UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-4482
ARROW ELECTRONICS, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
New York 11-1806155
- ------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
25 Hub Drive, Melville, New York 11747
- -------------------------------- ----------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code (516) 391-1300
--------------
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.
Common stock, $1 par value: 98,199,931 shares outstanding at October 27,
2000.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
--------------------
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------- ----------------------
2000 1999 2000 1999
---- ---- ---- ----
Sales $9,268,162 $6,827,457 $3,337,068 $2,375,797
---------- ---------- ---------- ----------
Costs and expenses:
Cost of products sold 7,823,157 5,881,809 2,805,362 2,052,570
Selling, general and
administrative expenses 844,643 637,421 296,038 212,197
Depreciation and
amortization 63,009 53,448 22,325 17,404
Integration charge - 24,560 - -
---------- ---------- ---------- ----------
8,730,809 6,597,238 3,123,725 2,282,171
---------- ---------- ---------- ----------
Operating income 537,353 230,219 213,343 93,626
Equity in losses of
affiliated companies (2,635) (173) (725) (211)
Interest expense 107,207 78,146 41,088 26,836
---------- ---------- ---------- ----------
Earnings before income
taxes and minority
interest 427,511 151,900 171,530 66,579
Provision for income taxes 175,249 67,447 68,612 28,828
---------- ---------- ---------- ----------
Earnings before minority
interest 252,262 84,453 102,918 37,751
Minority interest 3,290 4,337 975 998
---------- ---------- ---------- ----------
Net income $ 248,972 $ 80,116 $ 101,943 $ 36,753
========== ========== ========== ==========
Net income per share:
Basic $2.58 $.84 $1.05 $.39
===== ==== ===== ====
Diluted $2.53 $.83 $1.02 $.38
===== ==== ===== ====
Average number of shares
outstanding:
Basic 96,392 95,097 97,403 95,176
====== ====== ======= ======
Diluted 98,408 96,001 100,022 96,317
====== ====== ======= ======
See accompanying notes.
ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
ASSETS
- ------
Current assets:
Cash and short-term investments $ 43,565 $ 44,885
Accounts receivable, less allowance
for doubtful accounts ($47,881 in 2000
and $32,338 in 1999) 2,282,899 1,638,654
Inventories 1,926,305 1,444,929
Prepaid expenses and other assets 42,696 29,469
---------- ----------
Total current assets 4,295,465 3,157,937
Property, plant and equipment at cost:
Land 17,798 17,638
Buildings and improvements 119,659 114,158
Machinery and equipment 295,783 257,841
---------- ----------
433,240 389,637
Less accumulated depreciation and
amortization (192,334) (165,987)
---------- ----------
240,906 223,650
Investments in affiliated companies 37,775 52,233
Cost in excess of net assets of
companies acquired, net of amortization
($132,570 in 2000 and $113,762 in 1999) 999,694 960,770
Other assets 133,565 88,665
---------- ----------
$5,707,405 $4,483,255
========== ==========
See accompanying notes.
ARROW ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $1,140,499 $ 805,468
Accrued expenses 408,150 263,216
Short-term borrowings, including current
maturities of long-term debt and capital
lease obligations 1,464,996 255,977
---------- ----------
Total current liabilities 3,013,645 1,324,661
Long-term debt and capital lease obligations 859,436 1,533,421
Deferred income taxes 30,932 39,474
Other liabilities 22,775 23,754
Minority interest 14,863 11,416
Shareholders' equity:
Common stock, par value $1:
Authorized - 120,000,000 shares
Issued - 103,741,595 shares in
2000 and 102,949,640 shares in 1999 103,742 102,950
Capital in excess of par value 527,704 501,379
Retained earnings 1,487,951 1,238,979
Foreign currency translation adjustment (195,712) (95,295)
---------- ----------
1,923,685 1,748,013
Less: Treasury stock (5,552,692 shares in
2000 and 7,004,349 shares in 1999),
at cost 148,498 187,269
Unamortized employee stock awards 9,433 10,215
---------- ----------
1,765,754 1,550,529
---------- ----------
$5,707,405 $4,483,255
========== ==========
See accompanying notes.
ARROW ELECTRONICS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
-------------------------
2000 1999
---- ----
(Unaudited)
Cash flows from operating activities:
Net income $ 248,972 $ 80,116
Adjustments to reconcile net income to net
cash provided by (used for) operations:
Minority interest in earnings 3,222 4,337
Depreciation and amortization 69,187 59,115
Equity in losses of affiliated companies 2,635 173
Integration charge - 24,560
Deferred income taxes (3,945) (19,917)
Change in assets and liabilities,
net of effects of acquired businesses:
Accounts receivable (627,032) (189,200)
Inventories (471,108) 23,222
Prepaid expenses and other assets (12,509) (5,228)
Accounts payable 318,135 72,363
Accrued expenses 126,852 15,479
Other (27,359) 1,531
--------- ---------
Net cash provided by (used for) operating
activities (372,950) 66,551
--------- ---------
Cash flows from investing activities:
Acquisition of property, plant and
equipment, net (51,004) (62,655)
Cash consideration paid for acquired businesses (92,704) (430,390)
Investments (33,906) (30,557)
--------- ---------
Net cash used for investing activities (177,614) (523,602)
--------- ---------
Cash flows from financing activities:
Change in short-term borrowings 539,655 3,490
Change in credit facilities (125,490) 429,478
Change in long-term debt 106,344 (38,621)
Proceeds from exercise of stock options 34,407 382
Purchases of common stock (321) (100)
Distribution to minority partners - (37,852)
--------- ---------
Net cash provided by financing activities 554,595 356,777
--------- ---------
Effect of exchange rate changes on cash (5,351) (9,393)
--------- ---------
Net decrease in cash and short-term investments (1,320) (109,667)
Cash and short-term investments at beginning
of period 44,885 158,924
--------- ---------
Cash and short-term investments at end of period $ 43,565 $ 49,257
========= =========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Income taxes $ 77,464 $ 21,820
Interest 104,579 79,439
See accompanying notes.
ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000
(Unaudited)
Note A -- Basis of Presentation
- -------------------------------
The accompanying consolidated financial statements reflect all adjustments,
consisting only of normal recurring accruals, which are, in the opinion of
management, necessary for a fair presentation of the consolidated financial
position and results of operations at and for the periods presented. Such
financial statements do not include all the information or footnotes necessary
for a complete presentation and, accordingly, should be read in conjunction with
the company's audited consolidated financial statements for the year ended
December 31, 1999 and the notes thereto. The results of operations for the
interim periods are not necessarily indicative of results for the full year.
Note B -- Impact of Recently Issued Accounting Standards
- --------------------------------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities." This
Statement is required to be adopted effective January 1, 2001. The Statement
will require the company to recognize all derivatives on the balance sheet at
fair value. Gains and losses resulting from changes in the value of the
derivatives would be accounted for depending on the intended use of the
derivative and whether it qualifies for hedge accounting. Due to the company's
limited use of derivative financial instruments, adoption of Statement No. 133
is not expected to have a significant effect on the company's consolidated
results of operations, financial position, or cash flows.
Note C -- Debt
- --------------
During the quarter ended September 30, 2000, the global multi-currency
facility was reclassified from long-term debt to short-term debt, due to the
maturity date of September 30, 2001. The commercial paper and bid facilities
were also reclassified to short-term, as such amounts are supported by the
global multi-currency facility.
Note D -- Integration of Acquisitions
- -------------------------------------
In 1999, the company recorded a special charge of $24.6 million related to the
acquisition and integration of the electronics distribution group of
Bell Industries, Inc. ("EDG") and Richey Electronics, Inc. ("Richey"). The
company also recorded an additional $38.2 million, as adjusted, as cost in
excess of net assets of companies acquired. Of the total amounts recorded,
$41.7 million represented costs associated with closing facilities and severance
payments, $13 million represented costs associated with outside resources
related to the conversion of systems, professional fees principally related to
legal and accounting services, and certain other costs of the integration of
these businesses into Arrow, and $8.1 million represented the write-down of
property, plant and equipment and inventories to estimated fair value. Of the
expected $54.7 million to be spent in cash in connection with the acquisition
and integration of EDG and Richey, $29.4 million has been spent to date. The
remaining $25.3 million principally relates to vacated facilities leased with
various expiration dates through 2010. Excluding the integration charge, net
income and net income per share on a basic and diluted basis were $96.6 million,
$1.02, and $1.01, respectively, for the nine months ended September 30, 1999.
Note E -- Earnings Per Share
- ----------------------------
The following table sets forth the calculation of basic and diluted earnings
per share (in thousands except per share data):
For the Nine For the Three
Months Ended Months Ended
September 30, September 30,
------------------- --------------------
2000 1999 2000 1999
---- ---- ---- ----
Net income $248,972 $80,116 $101,943 $36,753
======== ======= ======== =======
Weighed average common
shares outstanding
for basic earnings
per share 96,392 95,097 97,403 95,176
Net effect of dilutive
stock options and
restricted stock
awards 2,016 904 2,619 1,141
------ ------ ------- ------
Weighted average common
shares outstanding
for diluted earnings
per share 98,408 96,001 100,022 96,317
====== ====== ======= ======
Basic earnings per share $2.58 $.84 $1.05 $.39
===== ==== ===== ====
Diluted earnings per share $2.53 $.83 $1.02 $.38
===== ==== ===== ====
Note F -- Comprehensive Income
- ------------------------------
Comprehensive income is defined as the aggregate change in shareholders'
equity excluding changes in ownership interests. For the company, the
components of comprehensive income are as follows (in thousands):
For the Nine For the Three
Months Ended Months Ended
September 30, September 30,
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
Net income $248,972 $80,116 $101,943 $36,753
Foreign currency
translation adjustments(a) (100,417) (38,951) (72,583) 9,576
-------- ------- -------- -------
Comprehensive income (b) $148,555 $41,165 $ 29,360 $46,329
======== ======= ======== =======
(a) The foreign currency translation adjustments have not been tax effected
as investments in foreign affiliates are deemed to be permanent.
(b) Excluding the integration charge of $24.6 million ($16.5 million after
taxes), comprehensive income was $57.6 million for the nine months ended
September 30, 1999.
Note G -- Segment and Geographic Information
- --------------------------------------------
The company is engaged in the distribution of electronic components to
original equipment manufacturers and computer products to value-added
resellers (VARs). The company has redefined its reportable segments to present
two distinct worldwide businesses that have different economic cycles,
structures, and competitors. Computer products include North American Computer
Products Operations together with UK Microtronica, Nordic Microtronica, ATD (in
Iberia), and Arrow Computer Products (in France). The prior year has been
restated for comparative purposes. Revenue and operating income, by segment,
are as follows (in thousands):
For the Nine For the Three
Months Ended Months Ended
September 30, September 30,
----------------------- -----------------------
2000 1999 2000 1999
---- ---- ---- ----
Revenue:
Electronic Components $7,027,775 $4,419,434 $2,601,334 $1,570,741
Computer Products 2,240,387 2,408,023 735,734 805,056
---------- ---------- ---------- ----------
Consolidated $9,268,162 $6,827,457 $3,337,068 $2,375,797
========== ========== ========== ==========
Operating income:
Electronic Components $ 622,934 $ 252,848 $ 251,749 $ 95,944
Computer Products 26,948 45,974 7,635 14,647
Corporate (112,529) (68,603) (46,041) (16,965)
---------- ---------- ---------- ----------
Consolidated $ 537,353 $ 230,219 $ 213,343 $ 93,626
========== ========== ========== ==========
Total assets, by segment, are as follows (in thousands):
September 30, December 31,
2000 1999
------------- ------------
Total assets:
Electronic Components $4,665,267 $3,317,253
Computer Products 841,358 991,785
Corporate 200,780 174,217
---------- ----------
Consolidated $5,707,405 $4,483,255
========== ==========
As a result of the company's philosophy of maximizing operating efficiencies
through the centralization of certain functions, selected fixed assets and
related depreciation, as well as borrowings and goodwill amortization are not
directly attributable to the individual operating segments.
Revenues, by geographic area, are as follows (in thousands):
For the Nine For the Three
Months Ended Months Ended
September 30, September 30,
---------------------- ----------------------
2000 1999 2000 1999
---- ---- ---- ----
Americas $5,665,263 $4,560,417 $2,026,455 $1,588,049
Europe 2,588,802 1,733,839 918,003 574,769
Asia/Pacific 1,014,097 533,201 392,610 212,979
---------- ---------- ---------- ----------
Consolidated $9,268,162 $6,827,457 $3,337,068 $2,375,797
========== ========== ========== ==========
Total assets, by geographic area, are as follows (in thousands):
September 30, December 31,
2000 1999
------------- ------------
Americas $3,067,198 $2,642,601
Europe 1,987,856 1,460,439
Asia/Pacific 652,351 380,215
---------- ----------
Consolidated $5,707,405 $4,483,255
========== ==========
Note H -- Subsequent Events
- ---------------------------
A special Meeting of Shareholders of the company was held on October 12, 2000
to vote on a proposed amendment to the Certificate of Incorporation to
increase the number of authorized shares of common stock from 120,000,000
shares to 160,000,000 shares. The company's Certificate of Incorporation was
duly amended on October 24, 2000.
On October 16, 2000, the company completed its previously announced
acquisition of Wyle Components and Wyle Systems (collectively "Wyle"), which
reported combined 1999 sales in North America of about $2 billion, for
approximately $945 million (including the assumption of debt).
On October 30, 2000, the company completed its previously announced
acquisition of the Merisel Open Computing Alliance ("MOCA"), which reported
1999 revenues of about $950 million, for approximately $173 million (including
the repayment of off-balance sheet financing).
In October the company sold $1.075 billion of notes to finance the
acquisitions of Wyle and MOCA, as well as for general corporate purposes. The
notes were sold in a Rule 144A offering in four tranches: $200 million of
Floating Rate Notes due 2001; $425 million of 8.20% Senior Notes due 2003;
$250 million of 8.70% Senior Notes due 2005; and $200 million of 9.15% Senior
Notes due 2010.
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations.
---------------------
Sales
- -----
Consolidated sales for the first nine months and third quarter of 2000
increased 36 percent and 41 percent, respectively, compared with the
year-earlier periods. The sales growth was driven by a 59 percent and 66
percent increase in sales of core components (net of foreign exchange rate
differences) for the first nine months and third quarter of 2000, respectively,
from the comparable year-earlier periods. Sales of computer products decreased
by 7 percent and 9 percent for the first nine months and third quarter of 2000,
respectively, when compared to the year-earlier periods, principally as a result
of market conditions for mid-range products and lower sales of low margin
microprocessors (a product segment not considered a part of the company's core
business).
Operating Income
- ----------------
The company recorded operating income of $537.4 million and $213.3 million
in the first nine months and third quarter of 2000, respectively, compared
with $230.2 million and $93.6 million, respectively, in the year-earlier
periods. Excluding the integration charge relating to EDG and Richey (see
Note D), operating income was $254.8 million for the nine months ended
September 30, 1999. The increase in operating income is due to increased
sales and improving gross profit margins in the core components businesses
around the world, as well as a change in mix resulting in greater weighting
of the core components business. In addition, operating expenses as a
percentage of sales decreased to 9.8 percent and 9.5 percent for the nine
months and third quarter ended September 30, 2000, respectively, from 10.1
percent and 9.7 percent, respectively, in the year-earlier periods.
Interest Expense
- ----------------
Interest expense of $107.2 million and $41.1 million in the first nine months
and third quarter of 2000, respectively, increased from $78.1 million and
$26.8 million, respectively, in the year-earlier periods. The increase is the
result of additional debt incurred to fund acquisitions, internet-related joint
ventures, and capital expenditures, and investments in working capital to
support accelerated sales growth.
Income Taxes
- ------------
The company recorded a provision for taxes at an effective rate of 41 percent
and 40 percent for the first nine months and third quarter of 2000,
respectively, compared with 44.4 percent and 43.3 percent in the comparable
year-earlier periods. Excluding the impact of the aforementioned integration
charge, the effective rate was 42.8 percent for the nine months ended
September 30, 1999. The company's effective tax rate is principally impacted
by, among other factors, the statutory tax rates in the countries in which it
operates, the related level of earnings generated by these operations, and the
nondeductibility of goodwill amortization.
Net Income
- ----------
The company recorded net income of $249 million and $101.9 million in the
first nine months and third quarter of 2000, respectively, compared with $80.1
million and $36.8 million, respectively, in the year-earlier periods. Excluding
the integration charge of $24.6 million ($16.5 million after taxes), net income
was $96.6 million for the first nine months of 1999. The increase in net income
is due to increased sales and improving gross profit margins, offset, in part,
by higher levels of interest.
Liquidity and Capital Resources
- -------------------------------
The company maintains a high level of current assets, primarily accounts
receivable and inventories. Consolidated current assets as a percentage of
total assets were approximately 75 percent at September 30, 2000 compared with
70 percent at September 30, 1999.
The net amount of cash used for the company's operating activities during the
first nine months of 2000 was $373 million, principally reflecting investments
in working capital, offset, in part, by earnings for the nine months. The net
amount of cash used for investing activities was $177.6 million, including $51
million for various capital expenditures, $92.7 million primarily for the
acquisitions of Rapac Electronics Ltd., Tekelec Europe, Jakob Hatteland AS, and
Dicopel S.A. de C.V., and $33.9 million for internet-related joint ventures. The
net amount of cash provided by financing was $554.6 million, primarily
reflecting borrowings under the company's commercial paper program, credit
facilities, and various short-term bank borrowings.
The net amount of cash provided by the company's operating activities during
the first nine months of 1999 was $66.6 million, principally reflecting
earnings, offset, in part, by investments in working capital. The net amount
of cash used for investing activities was $523.6 million, including $62.7
million for various capital expenditures and $460.9 million principally for
the acquisitions of Richey, EDG, the remaining 10% of Spoerle Electronic, the
remaining interest in Support Net, Inc., and the additional interest in
Scientific and Business Minicomputers, Inc., as well as certain internet-
related investments. The net amount of cash provided by financing activities
was $356.8 million, reflecting borrowings under the company's credit
facilities, offset, in part, by the repayment of Richey's 7.0% convertible
subordinated notes and debentures and distributions to partners.
Year 2000 Update
- ----------------
The company has experienced no significant failures or disruptions of its
internal systems either on or after January 1, 2000. Additionally, to date,
there have been no material Year 2000 related failures or disruptions with
respect to principal third-party business partners.
The company continues to monitor its systems and the capabilities of its
customers and suppliers to ensure that any previously unidentified Year 2000
issues that may arise are addressed promptly. In the unlikely event that any
issues should occur, the company anticipates that they will be resolved
through implementation of its comprehensive contingency planning efforts.
Information Relating to Forward-Looking Statements
- --------------------------------------------------
This report includes forward-looking statements that are subject to certain
risks and uncertainties which could cause actual results or facts to differ
materially from such statements for a variety of reasons, including, but not
limited to: industry conditions, changes in product supply, pricing, and
customer demand, competition, other vagaries in the electronic components and
commercial computer products markets, and changes in relationships with key
suppliers. Shareholders and other readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
on which they are made. The company undertakes no obligation to update
publicly or revise any of the forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
----------------------------------------------------------
The company is exposed to market risk from changes in foreign currency exchange
rates and interest rates.
The company, as a large international organization, faces exposure to adverse
movements in foreign currency exchange rates. These exposures may change over
time as business practices evolve and could have a material impact on the
company's financial results in the future. The company's primary exposure
relates to transactions in which the currency collected from customers is
different from the currency utilized to purchase the product sold in Europe,
the Asia/Pacific region, and Latin America. At the present time, the company
hedges only those currency exposures for which natural hedges do not exist.
Anticipated foreign currency cash flows and earnings and investments in
businesses in Europe, the Asia/Pacific region, and Latin America are not hedged
as in many instances there are natural offsetting positions. The translation of
the financial statements of the non-North American operations is impacted by
fluctuations in foreign currency exchange rates. Had the various average
foreign currency exchange rates remained the same during the first nine months
of 2000 as compared with December 31, 1999, 2000 sales and operating income
would have been $284 million and $27 million higher, respectively, than the
reported results.
The company's interest expense, in part, is sensitive to the general level of
interest rates in the Americas, Europe, and the Asia/Pacific region. The
company manages its exposure to interest rate risk through the proportion of
fixed rate and variable rate debt in its total debt portfolio. At September 30,
2000, the company had approximately 37 percent of its debt as fixed rate
borrowings and 63 percent of its debt subject to variable rates. Interest
expense would fluctuate by approximately $7 million if average interest rates
had changed by one percentage point during the first nine months of 2000. This
amount was determined by considering the impact of a hypothetical interest rate
on the company's borrowing cost. This analysis does not consider the effect of
the level of overall economic activity that could exist in such an environment.
Further, in the event of a change of such magnitude, management could likely
take actions to further mitigate any potential negative exposure to the change.
However, due to the uncertainty of the specific actions that would be taken and
their possible effects, the sensitivity analysis assumes no changes in the
company's financial structure.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
A Special Meeting of Shareholders of the company was held on October 12, 2000
to vote on a proposed amendment to the Certificate of Incorporation to
increase the number of authorized shares of common stock from 120,000,000
shares to 160,000,000 shares. The resolution amending the Certificate of
Incorporation was adopted by a vote of 85,380,575 shares in favor and 560,220
shares against with 91,238 shares abstaining and no broker non-votes.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
(22) Proxy Statement
(27) Financial Data Schedule
(b) Reports on Form 8-K.
During the quarter ended September 30, 2000 the following Current
Reports on Form 8-K were filed:
Date of Report Item Reported
----------------- --------------------------
September 1, 2000 Announcement of agreement
to acquire Wyle Components
and Wyle Systems.
September 18, 2000 Announcement of agreement
to acquire Merisel Open
Computing Alliance, Inc.
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.
ARROW ELECTRONICS, INC.
Date: November 13, 2000 By:/s/ Sam R. Leno
-------------------------
Sam R. Leno
Senior Vice President and
Chief Financial Officer
Date: November 13, 2000 By:/s/ Paul J. Reilly
----------------------
Paul J. Reilly
Vice President-Finance