<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 March 31, 1998
-----------------------------------------------
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 001-4802
------------
Becton, Dickinson and Company
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-0760120
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1 Becton Drive Franklin Lakes, New Jersey 07417-1880
------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(201) 847-6800
-----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
-----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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.
Class of Common Stock Shares Outstanding as of April 30, 1998
--------------------- ---------------------------------------
Common stock, par value $1.00 123,100,479
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements.
---------------------
Condensed Consolidated Balance Sheets at March 31, 1998 and September
30, 1997
Condensed Consolidated Statements of Income for the three and six
months ended March 31, 1998 and 1997
Condensed Consolidated Statements of Cash Flows for the six months
ended March 31, 1998 and 1997
Notes to Condensed Consolidated Financial Statements
2
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ITEM 1. FINANCIAL STATEMENTS
BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
Thousands of Dollars
<TABLE>
<CAPTION>
March 31, September 30,
Assets 1998 1997
- ------ ------------ -------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and equivalents $ 113,111 $ 112,639
Short-term investments 15,648 28,316
Trade receivables, net 559,373 595,685
Inventories (Note 2):
Materials 103,670 92,307
Work in process 84,540 79,519
Finished products 281,482 266,511
------------ -------------
469,692 438,337
Prepaid expenses, deferred taxes and other 155,827 137,632
------------ -------------
Total Current Assets 1,313,651 1,312,609
Property, plant and equipment 2,613,070 2,549,828
Less allowances for depreciation and amortization 1,355,099 1,299,123
------------ -------------
1,257,971 1,250,705
Goodwill, Net 222,033 164,097
Other Intangibles, Net 167,751 167,847
Other 211,200 184,994
------------ -------------
Total Assets $ 3,172,606 $ 3,080,252
============ =============
Liabilities and Shareholders' Equity
- ------------------------------------
Current Liabilities:
Short-term debt $ 233,840 $ 132,440
Payables and accrued expenses 520,920 545,757
------------ -------------
Total Current Liabilities 754,760 678,197
Long-Term Debt 564,207 665,449
Long-Term Employee Benefit Obligations 314,832 306,514
Deferred Income Taxes and Other 51,719 44,659
Commitments and Contingencies - -
Shareholders' Equity:
Preferred stock 50,038 51,111
Common stock 166,331 167,245
Capital in excess of par value 125,544 83,422
Cumulative currency translation adjustments (124,169) (86,870)
Retained earnings 2,326,544 2,249,463
Unearned ESOP compensation (28,795) (28,620)
Shares in treasury - at cost (1,028,405) (1,050,318)
------------ -------------
Total Shareholders' Equity 1,487,088 1,385,433
------------ -------------
Total Liabilities and Shareholders' Equity $ 3,172,606 $ 3,080,252
============ =============
</TABLE>
See notes to condensed consolidated financial statements
3
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BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Thousands of Dollars, Except Per Share Data
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
------------------------------- -------------------------------
1998 1997 1998 1997
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
REVENUES $ 738,433 $ 699,207 $1,440,073 $ 1,355,006
Cost of products sold 364,080 352,674 718,883 695,806
Selling and administrative 186,017 185,454 385,157 371,984
Research and development 43,796 39,411 88,426 79,067
----------- ----------- ----------- ------------
TOTAL OPERATING COSTS AND EXPENSES 593,893 577,539 1,192,466 1,146,857
----------- ----------- ----------- ------------
OPERATING INCOME 144,540 121,668 247,607 208,149
Interest expense, net (11,427) (8,563) (21,668) (18,010)
Other (expense) income, net (3,064) 3,333 (5,297) 8,141
----------- ----------- ----------- ------------
INCOME BEFORE INCOME TAXES 130,049 116,438 220,642 198,280
Income tax provision 37,714 33,767 63,986 57,501
----------- ----------- ----------- ------------
NET INCOME $ 92,335 $ 82,671 $ 156,656 $ 140,779
=========== =========== =========== ============
Basic Earnings Per Share $ .75 $ .67 $ 1.27 $ 1.13
=========== =========== =========== ============
Diluted Earnings Per Share $ .71 $ .63 $ 1.21 $ 1.08
=========== =========== =========== ============
Dividends Per Common Share $ .145 $ .13 $ .29 $ .26
=========== =========== =========== ============
</TABLE>
See notes to condensed consolidated financial statements
4
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BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Thousands of Dollars
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
----------------------------
1998 1997
------------ ------------
Operating Activities:
<S> <C> <C>
Net income $ 156,656 $ 140,779
Adjustments to Net Income to Derive Net Cash
Provided by Operating Activities:
Depreciation and amortization 108,710 101,060
Change in working capital (40,869) (46,095)
Other, net 17,245 13,568
----------- -----------
Net Cash Provided by Operating Activities 241,742 209,312
----------- -----------
Investing Activities:
Capital expenditures (89,945) (62,627)
Acquisitions of businesses, net of cash acquired (64,838) -
Proceeds from divestiture of a business - 20,860
Change in investments, net 7,308 21,112
Other, net (42,693) (19,315)
----------- -----------
Net Cash Used for Investing Activities (190,168) (39,970)
----------- -----------
Financing Activities:
Change in short-term debt 4,648 (20,744)
Proceeds of long-term debt - 97,838
Payments of long-term debt (759) (102,079)
Issuance of common stock 29,079 19,810
Repurchase of common stock (44,476) (107,875)
Dividends paid (37,044) (33,894)
----------- -----------
Net Cash Used for Financing Activities (48,552) (146,944)
----------- -----------
Effect of exchange rate changes on cash and equivalents (2,550) (6,266)
----------- -----------
Net increase in cash and equivalents 472 16,132
Opening Cash and Equivalents 112,639 135,151
----------- -----------
Closing Cash and Equivalents $ 113,111 $ 151,283
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
BECTON, DICKINSON AND COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Thousands of Dollars, Except Per Share Data
March 31, 1998
Note 1 - Basis of Presentation
- ------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, in the opinion of
the management of the Company, include all adjustments, which are of a normal
recurring nature, necessary for a fair presentation of financial position and
the results of operations and cash flows for the periods presented. However,
the financial statements do not include all information and footnotes required
for a presentation in accordance with generally accepted accounting principles.
These condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and the notes thereto included or
incorporated by reference in the Company's 1997 Annual Report on Form 10-K.
The results of operations for the interim periods are not necessarily indicative
of the results of operations to be expected for the full year.
Note 2 - Inventory Valuation
- ----------------------------
An actual valuation of inventory under the LIFO method can be made only at the
end of each fiscal year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations are based on management's estimates of
expected year-end inventory levels and costs.
Note 3 - Subsequent Event
- -------------------------
On April 3, 1998, the Company completed its acquisition of the Medical Devices
Division of Ohmeda, the health care business of The BOC Group, which has
estimated annual revenues of $200,000. The purchase price was approximately
$452,000 in cash, subject to certain post-closing adjustments.
6
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Note 4 - Earnings per Share
- ---------------------------
In 1998, the Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings per Share". All share and per share data
for all periods have been presented and, where necessary, restated to conform to
the SFAS No. 128 requirements. The reconciliation between the calculation of
basic and diluted earnings per share follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
-------------------- ----------------------
1998 1997 1998 1997
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $ 92,335 $ 82,671 $156,656 $140,779
Preferred stock dividends (809) (846) (1,634) (1,699)
-------- -------- -------- --------
Income available to
common shareholders (A) 91,526 81,825 155,022 139,080
Preferred stock dividends - using
"if converted" method 809 846 1,634 1,699
Additional ESOP contribution -
using "if converted" method (245) (283) (500) (568)
-------- -------- -------- --------
Income available to common shareholders
after assumed conversions (B) $ 92,090 $ 82,388 $156,156 $140,211
======== ======== ======== ========
Average common shares outstanding (C) 122,476 122,841 122,141 122,984
Dilutive stock equivalents from stock plans 5,149 4,980 4,725 4,416
Shares issuable upon conversion of
preferred stock 2,714 2,818 2,714 2,818
-------- -------- -------- --------
Average common and common equivalent
shares outstanding - assuming dilution (D) 130,339 130,639 129,580 130,218
======== ======== ======== ========
Basic earnings per share (A/C) $ .75 $ .67 $ 1.27 $ 1.13
======== ======== ======== ========
Diluted earnings per share (B/D) $ .71 $ .63 $ 1.21 $ 1.08
======== ======== ======== ========
</TABLE>
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations.
--------------
Results of Operations
- ---------------------
Second Quarter 1998 vs. Second Quarter 1997
- -------------------------------------------
Second quarter revenues of $738 million exceeded prior year revenues by 6%.
Revenue growth for the quarter was unfavorably impacted by the effect of a
stronger dollar versus the prior year, which reduced revenues by an estimated
$26 million. Excluding the estimated impact of foreign currency translation,
revenue growth would have been approximately 9%. Medical Supplies and Devices
segment ("Medical") revenues of $384 million increased 2%. Adjusting for the
estimated unfavorable impact of foreign currency translation, Medical revenues
would have increased approximately 6%. Diagnostic Systems segment
("Diagnostic") revenues of $355 million increased 10%, or 14% after excluding
the estimated unfavorable impact of foreign currency translation.
Domestic Medical revenues of $199 million increased 3%. International Medical
revenues of $184 million increased 2%, or 9% after adjusting for an estimated
$13 million unfavorable impact of foreign currency translation. Good growth
rates were experienced by the infusion therapy and injection systems businesses.
Domestic Diagnostic revenues of $203 million increased 21%, aided by prior year
acquisitions. International Diagnostic revenues of $152 million declined 3%,
but would have increased 6% after excluding the estimated unfavorable effect of
foreign currency translation.
The gross profit margin of 50.7% improved more than a full percentage point over
last year's second quarter rate of 49.6%. The improvement reflects a more
profitable mix of products sold as well as continuing productivity improvements.
Selling and administrative expense was $186 million, or 25.2% of revenues, which
improved from last year's second quarter ratio of 26.5%. Investment of $44
million in research and development increased to 5.9% of revenues from 5.6% in
last year's second quarter, primarily reflecting the continuation of strategic
investments in support of the Company's key businesses.
Operating income of $145 million increased 19% from last year's second quarter
amount of $122 million. The improved operating margin of 19.6%, as compared to
17.4%, reflects the improved gross profit margin as well as the lower selling
and administrative expense ratio.
Net interest expense of $11 million was about $3 million higher than last year
due to additional borrowings to fund recent acquisitions. Other (expense)
income, net decreased $6 million from last year, primarily due to the absence of
a $6 million gain on the sale of an equity investment in the prior year. The
second quarter income tax rate was 29%, consistent with last year's rate, which
is the expected rate for the year.
8
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Net income was $92 million compared with $83 million last year, an increase of
12%. Earnings per share of $.71 increased 13% over last year's $.63 on a
diluted basis, or 19% after adjusting for an estimated $.04 unfavorable foreign
currency translation effect.
Six Months 1998 vs. Six Months 1997
- -----------------------------------
Revenues of $1.440 billion were 6% higher than last year's revenues of $1.355
billion. After adjusting for the estimated unfavorable effect of foreign
currency translation, revenues would have increased approximately 10%. Medical
revenues of $756 million increased 5%, or 8% after adjusting for the estimated
unfavorable impact of foreign currency translation. Aided by prior year
acquisitions, Diagnostic revenues of $684 million increased 8%. After
adjusting for the unfavorable effect of foreign currency translation, diagnostic
revenues would have grown 13%. Domestic revenues of $791 million increased
14%, also aided by prior year acquisitions. International revenues of $649
million decreased 2%, but would have increased 6% after excluding the estimated
impact of foreign currency translation.
The gross profit margin of 50.1% was more than a full percentage point higher
than last year's rate of 48.6%. Selling and administrative expense was 26.7% of
revenues, lower than last year's rate of 27.5%. Research and development
spending was $88 million, 12% higher than last year. As a percentage of
revenues, research and development expense was 6.1%, compared with last year's
rate of 5.8%. The reasons for these changes are consistent with those
previously discussed in the Second Quarter Results of Operations.
Operating income of $248 million increased $39 million over the same period last
year. As a percent of revenues, operating income was 17.2% compared with last
year's rate of 15.4% resulting primarily from the improved gross profit margin.
Other (expense) income, net declined $13 million compared with last year,
principally due to higher foreign exchange losses and the absence of a $4
million one-time gain which occurred in the first quarter of the prior year, in
addition to the reasons discussed in the Second Quarter Results of Operations.
The income tax rate of 29.0% is consistent with last year's rate.
Net income was $157 million, compared with $141 million last year, an increase
of 11%. Diluted earnings per share of $1.21 increased 12% over last year's
$1.08, or 20% after excluding an estimated $.09 unfavorable impact of foreign
currency translation compared with the prior year.
Financial Condition
- -------------------
During the first six months of 1998, cash provided by operations was $242
million, compared with $209 million during the first six months of last year.
Capital expenditures during the first six months were $90 million compared with
$63 million during the first six months of last
9
<PAGE>
year. For the full year, capital expenditures are expected to be slightly higher
than last year's amount of $170 million. In the first quarter, the Company
invested $40 million for the acquisition of a manufacturer of ophthalmic
surgical and anesthesia products. In the second quarter, the Company acquired
IntelliCode Intelligent Bar Coding Systems and Tru-Fit Marketing Corporation for
an aggregate of $25 million in cash and 297,760 shares of the Company's common
stock, subject to certain post-closing adjustments.
As of March 31, 1998, total debt of $798 million represented 34.6% of total
capital (shareholders' equity, net non-current deferred income tax liabilities,
and debt) compared with 33.4% a year ago. Because of its strong credit rating,
the Company believes it has the capacity to arrange significant additional
borrowings should the need arise.
During the first six months of 1998, the Company repurchased 913,500 shares of
its common stock for a total expenditure of $44 million. At March 31, 1998,
authorization from the Board of Directors remained in effect to reacquire up to
an additional 10.6 million shares, although the Company expects to limit its
share repurchases for the balance of the year.
The Company continues to evaluate the appropriate courses of corrective action
needed to prepare its computer systems for the year 2000. Based on a
preliminary assessment, the Company expects to spend approximately $6 million to
$10 million to modify and replace its existing computer software to ensure
proper transaction processing in the year 2000 and beyond. A portion of these
costs will represent the redeployment of existing internal resources and,
therefore, are not expected to be incremental. The Company will expense the
costs to modify existing systems and will capitalize the costs to replace
software that is not Year 2000 compliant. Accordingly, the cost of the Year
2000 project to be incurred over the next two years is not expected to have a
material effect on the Company's results of operations or financial position. A
comprehensive evaluation of the impact of the Year 2000 issue on both the
Company's infrastructure and its interface with suppliers, distributors and
customers has been initiated and is expected to be completed in the latter part
of fiscal year 1998. The Company expects the remediation program to be
completed by the middle of 1999. There can be no guarantee, however, that the
systems of other entities with which the Company's systems interface also will
be converted on a timely basis or that any failure to convert by another entity
would not have an adverse effect on the Company's systems.
In March 1998, the Board of Directors approved an enterprise-wide systems
initiative. This project will develop a platform of common business practices
for the Company and will coordinate the installation of a global software system
to provide more efficient access to worldwide business information. The
initiative is expected to cost $160 million over the next seven years.
This interim report on Form 10-Q may contain certain forward looking statements
(as defined under federal securities laws) regarding the Company's performance,
including future revenues, products and income, which are based upon current
expectations of the Company and involve a number of business risks and
uncertainties. Actual results could vary materially from anticipated results
described in any forward looking statement. Factors that could cause actual
10
<PAGE>
results to vary materially include, but are not limited to, competitive factors,
changes in regional, national or foreign economic conditions, changes in
interest or foreign currency exchange rates, delays in product introductions,
and changes in health care or other governmental regulation, as well as other
factors discussed herein and in other of the Company's filings with the
Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
-----------------------------------------------------------
There have been no material changes in information reported since the
fiscal year ended September 30, 1997.
11
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings.
-----------------
The Company is a party to a number of federal proceedings in the
United States brought under the Comprehensive Environmental Response,
Compensation and Liability Act, also known as Superfund, and similar
state laws. The Company is also involved in other legal proceedings
and claims which arise in the ordinary course of business, both as a
plaintiff and a defendant. The results of these matters, individually
and in the aggregate, are not expected to have a material effect on
the Company.
Item 2. Changes in Securities and Use of Proceeds.
------------------------------------------
On February 18, 1998, the registrant completed the acquisition
of Tru-Fit Marketing Corporation, a Massachusetts corporation ("Tru-
Fit"), pursuant to an Agreement and Plan of Merger dated January 9,
1998 (the "Merger Agreement"). In connection with the acquisition, the
former shareholders of Tru-Fit received certain cash consideration and
an aggregate 248,134 shares of the registrant's common stock, par
value $1.00 per share ("Common Stock"), in exchange for all of the
issued and outstanding common stock of Tru-Fit. Pursuant to the terms
of the Merger Agreement, the former Tru-Fit shareholders may receive
up to an additional 49,626 shares of Common Stock pending resolution
of certain post-closing adjustments to the merger consideration paid
under the Merger Agreement and resolution of post-closing
indemnification claims of the registrant, if any.
The Common Stock issued to the former shareholders of Tru-Fit in
connection with the acquisition was offered and sold pursuant to the
exemption from registration provided by Section 4(2) of the Securities
Act of 1933, as amended (the "Securities Act"), for transactions not
involving a public offering of securities. In connection with the
offer and sale, the registrant relied upon the fact that the offering
was made to only two offerees (the former shareholders of Tru-Fit) and
did not involve any general advertising or solicitation, the offerees
were sophisticated investors, the size of the offering was small in
relation to the registrant's market capitalization, and the registrant
had taken reasonable steps to prevent resale of the Common Stock by
the former shareholders of Tru-Fit in violation of the Securities Act.
12
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Item 3. Defaults Upon Senior Securities.
--------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
a.) The Annual Meeting of Shareholders of the Company was held on
February 10, 1998.
c.) i.) A management proposal for the election of four directors
for the terms indicated below was voted upon as follows:
Nominee Term Votes For Votes Withheld
---------------------- ------- ----------- --------------
Richard W. Hanselman 2 Years 105,433,443 1,583,370
Henry P. Becton, Jr. 3 Years 105,525,229 1,491,584
Gerald M. Edelman 3 Years 105,524,335 1,492,478
Margaretha af Ugglas 3 Years 105,511,854 1,504,959
ii.) A management proposal to approve the selection of Ernst &
Young, LLP as independent auditors for the fiscal year
1998 was voted upon. 106,508,430 shares were voted for
the proposal, 234,040 shares were voted against and
274,343 shares abstained.
iii.) A management proposal relating to the adoption of the
1998 Stock Option Plan was voted upon. 98,639,298 shares
were voted for the proposal, 7,719,871 shares were voted
against and 657,644 shares abstained.
iv.) A shareholder proposal requesting the Board of Directors
take the necessary steps to provide for cumulative voting
in the election of directors was voted upon. 23,947,019
shares were voted for the proposal, 69,846,443 shares
were voted against and 1,973,319 shares abstained.
13
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Item 5. Other Information.
------------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
a) Exhibits
3(ii) - By-Laws, as amended February 10, 1998
27.1 - Financial Data Schedule
27.2 - Restated Financial Data Schedule
b) Reports on Form 8-K
During the three-month period ending March 31, 1998, the Company
filed one Current Report on Form 8-K under Item 5 - Other Events
concerning the announcement of the signing of a definitive
agreement to acquire the Medical Devices Division of Ohmeda, the
health care business of The BOC Group, Inc. This report was dated
January 28, 1998 and filed February 3, 1998.
14
<PAGE>
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.
Becton, Dickinson and Company
-----------------------------
(Registrant)
Date May 14, 1998
---------------
/s/ Edward J. Ludwig
---------------------------------------------------
Edward J. Ludwig
Senior Vice President - Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)
15
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EXHIBIT INDEX
-------------
Exhibit Method of
Number Description Filing
- --------- ------------------------------------- -----------
3(ii) By-Laws, as amended February 10, 1998 Filed with
this report
27.1 Financial Data Schedule Filed with
this report
27.2 Restated Financial Data Schedule Filed with
this report
16
<PAGE>
BY-LAWS
of
BECTON, DICKINSON AND COMPANY
A New Jersey Corporation
as Amended February 10, 1998
ARTICLE I
Offices
-------
The registered office of Becton, Dickinson and Company ("Company") shall be
in the Borough of Paramus, County of Bergen, State of New Jersey or such other
place within or without the State of New Jersey as the Board of Directors may
designate. The Company may also establish and have such other offices within or
without the State of New Jersey, as the Board of Directors may designate or its
business may require.
ARTICLE II
Meetings of Shareholders
------------------------
SECTION 1. PLACE OF MEETINGS. Meetings of the shareholders shall be held
at the registered office of the Company in New Jersey, or at such other place,
within or without the State of New Jersey, as may be designated by the Board of
Directors and stated in the notice of the meeting.
SECTION 2.A. ANNUAL MEETINGS. The annual meeting of shareholders for the
election of directors and the transaction of such other business as may be
related to the purposes set forth in the notice of the meeting shall be held at
such time as may be fixed by the Board of Directors.
B. SPECIAL MEETING FOR ELECTION OF DIRECTORS. If the annual meeting of
shareholders is not held on the date designated, the Board of Directors may call
a special meeting of the shareholders for the election of directors and the
transaction of other business.
C. SPECIAL MEETINGS. Special meetings of the shareholders may be called by
the Board of Directors or by the Chairman of the Board or by the President, and
shall be called by the Chairman of the Board or by the President upon written
request of a majority of the Directors then in office, which request shall state
the time, place and purpose of the meeting.
SECTION 3. QUORUM. The presence, in person or by proxy, of the holders of
shares representing a majority of the votes entitled to be cast at a meeting
shall constitute a quorum. The shareholders present in person or by proxy at a
duly organized meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum. If a quorum not be present or represented at any meeting,
the shareholders present in person, or by proxy, shall have power to adjourn
the meeting without notice until the required voting shares shall be
represented. At such adjourned meeting with the
-1-
<PAGE>
requisite amount of voting shares represented, any business may be transacted
which might have been transacted at the meeting as originally notified.
SECTION 4. NOTICE OF MEETINGS. A written notice of each annual or special
meeting of the shareholders of the Company, signed by the Chairman of the Board
or the President or the Secretary, which shall state the time, place and purpose
of such meeting, shall be delivered personally or mailed, not less than 10 days
nor more than 60 days before the date of any such meeting, to each shareholder
of record entitled to vote at such meeting. If mailed, the notice shall be
directed to the shareholder at his address as it appears on the records of the
stock transfer agent. Any shareholder, in person or by proxy, may at any time
by a duly signed statement in writing to that effect, waive any statutory or
other notice of any meeting, whether such statement be signed before or after
such meeting.
SECTION 5. VOTING. At all meetings of the shareholders, each holder of
common stock having the right to vote, and present at the meeting in person or
by proxy, shall be entitled to one vote for each full share of common stock of
the Company entitled to vote and registered in his name. Each holder of
preferred stock of any series shall have such voting powers, if any, as the
Board of Directors shall have fixed by resolution prior to the issuance of any
shares of such series. Whenever any action is to be taken by vote of the
shareholders, it shall be authorized by a majority of the votes cast at a
meeting of the shareholders by the holders of shares entitled to vote,
unless a greater plurality is required by law or the Certificate of
Incorporation.
SECTION 6. PROXIES. Any shareholder of record entitled to vote may be
represented at any annual or special meeting of the shareholders by a duly
appointed proxy. All proxies shall be written and properly signed, but shall
require no other attestation, and shall be filed with the Secretary of the
meeting before being voted.
SECTION 7. ORGANIZATION. The Chairman of the Board, or in the absence of
the Chairman of the Board, the Vice Chairman or the President, shall act as
chairman of the meeting at all meetings of the shareholders. The Secretary, or
in his absence one of the Assistant Secretaries, shall act as secretary of the
meeting. In case none of the officers above designated to act as Chairman or
Secretary of the meeting shall be present, a chairman or a secretary of the
meeting, as the case may be, shall be chosen by a vote of the shareholders.
SECTION 8. ORDER OF BUSINESS. The order of business at all meetings of the
shareholders shall be as determined by the Chairman of the meeting, but the
order of business to be followed at any meeting at which a quorum is present may
be changed by a vote of the shareholders.
ARTICLE III
Directors
---------
SECTION 1. QUALIFICATIONS. Each Director shall be at least 21 years of age,
a shareholder of record of the Company, and shall be elected in the manner
provided by these By-Laws.
-2-
<PAGE>
SECTION 2. DUTIES AND POWERS. The Board of Directors shall control and manage
the business and affairs of the Company, and shall exercise all powers of the
Company and perform all acts which are not required to be exercised or performed
by the shareholders. The Directors may adopt such rules and regulations for the
conduct of their meetings and the management of the Company as they may deem
proper.
SECTION 3. PLACE OF MEETINGS. Meetings of the Board of Directors shall be
held at the principal office of the Company or at such other place within or
without the State of New Jersey, as the Chairman of the Board or the Board may
designate.
SECTION 4. TELEPHONE MEETINGS. Any or all Directors may participate in a
meeting of the Board or a committee of the Board by means of conference
telephone or any means of communication by which all persons participating in
the meeting are able to hear each other.
SECTION 5. NOTICE OF MEETINGS There shall be an annual meeting of the
Board of Directors held without notice immediately following the annual meeting
of shareholders, or as soon thereafter as convenient, at the same place as the
annual meeting of shareholders unless some other location is designated by the
Chairman of the Board or by the President. Regular meetings, without notice,
may be held at such time and place as the Board of Directors may designate. The
Chairman of the Board or the President may call any special meeting of the Board
of Directors, and shall do so whenever requested in writing by at least one-
third of the Directors. Notice of each special meeting shall be mailed to
each director at least four days before the date on which the meeting is to be
held, or be telephoned or sent to each Director by telegraph, telex, TWX,
cable, wireless or similar means of communication, or be delivered in person,
not later than the day before the date on which such meeting is to be held. The
Board of Directors may meet to transact business at any time and place without
notice, provided that each director shall be present, or that any Director or
Directors not present shall waive notice in writing, either before or after such
meeting. The attendance of any Director at a meeting without protesting prior to
the conclusion of the meeting the lack of notice of such meeting shall
constitute a waiver of notice by him. Neither the business to be transacted
at, nor the purpose of, any meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting. Notice of an adjourned
meeting need not be given if the time and place are fixed at the meeting
adjourning and if the period of adjournment does not exceed 10 days in any one
adjournment.
SECTION 6. QUORUM. A majority of the Directors then in office shall
constitute a quorum for the transaction of business, but the Director or
Directors present, if less than a quorum, may adjourn any meeting from time to
time until such quorum shall be present. All questions coming before the Board
of Directors shall be determined and decided by a majority vote of the Directors
present, unless the vote of a greater number is required by statute, the
Certificate of Incorporation or these By-Laws.
SECTION 7. ACTION WITHOUT A MEETING. The Board of Directors may act without
-3-
<PAGE>
a meeting if, prior or subsequent to such action, each Director shall consent in
writing to such action. Such written consent or consents shall be filed with
the minutes of the proceedings of the Board of Directors.
SECTION 8. COMPENSATION OF DIRECTORS. The Board may, by the affirmative
vote of a majority of the Directors then in office, fix reasonable fees or
compensation of the Directors for services to the Company, including attendance
at meetings of the Board of Directors or Committees of the Board. Nothing
herein contained shall be construed to preclude any Director from serving the
Company in any other capacity and receiving compensation therefor. Each
Director shall be entitled to receive reimbursement for reasonable
expenses incurred in the performance of his duties.
ARTICLE IV
Committees
----------
SECTION 1. HOW CONSTITUTED AND POWERS. The Board of Directors, by
resolution of a majority of the Directors then in office, shall appoint from
among its members the committees enumerated in the By-laws and may appoint one
or more other committees. The Board shall designate one member of each
committee its chairman. To the extent provided in the By-law or any resolution
conferring or limiting its powers each committee shall have and may
exercise all the authority of the Board, except that no committee shall:
(a) make, alter, or repeal any By-law of the Company;
(b) elect, appoint or remove any Director, or elect, appoint or remove
any corporate officer;
(c) submit to shareholders any action that requires approval of
shareholders;
(d) amend or repeal any resolution adopted by the terms is amendable or
repealable only by the Board of Directors which by its Board;
(e) act on matters assigned to other committees appointed by the Board of
Directors;
(f) declare or pay any dividends or issue any additional shares of
authorized and unissued capital stock; or
(g) create, dissolve or fill any vacancy on any committee appointed by
the Board of Directors.
The Board, by resolution of a majority of the Directors then in office may fill
any vacancy in any committee; appoint one or more alternate members of any
committee to act in the absence or disability of members of such committees with
all the powers of such absent or disabled members; or remove any director from
membership on any committee.
-4-
<PAGE>
SECTION 2. EXECUTIVE COMMITTEE. The Executive Committee shall consist of
not less than 3 members. During the intervals between meetings of the Board of
Directors and subject to Section 1 of this Article, the Executive Committee
shall possess and may exercise all the powers and authority of the Board of
Directors in the control and management of the business and affairs of the
Company.
SECTION 3. INVESTMENT COMMITTEE. The Investment Committee shall consist of
not less than three members.
The Investment Committee shall (i) act as fiduciary of the Company's employee
benefit plans in the United States and Puerto Rico which require funding, and
(ii) be responsible for the selection of fund managers and trustees, the
establishment and implementation of funding and investment policies and
guidelines, and for the fiscal management and control of all such plans of the
Company and its subsidiaries in the United States and Puerto Rico.
SECTION 4. AUDIT COMMITTEE. The Audit Committee shall consist of not less
than 3 members, none of whom are officers or employees of the Company or any
subsidiary, and a majority of whom are not former officers of the Company or any
subsidiary.
The Audit Committee shall (i) recommend to the Board of Directors each year a
firm of independent accountants to be the auditors of the Company for the
ensuing fiscal year; (ii) review and discuss with the auditors and report to the
Board of Directors thereon, prior to the annual meeting of shareholders, the
plan and results of the annual audit of the Company; (iii) review and discuss
with the auditors their independence, fees, functions and responsibilities, the
internal auditing, control, and accounting systems of the Company and
other related matters as the Committee from time to time deems necessary or
desirable; and (iv) direct and supervise investigations into matters within the
scope of its duties.
SECTION 5. COMPENSATION AND BENEFITS COMMITTEE. The Compensation and
Benefits Committee (the "Committee") shall consist of not less than three
members, all of whom are to be "nonemployee directors" within the meaning of
Rule 16b-3(b)(3) under the Securities Exchange Act of 1934.
The Compensation and Benefits Committee shall: (i) review annually the
overall compensation program for the Company's corporate officers, including the
executive officers; (ii) approve the compensation of the executive officers,
including, but not limited to, regular or periodic compensation and additional
or year-end compensation; (iii) review and approve all consulting or employment
contracts of the Company or of any subsidiary with any corporate officer,
including any executive officer, or with any Director, provided, that any such
contract with any Director must also be approved by the Board of Directors; (iv)
serve as the granting and administrative committee for the Company's stock
option and stock award plans; and (v) perform such other duties as may from time
to time be assigned by the Board of Directors with respect to executive
compensation.
-5-
<PAGE>
In addition, the Committee shall: (i) oversee the administration of
employee benefits and benefit plans for the Company and its subsidiaries; (ii)
review and approve, or recommend to the Board, new benefits or changes in
existing benefits; and (iii) appoint from among the management of the Company
committees to administer such employee benefits and benefit plans.
SECTION 6. CORPORATE RESPONSIBILITY COMMITTEE. The Corporate
Responsibility Committee shall review the Company's policies and procedures
affecting its role as a responsible corporate citizen, including, but not
limited to, those relating to issues such as equal employment opportunity and
community relations, to health, safety and environmental matters, and to proper
business practices.
SECTION 7. COMMITTEE ON DIRECTORS. The Committee on Directors shall consist
of not less than 3 members, a majority of whom are neither officers of nor
otherwise employed or retained by the Company or any subsidiary.
The Committee on Directors shall: (i) recommend to the Board candidates for
election as Directors at the annual meeting of shareholders or to fill vacancies
on the Board; and (ii) make recommendations concerning the composition,
organization and functions of the Board and the performance, qualifications,
conduct, including memberships on other boards, and compensation of Directors.
SECTION 8. MEETINGS AND PROCEDURES. Each committee may make its own rules
of procedure and shall meet as provided by such rules or by resolution of the
Board of Directors, and shall also meet at the call of the chairman of the
committee, the Chairman of the Board, the President, or a majority of the
members of the committee.
A majority of the members of a committee shall constitute a quorum. The
affirmative vote of a majority of all of the members shall be necessary for the
adoption of a resolution or to approve any matter within the scope of the
authority of a committee. Minutes of the proceedings of a committee shall be
recorded in a book provided for that purpose and filed with the Secretary of the
Company. A committee may act without a meeting if, prior or subsequent to such
action, each member shall consent in writing to such action. Such written
consent or consents shall be filed with the minutes of the proceedings of the
committee.
Action taken by a committee, with or without a meeting, shall be reported to
the Board of Directors at its next regular meeting following such committee
action; except that, when the meeting of the Board is held within 2 days after
the committee action, such report, if not made at the first meeting, shall be
made to the Board at its second meeting following such action.
ARTICLE V
Officers
--------
SECTION 1. ENUMERATION, APPOINTMENT AND REMOVAL. The corporate officers of
the Company shall be a Chairman of the Board, a Vice Chairman of the Board, a
President, one or more Executive Vice Presidents, one or more Senior Vice
Presidents, one or
-6-
<PAGE>
more Sector Presidents, one or more Group Presidents, one or more Vice
Presidents, a Controller, a Treasurer, a Secretary and such other corporate
officers (including assistant corporate officers) as the Board of Directors may
deem necessary or desirable for the transaction of the business of the Company.
In its discretion, the Board of Directors may leave unfilled any office except
those of the President, Treasurer, and Secretary, and should any vacancy occur
among said officers by death, resignation or otherwise, the same shall be filled
at the next regular meeting of the Board of Directors or at a special meeting.
Any two or more offices may be held by the same person. The Board of Directors,
by resolution adopted by a majority of the Directors, then in office, shall
designate the Chairman of the Board or the President to serve as the Chief
Executive Officer of the Company.
The corporate officers shall be elected at the first meeting of the Board of
Directors after the annual election of Directors, and shall hold office until
the next succeeding annual meeting of the Board of Directors, subject to the
power of the Board of Directors to remove any corporate officer at pleasure
by an affirmative vote of the majority of the Directors then in office.
Every corporate officer shall have such authority and perform such duties in
the management of the Company as may be provided in these By-laws, or such
duties consistent with these By-laws as may be assigned by the Board of
Directors or the Chief Executive Officer.
SECTION 2. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be
elected from among the members of the Board of Directors and shall have general
charge and supervision over and responsibility for the business and affairs of
the Company. He shall keep the Board of Directors fully informed concerning
those areas in his charge, and shall perform such other duties as may be
assigned to him by the Board of Directors. In the absence or disability of the
Chairman of the Board and of the Vice Chairman of the Board, the Chief Executive
Officer shall have all the powers and perform all the duties of the Chairman of
the Board.
SECTION 3. CHAIRMAN OF THE BOARD The Chairman of the Board shall preside
at all meetings of the Board of Directors and of the shareholders and shall
perform such other duties as these By-laws or the Board of Directors
may prescribe.
SECTION 4. VICE CHAIRMAN OF THE BOARD. In the absence or disability of the
Chairman of the Board, the Vice Chairman of the Board shall have all the powers
and perform all the duties of the Chairman of the Board. He shall perform such
other duties as may be assigned to him by the Board of Directors or Chairman of
the Board.
SECTION 5. PRESIDENT. The President shall have such powers and perform such
duties as may be provided by statute, these By-laws, and as may be assigned by
the Board of Directors or the Chief Executive Officer.
SECTION 6. TREASURER. The Treasurer shall have the care and custody of the
Company funds and securities, maintain banking relationships and execute credit
and collection policies. He shall perform such other duties and possess such
other powers as are incident to his
-7-
<PAGE>
office.
SECTION 7. SECRETARY. The Secretary shall attend all meetings of the Board
of Directors and of the shareholders, and shall record all proceedings of such
meetings in books to be kept for that purpose. The Secretary shall give, or
cause to be given, notice of all meetings of the shareholders and the Board of
Directors. He shall have the custody of the seal of the Company and shall affix
the same to all instruments requiring it, and attest the same. He shall perform
such other duties and possess such other powers as are incident to his office.
ARTICLE VI
Certificate of Capital Stock
----------------------------
SECTION 1. FORM AND TRANSFERS. The interest of each shareholder of the
Company shall be evidenced by certificates for shares of capital
stock, certifying the number of shares represented thereby and in such form as
the Board of Directors may from time to time prescribe.
Transfers of shares of the capital stock of the Company shall be made only on
the books of the Company, which shall include the books of the stock transfer
agent, by the registered holder thereof, or by his attorney authorized by power
of attorney duly executed and filed with the Secretary of the Company, or a
transfer agent appointed as provided in Section 4 of this Article, and on
surrender of the certificate or certificates for such shares properly endorsed
and the payment of all taxes thereon. The person in whose name shares of
capital stock stand on the books of the Company shall be deemed the owner
thereof for all purposes. The Board may, from time to time, make such
additional rules and regulations as it may deem expedient concerning the
issue, transfer, and registration of certificates for shares of the capital
stock of the Company.
Certificates shall be signed by, or in the name of the corporation by, the
Chairman or Vice-Chairman of the Board, or the President or a Vice-President,
and may be countersigned by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the corporation and may be sealed with
the seal of the corporation or a facsimile thereof. Any or all signatures upon
a certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon such
certificate, shall have ceased to be such officer, transfer agent, or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent or
registrar at the date of its issue.
SECTION 2. FIXING RECORD DATE. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
an adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining the shareholders entitled
to receive payment of any dividend or allotment of any right, or for the purpose
of any other action, the Board of Directors shall fix a date not more than 60
days nor less than 10 days before the date of any such meeting, nor more than 60
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<PAGE>
days prior to any other action, as the record date for any such determination
of shareholders.
SECTION 3. LOST, STOLEN, DESTROYED, OR MUTILATED CERTIFICATES. No
certificate for shares of capital stock in the Company shall be issued in place
of any certificate alleged to have been lost, destroyed or stolen, except on
production of evidence of such loss, destruction or theft and on delivery to the
Company, if the Board of Directors shall so require, of a bond of indemnity upon
such terms and secured by such surety as the Board of Directors may in its
discretion require. A new certificate may be issued without requiring any bond
when, in the judgment of the Board of Directors, it is proper to do so.
SECTION 4. TRANSFER AGENT AND REGISTRAR. The Board of Directors may appoint
one or more transfer agents and one or more registrars, and may require all
certificates of capital stock to bear the signature or signatures of any of
them. One corporation may serve as both transfer agent and registrar.
SECTION 5. EXAMINATION OF BOOKS BY SHAREHOLDERS. So far as it is not
inconsistent with the law of New Jersey, the Board of Directors shall have power
to determine, from time to time, whether and to what extent and at what times
and places and under what conditions and regulations the books and records
of account, minutes of the proceedings of the shareholders, Board of Directors
and any committee of the Company, and other documents of the Company, or any of
them, shall be open to inspection of the shareholders.
SECTION 6. VOTING SHARES OF OTHER CORPORATIONS. Unless otherwise ordered by
the Board of Directors, the Chairman of the Board and the President, or either
of them, shall have full power and authority on behalf of the Company to attend
and to act and to vote at any meeting of Shareholders of any corporation in
which this Company may hold stock, and at any such meeting shall possess and may
exercise any and all rights and powers incident to the ownership of such stock,
and which, as the owner thereof, this Company might have possessed and exercised
if present. The Board of Directors, by resolution, from time to time, may confer
like powers upon any other person or persons.
ARTICLE VII
Dividends
---------
Dividends shall be declared and paid at such times and in such amounts as the
Board of Directors may in its absolute discretion determine and designate,
subject to the restrictions and limitations imposed by law.
ARTICLE VIII
Signatures
----------
Unless otherwise required by law, by the Certificate of Incorporation, by
these By-laws, or by resolution of the Board of Directors, the Chief Executive
Officer, the President or any Executive Vice President, Senior Vice President,
Sector President, Group President, or Vice
-9-
<PAGE>
President, or the Controller or the Treasurer of the Company may enter into and
execute in the name of the Company, contracts or other instruments in the
regular course of business, or contracts or other instruments not in the regular
course of business which are authorized either generally or specifically by the
Board of Directors, and the Secretary or an Assistant Secretary shall affix the
Company seal thereto and attest the same, if required.
ARTICLE IX
Fiscal Year
-----------
The fiscal year of the Company shall begin on the 1st day of October in each
year and end on the September 30th next succeeding.
ARTICLE X
Directors May Contract With Company
-----------------------------------
Any Director or corporate officer may be a party to or may be interested in
any agreement or transaction of this Company by which he may personally benefit,
with the same force and effect as if he were either an entire stranger to the
Company or to the Board of Directors, provided the fact that he is so interested
or may personally benefit shall be disclosed or shall have been known to the
majority of the Board of Directors; and further provided that such agreement or
transaction shall be approved or ratified by the affirmative vote of a majority
of the Directors not so interested or benefited.
ARTICLE XI
Indemnification
---------------
The Company shall indemnify to the full extent authorized or permitted by the
New Jersey Business Corporation Act, any corporate agent (as defined in said
Act), or his legal representative, made, or threatened to be made, a party to
any action, suit or proceeding (whether civil, criminal, administrative
or investigative) by reason of the fact that he is or was a corporate agent of
this Company.
ARTICLE XII
Amendments
----------
These By-laws may be altered, amended or repealed by the shareholders or by a
majority vote of the Directors then in office. Any By-law adopted, amended or
repealed by the shareholders may be amended or repealed by a majority vote of
the Directors then in office unless the resolution of the shareholders adopting
such By-law expressly reserves the right to amend or repeal it to the
shareholders.
ARTICLE XIII
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<PAGE>
Force and Effect of By-Laws
---------------------------
These By-laws are subject to the provisions of the New Jersey Business
Corporation Act and the Company's Certificate of Incorporation, as it may be
amended from time to time. If any provision in these By-laws is inconsistent
with a provision in that Act or the Certificate of Incorporation, the provision
of that Act or the Certificate of Incorporation shall govern to the extent of
such inconsistency.
-11-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Consolidated Financial Statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 113,111
<SECURITIES> 15,648
<RECEIVABLES> 559,373
<ALLOWANCES> 0<F1>
<INVENTORY> 469,692
<CURRENT-ASSETS> 1,313,651
<PP&E> 2,613,070
<DEPRECIATION> 1,355,099
<TOTAL-ASSETS> 3,172,606
<CURRENT-LIABILITIES> 754,760
<BONDS> 564,207
0
50,038
<COMMON> 166,331
<OTHER-SE> 1,270,719
<TOTAL-LIABILITY-AND-EQUITY> 3,172,606
<SALES> 1,440,073
<TOTAL-REVENUES> 1,440,073
<CGS> 718,883
<TOTAL-COSTS> 718,883
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 27,253
<INCOME-PRETAX> 220,642
<INCOME-TAX> 63,986
<INCOME-CONTINUING> 156,656
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 156,656
<EPS-PRIMARY> 1.27
<EPS-DILUTED> 1.21
<FN>
<F1> These items are consolidated only at year end.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains restated summary financial information extracted from the
Company's Consolidated Financial Statements for such periods and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1997
<PERIOD-END> MAR-31-1997 DEC-31-1996
<CASH> 151,283 152,677
<SECURITIES> 17,549 17,773
<RECEIVABLES> 533,096 508,383
<ALLOWANCES> 0<F1> 0<F1>
<INVENTORY> 402,753 403,543
<CURRENT-ASSETS> 1,235,027 1,223,748
<PP&E> 2,465,744 2,482,706
<DEPRECIATION> 1,256,502 1,248,622
<TOTAL-ASSETS> 2,793,234 2,822,118
<CURRENT-LIABILITIES> 658,358 676,187
<BONDS> 466,378 468,249
168,121 169,424
0 0
<COMMON> 51,955 52,493
<OTHER-SE> 1,097,719 1,114,089
<TOTAL-LIABILITY-AND-EQUITY> 2,793,234 2,822,118
<SALES> 1,355,006 655,799
<TOTAL-REVENUES> 1,355,006 655,799
<CGS> 695,806 343,132
<TOTAL-COSTS> 695,806 343,132
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0<F1> 0<F1>
<INTEREST-EXPENSE> 24,246 12,711
<INCOME-PRETAX> 198,280 81,842
<INCOME-TAX> 57,501 23,734
<INCOME-CONTINUING> 140,779 58,108
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 140,779 58,108
<EPS-PRIMARY> 1.13 0.46
<EPS-DILUTED> 1.08 0.44
<FN>
<F1> These items are consolidated only at year end.
</FN>
</TABLE>
