TABLE OF CONTENTS
~~~~~~~~~~~~~~~~~
Page No.
~~~~~~~~
PART I. FINANCIAL INFORMATION
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Item 1. Financial Statements
Consolidated Statement of Earnings for the Second 2
Quarter and First Half Ended July 3, 1994 and
July 4, 1993
Consolidated Statement of Financial Position at 3
July 3, 1994 and December 31, 1993
Consolidated Statement of Cash Flows for the First 4
Half Ended July 3, 1994 and July 4, 1993
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Results of 6
Operations and Financial Condition
PART II. OTHER INFORMATION
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Item 6. Exhibits and Reports on Form 8-K 10
Index to Exhibits 12
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CONSOLIDATED STATEMENT OF EARNINGS
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Unaudited
~~~~~~~~~
(Millions, Except per Share Amounts)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Second Quarter First Half
~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~
1994 1993 1994 1993
~~~~~~~~ ~~~~~~~~ ~~~~~~~~ ~~~~~~~~
NET SALES $1,204.9 $1,093.4 $2,304.1 $2,141.8
Cost of goods sold 907.2 832.8 1,735.8 1,630.2
~~~~~~~~ ~~~~~~~~ ~~~~~~~~ ~~~~~~~~
GROSS PROFIT 297.7 260.6 568.3 511.6
Selling & administrative expenses 160.8 145.4 309.4 286.0
Research & engineering expenses 56.4 52.0 110.4 101.6
Interest expense 4.6 9.1 9.1 18.7
Other (income) expense, net (.7) (2.0) (.7) 1.4
~~~~~~~~ ~~~~~~~~ ~~~~~~~~ ~~~~~~~~
Earnings before income taxes 76.6 56.1 140.1 103.9
Provision for income taxes 10.4 7.9 19.3 14.6
~~~~~~~~ ~~~~~~~~ ~~~~~~~~ ~~~~~~~~
NET EARNINGS 66.2 48.2 120.8 89.3
Preference stock dividends - 2.0 - 4.1
~~~~~~~~ ~~~~~~~~ ~~~~~~~~ ~~~~~~~~
EARNINGS AVAILABLE FOR COMMON SHARES $ 66.2 $ 46.2 $ 120.8 $ 85.2
~~~~~~~~ ~~~~~~~~ ~~~~~~~~ ~~~~~~~~
~~~~~~~~ ~~~~~~~~ ~~~~~~~~ ~~~~~~~~
Primary earnings per common share $ 1.58 $ 1.32 $ 2.94 $ 2.44
Fully diluted earnings per
common share 1.58 1.25 2.94 2.32
Cash dividends declared per
common share 1.25 .025 .25 .05
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
(Millions, Except per Share Amounts)
7/3/94 12/31/93
~~~~~~~~ ~~~~~~~~
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 150.1 $ 77.3
Receivables less allowances of $10.4 & $9.5 482.4 426.3
Inventories 508.9 440.2
Other current assets 136.3 127.9
~~~~~~~~ ~~~~~~~~
1,277.7 1,071.7
INVESTMENTS AND OTHER ASSETS 186.9 190.7
PROPERTY, PLANT & EQUIPMENT less accumulated
depreciation of $1,263.1 & $1,222.3 977.3 958.2
INTANGIBLES, DEFERRED TAXES & DEFERRED CHARGES 169.5 170.0
~~~~~~~~ ~~~~~~~~
TOTAL ASSETS $2,611.4 $2,390.6
~~~~~~~~ ~~~~~~~~
~~~~~~~~ ~~~~~~~~
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Loans payable $ 11.2 $ 13.4
Current maturities of long-term debt 32.5 32.6
Accounts payable 301.1 267.5
Other current liabilities 440.5 386.8
~~~~~~~~ ~~~~~~~~
785.3 700.3
~~~~~~~~ ~~~~~~~~
LONG-TERM DEBT 188.4 189.6
~~~~~~~~ ~~~~~~~~
OTHER LIABILITIES 687.7 679.6
~~~~~~~~ ~~~~~~~~
SHAREHOLDERS' INVESTMENT:
Convertible preference stock, no par value,
.2 shares outstanding - 112.2
Common stock, $2.50 par value, 43.7 & 40.6
shares issued 109.1 101.5
Additional contributed capital 923.0 822.8
Retained earnings 114.4 4.1
Common stock in treasury, at cost, 2.1 shares (67.3) (67.3)
Unearned ESOP compensation (55.0) (59.3)
Cumulative translation adjustments (74.2) (92.9)
~~~~~~~~ ~~~~~~~~
950.0 821.1
~~~~~~~~ ~~~~~~~~
TOTAL LIABILITIES & SHAREHOLDERS' INVESTMENT $2,611.4 $2,390.6
~~~~~~~~ ~~~~~~~~
~~~~~~~~ ~~~~~~~~
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited (Millions)
First Half Ended
7/3/94 7/3/93
~~~~~~~~ ~~~~~~~~
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $120.8 $ 89.3
~~~~~~ ~~~~~~
Adjustments to reconcile net earnings
to net cash from operating activities:
Depreciation and amortization 62.0 63.8
Accounts receivable (45.2) (51.4)
Inventories (60.3) (20.6)
Accounts payable and accrued expenses 84.5 24.8
Other 8.6 3.3
~~~~~~ ~~~~~~
Total adjustments 49.6 19.9
~~~~~~ ~~~~~~
Net cash provided by operating activities 170.4 109.2
~~~~~~ ~~~~~~
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment:
Additions (75.9) (58.9)
Disposals 3.2 4.3
Investments in and advances to affiliates
and unconsolidated companies ( 6.4) 19.7
Acquisitions of new business activities - 3.4
Net cash proceeds from the disposition of
certain business activities - 1.3
~~~~~~~ ~~~~~~~
Net cash used in investing activities (79.1) (30.2)
~~~~~~~ ~~~~~~~
NET CASH FLOWS FROM OPERATING & INVESTING
ACTIVITIES 91.3 79.0
~~~~~~ ~~~~~~
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 54.7
Payments on borrowings ( 2.6) (134.9)
Net borrowings under credit agreements ( 2.7) 18.4
Dividend payments (10.4) ( 5.8)
Other ( 4.6) ( 5.8)
~~~~~~~ ~~~~~~~
Net cash used for financing activities (20.3) (73.4)
~~~~~~~ ~~~~~~~
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1.8 .4
~~~~~~ ~~~~~~
NET CHANGE IN CASH & CASH EQUIVALENTS 72.8 6.0
Cash & cash equivalents at beginning of year 77.3 54.2
~~~~~~ ~~~~~~
CASH & CASH EQUIVALENTS AT END OF FIRST HALF $150.1 $ 60.2
~~~~~~ ~~~~~~
~~~~~~ ~~~~~~
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Unaudited
~~~~~~~~~
(Dollars in Millions, Unless Otherwise Stated)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
NOTE 1. ACCOUNTING POLICIES: The Consolidated Financial Statements for
the interim periods ended July 3, 1994 and July 4, 1993 have been prepared
in accordance with the accounting policies described in the Company's
Annual Report to Shareholders and Form 10-K. Management believes the
statements include all adjustments of a normal recurring nature necessary
to present fairly the results of operations for the interim periods.
Inventory values at interim reporting dates are based upon estimates of
the annual adjustments for taking physical inventory and for the change in
cost of LIFO inventories.
NOTE 2. INCOME TAXES: Income tax expense is reported during the
interim reporting periods on the basis of the estimated annual effective
tax rate for the taxable jurisdictions in which the Company operates.
In the first half of 1994 and 1993, the Company recognized approximately
$25 and $22, respectively, related to a reduction in its valuation
allowance for tax benefit carryforwards.
NOTE 3. PREFERENCE STOCK REDEMPTION: On January 24, 1994, the Company
called for redemption, at a price of $51.05 per depositary share, plus
accrued dividends, of its outstanding Convertible Exchangeable Preference
Stock, which had a face value of $112.2 at December 31, 1993. Holders
elected to convert their shares of preference stock into 2.9 million
shares of common stock prior to the redemption date.
NOTE 4. EARNINGS PER COMMON SHARE: Primary earnings per share of common
stock are computed by subtracting preference stock dividend requirements
from net earnings and dividing that amount by the weighted average number
of common shares outstanding during the period. The weighted average
number of shares, which assumes the exercise of certain stock options
granted to employees, was 41.7 million in the second quarter of 1994 and
41.1 million in the first half of 1994 and 34.9 million in both the second
quarter and first half of 1993. Fully diluted earnings per share are
computed by dividing net earnings by the weighted average number of shares
assuming the exercise of stock options and conversion of debt and
preference stock to common stock.
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
FINANCIAL CONDITION
~~~~~~~~~~~~~~~~~~~
(Dollars in Millions, Unless Otherwise Stated)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
OVERVIEW
~~~~~~~~
Cummins continued to benefit from strong business conditions in most of
its markets in the second quarter of 1994, which resulted in the highest
quarterly sales and earnings in the Company's 75-year history. Net sales
of $1.2 billion were 10 percent higher than in the second quarter of 1993.
In the first half of 1994, the Company's net sales were $2.3 billion,
compared to $2.1 billion in the first half of 1993.
The Company's net earnings were $66.2, or $1.58 per share, in the second
quarter of 1994, compared to $48.2, or $1.32 per share, in the second
quarter of 1993. For the first half of 1994, net earnings were $120.8, or
$2.94 per share, compared to $89.3, or $2.44 per share, in the first half
of 1993.
RESULTS OF OPERATIONS
~~~~~~~~~~~~~~~~~~~~~
The percentage relationships between net sales and other elements of
the Company's Consolidated Statement of Earnings for the comparative
reporting periods were:
Second Quarter First Half
~~~~~~~~~~~~~~ ~~~~~~~~~~~~
Percent of Net Sales 1994 1993 1994 1993
~~~~~~~~~~~~~~~~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~
Net sales 100.0 100.0 100.0 100.0
Cost of goods sold 75.3 76.2 75.4 76.1
~~~~~ ~~~~~ ~~~~~ ~~~~~
Gross profit 24.7 23.8 24.6 23.9
Selling and administrative expenses 13.3 13.3 13.4 13.3
Research and engineering expenses 4.7 4.8 4.8 4.7
Interest expense .4 .8 .4 .9
Other (income) expense, net (.1) (.2) - .1
~~~~~~ ~~~~~~ ~~~~~ ~~~~~
Earnings before income taxes 6.4 5.1 6.0 4.9
Provision for income taxes .9 .7 .8 .7
~~~~~ ~~~~~ ~~~~~ ~~~~~
Net earnings 5.5 4.4 5.2 4.2
~~~~~ ~~~~~ ~~~~~ ~~~~~
~~~~~ ~~~~~ ~~~~~ ~~~~~
Sales by Market
~~~~~~~~~~~~~~~
Sales for each of the Company's markets for the comparative reporting
periods were:
Second Quarter First Half
~~~~~~~~~~~~~~ ~~~~~~~~~~~~~
1994 1993 1994 1993
~~~~~~ ~~~~~~ ~~~~~~ ~~~~~~
Heavy-duty truck $ 354 $ 336 $ 689 $ 660
Midrange truck 135 101 234 187
Power generation 268 237 497 450
Bus and light commercial vehicles 146 116 303 264
Industrial products 142 133 266 251
Government 15 27 30 55
Marine 21 21 38 38
Fleetguard, Holset and Cummins
Electronics (a) 124 122 247 237
~~~~~~ ~~~~~~ ~~~~~~ ~~~~~~
Net sales $1,205 $1,093 $2,304 $2,142
~~~~~~ ~~~~~~ ~~~~~~ ~~~~~~
~~~~~~ ~~~~~~ ~~~~~~ ~~~~~~
(a) The second quarter and first half of 1993 included McCord's sales of
$14.6 and $20.5, respectively.
Sales to the heavy-duty truck market in the second quarter and first half
of 1994 were approximately 5 percent higher than the comparable periods of
1993. The increase in 1994 reflects the strength of the North American
heavy-duty truck market, which is forecasted to produce at a record in
excess of 200,000 units for the year. The Company continues to lead this
market with a 35-percent year-to-date market share. Shipments of the
Company's heavy-duty truck engines for international markets in the second
quarter of 1994 also were higher than in the second quarter of 1993, as a
result of improved market conditions in the United Kingdom.
Midrange truck engine sales in the second quarter of 1994 were 34 percent
higher than in the second quarter of 1993 and 25 percent higher in the
first half of 1994, compared to the first half of 1993. The increase in
sales in 1994 was due to higher engine shipments in both North America and
Europe.
Power generation sales in the second quarter of 1994 were $268, compared
to $237 in the second quarter of 1993. The Company has benefited this
year from strong demand in this market for industrial generator sets,
particularly in the international markets, and for power units in
recreational vehicles.
In the bus and light commercial vehicle market, the Company's sales were
$146 in the second quarter of 1994, compared to $116 million in the second
quarter of 1993. The increase in sales during 1994 was due to sales of
Cummins' midrange engines for light commercial vehicles in North America.
Demand for the Company's midrange engines for these vehicles continued to
be strong in the first half of 1994, with shipments up approximately 9
percent over the first half of 1993.
Sales to industrial markets increased approximately 6 percent in the
second quarter and first half of 1994, compared to corresponding reporting
periods of 1993. The increase in sales was due to improvements in both
North American and international construction markets. Shipments for the
agricultural market in North America also experienced modest gains in the
second quarter of 1994, compared to the second quarter of 1993. The first
half of the year traditionally is higher in these markets.
Engine shipments for all markets in the second quarter and first half of
1994 were 81,100 and 151,000, respectively, compared to 68,100 and 136,000
in the respective periods of 1993:
Second Quarter First Half
~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~
1994 1993 1994 1993
~~~~~~ ~~~~~~ ~~~~~~~ ~~~~~~~
Midrange engines 52,600 43,100 97,600 87,400
Heavy-duty engines 25,900 22,700 48 900 44,300
High-horsepower engines 2,600 2,300 4,500 4,300
~~~~~~ ~~~~~~ ~~~~~~~ ~~~~~~~
Total engine shipments 81,100 68,100 151,000 136,000
~~~~~~ ~~~~~~ ~~~~~~~ ~~~~~~~
~~~~~~ ~~~~~~ ~~~~~~~ ~~~~~~~
Sales of Fleetguard, Holset and Cummins Electronics were approximately 15
percent higher in both the second quarter and first half of 1994, compared
to the same periods of 1993. The increase in sales of these subsidiaries
during 1994 was due primarily to demand for the Company's filter products
in international markets.
Gross Profit
~~~~~~~~~~~~
In the second quarter of 1994, the Company's gross profit percentage was
24.7 percent of net sales, compared to 23.8 percent in the second quarter
of 1993. In the first half of 1994, gross profit percentage was 24.6
percent of net sales, compared to 23.9 percent in the first half of 1993.
The key factor contributing to the improved margin in 1994 was the
increase in demand for the Company's products in all key domestic and
international markets. The cost of product coverage programs was 2.5
percent of net sales in both the second quarter of 1994 and 1993. In the
first half of 1994, the cost of product coverage programs was 2.6 percent
of net sales, compared to 2.4 percent in the first half of 1993.
Operating Expenses
~~~~~~~~~~~~~~~~~~
Selling and administrative expenses of $160.8 in the second quarter of
1994 and $309.4 in the first half of 1994 were $15.4 and $23.4 higher,
respectively, than the corresponding periods of 1993. The increase in
expenditures in 1994 was primarily attributable to variable operating
expenses related to the higher sales volumes. The increase of $4.4 and
$8.8 in research and engineering expenses in the second quarter and first
half of 1994, compared to the respective periods of 1993, was due to
continued expenditures for fuel systems and for ongoing product
development.
Interest Expense
~~~~~~~~~~~~~~~~
Interest expense of $4.6 in the second quarter of 1994 and $9.1 in the
first half of 1994, compared to $9.1 and $18.7 in the respective periods
of 1993. The decrease in interest expense in 1994 was due to the
Company's early retirement and redemption of debt obligations during 1993.
Provision for Income Taxes
~~~~~~~~~~~~~~~~~~~~~~~~~~
As disclosed in Note 2 to the Consolidated Financial Statements, the
Company reduced its valuation allowance for tax benefit carryforwards
approximately $25 in the first half of 1994 and $22 in the first half of
1993.
FINANCIAL CONDITION AND CASH FLOW
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Key elements of the Consolidated Statement of Cash Flows were:
First Half
~~~~~~~~~~~~~~~~~~
1994 1993
~~~~~~ ~~~~~~
Net cash provided by operating activities $170.4 $109.2
Net cash used for investing activities (79.1) (30.2)
~~~~~~~ ~~~~~~~
Net cash flows from operating and
investing activities 91.3 79.0
Net cash used for financing activities (20.3) (73.4)
Effect of exchange rate changes on cash 1.8 .4
~~~~~~ ~~~~~~
Net change in cash and cash equivalents $ 72.8 $ 6.0
~~~~~~ ~~~~~~
~~~~~~ ~~~~~~
Cash reserves increased by $72.8 during the first half of 1994 to $150.1.
During the first half of 1994, the Company generated cash flows from
operating activities of $170.4, compared to $109.2 in the first half of
1993, due to improved earnings and net working capital requirements.
Investing activities required net cash resources of $79.1 for capital
expenditures and investments in and advances to affiliates and
unconsolidated companies in the first half of 1994.
As more fully disclosed in Note 3 to the Consolidated Financial
Statements, the Company called for redemption of its preference stock on
January 24, 1994. In lieu of accepting the cash redemption price, holders
elected to convert their shares of preference stock into common stock of
the Company.
Total indebtedness (including the guaranteed notes of the ESOP Trust) was
$232.1 at the end of the second quarter of 1994. The Company's debt-to-
capital ratio was 19.6 percent at the end of the second quarter of 1994,
compared to 22.3 percent at December 31, 1993.
On January 25, 1994, Moody's Investors Service upgraded the ratings of the
senior debt of the Company to investment grade (from Ba1 to Baa2).
Moody's stated that the action reflected the favorable intermediate-term
outlook for the Company's sales and operating performance as a result of
the Company's stronger and more diversified customer base, the expansion
of its international presence and better cost controls.
PART II. OTHER INFORMATION
~~~~~~~~~~~~~~~~~~~~~~~~~~~
Item 6. Exhibits and Reports on Form 8-K:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
(a) See the Index to Exhibits on Page 12 for a list of exhibits filed
herewith.
(b) The Company was not required to file a Form 8-K during the second
quarter of 1994.
<PAGE>
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.
CUMMINS ENGINE COMPANY, INC.
By: /s/John McLachlan
~~~~~~~~~~~~~~~~~
John McLachlan
Vice President - Corporate Controller
(Chief Accounting Officer) August 1, 1994
<PAGE>
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
INDEX TO EXHIBITS
~~~~~~~~~~~~~~~~~
Page No.
~~~~~~~~
4(b) Revolving Credit Agreement (First Amendment filed
herewith to agreement incorporated by reference to
Quarterly Report on Form 10-Q for the quarter
ended July 4, 1993). 13
10(a) Target Bonus Plan (filed herewith) 17
10(c) Key Employee Stock Investment Plan, as amended
(filed herewith) 22
10(e) Financial Counseling Program (filed herewith) 27
11 Schedule of Computation of Per Share Earnings
for the Second Quarter and First Half Ended
July 3, 1994 and July 4, 1993 (filed herewith) 28
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
EXHIBIT 4(b)
~~~~~~~~~~~~
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
FIRST AMENDMENT, dated as of March 31, 1994 (this "Amendment"),
to the Credit Agreement dated as of June 4, 1993, among CUMMINS
ENGINE COMPANY, INC., an Indiana corporation (the "Company"), the
banks and other financial institutions listed in Schedule I
thereto (the "Banks"), CHEMICAL BANK, a New York banking
corporation, as administrative agent for the Banks, and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, a New York banking
corporation, as co-agent for the Banks (the "Credit Agreement").
W I T N E S S E T H:
~ ~ ~ ~ ~ ~ ~ ~ ~ ~
WHEREAS, the Company has requested, and upon this Amendment
becoming effective, the Banks have agreed, that certain
provisions of the Credit Agreement be amended to provide for the
resignation of Chemical Bank ("Chemical") as Administrative Agent
and the appointment of Morgan Guaranty Trust Company of New York
("Morgan") as successor Administrative Agent, in the manner
hereinafter set forth:
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the
Credit Agreement.
2. Resignation of Administrative Agent, etc. Pursuant to the
provisions of Article VIII of the Credit Agreement, effective
on the Effective Date (as hereinafter defined):
a) Chemical hereby resigns as Administrative Agent under the
Credit Agreement and hereby notifies Morgan, the Banks
and the Company thereof;
b) The Banks hereby appoint Morgan as successor
Administrative Agent under the Credit Agreement; and
c) Morgan hereby accepts such appointment as successor
Administrative Agent under the Credit Agreement.
3. Amendment of Credit Agreement. The Credit Agreement is
hereby amended, effective on the Effective Date, as follows:
a) All references in the Credit Agreement (including
Exhibits) to the Administrative Agent shall be deemed to
refer to Morgan in its capacity as successor
Administrative Agent;
b) All references in the Credit Agreement (including
Exhibits) to Chemical in the capacity of Administrative
Agent shall be deemed to be deleted;
c) All references to Morgan in the capacity of Co-Agent,
and to the term "Co-Agent", shall be deemed to be
deleted;
d) All references to the plural term "Agents" shall be
deemed to refer instead to the singular term
"Administrative Agent";
e) The first sentence of Article VIII of the Credit
Agreement shall be amended to give effect to the
provisions of Section 2 of this Amendment;
f) The last sentence of the first paragraph of Article VIII
shall be deemed to be deleted; and
g) Section 9.1 of the Credit Agreement ("Notices") is hereby
amended by deleting paragraphs (b), (c) and (d) thereof
and substituting in lieu thereof the following:
"(b) if to the Administrative Agent, to it at 60 Wall
Street, New York, New York 10260, Attention of Kit C.
Wong, Associate (Telecopy No. 212-648-5336); and
(c) if to a Bank, to it at its address (or telecopy
number) set forth in Schedule I."
4. Amendments to Promissory Notes. Each Competitive Note, dated
June 4, 1993, and each Standby Note, dated June 4, 1993, is
hereby amended, effective on the Effective Date, by deleting
the words "at the office of Chemical Bank (the
"Administrative Agent"), at 270 Park Avenue, New York, New
York 10017" and by substituting, in lieu thereof, the words
"at the office of Morgan Guaranty Trust Company of New York
(the "Administrative Agent"), at 60 Wall Street, New York,
New York 10260."
5. Conditions to Effectiveness. This Amendment shall become
effective on the date the Company, Chemical, Morgan and the
Required Banks shall have executed and delivered this
Amendment (the "Effective Date").
6. General.
a) No Other Amendment; Confirmation. Except as expressly
amended, modified and supplemented hereby, the provisions
of the Credit Agreement and the Notes shall remain in
full force and effect.
b) Governing Law; Counterparts. (i) This Amendment and the
rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance
with, the laws of the State of New York. (ii) This
amendment may be executed by one or more of the parties
to this Amendment on any number of separate counterparts,
and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their respective proper and
duly authorized officers as of the day and year first above
written.
CUMMINS ENGINE COMPANY, INC.
by: /s/ Robert L. Fealy
~~~~~~~~~~~~~~~~~~~
Vice President - Treasurer
CHEMICAL BANK, in its capacities as a
Bank and as resigning Administrative
Agent
By: /s/ Rosemary Bradley
~~~~~~~~~~~~~~~~~~~~
Vice President
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, in its
capacities as a Bank, as successor
Administrative Agent and as former
Co-Agent.
By: /s/ Kit C. Wong
~~~~~~~~~~~~~~~
Associate
THE CHASE MANHATTAN BANK, N.A.
By: /s/ George Hansen
~~~~~~~~~~~~~~~~~
Vice President
CONTINENTAL BANK, N.A.
By: /s/ Mike Healy
~~~~~~~~~~~~~~
Vice President
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
~~~~~~~~~~~~~~~~
Senior Manager Loan Operations
THE NORTHERN TRUST COMPANY
By: /s/ W. Sullivan
~~~~~~~~~~~~~~~
Vice President
THE BANK OF NEW YORK
By: /s/ Bruce C. Miller
~~~~~~~~~~~~~~~~~~~
Vice President
NBD BANK, N.A.
By: /s/ William Sullivan
~~~~~~~~~~~~~~~~~~~~
Second Vice President
CITICORP USA, INC.
By: /s/ Robert G. Harrity
~~~~~~~~~~~~~~~~~~~~~
Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By: /s/ Patricia DelGrande
~~~~~~~~~~~~~~~~~~~~~~
Vice President
CUMMINS ENGINE COMPANY, INC.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
EXHIBIT 10(a)
~~~~~~~~~~~~~
TARGET BONUS PLAN
~~~~~~~~~~~~~~~~~
Adopted February 11, 1992
~~~~~~~~~~~~~~~~~~~~~~~~~
OBJECTIVES:
~~~~~~~~~~~
The Target Bonus Plan is designed to:
. Reinforce in the minds of Cummins management and other employees
the financial objectives of the Corporation.
. Attain and maintain a leadership position for the Corporation in
its method of compensating employees consistent with the
relative size of the business, the industry in which the
business competes and the relative performance of employees.
. Recognize the performance of the Corporation as a whole,
maximizing the contributions of the Corporation's various
businesses.
. Reward performance, both team and individual.
The Target Bonus Plan is an incentive plan providing compensation
which varies with the financial results of the Corporation.
PHILOSOPHY:
~~~~~~~~~~~
Bonus payments will relate to the importance of the position in
influencing Corporate performance, the performance of the
Corporation in the fiscal quarter and the performance of the
individual in that quarter. Bonus payments are to encourage and
promote outstanding decisions and efforts by teams and individuals
for the benefit of the Corporation. If the employee team involved
in the Target Bonus Plan is successful in obtaining good
profitability for the Corporation, they, as a group, should share in
their success. The incentive of bonus payments encourages and
rewards profitable performance.
DEFINITIONS:
~~~~~~~~~~~~
1. "Base Salary" means the accumulated salary paid to the
participant during the applicable Quarter (exclusive of
allowances, incentive pay, reimbursed expenses, etc.) as
determined in accordance with rules established by the
Compensation Committee.
2. "Compensation Committee" means the Committee of the Board of
Directors of the Corporation designated to review compensation
of officers and directors.
3. "Corporation" means Cummins Engine Company, Inc.
4. "Participants" means the officers designated by the Compensation
Committee and/or other employees as designated by the President
or his designee.
5. "PBT" means the net income before interest expense of the
Corporation for the quarter as calculated by the Corporate
Accounting department.
6. "PBT ROS" means PBT divided by net sales of the Corporation for
the quarter.
7. "Plan" means the Target Bonus Plan described herein.
8. "Plan Year" means the Corporation's fiscal year.
9. "Return on Equity (ROE)" means Profit After Tax divided by
Average Net Worth.
10. "Average Net Worth" means the Net Worth of the Corporation as
of January 1 of the Plan Year, plus Net Worth of the
Corporation as of December 31 of that Plan Year, divided by
two (2).
11. "Profit After Tax" means the Profit After Tax of the
Corporation for the Plan Year as presented in quarterly or
year-end statements prepared for communication with
shareholders, and adjusted as deemed appropriate by the
President for purposes of calibrating this Plan.
ELIGIBILITY:
~~~~~~~~~~~~
Based on recommendations from management, the Compensation Committee
will designate certain officers of the Corporation each year who
shall be participants in the Plan, and shall designate the Target
Bonus Percentage applicable to such Participants. The Compensation
Committee, upon a recommendation from management, shall have the
power to change the Target Bonus Percentage of a Participant or
remove one or more Participants from the Plan.
Regarding employees other than officers, the Compensation Committee
delegates authority as specified in the foregoing paragraph to the
President of the Corporation.
TARGET BONUS PERCENTAGE:
~~~~~~~~~~~~~~~~~~~~~~~~
Each Participant in the Plan shall be assigned a distinct Target
Bonus Percentage by the Compensation Committee (if an Officer) or
the President (if not an officer) based on the following criteria:
1. Scope and breadth of the Participant's position.
2. Opportunity for independent thought and action.
3. Effect on the Corporation's performance.
4. Structure of decision making.
5. Working relationships.
6. Level of incentive compensation prevailing in the industry in
which the Corporation competes.
BONUS PAYOUT SCHEDULES:
~~~~~~~~~~~~~~~~~~~~~~~
Annually a Bonus Payout Schedule will be calculated and made
available to Participants. The Bonus Payout Schedule will be
calculated to provide PBT ROS which translate to the following
levels of Return on Equity (ROE) for that Plan Year:
Target ROE
Equivalents Payout Factor
~~~~~~~~~~~ ~~~~~~~~~~~~~
.07 .1
Target: 13.8 1.0
19.2 2.0
The Target ROE levels and the equivalent PBT ROS Bonus Payout
Schedule may be changed by the Compensation Committee.
The Target ROE Equivalents will be checked periodically to determine
if they remain competitively appropriate.
TARGET BONUS:
~~~~~~~~~~~~~
A Target Bonus is obtained for each Participant by multiplying the
Base Salary times the Target Bonus Percentage of the Participant.
During each Plan Year, the Participant will be informed of his/her
Target Bonus Percentage and Base Salary for purposes of the Plan for
that Plan Year.
EARNED BONUS:
~~~~~~~~~~~~~
Corporate performance for each quarter in excess of the Target PBT
ROS or performance less than the Target PBT ROS will result in an
increased or diminished bonus, respectively, from the Target Bonus
communicated to the Participant. Earned Bonus will be calculated by
multiplying the Target Bonus Percentage times the Base Salary earned
in the quarter times the Bonus Factor associated with the actual PBT
ROS for that quarter as specified in the Bonus Payout Schedule in
effect for that Plan Year.
EXTRAORDINARY CHARGES AND CREDITS:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
For purposes of determining the Bonus Factor, the Corporate PBT will
exclude certain extraordinary charges and credits which occur
infrequently and are not a part of normal operating activities.
Some examples of extraordinary charges and credits which would not
have an effect on Corporate PBT in calculating Bonus Factor are:
. Gain or loss from disposal of principal operating location or
investment;
. Cost of Early Retirement Incentive programs;
. One-tine, cumulative Accounting adjustments;
. Cost of plant closings and operation restructurings.
Some examples of items that are recurrent and normal elements of
operating activities and WOULD BE included in Corporate PBT in
calculating Bonus Factor are:
. Write-down or write-off of receivables, inventories, equipment
leased to others or other intangible assets;
. Gains or losses from exchange or translation of foreign
currencies, including those related to major devaluations or
revaluations;
. Effects of a layoff of employees and benefits extended as part of
a layoff;
. Adjustments of accruals on long-term contracts.
The President of the Corporation is authorized to make final
determination of whether an extraordinary charge or credit is to be
included in PBT for purposes of calculating the Bonus Factor, within
the above guidelines.
ADJUSTMENT FOR INDIVIDUAL PERFORMANCE:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Earned Bonus will be the bonus paid except in unusual
circumstances where poor individual performance justifies a reduced
bonus. Unusually outstanding, one-time performance may be rewarded
outside of the Plan with monetary citation at the time the
outstanding performance is made. These variances must be approved
by the President of the Corporation.
OTHER ADJUSTMENTS:
~~~~~~~~~~~~~~~~~
A Participant during any quarter, as approved by the Compensation
Committee (if an officer) or the President (if not an officer), will
be eligible for an Earned Bonus that will be calculated on the basis
of the amount of his/her Base Salary earned in that quarter and the
Target Bonus Percentage in effect at the end of that quarter.
TERMINATION OF EMPLOYMENT:
~~~~~~~~~~~~~~~~~~~~~~~~~
During any quarter that a Participant's employment is voluntarily or
involuntarily terminated, including termination due to death,
disability or retirement, the amount of the Earned Bonus for that
quarter will be paid to the Participant or his/her legal
representative or estate, whichever is applicable, at the Bonus
Distribution Date next following that quarter.
BONUS DISTRIBUTION DATE:
~~~~~~~~~~~~~~~~~~~~~~~
Any bonus earned pursuant to this Plan will be distributed as soon
as practicable following the determination of PBT ROS. In general,
the Bonus Distribution Date should be approximately six (6) weeks
following the end of the quarter in which the bonus is earned.
AMENDMENT AND TERMINATION:
~~~~~~~~~~~~~~~~~~~~~~~~~
The Board of Directors may at any time amend, modify, alter or
terminate this Plan.
MISCELLANEOUS:
~~~~~~~~~~~~~
There shall be no bonus pool or cumulative bonus pool. This Plan is
based upon the number of Participants, the Target Bonus Percentages
assigned and the number of Participants therein, the PBT ROS and the
Bonus Factors assigned thereto and the Base Salaries of the
Participants.
Nothing in this Plan shall be deemed to confer on any Participant
the right to continue in the employ of the Corporation or affect the
right of the Corporation to terminate the employment of any
Participant with or without cause.
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
EXHIBIT 10(c)
~~~~~~~~~~~~~
CUMMINS KEY EMPLOYEE STOCK INVESTMENT PLAN
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
AS AMENDED FEBRUARY 14, 1989
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1. Objectives of Plan
~~~~~~~~~~~~~~~~~~
This Cummins Key Employee Stock Investment Plan (herein called
the Plan) is intended to encourage ownership of common stock of
the Company by eligible key employees, including officers of the
Company and its affiliates. Through the proprietary interests
thus created, the Plan is expected to benefit the Company and
its affiliates by attracting and retaining the best available
executive talent.
2. Definitions
~~~~~~~~~~~
(a) Company: The term "Company", as used herein, means Cummins
Engine Company, Inc., and any successor corporation, whether
by merger, consolidation, purchase or otherwise, including
the corporation issuing any shares distributed to all the
holders of the common stock of the Company resulting from a
sale of assets or similar transaction.
(b) Affiliate: The term "affiliate", as used herein, means any
corporation controlling, controlled by or under common
control with the Company. The term "control", as applied to
a particular corporation, means the ownership of more than
50% of the issued and outstanding voting stock of such
corporation, not including treasury shares.
(c) Committee: The term "Committee" means the Compensation
Committee of the Board of Directors.
3. The Shares of Stock
~~~~~~~~~~~~~~~~~~~
Shares of the Company's common stock may be acquired by the
Company, either in the open market or in private transactions,
and sold under the Plan from time to time while the Plan is in
effect. The amount that may be expended from time to time for
the acquisition of shares for the Plan shall be determined by the
Board of Directors; but the amount expended on any such
acquisition, when added to the aggregate amount theretofore
expended by the Company for purchases of shares for the Plan,
less the aggregate amount (not including interest) theretofore
received by the Company upon disposition of such shares, shall in
no event exceed 4% of a figure derived by multiplying the number
of shares then outstanding including treasury shares, by the
price of such shares determined as set forth in paragraph 5
hereof as of the last business day preceding the date of such
acquisition. The Plan will expire April 1, 1999 or earlier at
the option of the Board of Directors. Upon expiration of the
Plan no further shares shall be sold thereunder but the Plan will
continue in effect for the purpose of collecting installments
remaining due on shares theretofore sold.
4. Persons to Whom Shares of Stock may be Offered
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Shares of stock may be offered under the Plan to such present or
future officers and employees of the Company or of any of its
affiliates as the Board of Directors may designate, and purchases
by officers and employees pursuant to such offers shall be
covered by separate purchase agreements entered into pursuant
hereto. No member of the Committee, nor any person who is a
director but not an officer of the Company or of an affiliate of
the Company shall be eligible to participate in the Plan. The
Board of Directors shall determine the number of shares to be
offered to each individual under the Plan; provided, however,
that, on the date of the execution and delivery of any such
agreement with a purchaser and after giving effect to such
agreement, the aggregate of the unpaid installments on all
purchase agreements of such purchaser shall not exceed the annual
salary then in effect for such purchaser. In determining the
number of shares to be offered to an officer or employee, the
Board may take into account the nature of the services rendered
by him, his present and potential contributions to the Company's
success, the responsibility involved in his employment and such
other factors as the Board shall deem relevant.
5. Price and Terms of Payment
~~~~~~~~~~~~~~~~~~~~~~~~~~
The terms of payment for all shares sold under the Plan shall be
those specified by the Board of Directors and set forth in the
written agreement entered into with each purchaser, subject,
however, to the limitations herein set forth. The price of all
shares sold under the Plan shall be the closing price of the
shares on the New York Stock Exchange on the last business day
preceding the date of purchase (or, if there were no such sales
on such day, the fair market value of such shares determined by
the Board of Directors in any reasonable manner). Provision will
be made for the payment of the purchase price for shares in
installments; provided, however, that (a) the purchaser at his
option may repay any or all such installments any time, (b) the
provisions of the agreement of purchase shall be such as to
comply with credit regulations, if any, then in effect and issued
or enacted by governmental authority having jurisdiction,
including Regulation G of the Board of Governors of the Federal
Reserve System if such Regulation is then in effect, and (c) no
more than ten years shall be allowed in which to complete payment
for the shares purchased pursuant to each such agreement. Each
agreement shall provide for interest at the rate of 4% per annum
on unpaid installments or such higher or lower rate as the Board
of Directors shall fix from time to time.
6. Delivery of Shares -- Title Thereto
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Upon the making of a purchase hereunder, certificates for the
shares of stock purchased will be delivered to the purchaser, who
shall take title to such shares and be entitled to all voting
rights with respect thereto and all cash dividends paid thereon.
The certificates for such shares, together with a properly
executed stock power, will be immediately deposited by the
purchaser with the Company to be held by the Company as security
for the payment of the installments of the purchase price,
including interest. In the event of the payment by the Company
of a stock dividend on any of its shares held as security
pursuant to a purchase agreement hereunder, the pledge under such
agreement shall extend to the shares issued in payment of such
stock dividend. The purchaser shall promptly after the payment
of any such stock dividend deliver to the Company the
certificates representing the dividend shares, with a properly
executed stock power. In the event that the shares held as
security pursuant to a purchase agreement hereunder shall be
changed or reclassified as a result of any charter amendment,
recapitalization, reorganization, merger, consolidation, sale of
assets or similar transaction, the changed or reclassified shares
or other assets or both received as a result of such transaction
shall be substituted for the shares pledged under such agreement,
and the purchaser shall promptly deliver to the Company any
certificates issued to represent the shares so changed or
reclassified and any such other assets, together with a properly
executed stock power. If there shall be issued to holders of
shares held as security pursuant to purchase agreement hereunder,
rights to subscribe for or purchase agreement hereunder, rights
to subscribe for or purchase stock or other securities, such
rights shall belong to the purchaser free from pledge. If at the
time of a purchase pursuant to the Plan the Company does not have
in effect under the Securities Act of 1933 a registration
statement covering the shares purchased, the Company may, as a
condition of accepting the purchase, require the purchaser to
represent to the Company that he is purchasing the shares for
investment and not with a view to resale or distribution. Upon
completion of payment for such shares, including interest to the
date of payment, and subject to any requirements necessary to
comply with Regulation G or other applicable credit regulation,
the purchaser shall be entitled to re-delivery from the Company
of the certificates so pledged.
7. Sale of Shares After Purchase-Effect
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
In the event that, after a purchase of shares under the Plan, the
purchaser sells any common stock of the Company, he shall not,
for a period of six months following such sale, be entitled to
make any additional purchase of shares under the Plan or make any
borrowing under paragraph 11; provided, however, that the
Committee may waive the provisions of this paragraph 7 in cases
in which it determines that an unforeseen hardship necessitated
the sale of such common stock by such purchaser.
8. Termination of Employment or Death of Employee
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Upon the death of an employee or upon his ceasing to be an
employee of the Company or an affiliate of the Company (not
including a transfer of employment from the Company to an
affiliate, from an affiliate to the Company or among affiliates),
all remaining unpaid installments for the purchase of shares of
stock under the Plan or of a loan under paragraph 11 hereof shall
become immediately due and payable, with interest to the date of
payment; provided, however, upon the death of an employee, the
Committee in its discretion may permit such employee's estate,
herein or personal representative to continue payment of such
purchase price or of such loan in installments.
9. Amendment of Plan
~~~~~~~~~~~~~~~~~
The Board of Directors at any time may make such changes in the
Plan, and in any agreements subsequently entered into thereunder,
as it may deem necessary or advisable; provided, however, that no
such amendment shall (i) increase the maximum amount that may be
expended by the Company for shares for purposes of the Plan, (ii)
reduce the price at which shares are to be sold to employees
under the Plan, or (iii) extend the period for the completion of
payment for shares purchased by employees under the Plan or of
loans pursuant to paragraph 11 hereof. Neither the termination
of the Plan nor any amendment thereof will affect any then
existing purchase agreement or loan agreement entered into under
paragraph 11 without the consent of the purchaser.
10. Effectiveness of the Plan
~~~~~~~~~~~~~~~~~~~~~~~~~
Subject to securing any necessary rulings of regulatory
authorities having jurisdiction in the premises, the Plan shall
become effective on the date when it is approved by the vote of
the holders of a majority of the outstanding common stock of the
Company voting at a meeting of stockholders. No employee or
other person shall have any rights in or under the Plan except as
expressly granted in an agreement entered into pursuant to the
terms thereof.
11. Loans for Purchase of Common Stock of the Company
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
As an alternative to the sale of shares to key employees pursuant
to the foregoing provisions of this Plan, the Company may make
loans to such employees, to the extent permitted by law for the
purpose of purchasing shares of the Company's common stock;
provided, however, that (a) the unpaid balance of the aggregate
principal amount of such loans shall be deducted from the amount
that may be expended by the Company pursuant to paragraph 3
hereof, (b) the amount of each loan shall not be greater than the
purchase price, determined as provided in paragraph 5 hereof, of
the number of shares that might have been then offered to the key
employee involved pursuant to the provisions of paragraph 4
hereof, (c) each such loan shall be payable in installments or in
a single payment of principal with the last installment or single
payment payable not later than ten years from the date of the
making of the loan, and the other provisions of paragraph 5
hereof, regarding prepayment of principal, interest, and credit
regulations, shall be applicable to such loan, and (d) the shares
purchased by the employee shall be pledged with the Company as
security for the repayment of such loan, in accordance with and
subject to the provisions of paragraph 6.
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
EXHIBIT 10(e)
~~~~~~~~~~~~~
DESCRIPTION OF FINANCIAL COUNSELING PROGRAM
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The financial counseling program, initiated in 1975, is available to
officers of the Company. Under this program a participant may
receive personal financial, estate planning and tax planning advice
from outside consultants. The amount of fees paid by the Company is
included as income to the participant.
CUMMINS ENGINE COMPANY, INC., AND SUBSIDIARIES
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
EXHIBIT 11
~~~~~~~~~~
SCHEDULE OF COMPUTATION OF PER SHARE EARNINGS
FOR THE SECOND QUARTER & FIRST HALF ENDED JULY 3, 1994 & JULY 4, 1993
(Millions, Except per Share Data)
Second Quarter First Half
~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~
Weighted Weighted
Average Net Average Net
Shares Earnings Shares Earnings
~~~~~~~~ ~~~~~~~~ ~~~~~~~~ ~~~~~~~~
1994
~~~~
Shares outstanding & earnings
available for common stock
shareholders 41.6 $66.2 40.9 $120.8
Options .1 - .2 -
~~~~ ~~~~~ ~~~~ ~~~~~~
Used in the determination of
primary and fully diluted
earnings per common share 41.7 $66.2 41.1 $120.8
~~~~ ~~~~~ ~~~~ ~~~~~~
~~~~ ~~~~~ ~~~~ ~~~~~~
Primary and fully diluted
earnings per share $1.58 $ 2.94
1993
~~~~
Shares outstanding & earnings
available for common stock
shareholders 34.7 $46.2 34.6 $ 85.2
Options .2 - .3 -
~~~~ ~~~~~ ~~~~ ~~~~~~
Used in the determination of
primary earnings per common
share 34.9 46.2 34.9 85.2
Liquid yield option notes 1.0 .8 1.0 1.7
Convertible preference stock 3.0 2.0 3.0 4.1
Other - (.4) - (.8)
~~~~ ~~~~~ ~~~~ ~~~~~~
Used in the determination of
fully diluted earnings per
common share 38.9 $48.6 38.9 $ 90.2
~~~~ ~~~~~ ~~~~ ~~~~~~
~~~~ ~~~~~ ~~~~ ~~~~~~
Earnings per share:
Primary $1.32 $ 2.44
Fully diluted $1.25 $ 2.32
