- ---------------------------------------------------------------------------
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------------------
Commission file number 1-9397
-----------------------------
BAKER HUGHES INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 76-0207995
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3900 Essex Lane, Houston, Texas 77027
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (713) 439-8600
-----------------------------
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
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at February 1, 1997
----- -------------------------------
Common Stock, $1.00 par value per share 145,428,600 shares
- ---------------------------------------------------------------------------
BAKER HUGHES INCORPORATED
INDEX
Page
No.
----
Part I - Financial Information:
Consolidated Condensed Statements of Operations - Three Months
ended December 31, 1996 and 1995 2
Consolidated Condensed Statements of Financial Position
- December 31, 1996 and September 30, 1996 3
Consolidated Condensed Statements of Cash Flows - Three months
ended December 31, 1996 and 1995 5
Notes to Consolidated Condensed Financial Statements 6
Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Part II - Other Information 13
-1-
PART I. FINANCIAL INFORMATION
BAKER HUGHES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
December 31,
1996 1995
REVENUES: --------- ---------
Sales $ 548,948 $ 464,955
Services and rentals 259,672 229,742
--------- ---------
Total revenues 808,620 694,697
COSTS AND EXPENSES: --------- ---------
Cost of sales 322,143 267,336
Cost of services and rentals 123,263 118,299
Research and engineering 23,495 21,408
Marketing and field service 190,164 161,239
General and administrative 47,957 48,218
Amortization of goodwill and other intangibles 7,327 7,393
--------- ---------
Total costs and expenses 714,349 623,893
--------- ---------
Operating income 94,271 70,804
Interest expense (11,553) (15,427)
Interest income 531 482
--------- ---------
Income before income taxes and cumulative effect of
accounting change 83,249 55,859
Income taxes (32,883) (23,461)
--------- ---------
Income before cumulative effect of accounting change 50,366 32,398
Cumulative effect of accounting change -
Impairment of long-lived assets to be disposed of
(net of $5,965 income tax benefit) (12,079)
--------- ---------
Net income $ 38,287 $ 32,398
========= =========
Per share of Common Stock:
Income before cumulative effect of accounting
change $ .35 $ .23
Cumulative effect of accounting change (.08)
--------- ---------
Net income $ .27 $ .23
========= =========
Cash dividends per share of common stock $ .115 $ .115
========= =========
See accompanying notes to consolidated condensed financial statements.
-2-
BAKER HUGHES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(In thousands)
ASSETS
December 31, September 30,
1996 1996
---------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 18,758 $ 7,714
---------- ----------
Receivables - net 811,259 793,801
---------- ----------
Inventories:
Finished goods 691,715 665,715
Work in process 75,870 70,609
Raw materials 80,792 65,870
---------- ----------
Total inventories 848,377 802,194
---------- ----------
Deferred income taxes 81,549 78,680
---------- ----------
Other current assets 36,452 34,004
---------- ----------
Total current assets 1,796,395 1,716,393
---------- ----------
PROPERTY - NET 618,469 598,950
---------- ----------
OTHER ASSETS:
Investments 66,208 68,992
Property held for disposal 43,813 57,666
Other assets 83,652 98,104
Excess costs arising from acquisitions - net 751,694 757,285
---------- ----------
Total other assets 945,367 982,047
---------- ----------
Total $ 3,360,231 $ 3,297,390
========== ==========
See accompanying notes to consolidated condensed financial statements.
-3-
BAKER HUGHES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, September 30,
1996 1996
---------- ----------
CURRENT LIABILITIES:
Accounts payable $ 306,467 $ 330,138
Short-term borrowings and current portion
of long-term debt 1,502 1,859
Accrued employee compensation and benefits 132,000 155,310
Income taxes 47,445 32,925
Taxes other than income 29,691 26,600
Accrued insurance 21,213 28,052
Accrued interest 14,027 10,324
Other accrued liabilities 48,714 50,112
---------- ----------
Total current liabilities 601,059 635,320
---------- ----------
LONG-TERM DEBT 729,061 673,588
---------- ----------
DEFERRED INCOME TAXES 160,226 150,460
---------- ----------
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 98,802 97,635
---------- ----------
OTHER LONG-TERM LIABILITIES 47,764 51,178
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock 145,176 144,553
Capital in excess of par value 1,405,605 1,393,580
Retained earnings 272,190 250,567
Cumulative foreign currency translation
adjustment (119,758) (118,766)
Unrealized gain on securities available for
sale 20,106 19,275
---------- ----------
Total stockholders' equity 1,723,319 1,689,209
---------- ----------
Total $ 3,360,231 $ 3,297,390
========== ==========
See accompanying notes to consolidated condensed financial statements.
-4-
BAKER HUGHES INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
December 31,
1996 1995
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 38,287 $ 32,398
Adjustments to reconcile net income to net cash
flows from operating activities:
Depreciation and amortization of:
Property 30,919 29,362
Other assets and debt discount 9,760 10,063
Gain on disposal of assets (7,250) (6,632)
Foreign currency translation (gain)loss - net (28) 2,909
Cumulative effect of accounting change 12,079
Change in receivables (11,551) (46,711)
Change in inventories (38,578) (29,693)
Change in accounts payable (30,846) (22,188)
Changes in other assets and liabilities (4,402) (19,848)
-------- --------
Net cash flows from operating activities (1,610) (50,340)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (49,292) (34,676)
Proceeds from disposal of assets 13,192 23,856
-------- --------
Net cash flows from investing activities (36,100) (10,820)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) borrowings from commercial
paper and revolving credit facilities 52,559 76,941
Proceeds from exercise of stock options
and stock purchase grants 12,648 2,321
Dividends (16,664) (16,359)
-------- --------
Net cash flows from financing activities 48,543 62,903
-------- --------
Effect of exchange rate changes on cash 211 (534)
-------- --------
Increase in cash and cash equivalents 11,044 1,209
Cash and cash equivalents, beginning of period 7,714 6,817
-------- --------
Cash and cash equivalents, end of period $ 18,758 $ 8,026
======== ========
Income taxes paid $ 12,301 $ 7,120
Interest paid $ 5,852 $ 7,445
See accompanying notes to consolidated condensed financial statements.
-5-
BAKER HUGHES INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. General
In the opinion of Baker Hughes Incorporated (the "Company" or "Baker
Hughes"), the unaudited consolidated condensed financial statements include
all adjustments consisting of normal recurring accruals necessary for a
fair presentation of the Company's consolidated financial position as of
December 31, 1996 and its consolidated results of operations and cash flows
for each of the three month periods ended December 31, 1996 and 1995.
Although the Company believes that the disclosures in these financial
statements are adequate to make the information presented not misleading,
certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission (see the
Company's Annual Report on Form 10-K for the year ended September 30, 1996
for the most recent annual financial statements prepared in accordance with
generally accepted accounting principles). The results of operations for
the three months ended December 31, 1996 are not necessarily indicative of
the results to be expected for the full year.
Note 2. Income Per Common Share
Net income per common share is based on the weighted average number of
shares outstanding during the respective periods (three months ended
December 31, 1996 and 1995, 144,920,000 and 142,281,000, respectively) and
excludes the negligible dilutive effect of shares issuable in connection
with employee stock, stock option and similar plans.
Note 3. Impairment of Long-Lived Assets to be Disposed Of
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of", effective October 1, 1996. The
statement sets forth guidance as to when to recognize an impairment of
long-lived assets, including goodwill, and how to measure such an
impairment. The methodology set forth in SFAS No. 121 is not significantly
different from the Company's current policy and, therefore, the adoption of
SFAS No. 121 does not have a significant impact on the consolidated
financial statements as it relates to impairment of long-lived assets used
in operations. However, SFAS No. 121 also addresses the accounting for
long-lived assets to be disposed of and requires these assets to be carried
at the lower of cost or fair market value, rather than the lower of cost or
net realizable value, the method that was previously used by the Company.
The Company recognized a charge to income of $12.1 million ($.08 per
share), net of a tax benefit of $6.0 million, as the cumulative effect of a
change in accounting in the first quarter of 1997.
-6-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results
of Operations should be read in conjunction with the Company's Consolidated
Condensed Financial Statements and the related notes thereto.
BUSINESS ENVIRONMENT
- --------------------
Baker Hughes provides products and services to the worldwide oilfield
services and continuous process industries. Oilfield services generate
approximately 88% of the Company's consolidated revenues.
Baker Hughes Oilfield Operations consist of six divisions that provide
products, services and solutions used in the drilling, completion,
production and maintenance of oil and gas wells. The business environment
for oilfield operations and its corresponding operating results are
affected significantly by petroleum industry exploration and production
expenditures. These expenditures are influenced strongly by oil company
expectations about energy prices and the supply and demand for crude oil
and natural gas. Petroleum supply and pricing, in turn, are influenced by
numerous factors. These include, but are not limited to, world economic
conditions, weather, the legislative environment in the United States and
other countries, OPEC policy and conflict in the Middle East and other
major petroleum producing regions.
Baker Hughes Process Equipment Company ("BHPEC") has three divisions
that serve a broad range of process industries around the world. BHPEC's
technology separates solids from liquids and liquids from liquids through
filtration, sedimentation, centrifugation and flotation processes. The
business environment for BHPEC is affected significantly by worldwide
economic conditions and the economic health of the specific markets where
it participates. The results for BHPEC also includes the results of Tracor
Europa, a computer peripherals operation.
OPERATING ENVIRONMENT FOR OILFIELD OPERATIONS
- ---------------------------------------------
Two key trends are altering the oilfield service market place: the
impact of technology and the growth in outsourcing and partnering.
Advances in the design and application of the Company's products and
services allow oil and gas operators to drill and complete wells at a lower
overall cost. At the same time, this technology helps accelerate
hydrocarbon production and enhance reserve recovery.
Similarly, oil companies have increased their levels of outsourcing to
and partnering with service companies because this approach has proven to
be effective in lowering finding and development costs. The Company
continues to expand and develop its involvement in project management.
Baker Hughes works closely with client companies in project planning, and
in the engineering and integration of several products and services into
solutions that meet client objectives.
Crude oil and natural gas prices and the Baker Hughes rotary rig count
are summarized in the tables below as quarterly averages followed by the
-7-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
Company's outlook. While reading the Company's outlook set forth below,
caution is advised that the factors described above in "Business
Environment" could negatively impact the Company's expectations for oil
demand, oil and gas prices and drilling activity.
Oil and Gas Prices
Quarter Ending December 31, 1996 1995
- --------------------------- ---- ----
WTI ($/bbl) 24.67 18.16
U.S. Spot Natural Gas ($/mcf) 2.96 1.91
The Company expects crude oil to trade between $18 and $22 per barrel
in 1997 while remaining susceptible to short-term price fluctuations as the
growth in worldwide demand is met by increased production by non-OPEC
producing countries. According to the International Energy Agency, the
demand for crude oil is expected to grow 1.4 million to 2.0 million barrels
per day per year through the end of the century. Three-quarters of the
incremental demand are expected to be driven by relatively low energy
prices, low but increasing energy consumption per capita, population growth
and economic growth in non-OECD countries, particularly in Asia and Latin
America.
U.S. natural gas prices are expected to moderate in 1997 with the
return of "normal" weather and limited pipeline de-bottlenecking. Natural
gas prices are expected to average above $2/mcf. The Company believes that
natural gas prices at or above $2/mcf will sustain the current natural gas
exploration and development drilling activity.
Rotary Rig Count
Quarter Ending December 31, 1996 1995
- --------------------------- ----- -----
U.S. - Land 736 659
U.S. - Offshore 109 106
Canada 318 227
----- -----
North America 1,163 992
----- -----
Latin America 281 271
North Sea 54 51
Other Europe 62 64
Africa 82 63
Middle East 138 129
Asia Pacific 181 170
----- -----
International 798 748
----- -----
Worldwide 1,961 1,740
----- -----
U.S. Workover 1,352 1,286
-8-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
North America
The Company anticipates a moderate increase in U.S. drilling activity.
Offshore activity will remain strong; however, the worldwide shortage of
offshore drilling rigs will limit future growth. Canadian activity is
expected to increase from 1996 levels.
International
The Company is optimistic that most international areas will post an
increasing rig count in 1997. The Company is forecasting increases in
Latin America, the North Sea and West Africa while activity in the Middle
East and Asia Pacific is forecasted to be flat.
RESULTS OF OPERATIONS - THREE MONTHS ENDED DECEMBER 31, 1996 VS. THREE
- --------------------- MONTHS ENDED DECEMBER 31, 1995
Industry Segment Results (In millions) Three Months Ended
December 31,
1996 1995
Revenues ---- ----
- -------
Oilfield Operations 710.4 612.2
BHPEC 98.2 82.5
----- -----
Consolidated Revenues 808.6 694.7
===== =====
Operating Income
- ----------------
Oilfield Operations 96.5 74.7
BHPEC 7.4 5.8
Corporate and Other (9.6) (9.7)
----- -----
Consolidated Operating Income 94.3 70.8
===== =====
Revenues
Consolidated revenues in the first quarter of 1997 increased $113.9
million, or 16.4%. Sales revenue was up 18.1% and service and rentals
revenue was up 13.0%. The revenue improvement was lead by Oilfield
Operations where most all regions of the world reported an increase.
Activity was particularly strong in several key oilfield regions of the
world including the United States, Venezuela and Nigeria where revenues
were up $28.1 million, $12.1 million and $10.7 million, respectively. The
continued deployment of new technology aimed at reducing the cost to our
customers to drill and complete a well coupled with increased drilling
activity around the globe contributed to revenue gains.
-9-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
BHPEC reported a revenue increase in the first quarter of 1997 of $15.7
million, or 19.0%, as BHPEC continues to focus on expansion into
international markets. In addition, two 1996 acquisitions account for $7.1
million of the increase.
Operating Income
Oilfield Operations margins were 13.6% in the first quarter of 1997
compared to 12.2% in the prior year quarter. BHPEC margins were 7.5% in
the first quarter of 1997 compared to 7.0% in the prior year quarter.
Cost and Expenses
The increase in cost of sales, cost of services and rentals, research
and engineering and marketing and field service expenses is in line with
the increase in the related revenue. In total, as a percent of
consolidated revenues, costs and expenses applicable to revenues decreased
from 81.8% in the first quarter of 1996 to 81.5% in the first quarter of
1997.
General and administrative expense, which is less sensitive to changes
in revenue, declined slightly due to smaller foreign exchange losses in the
current quarter.
Interest Expense
Interest expense for the first quarter of 1997 decreased compared to
the prior year quarter due to the repayment of the 4.125% Swiss Franc Bonds
which matured in June 1996.
Income Taxes
The effective income tax rate in the first quarter of 1997 is 39.5%,
down from 42.0% in the prior quarter due to a change in the mix of foreign
earnings and the fixed nature of the nondeductible goodwill amortization.
CAPITAL RESOURCES AND LIQUIDITY
Financing Activities
Net cash inflows from financing activities during the first quarter of
1997 were $48.5 million compared to $62.9 million for the first quarter in
1996.
Total debt outstanding at December 31, 1996 was $730.6 million,
compared to $675.4 million at September 30, 1996. The debt to equity ratio
was .424 at December 31, 1996, compared to .400 at September 30, 1996.
The Company's stock price increased significantly in the first quarter
of 1997 compared to the same quarter in 1996 resulting in $12.6 million of
capital raised through employee stock plans.
10-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
At December 31, 1996, the Company had $593.6 million of credit
facilities with commercial banks, of which $300.0 million is committed.
These facilities are subject to normal banking terms and conditions and do
not materially restrict the Company's activities.
Investing Activities
Net cash outflows from investing activities were $36.1 million in the
first quarter of 1997 compared to cash outflows of $10.8 million in the
first quarter of 1996.
Proceeds from the disposal of assets and noncore businesses generated
$13.2 million in the first quarter of 1997 compared to $23.9 million in the
first quarter of 1996. Property additions increased to $49.3 million from
$34.7 million. The increase in additions is in line with the Company's
objective of replacing capital to increase productivity and ensure that the
necessary capacity is available to meet the increased market demand.
The majority of the capital expenditures have been in Oilfield
Operations where the largest single item is the expenditure for rental
tools and equipment to supplement the rental fleet. Funds provided from
operations and outstanding lines of credit are expected to be more than
adequate to meet future capital expenditure requirements. The Company
expects 1997 capital expenditures to be in excess of $200 million.
Operating Activities
Net cash outflows from operating activities for the first quarter of
1997 were $1.6 million compared to $50.3 million in the first quarter of
1996.
The decrease of $48.7 million in 1997 was due to an increase in net
income adjusted for noncash items and a decrease in the growth of working
capital from the prior year due primarily to the decrease in days sales
outstanding from increased accounts receivable collections.
ACCOUNTING STANDARDS
Impairment of Long-Lived Assets
The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," effective October 1, 1996. The
statement sets forth guidance as to when to recognize an impairment of
long-lived assets, including goodwill, and how to measure such an
impairment. The methodology set forth in SFAS No. 121 is not significantly
different from the Company's current policy and, therefore, the adoption of
SFAS No. 121 does not have a significant impact on the consolidated
financial statements as it relates to impairment of long-lived assets used
in operations. However, SFAS No. 121 also addresses the accounting for
long-lived assets to be disposed of and requires these assets to be carried
-11-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
at the lower of cost or fair market value, rather than the lower of cost or
net realizable value, the method that was previously used by the Company.
The Company recognized a charge to income of $12.1 million ($.08 per
share), net of a tax benefit of $6.0 million, as the cumulative effect of a
change in accounting in the first quarter of 1997.
Stock Based Compensation
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-
Based Compensation". SFAS No. 123 permits, but does not require, a fair
value based method of accounting for employee stock option plans which
results in compensation expense being recognized in the results of
operations when stock options are granted. The Company will continue the
use of its current intrinsic value based method of accounting for such
plans where no compensation expense is recognized. However, as required by
SFAS No. 123, the Company will provide pro forma disclosure of net income
and earnings per share in the notes to the consolidated financial
statements for the year ending September 30, 1997, as if the fair value
based method of accounting had been applied.
-12-
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on January 22,
1997, to elect four Class III members of the Board of Directors and to
consider a proposal to implement or increase activity on the MacBride
Principles with respect to the Company's operations in Northern Ireland.
The four Class III directors who were so elected are: Victor G.
Beghini, Eunice M. Filter, Max L. Lukens and James F. McCall. The
directors whose term of office continued after the Annual Meeting are:
Lester M. Alberthal, Jr., Jack S. Blanton, Joe B. Foster, Richard D.
Kinder, John F. Maher, Dana G. Mead, and Donald C. Trauscht. H. John
Riley, Jr. was elected by the remaining Class I directors to fill the
vacancy created by the retirement of Harry M. Conger due to the term
limitation contained in the Company's Bylaws. James D. Woods retired as a
Class III director and Chairman of the Company at the Annual Meeting. The
number of affirmative votes and the number of votes withheld for the four
Class III directors so elected were:
Number of
Affirmative
Votes Abstentions
----------- -----------
Victor G. Beghini 125,887,881 812,773
Eunice M. Filter 125,893,248 807,406
Max L. Lukens 125,979,684 720,970
James F. McCall 125,859,040 841,614
The number of affirmative votes, the number of negative votes, the
number of abstentions and the number of broker non-votes with respect to
the stockholder proposal regarding Northern Ireland were as follows:
Number of Number of
Affirmative Negative Broker
Votes Votes Abstentions Non-Votes
----------- ----------- ----------- -----------
Proposal regarding
Northern Ireland 16,618,966 87,758,375 9,759,017 12,518,457
Item 5. Other Information
On January 22, 1997, the Board of Directors of the Company elected Max
L. Lukens as Chairman of the Board of Directors of the Company. In
addition, Mr. Lukens also serves as President and Chief Executive Officer
of the Company.
-13-
PART II. OTHER INFORMATION CONTINUED
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K:
None.
-14-
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.
BAKER HUGHES INCORPORATED
(Registrant)
Date: February 13, 1997 By /s/LAWRENCE O'DONNELL, III
------------------------------------
Vice President and General Counsel
Date: February 13, 1997 By /s/JAMES E. BRAUN
------------------------------------
Controller
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Consolidated Statements of Operations and Consolidated Statements of Financial
Position and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 18,758
<SECURITIES> 0
<RECEIVABLES> 832,126
<ALLOWANCES> 20,867
<INVENTORY> 848,377
<CURRENT-ASSETS> 1,796,395
<PP&E> 1,569,010
<DEPRECIATION> 950,541
<TOTAL-ASSETS> 3,360,231
<CURRENT-LIABILITIES> 601,059
<BONDS> 729,061
145,176
0
<COMMON> 0
<OTHER-SE> 1,578,143
<TOTAL-LIABILITY-AND-EQUITY> 3,360,231
<SALES> 548,948
<TOTAL-REVENUES> 808,620
<CGS> 322,143
<TOTAL-COSTS> 659,065
<OTHER-EXPENSES> 55,284
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,553
<INCOME-PRETAX> 83,249
<INCOME-TAX> 32,883
<INCOME-CONTINUING> 50,366
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (12,079)
<NET-INCOME> 38,287
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
</TABLE>
