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 March 26, 1994
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 Number 33-23528
Duracell International Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-1240267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Berkshire Corporate Park, Bethel, CT 06801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 796-4000
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 of the past 90 days. YES X NO ____
Number of Shares of Common Stock, Par Value $.01,
Outstanding as of April 23, 1994 117,080,240
<PAGE>
DURACELL INTERNATIONAL INC.
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION:
Consolidated Unaudited Financial Statements:
Statements of Consolidated Operations for the Three and Nine
Fiscal Months Ended March 26, 1994 and March 27, 1993 1
Consolidated Balance Sheets - March 26, 1994 and June 30, 1993 2
Statements of Consolidated Cash Flows for the Three and Nine
Fiscal Months Ended March 26, 1994 and March 27, 1993 3
Notes to Consolidated Financial Statements 4-7
Management's Discussion and Analysis of Results of Operations
and Financial Condition 8-12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
<PAGE>
<TABLE>
Duracell International Inc.
Statements of Consolidated Operations
(Unaudited)
<CAPTION>
For the Three Fiscal Months Ended For the Nine Fiscal Months Ended
In millions, except per share amounts
March 26, March27, March 26, March 27,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $337.9 $313.2 $1,436.0 $1,366.0
Operating expenses:
Cost of products sold 130.5 125.3 494.8 502.9
Selling, general and administrative
expenses 176.9 168.2 655.5 612.8
Total operating expenses 307.4 293.5 1,150.3 1,115.7
Operating income 30.5 19.7 285.7 250.3
Interest expense 6.6 10.1 22.9 36.6
Other (income) expense (1.5) .7 1.8 10.8
Income before accounting change
and income taxes 25.4 8.9 261.0 202.9
Provision for income taxes 10.5 5.0 102.6 63.8
Income before acctg change 14.9 3.9 158.4 139.1
Cumulative effect of accounting change, net of
income tax benefit of $4.7 - - - (75.4)
Net income $ 14.9 $ 3.9 $ 158.4 $ 63.7
Per share data:
Income before acctg change $0.12 $ 0.03 $ 1.33 $ 1.17
Cumulative effect of
acctg change - - - (.63)
Net income $0.12 $ 0.03 $ 1.33 $ .54
Weighted average shares and share
equivalents outstanding 120.4 119.1 118.9 118.8
Cash dividends per share on
common stock $0.22 $ 0.16 $ 0.54 $ 0.32
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Duracell International Inc.
Consolidated Balance Sheets
<CAPTION>
In millions March 26, 1994 June 30, 1993
<S> (unaudited)
ASSETS <C> <C>
Current assets:
Cash and cash equivalents $ 25.1 $ 25.9
Accounts receivable, less allowance
of $21.4 and $18.1 280.1 270.6
Inventories 200.8 194.9
Prepaid and other current assets 43.6 34.6
Total current assets 549.6 526.0
Property, plant and equipment, net of accumulated
depreciation of $196.8 and $170.1 300.8 294.2
Intangibles, net of accumulated amortization
of $264.9 and $233.0 1,128.4 1,165.2
Other assets 13.4 12.2
Total assets $ 1,992.2 $ 1,997.6
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 90.7 $ 90.1
Short-term borrowings 41.1 30.7
Accrued liabilities 209.0 202.7
Total current liabilities 340.8 323.5
Long-term debt 294.2 473.8
Postretirement benefits other than pensions 96.4 91.2
Deferred income taxes 83.1 62.2
Other non-current liabilities 59.2 65.1
Total liabilities 873.7 1,015.8
Commitments and contingencies
Equity:
Common stock and capital surplus 1,065.1 1,016.2
Retained earnings (accumulated deficit) 82.7 (12.9)
Accumulated translation adjustment (29.3) (21.5)
Total equity 1,118.5 981.8
Total liabilities and equity $1,992.2 $1,997.6
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Duracell International Inc.
Statements of Consolidated Cash Flows
(Unaudited)
<CAPTION>
For the Nine Fiscal Months Ended
In millions March 26, 1994 March 27, 1993
<S>
Operating activities: <C> <C>
Income before accounting change $158.4 $139.1
Adjustments to reconcile income before accounting change to
cash provided by operating activities:
Depreciation 29.4 29.9
Amortization 32.1 36.0
Provision for deferred taxes 56.5 29.6
Other noncash items 1.8 17.7
(Increase) decrease in:
Accounts receivable (16.8) (15.0)
Inventories (10.0) 36.0
Other working capital 4.0 3.1
Cash provided by operating activities 255.4 276.4
Investing activities:
Purchase of property, plant and equipment (40.7) (29.2)
Proceeds from sales of assets and other (0.1) 3.6
Cash used by investing activities (40.8) (25.6)
Financing activities:
Issuance of common stock 13.5 12.4
Dividends paid (62.8) (36.5)
Repayment of revolving credit
borrowings, net (159.2) (199.8)
Issuance (repayment) of commercial
paper, net (18.5) 1.7
Net change in other borrowings and other 11.6 (9.2)
Cash used by financing activities (215.4) (231.4)
Effect of exchange rate changes on cash - 1.5
Increase (decrease) in cash and
cash equivalents (0.8) 20.9
Cash and cash equivalents, beginning of period25.9 7.9
Cash and cash equivalents, end of period $ 25.1 $ 28.8
Cash paid during the period for:
Interest $ 23.3 $ 36.0
Taxes $ 37.4 $ 21.4
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
DURACELL INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollar amounts in millions except per share amounts)
(unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of Duracell International Inc.
(the "Company") are unaudited, but in the opinion of
management contain all adjustments which are of a normal and
recurring nature necessary to represent fairly the financial
position and the results of operations and cash flows for the
periods presented.
The results of operations for these periods are not necessarily
indicative of the results to be expected for the full year.
Worldwide battery sales are significantly greater in the second
half of the calendar year than the first half due to consumers'
traditionally strong purchases during the holiday season.
The Company's fiscal year ends June 30.
Inventories
Inventories are valued at the lower of cost or market using the
first-in, first-out method.
Advertising
Accruals for advertising costs are recorded in interim periods
based upon forecasted expenditures for the current fiscal year
and charged to expense proportionally to the ratio of
year-to-date sales to the most recent forecast of annual sales.
Earnings Per Share
Earnings per share is calculated by dividing net income by the
weighted average number of common shares and common stock
equivalents outstanding during the period.
2. Inventories
The cost of inventories by stage of manufacture was:
<TABLE>
<CAPTION>
March 26, June 30,
1994 1993
<S> <C> <C>
Finished goods $130.6 $132.4
Work in process 51.6 43.2
Raw materials and supplies 18.6 19.3
Total $200.8 $194.9
</TABLE>
<PAGE>
3. Income Taxes
The Company adopted Financial Accounting Standards ("FAS") No.
109, "Accounting for Income Taxes", effective July 1, 1993.
Adoption of FAS No. 109 did not have a material effect on the
results of operations.
Deferred income taxes reflect the impact of temporary
differences between the amount of assets and liabilities
recognized for financial reporting purposes and such amounts
recognized for tax purposes. Deferred taxes are measured by
applying current tax laws. The deferred tax liability as of
July 1, 1993 after giving effect to the adoption of FAS No. 109
follows:
<TABLE>
<S> <C>
Deferred tax liabilities:
Intangibles $285.2
Property, plant and equipment 41.1
Other 34.0
Total 360.3
Deferred tax assets:
Operating loss carryforwards 292.4
Postretirement benefit obligation 34.1
Other 36.4
Total 362.9
Valuation allowance (46.9)
Net deferred tax liability $44.3
</TABLE>
Upon adoption of FAS No. 109, $22.4 of previously unrecorded tax
benefits arising from stock option exercises were recognized in
capital surplus.
The Company's effective income tax rate was 39.3% for the first
nine months of fiscal 1994, compared with 31.4% in the
comparable 1993 period. The increase reflects the impact of the
full utilization of domestic net operating loss carryforwards
during fiscal 1993. The adoption of FAS No. 109 had no material
effect on the effective tax rate for the first nine months.
The provision for income taxes for the nine months ended March
26, 1994 and March 27, 1993 was $102.6 and $63.8, respectively.
Information to identify the components of the income tax expense
is not available. The valuation allowance at March 26, 1994 was
$35.9.
<PAGE>
At June 30, 1993, the Company had U.S. federal net operating
loss carryforwards of approximately $550 for tax purposes which
do not begin to expire until 2004 and foreign net operating loss
carryforwards of $50 for tax purposes which expire beginning in
1994.
See Note 6 for a discussion of the U.S. Internal Revenue
Service's audit of the Company's 1988, 1989 and 1990 U.S. tax
returns.
No provision was made in fiscal 1993 for U.S. income taxes on
the undistributed earnings of the foreign subsidiaries as it is
the Company's intention to utilize those earnings in the foreign
operations for an indefinite period of time or repatriate such
earnings only when tax effective to do so. At June 30, 1993,
undistributed earnings of the Company's foreign subsidiaries
amounted to $160. It is not practicable to determine the amount
of income or withholding tax that would be payable upon the
remittance of those earnings.
4. Debt
Effective December 22, 1993 the Company amended two of its
principal credit facilities which provided for a pricing
reduction, elimination of $175.0 of credit availability and a
one year maturity extension to 1997.
5. Equity
The Company paid cash dividends of $0.54 and $0.32 per share of
common stock during the first nine months of fiscal 1994 and
1993, respectively. Total dividends paid during these periods
were $62.8 and $36.5, respectively.
Common stock and capital surplus increased $48.9 reflecting
proceeds of $13.5 from stock option exercises and $35.4 of tax
benefits arising from stock option transactions, including $22.4
of previously unrecorded tax benefits recognized at the
beginning of the year as a result of the adoption of FAS No. 109
as discussed in Note 3.
6. Commitments and Contingencies
During the second quarter of fiscal 1994, the Company received
from the U.S. Internal Revenue Service proposed adjustments as a
result of their examination of the Company's U.S. tax returns
for 1988, 1989 and 1990. The proposed adjustments relate to
deductions taken by the Company with respect to the assets of
the battery business acquired from Kraft, Inc. on June 24, 1988.
The proposed audit adjustments, if ultimately upheld, would
result in elimination of the Company's U.S. federal tax net
operating loss carryforward. The Company believes that these
deductions were properly claimed and is taking appropriate steps
to defend its position. As these proposed adjustments relate to
assets acquired in the June 1988 acquisition, the tax impact of
any adjustments ultimately upheld would decrease the Company's
cash, increase it's goodwill, and not have any significant
impact on the Company's future earnings.
<PAGE>
Duracell's Lexington, North Carolina manufacturing site
continues to be under review by the U.S. Environmental
Protection Agency ("EPA") for mercury contamination, a process
which is now expected to result in it being designated a federal
Superfund site. Comprehensive remediation actions have taken
place at the Lexington site over the past ten years. Management
believes these actions, combined with its planned future
remediation efforts, should adequately address certain concerns
on the part the EPA. As of March 26, 1994, the Company
estimates that future costs will not exceed $10 million, which
the Company has reserved.
<PAGE>
Management's Discussion and Analysis of Results of Operations
and Financial Condition.
Results of Operations
Summarized below are the results of operations for the three and
nine months ended March 26, 1994 and March 27, 1993,
respectively (in millions, except per share amounts):
<TABLE>
<CAPTION>
Three Fiscal Months Ended Nine Fiscal Months Ended
% Change % Change
Mar.26, Mar.27,Reported Perf.* Mar.26,Mar.27, Reported Perf.*
1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alkaline unit volume:
North America 187.8 170.8 10 10 907.4 816.8 11 11
Europe 127.5 119.7 7 7 520.6 497.8 5 5
Other International
Markets 131.1 115.2 14 14 434.7 389.6 12 12
Total 446.4 405.7 10 10 1,862.7 1,704.2 9 9
Sales:
North America$170.1 $151.2 13 13 $780.1 $707.1 10 11
Europe 100.8 106.7 (6) 1 439.2 474.7 (7) 5
Other International
Markets 67.0 55.3 21 21 216.7 184.2 18 18
Total 337.9 313.2 8 11 1,436.0 1,366.0 5 10
Operating income:
North America 29.4 22.1 33 34 223.6 188.7 18 19
Europe 12.4 11.7 6 16 90.5 94.9 (5) 9
Other International
Markets 9.9 7.9 25 27 32.9 26.4 25 27
Subtotal 51.7 41.7 24 27 347.0 310.0 12 17
Corporate/R&D (21.2) (22.0) 4 4 (61.3) (59.7) (3) (3)
Total 30.5 19.7 55 65 285.7 250.3 14 21
Int. expense 6.6 10.1 35 33 22.9 36.6 37 34
Other (income)
expense (1.5) .7 N/M N/M 1.8 10.8 83 82
Income before accounting change and
income taxes 25.4 8.9 185 218 261.0 202.9 29 36
Tax expense 10.5 5.0 (110) (144) 102.6 63.8 (61) (74)
Effective tax rate41.3% 55.7% 14.4pp 14.4pp 39.3% 31.4% (7.9pp)(7.9pp)
Income before accounting
change 14.9 3.9 282 303 158.4 139.1 14 19
Income per share before accounting
change $0.12 $0.03 300 300 $1.33 $1.17 14 19
<FN>
* Performance - adjusted for foreign exchange (i.e., foreign
currency translation, defined as the impact of translating the
income statement from local currency to U.S. dollars).
</TABLE>
<PAGE>
Overview
Third quarter earnings per share was up four-fold to $0.12
driven by a 55% increase in operating income resulting from
double digit alkaline unit volume and sales growth in North
America and Other International Markets, improved margins,
savings from the fiscal 1993 restructuring and greater operating
leverage. Consolidated sales increased 8% (up 11% before the
impact of unfavorable currency translation) due to alkaline
volume growth and higher prices across most markets. The growth
in operating income combined with interest savings more than
offset higher taxes and resulted in a 300% increase in net
income to $14.9 million for the quarter, which has historically
been Duracell's smallest quarter in terms of profitability.
For the nine months ended March 26, 1994, income before
accounting change increased 14% to $158.4 million as a 14%
increase in operating income (up 21% before currency
translation) and a 37% reduction in interest costs were
partially offset by higher taxes, resulting from the full
utilization of U.S. net operating loss carryforwards in fiscal
1993.
Third Quarter Ended March 26, 1994
North America
Alkaline unit volume grew as a result of market growth and share
gains in the mass merchandiser trade class and expanded
distribution in wholesale clubs. The sales increase reflects
the volume growth, benefits from a 3% U.S. price increase in
March 1993 and shipments of the Company's new nickel metal
hydride rechargeable batteries. Operating income rose 33%
driven by the sales gain and improved operating leverage reduced
by increased investment in advertising and promotion to support
the DURACELL brand.
Europe
Alkaline unit volume growth was achieved through nonconsumer
shipments and expanded distribution in Eastern Europe which
offset weakness throughout much of Europe resulting from
recessionary economies and strong price competition. Reported
sales were down 6%, although after excluding unfavorable
currency translation of $6 million, sales increased 1% due to
higher prices and volume growth partially offset by unfavorable
mix. Operating income increased 16% after excluding $1 million
of unfavorable currency translation (up 6% on a reported basis)
through a combination of higher prices, volume efficiencies,
restructuring related savings and cost containment of non-volume
related expenses.
Other International Markets
Alkaline unit volume growth was driven by continued alkaline
penetration and distribution gains throughout much of Latin
America, the Middle East and Africa as well as new distribution
into China, partially offset by volume declines in Brazil due to
the soft economy and competitive pressures. Mexican alkaline
volumes rebounded in the quarter through alkaline penetration
and higher market share. Sales increased reflecting the volume
growth and higher prices. Operating income, which continues to
increase at a greater pace than sales, was driven by improved
gross margins partially offset by volume-related spending,
including advertising and promotion, to support alkaline volume
growth.
<PAGE>
Nine Months Ended March 26, 1994
North America
Alkaline unit volume grew as a result of market growth and share
gains in the mass merchandiser trade class and expanded
distribution in wholesale clubs offset in part by the absence of
shipments related to Hurricane Andrew in August 1992. Higher
sales reflects the volume growth, the benefits from the March
1993 U.S. price increase and shipments of the Company's new
nickel metal hydride rechargeable batteries partially offset by
$4 million of unfavorable foreign currency translation in
Canada. Operating income rose 18% driven by the sales gain and
operating leverage offset in part by increased investment in
advertising and promotion.
Europe
As a result of recessionary economies throughout much of Europe
and strong price competition in several key markets, alkaline
unit volume growth was limited to 5%. Reported sales were down
7%, although sales increased 5% after excluding unfavorable
currency translation of $58 million, due to higher prices and
volume growth partially offset by unfavorable mix. Operating
income as reported decreased 5%, however, after excluding
unfavorable foreign currency translation of $12 million,
operating income increased 9% on sales growth, lower
manufacturing costs and restructuring-related savings partially
offset by increased advertising and promotion.
Other International Markets
Alkaline unit volume increased reflecting alkaline penetration
and distribution gains in Latin American, Middle Eastern and
African markets as well as new distribution into China offset in
part by declines in Mexico, Brazil and Australia reflecting soft
economies and competitive pressures. The sales increase was
driven by volume growth and higher prices. Operating income,
which increased at a pace greater than sales, continued to grow
through improved gross margins partially offset by higher
advertising, promotion and other volume-related costs to support
alkaline volume growth.
Corporate/Research & Development
Operating expenses decreased 4% during the third quarter as
higher research and development costs related to the Company's
new line of high power batteries were more than offset by lower
administrative costs.
Operating expenses increased 3% during the nine months ended
March 26, 1994 reflecting higher spending on research and
development related to high power batteries.
Interest Expense
The decrease in interest expense reflects debt reduction,
achieved through the use of cash generated from operations.
<PAGE>
Other (Income) Expense
Other expense decreased as a result of lower foreign exchange
losses due in large part to the success of foreign exchange
hedging activities and the absence of turmoil between the
European currencies which existed during fiscal 1993.
Income Tax Expense
Income tax expense increased during the third quarter when
compared to the prior year reflecting higher pre-tax income
partially offset by a lower effective tax rate. The decrease in
the Company's effective tax rate for the period reflects the
impact of losses incurred during fiscal 1993 in countries which
were not tax benefited.
The provision for income taxes for the nine month period
increased as a result of higher pre-tax income and higher
effective tax rates. The increase in the Company's effective
tax rate for the period reflects the impact of the full
utilization of domestic net operating loss carryforwards during
fiscal 1993.
The Omnibus Budget Reconciliation Act of 1993 (the "Act") became
effective August 10, 1993. The Company has analyzed the effects
of the tax changes included in the Act on its operations and has
concluded that the impact is insignificant.
The Company adopted FAS No. 109 "Accounting for Income Taxes"
during the first quarter of fiscal 1994. Implementation of this
standard did not have a material impact on results of operations
or financial condition.
Financial Condition
<TABLE>
<CAPTION>
Nine Months Ended
March 26, 1994 March 27, 1993
<S> <C> <C>
Cash flow from operations (1) $ 316.1 $ 333.8
Capital Expenditures 40.7 29.2
Interest paid 23.3 36.0
Taxes paid 37.4 21.4
Other sources (uses) of cash (0.1) 3.6
Free cash flow (2) 214.6 250.8
Dividends paid 62.8 36.5
Total debt-to-capital ratio 23% 33%
<FN>
(1) Excludes changes in accrued interest and taxes.
(2) Defined as cash flow after operating and investing
activities.
</TABLE>
<PAGE>
Free cash flow decreased $36.2 million to $214.6 million for the
nine months ended March 26, 1994 as a result of the absence of
an inventory reduction which occurred in fiscal 1993, higher
capital expenditures and tax payments partially offset by lower
interest costs.
The Company will rely on cash generated from operations to fund
its future working capital and capital expenditure requirements
needed to support continued sales growth, geographic expansion
and investment in new high power rechargeable batteries. Funds
available from unused bank credit facilities will be used
primarily to fund seasonal working capital during the year when
receivables and inventories rise to meet operating requirements.
Capital expenditures are expected to continue to increase
throughout the remainder of fiscal 1994 and over the next
several years, when compared to prior years, for capacity
expansion, efficiencies in the manufacturing process, and
investments to develop new high power rechargeable batteries.
These expenditures will include the construction of
manufacturing facilities in China and India as well as a nickel
metal hydride rechargeable manufacturing facility in the United
States. The rechargeable facility will be jointly owned by the
Company, Toshiba of Japan and Varta of Germany.
Interest payments decreased $12.7 million or 35% for the nine
months ended March 26, 1994 when measured against the comparable
prior year period. This decline was achieved through a
reduction in the Company's debt levels.
Cash taxes have remained low as taxable income was shielded by
deductions for amortization and depreciation taken earlier for
tax purposes than recognized for book purposes, principally in
the United States. As of the end of fiscal 1993, the U.S. tax
net operating loss carryforward was $550 million. See Footnote
6 in the Notes to Consolidated Unaudited Financial Statements
for discussion regarding the U.S. Internal Revenue Service's
audit of the Company's 1988, 1989 and 1990 U.S. tax returns.
As of March 26, 1994, the Company has $797 million in
contractually committed lines of credit from its principal
long-term bank credit facilities under which $252 million was
outstanding. Commitments under the facilities can be used to
support commercial paper, of which $47 million was outstanding
at March 26, 1994. The Company's commercial paper program is
rated investment grade by both Standard & Poor's Corporation and
Moody's Investors Services Inc. Unused borrowing capacity under
its principal bank credit facilities at March 26, 1994 was $545
million.
<PAGE>
PART II
OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(i) Statement re: computation of earnings per share
(b) Reports on Form 8-K
The Company did not file any report on Form 8-K during the
three months ended March 26, 1994.
<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.
DURACELL INTERNATIONAL INC.
May 6, 1994 By: Robert A. Burgholzer, Jr.
Robert A. Burgholzer, Jr.
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
<TABLE>
DURACELL INTERNATIONAL INC.
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK
For the Three and Nine Fiscal Months Ended
March 26, 1994 and March 27, 1993
<CAPTION>
Three Fiscal Months Ended Nine Fiscal Months Ended
In millions, except per share amounts
March 26, March 27, March 26, March 27,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Primary Computations:
Weighted average number of
shares outstanding 116.7 114.6 116.1 113.5
Effect of outstanding
stock options 3.7 4.5 2.8 5.3
Weighted average number of shares and share
equivalents outstanding 120.4 119.1 118.9 118.8
Per share amounts:
Income before acctg change $0.12 $0.03 $1.33 $1.17
Accounting change - - - (0.63)
Net income (a) (b) $0.12 $0.03 $1.33 $0.54
Fully Diluted Computations:
Weighted average number of
shares outstanding 116.7 114.6 116.1 113.5
Effect of outstanding
stock options 3.9 4.8 3.9 5.4
Weighted average number of shares and share
equivalents outstanding 120.6 119.4 120.0 118.9
Per share amounts:
Income before acctg change $0.12 $0.03 $1.32 $1.17
Accounting change - - - (0.63)
Net income (a) (b) $0.12 $0.03 $1.32 $0.54
_________________________________
<FN>
(a) These calculations are submitted in accordance with
Regulation S-K item (b) (11)
(b) Calculated by dividing the following by the weighted
average number of shares and share equivalents:
Income before accounting
change $14.9 $3.9 $158.4 $139.1
Accounting change - - - (75.4)
Net income $14.9 $3.9 $158.4 $ 63.7
</TABLE>
<PAGE>
