<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 10-Q
-------------
Quarterly report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
FOR QUARTER ENDED MARCH 31, 1995
COMMISSION FILE NUMBER 1-4199
CPC INTERNATIONAL INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
36-2385545
(I.R.S. Employer Identification Number)
INTERNATIONAL PLAZA, P.O. BOX 8000
ENGLEWOOD CLIFFS, N.J. 07632-9976
(Address of principal executive office) (Zip Code)
(201)-894-4000
(Registrant's telephone number, including area code)
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
registrant's classes of common stock, as of latest
practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT MARCH 31, 1995
<S> <C>
Common Stock, $.25 par value 146,275,360 shares
</TABLE>
<PAGE> 2
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
($ MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1995 1994
-------- --------
<S> <C> <C>
Net sales $ 1,955 $ 1,738
-------- --------
Cost of sales 1,173 1,063
Operating expenses 564 482
-------- --------
1,737 1,545
-------- --------
Operating income 218 193
-------- --------
Financing costs 26 20
-------- --------
Income before income taxes 192 173
Provision for taxes on income 74 69
-------- --------
118 104
Minority stockholders' interest 7 6
-------- --------
Net income $ 111 $ 98
======== ========
Average common shares outstanding 146,486 149,559
Earnings per common share based on net
income reduced by "ESOP" preferred stock
dividends net of taxes $ .73 $ .63
Cash dividends declared per common share $ .36 $ .34
</TABLE>
___________
See notes to financial statements.
1
<PAGE> 3
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ MILLIONS)
<TABLE>
<CAPTION>
March 31, 1995 Dec. 31, 1994
-------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
- ------
Current assets
Cash and cash equivalents $ 166 $ 125
Notes and accounts receivable, net 1,130 1,093
Inventories 992 907
Prepaid expenses 91 90
------ ------
Total current assets 2,379 2,215
------ ------
Investments in unconsolidated
affiliates 100 65
------ ------
Plant and properties 4,524 4,545
Less accumulated depreciation 2,281 2,264
------ ------
2,243 2,281
------ ------
Excess cost over net assets of
businesses acquired and other
intangible assets (net of accumulated
amortization of $180 and $172) 956 954
------ ------
Other assets 142 138
------ ------
$5,820 $5,653
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Notes and drafts payable $ 743 $ 664
Accounts payable and accrued items 1,268 1,237
Income taxes payable 154 134
Dividends payable 52 53
------ ------
Total current liabilities 2,217 2,088
------ ------
Non-current liabilities 831 810
------ ------
Long-term debt 858 879
------ ------
Deferred taxes on income (4) (15)
------ ------
Minority interest 146 142
------ ------
Stockholders' equity
Preferred stock, authorized 25,000,000
shares $1 par value -- --
Designations: Series A ESOP convertible
3,000,000 shares designated - 2,161,377
shares issued at stated value (1994:
2,170,854 shares) 193 194
Series A Junior Participating 600,000
shares designated - none issued -- --
Common stock authorized 900,000,000
shares $.25 par value - issued 195,271,444 49 49
Capital in excess of par value of stock 159 155
Unearned ESOP compensation (141) (141)
Cumulative translation adjustment (188) (181)
Common stock in treasury at cost -
48,966,084 shares (1994: 48,510,458 shares) (1,263) (1,231)
Retained earnings 2,963 2,904
------ ------
Total stockholders' equity 1,772 1,749
------ ------
$5,820 $5,653
====== ======
</TABLE>
----------
See notes to financial statements.
2
<PAGE> 4
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ MILLIONS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1995 1994
------ ------
<S> <C> <C>
Cash flows from (used for) operating activities
- -----------------------------------------------
Net income $111 $ 98
Non-cash charges (credits) to net income
Depreciation and amortization 78 71
Deferred taxes 1 (2)
Translation losses 2 2
Other, net 4 1
Changes in trade working capital:
Notes and accounts receivable (74) (87)
Inventories (98) (43)
Accounts payable and accrued items 97 34
---- ----
Net cash flows from operating activities 121 74
---- ----
Cash flows from (used for) investing activities
- -----------------------------------------------
Capital expenditures paid (88) (93)
Disposal of plants and properties 1 3
Investment in joint venture (16) --
Businesses acquired (2) (109)
---- ----
Net cash flows used for investing activities (105) (199)
---- ----
Net cash flows after investments 16 (125)
---- ----
Cash flows from (used for) financing activities
- -----------------------------------------------
Purchase of treasury stock (36) (46)
Repayment of long-term debt (15) (10)
New long-term debt 4 7
Net change in short-term debt 108 171
Dividends paid on common stock (53) (48)
Common stock issued 4 4
Other liabilities (deposits) 14 8
---- ----
Net cash flows (used for) financing activities 26 86
---- ----
Effects of exchange rate changes on cash (1) (2)
---- ----
Increase (decrease) in cash and cash equivalents 41 (41)
---- ----
Cash and cash equivalents, beginning of year 125 166
---- ----
Cash and cash equivalents, end of period $166 $125
==== ====
</TABLE>
__________
See notes to the financial statements.
3
<PAGE> 5
CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
(UNAUDITED)
($ MILLIONS)
<TABLE>
<CAPTION>
Preferred
Stock Capital in Unearned Cumulative
Series A Common Excess of ESOP Translation Treasury Retained
ESOP Stock Par Value Compensation Adjustment Stock Earnings
-------- ------ --------- ------------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 $194 $49 $155 $(141) $(181) $(1,231) $2,904
Net income for the period 111
ESOP shares redeemed (1)
Common stock dividends (52)
Translation adjustment for
the period (7)
Shares issued for:
Stock options,
deferred compensation and
restricted stock awards 4 4
Treasury stock acquired (36)
----------------------------------------------------------------------------
Balance, March 31, 1995 $193 $49 $159 $(141) $(188) $(1,263) $2,963
============================================================================
</TABLE>
__________
See notes to financial statements.
4
<PAGE> 6
CPC INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL STATEMENTS
The unaudited consolidated interim financial statements included herein
were prepared by management and reflect all adjustments (consisting
solely of normal recurring items) which are, in the opinion of
management, necessary to present a fair statement of results of
operations for the interim periods ended March 31, 1995 and 1994 and
the financial position as of March 31, 1995 and December 31, 1994.
References to "the Company" are to CPC International Inc. and its
consolidated subsidiaries. These statements should be read in
conjunction with the consolidated financial statements and the related
footnotes to these statements contained in the Company's Annual Report
to Stockholders which notes were incorporated by reference in Form
10-K for the fiscal year ended December 31, 1994.
2. ACQUISITIONS
In the first quarter, the Company's Mexican corn refining business
entered into a joint venture with Arancia, S.A. de C.V., a corn refining
business located in Mexico. This venture expects to have annual sales of
approximately $250 million and will be accounted for on the equity method. Also
in the first quarter the Company acquired a dessert business in Hong Kong for
$2 million. In the second quarter of 1995, the Company acquired the Lesieur
mayonnaise and salad dressing business in France, which has sales of
approximately $100 million.
3. INVENTORIES
Inventories are summarized as follow:
<TABLE>
<CAPTION>
March 31,1995 Dec.31,1994
------------- -----------
<S> <C> <C>
Finished and goods in process $617 $559
Raw materials 227 207
Supplies 148 141
---- ----
$992 $907
==== ====
</TABLE>
5
<PAGE> 7
4. LONG-TERM DEBT
A summary of long-term debt is as follows:
<TABLE>
<CAPTION>
March 31,1995 Dec.31,1994
------------- -----------
<S> <C> <C>
7.78% ESOP guaranteed notes due
December 2004 $173 $173
5.625% -- 6.75% pollution control
revenue bonds due 2007-2016 15 15
5.02% medium term notes due - 1996 50 50
8.5% sinking fund debentures due
April 2016 100 100
5.75% Swiss franc debentures 153 155
6.75% German mark debentures 129 129
Commercial paper supported by revolving
credit agreements 100 100
Other secured and unsecured notes
and loans at various rates and
due dates 226 223
---- ----
946 945
---- ----
Less current maturities 88 66
---- ----
$858 $879
==== ====
</TABLE>
5. CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplementary information for the consolidated statements of cash
flows is set forth below:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
Cash paid during the period for: 1995 1994
---- ----
<S> <C> <C>
Interest $37 $ 31
Income taxes 51 59
Details of businesses acquired
were as follows:
Fair value of assets acquired $ 2 $289
Liabilities assumed -- 180
--- ----
Net cash paid for acquisitions $ 2 $109
=== ====
</TABLE>
6
<PAGE> 8
6. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying values of cash
equivalents, accounts receivable, accounts payable, and short-term debt
approximate fair values. The value of long-term debt at December 31, 1994 was
$870 million. The fair value of long-term debt was based on quotes obtained
from brokers.
FOREIGN EXCHANGE CONTRACTS - The Company's policy is to hedge its
exposure to foreign currency cash flows resulting from planned dividends, fees
and royalties, intercompany loans, and other similar transactions. The Company
also hedges certain net investments in foreign operations with foreign exchange
contracts or with borrowings denominated in the particular foreign currency.
As a matter of policy, the Company does not speculate on foreign currencies.
Gains and losses, both realized and unrealized, on financial instruments that
hedge operating activities and related cashflows, flow through income in the
same period as the items being hedged. Gains and losses, both realized and
unrealized, on financial instruments that hedge the Company's investments in
foreign operations are recognized as part of the cumulative translation
adjustment in stockholders' equity.
At March 31, 1995, the Company had forward exchange contracts to
deliver $419 million of foreign currencies comprising $126 million in German
marks, $74 million in British pounds, $68 million in Italian lira, $48 million
in Dutch guilders, $86 million in French francs, and $17 million in various
other currencies. The Company also had, at March 31, 1995, contracts to
purchase $9 million worth of Austrian schillings.
At December 31, 1994, the Company had forward exchange contracts to
deliver $414 million of foreign currencies comprising $137 million in German
marks, $87 million in British pounds, $14 million in Swiss francs, $71 million
in Italian lira, $26 million in Dutch guilders, $52 million in French francs,
and $27 million in various other currencies. The Company also had, at December
31, 1994, contracts to purchase $56 million worth of foreign currencies
consisting of $15 million in Italian lira, $13 million in Austrian schillings,
and $28 million in other currencies.
INTEREST RATE SWAPS - The Company utilizes interest rate swap
agreements to minimize its financing costs and to balance its current and
non-current asset levels with floating and fixed-rate debt positions. The
Company's risk related to swap agreements is limited to the cost of replacing
such agreements at current market rates. The Company continually monitors its
positions and credit ratings of its counterparties, and limits the number of
agreements it enters into with any one party. Management believes the risk of
incurring a material loss is remote. Any interest rate differential on
interest rate swaps is recognized as an adjustment to interest expense over the
term of the agreement.
7
<PAGE> 9
At March 31, 1995, the Company had $250 million notional amount of
interest rate swap agreements outstanding. A portion of the Company's variable
interest rate debt position was hedged with $150 million notional amount of
swap agreements with a weighted average receive rate of 6.10% and a weighted
average pay rate of 5.47%. The remaining agreements with maturity dates through
2000 effectively convert fixed interest rate debt into variable interest rate
debt with a weighted average receive rate of 5.88% and a weighted average pay
rate of 6.13%.
At December 31, 1994, the Company had $280 million notional amount of
interest rate swap agreements outstanding. A portion of the Company's variable
interest rate debt position was hedged with $100 million notional amount of
swap agreements with a weighted average receive rate of 6.50% and a weighted
average pay rate of 5.09%. The remaining agreements with maturity dates through
2000 effectively convert fixed interest rate debt into variable interest rate
debt with a weighted average receive rate of 5.89% and a weighted average pay
rate of 6.50%.
COMMODITIES - The Company follows a policy of fixing the cost, with
commodities future contracts, of certain of its key North American raw material
purchases in line with production requirements to minimize cost risk due to
market fluctuations. Such raw materials may or may not be hedged at any given
time based on manangement's decisions as to the need to fix the cost of such
raw materials. In addition, commodity futures contracts are employed to
fix the raw material cost of certain fixed price sales contracts of the corn
refining business. Gains and losses arising from such hedging transactions are
included with the cost of raw material purchases.
The Company's products are manufactured from a number of raw materials,
including soybean and other edible oils, peanuts, corn and wheat, all of which
are, and are expected to continue to be, in adequate supply. However, as
market prices of these materials depend on a number of unpredictable factors,
such as farm plantings and weather, resulting fluctuations may have an effect
on the Company's earnings to the extent such fluctuations cannot, for
competitive reasons, be passed on immediately through pricing adjustments of
the Company's products. It is the possible exposure to such relatively
short-term cost/pricing imbalances that the Company attempts to cover through
fixing, when appropriate, the costs of certain commodities in the short term by
using commodities futures contracts.
At March 31, 1995 and December 31, 1994, the Company had commodity
futures contracts to purchase primarily corn totaling $93 million and $138
million, respectively. The commodity futures contracts at March 31, 1995,
principally call for delivery in the period April to December 31, 1995.
Contracts for delivery beyond June 30, 1995, aggregate about $70 million, of
which $36 million is due in July, $19 million in September, and the balance
later in the year. At March 31, 1995, the Company had unrealized gains of $3
million on these contracts.
8
<PAGE> 10
7. RESTRUCTURING CHARGE
In June 1994, the Company recorded a charge of $227 million, $137
million after taxes or $.92 per common share, to recognize the cost of
restructuring. This program compresses into a period from mid-1994 to mid-1996
restructuring activities needed to meet the competitive challenge of
increasingly unifying markets throughout the world.
The majority of the charge relates to the Company's European and North
American consumer foods businesses. The restructuring charge and its
utilization at March 31, 1995 is summarized below:
<TABLE>
<CAPTION>
Utilized Utilized To be
Total in prior in current Utilized in
$Millions charge periods quarter future periods
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employee severence $102 $ 12 $9 $81
Plant and
support facilities 114 114 -- --
Other 11 -- -- 11
- -------------------------------------------------------------------
Total $227 $126 $9 $92
===================================================================
</TABLE>
The charge is designed to cover the cost of a phased reduction of
about 2,600 employees worldwide and the cost of realignment of manufacturing
capacity. The realignment will be achieved through a combination of plant
closures, specializations, and relocations of production. In total, 24
consumer foods plants and four corn refining plants will be affected by the
restructuring.
The time period for completion of the restructuring is from a few
months at some sites to two years in instances where alternative production
facilities are to be constructed.
At March 31, 1995, $57 million was included in current liabilities and
$35 million was included in noncurrent liabilities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
First quarter 1995 earnings per share advanced 16% to $.73 compared to $.63
per share in the same quarter of 1994. Net income rose 13% to $111 million
from $98.1 million in the same period last year. The results reflect strong
operating gains in most areas of the business.
CPC's worldwide sales rose 13% to $1.95 billion from $1.74 billion in last
year's first quarter. Volume growth of 7.7%, about one-half of which came from
acquisitions, was the chief factor in the sales gain. Favorable currency
effects also contributed.
Operating income advanced 13% to $217.5 million, compared to $192.7 million
in the same period last year. Financing costs increased in the quarter on
higher borrowing levels and interest rates. A slightly lower effective tax
rate of 38.5%, compared with 39.5% for 1994, benefited results.
9
<PAGE> 11
Commenting on the company's first quarter results, Chairman and Chief
Executive Officer C.R. Shoemate said, "This has been an excellent quarter for
all our international consumer foods operations and for our North American and
Latin American corn refining businesses. By far the most important factor in
the progress of all these operations was volume growth. This included a
dramatic volume increase in Latin American corn refining, coming chiefly from
the addition of a highly successful new product in Brazil, high maltose corn
syrup for the brewing industry. Our Brazilian consumer foods business also
posted outstanding results.
"After strong fourth quarter sales and volume growth in North America last
year, Best Foods' first quarter sales increased 4%, while operating income
declined 7.9%. The drop in operating income, however, needs to be seen in
relation to an aggressive boost in marketing spending, up over 18%, and our new
product launches. We introduced Hellmann's and Best Foods low fat mayonnaise
during the first quarter, and are currently launching nationally Hellmann's and
Best Foods One Step dressings. We expect that our businesses will benefit from
the heavier first quarter spending later in the year."
CONSUMER FOODS
CPC's worldwide sales of consumer foods advanced 13% to $1.65 billion
compared to the first quarter sales in 1994. First quarter operating income
from consumer foods was 14% higher, advancing to $186.3 million.
Best Foods posted sales growth of 4% from growth in the Knorr business and
from acquisitions. Volumes of specialty baking, Knorr, and Hispanic products as
well as pasta were all higher, while Mazola corn oil volumes were significantly
lower, after a solid increase in the fourth quarter of 1994. Volumes of
Hellmann's mayonnaise and Skippy peanut butter declined more modestly.
Best Foods' operating income declined 7.9% as a result of strengthened
marketing expenditures previously discussed.
CPC's European consumer foods business recorded a sales gain of 14%, half
of which was due to higher volumes from acquisitions, primarily the company's
new business in South Africa. Operating income from European operations grew
13%, with most of the increase coming from existing businesses. The strength
of European currencies, when translated into dollars, contributed importantly
to the gains.
CPC's Latin American consumer foods business recorded first quarter sales
growth of 20% and a 45% increase in operating income, compared to sales and
earnings in a strong first quarter last year. The sales gains reflected 12%
volume growth and healthy pricing levels. Higher volumes, combined with better
margins, accounted for the advance in operating income.
10
<PAGE> 12
In Mexico, where the value of the peso dropped substantially at the end of
our first quarter, CPC's operations are performing strongly. The company
expects that second quarter results in Mexico as well as the rest of Latin
America will also be strong, although the first quarter Latin American gain
levels are likely to moderate somewhat for the year as a whole, as the division
boosts marketing expenditures.
CPC's Asian consumer foods operations posted a 26% sales gain. The
company continues to invest aggressively in infrastructure, selling, and
marketing in its new operations. As a result operating income increased only
slightly for the quarter. CPC is currently renovating a plant in North China
for production of Knorr products and mayonnaise. This is the company's second
venture in China; in South China a newly-constructed CPC plant is now in
operation.
CORN REFINING
First quarter sales of CPC's corn refining business rose 11.2%, on sharply
higher volumes, while operating income rose 13%. North American corn refining
operations posted a strong gain in operating income of 9.1%, resulting from
good volumes and better margins. The Latin American corn refining business
reported an operating income gain of 19% on the strength of sharply increased
volumes, which overcame lower margins.
Looking ahead, the company's corn refining business expects to continue
building its dynamic new business in high maltose corn syrup, extending the
product from Brazil to other countries in Latin America.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources and uses of funds as well as its general
financial policy are discussed on pages 22-26 of the 1994 Annual Report to
Stockholders which were incorporated by reference in Form 10-K for the year
ended December 31, 1994.
The Company's capital expenditures are expected to be approximately $410
million in 1995.
___________
Note: The brand names shown above in distinctive type are trademarks of CPC
International Inc. and its affiliates.
11
<PAGE> 13
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no material developments in the legal proceedings as
previously reported in Form 10-K for the year ended December 31, 1994.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) The Company held its annual meeting of stockholders on April
27, 1995.
b) Proxies for the meeting were solicited pursuant to Regulation
14 of the Securities Exchange Act of 1934; there were no
solicitations in opposition to management's nominees, and all
such nominees were elected.
c) In addition to the election of directors, appointment of auditors, and
procedural matters, the following resolution was voted on at the
meeting with the voting results indicated:
Amendment to the 1993 Stock and Performance Plan was ratified with
results as follows:
<TABLE>
<CAPTION>
For Against Abstained
----------- ----------- ---------
<S> <C> <C>
117,115,355 6,326,519 2,933,162
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits pursuant to Item 601 of Regulation S-K.
Exhibit 11 - Statements re: computation of earnings per
common share (Part I data)
b) Reports on Form 8-K.
None filed.
12
<PAGE> 14
CPC INTERNATIONAL INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CPC INTERNATIONAL, INC.
DATE: May 11, 1995
/S/Konrad Schlatter
--------------------------------------------
Konrad Schlatter
Senior Vice President &
Chief Financial Officer
DATE: May 11, 1995
/S/James E. Healey
--------------------------------------------
James E. Healey
Comptroller & Chief
Accounting Officer
13
<PAGE> 15
EXHIBIT INDEX
Exhibit No. Description Page No.
- ---------- ----------- --------
Ex-11 Computation of Earnings per Share
Ex-27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11
CPC INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
Earnings per common share for CPC International Inc. is based on net income
available to common stockholders and the average number of common shares
outstanding during each period. Net income available to common shareholders has
been reduced by the pro rata ESOP preferred stock dividend net of the tax
benefit. A potentially dilutive effect on earnings per common share results
from the operation of the 1993 Stock and Performance Plan, the deferred
compensation and stock options arising from a previous executive incentive
compensation plan, and the Deferred Compensation Plan for Outside Directors. The
effect on earnings per common share resulting from the assumed exercise of
outstanding options and delivery of deferred stock awards under these programs
is not material. The maximum number of shares of common stock issuable and
deliverable under such assumptions, without giving effect to the assumed
reacquisitions of common stock with the proceeds from options exercised,
amounted to the following percentages of the average number of shares of common
stock outstanding at March 31:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C>
2.1% 1.7%
</TABLE>
Since the dilution resulting from deferred stock awards and stock options is
less than 3%, these items have not been considered in the computation of shares
outstanding. Furthermore, the potentially dilutive effect derived from using
the if-converted method in calculating fully diluted earnings per share for the
ESOP would not cause the dilution to exceed 3% even when considered with the
aforementioned programs.
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 166
<SECURITIES> 0
<RECEIVABLES> 1,130
<ALLOWANCES> 0
<INVENTORY> 992
<CURRENT-ASSETS> 2,379
<PP&E> 4,524
<DEPRECIATION> 2,281
<TOTAL-ASSETS> 5,820
<CURRENT-LIABILITIES> 2,217
<BONDS> 0
<COMMON> 49
0
193
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,820
<SALES> 0
<TOTAL-REVENUES> 1,955
<CGS> 1,173
<TOTAL-COSTS> 1,737
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 192
<INCOME-TAX> 74
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111
<EPS-PRIMARY> 0.73
<EPS-DILUTED> 0
</TABLE>
