SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1994 Commission File Number 1-3761
TEXAS INSTRUMENTS INCORPORATED
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 75-0289970
- - ------------------------ ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
13500 North Central Expressway, P.O. Box 655474, Dallas, Texas 75265-5474
- - -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 214-995-3773
---------------------------------------------------------------
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
---- ----
92,210,170
- - ------------------------------------------------------------------------------
Number of shares of Registrant's common stock outstanding as of June 30, 1994
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Consolidated Financial Statements
(In millions of dollars, except per-share amounts.)
For Three Months Ended For Six Months Ended
---------------------- --------------------
June 30 June 30 June 30 June 30
Income 1994 1993 1994 1993
- - ------ ------- ------- ------- -------
Net revenues............................................... $ 2,510 $ 2,105 $ 4,959 $ 3,988
Operating costs and expenses:
Cost of revenues......................................... 1,802 1,557 3,589 2,963
General, administrative and marketing.................... 317 306 696 590
Employees' retirement and profit sharing plans........... 99 69 173 123
------- ------- ------- -------
Total.................................................. 2,218 1,932 4,458 3,676
------- ------- ------- -------
Profit from operations..................................... 292 173 501 312
Interest income............................................ 11 7 22 15
Other income (expense) net................................. (15) 1 (20) (5)
Interest on loans.......................................... 11 12 22 24
------- ------- ------- -------
Income before provision for income taxes and
cumulative effect of accounting changes.................. 277 169 481 298
Provision for income taxes................................. 93 57 163 102
------- ------- ------- -------
Income before cumulative effect of accounting changes...... 184 112 318 196
Cumulative effect of accounting changes.................... -- -- -- (4)
------- ------- ------- -------
Net income................................................. $ 184 $ 112 $ 318 $ 192
======= ======= ======= =======
Earnings per common and common equivalent share:
Income before cumulative effect of accounting changes.... $ 1.93 $ 1.18 $ 3.35 $ 2.09
Cumulative effect of accounting changes.................. -- -- -- (0.05)
------- ------- ------- -------
Net income............................................. $ 1.93 $ 1.18 $ 3.35 $ 2.04
======= ======= ======= =======
Cash dividends declared per share of common stock.......... $ 0.25 $ 0.18 $ 0.43 $ 0.36
Cash Flows
- - ----------
Net cash provided by operating activities.............................................. $ 704 $ 334
Cash flows from investing activities:
Additions to property, plant and equipment........................................... (459) (326)
Purchases of short-term investments.................................................. (289) (421)
Sales and maturities of short-term investments....................................... 105 554
------- -------
Net cash used in investing activities.................................................. (643) (193)
Cash flows from financing activities:
Dividends paid on common and preferred stock......................................... (34) (46)
Sales and other common stock transactions............................................ 84 47
Other................................................................................ (1) (29)
------- -------
Net cash provided by (used in) financing activities.................................... 49 (28)
Effect of exchange rate changes on cash................................................ 7 (5)
------- -------
Net increase in cash and cash equivalents.............................................. 117 108
Cash and cash equivalents, January 1................................................... 404 356
------- -------
Cash and cash equivalents, June 30..................................................... $ 521 $ 464
======= =======
2
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
(In millions of dollars, except per-share amounts.)
June 30 Dec. 31
Balance Sheet 1994 1993
- - ------------- ------- -------
Assets
Current assets:
Cash and cash equivalents.......................................... $ 521 $ 404
Short-term investments............................................. 675 484
Accounts receivable, less allowance for losses of
$47 million in 1994 and $42 million in 1993...................... 1,446 1,218
Inventories:
Raw materials.................................................... 246 244
Work in process.................................................. 571 557
Finished goods................................................... 277 250
Less progress billings........................................... (210) (229)
------- -------
Inventories (net of progress billings)......................... 884 822
------- -------
Prepaid expenses................................................... 65 55
Deferred income taxes.............................................. 342 331
------- -------
Total current assets............................................. 3,933 3,314
------- -------
Property, plant and equipment at cost................................ 4,695 4,620
Less accumulated depreciation...................................... (2,367) (2,417)
------- -------
Property, plant and equipment (net).............................. 2,328 2,203
------- -------
Deferred income taxes................................................ 236 237
Other assets......................................................... 180 239
------- -------
Total assets......................................................... $ 6,677 $ 5,993
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Loans payable and current portion long-term debt................... $ 222 $ 211
Accounts payable................................................... 663 543
Accrued and other current liabilities.............................. 1,423 1,247
------- -------
Total current liabilities........................................ 2,308 2,001
------- -------
Long-term debt....................................................... 688 694
Accrued retirement costs............................................. 775 739
Deferred credits and other liabilities............................... 230 244
Stockholders' equity:
Preferred stock, $25 par value. Authorized - 10,000,000 shares.
Participating cumulative preferred. None issued.................. -- --
Common stock, $1 par value. Authorized - 300,000,000 shares.
Shares issued: 1994 - 92,314,817; 1993 - 90,919,314.............. 92 91
Paid-in capital.................................................... 1,016 932
Retained earnings.................................................. 1,585 1,307
Less treasury common stock at cost.
Shares: 1994 - 104,647; 1993 - 102,522........................... (6) (5)
Other.............................................................. (11) (10)
------- -------
Total stockholders' equity....................................... 2,676 2,315
------- -------
Total liabilities and stockholders' equity........................... $ 6,677 $ 5,993
======= =======
3
/TABLE
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
Notes to Financial Statements
Earnings per common and common equivalent share are based on average
common and common equivalent shares outstanding (95.6 and 93.8 million shares
for the second quarters of 1994 and 1993, and 95.3 and 93.5 million shares for
the six months ended June 30, 1994 and 1993). Shares issuable upon exercise
of dilutive stock options and upon conversion of dilutive convertible
debentures and, for 1993, conversion preferred stock are included in average
common and common equivalent shares outstanding. In computing per-share
earnings for the periods, net income is reduced by $7 million for the second
quarter of 1993, and $15 million for the six months ended June 30, 1993, for
dividends accrued on preferred stock, and increased by $1 million and $7
million for the second quarters of 1994 and 1993, and $1 million and $14
million for the six months ended June 30, 1994 and 1993, for interest (net of
tax and profit sharing effect) and dividends on the convertible debentures and
conversion preferred stock considered dilutive common stock equivalents.
Results for the first six months of 1994 include the following first-
quarter items: special pretax charges of $132 million and one-time royalty
revenues of $69 million.
In April 1994, the company amended its asset securitization agreement
for accounts receivable and reduced the outstanding balance from $175 million
to $125 million.
Effective January 1, 1993, the company adopted two new accounting
standards: SFAS No. 106, which requires accrual of expected retiree health-
care benefit costs during the employees working careers, and SFAS No. 109,
which requires increased recording of deferred income tax assets. This
resulted in a charge of $294 million ($3.15 per share) for SFAS No. 106 and a
credit of $290 million ($3.10 per share) for SFAS No. 109, for the cumulative
effect of the accounting changes.
The statements of income, statements of cash flows and balance sheet at
June 30, 1994, are not audited but reflect all adjustments which are of a
normal recurring nature and are, in the opinion of management, necessary to a
fair statement of the results of the periods shown.
4
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Net revenues for the second quarter of 1994 were $2510 million, up 19 percent
from $2105 million in the second quarter of 1993. The increase resulted
primarily from strong growth in semiconductor revenues.
The Registrant's (the "company" or "TI") profit from operations for the
quarter was $292 million, up 69 percent from $173 million in the second
quarter of 1993. Most of the profit increase came from continuing improvement
in semiconductor operations. Net income for the quarter was $184 million,
compared with $112 million in the second quarter of 1993. Earnings per share
were $1.93, an increase of 64 percent from $1.18 in the second quarter of
1993.
Second-quarter 1994 results include an accrual of $49 million for employee
profit-sharing plans, compared with a $20 million accrual in the second
quarter of 1993.
Profit after tax return on assets (PAT ROA) reached an annualized rate of 10.0
percent in the first half of 1994. TI's goal is to sustain PAT ROA in the
range of 8-10 percent to increase value for shareholders.
There were no one-time royalty revenues in the second quarter of 1994 because
no new agreements were concluded during the quarter. One-time royalties in
the second quarter of 1993 were $31 million. Ongoing royalties were up
significantly from the second quarter of 1993 and flat with the first quarter
of 1994.
SEMICONDUCTORS
TI's semiconductor orders, revenues and operating profit reached record levels
in the second quarter. U.S. orders remained at the record level of the first
quarter of 1994, and orders surpassed previous records in Europe, Japan and
the Asia-Pacific region. Orders were strong for application-specific
products, memory and mixed-signal products. Digital signal processor orders
essentially doubled from the second quarter of 1993 and reached record levels,
driven by new opportunities in telecommunications and consumer end equipment.
Semiconductor revenues increased substantially over the second quarter of
1993, led by strong growth in memory revenues. Revenues were also up over the
first quarter of 1994, with the largest contribution coming from double-digit
growth in application-specific and mixed-signal products. Semiconductor
margins continued steady improvement, and operating profit more than doubled
over the second quarter of 1993. Semiconductor operating profit was up from
the first quarter of 1994, with the largest contribution coming from
application-specific products.
TI made substantial progress toward its operational excellence goals during
the first half of the year. As a result of improved operating efficiencies,
the company generated additional wafer output equivalent to almost one
additional wafer-fabrication facility. TI also continues to improve on-time
delivery performance, at a time when semiconductor capacity is tight. Until
new manufacturing facilities come on line in 1995, the rate of growth in TI's
semiconductor output will depend upon further improvement in manufacturing
efficiencies from existing facilities.
5
Construction of TI's new submicron CMOS facility in Dallas is progressing on
schedule, and this facility is expected to be in initial production of
advanced semiconductor products by mid-1995. The TI-Acer joint venture in
Taiwan is preparing for its Phase II expansion, which is expected to increase
its DRAM production capacity in the second half of 1995.
DEFENSE ELECTRONICS
Revenues in TI's defense electronics business continued to decline because of
lower spending by the U.S. Department of Defense. Margins remained stable.
TI expects the rate of revenue decline to increase in the second half of 1994,
especially in the fourth quarter. During the second quarter, a joint venture
of TI and Martin Marietta received the initial low-rate production contract
for the Javelin antitank missile developed for the U.S. Army and Marine Corps.
The Javelin could provide more than a billion dollars of revenue for TI over
the life of the program.
SOFTWARE
Progress continues in focusing TI's software business on the company's primary
software development products, the Information Engineering Facility (IEF)(TM)
tool set. Revenues increased from the second quarter of 1993, and the
business was essentially at breakeven for the quarter. During the quarter, TI
and Microsoft Corporation announced an alliance for joint design and marketing
of an open, object-oriented repository standard for use by software developers
and end users.
OUTLOOK
Although the rate of growth in the world semiconductor market is expected to
moderate somewhat in the second half of 1994, forces driving the longer-term
growth of the world market remain intact. The Asia-Pacific region continues
to be the fastest growing semiconductor market in the world. TI is well
positioned in the Asia-Pacific market, and the company is increasing its
resources in the region to serve a rapidly expanding customer base.
The district court in Tokyo has completed all hearings relating to the
company's litigation with Fujitsu Limited over TI's Kilby patent and has
closed the record in that matter. It is not certain when the court will issue
its decision. Regardless of the outcome, there should be no significant
effect on existing licensing agreements. TI continues to expect a significant
ongoing stream of royalty revenue throughout the remainder of the decade.
As TI continues to realize improvements in operating performance, the company
will have the flexibility to accelerate research and development in key
technologies fundamental to the digital revolution. This includes data
compression and transmission, signal processing and digital display
technologies. Management will also continue efforts to improve TI's
competitive position by ongoing reengineering and streamlining of worldwide
operations.
6
ADDITIONAL FINANCIAL INFORMATION
Change in orders, Change in net revenues,
Segment 2Q94 vs. 2Q93 2Q94 vs. 2Q93
- - ------------------- ----------------- -----------------------
Components up 27% up 29%
Defense Electronics up 25% down 8%
Digital Products up 20% up 21%
Total up 24% up 19%
Change in orders, Change in net revenues,
Segment 1H94 vs. 1H93 1H94 vs. 1H93
- - -------------------- ----------------- -----------------------
Components up 31% up 37%
Defense Electronics down 29% down 4%
Digital Products up 18% up 18%
Total up 15% up 24%
TI's orders for the second quarter of 1994 were $2549 million, compared with
$2051 million in the same period of 1993. Higher semiconductor orders
accounted for the increase in the components segment. The increase in defense
electronics orders reflects the Javelin contract and higher electro-optics
system orders. The increase in digital products was primarily in custom
manufacturing services and personal productivity products.
TI's revenues in the second quarter of 1994 were $2510 million, compared with
$2105 million in the second quarter of 1993. The increase in components
segment revenues resulted primarily from higher semiconductor revenues,
attributable mainly to increased shipments and new products. Defense
electronics revenues were down because of ramp-down of mature production
programs. The increase in digital products segment revenues was primarily in
personal productivity products and custom manufacturing services.
Profit from operations for the second quarter was $292 million, compared with
$173 million in the second quarter of 1993. Components segment profit was up
substantially, primarily because of improved semiconductor operations.
Digital products segment profit was up because of a profit in personal
productivity products compared with a small loss in the year-ago quarter, and
improved performance in information technology.
TI's current estimate of the income tax rate for 1994 is 34.0 percent.
7
For the first six months of 1994, TI's orders were $4963 million, up 15
percent from the first six months of 1993. The increase in components segment
orders resulted primarily from increased semiconductor orders. The decrease
in defense segment orders was related primarily to the phasing of orders for
the High-Speed Antiradiation Missile (HARM). The increase in digital segment
orders was primarily in custom manufacturing services and personal
productivity products.
Net revenues for the first half of 1994 were $4959 million, up 24 percent from
$3988 million in the first half of 1993. Most of the increase was
attributable to new products and increased shipments. The increase in
components segment revenues reflects doubling of semiconductor memory revenues
over the first half of 1993, higher ongoing royalties, and strong growth in
mixed-signal devices and application-specific products. Defense segment
revenues were down, reflecting the ramp-down of mature production programs.
The increase in digital segment revenues was primarily in personal
productivity products.
TI's profit from operations for the first six months of 1994 was $501 million,
compared with $312 million in the first half of 1993. Essentially all the
increase was in the components segment, resulting from improved semiconductor
operations and higher ongoing royalties.
Net income for the first half was $318 million, compared with $192 million in
the first six months of 1993. Earnings per share were $3.35, compared with
$2.04 in the first half of 1993.
In the first quarter of 1994, the company took a pretax charge of $83 million
for restructuring of its European operations from the traditional country-by-
country approach to business centers that will have pan-European
responsibilities. The charge included future cash outlays of $58 million for
severance and $17 million for other costs, plus non-cash asset write-downs of
$8 million. This action, primarily affecting semiconductor activities, is
expected to be essentially complete by the end of 1994 and to result in annual
savings of approximately $54 million when fully implemented. Also taken in
the first quarter was a pretax charge of $49 million for costs related to the
divestiture within the subsequent 12 months of nonstrategic product lines,
primarily in information technology. The charge included future cash outlays
of $4 million for severance and $22 million for other costs, plus non-cash
asset write-downs of $23 million. These restructuring and divestiture
actions, which include severance actions affecting approximately 1,000
employees, primarily in Europe, are proceeding essentially on schedule.
First-half 1994 results also include $69 million in one-time royalty revenues
in the first quarter, approximately offsetting the restructuring charge in the
components segment. One-time royalties in the first half of 1993 were $53
million.
TI's financial condition remains strong. Cash flow from operating activities
net of additions to property, plant, and equipment was positive for the first
half of 1994.
8
During the first half of 1994, cash and cash equivalents plus short-term
investments increased by $308 million to $1196 million, primarily because of
the cash flow mentioned above. Holders of TI's 2.75% convertible subordinated
debentures due 2002 have the option of notifying TI (during the thirty-two-day
period beginning July 29, 1994) of their intent to redeem these securities at
par during the thirty-day period beginning September 29, 1994. These
debentures, of which $200 million are outstanding, are also convertible into
common stock at a conversion price of $82.875 per share. Any such redemption
will be funded from existing cash balances. In early April, the company
amended its asset securitization agreement for accounts receivable and reduced
the outstanding balance from $175 million to $125 million. On June 17, the
company announced an increase in the annual common dividend rate per share
from $0.72 to $1.00. At current common share balances, this will amount to
approximately $7 million of increased dividend payments per quarter. TI's
debt-to-total-capital ratio was .25 at the end of the second quarter, down
from .27 at first quarter's end and .28 at year-end 1993.
TI's backlog of unfilled orders as of June 30, 1994, was $3810 million, down
$233 million from the end of last year's second quarter. Increases in
semiconductor backlog were offset by declines in defense electronics. Backlog
is up $5 million from year-end 1993, and up $39 million from the end of the
first quarter of 1994, with higher semiconductor backlog offsetting declines
in defense electronics.
TI-funded R&D was $168 million in the second quarter of 1994, compared with
$145 million in the same period of 1993. The increase was driven primarily by
investments in semiconductors and digital micromirror device technology.
Capital expenditures in the second quarter of this year were $254 million,
compared with $181 million in the second quarter of 1993, and $459 million for
the first six months of 1994, compared with $326 million in the first half of
1993.
Depreciation in the second quarter of 1994 was $162 million, compared with
$149 million in the second quarter of 1993, and $317 million for the first six
months of 1994, compared with $292 million in the same period of 1993.
9
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Stockholders held on April 21, 1994, the
stockholders voted upon the election of directors.
The board nominees were elected as directors with the following vote:
Nominee For Withheld
- - ---------------------- ---------- --------
James R. Adams 79,845,481 72,171
James B. Busey IV 79,831,921 85,731
Gerald W. Fronterhouse 79,818,753 98,899
Jerry R. Junkins 79,835,493 82,159
William S. Lee 79,850,531 67,121
William B. Mitchell 79,832,305 85,347
David M. Roderick 79,822,270 95,382
Gloria M. Shatto 79,836,512 81,140
William P. Weber 79,837,641 80,011
Clayton K. Yeutter 79,840,436 77,216
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Designation of
Exhibits in
this Report Description of Exhibit
-------------- -----------------------------
11 Computation of primary and
fully diluted earnings per
common and common equiv-
alent share.
12 Computation of Ratio of
Earnings to Fixed Charges and
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends.
(b) Report on Form 8-K
None.
10
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.
TEXAS INSTRUMENTS INCORPORATED
WILLIAM A. AYLESWORTH
Senior Vice President,
Treasurer and
Chief Financial Officer
Date: July 15, 1994
11
Exhibit Index
Paper(P)
Designation of or
Exhibits in Electronic
this Report Description of Exhibit (E)
- - -------------- ------------------------------ ----------
11 Computation of primary and E
fully diluted earnings per
common and common equiv-
alent share.
12 Computation of Ratio of E
Earnings to Fixed Charges and
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends.
EXHIBIT 11
----------
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
PRIMARY AND FULLY DILUTED EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
(In thousands, except per-share amounts.)
For Three Months Ended For Six Months Ended
---------------------- ---------------------
June 30 June 30 June 30 June 30
1994 1993 1994 1993
-------- -------- -------- --------
Income before cumulative effect of accounting changes...... $183,938 $111,575 $317,640 $196,420
Less preferred dividends accrued:
Market auction preferred............................... -- (601) -- (1,246)
Money market preferred................................. -- (605) -- (1,321)
Series A conversion preferred.......................... -- (6,164) -- (12,443)
Add:
Dividends on series A conversion preferred
shares assumed converted............................. -- 6,164 -- 12,443
Interest, net of tax and profit sharing effect, on
convertible debentures assumed converted............. 668 679 1,330 1,350
-------- -------- -------- --------
Adjusted income before cumulative effect
of accounting changes.................................... 184,606 111,048 318,970 195,203
Cumulative effect of accounting changes.................... -- -- -- (4,173)
-------- -------- -------- --------
Adjusted net income........................................ $184,606 $111,048 $318,970 $191,030
======== ======== ======== ========
Earnings per Common and Common Equivalent Share:
- - ------------------------------------------------
Weighted average common shares outstanding................. 91,944 83,392 91,573 83,087
Weighted average common equivalent shares:
Stock option and compensation plans.................... 1,219 1,483 1,312 1,358
Convertible debentures................................. 2,413 2,413 2,413 2,413
Series A conversion preferred.......................... -- 6,544 -- 6,610
-------- -------- -------- --------
Weighted average common and common equivalent shares..... 95,576 93,832 95,298 93,468
======== ======== ======== ========
Earnings per Common and Common Equivalent Share:
Income before cumulative effect of accounting changes.... $ 1.93 $ 1.18 $ 3.35 $ 2.09
Cumulative effect of accounting changes.................. -- -- -- (0.05)
-------- -------- -------- --------
Net income............................................... $ 1.93 $ 1.18 $ 3.35 $ 2.04
======== ======== ======== ========
Earnings per Common Share Assuming Full Dilution:
- - -------------------------------------------------
Weighted average common shares outstanding................. 91,944 83,392 91,573 83,087
Weighted average common equivalent shares:
Stock option and compensation plans.................... 1,311 1,801 1,404 1,787
Convertible debentures................................. 2,413 2,413 2,413 2,413
Series A conversion preferred.......................... -- 6,544 -- 6,610
-------- -------- -------- --------
Weighted average common and common equivalent shares..... 95,668 94,150 95,390 93,897
======== ======== ======== ========
Earnings per Common Share Assuming Full Dilution:
Income before cumulative effect of accounting changes.... $ 1.93 $ 1.18 $ 3.34 $ 2.08
Cumulative effect of accounting changes.................. -- -- -- (0.05)
-------- -------- -------- --------
Net income............................................... $ 1.93 $ 1.18 $ 3.34 $ 2.03
======== ======== ======== ========
EXHIBIT 12
----------
TEXAS INSTRUMENTS INCORPORATED AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(Dollars in millions)
For Six Months
Ended June 30
--------------
1989 1990 1991 1992 1993 1993 1994
----- ----- ----- ----- ----- ----- -----
Income (loss) before income taxes
and fixed charges:
Income (loss) before cumulative
effect of accounting changes,
interest expense on loans,
capitalized interest amortized,
and provision for income taxes....... $ 387 $ 14 $(250) $ 433 $ 755 $ 328 $ 509
Add interest attributable to
rental and lease expense............. 47 50 43 42 38 18 21
----- ----- ----- ----- ----- ----- -----
$ 434 $ 64 $(207) $ 475 $ 793 $ 346 $ 530
===== ===== ===== ===== ===== ===== =====
Fixed charges:
Total interest on loans (expensed
and capitalized)..................... $ 38 $ 47 $ 59 $ 57 $ 55 $ 28 $ 27
Interest attributable to rental
and lease expense.................... 47 50 43 42 38 18 21
----- ----- ----- ----- ----- ----- -----
Fixed charges.............................. $ 85 $ 97 $ 102 $ 99 $ 93 $ 46 $ 48
===== ===== ===== ===== ===== ===== =====
Combined fixed charges and
preferred stock dividends:
Fixed charges.......................... $ 85 $ 97 $ 102 $ 99 $ 93 $ 46 $ 48
Preferred stock dividends
(adjusted as appropriate to a
pretax equivalent basis)............. 47 36 34 55 29 23 --
----- ----- ----- ----- ----- ----- -----
Combined fixed charges and
preferred stock dividends............ $ 132 $ 133 $ 136 $ 154 $ 122 $ 69 $ 48
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges......... 5.1 * * 4.8 8.5 7.5 11.0
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to combined
fixed charges and preferred
stock dividends.......................... 3.3 ** ** 3.1 6.5 5.0 11.0
===== ===== ===== ===== ===== ===== =====
* Not meaningful. The coverage deficiency was $33 million in 1990 and $309 million in 1991.
** Not meaningful. The coverage deficiency was $69 million in 1990 and $343 million in 1991.
