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Cash Used For Financing Activities
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($ millions) 1993 Change 1992 Change 1991
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Cash used for financing
activities .................. $593 -$15 $608 -$79 $687
-2.5% -11.5%
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The slight decrease in 1993 cash used for financing activities reflects a
$624 million decrease in cash derived from net short-term borrowings which was
more than offset by increased proceeds from treasury stock issuances and other
activity. Treasury stock issuances increased to $728 million (at cost) during
1993 from $173 million in 1992. The increased issuances were primarily to
meet the greater requirements of the Corporation's dividend reinvestment and
stock purchase plan due to features introduced in December 1992 offering
discounted stock purchases. During September 1993, the Corporation
discontinued this offer. For 1993, the Board maintained the Corporation's
dividend at $2.18 per share, the same level as in 1992. Management intends to
recommend to the Board that this level be maintained in 1994.
Long-term borrowing activity, excluding spin-off operations, included the
following issuances and redemptions:
Interest Maturity Principal
($ millions) Rate Date Amount
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Issuances:
1993 ............ 6.25% to 7.50% 2005 to 2043 $2,650
1992 ............ 7.00% to 7.75% 2002 to 2032 $ 929
Retirements:
1993 ............ 6.125% to 9.625% 1993 to 2030 $2,624
1992 ............ 5.125% to 9.875% 1993 to 2019 $ 973
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Pre-tax interest coverage was negative for 1993 compared to 4.6 times for
1992. This decrease was primarily due to the Corporation's 1993 reported
loss. The Corporation's debt ratio of 41.0 percent as of December 31, 1993
decreased from 43.5 percent as of December 31, 1992, reflecting reduced debt
balances. The Corporation's debt ratio, excluding spin-off operations,
increased to 53.8 percent from 45.9 percent as of December 31, 1992. This
increase reflects the effect of excluding the Corporation's equity in PacTel,
which increased during 1993 and more than offset the impact of reduced debt
balances.
In 1992, cash used for financing activities decreased reflecting reduced
purchases of treasury shares. Dividends per share increased 1.9 percent to
$2.18.
The Corporation's adoption of SFAS 106 and SFAS 112, effective January 1,
1993, increased other noncurrent liabilities by $2.9 billion. Deferred income
tax liabilities were reduced by $1.2 billion due to the related tax benefits,
resulting in a net increase to liabilities of $1.7 billion upon adopting these
two new standards.
F-21
