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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 13, 1996
WESTINGHOUSE ELECTRIC CORPORATION
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(Exact name of registrant as
specified in its charter)
Pennsylvania 1-977 25-0877540
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(State or other juris- (Commission File (IRS Employer
diction of incorporation) Number) Identification Number)
Westinghouse Bldg.; 11 Stanwix St., Pittsburgh, PA. 15222-1384
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 244-2000
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Page 1 of 14 Pages
Exhibit Index on Page 4
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Item 5. Other Events
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On November 13, 1996, the registrant issued two press releases, copies
of which are attached hereto as Exhibit 99.1 and 99.2 and are incorporated in
their entirety.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
A press release issued by the registrant on November 13, 1996 announcing
the spin-off of its industrial business, is filed as Exhibit 99.1 to this
Report.
A press release issued by the registrant on November 13, 1996 announcing
the elimination of 1,100 positions and a charge of approximately $125 million
to cover severance programs, is filed as Exhibit 99.2 to this Report.
Page 2 of 14 Pages
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTINGHOUSE ELECTRIC CORPORATION
(Registrant)
By: /s/ LOUIS J. BRISKMAN
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Louis J. Briskman
Senior Vice President and
General Counsel
Date: November 13, 1996
Page 3 of 14 Pages
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Sequential Page No.
<S> <C> <C>
99.1 A press release issued by
the Company on November 13,
1996 announcing the spin-off
of its industrial business. 5
99.2 A press release issued by the
Company on November 13, 1996
announcing the elimination of
1,100 positions and a charge of
approximately $125 million. 11
</TABLE>
Page 4 of 14 Pages
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Exhibit 99.1
Contact: Mimi Limbach Kevin Ramundo Gil Schwartz
Westinghouse Westinghouse CBS Trade Press
(212) 975-2081 (212) 975-5418 (212) 975-2121
Vaughn Gilbert Roy Morrow
Westinghouse Westinghouse
Industrial Trade Press Pittsburgh & Communities Press
(412) 642-5564 (412) 642-3005
WESTINGHOUSE ANNOUNCES SPIN-OFF OF INDUSTRIAL BUSINESS
PITTSBURGH, Nov. 13--Westinghouse Electric Corporation (NYSE:WX)
reported today that its Board of Directors approved a plan to separate its $4.6
billion industrial business by way of a tax-free spin-off to shareholders,
forming a new publicly-traded company to be called Westinghouse Electric
Company (for brevity, hereafter referred to as WELCO). It also plans a public
offering by Thermo King of up to 20 percent of the stock of Thermo King, its
transport temperature control company, which will become a majority-owned
subsidiary of WELCO.
Commenting on the WELCO spin-off, Michael H. Jordan, Chairman and Chief
Executive Officer of Westinghouse Electric Corporation, said: "We will create a
company with several significant advantages. The new company will focus on two
major technologies: transport temperature control and power generation,
including nuclear. Well capitalized and with strong investment programs for
each of its businesses, WELCO will be a reliable, high-performing supplier to
its customers. With historical obligations now clearly defined and a rapidly
declining cost base, WELCO will be particularly attractive to investors."
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2
The remaining business of Westinghouse Electric Corporation will
consist of its $4.2 billion broadcasting company which has major holdings in
radio, television broadcasting and syndication, and cable.
Headquarters for WELCO will be Pittsburgh, Pennsylvania, the current
home of Westinghouse Electric Corporation. The broadcasting company will be
headquartered in New York. After the spin-off, each company will have its own
board of directors, officers, and publicly-traded stock.
THE SEPARATION PLAN
Commenting on the separation decision, Mr. Jordan said, "We will create
for our shareholders two companies with solid market positions and first-rate
operations. They will be structured and financed to compete and win in their
respective markets, with the management talent and investment potential to
provide maximum value and return to all of our shareholders."
For the past several months, the Westinghouse management team has been
addressing various options with the objective of:
1. Maximizing the value to shareholders of each of its major
businesses: broadcasting, power systems, and Thermo King.
2. Rationalizing the structure to recognize that Westinghouse's
broadcasting and industrial businesses are operating in vastly
different environments and are being managed as two separate
companies today.
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3
3. Discharging obligations of the past in the most economically
favorable manner.
4. Optimizing the approximate $1.8 billion tax net operating loss
carry forward (NOL).
After reviewing a number of options, the management team
recommended, and the Board of Directors approved, a plan that is expected to
maximize the long-term after-tax value for Westinghouse shareholders. The plan
capitalizes each business appropriately to reflect respective business
opportunities and risks.
Specifically, the broadcast company will retain all debt obligations of
the current Westinghouse Electric Corporation as well as the tax NOL. WELCO
will assume most of the unfunded pension obligations and other non-debt
obligations ("legacies") generated by Westinghouse's industrial companies in
earlier years. The proceeds of the Thermo King public offering will provide
initial cash funding for WELCO.
Commenting on the benefits of the proposed transaction, Fredric
Reynolds, Westinghouse's Executive Vice President and Chief Financial Officer,
said, "This is a pragmatic structure that creates real strategic and
operational advantages for the two companies, while maximizing benefits for our
shareholders. For our broadcast company, it creates a very attractive pure-play
media stock that maximizes the value of the NOL. For our industrial company, it
launches WELCO with a strong balance sheet and illuminates the significant
value of Thermo King to both our existing shareholders and new investors."
Completion of the separation is subject to a number of conditions,
including a favorable ruling from the Internal Revenue Service that the
transaction will not be taxable to Westinghouse's shareholders or to
Westinghouse and registration of the WELCO stock with the Securities & Exchange
Commission. The company anticipates it will take approximately nine months to
formally separate the two companies, with the planned Thermo King public
offering taking place prior to the formal separation.
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4
THE BROADCASTING COMPANY
After the spin-off, Westinghouse Electric Corporation (the current
parent company) will consist of CBS Inc., the largest television and radio
broadcaster; Group W Satellite Communications Company, a leading cable
television marketing and distribution company; and Infinity Broadcasting when
this previously-announced acquisition is completed.
With approval of the U.S. Department of Justice announced yesterday,
closing of the Infinity transaction is expected by end of this year, subject to
FCC approval and the approval of Westinghouse and Infinity Shareholders.
Mr. Jordan said, "We believe that our Broadcasting Company is superbly
positioned to provide attractive long-term growth. Under the leadership of
Peter Lund, CEO of CBS, and his management team, our TV network and station
business is well on the way to a major turnaround. In radio, one of the fastest
growing broadcast media, CBS and Infinity each continues to outpace the
industry's revenue growth and operating margins. With Mel Karmazin, CEO of
Infinity Broadcasting, at the helm of our radio operations after the
acquisition is completed, we are confident that excellent performance will
continue."
THE NEW WESTINGHOUSE ELECTRIC COMPANY (WELCO)
WELCO will consist of four business units, each with significant market
positions and strong technology leadership in its respective industries: Thermo
King, Power Generation, Energy Systems and Government Operations.
Thermo King is the world leader in mobile transport temperature control
equipment for trucks and trailers and is a strong participant in the related
markets for bus air-conditioning and seagoing containers. Thermo King's product
quality, outstanding service support and global presence are expected to
continue its outstanding revenue and profit growth over the next decade.
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5
Westinghouse Power Generation holds market and technology leadership
positions for steam and combustion turbines in a global market expected to
experience 60% growth in new capacity additions over the next ten years. Its
technology represents 25 percent of the world's installed power generation
capacity--the second largest worldwide. Although it faces a difficult domestic
market, Westinghouse Power Generation maintains its strong positions in the
high-growth markets of Asia and Latin America that are expected to yield
sustained profitable growth.
Westinghouse Energy Systems helped pioneer the commercial nuclear power
business and today holds the premier position for nuclear fuel, services and
technology in the $9 billion annual global market. The unit has an unparalleled
record of supporting the nuclear utility industry to achieve high levels of
safety, operating, and cost performance. It has translated its strong global
franchise into performance and market leadership.
Westinghouse Government Operations manages Department of Energy sites
and Army chemical de-militarization operations as well as provides development
and support services for the Navy's nuclear powered vessels. The unit's strong
nuclear technology base and its experience in handling, stabilizing and safety
storing nuclear waste have resulted in contracts that extend beyond the turn of
the century and position it for a significant share of this growing business.
Concurrent with the separation plans, Westinghouse announced that it is
divesting its Security Systems businesses and restructuring its Pittsburgh
corporate headquarters and other industrial businesses to significantly reduce
WELCO's overhead and operating costs. The staffs of the corporate and
industrial group headquarters and a number of administrative functions in the
business units will be consolidated. Several operations and processes in the
Energy Systems business unit have also been reengineered to improve
productivity and to
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address changing market conditions in the power industry. Total personnel
reductions will be approximately 1100, about five percent of WELCO's workforce,
excluding its government operations employees. A one-time restructuring charge
of approximately $125 million will be taken in the 4th quarter to cover
severance and related costs.
MANAGEMENT
Michael H. Jordan will be Chairman and CEO of the broadcasting company
and non-executive Chairman of WELCO for a transition period. A successor to Mr.
Jordan as chief executive officer of WELCO will be chosen prior to the
separation.
Until the separation, Mr. Jordan will continue to serve as Chief
Executive Officer of both WELCO and the broadcast company. He will be assisted
by the current operating management of the two companies.
The Westinghouse Board of Directors has appointed Gary M. Clark,
President of Westinghouse, to the additional post of Vice Chairman. Mr. Clark
will work closely with Mr. Jordan and Francis J. Harvey, Chief Operating
Officer of WELCO, to ensure a smooth transition and to further our strong
partnership with our customers and host communities.
Editor's Note: Westinghouse will hold a news conference at 2:00 P.M. EST at CBS
Headquarters at 51 West 52nd Street, 19th Floor in Studio 19. The news
conference will also be available by teleconference. Reporters can call
1-800-255-5050 in the United States or 1-312-864-5041 from outside the U.S. The
news conference will be transmitted by satellite: Telstar 402, Transponder 14,
C-band, Reference Number ATT 1107-0013.
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11/13/96
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Exhibit 99.2
Contact: Mimi Limbach Kevin Ramundo
Telephone: (212) 975-2081 (212) 975-5418
FOR USE: IMMEDIATE
WESTINGHOUSE STREAMLINES INDUSTRIES & TECHNOLOGY BUSINESS
- - Approximately 1,100 positions to be eliminated
- - Staff support functions reorganized consistent with smaller, more focused
business portfolio
- - Reductions in Power Systems reflect impact of deregulation and competitive
conditions
PITTSBURGH, Nov. 13 - Westinghouse Electric Corporation today announced
it will streamline its Industries and Technology Group by reorganizing staff
support functions and reducing the number of employees in its Energy Systems
and Power Generation units. In total, approximately 1,100 positions, including
approximately 300 from this fall's voluntary separation program, will be
eliminated, a figure equal to five percent of employees, excluding those in our
government operations. The workforce reduction is in response to the Group's
smaller size following divestitures earlier this year, the current softness in
the demand for power plant services, and the need to strengthen its competitive
position. Westinghouse expects to take a charge of approximately $125 million
in this year's fourth quarter to cover the cost of the severance programs.
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These actions will reduce the organization's cost structure by
approximately $80 million on an annual basis and will generate important
efficiency gains which will strengthen the Industries and Technology Group as a
stand-alone company. Westinghouse announced today its plans to separate its
industrial and broadcasting units by creating separate public companies, each
with its own management team, board of directors, and publicly traded stock.
In announcing its separation plans, Michael H. Jordan, the company's
chairman and chief executive officer, reaffirmed the company's commitment to it
industrial portfolio. "The Westinghouse Electric Company, as our industrial and
technology businesses will be called, is solid, well-focused, and has
excellent growth potential. Today's announcement demonstrates our commitment to
these businesses and our customers. Our management team is aggressively working
to improve performance and become as even more valuable supplier."
The reorganization of the staff support functions follows an extensive
three-month study to determine the most efficient and effective way to provide
support functions to a smaller, but more focused, portfolio of industrial
businesses following the divestiture of the company's defense electronics and
office furnishings units earlier this year. The functions included: legal and
environment affairs, human resources, finance, information systems,
communications, and strategic management.
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3
According to Francis J. Harvey, the Industries and Technology Group
executive vice president and chief operating officer, "Our actions to
streamline the Group will provide an even stronger foundation for success as a
stand-alone, self-sufficient, and more collaborative organization. We will be
more efficient, better able to provide our customers with the best value in
technologies, products and services. We are reviewing, rethinking, reshaping,
and revitalizing every aspect of our business. When we are finished, we will be
a more entrepreneurial company which takes the best of Westinghouse and
produces winning results for our employees, customers, and our shareholders."
Regarding the Energy Systems unit where many of the job cuts will
occur, Mr. Harvey added, "This is a very important business to us. Westinghouse
is the leader in serving the nuclear utility industry in the United States and
throughout the world. The quality of our products, services, and technology is
unmatched. But like our customers, we need to adjust our costs in light of
deregulation and increased competition, and we will do so without affecting our
ability to serve our customers."
Westinghouse will provide severance benefits that include cash based on
years of service, extended health care, outplacement services and retaining
assistance. The majority of the eliminations are expected to occur by the end
of 1996, and the balance by 1997.
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"As necessary as these actions are, the decision to lay-off employees
is very difficult. We will provide for those employees directly affected, and
help our remaining 40,000 employees understand the unique opportunity we have
to create and build a new Westinghouse," Mr. Harvey said.
##1000-1078##
11/13/96
