FORM 8 - K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8 - K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported): July 20, 1999
PITNEY BOWES INC.
Commission File Number: 1-3579
State of Incorporation IRS Employer Identification No.
Delaware 06-0495050
World Headquarters
Stamford, Connecticut 06926-0700
Telephone Number: (203) 356-5000
<PAGE>
Item 5 - Other Events.
The registrant's press release dated July 20, 1999, regarding its financial
results for the period ended June 30, 1999, including consolidated statements of
income for the three and six months ended June 30, 1999 and 1998 and
consolidated balance sheets at June 30, 1999, December 31, 1998 and June 30,
1998, are attached.
Consolidated statements of income and selected segment data for the quarters
ended in 1999 and 1998, the year ended December 31, 1998, and the six months
ended June 30, 1999 reflecting the results of Atlantic Mortgage and Investment
Corporation in discontinued operations are also attached.
Item 7 - Financial Statements and Exhibits.
c. Exhibits.
The following exhibits are furnished in accordance with the provisions of Item
601 of Regulation S-K:
Exhibit Description
------- --------------------------------------------------------------
(1) Pitney Bowes Inc. press release dated July 20, 1999.
(2) Pitney Bowes Inc. consolidated statements of income for the
periods specified in Item 5 above.
(3) Pitney Bowes Inc. selected segment data for the periods
specified in Item 5 above.
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 hereunto duly authorized.
PITNEY BOWES INC.
July 23, 1999
/s/ M. L. Reichenstein
-------------------------------
M. L. Reichenstein
Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ A. F. Henock
-------------------------------
A. F. Henock
Vice President - Controller
and Chief Tax Counsel
(Principal Accounting Officer)
<PAGE>
(1)
Exhibit 1
PITNEY BOWES REPORTS STRONG SECOND QUARTER EARNINGS
Highlights
o 18th Consecutive Quarter of Double-Digit Earnings Per Share Growth
o Continued Strength in Mailing and Integrated Logistics (MAIL) Segment
o Decision to Dispose of Mortgage Servicing Unit to Focus on Core
Businesses
FOR IMMEDIATE RELEASE
Stamford, Conn., July 20, 1999 - Pitney Bowes Inc. (NYSE: PBI) today
reported strong second quarter results with a 21.5-percent increase in diluted
earnings per share from continuing operations to 58 cents. Revenue increased by
nine percent on a consolidated basis to $1.1 billion for the strongest second
quarter growth rate in nine years. Income from continuing operations grew 19
percent to $157.4 million versus $132.8 million in the second quarter 1998. The
company has now recorded 18 consecutive quarters of double-digit, year-on-year
diluted earnings per share growth from continuing operations. Net income,
including a one-time charge for discontinued operations attributable to the
company's decision to dispose of its mortgage servicing business, is $129.7
million or 48 cents per diluted share, versus $142.0 million or 51 cents per
diluted share in the second quarter 1998.
Chairman and Chief Executive Officer Michael J. Critelli discussed the
company's performance during the quarter: "We are pleased with this quarter's
strong financial performance, which was led by our Mailing and Integrated
Logistics (MAIL) segment. The segment continues to benefit from demand for our
customized mail creation and full range of shipping solutions, complementing our
core mailing and financing offerings. As a result, we have again experienced
excellent revenue growth and expanding operating profit margin in our largest
business segment."
<PAGE>
(2)
Adds Mr. Critelli: "The underlying strength of our mailing and shipping
business has allowed us to accelerate our efforts to position the Office
Solutions segment for even greater future profitable growth."
In segment performance for the quarter, Mailing and Integrated Logistics
posted strong revenue growth of 12 percent and a 22-percent increase in
operating profit. The segment includes revenues and related expenses from the
rental, sale and financing of mailing and shipping equipment, related supplies
and service, and software. Contributors to growth included:
o The Internet's positive impact on package delivery and direct mail volumes.
Our multi-carrier, shipping and logistics systems enable customers to rate
shop for the most cost-effective and efficient ways to ship overnight
letters and packages with systems which integrate with enterprise-wide
resource planning systems
o Customized, high-speed production mail equipment used in Automated Document
Factories and high-volume mailrooms
o Advanced, multi-functional mailing systems, such as ParagonTM and the
recently introduced digital GalaxyTM system, which enable customers to
process mid- to high volumes of mail quickly and conveniently
o Demand for Mail Creation solutions, led by DocuMatchTM, which prints and
prepares customized, one-to-one marketing materials
The U.S. Postal Service recently honored Pitney Bowes for helping customers
transition to advanced metering technologies by converting 98 percent of its
meter unit base to electronic and digital systems. In fact, with over 40 percent
of our meter unit base now digital, the company continues to lead in delivering
the most advanced technologies to the marketplace, while recognizing excellent
supplies revenues and reduced costs related to supporting new metering systems.
<PAGE>
(3)
As the inventor of PC-based postage, Pitney Bowes is excited about the
potential benefits this innovative technology will deliver for certain mailing
applications of small businesses and entrepreneurs who today use stamps. While
several other companies are currently testing products, Pitney Bowes is the only
company that has two versions of the PC-based postage product in the U.S. Postal
Service supervised beta product review and testing process:
o ClickStampTM Plus, that allows customers to print postage via the computer
without a constant connection to the Internet, and
o ClickStampTM Online, which is designed for customers who prefer to maintain
an Internet connection.
The extensive testing process consists of three beta phases with limited
quantities of product available in specific Zip codes. During the limited launch
testing phase, companies will be allowed to place up to 10,000 units, with a
review by the U.S. Postal Service, before permission is given to distribute
another 10,000 units. None of the companies involved in the testing process have
been given a timetable for the unrestricted, national availability of this
product.
The Office Solutions Segment includes Pitney Bowes Office Systems and
Pitney Bowes Management Services. Second-quarter performance in this segment
featured four-percent revenue growth and a five-percent increase in operating
profit.
During the quarter, Management Services revenues grew four percent as the
company continues to focus on profitable growth through providing high value
services, such as business recovery, to both new and existing customers. The
focus on profitability resulted in double-digit operating profit growth.
Office Systems, featuring Copier and Facsimile, grew revenues five percent
for the quarter. The copier business remains solid, posting strong sales growth.
Additionally, the business continues the transition from stand-alone analog
copiers, to digital, networked solutions while strengthening the ability to sell
to national and major accounts. Facsimile revenues were helped by strong unit
placements partly offset by ongoing price pressure in the market.
<PAGE>
(4)
The Capital Services Segment includes primarily asset- and fee-based income
generated by large ticket external assets. During the quarter, the segment's
revenue decreased by two percent while its operating profit increased five
percent. This performance is consistent with the company's previously announced
strategy to shift from asset-based income by lowering the asset base and
concentrating on fee-based income opportunities.
The results from Mortgage Servicing have been excluded from continuing
operations. Pitney Bowes decided to dispose of Atlantic Mortgage & Investment
Corporation (AMIC) after an extensive review of various strategic options to
determine how best to enhance shareholder value. This decision will also allow
the company to actively market the business and focus on its core businesses.
The company has recorded a $27.7 million after-tax charge, which includes costs
associated with:
o Net loss from mortgage servicing operations of $2.7 million for the second
quarter primarily attributable to increased amortization of mortgage
servicing rights
o Expected loss of $34.3 million after-tax on the disposal of AMIC offset by
gains of $9.3 million from the company's sale of Colonial Pacific Leasing
Corporation (CPLC) completed in 1998
The company commenced its review of AMIC earlier this year. The process was
consistent with earlier reviews of its financial services businesses, which
resulted in the GATX transaction in 1997 and the CPLC transaction in 1998. The
strategic review was undertaken to address the changing profile of the mortgage
servicing industry, the dynamic interest rate environment and the potential
impact of fluctuating interest rates and prepayment patterns on the business in
the future.
Mr. Critelli concluded, "This quarter we continued to take actions that will
maximize long-term shareholder value. While we have decided to exit the mortgage
servicing business, the quarter's performance underscores the ongoing demand for
advanced business messaging solutions worldwide. We will continue to invest in
research and development and provide innovative products and services that
reduce the cost, increase the efficiency and enhance the productivity of mail
and messaging. The outlook for our business remains very positive."
<PAGE>
(5)
The company previously announced an 11.6-million share repurchase program.
During the second quarter the company repurchased approximately 1.9 million
shares on the open market under this program, for a total of 4.1 million shares
repurchased year-to-date.
Second quarter 1999 revenue included $546.4 million from sales, up 11
percent from $492.3 million in the second quarter of 1998; $418.8 million from
rentals and financing, up six percent from $393.8 million; and $140.3 million
from support services, up nine percent from $128.5 million.
Second quarter 1999 net income was $129.7 million, or 48 cents per diluted
share, compared to $142.0 million, or 51 cents per diluted share, in 1998.
Second quarter net income included a $27.7 million charge, or 10 cents per
diluted share related to discontinued operations, compared to $9.2 million of
income, or three cents per diluted share, in 1998.
For the six-month period ended June 30, 1999 revenue was $2.155 billion, up
nine percent from $1.968 billion in 1998; and net income in 1999 was $272.0
million, or 99 cents per diluted share, compared to $271.7 million, or 97 cents
per diluted share in 1998. The year-to-date net income included a $24.0 million
net after-tax charge, or nine cents per diluted share, for discontinued
operations compared to $16.6 million of income, or six cents per diluted share,
in 1998.
Pitney Bowes is a global provider of informed mail and messaging management.
The forward-looking statements contained in this news release involve risks
and uncertainties, and are subject to change based on various important factors
including timely development and acceptance of new products, gaining product
approval, successful entry into new markets, changes in interest rates, and
changes in postal regulations, as more fully outlined in the company's 1998 Form
10-K Annual Report filed with the Securities and Exchange Commission.
# # #
Note: Consolidated statements of income for the three and six months ended June
30, 1999 and 1998 and consolidated balance sheets at June 30, 1999, December 31,
1998, and June 30, 1998 are attached.
<PAGE>
Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited)
-----------
<TABLE>
<CAPTION>
(Dollars in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
------------------------------- ------------------------------
1999 1998 1999 1998
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenue from:
Sales $ 546,370 $ 492,310 $ 1,056,752 $ 942,735
Rentals and financing 418,773 393,825 824,498 774,196
Support services 140,289 128,455 273,506 251,444
------------- ------------- -------------- -------------
Total revenue 1,105,432 1,014,590 2,154,756 1,968,375
------------- ------------- -------------- -------------
Costs and expenses:
Cost of sales 306,351 289,983 603,070 564,983
Cost of rentals and financing 117,443 104,355 228,376 206,976
Selling, service and administrative 373,132 352,916 734,160 683,898
Research and development 27,698 25,065 53,602 48,696
Interest, net 46,938 40,451 92,438 75,948
------------- ------------- -------------- -------------
Total costs and expenses 871,562 812,770 1,711,646 1,580,501
------------- ------------- -------------- -------------
Income from continuing operations
before income taxes 233,870 201,820 443,110 387,874
Provision for income taxes 76,462 69,051 147,131 132,770
------------- ------------- -------------- -------------
Income from continuing operations 157,408 132,769 295,979 255,104
Discontinued operations (27,667) 9,248 (23,967) 16,600
------------- ------------- -------------- -------------
Net income $ 129,741 $ 142,017 $ 272,012 $ 271,704
============= ============= ============== =============
Basic earnings per share
Continuing operations $ 0.58 $ 0.49 $ 1.10 $ 0.92
Discontinued operations (0.10) 0.03 (0.09) .06
------------- ------------- -------------- -------------
$ 0.48 $ 0.52 $ 1.01 $ 0.98
============= ============= ============== =============
Diluted earnings per share
Continuing operations $ 0.58 $ 0.48 $ 1.08 $ 0.91
Discontinued operations (0.10) 0.03 (0.09) .06
------------- ------------- -------------- -------------
$ 0.48 $ 0.51 $ 0.99 $ 0.97
============= ============= ============== =============
Average common and potential common
shares outstanding 273,016,885 279,494,653 274,073,691 281,413,128
============= ============= ============== =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pitney Bowes Inc.
Consolidated Balance Sheets
---------------------------
(Dollars in thousands, except per share data) (*)
(Unaudited) (Unaudited)
Assets 6/30/99 12/31/98 6/30/98
- ------ ----------- ----------- ----------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 132,693 $ 125,684 $ 115,322
Short-term investments, at cost which
approximates market 949 3,302 1,943
Accounts receivable, less allowances:
6/99 $24,983 12/98 $24,665 6/98 $21,883 416,302 382,406 367,409
Finance receivables, less allowances:
6/99 $48,642 12/98 $51,232 6/98 $61,867 1,498,531 1,400,786 1,646,627
Inventories 259,858 266,734 240,045
Other current assets and prepayments 83,173 330,051 282,931
Net assets of discontinued operations 156,507 - -
----------- ----------- ----------
Total current assets 2,548,013 2,508,963 2,654,277
----------- ----------- ----------
Property, plant and equipment, net 467,013 477,476 491,552
Rental equipment and related inventories, net 842,176 806,585 823,530
Property leased under capital leases, net 3,269 3,743 4,080
Long-term finance receivables, less allowances:
6/99 $76,291 12/98 $79,543 6/98 $77,755 1,954,990 1,999,339 2,327,915
Investment in leveraged leases 962,531 827,579 776,930
Goodwill, net of amortization:
6/99 $51,425 12/98 $47,514 6/98 $44,208 227,874 222,980 208,946
Other assets 454,198 814,374 785,738
Net assets of discontinued operations 313,063 - -
----------- ----------- ----------
Total assets $ 7,773,127 $ 7,661,039 $8,072,968
=========== =========== ==========
Liabilities and stockholders' equity
- ------------------------------------
Current liabilities:
Accounts payable and accrued liabilities $ 776,665 $ 898,548 $ 845,562
Income taxes payable 186,279 194,443 139,867
Notes payable and current portion of
long-term obligations 1,273,197 1,259,193 1,761,162
Advance billings 391,103 369,628 376,871
----------- ----------- ----------
Total current liabilities 2,627,244 2,721,812 3,123,462
----------- ----------- ----------
Deferred taxes on income 1,029,923 920,521 925,837
Long-term debt 1,898,942 1,712,937 1,627,127
Other noncurrent liabilities 352,911 347,670 368,039
----------- ----------- ----------
Total liabilities 5,909,020 5,702,940 6,044,465
----------- ----------- ----------
Preferred stockholders' equity in a
subsidiary company 310,000 310,097 300,000
Stockholders' equity:
Cumulative preferred stock, $50 par value,
4% convertible 29 34 34
Cumulative preference stock, no par value,
$2.12 convertible 1,945 2,031 2,112
Common stock, $1 par value 323,338 323,338 323,338
Capital in excess of par value 11,927 16,173 21,864
Retained earnings 3,208,052 3,073,839 2,892,080
Accumulated other comprehensive income (85,851) (88,217) (74,630)
Treasury stock, at cost (1,905,333) (1,679,196) (1,436,295)
----------- ----------- ----------
Total stockholders' equity 1,554,107 1,648,002 1,728,503
----------- ----------- ----------
Total liabilities and stockholders' equity $ 7,773,127 $ 7,661,039 $8,072,968
=========== =========== ==========
<FN>
(*) Certain prior year amounts have been reclassified to conform with the
current year presentation.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pitney Bowes Inc.
Revenue and Operating Profit
By Business Segment
June 30, 1999
(Unaudited)
(Dollars in thousands)
%
1999 1998 Change
----------- ----------- ---------
<S> <C> <C> <C>
Second Quarter
- --------------
Revenue
-------
Mailing and Integrated Logistics $ 746,952 $ 668,281 12%
Office Solutions 316,753 303,682 4%
Capital Services 41,727 42,627 (2%)
----------- ----------- ---------
Total Revenue $1,105,432 $1,014,590 9%
=========== =========== =========
Operating Profit (1)
--------------------
Mailing and Integrated Logistics $ 200,654 $ 164,223 22%
Office Solutions 60,656 57,610 5%
Capital Services 12,784 12,202 5%
----------- ----------- ---------
Total Operating Profit $ 274,094 $ 234,035 17%
=========== =========== =========
<FN>
(1) Operating profit excludes general corporate expenses, income taxes and net
interest other than that related to finance operations.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pitney Bowes Inc.
Revenue and Operating Profit
By Business Segment
June 30, 1999
(Unaudited)
(Dollars in thousands)
%
1999 1998 Change
----------- ----------- ---------
<S> <C> <C> <C>
Year to Date
- ------------
Revenue
-------
Mailing and Integrated Logistics $1,445,581 $1,294,521 12%
Office Solutions 631,333 594,864 6%
Capital Services 77,842 78,990 (1%)
----------- ----------- ---------
Total Revenue $2,154,756 $1,968,375 9%
=========== =========== =========
Operating Profit (1)
--------------------
Mailing and Integrated Logistics $ 375,039 $ 308,630 22%
Office Solutions 119,201 110,069 8%
Capital Services 20,966 20,547 2%
----------- ----------- ---------
Total Operating Profit $ 515,206 $ 439,246 17%
=========== =========== =========
<FN>
(1) Operating profit excludes general corporate expenses, income taxes and net
interest other than that related to finance operations.
</FN>
</TABLE>
<PAGE>
Exhibit 2
PITNEY BOWES INC.
CONSOLIDATED STATEMENTS OF INCOME
ANALYSTS' P&L
(UNAUDITED) RESTATED FOR DISCONTINUED OPERATIONS
<TABLE>
<CAPTION>
($000'S, EXCEPT PER SHARE DATA)
-------------------------------------------------- ---------- ------------------------- -----------
First Second Third Fourth Year First Second Six Months
Quarter Quarter Quarter Quarter Ended Quarter Quarter Ended
1998 1998 1998 1998 1998 1999 1999 1999
-------------------------------------------------- ---------- ------------------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE FROM:
SALES........................ $ 450,425 $ 492,310 $ 488,575 $ 562,236 $ 1,993,546 $ 510,382 $ 546,370 $ 1,056,752
RENTALS AND FINANCING........ 380,371 393,825 396,329 411,341 1,581,866 405,725 418,773 824,498
SUPPORT SERVICES............. 122,989 128,455 128,271 135,788 515,503 133,217 140,289 273,506
------------------------------------------------- ------------ ------------------------ -----------
TOTAL REVENUE......... 953,785 1,014,590 1,013,175 1,109,365 4,090,915 1,049,324 1,105,432 2,154,756
------------------------------------------------- ------------ ------------------------ -----------
COSTS AND EXPENSES:
COST OF SALES................ 275,000 289,983 282,503 298,918 1,146,404 296,719 306,351 603,070
COST OF RENTALS AND FINANCING 102,621 104,355 102,767 109,380 419,123 110,933 117,443 228,376
SELLING, SERVICE AND
ADMINISTRATIVE............... 330,982 352,916 362,921 396,261 1,443,080 361,028 373,132 734,160
RESEARCH AND DEVELOPMENT..... 23,631 25,065 24,699 27,411 100,806 25,904 27,698 53,602
INTEREST, NET................ 35,497 40,451 39,261 41,689 156,898 45,500 46,938 92,438
------------------------------------------------- ------------ ------------------------ -----------
TOTAL COSTS AND EXPENSES.. 767,731 812,770 812,151 873,659 3,266,311 840,084 871,562 1,711,646
------------------------------------------------- ------------ ------------------------ -----------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES. 186,054 201,820 201,024 235,706 824,604 209,240 233,870 443,110
PROVISION FOR INCOME TAXES..... 63,719 69,051 68,201 81,121 282,092 70,669 76,462 147,131
------------------------------------------------- ------------ ------------------------ -----------
INCOME FROM CONTINUING
OPERATIONS.................... 122,335 132,769 132,823 154,585 542,512 138,571 157,408 295,979
DISCONTINUED OPERATIONS....... 7,352 9,248 8,763 8,519 33,882 3,700 (27,667) (23,967)
------------------------------------------------- ------------ ------------------------ -----------
NET INCOME.................... $ 129,687 $ 142,017 $ 141,586 $163,104 $ 576,394 $ 142,271 $ 129,741 $ 272,012
================================================= ============ ======================== ===========
BASIC EARNINGS PER SHARE:
CONTINUING OPERATIONS........ $ 0.43 $ 0.49 $ 0.49 $ 0.57 $ 1.98 $ 0.52 $ 0.58 $ 1.10
DISCONTINUED OPERATIONS...... 0.03 0.03 0.03 0.03 0.12 0.01 (0.10) (0.09)
------------------------------------------------- ----------- ------------------------- -----------
NET INCOME................... $ 0.46 $ 0.52 $ 0.52 $ 0.60 $ 2.10 $ 0.53 $ 0.48 $ 1.01
================================================= =========== ========================= ===========
DILUTED EARNINGS PER SHARE:
CONTINUING OPERATIONS........ $ 0.43 $ 0.48 $ 0.48 $ 0.56 $ 1.94 $ 0.51 $ 0.58 $ 1.08
DISCONTINUED OPERATIONS...... 0.03 0.03 0.03 0.03 0.12 0.01 (0.10) (0.09)
------------------------------------------------- ----------- ------------------------- -----------
NET INCOME................... $ 0.46 $ 0.51 $ 0.51 $ 0.59 $ 2.06 $ 0.52 $ 0.48 $ 0.99
================================================= =========== ========================= ===========
AVERAGE COMMON AND POTENTIAL
COMMON SHARES OUTSTANDING... 283,871,448 279,494,653 278,712,757 276,722,479 279,656,603 274,962,244 273,016,885 274,073,691
================================================= =========== ========================== ============
</TABLE>
<PAGE>
Exhibit 3
Pitney Bowes Inc.
Segment Reporting RESTATED FOR DISCONTINUED OPERATIONS
<TABLE>
<CAPTION>
(Dollars in thousands)
------------------------------------------------- ------------- ------------------------- -------------
First Second Third Fourth Year First Second Six Months
Quarter Quarter Quarter Quarter Ended Quarter Quarter Ended
Revenue 1998 1998 1998 1998 1998 1999 1999 1999
- --------------------------- ------------------------------------------------- ------------- ------------------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Business segments:
Mailing and Integrated
Logistics $ 626,240 $ 668,281 $ 666,141 $ 746,382 $ 2,707,044 $ 698,629 $ 746,952 $1,445,581
Office Solutions 291,182 303,682 306,716 314,427 1,216,007 314,580 316,753 631,333
Capital Services 36,363 42,627 40,318 48,556 167,864 36,115 41,727 77,842
------------------------------------------------- ------------- ------------------------- -------------
Total Revenue $ 953,785 $1,014,590 $1,013,175 $1,109,365 $ 4,090,915 $1,049,324 $1,105,432 $2,154,756
================================================= ============= ========================= =============
------------------------------------------------- ------------- ------------------------- -------------
First Second Third Fourth Year First Second Six Months
Quarter Quarter Quarter Quarter Ended Quarter Quarter Ended
Operating Profit (1) 1998 1998 1998 1998 1998 1999 1999 1999
- --------------------------- ------------------------------------------------- ------------ -------------------------- -------------
Business segments:
Mailing and Integrated
Logistics $ 144,407 $ 164,223 $ 163,702 $ 188,408 $ 660,740 $ 174,385 $ 200,654 $ 375,039
Office Solutions 52,459 57,610 59,461 65,626 235,156 58,545 60,656 119,201
Capital Services 8,345 12,202 11,482 19,402 51,431 8,182 12,784 20,966
------------------------------------------------- ------------- ------------------------- -------------
Total Operating Profit $ 205,211 $ 234,035 $ 234,645 $ 273,436 $ 947,327 $ 241,112 $ 274,094 $ 515,206
================================================= ============= ========================= =============
<FN>
(1) Operating profit excludes general corporate expenses, income taxes and net
interest other than that related to finance operations.
</FN>
</TABLE>
