Exhibit (13)
Management's Discussion and Analysis
General
On November 11, 1993, the Company's Board of Directors
approved a plan to divest operations of the Company's
Instrumentation Divisions, which serve primarily
chromatography and bioscience markets. These divisions,
which represented separate product lines with separate
customers, are accounted for as discontinued operations.
The Company expects to realize a net gain in 1994 upon
disposition of these divisions. The consolidated statement
of income in 1993 includes the results of discontinued
operations through November 11, 1993. The loss from
discontinued operations during this period includes the
impact of a $13.0 million restructuring charge recorded in
the first quarter of 1993. The following discussion on
results of operations applies to continuing operations.
Results of Operations
Consolidated net sales increased 4 percent in 1993 to $445
million. Sales growth rates, measured both in local
currencies and in U.S. dollars, are summarized in the table
below.
Sales growth rates Sales growth rates
measured in local currencies measured in U.S. dollars
1993 1992 1991 1993 1992 1991
Americas 6% (1%) 5% 6% (1%) 5%
Europe 4% 9% 5% (7%) 12% 4%
Asia/Pacific 10% (6%) 17% 18% (2%) 25%
Consolidated 6% 1% 8% 4% 3% 9%
Sales growth in the Americas in 1993 was 6 percent following
a decline of 1 percent in 1992, as sales to microelectronics
and biotechnology customers grew faster in 1993 than in
1992. Sales of the Company's laboratory water products were
also strong in 1993. In Europe, sales growth slowed to 4
percent following a strong 1992. Sales growth was impeded
by increased competition and a recessionary environment,
particularly in the laboratory and laboratory water markets.
Also, sales of large process systems were lower in 1993 than
in 1992. Sales in Japan grew 2 percent in 1993 following a
decline of 11 percent in 1992, as sales growth was adversely
impacted by a weak Japanese economy, particularly in the
microelectronics market. Sales growth in the balance of
Asia continued to be strong in 1993 led by strong sales to
the microelectronics customers in Korea. Foreign currency
exchange rates had a 2 percent net unfavorable impact on sales
growth in 1993, compared to a 2 percent net favorable impact in
1992 and a 1 percent net favorable impact in 1991. Though a weaker
dollar will benefit, and a stronger dollar will affect
adversely, future operations, the Company is unable to
predict future currency movements and to quantify their
effect on income. The Company sells a wide range of
products in many worldwide industrial markets. Price
changes and inflation have not significantly affected the
comparability of sales during the past three years.
Gross Margins were 56.5 percent in 1993, 54.2 percent in
1992, and 53.1 percent in 1991. Excluding the charges for
EPA settlements and the accrual of costs associated with
increasing the efficiency of our manufacturing operations in
1992, margins in 1992 were 56.3 percent. The slight
improvement in margins in 1993 was primarily due to
continued cost reduction activities in the Company's
manufacturing operations.
Selling, General and Administrative (S,G&A) expenses,
excluding the effects of foreign exchange grew 6 percent in
1993, 10 percent in 1992 and 11 percent in 1991. The
Company continued its focus on cost control in 1993 in light
of lower sales growth rates, as headcount levels were flat
in 1993 compared to 1992.
Research and Development Expenses (R&D) increased by 6
percent in 1993, following a marginal increase in 1992 and
an increase of 10 percent in 1991. The Company continued to
fund all major programs in 1993.
The Loss on Sale of Business reflects the loss taken on the
sale of the Company's environmental testing business
Resource Analysts Inc. (RAI) in 1992. The business was sold
because it no longer fit with the Company's long-term
strategic goals.
Net Interest Expense in 1993 was slightly higher than in
1992 and 1991, primarily due to higher net borrowings during
the first half of 1993 and slightly lower capitalized
interest on facilities projects. Overall, effective
interest rates in 1993 were slightly lower than in 1992 and
1991.
The Provision for Income Taxes was 22.5 percent of pre-tax
income in 1993, as compared to 22.5 percent in 1992 and 28.9
percent in 1991. The Company continues to benefit from low
tax rates in Puerto Rico and tax incentives attributable to
its U.S. export operations.
Page 33
Extraordinary Loss on Early Extinguishment of Debt reflects
the after tax cost recorded by the Company in the fourth
quarter to pre-pay it's $100 million note, which bore
interest at 9.2 percent and was callable in 1995. In March
1994, the Company issued a new $100 million note bearing
interest at 6.78 percent.
Earnings Per Share for the past three years include a number
of charges resulting from either specific transactions or
adoption of new accounting pronouncements. Earnings per
share from continuing operations adjusted for these events
are summarized as follows:
1993 1992 1991
Earnings from continuing
operations after accounting
changes and charges $1.62 $1.07 $1.27
Adoption of new Accounting
Pronouncements:
SFAS #106 Charges
- cumulative impact - .19 -
SFAS #109 Charges - - .11
Charges .13 .34 -
Earnings from continuing
operations before accounting
changes and charges $1.75 $1.60 $1.38
The charge in 1993 resulted from the early extinguishment of
the Company's long-term debt. The charges in 1992 resulted
from providing for the settlement of all known environmental
disputes with the Environmental Protection Agency (EPA), the
sale of the Company's environmental testing business (RAI),
and an additional charge taken to cover costs of increasing
the efficiencies of our manufacturing operations.
Legal Proceedings
The potential settlement amount of all environmental claims
against all participants at hazardous waste ("Superfund")
sites in which the Company has been named a potential
responsible party by the EPA is significant. It is
unlikely, however, that the Company's share of these costs
will have a material impact on the financial condition of
the Company. The Company is only one of many potentially
responsible parties named at each site. Additionally, in
certain instances the Company believes that its insurance
will cover a portion of the costs incurred. In 1992, the
EPA unexpectedly proposed settlements for several of these
sites. Based on these proposed settlements and all other
information available to management, the Company recorded a
provision of $5.8 million against cost of sales in 1992,
which, in management's best estimate, will be sufficient to
satisfy all known claims by the EPA. No individual
settlement to date has had a material impact on the
Company's financial condition.
Capital Resources and Liquidity
In 1993, the Company generated $34 million of cash from
continuing operations, compared to using $14 million in 1992
and $6 million in 1991. Cash provided by operations
continues to be the Company's primary source of funding
working capital requirements and capital expenditures. In
1993, cash flow from continuing operations, net of working
capital requirements, was $73 million compared to $47
million in 1992. The improved cash flow from continuing
operations in 1993 was primarily driven by a $15 million
decrease in spending on inventory in 1993.
Capital expenditures by continuing operations were
significantly lower in 1993 than in 1992 and 1991 as the
Company spent less on facility expansions. The Company
expects capital expenditures in 1994 to be comparable with
1993. At December 31, 1993 the Company had no significant
commitments for capital expenditures.
The Company has $41 million of cash and short-term
investments on hand at the end of 1993, which along with the
Company's strong financial position, provides a high degree
of flexibility in financing future requirements. In
addition, the Company prepaid it's $100 million note
callable in 1995 and secured a new $100 million note due in
2004.
Dividends
The quarterly dividend was increased in the second quarter
of 1993 from $0.13 to $0.14 per share. Dividends paid in
1993 were $15.1 million.
Page 34
Consolidated Statements of Income
Millipore Corporation
Year ended December 31
(In thousands except per share data) 1993 1992 1991
Net sales $ 445,366 $ 427,188 $415,075
Cost of sales 193,575 195,462 194,557
Gross profit 251,791 231,726 220,518
Selling, general and
administrative expenses 145,647 142,701 129,593
Research and development expenses 34,952 32,953 32,633
Operating income 71,192 56,072 58,292
Loss on sale of business - (2,415) -
Interest income 4,069 6,888 6,182
Interest expense (12,038) (14,692) (13,984)
Income from continuing
operations before income taxes 63,223 45,853 50,490
Provision for income taxes 14,225 10,317 14,570
Income from continuing operations before
extraordinary item and cumulative effect of
change in accounting principle 48,998 35,536 35,920
Earnings (loss) from discontinued
operations (10,851) 2,715 18,645
Income before extraordinary item and
cumulative effect of change in accounting
principle 38,147 38,251 54,565
Extraordinary item - loss on early
extinguishment of debt 3,544 - -
Cumulative effect of change in accounting
for postretirement benefits other
than pensions - 5,068 -
Net income $ 34,603 $ 33,183 $ 54,565
Income per share
Income from continuing operations$ 1.75 $ 1.26 $ 1.27
Net income per common share $ 1.24 $ 1.17 $ 1.93
Weighted average common
shares outstanding 27,951 28,242 28,294
The accompanying notes are an integral part of the consolidated financial
statements.
Page 35
Consolidated Balance Sheets
Millipore Corporation
December 31
(In thousands) 1993 1992
Assets
Current assets:
Cash $2,140 $1,915
Short-term investments 38,502 68,536
Accounts receivable (less allowance for
doubtful accounts of $3,063 in 1993
and $1,752 in 1992) 99,655 94,627
Inventories 65,187 72,279
Other current assets 12,790 13,915
Net current assets of discontinued operations 138,687 147,480
Total current assets 356,961 398,752
Property, plant and equipment, net 194,895 195,070
Intangible assets (less accumulated amortization
of $1,169 in 1993 and $911 in 1992) 2,769 1,670
Other assets 48,332 45,957
Net long-term assets of discontinued operations 99,647 106,194
Total assets $702,604 $747,643
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable and current portion of long-term debt $51,420 $112,064
Accounts payable and accrued expenses 57,505 51,465
Dividends payable 3,921 3,633
Accrued retirement plan contributions 2,547 2,706
Accrued and deferred income taxes payable 4,894 5,431
Total current liabilities 120,287 175,299
Long-term debt 102,047 103,240
Other liabilities 19,116 16,269
Commitments and contingent liabilities - -
Shareholders' equity:
Common stock, par value $1.00 per share, 80,000 shares
authorized. 28,344 shares issued
as of December 31, 1993 and 1992 28,344 28,344
Additional paid-in-capital 16,803 16,524
Retained earnings 434,988 416,563
Translation adjustments (7,624) 4,028
472,511 465,459
Less: Treasury stock at cost, 341 and 370 shares as of
December 31, 1993 and 1992, respectively 11,357 12,624
Total shareholders' equity 461,154 452,835
Total liabilities and shareholders' equity $702,604 $747,643
The accompanying notes are an integral part of the consolidated financial
statements.
Page 36
Consolidated Statements of Shareholders' Equity
Millipore Corporation
Year ended December 31, 1991, 1992 and 1993
(In thousands)
Additional Total
Common Stock Paid-in Retained Translation Treasury Stock Shareholders'
Shares Par Value Capital Earnings Adjustments Shares Cost Equity
Balance at
January 1, 1991 28,344 $28,344 $14,219 $360,954 $24,984 (107) $(1,493) $427,008
Net income 54,565 54,565
Cash dividends
declared,
$0.47 per share (13,098) (13,098)
Treasury stock
acquired (391) (15,938) (15,938)
Stock options
exercised (3,517) 384 13,444 9,927
Employees' stock
purchase plan
proceeds (330) 45 1,621 1,291
Incentive plan
awards 69 69 2,366 2,435
U.S. tax benefit
from stock plan
activity 1,524 1,524
Translation
adjustments (3,218) (3,218)
Balance at
December 31, 1991 28,344 $28,344 $15,743 $398,643 $21,766 0 $0 $464,496
Net income 33,183 33,183
Cash dividends
declared,
$0.51 per share (14,376) (14,376)
Treasury stock
acquired (484) (16,777) (16,777)
Stock options
exercised (889) 111 4,033 3,144
Employees' stock
purchase plan
proceeds 2 3 120 122
U.S. tax
benefit from
stock
plan activity 781 781
Translation
adjustments (17,738) (17,738)
Balance at
December 31, 1992 28,344 $28,344 $16,524 $416,563 $4,028 (370) $(12,624)$452,835
Net income 34,603 34,603
Cash dividends
declared,
$0.55 per share (15,396) (15,396)
Treasury stock
acquired (112) (3,427) (3,427)
Stock options
exercised (899) 104 3,468 2,569
Employees' stock
purchase plan
proceeds (32) 10 353 321
Incentive plan
awards 161 22 721 882
Stock Awards (12) 5 152 140
U.S. tax benefit
from stock plan
activity 279 279
Translation
adjustments (11,652) (11,652)
Balance at
December 31, 1993 28,344 $28,344 $16,803 $434,988 $(7,624) (341) $(11,357)$461,154
The accompanying notes are an integral part of the consolidated financial
statements.
Page 37
Consolidated Statements of Cash Flows
Millipore Corportion
Year ended December 31
(In thousands) 1993 1992 1991
Cash Flows From Operating Activities:
Net income $34,603 $33,183 $54,565
Adjustments to reconcile net income to
net cash provided by continuing operations
Net loss (income) from discontinued
operations 10,851 (2,715) (18,645)
Depreciation and amortization 23,775 23,507 20,905
Deferred income tax provision (1,745) 225 10,731
Extraordinary item-loss on
extinguishment of debt 3,544 - -
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable (5,440) 8,348 (10,939)
Decrease (increase) in inventories 6,398 (8,269) 2,250
Decrease (increase) in other current assets 763 1,276 (2,251)
(Increase) in other assets (1,981) (16,003) (5,181)
Increase (decrease) in accounts payable
and accrued expenses 3,740 (2,475) (5,608)
(Decrease) increase in accrued retirement plan
contributions (104) 600 (12)
(Decrease) increase in accrued
income taxes payable (1,002) (2,111) 3,474
Increase - Other 53 11,898 585
Net cash provided by continuing operations 73,455 47,464 49,874
Net cash provided by discontinued operations 8,708 4,691 9,842
Net cash provided by operating activities 82,163 52,155 59,716
Cash Flows From Investing Activities:
Additions to property, plant and equipment, net (24,469) (33,906) (40,660)
Net investing activities of
discontinued operations (9,357) (11,018) (7,668)
Net cash used for investing activities (33,826) (44,924) (48,328)
Cash Flows From Financing Activities:
Treasury stock acquired (3,427) (16,777) (15,938)
Issuance of treasury stock under stock plans 3,912 3,266 13,653
(Decrease) increase in short-term debt (59,887) 20,137 26,548
(Decrease) in long-term debt (1,222) (2,988) (1,320)
Dividends paid (15,108) (14,093) (12,814)
Net cash (used for) provided by financing
activities (75,732) (10,455) 10,129
Effect of foreign exchange rates on cash and
short-term investments (2,414) (2,765) (442)
Net (decrease) increase in cash and short-term
investments (29,809) (5,989) 21,075
Cash and short-term investments on January 1 70,451 76,440 55,365
Cash and short-term investments on
December 31 $ 40,642 $ 70,451 $ 76,440
The accompanying notes are an integral part of the consolidated financial
statements.
Page 38
Notes to Consolidated Financial Statements
(In thousands except per share data)
Note A - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly owned. All material
intercompany balances and transactions have been eliminated.
Translation of Foreign Currencies
For most of the Company's foreign subsidiaries, assets and liabilities are
translated at exchange rates prevailing on the balance sheet date, revenues
and expenses are translated at average exchange rates prevailing during the
period, and elements of shareholders' equity are translated at historical
rates. Any resulting translation gains and losses are reported separately in
shareholders' equity. For the Company's subsidiary in Brazil, where
inflation is very high, the translation is the same except that inventories,
cost of sales, property, plant and equipment, and depreciation are
translated at historical rates. Resulting translation gains and losses for
this subsidiary are included in income. Net losses from foreign currency
transactions and translations of $867 in 1993, $1,767 in 1992, and $715 in
1991 were included in selling, general and administrative expenses.
Short-term Investments
Short-term investments consist primarily of government securities and
certificates of deposit and are carried at cost plus accrued interest, which
approximates market value.
Inventories
The Company values all of its inventories at the lower of cost or market,
principally on a last-in, first-out (LIFO) basis. The remaining inventories
are valued on a first-in, first-out (FIFO) basis.
Property, Plant and Equipment
Property, plant and equipment is recorded at cost. Expenditures for
maintenance and repairs are charged to expense while the costs of
significant improvements are capitalized. Depreciation on assets acquired
before January 1, 1989 generally is provided using accelerated methods over
the estimated useful lives of the assets. Assets acquired after January 1,
1989 primarily are depreciated using straight-line methods. Upon retirement
or sale, the cost of assets disposed and the related accumulated
depreciation are eliminated and related gains or losses reflected in income.
Intangible Assets
Intangible assets consist primarily of licenses. Intangible assets are
amortized on a straight-line basis over appropriate periods not exceeding 10
years.
Income Taxes
In 1992, the Company adopted the provisions of SFAS #109 "Accounting for
Income Taxes." As discussed more fully in Note H, deferred income taxes
under SFAS #109 are determined on the liability method. The Company
provides deferred income taxes on the unremitted earnings of foreign and
Puerto Rican subsidiaries which are expected to be repatriated.
Treasury Stock
Treasury stock is recorded at its cost on the date acquired and is relieved
at its weighted average cost upon reissuance. The excess of the cost over
proceeds of treasury stock reissued is charged to retained earnings.
Net Income Per Common Share
Net income per common share is calculated by dividing the net income for the
period by the weighted average number of common shares outstanding for the
period.
Postretirement Benefits Other Than Pensions
In 1992, the Company adopted the provisions of SFAS #106 "Employers'
Accounting for Postretirement Benefits Other than Pensions." This new
standard, discussed more fully in Note L requires that the expected cost of
retiree health benefits be expensed during the years employees render
service rather than the Company's prior practice of recognizing these costs
on a cash basis.
Reclassifications
Certain reclassifications have been made to prior years' financial
statements to conform with the 1993 presentation.
Page 39
Note B - Discontinued Operations
On November 11, 1993, the Company's Board of Directors approved a plan to
divest operations of the Company's Instrumentation Divisions, which serve
primarily chromatography and bioscience markets. The operating results of
these businesses, which have been classified as discontinued operations in
the accompanying consolidated financial statements, are summarized as
follows:
1993 1992 1991
through
11/11/93
Net sales $279,303 $349,813 $346,314
Pre-tax income (loss) $(14,001) $5,632 $26,226
Provision (credit)
for income taxes (3,150) 1,267 7,581
Cumulative effect of change
in accounting for post-
retirement benefits - 1,650 -
Net income (loss) $ (10,851) $ 2,715 $ 18,645
Earnings (loss) per share $ (0.38) $ 0.10 $ 0.66
The operating results for 1993 are for the period ended November 11, 1993,
the date the divestiture plan was approved. In the first quarter of 1993,
the Company recorded a restructuring charge of $13.0 million to cover costs
associated with reorganizing and restructuring the Company's chromatography
division into more market-focused customer-oriented business units. The
restructuring charge covered the cost of severance and other personnel
related items resulting from the reorganization.
The operating results from November 11, 1993 to the date of divestiture will
be deferred until the divestiture is completed. The Company expects to
realize a net gain in 1994 upon the sale of these businesses.
Net current and long-term assets of discontinued operations consist primarily
of accounts receivable, inventory, property, plant and equipment,
intangibles, and accounts payable, and have been classified separately in the
accompanying consolidated balance sheets.
Note C - Inventories
Inventories at December 31 consisted of the following:
1993 1992
Raw materials $ 18,782 $ 17,778
Work in process 7,852 9,004
Finished goods 38,553 45,497
$ 65,187 $ 72,279
The value of inventories determined using the LIFO cost method was $47,097 or
72 percent of the total at December 31, 1993 and $50,793 or 70 percent of the
total at December 31, 1992. If these inventories had been valued using the
FIFO cost method, they would have been $48,847 at December 31, 1993 and
$53,244 at December 31, 1992.
Note D - Property, Plant and Equipment
Property, plant and equipment at December 31 consisted of the following:
1993 1992
Land $ 6,966 $ 6,939
Leasehold improvements 16,108 11,669
Buildings and improvements 108,054 104,041
Production and other equipment 206,207 183,179
Construction in progress 20,631 35,352
357,966 341,180
Less: accumulated depreciation and
amortization 163,071 146,110
$ 194,895 $ 195,070
Page 40
Note E - Notes Payable and Current Portion of Long-term Debt
Short-term borrowings and related lines of credit at December 31 are
summarized as follows:
1993 1992
Notes payable and current portion of
long-term debt:
Notes payable $ 50,802 $111,489
Current portion of long-term debt 618 575
$ 51,420 $112,064
Unused lines of credit $240,755 $192,347
Average amount outstanding at month-end
during the year $94,465 $132,696
Maximum month-end amount outstanding
during the year $129,332 $182,439
Weighted average interest rate during the year 4.3% 5.1%
Weighted average interest rate at year-end 4.5% 4.7%
Notes payable generally consist of renewable, uncollateralized borrowings
under lines of credit that are denominated in various currencies and bear
interest at prevailing rates.
Note F - Long-term Debt
Long-term debt at December 31 consisted of the following:
1993 1992
Notes payable with interest rates
of 9.2% due in 1998 $100,000 $100,000
Other notes payable with average interest of 5.9% in
1993 and 7.0% in 1992, due through 2005 2,665 3,815
102,665 103,815
Less: Current portion (618) (575)
Long-term debt $102,047 $103,240
In the fourth quarter of 1993, the Company entered into an agreement to
retire the $100,000 notes payable before their call date of March 30, 1995.
Accordingly, the Company recorded an extraordinary charge of $5,906 ($3,544
net of income taxes or $0.13 per share) in December, 1993 to reflect the cost
of extinguishing the notes. In March, 1994, the Company issued $100,000 of
6.78% notes due in 2004. Interest is payable semi-annually on these notes
beginning in September 1994.
Long-term debt, including current portion and after consideration of the
events discussed above, matures as follows:
Year ended December 31, 1994 $ 618
Year ended December 31, 1995 562
Year ended December 31, 1996 454
Year ended December 31, 1997 247
Year ended December 31, 1998 249
Years subsequent to December 31, 1998 100,535
Certain notes contain covenants relating to maintenance of current asset
levels, cash dividends and limitations on long-term debt. The Company is in
compliance with all such covenants.
The Company capitalized interest costs associated with the construction
of certain assets of $1,301 in 1993, $1,561 in 1992, and $1,645 in 1991.
Interest paid on debt during 1993, 1992, and 1991 amounted to $13,356,
$16,637, and $15,263, respectively.
The Company had partially hedged its foreign currency net asset exposure
by entering into a currency swap which was to mature in 1995. Under the
terms of the original swap, the Company exchanged $100,000 of dollar debt
service obligations for foreign obligations of 9,936,000 yen and 33,193 DM.
The Company's foreign currency obligations had an effective weighted average
interest rate of 6.02 percent in 1993. The effects of foreign currency
exchange rate fluctuations resulting from these swap agreements are included
in translation adjustments and in transaction gains/losses. Unrealized
losses on these swap agreements of $8,020 at December 31, 1993 and $92 at
December 31, 1992 are included in other assets in the consolidated balance
sheets.
In January, 1994, the Company closed out the yen denominated swap and
simultaneously exchanged $80,000 of dollar debt service obligation for a yen
denominated obligation of 8,760,000 yen, which bears interest at a rate of
4.49 percent. The swap matures in 2004.
Page 41
Note G - Foreign Exchange
In the fourth quarter of 1992, the Company entered into forward exchange
contracts to reduce the impact of foreign currency fluctuations on certain
transactions in 1993. A gain of $2.3 million was realized on these contracts
and was recorded in cost of sales in 1993. In the fourth quarter of 1993,
the Company has again entered into forward exchange contracts to reduce the
impact of foreign currency fluctuations on certain transactions. The gains
or losses on these contracts will be included in income when the operating
revenues and expenses related to the underlying transactions are recognized.
Contracts open at December 31, 1993, aggregating $85,000, have an unrealized
gain of $1,000. All open contracts have maturities which do not exceed
fifteen months.
Note H - Income Taxes
The Company has provided for income taxes on both continuing and
discontinued operations according to the provisions of SFAS #109 "Accounting
for Income Taxes" which the Company adopted in 1992. Data related to the
provisions for income taxes are summarized as follows:
1993 1992 1991
Domestic and foreign income before income taxes:
Domestic $16,690 $27,077 $51,530
Foreign 32,532 24,408 25,186
49,222 51,485 76,716
Less: (income) loss from discontinued
operations 14,001 (5,632) (26,226)
Income from continuing operations before
income taxes $63,223 $45,853 $50,490
Domestic and foreign provisions for income taxes:
Domestic $(2,781) $ 2,842 $ 8,589
Foreign 13,356 8,242 13,063
State 500 500 499
11,075 11,584 22,151
Less: portion applied to discontinued
operations 3,150 (1,267) (7,581)
$14,225 $10,317 $14,570
Current and deferred components of the provision
for income taxes:
Current $12,820 $11,359 $11,420
Deferred (1,745) 225 10,731
$11,075 $11,584 $22,151
Components of the deferred income tax provisions:
Intercompany and inventory-related
transactions $(2,241) $2,542 $545
Unremitted foreign earnings - - (802)
Depreciation (1,232) (111) 530
Costs related to business dispositions- - 438
Restructuring charge - 576 8,813
Provision for postretirement benefits other
than pensions (419) (555) -
Other 2,147 (2,227) 1,207
$(1,745) $ 225 $10,731
Summary of the differences between the Company's consolidated effective
tax rate and the United States statutory federal income tax rate:
U.S. statutory income tax rate 35.0% 34.0% 34.0%
Puerto Rico tax rate benefits (11.9) (9.8) (8.0)
Excess foreign over U.S. tax rate 5.6 - 6.4
State income tax, net of federal income tax
benefit .7 .6 .4
Foreign Sales Corporation income
not taxed (4.6) (4.1) (2.8)
U.S. tax credits - - (1.8)
Other (2.3) 1.8 .7
Effective tax rate applicable
to operations 22.5% 22.5% 28.9%
Page 42
Net deferred tax assets result from temporary differences in the recognition
of revenues and expenses for financial statement and income tax purposes.
Components of the net deferred tax assets are as follows:
1993 1992
Intercompany and inventory $18,698 $16,457
related transactions
Postretirement benefits other
than pensions 4,435 4,016
Tax credits (including foreign tax
credits on unremitted earnings) 21,800 17,640
U.S. net operating loss
carryforwards 14,001 12,000
Other, net 1,248 (4,183)
60,182 45,930
Valuation allowance (19,390) (15,526)
Net deferred tax asset $ 40,792 $ 30,404
Net deferred tax assets are classified in other assets in the balance sheet.
The valuation allowance is provided primarily against foreign tax credits
which can be utilized against future taxable income in the United States
after the utilization of other carryforwards and expire no later than 1996.
The reduction in tax expense attributable to tax exemptions on the Company's
operations in Puerto Rico was $5,843 in 1993, $5,035 in 1992, and $6,275 in
1991 or $.21, $.18, and $.22 per share, respectively. Tax exemptions
relating to these operations are effective through 2004. Income taxes paid
during 1993, 1992, and 1991 were $15,185, $18,634 ,and $10,753 respectively.
Note I - Legal Proceedings
The Company has been notified in a number of instances that the
United States Environmental Protection Agency (EPA) has determined
that a release or a substantial threat of a release of hazardous
substances (Release) as defined in Section 101 of the Comprehensive
Environmental Response Compensation and Liability Act of 1980 as
amended by the Superfund Amendments and Reauthorization Act of 1986
(the so-called "Superfund" law) has occurred at certain sites to
which chemical wastes generated by the manufacturing operations of
the Company have been sent. These notifications typically also
allege that the Company may be a responsible party under the law
with respect to any remedial action needed to control or prevent any
such Release. Under the law the EPA may undertake remedial action
and responsible parties may be liable, without regard to fault or
negligence, for all costs incurred. In several of these instances
the EPA has issued a proposal for remedial action it considers
necessary to protect the environment. In each instance the Company
was only one of a large number of corporations and entities which
received such notification, and anticipates that any ultimate
liability for remedial costs will be shared by others. In 1992,
the EPA unexpectedly proposed settlements for several of these
sites. Based on those proposed settlements and all other
information available to management, the Company recorded a
provision of $5,800 against cost of sales which, in management's
best estimate will be sufficient to satisfy all know claims by the
EPA. The Company has paid a total of $13,900 to date to satisfy
environmental claims. The aggregate of further potential
liabilities is not expected to have a material adverse effect on the
Company's financial condition.
Eastern Enterprises has filed a lawsuit against the Company
alleging misrepresentations made in connection with its 1989
purchase of the Company's Process Water Division. The Company
believes it has meritorious defenses against all claims. Although
the Company is unable to predict with certainty the outcome of this
matter, its ultimate disposition is not expected to have a material
adverse effect on the Company's financial condition.
Note J - Leases
Lease agreements cover sales offices, warehouse space, computers and
automobiles. These leases have expiration dates through 2026.
Certain land and building leases contain renewal options for periods
ranging from five to ten years and purchase options at fair market
value. Rental expense was $10,878 in 1993, $8,880 in 1992, and
$7,706 in 1991. At December 31, 1993 future minimum rents payable
under noncancelable leases with initial terms exceeding one year
were as follows:
1994 $10,615
1995 9,056
1996 6,851
1997 6,146
1998 5,142
1999 - 2026 48,617
Page 43
Note K - Stock Plans
Stock Option Plan
Under the Company's Combined Stock Option Plan, stock options to purchase
Millipore common stock may be granted to employees. The plan provides that
the option price per share may not be less than the fair market value of the
stock at the time the option is granted and that options must expire not
later than 10 years from the date of grant. Plan data are summarized as
follows:
1993 1992 1991
Option shares:
Outstanding at beginning of period 2,431 2,207 2,136
Issued during period 516 510 527
Exercised during period (100) (111) (384)
Canceled during period (127) (175) (72)
Outstanding at end of period 2,720 2,431 2,207
Exercisable at end of period 1,536 1,254 1,073
Shares available for granting of options
at end of period 879 270 604
Average price of outstanding options
at end of period $33.34 $32.70 $32.14
Average price of exercised options
during the period $24.51 $28.22 $25.95
Shares available include 1,000 shares authorized by the Board of Directors in
December, 1993 subject to shareholder approval at the Annual Meeting in
April, 1994.
Non-Employee Director Stock Option Plan
In 1990, a stock option plan for Non-Employee Directors was approved by the
Company's shareholders. Under this plan, stock options to purchase up to 100
shares of Millipore common stock may be granted to non-employee directors of
the Company. The plan provides that the option price per share may not be
less then the fair market value of the stock at the time the option is
granted. At December 31, 1993, 59 options have been issued and 54 are
outstanding.
Employees' Stock Purchase Plan
Under the Company's Employees' Stock Purchase Plan, all employees of the
Company and its subsidiaries who have 90 days continuous service prior to the
beginning of the plan year, May 1, may purchase shares of Millipore common
stock by payroll deduction. The purchase price per share during the plan year
is the lesser of the fair market value of the common stock at the time of
purchase or on May 1.
In 1993, 1992, and 1991 shares issued under the plan were 10, 3, and 45,
respectively. As of December 31, 1993, 117 shares of Millipore common stock
were available for sale to employees under the plan.
Incentive Plan for Senior Management
Under this plan, Millipore common stock is awarded to key members of senior
management at no cost to them. The stock cannot be sold, assigned,
transferred or pledged during a restriction period which is normally four
years. Shares are subject to forfeiture should employment terminate during
the restriction period.
The stock issued under the plan is recorded at its fair market value on the
award date; the related deferred compensation is amortized to selling,
general and administrative expenses over the restriction period. At the end
of 1993, 1992, and 1991, 133, 114, and 160 shares, respectively, were
outstanding under the plan. Plan expense was $833 in 1993, $924 in 1992, and
$1,159 in 1991. As of December 31, 1993, 78 shares of Millipore common stock
were available for future awards under this plan.
Note L - Employee Retirement Plans
Participation and Savings Plan
The Millipore Corporation Employees' Participation and Savings Plan
(Participation and Savings Plan), maintained for the benefit of all full-time
U.S. employees, combines both a defined contribution plan (Participation
Plan) and an employee savings plan (Savings Plan). Contributions to the
Participation Plan are allocated among the U.S. employees of the Company who
have completed at least two years of continuous service on the basis of the
compensation they received during the year for which the contribution is
made. The Savings Plan allows employees with one year of continuous service
to make certain tax-deferred voluntary contributions which the company
matches with a 25 percent contribution (50 percent contribution for employees
with 10 years of service). Total expense under the Participation and Savings
Plan was $8,679 in 1993, $8,520 in 1992, and $8,143 in 1991.
Retirement Plan
The Company's Retirement Plan for Employees of Millipore Corporation
(Retirement Plan) is a defined benefit plan for all U.S. employees which
provides benefits to the extent that assets of the Participation Plan,
Page 44
described above, do not provide guaranteed retirement income levels.
Guaranteed retirement income levels are determined based on years of service
and salary level as integrated with Social Security benefits. Employees are
eligible under the Retirement Plan after one year of continuous service and
are vested after 5 years of service. For accounting purposes, the Company
uses the projected unit credit method of actuarial valuation. The actuarial
method for funding purposes is the entry age normal method. The Company
contributes annually to the Retirement Plan, subject to Internal Revenue
Service and ERISA funding limitations. No contributions were required for
1993 and 1992.
The following table summarizes the funded status of the plan and amounts
reflected in the Company's consolidated balance sheets at December 31. The
projected benefit obligation was calculated using discount and investment
return rates of 7.5 percent in 1993 and 8 percent in 1992, and a salary
progression rate of 6 percent in both years. Plan assets are invested
primarily in common stock, mutual funds and money market funds.
1993 1992
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including
vested benefits of $2,804 on December 31, 1993 and
$1,813 on December 31, 1992 $ 2,983 $ 1,919
Projected benefit obligation for service
rendered to date $(5,003) $(3,434)
Plan assets at fair value 5,663 5,225
Plan assets in excess of projected
benefit obligation 660 1,791
Unrecognized net actuarial loss 3,069 1,653
Unrecognized prior service cost 413 448
Unrecognized net asset being amortized
over 16.7 years (747) (831)
Prepaid pension cost included in
financial statements $ 3,395 $ 3,061
Net pension income includes the following components
Service cost $ 393 $ 323
Interest cost (358) (260)
Return on plan assets 430 393
Amortization and deferral (131) (46)
Net pension income $ 334 $ 410
Postretirement Benefits Other Than Pensions
The Company sponsors several unfunded defined benefit postretirement plans
covering all U.S. employees. The plans provide medical and life insurance
benefits and are, depending on the plan, either contributory or non-contribu-
tory. As discussed in Note A, the Company adopted the provisions of SFAS #106
"Employers' Accounting for Postretirement Benefits Other Than Pensions" effect-
ive January 1, 1992. In adopting this standard, the Company recorded in the
first quarter of 1992, a one-time, non-cash charge against earnings from con-
tinuing operations of $7,678 before taxes and $5,068 after taxes, or $.19 per
share.
Net periodic postretirement benefit cost included the following components:
1993 1992
Service cost-benefits attributed to service
during the year $ 754 $ 834
Interest cost on accumulated postretirement
benefit obligation 787 800
Net amortization and deferral (15) -
Net periodic postretirement benefit cost $ 1,526 $ 1,634
Summary information on the Company's plans as of December 31 is as follows:
1993 1992
Accumulated postretirement benefit obligation:
Retirees and dependents $ (3,520) $ (3,702)
Fully eligible active plan participants (478) (368)
Other active plan participants (8,171) (7,743)
Accrued postretirement benefit cost (12,169) (11,813)
Unrecognized gain from past experience different
from that assumed and from changes in assumptions (361) -
Accrued postretirement benefit obligation $(12,530) $(11,813)
Page 45
The discount rate used in determining the accumulated postretirement benefit
obligation was 7.5 percent as of December 31, 1993 and 8 percent as of
December 31, 1992. The assumed health care cost trend rate used in measuring
the accumulated postretirement benefit obligation was 12 percent in 1993,
declining gradually to 6 percent through the year 2003 and remaining level
thereafter.
If the health care cost trend rate assumptions were increased by 1 percent,
the accumulated postretirement benefit obligation as of December 31, 1993
would be increased by $2,336 while the aggregate of the service and interest
cost components of net periodic postretirement benefit cost for 1993 would be
increased by $343.
Note M - Business Segment Information
Industry Segments
The Company operates in one industry segment. Using primarily membrane
technology, the Company develops, manufactures and markets products used for
analysis and purification.
Geographical Segments
The Company operates in the geographical segments indicated in the table
below. Sales are reflected in the segment from which the sales are made. The
Americas segment includes North and South America. The European region
includes Western and Central Europe, Russia, the Middle East and Africa. The
Asia/Pacific region includes Japan, Korea, Taiwan, Hong Kong, China, South-
east Asia and Australia. Transfer sales between geographical areas are
generally made at a discount from list price. Operating profits for each
geographical segment exclude general corporate expenses. Identifiable assets
consist of those assets utilized within each respective geographic segment
and exclude cash and short-term investments, which are classified as
corporate assets.
Americas Europe Pacific Eliminations Total
1993
Sales:
Unaffiliated
customers $168,800 $145,485 $128,840 $443,125
Unaffiliated export:
Pacific customers 977 977
European customers 1,264 1,264
Total unaffiliated 171,041 145,485 128,840 445,366
Transfer between areas 85,438 24,513 6,162 (116,113) -
Total sales $256,479 $169,998 $135,002 $(116,113) $445,366
Operating profits $ 23,180 $ 36,902 $ 27,731 $ 87,813
General corporate expenses (16,621)
Interest expense, net (7,969)
Income from continuing
operations before income taxes $ 63,223
Identifiable assets $280,941 $138,326 $127,302 $(122,941) $423,628
Corporate assets 40,642
Net current assets of
discontinued operations 138,687
Net long term assets of
discontinued operations 99,647
Total assets $702,604
1992
Sales:
Unaffiliated
customers $159,458 $154,200 $108,923 $422,581
Unaffiliated export:
Pacific customers 908 908
European customers 3,699 3,699
Total unaffiliated 164,065 154,200 108,923 427,188
Transfer between areas 80,944 23,391 7,360 (111,695) -
Total sales $245,009 $177,591 $116,283 $(111,695) $427,188
Operating profits $ 23,715 $ 40,962 $ 7,186 $ 71,863
General corporate expenses (15,791)
Interest expense, net (7,804)
Page 46
Loss on sale of business(2,415) (2,415)
Income from continuing
operations before income taxes $ 45,853
Identifiable assets $268,819 $178,224 $102,035 $(125,560) $423,518
Corporate assets 70,451
Net current assets of
discontinued operations 147,480
Net long term assets of
discontinued operations 106,194
Total assets $747,643
1991
Sales:
Unaffiliated
customers $162,182 $135,140 $110,115 $407,437
Unaffiliated export:
Pacific customers 1,943 1,943
European customers 5,695 5,695
Total unaffiliated 169,820 135,140 110,115 415,075
Transfer between areas 76,293 18,901 5,787 (100,981) -
Total sales $246,113 $154,041 $115,902 $(100,981) $415,075
Operating profits $ 49,101 $ 16,619 $ 9,820 $ 75,540
General corporate expenses (17,248)
Interest expense, net (7,802)
Income from continuing
operations before income taxes $ 50,490
Identifiable assets $253,071 $214,509 $ 97,975 $(136,293) $429,262
Corporate assets 76,440
Net current assets of
discontinued operations 140,364
Net long term assets of
discontinued operations 99,593
Total assets $745,659
Report of Independent Accountants
To the Shareholders and Directors of Millipore Corporation:
We have audited the accompanying consolidated balance sheets of Millipore
Corporation as of December 31, 1993 and 1992, and the related consolidated
statements of income, shareholders' equity, and cash flows for each of the
three years in the period ended December 31, 1993. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Millipore
Corporation at December 31, 1993 and 1992, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1993 in conformity with generally accepted accounting
principles.
As discussed in Notes A, H and L to the consolidated financial statements,
the Company changed its method of accounting for postretirement benefits
other than pensions and its accounting for income taxes in 1992.
Boston, Massachusetts Coopers & Lybrand
January 24, 1994, except as to the
information presented in Note F, for which the date
is March 3, 1994
Page 47
Eleven-year Summary of Operations
Millipore Corporation
(In thousands except per share)
1993 1992 1991 1990 1989 1988
Net sales $445,366 $427,188 $415,075 $380,983 $365,825 $347,267
Cost of sales 193,575 195,462 194,557 170,049 165,979 161,613
Gross profit 251,791 231,726 220,518 210,934 199,846 185,654
Selling, general and
administrative
expenses 145,647 142,701 129,593 117,214 115,951 116,636
Research and devel-
opment expenses 34,952 32,953 32,633 29,538 28,756 22,336
Restructuring charge - - - 17,103 - -
Operating income 71,192 56,072 58,292 47,079 55,139 46,682
Other income/loss, net - (2,415) - - 3,149 -
Interest income 4,069 6,888 6,182 6,723 3,914 3,450
Interest expense (12,038) (14,692) (13,984) (10,418) (8,543) (6,543)
Income from continuing
operations before
income taxes 63,223 45,853 50,490 43,384 53,659 43,589
Provision for income
taxes excluding non-
recurring tax benefit 14,225 10,317 14,570 13,629 11,619 10,955
Nonrecurring benefit - - - - - -
Income from continuing
operations 48,998 35,536 35,920 29,755 42,040 32,634
Earnings (loss) from
discontinued
operations (10,851) 2,715 18,645 (6,678) 10,462 22,751
Income before
extraordinary item
and cumulative effect
of change in
accounting principle 38,147 38,251 54,565 23,077 52,502 55,385
Extraordinary item-loss
on early extinguishment
of debt 3,544 - - - - -
Cumulative effect of
change in accounting for
postretirement benefits - 5,068 - - - -
Net income $34,603 $33,183 $54,565 $23,077 $52,502 $55,385
Net income per common share:
Income from continuing
operations $1.75 $1.26 $1.27 $1.05 $1.48 $1.15
Net income per
common share 1.24 1.17 1.93 0.82 1.85 1.96
Cash dividends declared
per share 0.55 0.51 0.47 0.43 0.39 0.35
Average common shares
and equivalents 27,951 28,242 28,294 28,307 28,323 28,329
Financial Data
Working Capital $236,674 $223,453 $250,064 $227,219 $251,486 $251,825
Total assets 702,604 747,643 745,659 688,651 615,038 547,997
Long-term obligations 102,047 103,240 106,306 107,517 106,147 105,946
Shareholders' equity $461,154 $452,835 $464,496 $427,008 $403,827 $362,800
The Company adopted SFAS #109 "Accounting for Income Taxes" during 1992 and
restated tax provisions in 1991, 1990 and 1986.
1984 earnings per share include a $.15 per share non-recurring tax benefit
from the reversal of all deferred taxes provided on DISC income prior to 1984.
Page 48
Eleven-year Summary of Operations (continued)
(In thousands except per share) 1987 1986 1985 1984 1983
Net sales $298,728 $251,212 $202,411 $193,190 $171,730
Cost of sales 138,587 117,997 99,427 97,048 85,631
Gross profit 160,141 133,215 102,984 96,142 86,099
Selling, general and
administrative expenses 98,730 87,058 66,409 62,777 57,579
Research and development
expenses 19,742 16,756 15,132 15,407 14,033
Restructuring charge - - - - -
Operating income 41,669 29,401 21,443 17,958 14,487
Other income/loss, net - - - - -
Interest income 2,234 3,066 3,403 4,145 3,129
Interest expense (3,432) (3,762) (3,300) (3,136) (3,355)
Income from continuing
operations before
income taxes 40,471 28,705 21,546 18,967 14,261
Provision for income taxes
excluding nonrecurring
tax benefit 10,040 10,538 5,357 5,121 3,824
Nonrecurring benefit - - - (4,002) -
Income from continuing
operations 30,431 18,167 16,189 17,848 10,437
Earnings (loss) from
discontinued operations 17,993 14,797 15,541 12,645 10,227
Income before extraordinary
item and cumulative effect
of change in accounting
principle 48,424 32,964 31,730 30,493 20,664
Extraordinary item-loss on
early extinguishment of debt - - - - -
Cumulative effect of change in accounting
for postretirement benefits - - - - -
Net income $48,424 $32,964 $31,730 $30,493 $20,664
Net income per common share:
Income from continuing
operations $1.07 $0.65 $0.59 $0.65 $0.38
Net income per common share 1.71 1.18 1.15 1.11 0.76
Cash dividends declared per share0.31 0.27 0.24 0.22 0.20
Average common shares and
equivalents 28,344 27,931 27,632 27,552 27,270
Financial Data
Working Capital $168,594 $165,421 $146,334 $121,075 $107,102
Total assets 452,387 369,414 326,903 283,517 259,700
Long-term obligations 6,378 12,094 13,446 10,630 10,545
Shareholders' equity $327,604 $283,547 $244,607 $214,289 $192,886
Page 49
Quarterly Results (Unaudited)
The Company's unaudited quarterly results are summarized below.
(In thousands, except per share data)
First Second Third Fourth
quarter quarter quarter quarter Year
1993
Net sales $105,189 $114,613 $111,854 $113,710 $445,366
Cost of sales 45,140 49,271 49,587 49,577 193,575
Gross profit 60,049 65,342 62,267 64,133 251,791
Selling, general and
administrative expenses 36,555 36,946 36,424 35,722 145,647
Research and development
expenses 8,587 9,010 8,652 8,703 34,952
Operating income 14,907 19,386 17,191 19,708 71,192
Interest (expense), net (2,217) (2,083) (1,968) (1,701) (7,969)
Income from continuing
operations before
income taxes 12,690 17,303 15,223 18,007 63,223
Provision for income taxes 2,855 3,893 3,425 4,052 14,225
Income from continuing
operations 9,835 13,410 11,798 13,955 48,998
Loss from discontinued
operations (9,083) (579) (1,189) - (10,851)
Extraordinary item - loss on early
extinguishment of debt - - - 3,544 3,544
Net income $ 752 $ 12,831 $ 10,609 $ 10,411 $ 34,603
Per share information
Income from continuing
operations $0.35 $0.48 $0.42 $0.50 $1.75
Net income $0.03 $0.46 $0.38 $0.37 $1.24
Weighted average common shares
outstanding 27,983 27,946 27,921 27,954 27,951
1992
Net sales $110,290 $108,300 $104,600 $103,998 $427,188
Cost of sales 49,268 52,829 45,534 47,831 195,462
Gross profit 61,022 55,471 59,066 56,167 231,726
Selling, general and
administrative expenses 34,837 35,868 35,608 36,388 142,701
Research and development
expenses 8,373 8,246 8,241 8,093 32,953
Operating income 17,812 11,357 15,217 11,686 56,072
Loss on sale of business - (2,415) - - (2,415)
Interest (expense), net (1,720) (1,785) (2,026) (2,273) (7,804)
Income from continuing
operations before
income taxes 16,092 7,157 13,191 9,413 45,853
Provision for income taxes 3,620 1,610 2,969 2,118 10,317
Income from continuing
operations 12,472 5,547 10,222 7,295 35,536
Earnings (loss) from discontinued
operations 1,149 (705) 2,735 (464) 2,715
Income before cum. effect of
change in accounting
principle 13,621 4,842 12,957 6,831 38,251
Cum. effect of change in
accounting for postretirement
benefits other than pensions 5,068 - - - 5,068
Net income $ 8,553 $ 4,842 $ 12,957 $ 6,831 $33,183
Per share information
Income from continuing
operations $0.44 $0.20 $0.36 $0.26 $1.26
Net income $0.30 $0.17 $0.46 $0.24 $1.17
Weighted average common shares
outstanding 28,360 28,292 28,207 28,108 28,242
Page 50
Investor Information
Registrar and Transfer Agent
The First National Bank of Boston
Shareholders Services Division
P.O. Box 644
Boston, Massachusetts 02102-0644
Annual Meeting
The Annual Meeting of Shareholders of Millipore Corporation will be held
at our Bedford Massachusetts Facility (80 Ashby Road) on Thursday, April
21, 1994 at 11 a.m.
Dividend Reinvestment
An automatic dividend reinvestment program is available to shareholders.
A descriptive brochure and authorization card are available on request.
Reports
In addition to our Annual Report, each shareholder will receive copies
of our three Quarterly Reports.
Form 10-K is filed annually with the Securities and Exchange Commission
and is now available on request from the Company. All inquiries should
be directed to:
John S. Glass
Director of Investor Relations
Millipore Corporation
80 Ashby Road
Bedford, Massachusetts 01730
(617) 275-9200
Common Stock
Millipore's Common Stock is traded on the New York Stock Exchange. Our
symbol is MIL. Stock price information is shown below.
Millipore Stock Prices
Stock price data from the New York Stock Exchange is based on high and
low sales prices. There were approximately 3,985 shareholders of record
as of December 31, 1993.
Range of Stock Prices Dividends Declared
Per Share
1993 1992 1993 1992
High Low High Low
First Quarter $35.50 $25.88 $42.00 $34.25 $0.13 $0.12
Second Quarter 32.38 26.50 39.50 33.00 0.14 0.13
Third Quarter 34.25 29.75 34.25 27.13 0.14 0.13
Fourth Quarter 40.25 32.75 38.00 30.00 0.14 0.13
Page 51