UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from___________to__________
Commission file number 1-5442
General Instrument Corporation
(Exact name of registrant as specified in its charter)
Delaware 13-3575653
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
181 West Madison Street, Chicago, Illinois 60602
(Address of principal executive offices)
(Zip Code)
(312) 541-5000
(Registrant's telephone number, including area code)
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
As of August 1, 1995 there were 123,276,737 shares of Common
Stock outstanding.
<PAGE>
<TABLE>
PART I
FINANCIAL INFORMATION
GENERAL INSTRUMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
ASSETS
<CAPTION>
(Unaudited)
June 30, December 31,
1995 1994
-------- ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 16,589 $ 5,128
Accounts receivable, less allowance for
doubtful accounts of $13,921
and $7,582, respectively 314,205 306,754
Inventories 264,537 214,180
Prepaid expenses and other current assets 29,710 22,256
Deferred income taxes 117,907 93,446
-------- ---------
Total current assets 742,948 641,764
Property, plant and equipment - net 377,520 343,868
Intangibles, less accumulated
amortization of $86,540 and $78,460,
respectively 153,330 161,410
Excess of cost over fair value of net
assets acquired, less accumulated
amortization of
$123,303 and $110,952, respectively 868,736 904,184
Investments and other assets 19,325 10,113
Deferred income taxes, net of valuation
allowance 24,651 29,238
Deferred financing costs, less
accumulated
amortization of $25,604 and $22,980, 15,750 18,374
respectively ---------- ---------
TOTAL ASSETS $2,202,260 $2,108,951
========== ==========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GENERAL INSTRUMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
(Unaudited)
June 30, December 31,
1995 1994
----------- ------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 180,763 $ 162,529
Accrued interest payable 4,256 2,737
Income taxes payable 51,407 52,670
Accrued liabilities 210,489 208,383
Current portion of long-term debt 4,310 2,155
------------ -----------
Total current liabilities 451,225 428,474
------------ -----------
Deferred income taxes 26,108 21,990
------------ -----------
Long-term debt 733,339 794,694
------------ -----------
Other non-current liabilities 191,451 186,615
------------ -----------
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $.01 par value;
20,000,000 shares authorized;
no shares issued - -
Common Stock, $.01 par value;
400,000,000 shares authorized;
122,835,016 and 122,231,348
issued at June 30, 1995 and
December 31, 1994, respectively 1,228 1,222
Additional paid-in capital 555,361 543,728
Retained earnings 243,741 132,634
------------ -----------
800,330 677,584
Less - Treasury stock, at cost,
11,259 shares of
Common Stock (17) (17)
Unearned compensation (176) (389)
------------ -----------
Total stockholders' equity 800,137 677,178
------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $2,202,260 $2,108,951
============ ===========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GENERAL INSTRUMENT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - In Thousands, Except Net Income Per Share)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ----------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $611,639 $508,783 $1,220,356 $941,305
--------- -------- ---------- --------
OPERATING COSTS AND
EXPENSES:
Cost of sales 416,269 353,870 834,153 637,239
Selling, general
and administrative 58,879 45,437 122,913 84,562
Research and
development 37,116 26,883 70,775 52,898
Amortization of
excess of cost
over fair value
of net assets
acquired 6,175 6,403 12,351 12,824
--------- -------- ---------- --------
Total operating
costs and
expenses 518,439 432,593 1,040,192 787,523
--------- -------- ---------- --------
OPERATING INCOME 93,200 76,190 180,164 153,782
Other expense, net (783) (1,943) (857) (3,007)
Interest expense, net (12,342) (13,681) (25,370) (26,575)
--------- -------- ---------- --------
INCOME BEFORE INCOME
TAXES AND CUMULATIVE
EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE 80,075 60,566 153,937 124,200
Provision for income (26,024) (8,565) (42,830) (19,297)
taxes --------- -------- ---------- --------
INCOME BEFORE CUMULATIVE
EFFECT OF A CHANGE
IN ACCOUNTING
PRINCIPLE 54,051 52,001 111,107 104,903
Cumulative effect of a
change in accounting
principle - - - (1,917)
--------- -------- ---------- --------
NET INCOME $ 54,051 $ 52,001 $ 111,107 $102,986
========= ======== ========== ========
Weighted Average Shares
Outstanding 123,741 123,211 123,499 123,084
Net Income per share
Primary:
Income before
cumulative effect
of a change in
accounting principle $0.44 $0.42 $0.90 $0.85
Cumulative effect of
a change in
accounting principle - - - (0.01)
--------- -------- ---------- --------
Net income $0.44 $0.42 $0.90 $0.84
========= ======== ========== ========
Fully Diluted:
Income before
cumulative effect
of a change in
accounting
principle $0.40 $0.40 $0.82 $0.81
Cumulative effect of
a change in
accounting principle - - - (0.01)
--------- -------- ---------- --------
Net income $0.40 $0.40 $0.82 $0.80
========= ======== ========== ========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GENERAL INSTRUMENT CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited - In Thousands)
<CAPTION>
Un-
Addit- Common earned Total
Common Stock ional Stock in Comp- Stock-
-------------- Paid-In Retained Trea- ensa- holders'
Shares Amount Capital Earnings sury tion Equity
------ ------ -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31,
1994 122,231 $1,222 $543,728 $132,634 ($17) ($389) $677,178
Net income for
the six
months ended
June 30, 1995 111,107 111,107
Exercise of
stock options 604 6 7,397 7,403
Tax benefit
from exercise
of stock
options 5,236 5,236
Costs
associated
with the sale
of Common
Stock (1,000) (1,000)
Amortization
of unearned
compensation 213 213
------- ------ -------- -------- -------- ------- --------
BALANCE, JUNE
30, 1995 122,835 $1,228 $555,361 $243,741 ($17) ($176) $800,137
======= ======= ======== ======== ======== ======= ========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
GENERAL INSTRUMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - In Thousands)
<CAPTION>
Six Months Ended
June 30,
-------------------
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $111,107 $102,986
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 52,856 46,433
Accounts receivable (1,451) (74,831)
Inventories (50,357) (50,627)
Prepaid expenses and other current
assets (7,454) (3,088)
Deferred income taxes (2,719) (1,234)
Accounts payable, income taxes
payable and other accrued liabilities 36,812 49,627
Other non-current liabilities (2,407) 9,967
Other (2,779) (503)
-------- --------
Net cash provided by operating activities 133,608 78,730
-------- --------
INVESTMENT ACTIVITIES:
Proceeds from sale of assets - 278
Additions to fixed assets - net (63,166) (54,750)
Investments in other assets (6,506) -
-------- --------
Net cash used in investment activities (69,672) (54,472)
-------- --------
FINANCING ACTIVITIES:
Costs associated with the sale of
Common Stock (678) (336)
Proceeds from the issuance of
Flexible Term Notes 10,800 -
Repayments of debt - (16,603)
Net proceeds (repayments) revolving
credit facilities (70,000) 26,000
Proceeds from stock options 7,403 3,233
-------- --------
Net cash (used in) provided by financing
activities (52,475) 12,294
-------- --------
Increase in cash and cash equivalents 11,461 36,552
Cash and cash equivalents, beginning of
the period 5,128 5,584
-------- --------
Cash and cash equivalents, end of the
period $ 16,589 $ 42,136
======== ========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
GENERAL INSTRUMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(In Thousands, Unless Otherwise Noted)
1. BASIS OF PRESENTATION
The consolidated balance sheet as of June 30, 1995, the
consolidated statements of income for the three and six months
ended June 30, 1995 and 1994, the consolidated statements of cash
flows for the six months ended June 30, 1995 and 1994 and the
consolidated statement of stockholders' equity for the six months
ended June 30, 1995 of General Instrument Corporation (the
"Company") are unaudited and reflect all adjustments of a normal
recurring nature which are, in the opinion of management,
necessary for a fair presentation of the interim period financial
statements. There were no adjustments of a non-recurring nature
recorded during the three and six months ended June 30, 1995 and
1994, except for an adjustment in March 1995 to reflect the
settlement of certain tax matters (See Note 4) and a cumulative
effect adjustment to reflect the adoption, as of January 1, 1994,
of Financial Accounting Standards Board Statement No. 112 ("SFAS
112"), Employers' Accounting for Postemployment Benefits. These
consolidated financial statements should be read in conjunction
with the Company's December 31, 1994 consolidated financial
statements and notes thereto.
Certain reclassifications have been made to the comparative prior
period financial statements to conform to the current period
presentation.
2. INVENTORIES
Inventories consist of:
June 30, 1995 December 31, 1994
------------- -----------------
Raw Materials $ 98,974 $ 81,987
Work in Process 28,153 25,822
Finished Goods 137,410 106,371
---------- --------------
Inventories $ 264,537 $214,180
=========== ==============
<PAGE>
3. LONG-TERM DEBT
Long-term debt consists of:
June 30, 1995 December 31, 1994
------------- -----------------
Senior indebtedness:
Revolving credit
facilities $170,000 $240,000
Taiwan Loan 56,849 56,849
Flexible Term
Notes 10,800 -
Convertible Junior
Subordinated Notes 500,000 500,000
---------- -------------
Total 737,649 796,849
Less current
maturities 4,310 2,155
---------- -------------
Long-Term debt $733,339 $794,694
=========== ==============
In January 1995, CommScope, Inc., an indirect wholly-owned
subsidiary of the Company, entered into an $11 million loan
agreement in connection with the issuance of notes by the
Alabama State Industrial Development Authority (the "Flexible
Term Notes"). Borrowings under the loan agreement bear
interest at variable rates based upon current market
conditions for short-term financing. The loan agreement will
mature on January 1, 2015 and any remaining amounts
outstanding under the Flexible Term Notes will be due and
payable on that date.
4. INCOME TAXES
The provision for income taxes for the three and six months
ended June 30, 1995 is based on the expected annual effective
rate reduced by a $12 million credit for the settlement of
certain tax matters.
5. STOCKHOLDERS' EQUITY
In April 1995, affiliates of Forstmann Little & Co. and
certain current and former directors of the Company sold an
aggregate of 15.6 million shares of Common Stock in a public
offering. The Company received no proceeds from such
offering.
In April 1995, the stockholders approved an amendment to the
Company's Certificate of Incorporation which increased the
number of authorized shares of Common Stock from 175 million
to 400 million.
<PAGE>
GENERAL INSTRUMENT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS)
NET SALES
Net sales for the three months ended June 30, 1995 ("Second
Quarter 1995") were $612 compared to $509 in the three months
ended June 30, 1994 ("Second Quarter 1994"), an increase of
$103, or 20%. Net sales were $1,220 in the six months ended
June 30, 1995 ("First Half 1995") compared to $941 in the six
months ended June 30, 1994 ("First Half 1994"), an increase
of $279 or 30%. These increases relate primarily to higher
sales volume which occurred in both the Broadband
Communications and Power Semiconductor segments.
Broadband Communications sales increased 16% or $69 and 28%
or $223 in Second Quarter 1995 and First Half 1995,
respectively, over the comparable 1994 periods, primarily as
a result of increased sales volume by the Communications
Division of DigiCipher TM digital compression products,
distribution electronics and CommScope cable products. The
higher sales volume primarily reflects commercialization of
digital broadband systems, as well as continued cable
television operator infrastructure spending in the United
States and continued deployment of new cable television
systems in international markets. International sales of
cable television products increased 52% and 56% in Second
Quarter 1995 and First Half 1995, respectively, over the
comparable 1994 periods. Satellite system sales increased
57% and 72% in Second Quarter 1995 and First Half 1995,
respectively, over Second Quarter 1994 and First Half 1994.
The increased satellite system sales in 1995, due primarily
to sales of digital consumer receivers to Primestar Partners,
were partially offset by a decline in the sales of
VideoCipher RS TM analog satellite receiver consumer modules.
In 1994, the Company had significant sales of these modules
to persons who had been receiving without authorization (or
"pirating") the commercial satellite programming data
signals. In 1995 these sales were at minimal levels as
expected.
Power Semiconductor sales increased 44% and 39% in Second
Quarter 1995 and First Half 1995, respectively, over the
comparable 1994 periods. These increases were a result of
broad-based global demand, primarily from automotive,
computer, and consumer electronics customers for power
rectifiers and protection devices.
GROSS PROFIT (NET SALES LESS COST OF SALES)
Gross profit increased $40, or 26%, to $195 in Second Quarter
1995 from $155 in Second Quarter 1994 and was 31.9% of sales
in Second Quarter 1995 compared to 30.4% of sales in Second
Quarter 1994. Gross profit increased $82, or 27%, to $386 in
First Half 1995 from $304 in First Half 1994 and was 31.6%
and 32.3% of sales in First Half 1995 and First Half 1994,
respectively.
The increase in gross profit during 1995 principally reflects
the higher sales volume discussed above. The increased gross
profit margin in Second Quarter 1995 compared to Second
Quarter 1994 primarily reflects efficiencies gained through
these higher volumes. The decrease in gross profit margin in
First Half 1995 from First Half 1994 reflects a shift in
product mix from higher margin VideoCipher RS TM analog
satellite receiver consumer modules to DigiCipher TM digital
compression products, which initially carry lower margins.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative ("SG&A") expenses
increased $13 to $59 in Second Quarter 1995 from $45 in
Second Quarter 1994, and increased as a percentage of sales
to 10% in Second Quarter 1995 from 9% in Second Quarter 1994.
SG&A expenses increased $38 to $123 in First Half 1995 from
$85 in First Half 1994 and increased as a percentage of sales
to 10% in First Half 1995 compared to 9% in First Half 1994.
The increase in SG&A expense in both Second Quarter 1995 and
First Half 1995 over the comparable 1994 periods, reflects
higher sales volume and additional marketing and selling
costs incurred by the Company to increase its sales force,
field support and marketing activities to take advantage of
increased growth opportunities in international cable and
satellite television and worldwide telecommunications
markets. The 1995 expenses also include $5 and $12, in
Second Quarter 1995 and First Half 1995, respectively,
related to a national advertising campaign to support sales
of C-Band satellite systems as well as a $6 provision during
the First Half 1995 related to the potential uncollectibility
of certain receivables.
RESEARCH AND DEVELOPMENT
Research and development ("R&D") expense was $37 in Second
Quarter 1995 compared to $27 in Second Quarter 1994 and was
6% and 5% of sales, respectively. R&D expense for First Half
1995 and First Half 1994 was $71 and $53, respectively, and
was 6% of sales in each period. This level of spending,
principally focused on the Broadband Communications business,
reflects continued development of the second generation of
cable set-top terminals, which incorporate digital
compression and multimedia capabilities; development of
enhanced addressable analog terminals; development of
advanced digital systems for cable and satellite television
distribution; and product development through strategic
alliances. Emerging R&D activities include development of
broadband telephony products and interactive multimedia
technologies for broadband networks. The Company's research
and development expenditures are expected to approximate $130
for the year ending December 31, 1995.
NET INTEREST EXPENSE
Net interest expense was $12 in Second Quarter 1995 compared
to $14 in Second Quarter 1994, and $25 for First Half 1995
compared to $27 in First Half 1994. The levels of interest
expense reflect lower weighted average borrowings in 1995
partially offset by higher interest rates.
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE
Effective January 1, 1994, the Company adopted Financial
Accounting Standards Board Statement No. 112, Employers'
Accounting for Postemployment Benefits ("SFAS No. 112"). As
a result of adopting SFAS No. 112, the Company recorded a
cumulative effect charge to income of $2.
INCOME TAXES
The effective income tax rates increased to 32.5% and 27.8%
in Second Quarter 1995 and First Half 1995, respectively,
from 14.1% and 15.5% in Second Quarter 1994 and First Half
1994, respectively. The increases in the effective tax rates
in 1995 are attributable to the Company having a valuation
allowance related to domestic deferred tax assets in 1994
which was reduced during 1994, to the extent that domestic
taxable income was generated. As of December 31, 1994, the
majority of the Company's domestic deferred tax assets were
determined to be realizable and therefore there was no
valuation allowance impact on income taxes in 1995. In
addition, during First Half 1995, the Company recorded a $12
credit to income related to the settlement of certain tax
matters.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, working capital was $292 compared to $213
at December 31, 1994. The working capital increase of $78
was due principally to an inventory build-up to support
business growth and new products and increased deferred tax
assets. Based on current levels of order input and backlog,
as well as significant sales agreements not yet reflected in
order and backlog levels, the Company believes that
operational working capital levels are appropriate to support
future operations and the rollout of new products. There can
be no assurance, however, that future industry specific
developments or general economic trends will not alter the
Company's working capital requirements. At June 30, 1995,
the Company had borrowings of $170 under its revolving credit
facilities and credit commitments, which the Company had not
borrowed against, of $330.
In January 1995, CommScope, Inc., an indirect wholly-owned
subsidiary of the Company, entered into an $11 loan agreement
in connection with the issuance of notes by the Alabama State
Industrial Development Authority. See Note 3 to the
consolidated financial statements.
During First Half 1995, the Company invested $64 in equipment
and facilities. These capital expenditures were used to
expand capacity to meet increased current and future demands
for analog and digital products, coaxial cable and
rectifiers. Capital expenditures for the year ending
December 31, 1995 are expected to approximate $180.
At June 30, 1995, the Company had $17 of cash and cash
equivalents on hand compared to $5 at December 31, 1994. At
June 30, 1995, long-term debt, including current maturities,
was $738 compared to $797 at December 31, 1994.
The Company's principal source of liquidity both on a short-
term and long-term basis is cash flow provided by operations.
Occasionally, however, the Company may borrow against its
revolving credit facilities to supplement cash flow from
operations. The Company believes that, based upon an
analysis of its consolidated financial position, its cash
flow during the past 12 months and the expected results of
operations in the future, operating cash flow and available
funding under its revolving credit facilities will be
adequate to fund operations, research and development
expenditures, capital expenditures and debt service for the
next 12 months. The Company intends to repay its remaining
indebtedness primarily with cash flow from operations. There
can be no assurance, however, that future industry specific
developments or general economic trends will not adversely
affect the Company's operations or its ability to meet its
cash requirements.
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securities Holders
The Company held its Annual Meeting of Stockholders (the
"Meeting" ) on April 26, 1995.
At the Meeting, the stockholders approved and adopted an
amendment to the Company's Amended and Restated Certificate
of Incorporation to increase the number of shares of
Common Stock that the Company has the authority to issue
from 175,000,000 to 400,000,000. 96,483,054 votes were
cast for the approval of the amendment, 15,484,381 votes
were cast against the approval of the amendment, and there
were 299,044 abstentions.
Also at the Meeting, the stockholders approved the
General Instrument Corporation Annual Incentive Plan for
the purpose of qualifying the compensation payable to the
Chief Executive Officer under the Annual Incentive Plan as
performance based compensation eligible for exclusion from
the tax deduction limitation of Section 162(m) of the
Internal Revenue Code. 108,398,923 were cast for the
approval of the amendment, 3,536,936 votes were cast
against the approval of the amendment, and there were
330,620 abstentions.
Four directors were nominated for election at the Meeting
and each was elected. John Seely Brown received
111,828,826 votes for election and 437,653 votes were
withheld. Theodore J. Forstmann received 111,640,582
votes for election and 625,897 votes were withheld. Morton
M. Meyerson received 111,820,442 votes for election and
446,037 votes were withheld. Felix G. Rohaytn received
111,814,793 votes for election and 451,686 votes were
withheld.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 - Computation of Earnings Per Share
(b) Report on Form 8-K
The Company filed a report on Form 8-K dated April
17, 1995 reporting the release of the Company's
operating results for the three months ended March 31,
1995.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GENERAL INSTRUMENT CORPORATION
August 9, 1995 /s/Paul J. Berzenski
-------------- -----------------------------
Date Paul J. Berzenski
Vice President and Controller
Signing both in his capacity
as Vice President
on behalf of the Registrant
and as Chief Accounting Officer
of the Registrant
<PAGE>
<TABLE>
GENERAL INSTRUMENT CORPORATION
Exhibit 11 - Computation of Earnings Per Share
(In Thousands Except Per Share Amounts)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
1995 1994 1995 1994
----- ----- ----- -----
<S> <C> <C> <C> <C>
PRIMARY:
Income before
cumulative effect of
a change in
accounting principle $54,051 $52,001 $111,107 $104,903
Cumulative effect of a
change in accounting
principle - - - (1,917)
-------- ------- --------- --------
Net Income $54,051 $52,001 $111,107 $102,986
======== ======= ========= ========
Weighted average common
shares outstanding 122,647 120,621 122,476 120,527
Incremental shares under
stock option plans 1,094 2,590 1,023 2,557
------- ------- --------- --------
Weighted average common
and common equivalent
shares outstanding 123,741 123,211 123,499 123,084
======= ======= ========= ========
Primary earnings per share:
Income before cumulative
effect of a change in
accounting principle $0.44 $0.42 $0.90 $0.85
Cumulative effect of a
change in accounting
principle - - - (0.01)
------- ------- --------- --------
Net income $0.44 $0.42 $0.90 $0.84
======= ======= ========= ========
FULLY DILUTED:
Income before
cumulative effect
of a change in
accounting principle $54,051 $52,001 $111,107 $104,903
Interest and amortization
of debt issuance
costs related to the
Convertible Junior
Subordinated Notes,
net of income tax
effects 4,119 6,469 8,238 12,939
------- ------- --------- --------
Adjusted income before
a cumulative effect
of a change in
accounting principle 58,170 58,470 119,345 117,842
Cumulative effect of a
change in accounting
principle - - - (1,917)
------- ------- --------- --------
Adjusted net income $58,170 $58,470 $119,345 $115,925
======= ======= ========= ========
Weighted average common
shares outstanding 122,647 120,621 122,476 120,527
Incremental shares
under stock option
plans 1,362 2,782 1,392 2,731
Incremental shares
attributable to
Convertible Junior
Subordinated Notes 21,053 21,053 21,053 21,053
-------- ------- --------- --------
Adjusted weighted
average shares
outstanding 145,062 144,456 144,921 144,311
======== ======= ========= ========
Fully diluted earnings per share:
Income before cumulative
effect of a change in
accounting principle $0.40 $0.40 $0.82 $0.81
Cumulative effect of a
change in accounting
principle - - - (0.01)
-------- ------- --------- --------
Net income $0.40 $0.40 $0.82 $0.80
======== ======= ========= ========
Note: The computations of primary and fully diluted earnings
per share assume incremental shares under stock option
plans using the treasury method.
<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000040656
<NAME> GENERAL INSTRUMENT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 16,589
<SECURITIES> 0
<RECEIVABLES> 314,205
<ALLOWANCES> 13,921
<INVENTORY> 264,537
<CURRENT-ASSETS> 742,948
<PP&E> 377,520
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,202,260
<CURRENT-LIABILITIES> 451,225
<BONDS> 733,339
<COMMON> 1,228
0
0
<OTHER-SE> 798,909
<TOTAL-LIABILITY-AND-EQUITY> 2,202,260
<SALES> 1,220,356
<TOTAL-REVENUES> 1,220,356
<CGS> 834,153
<TOTAL-COSTS> 834,153
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,370
<INCOME-PRETAX> 153,937
<INCOME-TAX> 42,830
<INCOME-CONTINUING> 111,107
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 111,107
<EPS-PRIMARY> .90
<EPS-DILUTED> .82
</TABLE>
