<PAGE>
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 October 1, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from: NOT APPLICABLE
Commission File No. 1-971
HONEYWELL INC.
(Exact name of registrant as specified in its charter)
DELAWARE 41-0415010
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
Honeywell Plaza, Minneapolis, Minnesota 55408
(Address of principal executive offices) (Zip Code)
(612) 951-1000
(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 October 1, 1995, the number of shares outstanding of the registrant's
common stock, $1.50 par value, was 126,978,425.
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INCOME STATEMENT
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<CAPTION>
Third Quarter Ended
-----------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) October 1, 1995 October 2, 1994
....................................................................................................
<S> <C> <C>
SALES $1,680.3 $1,507.6
-------- --------
COSTS AND EXPENSES
Cost of sales 1,148.1 1,011.9
Research and development 75.0 86.2
Selling, general and administrative 312.5 287.1
Interest - net 16.8 15.7
Equity (income) loss 0.2 (0.9)
-------- --------
1,552.6 1,400.0
-------- --------
INCOME BEFORE INCOME TAXES 127.7 107.6
PROVISION FOR INCOME TAXES 43.5 38.2
-------- --------
NET INCOME $ 84.2 $ 69.4
======== ========
EARNINGS PER COMMON SHARE $ 0.66 $ 0.54
======== ========
</TABLE>
<PAGE>
<TABLE>
INCOME STATEMENT
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<CAPTION>
Nine Months Ended
-----------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) October 1, 1995 October 2, 1994
....................................................................................................
<S> <C> <C>
SALES $4,814.6 $4,319.3
-------- --------
COSTS AND EXPENSES
Cost of sales 3,299.1 2,931.0
Research and development 237.2 240.5
Selling, general and administrative 917.9 836.1
Interest - net 52.4 43.6
Equity income (6.9) (1.7)
-------- --------
4,499.7 4,049.5
INCOME BEFORE INCOME TAXES 314.9 269.8
PROVISION FOR INCOME TAXES 107.1 95.8
-------- --------
NET INCOME $ 207.8 $ 174.0
======== ========
EARNINGS PER COMMON SHARE $ 1.63 $ 1.34
======== ========
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 127,222,511 129,894,294
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CASH FLOWS
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<CAPTION>
Nine Months Ended
-----------------------------------
(DOLLARS IN MILLIONS) October 1, 1995 October 2, 1994
....................................................................................................
<S> <C> <C>
Cash Flows from Operating Activities
Net income $207.8 $174.0
Adjustments to reconcile net income to net cash flows
from operating activities:
Depreciation 178.1 174.4
Amortization of intangibles 42.7 38.4
Deferred income taxes 17.7 9.4
Equity income, net of dividends received (5.6) (0.6)
Loss on sale of assets 3.6 2.0
Contributions to employee stock plans 21.2 20.2
Increase in receivables (30.8) (54.0)
Increase in inventories (44.2) (29.6)
Decrease in accounts payable (49.1) (63.3)
Increase (decrease) in accrued income taxes and interest (16.9) 14.6
Other changes in working capital, excluding short-term
investments and short-term debt (29.4) (42.7)
Other noncurrent items - net (7.7) (2.5)
------ ------
Net cash flows from operating activities 287.4 240.3
------ ------
Cash Flows from Investing Activities
Proceeds from sale of assets 12.3 7.9
Capital expenditures (173.5) (185.7)
Investment in acquisitions (41.5) (64.7)
(Increase) decrease in short-term investments (1.4) 7.0
Other - net (0.9) 15.4
------ ------
Net cash flows from investing activities (205.0) (220.1)
------ ------
Cash Flows from Financing Activities
Net increase (decrease) in short-term debt (11.5) 43.9
Proceeds from issuance of long-term debt 147.7 107.3
Repayment of long-term debt (130.8) (0.2)
Purchase of treasury stock (104.2) (98.9)
Proceeds from exercise of stock options 54.0 5.4
Dividends paid (95.4) (93.3)
------ ------
Net cash flows from financing activities (140.2) (35.8)
------ ------
Effect of Exchange Rate Changes on Cash 9.9 10.7
------ ------
Decrease in Cash and Cash Equivalents (47.9) (4.9)
Cash and Cash Equivalents at Beginning of Year 267.4 242.3
------ ------
Cash and Cash Equivalents at End of Nine Months $219.5 $237.4
====== ======
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF FINANCIAL POSITION
HONEYWELL INC. AND SUBSIDIARIES
(UNAUDITED)
<CAPTION>
(DOLLARS IN MILLIONS) October 1, 1995 December 31, 1994
......................................................................................................
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 219.5 $ 267.4
Short-term investments 9.2 7.4
Receivables (less allowance for doubtful accounts:
1995, $31.0; 1994, $31.1) 1,472.2 1,406.9
Inventories (less progress billing on uncompleted
contracts: 1995, $53.6; 1994, $32.5) 812.5 760.2
Deferred income taxes 193.1 207.5
-------- --------
2,706.5 2,649.4
Investments and Advances 279.2 242.8
Property, Plant and Equipment
Property, plant and equipment 2,893.7 2,716.8
Less accumulated depreciation 1,792.7 1,617.3
-------- --------
1,101.0 1,099.5
Other Assets
Long-term receivables (less allowance for doubtful
accounts: 1995, $0.7; 1994, $0.7) 48.1 40.1
Intangible assets 567.8 566.2
Deferred income taxes 101.6 98.5
Other 209.9 189.4
-------- --------
Total Assets $5,014.1 $4,885.9
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Short-term debt $ 320.0 $ 360.6
Accounts payable 391.0 429.6
Customer advances 95.0 72.6
Accrued income taxes 295.5 309.6
Deferred income taxes 6.2
Other accrued liabilities 859.7 899.4
-------- --------
1,967.4 2,071.8
Long-Term Debt 564.6 501.5
Deferred Income Taxes 41.4 39.8
Other Liabilities 424.1 418.1
Stockholders' Equity
Common stock - $1.50 par value
Authorized - 250,000,000 shares
Issued - 1995 - 188,166,334 shares 282.3
1994 - 188,286,000 shares 282.4
Additional paid-in capital 470.7 446.9
Retained earnings 2,712.9 2,600.4
Treasury stock - 1995 - 61,187,909 shares (1,630.8)
1994 - 61,030,565 shares (1,576.5)
Accumulated foreign currency translation 187.4 107.4
Pension liability adjustment (5.9) (5.9)
-------- --------
2,016.6 1,854.7
-------- --------
Total Liabilities and Stockholders' Equity $5,014.1 $4,885.9
======== ========
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
(1) The financial information and statements of companies owned 20 percent to
50 percent accounted for using the equity method are omitted pursuant to
Rule 10-01 of Regulation S-X.
(2) Interest consists of the following:
<TABLE>
<CAPTION>
Third Quarter Ended Nine Months Ended
------------------- -----------------
October 1, 1995 October 2, 1994 October 1, 1995 October 2, 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Interest expense $20.2 $19.7 $63.4 $55.3
Interest income (3.4) (4.0) (11.0) (11.7)
----- ----- ----- -----
Total $16.8 $15.7 $52.4 $43.6
===== ===== ===== =====
</TABLE>
Interest paid amounted to $17.8 and $61.5 for the third quarter and nine
months of 1995 and $16.8 and $50.3 for the third quarter and nine months of
1994, respectively.
(3) Income tax provisions for interim periods are based on estimated effective
annual income tax rates. Income tax expense varies from the normal U.S.
statutory tax rate primarily because of state taxes and variations in the
tax rates on foreign source income. While a portion of the annual tax
provisions will be deferred income taxes, it is not practicable to
determine the amount or composition of deferred income taxes for interim
periods. Income taxes paid, net of refunds received, amounted to $21.4 and
$93.6 for the third quarter and nine months of 1995 and $(6.7) and $69.2
for the third quarter and nine months of 1994, respectively.
(4) Dividends per share of common stock were $0.25 and $0.75 for the third
quarter and nine months of 1995 and $0.24 and $0.72 for the third quarter
and nine months of 1994, respectively.
(5) Inventories consist of the following:
<TABLE>
<CAPTION>
October 1, December 31,
1995 1994
--------- -----------
<S> <C> <C>
Finished goods $358.2 $297.4
Inventories related to long-term contracts 92.1 89.1
Work in process 160.0 156.9
Raw materials and supplies 202.2 216.8
------ ------
Total $812.5 $760.2
====== ======
</TABLE>
(6) Litton Litigation.
On March 13, 1990, Litton Systems Inc. filed suit against Honeywell Inc. in
U.S. District Court, Central District of California, alleging Honeywell
patent infringement relating to the process used by Honeywell to coat
mirrors incorporated in its ring laser gyroscopes; attempted monopolization
and predatory pricing by Honeywell of certain alleged markets for products
containing ring laser gyroscopes; and intentional interference by Honeywell
with Litton's prospective advantage in European markets and with its
contractual relationships with Ojai Research, Inc., a California
corporation. Honeywell generally denied Litton's allegations, contested
both the validity and infringement of the patent, and alleged that the
patent had been obtained by Litton's inequitable conduct before the United
States Patent and Trademark Office. Honeywell
<PAGE>
also filed counterclaims against Litton alleging, among other things, that
Litton's business and litigation conduct violated federal and state laws,
causing Honeywell considerable damage and expense.
On January 9, 1995, Judge Mariana Pfaelzer of the U.S. District Court set
aside an August, 1993 jury verdict and damage award of $1.2 billion against
Honeywell in the patent and interference with contract case. She ruled,
among other things, that the Litton patent was unenforceable because it was
obtained by inequitable conduct and invalid because it was an invention that
would have been obvious from combining existing processes. She further
ruled that if her judgment were ever subsequently vacated or reversed on
appeal, Honeywell would be granted a new trial on the issue of damages
because the jury's award in 1993 was inconsistent with the clear weight of
the evidence and permitting it to stand would constitute a miscarriage of
justice. Litton has appealed to the Court of Appeals for the Federal
Circuit, Washington, D.C. Briefs for the appeal have been submitted by the
parties and oral arguments are scheduled for December 8, 1995. In the
companion anti-trust case, Honeywell filed a motion for summary judgment
to dismiss all of Litton's claims. The motion was denied and the trial
for those claims is scheduled to commence November 20, 1995, before Judge
Pfaelzer and a different jury. Honeywell believes that the patent judgment
against Litton will be upheld on appeal, and that Litton's antitrust claims
are without merit. As a result, no provision has been made in the financial
statements with respect to this contingent liability.
(7) As of October 1, 1995, Honeywell had reserved 11,782,811 shares of common
stock for the issuance of shares in connection with stock option and stock
bonus plans.
(8) The figures set forth in this quarterly report are unaudited but, in the
opinion of the registrant, include all adjustments necessary for a fair
presentation of the results of operations for the three-month and nine-
month periods ended October 1, 1995, and October 2, 1994. Honeywell's
accounting policies are described in the notes to financial statements in
its 1994 Annual Report on Form 10-K.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Net income was $84.2 million ($0.66 per share) and $207.8 million ($1.63 per
share) for the third quarter and nine months of 1995 compared with $69.4 million
($0.54 per share) and $174.0 million ($1.34 per share) for the third quarter and
nine months of 1994.
Worldwide sales increased 11 percent to $1,680 million for the third quarter and
11 percent to $4,815 million for the nine months of 1995. Operating profit
increased 16 percent to $167.8 million for the third quarter and 16 percent to
$439.1 million for the nine months of 1995. Orders increased 15 percent for the
third quarter and 12 percent for the nine months when compared with last year.
The weakness of the U.S. dollar had a positive translation benefit of
approximately three percent on Honeywell's results for the first six months of
1995. This benefit dropped slightly in the third quarter of 1995 to
approximately two percent. Net interest expense increased for the third
quarter and nine months of 1995 primarily because of higher interest rates on
Honeywell's floating debt portfolio and higher debt levels. Earnings of
companies owned 20 percent to 50 percent, which are accounted for using the
equity method, increased for the nine months compared with 1994 which included
the writedown of assets.
Home and Building Control sales and operating profit increased 13 percent and 27
percent, respectively, for the third quarter and 15 percent and 21 percent,
respectively, for the nine months of 1995 continuing to benefit from improving
international performance. Orders were up 10 percent for the third quarter and
12 percent for the nine months of 1995. Home Control sales and operating profit
benefited from strong international performance for the third quarter and nine
months of 1995. Home Control continued to penetrate the original equipment
manufacturer market worldwide in the third quarter; it also broadened its
product offerings in gas valves, heat pumps and thermostats in key markets. In
the United States, Home Control received a commitment from Ducane, a South
Carolina-based furnace manufacturer, to use Honeywell's SmartValve-Registered
<PAGE>
Trademark- system and electronic fan timer in its new gas furnace. Home Control
orders were up in the third quarter of 1995 as a result of strong international
performance, primarily in Europe. Building Control experienced double-digit
sales growth fueled by continued strength overall in Europe and by its
comprehensive energy retrofit business in the United States in the third
quarter. Building Control third quarter profit improvements were driven by
improved project margins on international business, as well as continued
improvement on Installed Systems in the United States and continued reduction of
overhead costs. Building Control experienced solid third quarter order
activity, again driven by strong international results. Building Control's
efforts to globalize performance contracting began to pay off with orders in
Asia and Europe. In addition, there was continued benefit in the third quarter
from a strong acceptance worldwide of Honeywell's Excel Security Manager, an
access control system for buildings.
Industrial Control sales increased 9 percent and operating profit declined 6
percent for the third quarter of 1995. Sales and operating profit increased 11
percent and 7 percent, respectively, for the nine months of 1995. Orders were
up 13 percent for the third quarter and 15 percent for the nine months of 1995.
The decline in third quarter Industrial Control operating profit reflects the
decline in third quarter Industrial Automation and Control operating profit
resulting from the timing of TotalPlant-TM- project implementation and the
current mix of lower margin services, as well as the reduction in North American
headcount. Industrial Automation and Control sales were up moderately for the
third quarter and orders were strong paced by strength in both domestic and
international markets. Strong inroads were made in Asia during the quarter as
Honeywell announced a strategic alliance with Sinopec, the world's third-largest
petroleum refiner, representing the first major application of TotalPlant-TM-
advanced services in international markets. Sensing and Control sales and
operating profit for the quarter increased as a result of improvement in the
solid state and electrical switch margins in the U.S. and increased
international sales and profits driven by volume and lower product costs in
Europe. Sensing and Control orders were up modestly for the quarter driven by
commercial sensors in Europe and the infotech market in the United States.
Space and Aviation Control sales and operating profit increased 11 percent and
28 percent, respectively, for the third quarter and 8 percent and 25 percent,
respectively, for the nine months of 1995. Orders increased 25 percent for the
third quarter of 1995, led by order increases in the commercial and military
businesses. Orders increased 6 percent for the nine months of 1995. Sales and
profits in Commercial Aviation Systems for the third quarter and nine months of
1995 showed a strong increase . Sales and profits for the quarter were driven
by increased business jet activity. Sales and profits in Military Avionics
continued to decline in the third quarter of 1995 as a result of the sales and
margin mix. In the third quarter the business announced contracts to supply
color, flat panel cockpit displays and display generators for Lockheed Martin's
European F-16 mid-life update and Taiwan F-16 programs. The business was also
awarded a five-year contract to supply Embedded Global Positioning
System/Inertial Navigation Systems (EGI) for the U.S. Air Force, Navy and Army
to upgrade aircraft with state-of-the-art guidance and navigation equipment.
Sales and operating profit increased in Space Systems for the third quarter and
nine months of 1995 due to the favorable margin mix of programs for which sales
were recognized during the third quarter.
Sales from other operations which do not correspond with Honeywell's primary
business segments, including the activities of various units such as the Solid
State Electronics and the Honeywell Technology and research and development
centers, increased for the third quarter and nine months of 1995. These units
had operating profits of $5.9 million and $5.0 million for the nine months of
1995 and 1994, respectively.
FINANCIAL CONDITION
Stockholders' equity increased to $2,017 million from $1,855 million at the
end of 1994. The increase in stockholders' equity includes a $112 million
addition to retained earnings resulting from current year earnings less
dividends and a $80 million increase in the accumulated foreign currency
translation balance, partially offset by $30 million in net treasury stock
transactions.
Common shares outstanding decreased by 277,010 from the end of 1994 to
127.0 million. Shares repurchased during the first nine months of 1995
totaled 2,520,000 at a cost of $103.3 million. Shares
<PAGE>
issued during the first nine months of 1995 through stock option and stock bonus
plans totaled 2,242,990 and yielded $54.0 million in proceeds.
Debt as a percentage of total capital at the end of the third quarter was
30.5 percent compared with 31.7 percent at the end of 1994. Total debt
increased $22.5 million from 1994 year end. The increase was used to
partially finance capital expenditures, $41.5 million of acquisitions and
working capital.
Cash flow generated from operating activities, net of investing activities,
for the first nine months of 1995 was $82.4 million.
During 1994, 1993 and 1992 Honeywell established total reserves of $242.3
million for productivity initiatives to strengthen the company's
competitiveness. Expenditures of $47.5 million in the first nine months of
1995 included $37.3 million and $10.2 million related to work force
reduction costs and facilities consolidation costs, respectively. Accrued
costs remaining to be funded include $17.0 million related to work force
reduction costs and $6.0 million related to facilities consolidation costs.
Future cash flows from operating activities are expected to be sufficient
to fund these accrued costs.
On October 1, 1995, Honeywell had $725 million of committed credit lines
with twenty-one banks. There were no borrowings under these lines. In
addition, certain foreign units had $363 million in credit lines available
at the end of the third quarter. Honeywell believes its available cash,
committed credit lines and access to the public debt markets through its
$500 million medium-term note (MTN) program provide adequate short-term and
long-term liquidity.
During the nine months of 1995, Honeywell issued $121 million of medium-term
notes with maturities ranging from 3 to 7 years. Following the MTN issuances,
$222 million was outstanding under the $500 million medium-term note
program. During the month of August Honeywell retired $120 million of 8%
Dual-Currency Yen/U.S. Dollar notes.
Honeywell's credit ratings remained unchanged during the quarter. Ratings
for long-term and short-term debt are, respectively, A/A-1 by Standard and
Poor's Corporation, A/Duff1 by Duff and Phelps Corporation and A3/P-2 by
Moody's Investors Service, Inc.
Honeywell utilizes various foreign currency exchange contracts and interest
rate swaps to manage its exposure to exchange rate and interest rate
fluctuations and its mix of fixed and floating interest rates. At October
1, 1995, the notional amount of outstanding foreign exchange contracts was
approximately $1.278 billion. The amount of hedging gains and losses
deferred was not material at October 1, 1995. The notional amount of
outstanding interest rate swaps was $226 million at October 1, 1995.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported in Item 3. "Legal Proceedings" of Part I of
Honeywell's Annual Report on Form 10-K for the fiscal year ended December
31, 1994, Honeywell is a defendant in a lawsuit filed by Litton Systems
Inc. alleging patent infringement relating to the process used by Honeywell
to coat mirrors incorporated in its ring laser gyroscopes; attempted
monopolization and predatory pricing by Honeywell of certain alleged
markets for products containing ring laser gyroscopes; and intentional
interference by Honeywell with Litton's prospective advantage in
European markets and with its contractual relationships with Ojai
Research, Inc., a California corporation.
The information reported in Note (6) to the Financial Statements set
forth in Item 1 of Part I of this report and the information reported in
Item 2 of Part I of this report regarding the financial condition of
Honeywell are incorporated by reference into this Item 1.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(11) Computation of Earnings Per Share.
(12) Computation of Ratio of Earnings to Fixed Charges.
(27) Financial Data Schedule
<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.
HONEYWELL INC.
Date: November 15, 1995 By: /s/ E. D. Grayson
________________________________
E. D. Grayson
Vice President and General Counsel
Date: November 15, 1995 By: /s/ P. M. Palazzari
________________________________
P. M. Palazzari
Vice President and Controller
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Page No.
__________ _______
11 Computation of Earnings Per Share i
12 Computation of Ratio of Earnings to Fixed Charges ii
27 Financial Data Schedule iii
<PAGE>
EXHIBIT (11)
HONEYWELL INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Third Quarter Ended Nine Months Ended
------------------------------ ----------------------------
October 1, October 2, October 1, October 2,
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
PRIMARY:
Income:
Net income............................................... $ 84.2 $ 69.4 $ 207.8 $ 174.0
=========== =========== =========== ===========
Shares:
Weighted average of shares outstanding during the year... 127,263,618 129,246,798 127,222,511 129,894,294
=========== =========== =========== ===========
Earnings per share:
Net income............................................... $ 0.66 $ 0.54 $ 1.63 $ 1.34
=========== =========== =========== ===========
ASSUMING FULL DILUTION:
Income:
Net income............................................... $ 84.2 $ 69.4 $ 207.8 $ 174.0
=========== =========== =========== ===========
Shares:
Weighted average of shares outstanding during the year... 127,263,618 129,246,798 127,222,511 129,894,294
Shares issuable in connection with stock plans
less shares purchaseable from proceeds................. 1,653,849 832,642 1,812,115 835,628
----------- ----------- ----------- -----------
Total shares......................................... 128,917,467 130,079,440 129,034,626 130,729,922
=========== =========== =========== ===========
Earnings per share:
Net income............................................... $0.65 $0.53 $1.61 $1.33
=========== =========== =========== ===========
</TABLE>
i
<PAGE>
EXHIBIT (12)
HONEYWELL INC. AND SUBSIDIARIES
COMBINED WITH PROPORTIONAL SHARES OF 50% OWNED COMPANIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
(DOLLARS IN MILLIONS)
Nine Months Ended
October 1, 1995
------------------
<S> <C>
Income before income taxes......................... $314.90
Deduct:
Equity income................................... 6.90
-------
Subtotal........................................ 308.00
Add (deduct):
Dividends from less than 50% owned companies 1.32
Proportional share of income (loss) before
income taxes of 50% owned companies 0.41
-------
Adjusted income................................... 309.73
-------
Fixed Charges
Interest on indebtedness....................... 60.80
Amortization of debt expense................... 2.62
Interest portion of rent expense............... 36.49
-------
Total Fixed Charges.............................. 99.91
-------
Total Available Income........................... $409.64
=======
Ratio of Earnings to Fixed Charges............... 4.10
=======
</TABLE>
ii
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> OCT-01-1995
<CASH> 220
<SECURITIES> 9
<RECEIVABLES> 1,503
<ALLOWANCES> 31
<INVENTORY> 813
<CURRENT-ASSETS> 2,707
<PP&E> 2,894
<DEPRECIATION> 1,793
<TOTAL-ASSETS> 5,014
<CURRENT-LIABILITIES> 1,967
<BONDS> 565
<COMMON> 282
0
0
<OTHER-SE> 1,734
<TOTAL-LIABILITY-AND-EQUITY> 5,014
<SALES> 4,815
<TOTAL-REVENUES> 4,815
<CGS> 3,299
<TOTAL-COSTS> 3,299
<OTHER-EXPENSES> 237
<LOSS-PROVISION> 5
<INTEREST-EXPENSE> 63
<INCOME-PRETAX> 315
<INCOME-TAX> 107
<INCOME-CONTINUING> 208
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 208
<EPS-PRIMARY> 1.63
<EPS-DILUTED> 1.61
</TABLE>
