<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
COMMISSION FILE NUMBER: 1-1927
THE GOODYEAR TIRE & RUBBER COMPANY
(Exact Name of Registrant as Specified in Its Charter)
OHIO 34-0253240
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1144 EAST MARKET STREET, AKRON, OHIO 44316-0001
(Address of Principal Executive Offices) (Zip Code)
(330) 796-2121
(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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
--- ---
-----------------------------------
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.
Number of Shares of Common Stock,
Without Par Value, Outstanding at September 30, 1997: 156,386,304
================================================================================
<PAGE> 2
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
Unaudited
<TABLE>
<CAPTION>
(In millions, except per share)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $ 3,322.2 $ 3,267.7 $ 9,870.9 $ 9,842.7
Cost of Goods Sold 2,544.8 2,508.8 7,538.6 7,524.3
Selling, Administrative and General Expense 466.3 461.4 1,396.6 1,395.8
Interest Expense 28.4 33.2 91.9 100.6
Other (Income) Expense 7.3 0.1 18.2 21.0
Foreign Currency Exchange (10.1) (0.7) (16.3) 5.9
Minority Interest in Net Income of Subsidiaries 11.9 10.9 35.1 34.1
--------- --------- --------- ---------
Income before Income Taxes 273.6 254.0 806.8 761.0
United States and Foreign Taxes on Income 79.5 83.8 250.1 251.1
--------- --------- --------- ---------
NET INCOME $ 194.1 $ 170.2 556.7 509.9
========= =========
Retained Earnings at Beginning of Period 2,603.0 2,661.0
CASH DIVIDENDS (131.3) (116.1)
--------- ---------
Retained Earnings at End of Period $ 3,028.4 $ 3,054.8
========= =========
PER SHARE OF COMMON STOCK:
NET INCOME $ 1.25 $ 1.09 $ 3.57 $ 3.29
========= ========= ========= =========
CASH DIVIDENDS $ 0.28 $ 0.25 $ 0.84 $ 0.75
========= ========= ========= =========
Average Shares Outstanding 156.2 155.3 156.1 154.8
</TABLE>
The accompanying notes are an integral part of this financial statement.
-1-
<PAGE> 3
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Unaudited
<TABLE>
<CAPTION>
(Dollars in millions)
SEPTEMBER 30, DECEMBER 31,
1997 1996
ASSETS: ------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 226.7 $ 238.5
Accounts and notes receivable,
less allowance (1997-$53.2, 1996-$58.1) 1,998.9 1,706.0
Inventories:
Raw materials 294.9 288.4
Work in process 86.3 77.2
Finished product 1,433.5 1,408.6
--------- ---------
1,814.7 1,774.2
Prepaid expenses and other current assets 321.1 306.3
--------- ---------
TOTAL CURRENT ASSETS 4,361.4 4,025.0
Investments in Affiliates, at equity 124.6 140.3
Long Term Accounts and Notes Receivable 199.0 216.2
Deferred Charges 1,186.6 1,059.4
Other Assets 168.6 163.0
Properties and Plants,
less accumulated depreciation (1997-$5,051.8, 1996-$4,935.8) 4,011.0 4,067.9
--------- ---------
TOTAL ASSETS $10,051.2 $ 9,671.8
========= =========
LIABILITIES:
CURRENT LIABILITIES:
Accounts payable - trade $ 1,068.2 $ 1,096.7
Compensation and benefits 811.8 742.5
Other current liabilities 279.9 300.4
United States and foreign taxes 435.5 382.1
Notes payable to banks 510.0 218.1
Long term debt due within one year 19.8 26.4
--------- ---------
TOTAL CURRENT LIABILITIES 3,125.2 2,766.2
Compensation and Benefits 1,956.3 1,988.1
Long Term Debt 927.4 1,132.2
Other Long Term Liabilities 233.6 264.9
Minority Equity in Subsidiaries 268.0 241.3
--------- ---------
TOTAL LIABILITIES 6,510.5 6,392.7
SHAREHOLDERS' EQUITY:
Preferred Stock, no par value:
Authorized 50,000,000 shares, unissued - -
Common Stock, no par value:
Authorized 300,000,000 shares
Outstanding shares 156,386,304 (156,049,974 in 1996)
after deducting 39,292,364 treasury shares (39,628,694 in 1996) 156.4 156.1
Capital Surplus 1,054.2 1,059.4
Retained Earnings 3,028.4 2,603.0
Foreign Currency Translation and Other Adjustments (698.3) (539.4)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 3,540.7 3,279.1
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $10,051.2 $ 9,671.8
========= =========
</TABLE>
The accompanying notes are an integral part of this financial statement.
-2-
<PAGE> 4
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited
<TABLE>
<CAPTION>
(In millions) NINE MONTHS ENDED
SEPTEMBER 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES: ------ ------
<S> <C> <C>
NET INCOME $556.7 $509.9
Adjustments to reconcile net income to cash flows
from operating activities:
Depreciation 350.9 341.2
Accounts and notes receivable (322.9) (362.0)
Inventories (51.9) (121.3)
Accounts payable-trade (49.2) (159.0)
Other assets and liabilities 50.4 103.2
------ ------
Total adjustments (22.7) (197.9)
------ ------
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES 534.0 312.0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (377.6) (405.4)
Asset sales 37.6 32.9
Asset acquisitions (108.6) (92.1)
Other transactions 7.3 (24.4)
------ ------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (441.3) (489.0)
CASH FLOWS FROM FINANCING ACTIVITIES:
Short term debt incurred 369.4 476.9
Short term debt paid (106.2) (141.3)
Long term debt incurred 10.4 8.9
Long term debt paid (216.5) (33.2)
Common stock issued 73.6 64.5
Common stock purchased (78.4) -
Dividends paid (131.3) (116.1)
------ ------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES (79.0) 259.7
Effect of Exchange Rate Changes on Cash and Cash Equivalents (25.5) (26.7)
------ ------
Net Change in Cash and Cash Equivalents (11.8) 56.0
Cash and Cash Equivalents at Beginning of the Period 238.5 268.3
------ ------
Cash and Cash Equivalents at End of the Period $226.7 $324.3
====== ======
</TABLE>
The accompanying notes are an integral part of this financial statement.
-3-
<PAGE> 5
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NON-CONSOLIDATED OPERATIONS - SOUTH PACIFIC TYRE
- ------------------------------------------------
In addition to its consolidated operations in the Asia region, the Company
also owns a 50% interest in South Pacific Tyres Ltd (SPT), a partnership with
Pacific Dunlop Ltd of Australia. SPT is the largest tire manufacturer, marketer
and exporter in Australia and New Zealand. The Company is required to use the
equity method to account for its interest in the results of operations and
financial position of SPT.
The following table presents sales and operating income of the Company's
consolidated Asian operations and 100% of the operations of SPT:
<TABLE>
<CAPTION>
(In millions) THREE MONTHS ENDED SEPT. 30 NINE MONTHS ENDED SEPT. 30
--------------------------- --------------------------
Asia Asia
Segment SPT Total Segment SPT Total
------- --- ----- ------- --- -----
<S> <C> <C> <C> <C> <C> <C>
NET SALES:
1997 $201.6 $180.3 $381.9 $610.3 $568.1 $1,178.4
1996 211.3 197.6 408.9 629.5 600.5 1,230.0
OPERATING PROFIT:
1997 $ 21.6 $ 12.7 $ 34.3 $ 71.9 $ 47.8 $ 119.7
1996 23.0 15.5 38.5 74.2 54.5 128.7
</TABLE>
SUPPLEMENTAL INFORMATION ABOUT NONCASH INVESTING ACTIVITIES
- -----------------------------------------------------------
In the first quarter of 1997 the Company acquired a 60% equity interest in
a South African tire and industrial rubber products business, and assumed $29
million of debt under the terms of the purchase agreement.
In the first quarter of 1996, the Company increased its ownership of a
Polish tire manufacturer from 32.7% to 50.8% by purchasing original issue shares
of this tire manufacturer. This investment, which had been accounted for using
the equity method, is now accounted for as a consolidated subsidiary.
Information in the Consolidated Statement of Cash Flows is presented net of
the effects of these transactions.
PER SHARE OF COMMON STOCK
- -------------------------
Per share amounts have been computed based on the average number of common
shares outstanding.
ADJUSTMENTS
- -----------
All adjustments, consisting of normal recurring adjustments, necessary for
a fair statement of the results of these unaudited interim periods have been
included.
RECLASSIFICATION
- ----------------
Certain items previously reported in specific financial statement captions
have been reclassified to conform with the 1997 presentation.
-4-
<PAGE> 6
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
Unaudited
<TABLE>
<CAPTION>
(In millions) THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
-------- -------- -------- --------
INDUSTRY SEGMENTS
- -----------------
<S> <C> <C> <C> <C>
Sales to Unaffiliated Customers:
Tires $2,616.9 $2,541.8 $7,729.3 $7,631.8
Related products and services 232.4 254.9 701.2 767.7
-------- -------- -------- --------
Total Tires 2,849.3 2,796.7 8,430.5 8,399.5
General Products 449.4 440.3 1,366.8 1,346.3
Oil Transportation 23.5 30.7 73.6 96.9
-------- -------- -------- --------
NET SALES $3,322.2 $3,267.7 $9,870.9 $9,842.7
======== ======== ======== ========
Income:
Tires $ 264.0 $ 248.7 $ 796.0 $ 749.5
General Products 54.7 49.6 159.5 142.6
Oil Transportation 14.8 15.3 46.2 50.7
-------- -------- -------- --------
OPERATING INCOME 333.5 313.6 1,001.7 942.8
Exclusions from operating income (59.9) (59.6) (194.9) (181.8)
-------- -------- -------- --------
Income before Income Taxes $ 273.6 $ 254.0 $ 806.8 $ 761.0
======== ======== ======== ========
GEOGRAPHIC SEGMENTS
- -------------------
Sales to Unaffiliated Customers:
United States $1,797.6 $1,783.0 $5,230.2 $5,301.8
Europe 750.5 727.5 2,320.3 2,257.5
Latin America 403.2 378.9 1,188.2 1,150.7
Asia 201.6 211.3 610.3 629.5
Canada 169.3 167.0 521.9 503.2
-------- -------- -------- --------
NET SALES $3,322.2 $3,267.7 $9,870.9 $9,842.7
======== ======== ======== ========
Income:
United States $ 169.5 $ 136.4 $ 450.3 $ 396.7
Europe 62.4 88.1 233.7 254.8
Latin America 65.4 60.6 205.5 199.0
Asia 21.6 23.0 71.9 74.2
Canada 14.6 5.5 40.3 18.1
-------- -------- -------- --------
OPERATING INCOME $ 333.5 $ 313.6 $1,001.7 $ 942.8
======== ======== ======== ========
</TABLE>
-5-
<PAGE> 7
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
---------------------
CONSOLIDATED
- ------------
Sales in the third quarter of 1997 were $3.32 billion, increasing 1.7% from
$3.27 billion in the 1996 quarter. Net income in the quarter was $194.1 million
($1.25 per share), increasing 14.0% from net income of $170.2 million ($1.09 per
share) in 1996.
In the nine months, sales of $9.87 billion increased slightly from $9.84
billion in 1996. Net income of $556.7 million ($3.57 per share) increased 9.2%
from net income of $509.9 million ($3.29 per share) in the 1996 period.
Worldwide tire unit sales in the third quarter and nine months rose 7.4%
and 4.4%, respectively, from 1996's levels, increasing in both the original
equipment and replacement markets. In addition, unit sales of other automotive
and industrial rubber products were higher in both periods.
Revenues reflected continued worldwide competitive pricing pressures, which
are expected to continue indefinitely, and the adverse effect of currency
translations on international results. Results in the 1997 nine months were
also adversely affected by an 18 day strike against the Company by the United
Steel Workers of America, A.F.L.-C.I.O.-C.L.C. (USWA) at 10 U.S. tire and
engineered products manufacturing facilities, and by other strikes against
various U.S. original equipment manufacturers.
The following table presents cost of goods sold (CGS) and selling, general
and administrative expense (SAG) as a percent of sales:
<TABLE>
<CAPTION>
Third Quarter Nine Months
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
CGS 76.6% 76.8% 76.4% 76.4%
SAG 14.0 14.1 14.1 14.2
</TABLE>
Cost of goods sold was favorably impacted in both 1997 periods by lower raw
material costs, the effects of ongoing cost containment measures and improved
productivity. Costs were adversely affected in the 1997 nine months by
increased depreciation expense and the effects of the previously mentioned
strikes. Selling, administrative and general expense decreased as a percent to
sales in both 1997 periods, due primarily to the effects of ongoing cost
containment measures.
-6-
<PAGE> 8
Interest expense decreased in both 1997 periods due primarily to lower
average debt levels. Other (income) and expense in the third quarter of 1997 was
adversely affected by lower interest income on time deposits. Foreign currency
exchange expense was lower in both the third quarter and nine months due
primarily to gains realized on the Company's net currency exposures. Net income
in both 1997 periods also benefited from a lower estimated annual effective tax
rate compared to 1996, resulting primarily from lower U.S. taxes on foreign
source income.
SEGMENT INFORMATION
- -------------------
Segment operating income in the third quarter of 1997 was $333.5 million,
increasing 6.4% from $313.6 million in the 1996 quarter. Segment operating
margin rose to 10.0% of sales from 9.6% in the 1996 period.
In the nine months, segment operating income was $1,001.7 million,
increasing 6.3% from $942.8 million in the 1996 period. Segment operating margin
rose to 10.1% of sales from 9.6% in the 1996 nine months.
INDUSTRY SEGMENTS
- -----------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
---- ---- ---- ----
Segment Contribution
to Consolidated Sales:
<S> <C> <C> <C> <C>
Tires 85.8% 85.6% 85.4% 85.3%
General Products 13.5 13.5 13.8 13.7
Oil Transportation .7 .9 .8 1.0
Segment Operating Margin:
Tires 9.3% 8.9% 9.4% 8.9%
General Products 12.2 11.3 11.7 10.6
Oil Transportation 63.0 49.8 62.8 52.3
Consolidated 10.0 9.6 10.1 9.6
</TABLE>
-7-
<PAGE> 9
TIRES
- -----
Sales in the third quarter of 1997 of $2.85 billion increased 1.9% from
$2.80 billion in the 1996 period. In the nine months, sales of $8.43 billion
increased slightly from $8.40 billion in 1996.
Unit sales in the quarter and nine months increased in both the original
equipment and replacement markets in North America and all international
regions. Revenues in both periods were adversely affected by worldwide
competitive pricing pressures and the adverse effects of currency translation on
international results. Additionally, sales in the 1997 nine months reflected
reduced demand in the U.S. resulting from strikes against certain vehicle
production facilities.
The following table presents changes in Company tire unit sales compared to
the 1996 period:
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------- -----------
<S> <C> <C>
U.S. 3.4% 1.2%
International 11.7 7.9
Worldwide 7.4 4.4
</TABLE>
Tire segment operating income in the third quarter of 1997 was $264.0
million, increasing 6.2% from $248.7 million in the 1996 period. In the nine
months, operating income of $796.0 million increased 6.2% from $749.5 million in
1996.
Operating income in both the quarter and nine months reflected lower raw
material costs and the effects of ongoing cost containment measures, but was
adversely affected in the nine months by increased costs and lower revenues
resulting from the previously mentioned strikes.
Operating income in the 1996 quarter and nine months was reduced by charges
totaling $10.7 million and $43.2 million, respectively, related to
rationalizations and other provisions and costs related to improvements in
manufacturing efficiencies.
GENERAL PRODUCTS
- ----------------
Sales in the third quarter of 1997 were $449.4 million, increasing 2.1%
from $440.3 million in the 1996 period. In the nine months, sales of $1.37
billion increased 1.5% from $1.35 billion in 1996.
Sales increased in the quarter and nine months in engineered products on
higher unit volume of automotive and industrial rubber products. Sales in
chemical products decreased in both periods due to competitive pricing
conditions and reduced volume.
-8-
<PAGE> 10
Operating income in the third quarter was $54.7 million, increasing 10.2%
from $49.6 million in the 1996 period. In the nine months, operating income of
$159.5 million increased 11.8% from $142.6 million in 1996.
Operating income increased in the quarter and nine months in engineered
products due to increased unit sales and improved productivity. Chemical
operating income increased in both periods due primarily to lower manufacturing
costs and a more favorable product mix.
Operating income in the 1996 nine months was reduced by charges totaling
$5.2 million related to rationalizations and other provisions.
OIL TRANSPORTATION
- ------------------
Sales in the third quarter of 1997 were $23.5 million, decreasing 23.4%
from $30.7 million in the 1996 period. In the nine months, sales were $73.6
million, decreasing 24.1% from $96.9 million in 1996.
Operating income in the third quarter was $14.8 million, decreasing 2.7%
from $15.3 million in the 1996 period. In the nine months, operating income was
$46.2 million, decreasing 8.8% from $50.7 million in 1996.
Sales and operating income decreased in the quarter and nine months due
primarily to lower throughput and reduced spreads in purchasing, selling and
exchanging activities. Margins increased due to lower depreciation expense
resulting from the writedown of the All American Pipeline System and related
assets in the fourth quarter of 1996.
-9-
<PAGE> 11
GEOGRAPHIC SEGMENTS
- -------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
---- ---- ---- ----
Segment Contribution
to Consolidated Sales:
<S> <C> <C> <C> <C>
United States 54.1% 54.6% 53.0% 53.9%
Europe 22.6 22.3 23.5 22.9
Latin America 12.1 11.6 12.0 11.7
Asia 6.1 6.5 6.2 6.4
Canada 5.1 5.0 5.3 5.1
Segment Operating Margin:
United States 9.4% 7.7% 8.6% 7.5%
Europe 8.3 12.1 10.1 11.3
Latin America 16.2 16.0 17.3 17.3
Asia 10.7 10.9 11.8 11.8
Canada 8.6 3.3 7.7 3.6
Consolidated 10.0 9.6 10.1 9.6
</TABLE>
In the United States, sales in the third quarter of 1997 were $1.80
billion, increasing slightly from $1.78 billion in the 1996 period. In the nine
months, sales of $5.23 billion decreased 1.3% from $5.30 billion in 1996.
Unit sales of tires and engineered products in the U.S. were higher in both
the quarter and the nine months. Revenues were adversely affected in both
periods by competitive pricing pressures, reduced volume in chemical products
and lower revenues in oil transportation operations. In addition, results in the
nine months reflected the effects of the previously mentioned strike against the
Company and strikes against certain vehicle production facilities.
U.S. operating income in the third quarter of 1997 was $169.5 million,
increasing 24.3% from $136.4 million in the 1996 period. In the nine months,
operating income of $450.3 million increased 13.5% from $396.7 million in 1996.
Operating income in the quarter and nine months increased due primarily to
lower raw material costs, lower SAG and the effects of cost containment
measures. Operating income in the third quarter and nine months of 1996 was
reduced by charges totaling $6.8 million and $19.4 million, respectively,
related to rationalizations and other provisions.
-10-
<PAGE> 12
In Europe, sales in the third quarter of 1997 were $750.5 million,
increasing 3.2% from $727.5 million in the 1996 period. In the nine months,
sales of $2.32 billion increased 2.8% from $2.26 billion in 1996.
Third quarter operating income in Europe was $62.4 million, decreasing
29.1% from $88.1 million in the 1996 period. In the nine months, operating
income of $233.7 million decreased 8.3% from $254.8 million in 1996. Operating
income in the nine months of 1996 was reduced by a $15.0 million charge related
to rationalizations and other provisions.
Tire unit sales in Europe increased in the third quarter and nine months in
both the original equipment and replacement markets. In addition, results
benefited in both periods by the acquisition of a majority interest in tire and
engineered products manufacturing and distribution operations in South Africa.
Sales and operating income were adversely affected by currency translation and
competitive pricing pressures.
In Latin America, sales in the third quarter of 1997 were $403.2 million,
increasing 6.4% from $378.9 million in the 1996 period. In the nine months,
sales of $1.19 billion increased 3.3% from $1.15 billion in 1996.
Third quarter operating income in Latin America was $65.4 million,
increasing 8.1% from $60.6 million in the 1996 period. In the nine months,
operating income of $205.5 million increased 3.3% from $199.0 million in 1996.
Operating income in the 1996 quarter and nine months was reduced by charges
totaling $2.1 million and $12.2 million, respectively, related to
rationalizations and other provisions and improvements in manufacturing
efficiencies.
Tire unit sales in Latin America increased in the third quarter and nine
months in both the original equipment and replacement markets. Revenues rose in
both periods on increased sales volume of tires and engineered products, and
operating income benefited from lower raw material costs and the effects of
ongoing cost containment measures.
In Asia, sales in the third quarter of 1997 were $201.6 million, decreasing
4.6% from $211.3 million in the 1996 period. In the nine months, sales of $610.3
million decreased 3.1% from $629.5 million in 1996.
Third quarter operating income in Asia was $21.6 million, decreasing 5.9%
from $23.0 million in the 1996 period. In the nine months, operating income of
$71.9 million decreased 3.1% from $74.2 million in 1996. Operating income in the
1996 quarter and nine months was reduced by charges totaling $1.8 million
related to rationalizations and other provisions.
-11-
<PAGE> 13
Sales and operating income in Asia decreased in both the third quarter and
nine months due primarily to the strengthening of the U.S. dollar versus Asian
currencies, competitive pricing and lower results in natural rubber operations.
Tire unit sales increased in the third quarter and nine months in both the
original equipment and replacement markets. Operating income in the Asian tire
business was favorably impacted by lower raw material costs and the effects of
ongoing cost containment measures.
Sales and operating income of the Asia segment reflect the results of the
Company's majority-owned tire business and other operations in the region,
principally the engineered products and natural rubber businesses. In addition,
the Company owns a 50% interest in South Pacific Tyres Ltd (SPT), the largest
tire manufacturer, marketer and exporter in Australia and New Zealand. Results
of operations of SPT are not reported in segment results, and are reflected in
the Company's consolidated statement of income using the equity method.
The following table presents the sales and operating income of the
Company's Asian segment together with 100% of the sales and operating income of
SPT:
<TABLE>
<CAPTION>
(In millions) Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
---- ------ ------ ------
<S> <C> <C> <C> <C>
Net Sales:
Asia Segment $201.6 $211.3 $ 610.3 $ 629.5
SPT 180.3 197.6 568.1 600.5
----- ----- ------- -------
Total $381.9 $408.9 $1,178.4 $1,230.0
Operating Income:
Asia Segment $ 21.6 $ 23.0 $ 71.9 $ 74.2
SPT 12.7 15.5 47.8 54.5
---- ---- ------ -----
Total $ 34.3 $ 38.5 $ 119.7 $ 128.7
</TABLE>
In Canada, sales in the third quarter of 1997 were $169.3 million,
increasing 1.5% from $167.0 million in the 1996 period. In the nine months,
sales of $521.9 million increased 3.7% from $503.2 million in 1996.
Third quarter operating income in Canada was $14.6 million, compared to
$5.5 million in the 1996 period. In the nine months, operating income of $40.3
million increased from $18.1 million in 1996.
Sales and operating income in Canada increased in both periods due
primarily to higher unit sales of original equipment tires and engineered
products and lower raw material costs and selling, administrative and general
expenses.
-12-
<PAGE> 14
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Net cash provided by operating activities was $534.0 million during the
first nine months of 1997, as reported on the Consolidated Statement of Cash
Flows. Working capital requirements during the period increased for accounts
receivable and inventories, yet remained significantly lower than requirements
during the 1996 period.
Net cash used in investing activities was $441.3 million during the first
nine months of 1997. Capital expenditures were $377.6 million, primarily for
plant modernizations and expansions and new tire molds, and are expected to
total $675 million in 1997.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
(In millions) 1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Capital Expenditures $146.9 $137.5 $377.6 $405.4
Depreciation 113.5 115.2 350.9 341.2
</TABLE>
Other investing activities included the Company's first quarter acquisition
of a majority ownership interest in tire and engineered products manufacturing
and distribution operations in South Africa, in addition to the third quarter
acquisition of additional retreading operations in the United States and sale of
the Jackson, Ohio automotive trim plant.
Net cash used in financing activities was $79.0 million during the first
nine months of 1997. Cash was used for the third quarter redemption of all
$118.4 million of the Company's 10.26% promissory notes due 1999.
<TABLE>
<CAPTION>
(Dollars in millions) 9/30/97 12/31/96 9/30/96
-------- --------- ----------
<S> <C> <C> <C>
Consolidated Debt $1,457.2 $1,376.7 $1,840.7
Debt/Debt+Equity 29.2% 29.6% 33.2%
</TABLE>
No shares of Common Stock of the Company were repurchased during the third
quarter under the Company's $600 million three-year repurchase program. At
September 30, 1997, 1,478,200 shares have been repurchased under the February
1997 plan at an average cost of $53.06.
The Company actively manages its fixed and floating rate debt mix, within
defined limitations, using refinancings and unleveraged interest rate swaps. The
Company enters into fixed and floating interest rate swaps to alter its exposure
to the impact of changing interest rates. At September 30, 1997 the interest
rate on 53% of the Company's debt was fixed by either the nature of the
obligation or through the interest rate swaps. Floating rate contracts with
notional principal amounts totaling $110 million were sold in the third quarter
of 1997, in connection with the previously mentioned
-13-
<PAGE> 15
redemption of the 10.26% promissory notes.
Interest rate swaps in place and related weighted average interest rates
follow:
<TABLE>
<CAPTION>
(Dollars in millions) Fixed Rate Floating Rate
Contracts Contracts
--------- ---------
September 30, 1997:
<S> <C> <C>
- Notional principal amount $150.0 -
- Pay fixed rate 7.16% -
- Receive variable LIBOR 5.83 -
- Average years to maturity 2.4 -
- Fair value: (unfavorable) $ (0.5) -
- Carrying amount: (liability) (0.1) -
Third quarter - Rate paid 7.16% 5.75%
- Rate received 5.85 6.24
Nine months - Rate paid 7.55 5.63
- Rate received 5.70 6.24
</TABLE>
In order to reduce the impact of changes in foreign exchange rates on
consolidated results of operations and future foreign currency denominated cash
flows, the Company was a party to various foreign currency forward exchange
contracts at September 30, 1997. These contracts reduce exposure to currency
movements affecting existing foreign currency denominated assets, liabilities
and firm commitments. The contract maturities match the maturities of the
currency positions. The future value of these contracts and the related currency
positions are subject to offsetting market risk resulting from foreign currency
exchange rate volatility.
Substantial short term and long term credit sources are available to the
Company globally under normal commercial practices. At September 30, 1997 the
Company had short term uncommitted credit arrangements totaling $1.5 billion, of
which $750 million were unused. The Company also had available long term credit
arrangements at September 30, 1997 totaling $1.9 billion, of which $1.2 billion
were unused.
Funds generated by operations, together with funds available under existing
credit arrangements, are expected to be sufficient to meet currently anticipated
funding requirements.
-14-
<PAGE> 16
FORWARD-LOOKING INFORMATION - SAFE HARBOR STATEMENT
---------------------------------------------------
Certain information set forth herein (other than historical data and
information) may constitute forward-looking statements regarding events and
trends which may affect the Company's future operating results and financial
position. The words "estimate," "expect," "intend" and "project," as well as
other words or expressions of similar meaning, are intended to identify
forward-looking statements. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date of this quarterly
report. Such statements are based on current expectations, are inherently
uncertain, are subject to risks and should be viewed with caution. Actual
results and experience may differ materially from the forward-looking statements
as a result of many factors, including: changes in economic conditions in the
various markets served by the Company's operations; increased competitive
activity; fluctuations in raw material and energy prices; changes in the
monetary policies of various countries where the Company has significant
operations; and other unanticipated events and conditions. It is not possible to
foresee or identify all such factors. The Company makes no commitment to update
any forward-looking statement, or to disclose any facts, events or circumstances
after the date hereof that may affect the accuracy of any forward-looking
statement.
-15-
<PAGE> 17
PART II. OTHER INFORMATION
--------------------------
ITEM 1. LEGAL PROCEEDINGS.
- ------- ------------------
Reference is made to the Annual Report of The Goodyear Tire & Rubber
Company (the "Company") on Form 10-K for the year ended December 31, 1996 (the
"Annual Report"), wherein at Item 3, pages 13, 14, 15, and 16, the Company
reported certain legal proceedings. Reference is also made to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 (the "First
Quarter Report") and to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997 (the "Second Quarter Report"). In the First Quarter
Report, at Item 1 of Part II, page 13, the Company reported certain developments
regarding the legal proceedings described at paragraph (A) of Item 3 of the
Annual Report. In the Second Quarter Report, at Item 1 of Part II, page 16, the
Company reported certain developments regarding the legal proceedings described
at paragraph (C) of Item 3 of the Annual Report.
The Company reports the following developments in respect of the legal
proceedings described at paragraphs (C) and (D) of Item 3 of the Annual Report:
(1) As reported at paragraph (C) of Item 3 of the Annual Report, as
supplemented at Item 1 of Part II of the Second Quarter Report, in September of
1990, a civil action, EASTMAN KODAK COMPANY, ET AL. V. GOODYEAR, ET AL. (No.
CIV-2-90-221), was filed by Eastman Kodak Company, now Eastman Chemical Company
as the successor in interest ("Eastman"), in the United States District Court
for the Eastern District of Tennessee, Northeastern Division, whereunder Eastman
alleged infringement of a patent, which expired in December of 1994, in respect
of certain processes used in the manufacture of polyester resin on ten
production lines at the Pt. Pleasant, West Virginia polyester resin plant owned
and operated by the Company until December 18, 1992, when it was sold to Shell
Oil Company. The Company counterclaimed against Eastman alleging, among other
things, tort claims and antitrust law violations, which were dismissed by the
trial court. The trial court also ruled that the processes used in eight of the
plant's production lines did not infringe the patent. The jury rendered a
verdict of non-willful infringement in respect of two of the plant's
production lines and a judgment of $12,000,000, plus prejudgment and
postjudgment interest thereon (approximately $8,500,000) and court costs, was
entered against the Company. The Company and Eastman appealed to the Court of
Appeals, Federal Circuit, which affirmed the decisions of the trial court on
May 26, 1997, except that the Company's tort claim was reinstated. On June 3,
1997, the Company petitioned the Court of Appeals for Rehearing In Banc, which
appeal was denied on July 2, 1997. On September 19, 1997, the litigation was
concluded pursuant to a Satisfaction of Judgment whereunder Goodyear paid $20
million to Eastman and filed a Stipulation of Dismissal of the Company's tort
claim. Prior to the Company's payment to Eastman, the manufacturer of certain
of the equipment used at the plant paid $17.655 million to the Company in
satisfaction of its contractual obligation to indemnify the Company against
liability for patent infringement. The Company also received an additional
$234,952 from another contractual indemnitor.
(2) As reported at paragraph (D) of Item 3 of the Annual Report, in
December of 1993, certain civil actions filed against the Company and numerous
other defendants in Judicial District Court,
-16-
<PAGE> 18
Galveston, Texas, by 72 individual plaintiffs were consolidated into a single
action styled WHALEN, ET AL. V. AES, INC, ET AL.; Case No. 93-CV-0211. The
plaintiffs alleged that, among other things, the Company and several other named
defendants caused personal injuries and property damage by depositing allegedly
hazardous wastes at the McGinnis Waste Disposal Site. The plaintiffs' sought an
aggregate of $2 billion in actual damages and $13 billion in punitive damages.
In prior years, certain plaintiffs withdrew or were dismissed and 30 plaintiffs
entered into a settlement with the Company and other defendants at an aggregate
cost to the Company of approximately $5,600. In August of 1997, the remaining 24
plaintiffs entered into a settlement agreement with the Company and the other
defendants whereunder the Company paid a total of $10,585 to the plaintiffs,
thereby concluding this litigation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
- ------- ---------------------------------
(a) EXHIBITS. See the Index of Exhibits at page E-1, which is by
specific reference incorporated into and made a part of this Quarterly Report on
Form 10-Q.
(b) REPORTS ON FORM 8-K. No Current Report on Form 8-K was filed by The
Goodyear Tire & Rubber Company during the quarter ended September 30, 1997.
S I G N A T U R E S
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.
THE GOODYEAR TIRE & RUBBER COMPANY
(Registrant)
Date: October 21, 1997 By /s/ John W Richardson
-------------------------------------
John W Richardson,
Vice President
(Signing on behalf of Registrant as a duly
authorized officer of Registrant and
signing as the Principal Accounting
Officer of Registrant.)
-17-
<PAGE> 19
THE GOODYEAR TIRE & RUBBER COMPANY
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
INDEX OF EXHIBITS (1)
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
------- -------
TABLE ITEM NO. * Description of Exhibit NUMBER PAGE
-------------------- ------------------------------------- ------ ----
<S> <C> <C>
3 ARTICLES OF INCORPORATION AND BY-LAWS
--------------------------------------
(a) Certificate of Amended Articles of Incorporation
of Registrant, dated December 20, 1954, and
Certificate of Amendment to Amended Articles of
Incorporation of Registrant, dated April 6, 1993,
and Certificate of Amendment to Amended Articles of
Incorporation of Registrant dated June 4, 1996,
three documents comprising Registrant's Articles of
Incorporation as amended (incorporated by reference,
filed with the Securities and Exchange Commission as
Exhibit 3.1 to Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996).
(b) Code of Regulations of The Goodyear Tire &
Rubber Company, adopted November 22, 1955, as
amended April 5, 1965, April 7, 1980, April 6, 1981
and April 13, 1987 (incorporated by reference, filed
as Exhibit 4.1(B) to Registrant's Registration
Statement on Form S-3, File No. 333-1995).
4 INSTRUMENTS DEFINING
THE RIGHTS OF SECURITY HOLDERS,
INCLUDING INDENTURES
----------------------------------------------------
(a) Conformed copy of Rights Agreement, dated as of
June 4, 1996, between Registrant and First Chicago
Trust Company of New York, rights Agent
(incorporated by reference, filed as Exhibit 1 to
Registrant's Registration Statement on Form 8-A
dated June 11, 1996 and as Exhibit 4(a) to
Registrant's Current Report on Form
8-K dated June 4, 1996).
</TABLE>
- ----------
*Pursuant to Item 601 of Regulation S-K.
E-1
<PAGE> 20
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
------- -------
TABLE ITEM NO. * Description of Exhibit NUMBER PAGE
-------------------- ------------------------------------- ------ ----
<S> <C> <C>
(b) Specimen nondenominational Certificate for
shares of the Common Stock, Without Par Value, of
Registrant; First Chicago Trust Company of New York
as transfer agent and registrar (incorporated by
reference, filed with the Securities and Exchange
Commission as Exhibit 4.3 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September
30, 1996, File No. 1-1927).
(c) Conformed copy of Revolving Credit Facility
Agreement, dated as of July 15, 1994, among
Registrant, the Lenders named therein and Chemical
Bank, as Agent (incorporated by reference, filed as
Exhibit A to Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1994, File
No. 1-1927).
(d) Conformed copy of Replacement and Restatement
Agreement, dated as of July 15, 1996, among
Registrant, the Lenders named therein and The Chase
Manhattan Bank (formerly Chemical Bank), as Agent
(incorporated by reference, filed as Exhibit 4.5 to
Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996, File 1-1927).
(f) Conformed copy of First Amendment to Replacement
and Restatement Agreement, dated as of March 31,
1997, among Registrant, the Lenders named therein
and The Chase Manhattan Bank (formerly Chemical
Bank), as Agent (incorporated by reference, filed as
Exhibit 4.5 to Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1997, File
1-1927).
</TABLE>
- ----------
*Pursuant to Item 601 of Regulation S-K.
E-2
<PAGE> 21
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT
------- -------
TABLE ITEM NO. * Description of Exhibit NUMBER PAGE
-------------------- ------------------------------------- ------ ----
<S> <C> <C>
4 No instrument defining the rights of holders of
long-term debt which relates to securities having an
aggregate principal amount in excess of 10% of the
consolidated assets of Registrant and its
subsidiaries was entered into during the quarter
ended September 30, 1997. In accordance with
paragraph (iii) to Part 4 of Item 601 of Regulation
S-K, agreements and instruments defining the rights
of holders of long term debt entered into during the
quarter ended September 30, 1997 which relate to
securities having an aggregate principal amount less
than 10% of the consolidated assets of Registrant
and its Subsidiaries are not filed herewith. The
Registrant hereby agrees to furnish a copy of any
such agreements or instruments to the Securities and
Exchange Commission upon request.
11 STATEMENT RE COMPUTATION OF
PER SHARE EARNINGS
----------------------------------------------------
Statement setting forth the computation of Per Share 11 X-11-1
Earnings.
12 STATEMENT RE COMPUTATION
OF RATIOS
----------------------------------------------------
Statement setting forth the computation of Ratio of 12 X-12-1
Earnings to Fixed Charges.
27 FINANCIAL DATA SCHEDULE
----------------------------------------------------
27 X-27-1
Financial Data Schedule.
</TABLE>
- ----------
*Pursuant to Item 601 of Regulation S-K.
E-3
<PAGE> 1
EXHIBIT 11
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Set forth below are computations, on a primary basis and on a fully diluted
basis in accordance with subparagraph (b) (11) of Item 601 of Regulation S-K of
the Securities and Exchange Commission, of earnings per share of the Common
Stock, without par value, of Registrant.
<TABLE>
<CAPTION>
(In millions, except per share) THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
--------- --------- --------- ---------
PRIMARY:
<S> <C> <C> <C> <C>
Net Income $ 194.1 $ 170.2 $ 556.7 $ 509.9
Adjusted average number of
shares outstanding 158.3 156.7 158.0 156.6
PRIMARY EARNINGS PER SHARE $ 1.23 $ 1.09 $ 3.52 $ 3.26
FULLY DILUTED:
Net Income $ 194.1 $ 170.2 $ 556.7 $ 509.9
Adjusted average number
of shares outstanding 158.5 156.7 158.5 156.6
FULLY DILUTED EARNINGS PER SHARE $ 1.22 $ 1.09 $ 3.51 $ 3.26
</TABLE>
The foregoing computations do not reflect any significant potentially
dilutive effect Registrant's Preferred Stock Purchase Rights Plan could have in
the event such Rights become exercisable and any shares of either Series B
Preferred Stock or the Common Stock of Registrant are issued upon the exercise
of, or in exchange for, such Rights.
Reference is made to Note 19, captioned "Preferred Stock Purchase Rights
Plan", in the Notes to Financial Statements set forth in Item 8 of Registrant's
Annual Report on Form 10-K for the year ended December 31, 1996 at page 50.
x - 11 - 1
<PAGE> 1
EXHIBIT 12
THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
9 MONTHS
ENDED
9/30/97 1996 1995 1994 1993 1992
------- ---- ---- ---- ---- ----
EARNINGS
- --------
<S> <C> <C> <C> <C> <C> <C>
INCOME BEFORE INCOME TAXES, EXTRAORDINARY
ITEMS AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES $ 806.8 $ 122.3 $ 925.8 $ 865.7 $ 784.9 $ 629.9
ADD:
AMORTIZATION OF PREVIOUSLY CAPITALIZED INTEREST $ 8.2 $ 11.6 $ 11.7 $ 10.2 $ 10.1 $ 9.6
MINORITY INTEREST IN NET INCOME OF
CONSOLIDATED SUBSIDIARIES WITH FIXED CHARGES 36.2 45.9 30.1 16.9 19.0 14.2
PROPORTIONATE SHARE OF FIXED CHARGES OF INVESTEES
ACCOUNTED FOR BY THE EQUITY METHOD 6.9 6.2 6.3 5.0 4.7 6.9
PROPORTIONATE SHARE OF NET LOSS OF INVESTEES
ACCOUNTED FOR BY THE EQUITY METHOD 0.9 2.7 0.5 0.2 0.3 2.2
----------------------------------------------------------------------
TOTAL ADDITIONS $ 52.2 $ 66.4 $ 48.6 $ 32.3 $ 34.1 $ 32.9
DEDUCT:
CAPITALIZED INTEREST $ 5.0 $ 5.4 $ 5.1 $ 5.7 $ 5.0 $ 4.0
MINORITY INTEREST IN NET LOSS OF CONSOLIDATED SUBSIDIARIES 2.5 4.4 3.3 0.3 0.3 1.8
UNDISTRIBUTED PROPORTIONATE SHARE OF NET INCOME
OF INVESTEES ACCOUNTED FOR BY THE EQUITY METHOD - - 0.2 7.2 4.0 0.9
----------------------------------------------------------------------
TOTAL DEDUCTIONS $ 7.5 $ 9.8 $ 8.6 $ 13.2 $ 9.3 $ 6.7
TOTAL EARNINGS $ 851.5 $ 178.9 $ 965.8 $ 884.8 $ 809.7 $ 656.1
======================================================================
FIXED CHARGES
- -------------
INTEREST EXPENSE $ 91.9 $ 128.6 $ 135.0 $ 129.4 $ 162.4 $ 232.9
CAPITALIZED INTEREST 5.0 5.4 5.1 5.7 5.0 4.0
AMORTIZATION OF DEBT DISCOUNT, PREMIUM OR EXPENSE 0.1 0.3 0.4 0.7 0.4 1.0
INTEREST PORTION OF RENTAL EXPENSE 52.2 69.5 77.0 83.0 83.7 87.6
PROPORTIONATE SHARE OF FIXED CHARGES OF INVESTEES
ACCOUNTED FOR BY THE EQUITY METHOD 6.9 6.2 6.4 5.0 4.7 6.9
----------------------------------------------------------------------
TOTAL FIXED CHARGES $ 156.1 $ 210.0 $ 223.9 $ 223.8 $ 256.2 $ 332.4
======================================================================
TOTAL EARNINGS BEFORE FIXED CHARGES $ 1,007.6 $ 388.9 $ 1,189.7 $ 1,108.6 $ 1,065.9 $ 988.5
======================================================================
RATIO OF EARNINGS TO FIXED CHARGES 6.45 1.85 5.31 4.95 4.16 2.97
</TABLE>
SUPPLEMENTAL INFORMATION - INCOME BEFORE INCOME TAXES, EXTRAORDINARY ITEMS
AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES IN 1996 WAS REDUCED BY A CHARGE OF
$755.6 MILLION RELATED TO THE WRITEDOWN OF THE ALL AMERICAN PIPELINE SYSTEM AND
RELATED ASSETS. EXCLUDING THIS CHARGE, THE RATIO OF EARNINGS TO FIXED CHARGES
FOR 1996 WOULD HAVE BEEN 5.45.
x- 12 - 1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION ABSTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS AND THE CONSOLIDATED
BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 227
<SECURITIES> 0
<RECEIVABLES> 1,999
<ALLOWANCES> 53
<INVENTORY> 1,815
<CURRENT-ASSETS> 4,361
<PP&E> 9,063
<DEPRECIATION> 5,052
<TOTAL-ASSETS> 10,051
<CURRENT-LIABILITIES> 3,125
<BONDS> 927
<COMMON> 156
0
0
<OTHER-SE> 3,385
<TOTAL-LIABILITY-AND-EQUITY> 10,051
<SALES> 9,871
<TOTAL-REVENUES> 9,871
<CGS> 7,539
<TOTAL-COSTS> 7,539
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 92
<INCOME-PRETAX> 807
<INCOME-TAX> 250
<INCOME-CONTINUING> 557
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 557
<EPS-PRIMARY> 3.57
<EPS-DILUTED> 0
</TABLE>
