SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended Commission File
September 30, 1994 Number 1-2328
GATX CORPORATION
Incorporated in the IRS Employer Identification No.
State of New York 36-1124040
500 West Monroe Street
Chicago, Illinois 60661-3676
(312) 621-6200
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
----- ------
Registrant had 19,870,639 shares of common stock outstanding as of
October 28, 1994.
<PAGE>
PART I--FINANCIAL INFORMATION
GATX CORPORATION AND SUBSIDIARIES
<TABLE>
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
IN MILLIONS, EXCEPT PER SHARE AMOUNTS
<CAPTION>
Three Nine
Months Ended Months Ended
September 30 September 30
1994 1993 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Gross income..................................... $298.9 $279.9 $844.0 $806.4
Costs and expenses
Operating expenses............................. 149.8 138.5 424.1 381.1
Interest....................................... 38.7 38.7 109.5 115.9
Provision for depreciation and amortization.... 42.4 40.1 120.9 112.9
Provision for possible losses.................. 5.2 8.1 15.3 24.3
Selling, general and administrative............ 31.7 31.4 91.3 89.7
------ ------ ------ ------
267.8 256.8 761.1 723.9
------ ------ ------ ------
Income before income taxes and equity in
net earnings of affiliated companies........... 31.1 23.1 82.9 82.5
Income taxes .................................... 12.2 17.4 33.2 41.4
------ ------ ------ ------
Income before equity in net earnings
of affiliated companies ....................... 18.9 5.7 49.7 41.1
Equity in net earnings of affiliated companies... 6.4 6.0 16.7 15.4
------ ------ ------ ------
Net income ...................................... $ 25.3 $11.7 $ 66.4 $ 56.5
====== ====== ====== ======
Per common share:
Net income .................................... $ 1.09 $ .42 $ 2.80 $ 2.34
Net income, assuming full dilution............. 1.04 .42* 2.75 2.34*
Dividends declared............................. .375 .35 1.125 1.05
<FN>
* Conversion of Preferred Stock is excluded from computation of fully diluted
earnings per share because of antidilutive effects.
Note - The consolidated balance sheet at December 31, 1993 has been derived
from the audited financial statements at that date. All other consolidated financial
statements are unaudited but include all adjustments, consisting only of normal
recurring items, which management considers necessary for a fair statement of the
consolidated results of operations and financial position for the respective periods. Operating
results for the nine months ended September 30, 1994 are not necessarily indicative of the
results that may be achieved for the entire year ending December 31, 1994. Certain
amounts in the 1993 financial statements have been reclassified to conform
to the 1994 presentation.
</FN>
</TABLE>
-1-
<PAGE>
GATX CORPORATION AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS
IN MILLIONS
ASSETS
<CAPTION>
September 30 December 31
1994 1993
(Unaudited)
<S> <C> <C>
Cash and cash equivalents...................... $ 32.8 $ 26.2
Receivables
Trade accounts............................... 92.8 88.0
Finance leases............................... 531.6 537.0
Secured loans................................ 219.1 226.1
Less - Allowance for possible losses......... (104.1) (96.0)
------- ------
739.4 755.1
Property, plant and equipment
Railcars and support facilities.............. 1,773.3 1,735.8
Tank storage terminals and pipelines......... 1,099.6 1,014.8
Great Lakes vessels.......................... 203.4 203.4
Operating lease investments and other........ 405.2 351.1
------- ------
3,481.5 3,305.1
Less - Allowances for depreciation........... (1,425.4) (1,342.8)
---------- ----------
2,056.1 1,962.3
Investments in affiliated companies............ 344.5 329.1
Other assets................................... 302.8 319.4
------- ------
TOTAL ASSETS $ 3,475.6 $ 3,392.1
========== ==========
</TABLE>
-2-
<PAGE>
<TABLE>
LIABILITIES, DEFERRED ITEMS AND SHAREHOLDERS' EQUITY
<CAPTION>
September 30 December 31
1994 1993
(Unaudited)
<S> <C> <C>
Accounts payable............................... $ 232.6 $ 190.6
Accrued expenses............................... 50.3 53.0
Debt
Short-term debt.............................. 229.6 226.1
Long-term debt............................... 1,482.9 1,446.5
Capital lease obligations.................... 256.2 267.3
------- ------
1,968.7 1,939.9
Deferred income taxes.......................... 260.4 248.2
Other deferred items........................... 317.4 370.5
------- ------
Total liabilities and deferred items 2,829.4 2,802.2
Shareholders' equity
Preferred Stock.............................. 3.4 3.4
Common Stock................................. 14.2 14.1
Additional capital........................... 317.3 312.4
Reinvested earnings.......................... 339.1 305.1
Cumulative foreign currency
translation adjustment...................... 19.3 2.0
------- ------
693.3 637.0
Less - Cost of common shares in treasury..... (47.1) (47.1)
------- ------
Total shareholders' equity 646.2 589.9
------- ------
TOTAL LIABILITIES, DEFERRED ITEMS
AND SHAREHOLDERS' EQUITY $ 3,475.6 $ 3,392.1
========== ========
</TABLE>
-3-
<PAGE>
GATX CORPORATION AND SUBSIDIARIES
<TABLE>
STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
IN MILLIONS
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 25.3 $ 11.7 $ 66.4 $ 56.5
Adjustments to reconcile net income
to net cash provided by operating activities:
Realized gain on disposition of leased
equipment (4.3) (7.8) (12.4) (43.3)
Provision for depreciation and amortization 42.4 40.1 120.9 112.9
Provision for possible losses 5.2 8.1 15.3 24.3
Deferred income taxes 5.4 10.5 7.9 8.3
Net change in trade receivables, inventories,
accounts payable and accrued expenses (6.1) 2.1 38.4 12.6
Other (6.7) (4.9) (64.1) (17.4)
------- -------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 61.2 59.8 172.4 153.9
INVESTING ACTIVITIES
Additions to property, plant and equipment (111.1) (91.9) (277.7) (223.7)
Additions to equipment on lease,
net of nonrecourse financing (23.5) (12.7) (129.0) (160.8)
Secured loans extended (9.6) (8.3) (55.3) (24.0)
Investments in affiliated companies (.3) (9.7) (1.1) (42.4)
Progress payments and other - - (1.0) (3.2)
------- ------- -------- --------
Capital additions (144.5) (122.6) (464.1) (454.1)
Portfolio proceeds:
From disposition of leased equipment 17.5 15.9 42.6 80.9
From return of investment 54.4 37.1 99.9 115.6
------- ------- -------- --------
Total portfolio proceeds 71.9 53.0 142.5 196.5
Proceeds from other asset dispositions 131.4 238.4 146.1 241.2
------- -------- -------- --------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 58.8 168.8 (175.5) (16.4)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 25.0 21.2 139.2 195.0
Repayment of long-term debt (13.8) (13.4) (93.6) (111.9)
Net (decrease) increase in short-term debt (104.1) (214.3) 3.5 (179.5)
Repayment of capital lease obligations (5.0) (8.7) (11.0) (13.7)
Issuance of Common Stock under employee
benefit programs .1 1.9 3.9 3.6
Cash dividends (10.8) (10.2) (32.3) (30.5)
-------- -------- -------- --------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (108.6) (223.5) 9.7 (137.0)
-------- -------- -------- --------
NET INCREASE IN CASH AND
CASH EQUIVALENTS $ 11.4 $ 5.1 $ 6.6 $ .5
======= ======== ======= =======
</TABLE>
-4-
<PAGE>
MANAGEMENT'S DISCUSSION OF OPERATIONS
COMPARISON OF FIRST NINE MONTHS OF 1994
TO FIRST NINE MONTHS OF 1993
GENERAL
GATX Corporation's net income for the first nine months of 1994 was $66 million
or $2.80 per common share compared to net income of $57 million or $2.34 per
common share for the first nine months of 1993. As a result of federal tax
legislation enacted in the third quarter of 1993 which increased the federal
income tax rate from 34% to 35% retroactively to January 1, 1993, net income for
1993 included an increase in income tax expense of $7 million or $.37 per common
share for the cumulative increase in deferred income taxes.
Improved operating performance at Transportation due to 3,000 more railcars on
lease and at Terminals due to increased utilization and throughput resulted
in higher net income. Financial Services net income decreased as higher
lease, interest and fee income and a lower loss provision were more than
offset by the lower disposition gains; 1993 included a $17 million pretax
gain from an insurance settlement related to marine equipment. American
Steamship's results decreased in 1994 due to severe ice and weather
conditions early in the shipping season and the inclusion in 1993 income
of a gain from the sale of a customer bankruptcy claim. Results were
lower at Logistics due to continuing margin pressures.
Operating activities provided $172 million of cash flow during the first nine
months of 1994, an $18 million increase over the first nine months of 1993. Net
income adjusted for non-cash items generated $198 million, up $39 million from
the first nine months of 1993. The $31 million decrease in realized gains on
disposition of leased equipment effectively increased cash from operating
activities as the full amount of proceeds was included under investing
activities as portfolio proceeds. The increase in working capital and decrease
in other is primarily the result of a reclassification from deferred items to
accounts payable; American Airlines has exercised its option to return four DC-
10 aircraft in early 1995.
Proceeds of $143 million were generated from the portfolio compared to $196
million in the first nine months of 1994. Disposition proceeds of $43 million
were $38 million less than the 1993 period which included an insurance
settlement for a casualty related to marine equipment and a high level of
rail dispositions. Proceeds from return of investment of $100 million
decreased $16 million due to less recovery of lease principal and a lower level
of distributions from joint ventures, partially offset by increased secured
loan repayments. Net cash proceeds from other asset dispositions in 1994 of
$146 million consisted of the proceeds received from the sale leaseback of
railcars at Transportation and the proceeds received from the sale of an
interest in an aircraft on lease which was acquired in the first quarter; the
1993 period primarily consisted of the proceeds received from the sale leaseback
of railcars at Transportation and the sale leaseback of a rail equipment
portfolio acquired by Financial Services.
-5-
<PAGE>
Capital additions in the first nine months of 1994 totaled $464 million compared
to $454 million in the comparable 1993 period. Capital additions at
Transportation included $179 million for railcars and railcar improvements
compared to $142 million in 1993; approximately $12 million was expended on
the upgrade to the repair facilities in 1994 compared to $18 million in 1993.
Terminals invested $80 million in tank construction, other modifications and
improvements, and the acquisition of two additional terminal facilities in 1994;
$51 million was expended in the 1993 period. Portfolio additions of $185
million were $44 million lower than the first nine months of 1993 which included
an acquired portfolio of rail assets. Logistics expended $6 million for
equipment additions, down $4 million from last year. GATX's full year 1994
capital spending is forecasted to be approximately $700 million compared to
$596 million in 1993. A portion of the 1994 expenditures may not be effected
depending on market conditions. It is anticipated that capital expenditures
will be funded by both internally generated funds and GATX's available
financing sources.
GATX had available unused committed lines of credit totaling $384 million at
September 30, 1994. General American Transportation Corporation (GATC) has a
$650 million shelf registration for debt securities and pass through trust
certificates, under which $75 million of medium-term notes and $93 million of
pass through trust certificates have been issued. During the quarter, GATC
issued $25 million of medium-term notes and completed a sale leaseback of GATC
railcars for $130 million, $93 million of which was the debt portion. GATX
Capital has a $300 million shelf registration, under which $55 million of
medium-term notes have been issued. GATX Capital did not issue any medium-term
notes during the quarter.
RESULTS OF OPERATIONS
Following is a discussion of the operating results of GATX's business segments:
RAILCAR LEASING AND MANAGEMENT (TRANSPORTATION)
Nine Months Ended
(In Millions) September 30
1994 1993 Change
Gross Income $238.8 $224.7 $14.1 6%
Net Income $ 40.7 $ 34.8 $ 5.9 17%
Transportation's gross income of $239 million for the first nine months of 1994
increased 6% from the comparable prior year period. The improvement resulted
from 3,000 additional railcars on lease and slightly higher overall lease
rates. At quarter end, the active fleet totaled 54,500 railcars compared to
51,500 railcars on lease a year ago. Fleet utilization at September 30, 1994
was 93% compared to 92% a year ago.
-6-
Net income of $41 million increased $6 million from the first nine months of
1993 which included a $4 million increase in the deferred tax provision as a
result of the increase in the federal income tax rate. Income before the tax
rate change was $39 million in 1993; on this more comparable basis, earnings
increased 4% over 1993. Increased rental income was partially offset by
increased fleet repair costs, ownership costs and lower investment earnings.
Operating margins decreased slightly due to the impact of increased fleet repair
costs.
<TABLE>
FINANCIAL SERVICES
<CAPTION>
Nine Months Ended
(In Millions) September 30
1994 1993 Change
<S> <C> <C> <C> <C>
Gross Income $150.5 $157.8 $(7.3) (5)%
Net Income $ 18.1 $ 19.3 $(1.2) (6)%
</TABLE>
Financial Services' year-to-date gross income decreased $7 million from the
first nine months of 1993 principally due to lower disposition gains.
Disposition gains do not fall evenly period to period and are generated
primarily from the sale of equipment at scheduled lease termination dates.
Gross income in 1993 included a $17 million pretax gain from an insurance
settlement related to marine equipment. Partially offsetting the lower
disposition gains were increases in lease, interest and fee income. The
increase in lease income was the result of new operating lease investment
volume. Interest income increased between years as a result of higher interest
rates and the early payoff of a loan in the third quarter of 1994 which
generated a $1 million prepayment premium. Fee income increased mainly due to a
large residual remarketing fee recorded in 1994.
Net income of $18 million decreased $1 million from the comparable 1993 period.
Net income in 1993 was reduced $2 million for the increase in the federal income
tax rate; on this more comparative basis, earnings decreased 13% from 1993
primarily due to the lower level of disposition gains partially offset by a
lower provision for losses. The increase in lease income was partially offset
by increased operating lease expenses. The provision for possible losses of
$15 million decreased $9 million from the 1993 period. The loss reserve at
September 30, 1994 was $96 million or 7.5% of total investments compared to
$107 million or 8.1% of total investments at
September 30, 1993.
-7-
<PAGE>
<TABLE>
TERMINALS AND PIPELINES (TERMINALS)
<CAPTION>
Nine Months Ended
(In Millions) September 30
1994 1993 Change
<S> <C> <C> <C> <C>
Gross Income $220.3 $206.9 $13.4 6%
Net Income $ 23.3 $ 18.8 $ 4.5 24%
</TABLE>
Terminals' gross income increased 6% from the first nine months of 1993
reflecting continuing strong demand at the pipeline operations, increased
chemical tanks and services at several terminals, and strong activity at
domestic petroleum terminals. Capacity utilization at Terminals' wholly-owned
facilities was 94 percent at the end of the third quarter compared to 92 percent
a year ago. Throughput for the nine months was 513 million barrels compared to
461 million barrels a year ago reflecting the overall improvement in the U.S.
economy.
Net income of $23 million increased $4 million from the first nine months of
1993; $2 million of this increase was due to a higher provision for deferred
taxes in 1993 as a result of the increase in the tax rate. Income in 1993 before
the tax rate change was $21 million; on this more comparable basis, earnings
increased 10% over 1993. A slightly improved operating margin was partially
offset by higher selling, general and administrative costs primarily
attributable to higher compensation, training and information systems costs.
Equity in net earnings of the foreign affiliates increased $1.5 million due to
strong demand at the Belgium and Singapore terminals; the Singapore terminals
also benefitted from infrastructure growth.
<TABLE>
GREAT LAKES SHIPPING
<CAPTION>
Nine Months Ended
(In Millions) September 30
1994 1993 Change
<S> <C> <C> <C> <C>
Gross Income $ 54.2 $ 57.1 $(2.9) (5)%
Net Income $ 3.6 $ 5.3 $(1.7) (32)%
</TABLE>
American Steamship Company's gross income for the first nine months of 1994
decreased $3 million from the prior year period. Gross income in 1993 included
the sale of a bankruptcy claim which generated a pretax gain of $2 million.
Tonnage carried in the first nine months of 1994 was 17.2 million tons compared
to 16.8 million tons in the first nine months of 1993; however, on a per ton
basis, freight revenue decreased 5% from last year as a result of competitive
rate pressures and a shift in commodity mix.
-8-
<PAGE>
Net income decreased $2 million from the first nine months of 1994 as a result
of the lower gross income and a reduced contribution margin. Margins also were
hurt by the severe weather conditions which impeded efficient vessel operations
at the commencement of the sailing season.
<TABLE>
LOGISTICS AND WAREHOUSING
<CAPTION>
Nine Months Ended
(In Millions) September 30
1994 1993 Change
<S> <C> <C> <C> <C>
Gross Income $182.8 $163.7 $19.1 12%
Net Loss $ (.9) $ - $ (.9) -%
</TABLE>
GATX Logistics' gross income increased 12% from the first nine months of 1993
due to new customers and increased volume. Total warehousing square footage
increased to 23.5 million square feet compared to 22.3 million square feet a
year ago. Space utilization was 93% at the end of the third quarter of 1994
compared to 91% at September 30, 1993.
Logistics' net loss for the first nine months of 1994 was $.9 million compared
to a breakeven level in the comparable 1993 period. Despite the increase in
gross income, the expense of implementing new business, relocating existing
customers, and labor inefficiencies offset contributions from new business.
Logistics' contribution margin continues to be under pressure as the competitive
environment is limiting operating profits.
-9-
<PAGE>
<TABLE>
FEDERAL TAX RATE CHANGE IN 1993
Following is a table showing the effect of the federal tax legislation which
increased the federal income tax rate from 34% to 35% retroactively affecting
all of 1993.
<CAPTION>
Net Income (Loss) Tax Net
Income Before Tax Rate Income
(Loss) Rate Change Change(A) (Loss)
- --------------------------------------------------------------------------------------------
In Millions, Except Per Share Data
Nine Months Ended September 30 ---1994---- ---------------1993----------
<S> <C> <C> <C> <C>
Railcar Leasing and Management $ 40.7 $ 39.1 $ (4.3) $ 34.8
Financial Services 18.1 20.9 (1.6) 19.3
Terminals and Pipelines 23.3 21.2 (2.4) 18.8
Great Lakes Shipping 3.6 5.3 - 5.3
Logistics and Warehousing (.9) - - -
- --------------------------------------------------------------------------------------------
Subtotal 84.8 86.5 (8.3) 78.2
Corporate and Other (18.4) (22.6) .9 (21.7)
- --------------------------------------------------------------------------------------------
Total Consolidated Amounts $ 66.4 $ 63.9 $ (7.4) $ 56.5
============================================================================================
Income Per Common Share $ 2.80 $ 2.71 $ (.37) $ 2.34
===========================================================================================
(A) Effect of tax rate change on pre-1993 deferred taxes
</TABLE>
-10-
<PAGE>
COMPARISON OF THIRD QUARTER 1994 TO
THIRD QUARTER 1993
GENERAL
For the third quarter of 1994, net income was $25 million or $1.09 per share as
compared to net income of $12 million or $.42 per share for the third quarter of
1993.
<TABLE>
GROSS INCOME
<CAPTION>
(In Millions) Three Months Ended
September 30
Business Segment 1994 1993 Change
<S> <C> <C> <C> <C>
Railcar Leasing and Management $ 80.8 $ 76.2 $4.6 6%
Financial Services 52.4 50.9 1.5 3
Terminals and Pipelines 76.4 69.8 6.6 9
Great Lakes Shipping 28.7 26.5 2.2 8
Logistics and Warehousing 61.6 58.2 3.4 6
</TABLE>
<TABLE>
NET INCOME (LOSS)
<CAPTION>
(In Millions) Three Months Ended
September 30
Business Segment 1994 1993 Change
<S> <C> <C> <C> <C>
Railcar Leasing and Management $ 14.0 $ 9.1 $4.9 54%
Financial Services 6.6 3.0 3.6 120
Terminals and Pipelines 8.2 4.8 3.4 71
Great Lakes Shipping 2.1 2.0 .1 5
Logistics and Warehousing (.1) .4 (.5) (125)
</TABLE>
Increases and decreases in gross income and net income between these quarters
for all segments were principally due to the same reasons as previously
discussed in relation to the nine-month periods. As a result of the 1993
federal tax legislation, net income for the third quarter of 1993 includes a $7
million charge for the increase in deferred income taxes resulting from the
change in the tax rate.
-11-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
GATX has previously reported various lawsuits seeking damages arising out of the
May 1989 explosion in San Bernardino, California. Of those suits, Goldie, et
al, v. Southern Pacific, et al, filed May 1990 in the County of San Bernardino
was settled in July 1994. Based upon information known to management, it
remains management's opinion that if damages are assessed and taking into
consideration probable insurance recovery, the ultimate resolution of the
lawsuits arising out of the May 1989 explosion will not have a material effect
on GATX's consolidated financial position or results of operations.
In the previously reported case of Searls v. Glasser, et al, filed in the U.S.
District Court for the Northern District of Illinois, the court has granted the
defendants' motion for summary judgement. The plaintiff has filed a notice of
appeal from that judgement. GATX continues to believe that it has a strong
defense and the case is without merit.
Item 6. Exhibits and Reports on Form 8-K. Page
(a) 11A Statement regarding computation of per share earnings. 14
11B Statement regarding computation of per share earnings
(full dilution). 15
27 Financial Data Schedule for GATX Corporation submitted
to the SEC along with the electronic submission of this
Quarterly Report on Form 10-Q.
(b) No reports on Form 8-K were filed during the reporting period.
-12-
<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.
GATX CORPORATION
(Registrant)
/s/David M. Edwards
--------------------------------
David M. Edwards
Vice President, Finance
and Chief Financial Officer
(Duly Authorized Officer)
Date: November 10, 1994
<TABLE>
EXHIBIT 11A
GATX CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
AND COMMON STOCK EQUIVALENTS
<CAPTION>
IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Average number of shares of
Common Stock outstanding............. 19.9 19.6 19.8 19.6
Shares issuable upon assumed exercise
of stock options, reduced by the
number of shares which could have
been purchased with the proceeds
from exercise of such options........ .3 .4 .3 .3
------ ------ ------ ------
Total.................................. 20.2 20.0 20.1 19.9
====== ====== ====== =======
Net income ............................ $ 25.3 $ 11.7 $ 66.4 $ 56.5
Deduct - Dividends paid
on Preferred Stock................... 3.3 3.3 10.0 10.0
------ ------ ------ ------
Net income, as adjusted................ $ 22.0 $ 8.4 $ 56.4 $ 46.5
====== ====== ====== =======
Net income per share.................. .$ 1.09 $ .42 $ 2.80 $ 2.34
====== ====== ====== =======
</TABLE>
<TABLE>
EXHIBIT 11B
GATX CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
AND COMMON STOCK EQUIVALENTS
ASSUMING FULL DILUTION
<CAPTION>
IN MILLIONS, EXCEPT PER SHARE AMOUNTS
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
------------------- -----------------
<S> <C> <C> <C> <C>
Average number of shares used to
compute primary earnings per share... 20.2 20.0 20.1 19.9
Common Stock issuable upon assumed
conversion of Preferred Stock........ 4.0 * 4.1 *
------- ----- ------ ------
Total.................................. 24.2 20.0 24.2 19.9
====== ====== ====== ======
Net income as adjusted
per primary computation.............. $ 22.0 $ 8.4 $ 56.4 $ 46.5
Add - Dividends paid
on Preferred Stock................... 3.3 * 10.0 *
------- ------ ------ ------
Net income as adjusted................. $ 25.3 $ 8.4 $ 66.4 $ 46.5
====== ====== ====== ======
Net income per share,
assuming full dilution............... $ 1.04 $ .42 $ 2.75 $ 2.34
====== ====== ====== ======
* Conversion of Preferred Stock is excluded from computation of fully diluted
earnings because of antidilutive effects.
Additional fully diluted computation (1)
Average number of shares used to
compute primary earnings per share. 20.0 19.9
Common stock issuable upon
assumed conversion of Preferred Stock,
and stock option exercises......... 4.0 4.0
------ -------
24.0 23.9
====== =======
Net income as adjusted
per primary computation............ $ 8.4 $ 46.5
Add - Dividends paid and accrued
on Preferred Stock................. 3.4 10.0
------- --------
$ 11.8 $ 56.5
====== ======
Net income per share,
assuming full dilution............. $ .49 $ 2.36
====== ======
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15
because it produces an antidilutive result.
</TABLE>
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED INCOME STATEMENT AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 33
<SECURITIES> 0
<RECEIVABLES> 844<F1>
<ALLOWANCES> 104
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3482
<DEPRECIATION> 1425
<TOTAL-ASSETS> 3476
<CURRENT-LIABILITIES> 0
<BONDS> 1739<F2>
<COMMON> 14
3
0
<OTHER-SE> 629
<TOTAL-LIABILITY-AND-EQUITY> 3476
<SALES> 0
<TOTAL-REVENUES> 844
<CGS> 0
<TOTAL-COSTS> 424<F3>
<OTHER-EXPENSES> 121<F4>
<LOSS-PROVISION> 15
<INTEREST-EXPENSE> 110
<INCOME-PRETAX> 83<F5>
<INCOME-TAX> 33
<INCOME-CONTINUING> 66
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 66
<EPS-PRIMARY> 2.80
<EPS-DILUTED> 2.75
<FN>
<F1>RECEIVABLE CONSISTS OF THREE COMPONENTS: TRADE ACCOUNTS OF 93 MILLION, FINANCE
LEASES OF 532 MILLION AND SECURED LOANS OF 219 MILLION
<F2>THIS TAG CONSISTS OF TWO COMPONENTS; LONG-TERM DEBT OF 1483 MILLION AND CAPITAL
LEASE OBLIGATIONS OF 256 MILLION; SHORT-TERM DEBT IS NOT INCLUDED IN THIS
VALUE.
<F3>THIS VALUE REPRESENTS OPERATING EXPENSES ON THE CONSOLIDATED INCOME STATEMENT.
<F4>THIS VALUE REPRESENTS PROVISION FOR DEPRECIATION AND AMORTIZATION ON THE
CONSOLIDATED INCOME STATEMENT.
<F5>THIS VALUE REPRESENTS INCOME BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF
AFFILIATED COMPANIES.
</FN>
</TABLE>
