stock ................................................ (32) -
Dividends Paid........................................................... (1) (1)
Other ................................................................... (1) -
------ -------
Net Cash Used by Financing Activities.................................... (64) (53)
------ -------
Net Increase (Decrease) in Cash and Cash Equivalents.................... - (1)
Cash and Cash Equivalents at Beginning of Period......................... 2 3
------ -------
Cash and Cash Equivalents at End of Period............................... $ 2 $ 2
====== =======
Cash Paid (Received) During the Period for Income Taxes.................. $ - $ (3)
====== =======
Cash Paid During the Period for Interest................................. $ 3 $ 7
====== =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements of
cash flows.
4
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NEWPORT NEWS SHIPBUILDING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PREPARATION
Unless the context otherwise requires, the term "Company" refers to Newport News
Shipbuilding Inc. ("NNS") and its consolidated subsidiaries. Although certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to SEC rules and regulations, the Company believes
that the disclosures included herein are adequate to make the information
presented not misleading. Operating results for the three month period ended
March 19, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000. These unaudited financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1999.
The Company is reporting quarterly results on an accounting-month basis
consistent with the prior year. In order to more effectively match revenues,
costs, and profits with operating segments, certain amounts for 1999 have been
reclassified to conform with the 2000 presentation. In the opinion of the
Company's management, the unaudited financial statements contain all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation.
2. EARNINGS PER SHARE
Basic earnings per common share is computed by dividing net earnings by the
weighted average number of shares of common stock outstanding during the period.
Diluted earnings per common share is computed assuming the terms and conditions
for the contingent shares and common stock options were met and converted on
March 19, 2000 and March 21, 1999, respectively.
3. COMMITMENTS AND CONTINGENCIES
Government Contracting
As a general practice in the defense industry, the Defense Contract Audit Agency
("DCAA") and other government agencies continually review the cost accounting
and other practices of government contractors, including the Company, conduct
other investigations, and make specific inquiries. In the course of those
reviews and investigations, cost accounting and other issues are identified,
discussed and settled, or resolved through legal proceedings. In some cases,
recognition of the inherent uncertainties and costs of litigation may cause
management to decide to settle a matter.
As with other government contractors, the U.S. Government has from time to time
recommended that certain of the Company's contract prices be reduced, or costs
allocated to its government contracts be disallowed. Some of these
recommendations involve substantial amounts. In the past, as a result of such
audits and other investigations and inquiries, the Company has on occasion
agreed to adjustments to its contract prices and the costs allocated to its
government contracts. The Company is currently involved in several such audits
and other investigative proceedings with the U.S. Government. The Company is
also engaged in settlement discussions on certain matters and has filed a
lawsuit concerning specific cost accounting issues.
As previously reported, the DCAA conducted a post-award audit of the contract to
build the aircraft carrier Reagan. In April 1998, the DCAA issued its official
audit report ("Audit Report") in which it concluded that the cost or pricing
data supplied by the Company to the U.S. Navy was not current, accurate, and
complete and, therefore, projected labor and overhead costs were overstated for
the Reagan contract. Accordingly, the DCAA recommended
5
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to the U.S. Navy's contracting officer that the contract price for Reagan be
reduced by approximately $135 million. After giving consideration to the cost
sharing provisions in the contract, the proposed price reduction could generate
an operating income adjustment of approximately $47 million over the life of the
contract.
The Company disagrees with the conclusions of the Audit Report and the DCAA's
recommendation to the contracting officer. Management believes that the Company
has substantial and meritorious grounds on which to contest any action by the
U.S. Navy seeking to reduce the Reagan contract price and intends to pursue its
defenses in response to any attempt by the U.S. Navy to make such a reduction.
Management believes that the final resolution of this matter will not have a
material impact on the financial position, results of operations, or cash flows
of the Company.
In addition to the DCAA audit, a civil investigation, also focused on the cost
or pricing data that the Company supplied to the U.S. Navy in connection with
the Reagan contract, is being conducted jointly by the Department of Defense,
the Department of Justice, the U.S. Attorney's Office for the Eastern District
of Virginia, and the Naval Criminal Investigative Service. Management believes
the Company complied with all applicable laws.
During the first quarter of 1999, the Company received a letter from the U.S.
Navy Supervisor of Shipbuilding forwarding a DCAA final audit report questioning
approximately $83 million of costs allocated to U.S. Government contracts as
Independent Research and Development ("IR&D"). The letter requested additional
comments regarding why NNS considers its existing cost accounting practice to be
compliant with the Cost Accounting Standards. The Company provided such comments
in the second quarter of 1999. Based on the Company's present understanding of
the claims the U.S. Government might assert, and defenses believed to be
available in connection with this issue, management believes that the final
resolution of this matter will not have a material impact on the financial
position, results of operations, or cash flows of the Company.
Litigation
The Company is both a plaintiff and defendant in matters of varying nature
related to the normal conduct of its business. In the opinion of management, the
outcome of these proceedings should not have a material adverse effect on the
financial position, results of operations, or cash flows of the Company.
6
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4. REPORTABLE SEGMENTS
The Company's reportable operating segments represent strategic initiatives
supporting the entire lifecycle of U.S. Navy ships - Construction, Fleet
Services, and Engineering, as well as a logical linking of similar contracts
based on funding provisions. Engineering contracts generally receive funding on
an annual basis, Fleet Services contracts typically span between one month and
two years, and Construction contracts generally span a period of two or more
years. The reportable segments are managed separately because each business has
differing customer requirements based on the nature of the services provided.
The Company evaluates performance based on profit or loss from operations before
interest and income taxes, not including nonrecurring gains and losses.
Information about Revenues and Operating Earnings
For the Quarters Ended March 19, 2000 and March 21, 1999, respectively (in
millions)
<TABLE>
<CAPTION>
Fleet All
Construction Services Engineering Others(1) Total
------------ -------- ----------- --------- -----
<S> <C> <C> <C> <C> <C>
2000
- ----
Revenues.................................... $ 206 $ 192 $ 68 $ 3 $ 469
Segment Operating Earnings.................. 24 17 5 1 47
1999
- ----
Revenues.................................... $ 181 $ 207 $ 41 $ 1 $ 430
Segment Operating Earnings.................. 19 22 3 - 44
</TABLE>
1. Other business activities include valve and pump repair and technical
services, equity investments, and corporate activities.
A reconciliation of the totals reported for the operating segments to the
applicable line items in the consolidated financial statements is as follows:
Reconciliation of Segment Revenues and Operating Earnings to Consolidated
Amounts
For the Quarters Ended March 19, 2000 and March 21, 1999, respectively (in
millions)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Revenues
- --------
Total revenues for reportable segments................................... $ 466 $ 429
Other revenues........................................................... 3 1
--------- ---------
Total consolidated revenues..................................... $ 469 $ 430
========= =========
Operating Earnings
- ------------------
Total operating earnings for reportable segments......................... $ 46 $ 44
Other operating earnings................................................. 1 -
--------- ---------
Total consolidated operating earnings........................... $ 47 $ 44
========= =========
</TABLE>
7
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Information about Assets (in millions)
<TABLE>
<CAPTION>
Fleet All
Construction Services Engineering Others(1) Total
------------ -------- ----------- --------- -----
<S> <C> <C> <C> <C> <C>
March 19, 2000.............................. $ 187 $ 127 $ 57 $ 14 $ 385
December 31, 1999........................... 190 164 40 16 410
</TABLE>
1 As the Company has a fully integrated production facility, its fixed assets
are commingled and not identified with specific profit centers. Therefore,
segment assets consist only of accounts receivable ("A/R") and contracts in
process ("CIP") balances applicable to identified segments.
Reconciliation of Segment Assets to Consolidated Amounts (in millions)
<TABLE>
<CAPTION>
March 19, December 31,
2000 1999
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Assets
- ------
<S> <C> <C>
Total A/R and CIP for reportable segments..... $ 371 $ 394
Other unallocated A/R and CIP ................ 14 16
Other unallocated amounts .................... 1,105 1,102
------ ------
Total consolidated assets .................... $1,490 $1,512
====== ======
</TABLE>
8
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NEWPORT NEWS SHIPBUILDING INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
BUSINESS OVERVIEW
The Company's primary business is the design, construction, repair, overhaul and
refueling of nuclear-powered aircraft carriers and submarines for the U.S. Navy.
The Company also provides ongoing fleet services for other U.S. Navy vessels
through work in overhauling, lifecycle engineering, and repair. The U.S.
Government accounted for approximately 99% and 97% of the Company's revenues for
the quarterly periods ended March 19, 2000 and March 21, 1999, respectively.
RESULTS OF OPERATIONS
For the First Quarter Ended
- -------------------------------------------------------------------------------
2000 1999
- -------------------------------------------------------------------------------
Millions
Revenues........................................ $ 469 $ 430
Operating Earnings.............................. 47 44
Revenues for the first quarter of 2000 increased $39 million to $469 million
compared with the same period in 1999. The revenue improvement was attributable
to gains in the Construction and Engineering segments. Construction revenues
increased as a result of advanced planning work on the next aircraft carrier
(CVN 77) and increased activity on the Virginia-class submarine program,
partially offset by lower activity on the carrier Reagan. Engineering revenues
increased due to development work on the propulsion plant for the next
generation of aircraft carriers. While revenues in the Construction and
Engineering segments reflected growth, Fleet Services revenues were slightly
lower because of the reallocation of resources to construction programs as the
refueling and overhaul of the carrier Nimitz enters its final stages. Revenues
for the first quarter of 2000 were also favorably impacted by the timing of
material receipts across all segments.
First quarter 2000 operating earnings increased $3 million to $47 million. The
improvement was primarily driven by volume gains in the Construction and
Engineering segments.
The Company's funded backlog was $3.1 billion at March 19, 2000, substantially
all of which was U.S. Navy-related.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
The following table reflects the summarized components of the Company's cash
flows for the periods indicated:
For the First Quarter Ended
- -------------------------------------------------------------------------------
2000 1999
- -------------------------------------------------------------------------------
Millions
Net cash provided by operating activities....... $ 71 $ 53
Capital expenditures............................ (2) (1)
Other investing cash flows...................... (5) -
------- -------
Subtotal........................................ 64 52
Financing activities............................ (64) (53)
------- -------
Net increase (decrease) in cash and
cash equivalents.............................. $ - $ (1)
======= =======
9
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NET CASH PROVIDED BY OPERATING ACTIVITIES
The $18 million increase in 2000's comparative cash flows from operating
activities was primarily due to a reduction in working capital, as well as
improved quarterly earnings as discussed above in "Results of Operations." The
reduction in working capital was due to normal timing fluctuations with respect
to billings, accounts receivable collections, the recognition of contract costs,
and the payment of trade accounts payable.
OTHER INVESTING CASH FLOWS
Other investing cash flow activities in 2000 relate to a $5 million investment
in AMSEC LLC. The Company owns 45% of this low-cost fleet services organization.
FINANCING ACTIVITIES
The financing activities for the period ended March 19, 2000 reflect the
purchase of Company stock on the open market, pay down of the revolving credit
facility, and the payment of a quarterly dividend of four cents per share. The
1999 financing activities primarily reflect the receipt of proceeds from the
issuance of SECT shares related to the Company's benefit plans, the pay off of
short-term debt, pay down of the revolving credit facility, and the payment of a
quarterly dividend.
CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-Q contains forward-looking statements
concerning, among other things, the Company's prospects, developments and
business strategies. These forward-looking statements are identified by terms
such as "intends," "estimates," "expects," "projects," "anticipates," "goal,"
"plan," "should," "believes," "assumed," and "scheduled." The Company's actual
results may differ materially from the results discussed in the forward-looking
statements. Factors that might cause such a difference include (i) the factors
discussed in Note 3 to the Company's Consolidated Financial Statements, (ii) the
factors addressed in Management's Discussion and Analysis of Financial Condition
and Results of Operations, and (iii) the following factors: (a) general U.S.
and international political, economic and competitive conditions;
(b) initiatives to reduce the federal budget deficit, including reductions in
defense spending, or the failure of anticipated increases in defense spending to
materialize in whole or in part; (c) reductions in the number or size of U.S.
Navy contracts awarded to the Company; and (d) unanticipated events affecting
delivery and production schedules or design and manufacturing processes, which
could impair the Company's efforts to deliver its products on time or to reduce
production costs and cycle time or realize in a timely manner some or all of the
benefits, if any, of such reductions.
10
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Reference is made to Note 3, "Commitments and Contingencies" to the Company's
Consolidated Financial Statements contained herein, which is incorporated in
this Item 1 of Part II by reference.
ITEM 5. OTHERS MATTERS.
Share Repurchase Programs
On February 1, 2000, the Company announced a $100 million share repurchase
program adding to a $100 million share repurchase program authorized in June
1999. The new plan will be implemented over the 2000-2001 time period and will
be accomplished through open market and privately negotiated transactions. The
Company has purchased 3.4 million shares at a cost of $100 million completing
the June 1999 authorization. As of April 18, 2000, the Company has also
purchased an additional 0.8 million shares at a cost of $23 million under the
February 1, 2000 share repurchase program.
Stockholder Proposals
In order for a stockholder to nominate a candidate for election as a director of
the Company or to propose other business to come before the Company's 2001
Annual Meeting of Stockholders, such nomination or proposal must be received by
the Secretary of the Company at its principal executive offices at 4101
Washington Avenue, Newport News, Virginia 23607, not later than March 9, 2001,
in accordance with the Company's Bylaws. Any proposal submitted by a stockholder
for inclusion in the proxy materials for the Company's Annual Meeting of
Stockholders in 2001 must be delivered to the Secretary of the Company at the
foregoing address, in accordance with Securities and Exchange Commission Rule
14a-8, not later than December 12, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit 27.1 Financial Data Schedule
Except as indicated, during the first quarter, the Company filed the following
current reports on Form 8-K.
Date of Filing Subject
- -------------- -------
February 2, 2000 Announcing a $100 million share repurchase program and
regular dividend.
February 15, 2000 The Board of Directors of the Company established
Thursday, May 18, 2000, as the date for the Company's
2000 Annual Meeting of Stockholders.
March 24, 2000* Announcing the election of Dr. Shirley Ann Jackson as
a Class III director of the Company effective
July 1, 2000.
* Filed subsequent to the end of the first quarter.
11
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SIGNATURE
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.
Newport News Shipbuilding Inc.
By: /s/ Charles P. Wingfield, Jr.
--------------------------------
Vice President and Controller
(Principal Financial Officer)
Date: May 2, 2000
12
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE NEWPORT
NEWS SHIPBUILDING INC. CONSOLIDATED BALANCE SHEET AS OF MARCH 19, 2000, AND THE
RELATED CONSOLIDATED STATEMENT OF EARNINGS FOR THE THREE MONTHS ENDED MARCH 19,
2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-19-2000
<CASH> 2
<SECURITIES> 0
<RECEIVABLES> 117
<ALLOWANCES> 0
<INVENTORY> 55
<CURRENT-ASSETS> 574
<PP&E> 1,584
<DEPRECIATION> 881
<TOTAL-ASSETS> 1,490
<CURRENT-LIABILITIES> 467
<BONDS> 400
0
0
<COMMON> 1
<OTHER-SE> 259
<TOTAL-LIABILITY-AND-EQUITY> 1,490
<SALES> 469
<TOTAL-REVENUES> 469
<CGS> 423
<TOTAL-COSTS> 423
<OTHER-EXPENSES> (1)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11
<INCOME-PRETAX> 36
<INCOME-TAX> 15
<INCOME-CONTINUING> 21
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21
<EPS-BASIC> .65
<EPS-DILUTED> .63
</TABLE>
