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 period ended June 30, 1996 Commission file number 1-6682
HASBRO, INC.
--------------------
(Name of Registrant)
Rhode Island O5-0155090
- - ------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1027 Newport Avenue, Pawtucket, Rhode Island 02861
---------------------------------------------------
(Principal Executive Offices)
(401) 431-8697
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 or No
--- ---
The number of shares of Common Stock, par value $.50 per share,
outstanding as of August 9, 1996 was 86,323,230.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands of Dollars Except Share Data)
(Unaudited)
Jun. 30, Jul. 2, Dec. 31,
Assets 1996 1995 1995
--------- --------- ---------
Current assets
Cash and cash equivalents $ 69,998 86,213 161,030
Accounts receivable, less allowance
for doubtful accounts of $51,200,
$45,800 and $48,800 683,906 654,216 791,111
Inventories:
Finished products 290,769 272,182 240,126
Work in process 26,619 29,987 22,093
Raw materials 80,711 61,873 53,401
--------- --------- ---------
Total inventories 398,099 364,042 315,620
Deferred income taxes 83,115 81,173 85,849
Prepaid expenses 77,721 79,920 71,888
--------- --------- ---------
Total current assets 1,312,839 1,265,564 1,425,498
Property, plant and equipment, net 305,772 309,571 313,240
--------- --------- ---------
Other assets
Cost in excess of acquired net assets,
less accumulated amortization of
$107,321, $91,499 and $99,404 473,594 486,034 473,388
Other intangibles, less accumulated
amortization of $90,281, $68,363 and
$79,648 370,129 351,852 343,624
Other 65,180 46,747 60,638
--------- --------- ---------
Total other assets 908,903 884,633 877,650
--------- --------- ---------
Total assets $2,527,514 2,459,768 2,616,388
========= ========= =========
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(Thousands of Dollars Except Share Data)
(Unaudited)
Jun. 30, Jul. 2, Dec. 31,
Liabilities and Shareholders' Equity 1996 1995 1995
--------- --------- ---------
Current liabilities
Short-term borrowings $ 288,872 353,051 119,987
Trade payables 106,444 115,321 198,328
Accrued liabilities 293,937 314,563 433,567
Income taxes 79,891 57,905 117,982
--------- --------- ---------
Total current liabilities 769,144 840,840 869,864
Long-term debt, excluding current
installments 149,920 149,993 149,991
Deferred liabilities 72,066 66,292 70,921
--------- --------- ---------
Total liabilities 991,130 1,057,125 1,090,776
--------- --------- ---------
Shareholders' equity
Preference stock of $2.50 par
value. Authorized 5,000,000
shares; none issued - - -
Common stock of $.50 par value.
Authorized 300,000,000 shares; issued
88,088,526, 88,086,040 and 88,086,108 44,044 44,043 44,043
Additional paid-in capital 305,915 279,933 279,288
Retained earnings 1,211,565 1,064,150 1,201,242
Cumulative translation adjustments 17,137 24,464 23,450
Treasury stock, at cost; 1,251,853,
335,435 and 741,237 shares (42,277) (9,947) (22,411)
--------- --------- ---------
Total shareholders' equity 1,536,384 1,402,643 1,525,612
--------- --------- ---------
Total liabilities and
shareholders' equity $2,527,514 2,459,768 2,616,388
========= ========= =========
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
(Thousands of Dollars Except Share Data)
(Unaudited)
Quarter Ended Six Months Ended
------------------- --------------------
Jun. 30, Jul. 2, Jun. 30, Jul. 2,
1996 1995 1996 1995
-------- -------- --------- ---------
Net revenues $511,609 481,854 1,050,294 1,008,357
Cost of sales 234,184 214,085 471,955 446,657
------- ------- --------- ---------
Gross profit 277,425 267,769 578,339 561,700
------- ------- --------- ---------
Expenses
Amortization 10,007 9,725 19,806 18,968
Royalties, research and
development 64,356 62,085 118,778 117,169
Discontinued development
project - 31,100 - 31,100
Advertising 66,171 68,164 136,447 138,397
Selling, distribution and
administration 124,909 119,005 250,274 239,808
------- ------- --------- ---------
Total expenses 265,443 290,079 525,305 545,442
------- ------- --------- ---------
Operating profit (loss) 11,982 (22,310) 53,034 16,258
------- ------- --------- ---------
Nonoperating (income) expense
Interest expense 5,353 7,384 10,259 13,207
Other (income), net (2,514) (5,477) (5,477) (7,989)
------- ------- --------- ---------
Total nonoperating expense 2,839 1,907 4,782 5,218
------- ------- --------- ---------
Earnings (loss) before
income taxes 9,143 (24,217) 48,252 11,040
Income taxes 3,157 (9,324) 17,901 4,250
------- ------- --------- ---------
Net earnings (loss) $ 5,986 (14,893) 30,351 6,790
======= ======= ========= =========
Per common share
Net earnings (loss) $ .07 (.17) .34 .08
======= ======= ========= =========
Cash dividends declared $ .10 .08 .20 .16
======= ======= ========= =========
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996 and July 2, 1995
(Thousands of Dollars)
(Unaudited)
1996 1995
------- -------
Cash flows from operating activities
Net earnings $ 30,351 6,790
Adjustments to reconcile net earnings to net cash
utilized by operating activities:
Depreciation and amortization of plant and equipment 45,843 40,415
Other amortization 19,806 18,968
Deferred income taxes 2,882 (3,521)
Change in operating assets and liabilities (other
than cash and cash equivalents):
Decrease in accounts receivable 101,284 79,057
Increase in inventories (83,079) (108,054)
Increase in prepaid expenses (6,145) (8,323)
Decrease in trade payables and accrued liabilities (266,450) (208,513)
Other 3,553 12,016
------- -------
Net cash utilized by operating activities (151,955) (171,165)
------- -------
Cash flows from investing activities
Additions to property, plant and equipment (40,943) (38,752)
Investments and acquisitions, net of cash acquired (21,300) (102,413)
Other (8,310) 2,215
------- -------
Net cash utilized by investing activities (70,553) (138,950)
------- -------
Cash flows from financing activities
Proceeds from borrowings with original maturities
of more than three months 96,026 185,000
Repayments of borrowings with original maturities
of more than three months (30,990) (10)
Net proceeds of other short-term borrowings 106,278 76,332
Purchase of common stock (28,869) (312)
Stock option transactions 7,991 4,866
Dividends paid (15,688) (13,147)
------- -------
Net cash provided by financing activities 134,748 252,729
------- -------
Effect of exchange rate changes on cash (3,272) 6,571
------- -------
Decrease in cash and cash equivalents (91,032) (50,815)
Cash and cash equivalents at beginning of year 161,030 137,028
------- -------
Cash and cash equivalents at end of period $ 69,998 86,213
======= =======
Supplemental information
Cash paid during the period for:
Interest $ 8,799 10,279
Income taxes $ 48,790 45,982
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements
(Thousands of Dollars)
(Unaudited)
(1) In the opinion of management and subject to year-end audit, the
accompanying unaudited interim financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly
the financial position of the Company as of June 30, 1996 and July 2, 1995,
and the results of operations and cash flows for the periods then ended.
The six months ended June 30, 1996 consisted of 26 weeks while the six
months ended July 2, 1995 consisted of 27 weeks.
The results of operations for the six months ended June 30, 1996, are
not necessarily indicative of results to be expected for the full year.
(2) During the second quarter of 1995, the Company discontinued its
efforts, begun in 1992, related to the development of a mass-market virtual
reality game system. The impact of this decision on the quarter was a
pretax charge of $31,100. (See further discussion in Management's
Discussion and Analysis of Financial Condition and Results of Operations.)
(3) Earnings per common share are based on the weighted average number of
shares of common stock and dilutive common stock equivalents outstanding
during each period. Common stock equivalents include stock options and
warrants for the period prior to their exercise. Under the treasury stock
method, the unexercised options and warrants are assumed to be exercised at
the beginning of the period or at issuance, if later. The assumed proceeds
are then used to purchase common stock at the average market price during
the period.
For each of the reported periods the difference between primary and
fully diluted earnings per share was not significant.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Thousands of dollars)
NET REVENUES
- - ------------
Net revenues for the second quarter and six months of 1996 were $511,609
and $1,050,294, respectively, up from the $481,854 and $1,008,357 reported
for the same periods of 1995. Continuing the first quarter 1996 trends, the
increased volumes were primarily attributable to growth in boys' toys and
games experienced within the United States. During the quarter, the
Company's international operations reported increased local currency
revenues in most of the major markets, although these were insufficient to
overcome the approximate $7,000 adverse impact of the strengthened U.S.
dollar and the decreased revenues in France and Germany.
COST OF SALES
- - -------------
The Company is receiving the anticipated benefits from reduced prices on
certain raw material commodities, including plastics and paper. In spite of
this, the 1996 gross profit margin, expressed as a percentage of net
revenues, decreased in comparison to the 1995 levels; for the quarter to
54.2% from 55.6%, and for the six months to 55.1% from 55.7%. During the
quarter, the Company had an increased amount of sales made at less than
normal margins. Absent the impact of such second quarter sales in the major
markets, the gross profit margins for the quarter and six months of 1996
were 57.3% and 56.5%, respectively, up from 56.7% and 56.2% for the same
periods of 1995.
EXPENSES
- - --------
Royalties, research and development expenses for both the second quarter
and six months decreased when expressed as a percentage of net revenues
although increasing in amount. The royalty component increased in both
percentage and amount. In addition to reflecting the Company's revenue
growth, the increases can also be attributed to the mix of products sold
with more revenue being derived from items carrying higher royalty rates.
Research and development was $35,391 and $65,510 for the quarter and six
months of 1996, respectively, compared with $34,864 and $67,428 for the
same periods of 1995.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Thousands of dollars)
During the second quarter of 1995, the Company discontinued its efforts,
begun in 1992, related to the development of a mass-market virtual reality
game system. The impact of this decision on the second quarter of 1995 was
a charge of $31,100, the estimated costs associated with such action.
Approximately half of the charge resulted from the expensing of software
development costs related to both the operating system and games for the
system. These costs were previously capitalized under the provisions of
Statement of Financial Accounting Standards No. 86. The remaining amount
represented provisions for discontinuation costs, including the termination
of contractual agreements relating to the development of the system and
games, the write-off of certain fixed assets and various other
cancellation/termination costs. Substantially all of these costs have now
been paid.
Advertising expense for both the quarter and six months decreased in amount
and also when expressed as a percentage of net revenues. For the second
quarter and six months of 1996, the amounts were $66,171 and $136,447,
respectively, compared with $68,164 and $138,397 in the same periods of
1995. Expressed as a percentage of net revenues, 1996 was 12.9% and 13.0%
while 1995 was 14.1% and 13.7%. The decreases in the current year reflect
the lower proportion of the Company's revenues arising from the
international marketing units, which generally have a higher advertising to
sales ratio than the domestic groups, as well as the impact of sales made
at less than normal margins, which products are generally not advertised.
The Company's selling distribution and administration expenses increased in
amount during both the second quarter and six months of 1996, when compared
with the same periods of 1995. When expressed as a percentage of net
revenues, in the second quarter of 1996 it decreased from the 1995 level
and for the six months, remained constant. The decrease in percentage
reflects the Company's efforts to better leverage these costs.
NONOPERATING (INCOME) EXPENSE
- - -----------------------------
Interest expense during the second quarter and six months of 1996 decreased
from the comparable 1995 levels reflecting both lower interest rates and
the Company's reduced borrowing requirements.
Other income, net, also declined during both the quarter and six months,
again reflecting the lower interest rates being experienced. Also impacting
the comparison of this category of expense during the quarter was the
negative impact of foreign currency transactions.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Thousands of dollars)
INCOME TAXES
- - ------------
Income tax expense as a percentage of pretax earnings for the six months of
1996 and 1995 was 37.1% and 38.5%, respectively. The decrease in the
effective rate in 1996 reflects changes in the Company's operations as well
as the impact of certain strategies implemented during 1996. The lower rate
for the second quarter results from the adjustment to the new effective tax
rate.
OTHER INFORMATION
- - -----------------
During the past several years the Company has experienced a shift in its
revenue pattern wherein the second half of the year has grown in
significance to its overall business and within that half the fourth
quarter has become more prominent. The Company expects that this trend will
continue. This concentration increases the risk of (a) underproduction of
popular items, (b) overproduction of less popular items and (c) failure to
achieve tight and compressed shipping schedules. The business of the
Company is characterized by customer order patterns which vary from year to
year largely because of differences in the degree of consumer acceptance of
a product line, product availability, marketing strategies and inventory
levels of retailers and differences in overall economic conditions. Also,
more retailers are using quick response inventory management practices
which results in fewer orders being placed in advance and more orders, when
placed, for immediate delivery. As a result, comparisons of unshipped
orders on any date in a given year with those at the same date in a prior
year are not necessarily indicative of sales for the entire year. In
addition, it is a general industry practice that orders are subject to
amendment or cancellation by customers prior to shipment. At the end of its
fiscal July (July 28, 1996 and July 30, 1995) the Company's unshipped
orders were approximately $890,000 and $930,000, respectively.
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
Because of the seasonality of the Company's business coupled with certain
customer incentives, mainly in the form of extended payment terms, the
interim cash flow statements are not representative of those which may be
expected for the full year. As a result of these extended payment terms,
the majority of the Company's cash collections occur late in the fourth
quarter and early in the first quarter of the subsequent year. While a
large portion of these receivables are of a quality which would allow their
sale, alleviating the need for much of its interim financing, the Company
believes it to be more cost effective to use its available funds and short-
term borrowings to finance them. As receivables are collected late in the
fourth quarter and through the first quarter of the subsequent year, cash
flow from operations becomes positive and is used to repay a significant
portion of the short-term borrowings.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Thousands of dollars)
As a result, management believes that on an interim basis, rather than
discussing its cash flows, a better understanding of its liquidity and
capital resources can be obtained through a discussion of the various
balance sheet categories. Also, as several of the major categories,
including cash and cash equivalents, accounts receivable, inventories and
short-term borrowings, fluctuate significantly from quarter to quarter,
again due to the seasonality of its business and the extended payment terms
offered, management believes that a comparison to the comparable period in
the prior year is generally more meaningful than a comparison to the prior
year-end.
Receivables were approximately $30,000 greater than at the same time in
1995, largely reflecting the Company's increased revenues in 1996. When
expressed as days sales outstanding, current year receivables are the same
as those of a year ago, which is an improvement from the first quarter when
days sales outstanding were almost 10% greater than 1995. The growth in
inventories which has been evident during the past year moderated somewhat
during the second quarter. The approximate $34,000 increase from the prior
year reflects the Company's planned actions necessary to have available
product to provide faster and more complete shipment of customer orders.
Other assets, as a group, increased from their level of a year ago,
primarily resulting from the Company's acquisitions of product rights and
licenses during the most recent twelve months, partially offset by twelve
additional months of amortization expense.
The Company attempts to keep its cash and cash equivalents at the lowest
level possible whenever it has short-term borrowings, although at times the
cash available and the borrowing requirement may be in different countries
and currencies which may make it impractical to substitute one for the
other. The Company's net borrowings (short-term borrowings less cash and
cash equivalents), at $218,874 were approximately $48,000, or 18% less than
last year, again reflecting funds generated from operations within the most
recent twelve months available to reduce such borrowings. This decrease
occurred even after the repurchase of approximately 1,300,000 shares of the
Company's common stock during the past twelve months. At June 30, 1996, the
Company had committed unsecured lines of credit totaling approximately
$440,000 available to it. It also had available uncommitted lines
approximating $900,000. The Company believes that these amounts are
adequate for its needs. Of these available lines, approximately $315,000
was in use at June 30, 1996.
HASBRO, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of Financial
Condition and Results of Operations
(Thousands of dollars)
RECENT EVENT
- - ------------
On July 30, 1996, the Company announced two steps taken to provide
strategic direction as it moves to become more brands driven and globally
focused. First, the establishment of an Office of the Chairman and second,
plans for a new Global Brands Board and a Global Operations Board. To this
point, the Company has been structured as a multi-national company, with
the focus on developing product and programs for individual countries and
regions. The new focus will allow the development of brands globally, while
still recognizing regional differences. The new Global Brands Board will
provide greater coordination of key brands from a world-wide perspective
while the Global Operations Board will develop a blueprint for the global
coordination of production and sourcing requirements.
In addition to Chairman and Chief Executive Officer, Alan G. Hassenfeld,
the Office of the Chairman will consist of: Alfred J. Verrecchia, Executive
Vice President and President of Global Operations, who will also chair the
Global Operations Board; George Ditomassi, Executive Vice President and
President Global Innovation; Harold P. Gordon, Vice Chairman; John T.
O'Neill, Executive Vice President and Chief Financial Officer, and Norman
Walker, Executive Vice President and President International, who will also
chair the Global Brands Board. Another member of the Office of the Chairman
is Adam Klein, who has been elected Executive Vice President of Corporate
Strategy. Mr Klein comes to the Company after eighteen years of strategy
consulting, including time with the Boston Consulting Group and teaching at
Harvard Business School. Also to become a member of the Office of the
Chairman will be the President of Global Marketing, a new position for
which an executive search is in progress.
PART II. Other Information
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
At the Company's Annual Meeting of Shareholders held on May
15, 1996, the Company's Shareholders reelected the following
persons to the Board of Directors of the Company: Sylvia K.
Hassenfeld (72,124,405 votes for, 3,349,819 votes withheld);
Norma T. Pace (72,122,434 votes for, 3,351,790 votes withheld);
E. John Rosenwald, Jr. (71,416,036 votes for, 4,058,188 votes
withheld; and Alfred J. Verrecchia (72,152,743 votes for,
3,321,481 votes withheld). There were no votes against any
nominee and no broker nonvotes.
In addition, the Company's Shareholders ratified the selection
of KPMG Peat Marwick LLP as the independent public accountants
for the Company for the 1996 fiscal year by a vote of 75,286,949
for, 41,025 against, 146,250 abstentions and no broker nonvotes.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
11.1 Computation of Earnings Per Common Share - Six Months
Ended June 30, 1996 and July 2, 1995.
11.2 Computation of Earnings Per Common Share - Quarter
Ended June 30, 1996 and July 2, 1995.
12 Computation of Ratio of Earnings to Fixed Charges -
Six Months and Quarter Ended June 30, 1996.
27 Article 5 Financial Data Schedule - Second Quarter 1996
(b) Reports on Form 8-K
A Current Report on Form 8-K, dated July 18, 1996, was filed by
the Company and included the Press Release dated July 18, 1996,
announcing the Company's results for the current quarter.
Consolidated Statements of Earnings (without notes) for the
quarters and six months ended June 30, 1996 and July 2, 1995
and Consolidated Condensed Balance Sheets (without notes) as
of said dates were also filed.
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.
HASBRO, INC.
------------
(Registrant)
Date: August 14, 1996 By: /s/ John T. O'Neill
---------------------
John T. O'Neill
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
HASBRO, INC. AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the Period Ended June 30, 1996
Exhibit Index
Exhibit
No. Exhibits
- - ------- --------
11.1 Computation of Earnings Per Common Share -
Six Months Ended June 30, 1996 and July 2, 1995
11.2 Computation of Earnings Per Common Share -
Quarter Ended June 30, 1996 and July 2, 1995
12 Computation of Ratio of Earnings to Fixed
Charges - Six Months and Quarter Ended June 30, 1996
27 Article 5 Financial Data Schedule - Second Quarter 1996
EXHIBIT 11.1
HASBRO, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
Six Months Ended June 30, 1996 and July 2, 1995
(Thousands of Dollars and Shares Except Per Share Data)
1996 1995
----------------- -----------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net earnings $ 30,351 30,351 6,790 6,790
Interest and amortization on 6%
convertible notes, net of taxes (a) - - - -
------- ------- ------- -------
Net earnings applicable to
common shares $ 30,351 30,351 6,790 6,790
======= ======= ======= =======
Weighted average number of shares
outstanding:(b)
Outstanding at beginning of
period 87,345 87,345 87,528 87,528
Actual exercise of stock
options and warrants 155 155 122 122
Assumed exercise of stock
options and warrants 1,086 1,086 619 726
Actual conversion of 6%
convertible notes 1 1 - -
Assumed conversion of 6%
convertible notes (a) - - - -
Purchase of common stock (340) (340) (6) (6)
------- ------- ------- -------
Total 88,247 88,247 88,263 88,370
======= ======= ======= =======
Per common share:
Net earnings $ .34 .34 .08 .08
======= ======= ======= =======
(a) The effect of these notes is antidilutive and as such is not included.
(b) Computation to arrive at the average number is a weighted average
computation.
EXHIBIT 11.2
HASBRO, INC. AND SUBSIDIARIES
Computation of Earnings Per Common Share
Quarter Ended June 30, 1996 and July 2, 1995
(Thousands of Dollars and Shares Except Per Share Data)
1996 1995
----------------- -----------------
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Net earnings (loss) $ 5,986 5,986 (14,893) (14,893)
Interest and amortization on 6%
convertible notes, net of taxes (a) - - - -
------- ------- ------- -------
Net earnings (loss) applicable to
common shares $ 5,986 5,986 (14,893) (14,893)
======= ======= ======= =======
Weighted average number of shares
outstanding:(b)
Outstanding at beginning of
period 87,068 87,068 87,635 87,635
Actual exercise of stock
options and warrants 76 76 84 84
Assumed exercise of stock
options and warrants 1,313 1,313 - -
Actual conversion of 6%
convertible notes 1 1 - -
Assumed conversion of 6%
convertible notes (a) - - - -
Purchase of common stock (71) (71) - -
------- ------- ------- -------
Total 88,387 88,387 87,719 87,719
======= ======= ======= =======
Per common share:
Net earnings (loss) $ .07 .07 (.17) (.17)
======= ======= ======= =======
(a) The effect of these notes is antidilutive and as such is not included.
(b) Computation to arrive at the average number is a weighted average
computation.
EXHIBIT 12
HASBRO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
Six Months and Quarter Ended June 30, 1996
(Thousands of Dollars)
Six
Months Quarter
------- -------
Earnings available for fixed charges:
Net earnings $ 30,351 5,986
Add:
Fixed charges 17,949 9,328
Income taxes 17,901 3,157
------- -------
Total $ 66,201 18,471
======= =======
Fixed Charges:
Interest on long-term debt $ 4,632 2,315
Other interest charges 5,627 3,038
Amortization of debt expense 170 85
Rental expense representative
of interest factor 7,520 3,890
------- -------
Total $ 17,949 9,328
======= =======
Ratio of earnings to fixed charges 3.69 1.98
======= =======
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