SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(mark one)
[XX] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _________ to _________
********************************
Commission File No. 1-4235
AMP INCORPORATED
(Exact Name of Registrant as Specified in Charter)
********************************
Commonwealth of Pennsylvania 23-0332575
(State or Other Jurisdiction of Incorporation IRS Employer Identification No.
or Organization)
Harrisburg, Pennsylvania 17105-3608
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (717) 564-0100
********************************
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 [ ].
The number of shares of AMP Common Stock (without Par Value) outstanding at May
12, 1998 was 219,416,099 (excluding shares held in the treasury of the
Corporation, all of which are issued but not outstanding and are not entitled to
vote).
Includes an Exhibit Index.
<PAGE>
AMP Incorporated & Subsidiaries
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Consolidated Statements of Income and the Consolidated Statements of
Cash Flows for the three months ended March 31, 1998 and 1997, and the Condensed
Consolidated Balance Sheets at March 31, 1998 and December 31, 1997, are
presented below. See the notes to these condensed consolidated financial
statements at the end thereof.
AMP Incorporated & Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands,
except per share data)
For the Three Months
Ended March 31,
1998 1997
---------- ----------
Net Sales .................... $1,394,889 $1,392,867
Cost of Sales (see Note 2).... 958,971 970,963
---------- ----------
Gross income ............. 435,918 421,904
Selling, General and
Administrative Expenses
(see Note 2) ........... 275,879 261,235
---------- ----------
Income from operations ... 160,039 160,669
Interest Expense ............. (7,898) (8,098)
Other Income (Deductions), net (176) (2,457)
---------- ----------
Income before income taxes 151,965 150,114
Income Taxes ................. 49,389 48,786
---------- ----------
Net Income before cumulative..
effect of accounting changes $ 102,576 $ 101,328
Cumulative Effect of Accounting
Changes, (see Note 2)..... - 15,450
=========== ===========
Net income.................... $ 102,576 $ 116,778
=========== ===========
Basic and Diluted Per Share Earnings:
Net income before cumulative
effect of accounting changes 47 cents 46 cents
Cumulative Effect of Accounting
Changes .................. - cents 7 cents
Net income.................... 47 cents 53 cents
Cash dividends................ 27 cents 26 cents
=========== ===========
The accompany Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
AMP Incorporated & Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Condensed and Unaudited)
(dollars in thousands)
For the Three Months
Ended March 31,
1998 1997
--------- ---------
Cash and Cash Equivalents at January 1 ............... $350,320 $223,779
Operating Activities:
Net Income ..................................... 102,576 116,778
Non-cash items -
Depreciation and amortization ............... 102,023 109,443
Cumulative effect of accounting changes
(see Note 2) -- (22,889)
Changes in operating assets and liabilities . (62,437) (32,372)
Other, net ..................................... (6,485) (5,078)
------- -------
Cash provided by operating activities ....... 135,677 165,882
======= =======
Investing Activities:
Additions to property, plant and equipment ..... (107,162) (120,956)
Other, net ..................................... 12,105 16,059
-------- --------
Cash used for investing activities .......... (95,057) (104,897)
-------- --------
Financing Activities:
Changes in short-term debt ..................... (12,336) (13,136)
Additions to long-term debt .................... 23,409 19,071
Reductions of long-term debt ................... (27,507) (9,302)
Purchases of treasury stock .................... (17,944) --
Dividends paid ................................. (59,201) (57,039)
------- -------
Cash used for financing activities .......... (93,579) (60,406)
------- -------
Effect of Exchange Rate Changes on Cash .............. (2,791) (6,904)
------- -------
Cash and Cash Equivalents at March 31 ................ $294,570 $217,454
======= =======
Changes in Operating Assets and Liabilities:
Receivables .......................................... (4,063) (71,560)
Inventories .......................................... (42,715) (1,829)
Other current assets ................................. (1,814) 6,729
Payables, trade and other ............................ (35,331) (13,180)
Accrued payrolls and benefits ........................ 35,218 22,578
Other accrued liabilities ............................ (13,732) 24,890
------- -------
(62,437) (32,372)
======= =======
Interest paid during the periods was approximately equal to amounts charged
to expense.
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
AMP Incorporated & Subsidiaries
CONSOLIDATED BALANCE SHEETS
(condensed)
- - -------------------------------------------------------------------------------
(dollars in thousands) March 31, December 31,
1998 1997
- - -------------------------------------------------------------------------------
ASSETS (Unaudited)
Current Assets:
Cash & cash equivalents ........... $ 294,570 $ 350,320
Securities available for sale ..... 89,763 79,350
Receivables ....................... 1,044,297 1,051,422
Inventories --
Finished goods & work in process. 520,696 491,688
Purchased and manufactured parts. 302,988 314,375
Raw materials.................... 115,527 102,156
---------- ----------
Total inventories................ 939,211 908,219
Other Current Assets............... 273,199 260,489
---------- ----------
Total current assets............. 2,641,040 2,649,800
---------- ----------
Property, Plant and Equipment ....... 4,640,794 4,627,419
Less-Accumulated depreciation ..... 2,752,104 2,711,434
---------- ----------
Property, plant & equipment,
net .......................... 1,888,690 1,915,985
---------- ----------
Investments and Other Assets ........ 284,482 282,318
---------- ----------
TOTAL ASSETS ........................ $4,814,212 $4,848,103
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt ................... $ 445,433 $ 465,233
Payables, trade and other ......... 450,860 487,863
Accrued liabilities ............... 534,624 492,200
---------- ----------
Total current liabilities ....... 1,430,917 1,445,296
Long-Term Debt ...................... 153,122 159,695
Other Liabilities and
Deferred Credits .................. 281,276 291,577
---------- ----------
Total liabilities ............... 1,865,315 1,896,568
Shareholders' Equity ................ 2,948,897 2,951,535
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY ............................. $4,814,212 $4,848,103
========== ==========
The accompanying Notes to Condensed Consolidated Financial Statements are an
integral part of these statements.
AMP Incorporated & Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(March 31, 1998, Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and the notes thereto included in the Company's latest
annual report and Form 10-K.
The information furnished reflects all adjustments which are, in the
opinion of management, necessary for a fair statement of the results for the
interim periods.
The following table presents a reconciliation of the shares used to
calculate earnings per share as well as per share amounts:
For the Three Months Ended March 31,:
- - ------------------------------------------------------------------------------
1998 1997
- - ------------------------------------------------------------------------------
Shares EPS Shares EPS
Basic Calculation 219,639,946 $0.47 219,602,584 $0.53
Dilutive Securities -
Primarily Options 473,263 329,070
- - ------------------------------------------------------------------------------
Diluted Calculation 220,113,209 $0.47 219,931,654 $0.53
==============================================================================
2. ACCOUNTING CHANGES
Effective January 1, 1998, AMP Incorporated, the United States parent
company of AMP Incorporated and Subsidiaries (the "Company"), consolidated the
majority of its operating divisions and reorganized into functional
organizations, including manufacturing, materials management, engineering and
finance. As a result of this change, certain manufacturing administrative
functions are now included in general and administrative expenses, a
classification which is consistent with the Company's subsidiaries. The prior
period amounts have been reclassified to provide for consistent data
comparisons.
In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130").
For interim periods, SFAS No. 130 permits footnote presentation of a description
of the impact of SFAS No. 130 on the Company, total comprehensive income, any
material components of total comprehensive income for the periods presented and
cumulative other comprehensive income. Under SFAS No. 130, comprehensive income
is defined as the total of net income and all other non-owner changes in equity.
The Company's non-owner changes in equity include: unrealized holding
gains/losses on securities classified as available-for-sale under FASB Statement
No. 115 and foreign currency translation adjustments accounted for under FASB
Statement No. 52. The adoption of SFAS No. 130 involves new disclosure
requirements only and did not impact the reported financial position or results
of operations.
Total comprehensive income and its components are as follows:
For the Three Months Ended:
March 31, 1998 March 31, 1997
---------------------------------------
Net Income $102,576 $116,778
Unrealized gains/(losses) on securities 3,750 (3,823)
Cumulative translation adjustment (36,682) (56,332)
---------------------------------------
Total comprehensive income $ 69,644 $ 56,623
=======================================
Cumulative other comprehensive income was ($6,226) and $26,706 at March 31,
1998 and December 31, 1997, respectively.
During the first quarter of 1997, the Company made two changes to the
accounting practices used to develop its inventory costs. The first change was
made to standardize globally the definition of capacity used to determine volume
assumptions for overhead rates. The new definition more properly reflects the
Company's objectives for plant and equipment utilization and provides for
consistent measurements of AMP facilities.
In an effort to provide increased focus on engineering efforts for both
product development and manufacturing cost reductions, the Company also changed
its inventory costing methodology to include manufacturing engineering costs in
the inventory costs. Previously, these costs were expensed in the period
incurred and included in Cost of Sales on the Consolidated Statement of Income.
The net benefit of the preceding changes in accounting for inventory of
$15.5 million, or $.07 per share, was presented as a cumulative effect of
accounting changes on the Consolidated Statement of Income for the three months
ended March 31, 1997.
<TABLE>
<CAPTION>
AMP Incorporated & Subsidiaries
RECLASSIFIED CONSOLIDATED STATEMENTS OF INCOME <F5>
1997 (Unaudited)
(dollars in thousands except Quarter 1 Quarter 2 Quarter 3 Quarter 4
per share data) 1997 1997 1997 1997
============================================================================================================
<S> <C> <C> <C> <C>
Net Sales $ 1,392,867 $ 1,468,005 $ 1,432,600 $1,451,763
Cost of Sales 970,963 995,617 954,530 975,133
----------- ----------- ------------ ----------
Gross income 421,904 472,388 478,070 476,630
30.3% 32.2% 33.4% 32.8%
Selling, General and
Administrative Expenses 261,235 283,105 284,176 274,703
18.8% 19.3% 19.8% 18.9%
Restructuring & One-time (Credits) -- -- -- (21,338)<F2>
----------- ----------- ------------ ----------
Income from operations 160,669 189,283 193,894 223,265
Interest Expense (8,098) (8,964) (8,098) (6,683)
Other Income (Deductions), net (2,457) (21,366)<F1> (5,640) (27,820)<F3>
----------- ----------- ------------ ----------
Income before income taxes 150,114 158,953 180,156 188,762
Income Taxes 48,786 51,660 58,551 61,348
----------- ----------- ------------ ----------
Net Income before Cumulative
Effect of Accounting Changes $ 101,328 $ 107,293 $ 121,605 $ 127,414
========== ========== ============ ==========
Cumulative Effect of Accounting
Changes $ 15,450 $ -- $ -- $ --
========== ========== ============ ==========
Net Income $ 116,778 $ 107,293 $ 121,605 $ 127,414
========== ========== ============ ==========
BASIC AND DILUTED EPS DATA:
Net Income before Cumulative
Effect of Accounting Changes $ 0.46 $ 0.49 $ 0.55 $ 0.58
Cumulative Effect of
Accounting Changes $ 0.07 $ -- $ -- $ --
----------- ---------- ------------ ----------
Net Income $ 0.53 $ 0.49 $ 0.55 $ 0.58
========== ========== ============ ==========
1996 (Unaudited)
(dollars in thousands except Quarter 1 Quarter 2 Quarter 3 Quarter 4
per share data) 1996 1996 1996 1996
============================================================================================================
Net Sales $ 1,362,975 $ 1,365,487 $ 1,336,233 $1,403,333
Cost of Sales 915,360 930,839 929,586 1,058,529<F4>
----------- ----------- ------------ ----------
Gross income 447,615 434,648 406,647 344,804
32.8% 31.8% 30.4% 24.6%
Selling, General and
Administrative Expenses 262,654 260,108 250,371 259,875
19.3% 19.0% 18.7% 18.5%
Restructuring & One-time Charges -- -- -- 98,000 <F4>
----------- ----------- ------------ ----------
Income from operations 184,961 174,540 156,276 (13,071)
Interest Expense (7,982) (8,166) (7,959) (7,049)
Other Income (Deductions), net 3,561 7,132 (3,520) (40,415)<F4>
----------- ----------- ------------ ----------
Income before income taxes 180,540 173,506 144,797 (60,535)
Income Taxes 64,092 57,885 49,955 (20,608)
----------- ----------- ------------ ----------
Net Income $ 116,448 $ 115,621 $ 94,842 $ (39,927)
=========== ========== ============ ==========
Basic and Diluted EPS 0.53 $ 0.53 $ 0.43 $ (0.18)
=========== ========== ============ ==========
<FN>
<F1> Includes a charge to net income of $17.7 million to establish a litigation
reserve.
<F2> Represents a favorable adjustment to reduce the Restructuring reserve
established in 1996.
<F3> Includes a $26 million charge to write-down certain equity investments.
<F4> Restrucuring and One-time Charges were recorded in the fourth quarter of
1996 related to the Company exiting certain facilities and product lines,
as well as equity ventures. The charges were recorded in the Consolidated
Statement of Income as follows: $62.5 million to Cost of Sales, $98
million to Restructuring and One-time Charges and $34.5 million to Other
Income/(Deductions).
<F5> This statement reflects the reclassification of certain expenses from cost
of sales to selling, general and administrative expenses to be consistent
with the current year presentation as noted in Footnote 2 to the
Consolidated Statements of Income for the 3 months ended March 31, 1998
and 1997 included in this Report on Form 10-Q.
</FN>
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Net sales for the first quarter of 1998 were $1.395 billion, essentially
flat with 1997. On a local currency basis, sales were up 4.1%. The continued
strength of the U.S. dollar reduced sales approximately $55 million from the
year-earlier quarter.
Bookings for the first quarter were $1.426 billion, down 1.7% in U.S.
dollars and up 2.3% in local currencies from the $1.451 billion in the
year-earlier quarter. The Company's order backlog increased $26 million to $970
million from $944 million at the end of 1997.
Sales in the Americas, approximately 50% of total sales, were down 1% from
the year-earlier quarter. Driven by weakness in the Communications and Personal
Computer markets, sales in the United States were down 2%. United States sales
in the first quarter of 1997 included approximately $22 million for businesses
discontinued last year. Normalized for these discontinued businesses, U.S. sales
grew 1%. The rest of the Americas, led by Canada and Argentina, posted double-
digit growth in local currencies and 8.8% growth in U.S. dollars.
Asia/Pacific sales, approximately 18% of total sales, were up 2% in local
currencies and down 5% in U.S. dollars. Taiwan, Singapore, China and Hong Kong
experienced double-digit local currency growth driven by the Personal Computer
and Business and Retail Equipment markets, while sales in Japan were down 5% in
local currencies.
Europe, Middle East and Africa sales, approximately 32% of total sales,
were up 13% in local currencies and 6% in U.S. dollars. Led by the
Communications and Motor Vehicles markets, growth was strong in most countries.
Gross income increased to 31.3% of net sales for the quarter ended March
31, 1998, up from 30.3% in the year-earlier quarter. The increase in gross
margin was primarily due to the benefits of ongoing cost reduction programs.
Selling, general and administrative expenses (S,G&A) for the quarter ended
March 31, 1998 of 19.8% of net sales represent an increase from 18.8% in the
year-earlier quarter. The increase in S,G&A expenses is related to additional
investments in information systems and sales deployment.
Net income for the first quarter of 1998 was $102.6 million, up $1.3
million from $101.3 million before the cumulative effect of the accounting
changes in the year-earlier quarter. Basic and diluted earnings per share were
$0.47, up 2.2% compared to $0.46 before the cumulative effect of accounting
changes in the first quarter 1997. First quarter 1997 net income, after the
cumulative effect of accounting changes, was $116.8 million or $0.53 per share.
Capital expenditures for the first quarter 1998 were $107.1 million, down
11.5% from $121.0 million in the prior year first quarter. The Company continues
to focus on improving existing asset utilization and productivity. Capital
expenditures for 1998 are expected to be below $600 million, up from the 1997
capital expenditures of $481 million.
OUTLOOK
As a result of the April 1998 operating earnings falling short of
expectations, the Company is expecting the financial results for the second
quarter to be below prior year levels for the same comparable period. April
sales were down about 7% in U.S. dollars and down 4% in local currencies. Sales
are weak in both Asia/Pacific and the United States and the trend primarily
relates to the computer and communications markets.
The Company is finalizing comprehensive action plans to stimulate sales
growth and to improve manufacturing effectiveness. The specific plans will be
communicated by the time we report the results for the second quarter.
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR"
- - -------------------------------------------------------
Statements in this Report on Form 10-Q that are not strictly historical are
"forward-looking" statements which should be considered as subject to the many
uncertainties that exist in the Company's operations and business environment.
These uncertainties, which include economic and currency conditions, market
demand and pricing, competitive and cost factors, and the like, are set forth in
the AMP Report on Form 10-K for the year ended December 31, 1997 filed with the
Securities and Exchange Commission on or about March 30, 1998.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in quantitative and qualitative
disclosures in 1998. Reference is made to Item 7A in the Annual Report on Form
10-K for the year ended December 31, 1997.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Annual Meeting of Shareholders of AMP Incorporated was held on
Wednesday, April 22, 1998 beginning at 10:30 a.m., local time, at the AMP Global
Executive Leadership Center, 441 South 40th Street, Harrisburg, Pennsylvania. As
of the record date (March 3, 1998) for the Annual Meeting, 219,559,875 shares of
Common Stock were outstanding and entitled to vote. 197,113,256 shares,
representing over 89.7% of the outstanding Common Stock eligible to vote, were
represented at the Annual Meeting either in person or by proxy.
* All of the directors of the Company, eleven in number, were elected at the
Annual Meeting, each by an affirmative vote of at least 99.2% of the votes
cast. The results of the vote tabulation for each director are as follows:
Director Votes For Votes Withheld
-------- --------- --------------
Ralph D. DeNunzio ...... 195,693,785 1,419,471
Barbara H. Franklin .... 195,668,033 1,445,223
Joseph M. Hixon III .... 195,657,682 1,455,574
William J. Hudson, Jr... 195,663,075 1,450,181
Joseph M. Magliochetti.. 195,714,322 1,398,934
James E. Marley ........ 195,718,112 1,395,144
Harold A. McInnes ...... 195,615,887 1,497,369
Jerome J. Meyer ........ 195,731,714 1,381,542
John C. Morley ......... 195,713,745 1,399,511
Paul G. Schloemer ...... 195,640,809 1,472,447
Takeo Shiina ........... 195,703,772 1,409,484
The proposal for shareholder approval of the Company's 1998 Employee Stock
Purchase Plan, a plan intended to qualify under Section 423 of the Internal
Revenue Code of 1986, as amended, and under which eligible employees of the
Company and its subsidiaries throughout the world will have the opportunity to
purchase the Company's common stock through payroll deductions and at a discount
from market price, was approved by an affirmative vote of more than 98.4% of the
votes cast and more than 98.0% of the quorum for the Annual Meeting. On this
matter, which was deemed a routine proposal under the rules of The New York
Stock Exchange, 193,323,371 votes were for the proposal, 3,042,770 votes were
against, and 747,115 votes abstained. Abstentions were not counted as votes cast
but were included in the quorum.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits --
Exhibit
Number Description
------- -----------
10 - Fourth Amendment to the Pension Restoration Plan, effective
as of January 1, 1998
27 - Financial Data Schedule
<PAGE>
(B) Reports on Form 8-K --
No Report on Form 8-K was filed by the Company during the three
months ended March 31, 1998.
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.
Date: May 15, 1998 AMP INCORPORATED
(Registrant)
By: /s/ W. S. Urkiel
____________________________________________
William S. Urkiel
Vice President and Chief Financial Officer
By: /s/ Mark E. Lang
____________________________________________
Mark E. Lang
Corporate Controller
**
EXHIBIT INDEX
-------------
Exhibit
Number Description
------- -----------
10 - Fourth Amendment to the Pension Restoration Plan, effective
as of January 1, 1998
27 - Financial Data Schedule
FOURTH AMENDMENT
to the
AMP INCORPORATED
PENSION RESTORATION PLAN
The AMP Incorporated Pension Restoration Plan (January 1, 1995
Restatement), as heretofore amended on three occasions, is hereby further
amended as set forth below.
1. Effective for Retirements Dates after January 1, 1998, Section 6.1 of
the Plan is amended to provide as follows:
SECTION 6
AMOUNT AND PAYMENT OF BENEFIT
6.1 Effective for Retirement Dates that occur after January 1, 1998, a
Retiree's monthly accrued benefit under this Plan shall have a value
on a pre-tax basis that is equal to the difference between A and B,
where A is the monthly accrued benefit the Retiree would have been
entitled to receive under the pension provisions of the Pension Plan
(a) disregarding any reductions or restrictions on such benefit as a
result of the Code Limitations, (b) using as the annual earnings
measurement periods for Plan purposes the twelve consecutive calendar
months that end on a relevant benefit computation date and the nine
prior such twelve-month periods, (c) including as earnings
attributable to an annual earnings measurement period both base
earnings and annual cash bonus amounts paid or payable in the
measurement period (without regard to whether a portion of such base
earnings or cash bonus amounts have been deferred under the terms of
the AMP Incorporated or Whitaker Corporation Deferred Compensation
Plan or under any AMP-sponsored plan complying with the provisions of
Sections 401(k) or 125 of the Code), (d) determining final 3-year
average earnings by reference to the three such measurement periods
that have the highest annual earnings totals, without regard to
whether the periods are consecutive, and (e) augmenting a Retiree's
credited years of service with any additional credit years of service
granted to the Retiree for Plan purposes by written employment
agreement, and B is the monthly accrued benefit actually payable to
the Retiree under the Pension Plan.
2. Effective January 1, 1998, Exhibit A is hereby amended to add certain
individuals as Eligible Employees for Plan purposes. As of such date,
the Exhibit A attached to this Amendment shall replace and become
Exhibit A for purposes of the Plan.
Executed this 14th day of May, 1998.
AMP Incorporated
/s/ W. J. Hudson
By:___________________________________
President & CEO
Title:________________________________
APPENDIX A
The following are Employees for purposes of the Plan on and after the
indicated effective date:
Eligibility
Name SSAN Effective Status
Date
Hudson, W. J. 01/01/89 Active
Marley, J. E. 01/01/89 Active
Cole, H. 12/31/93 Active
Dalrymple, T. 12/31/93 Retired
Drysdale, K. 12/31/93 Active
Gassner, R. 12/31/93 Active
Goonrey, C. 12/31/93 Active
Guarneschelli, P 12/31/93 Retired
Gurski, J. 12/31/93 Active
Hassan, J. 10/01/93 Active
Kastel, A. 12/31/93 Active
Knerr, Jr. G. R. 12/31/93 Retired
Maher, J. 12/31/93 Retired
Seitchik, J. 12/31/93 Active
Timmins, H. 12/31/93 Retired
Ripp, R. 08/15/94 Active
Horowitz, D. 09/12/94 Terminated Vested
Cornelius, D. 02/01/95 Active
Hooper, D. 02/01/95 Active
Kegel, J. 02/01/95 Active
Proietto, N. 02/01/95 Active
Clark, R. 02/01/96 Active
DiClemente, T. 02/01/96 Active
Keizer, A. 02/01/96 Active
Overbaugh, J. 02/01/96 Active
Peiffer, H. 02/01/96 Retired
Roche, D. 02/01/96 Active
Spatz, N. 02/01/96 Active
Urkiel, W. 02/01/96 Active
Walker, L. 02/01/96 Active
Wilkie, D. 02/01/96 Active
Zettlemoyer, A. 02/01/96 Active
Grabbe, D. 02/01/97 Active
Kapany, N. 02/01/97 Active
Miller, Jr., L. 02/01/97 Active
Timashenka, P. 02/01/97 Active
Yohe, Jr., M. 02/01/97 Active
Bruggeworth, R. 02/01/98 Active
Dittmann, L. 02/01/98 Active
Goldstein, J. 02/01/98 Active
Henschel, D. 02/01/98 Active
Kaleida, R. 02/01/98 Active
Lemaitre, P. 02/01/98 Active
Lightner, L. 02/01/98 Active
Unter, T. 02/01/98 Active
Usner, J. 02/01/98 Active
Vance, R. 02/01/98 Active
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENTS
CONTAINED IN THE COMPANY'S 1998
FIRST QUARTER 10Q AND IS
QUALIFIED BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 294,570
<SECURITIES> 89,763
<RECEIVABLES> 1,044,297
<ALLOWANCES> 0
<INVENTORY> 939,211
<CURRENT-ASSETS> 2,641,040
<PP&E> 4,640,794
<DEPRECIATION> 2,752,104
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0
0
<OTHER-SE> 2,867,172
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<TOTAL-REVENUES> 1,394,889
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<INCOME-TAX> 49,389
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<EPS-BASIC> .47
<EPS-DILUTED> .47
</TABLE>
