EXHIBIT 13
ANNUAL REPORT TO SHAREHOLDERS
PART I, ITEM 1 (page 27 of Annual Report)
9. Information Relating to Operations in Different Geographic Areas
The Corporation is engaged in the design, manufacture, and
marketing of electrical and electronic connectors, components and
systems. Operations are conducted in three principal areas:
Domestic, Europe and Other International locations. Transfers
between geographic areas are priced on a basis that yields an
appropriate rate of return based on assets employed, risk and other
factors.
Financial Information Relating to Operations in Different
Geographic Areas
In thousands 1993 1992 1991
Sales to Unaffiliated Customers:
Domestic $ 815,944 $773,464 $302,185
Europe 164,159 186,165 179,518
Other International 95,800 91,447 84,739
Total 1,075,903 $1,051,076 566,442
Sales or Transfers Between Geographic Areas:
Domestic 50,303 44,806 38,237
Europe 4,854 3,358 3,449
Other International 8,563 7,287 4,288
Total 63,720 55,451 45,974
Earnings Before Income Taxes:
Domestic 60,061 45,434 30,401
Europe 7,525 10,159 20,475
Other International 12,823 13,693 16,343
Adjustments and eliminations (1,965) 469 769
Consolidated 78,444 69,755 67,988
Identifiable Assets:
Domestic 815,817 784,944 273,543
Europe 113,722 130,129 144,041
Other International 88,181 78,495 69,548
Corporate assets (principally
cash and investments) 119,726 124,087 114,084
Adjustments and eliminations (4,264) (592) (1,544)
Total $1,133,182 $1,117,063 $599,672
PART II, ITEM 5 (pages 17 and 29 of Annual Report)
DIVIDENDS AND RELATED SECURITY HOLDER MATTERS
In 1993, the Corporation declared cash dividends of $2.24 per share
or $42 million, representing 75 percent of earnings, compared to 82
percent in 1992. Dividends have increased 24 percent over the last five
years, from $1.80 per share in 1988 to $2.24 per share in 1993. Debt
covenants permit the Corporation to continue paying dividends at the
current rate, with increases allowed only if the dividend payout does
not exceed 50 percent of earnings. Thomas & Betts has paid dividends
for 60 consecutive years. The Corporation's common stock is traded on
the New York Stock Exchange. Thomas & Betts had 18,873,000 shares of
common stock outstanding at January 2, 1994, held by 4,294 shareholders
of record.
QUARTERLY REVIEW
Dollars in thousands
(except per share data) 1993 1992 (1) 1991 1990 1989 1988
First Quarter
Net sales $267,124 $259,503 $151,099 $153,143 $137,387 $127,038
Gross profit 90,860 86,885 61,316 65,315 60,498 59,796
Earnings before income taxes 18,886 (3) 180 (4) 20,716 22,628 22,774 22,735
Income taxes 5,666 48 6,422 7,128 7,334 7,835
Net earnings 14,848 (3) 132 (4) 14,294 15,500 15,440 14,900
Earnings per share (2) .79 (3) .01 (4) .84 .91 .91 .88
Cash dividends declared per share .56 .56 .53 .50 .46 .42
Market price range 71 3/8-63 65 1/4-55 1/4 56 1/2-45 57 3/8-47 3/4 53 1/4-46 57 1/2 - 47
Second Quarter
Net sales $264,756 $264,673 $140,600 $151,666 $136,175 $131,637
Gross profit 89,407 90,453 56,393 63,706 59,915 62,207
Earnings before income taxes 17,479 20,444 17,381 21,907 20,374 24,149
Income taxes 5,244 5,418 5,106 6,901 6,260 8,069
Net earnings 12,235 15,026 12,275 15,006 14,114 16,080
Earnings per share (2) .65 .80 .72 .88 .83 .95
Cash dividends declared per share .56 .56 .56 .53 .50 .46
Market price range 72-62 62 1/4-54 3/4 60 7/8-52 1/2 61 1/2-52 54 1/4-46 60 3/4-51 1/4
Third Quarter
Net sales $268,474 $266,388 $135,641 $148,576 $131,318 $126,102
Gross profit 90,411 95,472 53,385 62,034 56,971 57,371
Earnings before income taxes 18,858 23,103 15,071 11,179 (5) 17,958 20,775
Income taxes 5,657 6,261 4,371 6,083 5,874 6,909
Net earnings 13,201 16,842 10,700 5,096 (5) 12,084 13,866
Earnings per share (2) .70 .90 .63 .30 (5) .71 .82
Cash dividends declared per share .56 .56 .56 .53 .50 .46
Market price range 64 7/8-59 5/8 69-59 1/2 55 3/4-50 3/8 56-40 3/4 55 3/4-48 3/4 56 1/2-48 7/8
Fourth Quarter
Net sales $275,549 $260,512 $139,102 $145,646 $139,203 $129,857
Gross profit 95,136 95,125 53,139 59,016 58,004 59,308
Earnings before income taxes 23,221 26,028 14,820 18,661 17,819 19,713
Income taxes 6,966 7,105 3,639 5,863 5,722 5,909
Net earnings 16,255 18,923 11,181 12,798 12,097 13,804
Earnings per share (2) .86 1.01 .65 .75 .71 .81
Cash dividends declared per share .56 .56 .56 .53 .50 .46
Market price range 62 5/8-57 69-62 1/4 58 1/8-50 5/8 47 1/4-40 1/4 52-47 1/8 51-45 3/8
<FN>
(1) Includes the results of American Electric acquired January 2, 1992.
(2) Based on average shares outstanding in each quarter.
(3) Includes a one-time gain of $1,628 ($.09 per share) for the cumulative effect of change in accounting
for income taxes.
(4) Includes a pre-tax charge of $15,000 ($.59 per share) for restructured operations.
(5) Includes a pre-tax charge of $9,000 ($.43 per share) for consolidating manufacturing facilities and
reducing operating expenses.
/TABLE
PART II, ITEM 6 (pages 30-31 of Annual Report)
ELEVEN-YEAR SUMMARY OF SELECTED FINANCIAL DATA
Thomas & Betts Corporation
Dollars and shares in thousands
(except per share data) 1993 1992 1991 1990 1989 1988
Operational Data
Net sales $1,075,903 $1,051,076 $566,442 $599,031 $544,083 $514,634
Costs and expenses:
Cost of sales 710,089 683,141 342,209 348,960 308,695 275,952
Marketing, general and administrative 225,883 215,668 130,846 136,913 130,905 129,309
Research and development 22,564 20,969 14,961 18,543 18,350 17,531
Provision for restructured operations - 15,000 - 9,000 - -
958,536 934,778 488,016 513,416 457,950 422,792
Earnings from operations 117,367 116,298 78,426 85,615 86,133 91,842
Patent infringement recovery - - - - - -
Other income (expense)--net (38,923) (46,543) (10,438) (11,240) (7,208) (4,470)
Earnings before income taxes 78,444 69,755 67,988 74,375 78,925 87,372
Income taxes 23,533 18,832 19,538 25,975 25,190 28,722
Net earnings before cumulative effect
of change in accounting for
income taxes 54,911 50,923 48,450 48,400 53,735 58,650
Cumulative effect of change in
accounting for income taxes 1,628 - - - - -
Net earnings $ 56,539 $ 50,923 $ 48,450 48,400 53,735 58,650
Percent of sales 5.3% 4.8% 8.6% 8.1% 9.9% 11.4%
Return on average shareholders' equity 12.0% 12.3% 13.6% 14.1% 16.5% 19.4%
Financial Position (at year end)
Current assets $ 489,091 $ 463,463 $ 334,889 $ 337,136 $ 331,636 $ 294,675
Current liabilities $ 205,465 $ 198,659 $ 152,426 $ 167,103 $ 158,895 $ 124,335
Working capital $ 283,626 $ 264,804 $ 182,463 $ 170,033 $ 172,741 $ 170,340
Current ratio 2.4 to 1 2.3 to 1 2.2 to 1 2.0 to 1 2.1 to 1 2.4 to 1
Property, plant and equipment--net $ 296,004 $ 296,138 $ 213,400 $ 206,283 $ 188,747 $ 165,630
Long-term debt $ 393,502 $ 420,345 $ 68,270 $ 48,763 $ 57,579 $ 40,590
Shareholders' equity $ 480,832 $ 463,062 $ 363,394 $ 350,590 $ 335,534 $ 314,819
Total assets $1,133,182 $1,117,063 $ 599,672 $ 585,527 $ 564,309 $ 492,942
Common Stock Data
Cash dividends declared $ 42,220 $ 41,948 $ 37,708 $ 35,601 $ 33,330 $ 30,536
Percent of net earnings 75% 82% 78% 74% 62% 52%
Per share:
Earnings $ 3.00 (1) $ 2.72 $ 2.84 $ 2.84 $ 3.16 $ 3.46
Cash dividends declared $ 2.24 $ 2.24 $ 2.21 $ 2.09 $ 1.96 $ 1.80
Shareholders' equity 25.48 $ 24.68 $ 21.27 $ 20.62 $ 19.72 $ 18.57
Market price range 72-57 69-54 3/4 60 7/8-45 61 1/2-40 1/4 55 3/4-46 60 3/4-45 3/8
Other Data:
Capital expenditures $ 38,555 $ 47,434 $ 40,292 $ 47,874 $ 44,901 $ 53,899
Depreciation $ 46,026 $ 41,233 $ 30,933 $ 30,782 $ 25,558 $ 24,156
Employees 8,000 7,600 4,700 4,900 5,000 4,700
Average shares outstanding 18,837 18,717 17,053 17,030 16,998 16,953
1987 1986 1985 1984 1983
Operational Data:
Net sales $436,463 $385,801 $347,912 $352,232 $301,958
Costs and expenses:
Cost of sales 221,328 193,980 179,792 177,981 155,649
Marketing, general and administrative 121,700 107,539 96,459 91,570 83,135
Research and development 18,550 17,643 18,469 17,985 15,695
Provision for restructured operations 4,995 - - - -
366,573 319,162 294,720 287,536 254,479
Earnings from operations 69,890 66,639 53,192 64,696 47,479
Patent infringement recovery 5,389 - - - -
Other income (expense)--net 149 606 1,563 256 (374)
Earnings before income taxes 75,428 67,245 54,755 64,952 47,105
Income taxes 26,928 27,030 20,493 25,241 19,350
Net earnings before cumulative effect
of change in accounting for
income taxes 48,500 40,215 34,262 39,711 27,755
Cumulative effect of change in
accounting for income taxes - - - - -
Net earnings $ 48,500 $ 40,215 $ 34,262 $ 39,711 $ 27,755
Percent of sales 11.1% 10.4% 9.8% 11.3% 9.2%
Return on average shareholders' equity 17.8% 16.3% 15.0% 18.8% 14.1%
Financial position (at year end)
Current assets $259,808 $240,843 $209,659 $212,012 $184,674
Current liabilities $ 88,582 $ 80,721 $ 65,626 $ 67,607 $ 56,141
Working capital $171,226 $160,122 $144,033 $144,405 $128,533
Current ratio 2.9 to 1 3.0 to 1 3.2 to 1 3.1 to 1 3.3 to 1
Property, plant and equipment--net $141,936 $114,358 $100,905 $ 82,446 $ 80,527
Long-term debt $ 19,441 $ 16,281 $ 13,625 $ 12,679 $ 5,944
Shareholders' equity $288,577 $257,627 $234,969 $220,483 $202,531
Total assets $410,087 $363,453 $319,827 $303,326 $269,473
Common stock data
Cash dividends declared $ 26,739 $ 23,073 $ 20,665 $ 18,738 $ 16,801
Percent of net earnings 55% 57% 60% 47% 61%
Per share:
Earnings $ 2.88 $ 2.40 $ 2.05 $ 2.38 $ 1.66
Cash dividends declared $ 1.64 $ 1.48 $ 1.33 $ 1.21 $ 1.08
Shareholders' equity $ 17.07 $ 15.34 $ 14.08 $ 13.21 $ 12.11
Market price range 67 3/4-41 1/2 49 3/4-37 43 1/4-33 1/2 38-28 1/ 4 38 1/4-25 1/2
Other data:
Capital expenditures $ 43,071 $ 27,832 $ 32,656 $ 19,779 $ 13,482
Depreciation $ 21,561 $ 16,764 $ 15,138 $ 14,513 $ 12,184
Employees 4,200 4,100 3,900 3,900 3,700
Average shares outstanding 16,865 16,747 16,689 16,712 16,716
<FN>
Notes:
Includes results of American Electric acquired January 2, 1992.
Restated to include the results of Vitramon, Incorporated, acquired July 17, 1987 and accounted for as a
pooling of interests.
Adjusted for a 2-for-1 stock split paid July 9, 1984.
(1) Includes a one-time gain of $.09 per share for the cumulative effect of change in accounting for
income taxes.
/TABLE
PART II, ITEM 7 (pages 16 and 17 of Annual Report)
FINANCIAL REVIEW
1993 vs. 1992
Net sales for the year 1993 were $1,076 million, up 2 percent from 1992.
Net earnings of $56.5 million or $3.00 per share increased 11 percent
from 1992. Earnings in 1993 included a one-time gain of $1.6 million or
$0.09 per share for the adoption of Statement of Financial Accounting
Standard (SFAS) No. 109, "Accounting for Income Taxes." Earnings in 1992
included a pre-tax restructuring charge of $15 million, equal to $.59
per share, incurred primarily to combine the operations of American
Electric and the Electrical division of the Corporation into one
consolidated operation headquartered in Memphis, Tennessee. Without
these two items, 1993 net earnings would have been down 11 percent from
1992.
Economic conditions remained weak in North America for most of the
year and grew weaker in Europe and the Pacific. However, the
Corporation's overall sales volume was up about 5 percent from 1992,
with selling prices averaging 1 percent lower and the net effect of
exchange rate changes 2 percent unfavorable. Electrical division sales
in 1993 were up 4 percent over 1992 due primarily to growth in sales to
construction and utility markets. Electronics division sales, including
Pacific region results, were up 5 percent in 1993 compared to 1992 with
volume growth achieved despite weak economic conditions. Worldwide
sales of ceramic chip capacitors were up 6 percent in 1993, with sales
volume gains in the domestic automotive market offsetting lower pricing
and the effects of weaker currencies in Europe. European division sales
were down 14 percent in 1993 with lower sales volumes due to poor
economic conditions in Europe and the double digit unfavorable impact of
weaker currencies. In total, international sales represented 24 percent
of 1993 consolidated sales compared to 26 percent in 1992.
Gross profit margin in 1993 was 34 percent, down from 35 percent in
1992. The lower margin resulted primarily from unabsorbed overhead
related to weakness in European and certain North American markets,
competitive pricing pressure, and increased depreciation expense due to
adoption of SFAS No. 109. Marketing, general and administrative expense
represented 21.0 percent of sales in 1993 compared to 20.5 percent in
1992. Expense dollars increased 5 percent in 1993 over 1992. Research
and development expense represented 2.1 percent of sales in 1993
compared to 2.0 percent in 1992.
Other expense in 1993 decreased $7.6 million compared to 1992 due
to reduced interest expense, lower amortization of intangibles, gain on
the sale of idle property, and the absence of the one-time bank service
charges incurred in 1992 in connection with the acquisition of American
Electric. The Corporation's effective tax rate for 1993 was 30.0
percent, compared to 27.0 percent reported in 1992. The higher 1993
rate was due mainly to the alternative minimum tax credit carry forward
recovered in 1992. The Corporation's return on sales was 5.3 percent in
1993 (5.1 percent without the SFAS No. 109 gain) compared to 4.8 percent
in 1992 (5.9 percent without the restructuring charge). Return on
average shareholders' equity was 12.0 percent in 1993 (11.7 percent
without the SFAS No. 109 gain) compared to 12.3 percent in 1992 (14.8
percent excluding the restructuring charge).
1992 vs. 1991
Net sales in 1992 were $1,051 million, up 86 percent from 1991 and
included sales of American Electric, acquired in January of 1992. On a
pro forma basis (with 1991 results restated), sales were up 3 percent.
Net earnings in 1992 increased 5 percent to $50.9 million, while
earnings per share were $2.72 compared to $2.84 in 1991. Earnings in
1992 included a pre-tax restructuring charge of $15 million, equal to
$.59 per share, to combine the operations of American Electric and the
Corporation's former Electrical division and to consolidate certain
other unrelated facilities.
Pro forma sales volume was up about 3 percent from 1991, selling
prices averaged 1 percent lower and the impact of stronger foreign
currencies added 1 percent to sales. Electrical division sales in North
America increased 2 percent in 1992 over pro forma 1991 due primarily to
three small business acquisitions made in 1992. Sales growth in
industrial construction, export, and premises wiring markets were offset
by declines in the utility and telecommunications markets. Electronics
division sales, including North America and the Pacific region, were
down 2 percent from 1991. Net sales in Europe were down 1 percent in
1992, with lower sales volume partly offset by stronger currencies.
Worldwide sales of ceramic chip capacitors gained 18 percent over 1991.
With the addition of American Electric in 1992, international sales
represented 26 percent of consolidated sales compared to 47 percent in
1991.
Gross profit margin in 1992 was 35 percent compared to 40 percent
reported in 1991 and 35 percent on a pro forma basis. Margins in 1992
were pressured by competitive pricing and unabsorbed manufacturing costs
due to lower production in Europe and the Electronics division.
Marketing, general and administrative expense represented 20.5 percent
of sales in 1992, compared to 23.1 percent reported in 1991 and 21.8
percent on a pro forma basis. Research and development expense was 2.0
percent of sales compared to 2.6 percent in 1991 and 2.0 percent on a
pro forma basis.
Other expense from nonoperating items was up $36 million from 1991,
due to interest and fees on increased borrowings and the amortization of
additional intangibles principally from the acquisition of American
Electric. The Corporation's effective tax rate for 1992 was 27.0
percent, down from 28.7 percent reported in 1991. The lower 1992 rate
was due mainly to the benefit of carry forward credits relating to
alternative minimum taxes. The Corporation's return on sales was 4.8
percent in 1992 (5.9 percent without the restructuring charge) compared
to 8.6 percent in 1991. Return on average shareholders' equity was 12.3
percent in 1992 (14.8 percent excluding the restructuring charge)
compared to 13.6 percent in 1991.
LIQUIDITY AND CAPITAL RESOURCES
In January 1992, the Corporation acquired FL Industries Holdings, Inc.
("FLIH" or "American Electric") for consideration of $436.8 million
(excluding $7.3 million of debt assumed). The consideration consisted
of $89.6 million (1,564,434 shares) of newly issued common stock, $17.1
million in cash and $330.1 million to retire certain long-term debt of
FLIH. The Corporation entered into a revolving credit facility in
December 1991 to finance this acquisition. In January 1992, the
Corporation completed the sale of $125 million of 12-year debt
securities through a public offering and used the proceeds to reduce
borrowing under the credit facility. In May 1993, the credit facility
was renegotiated and reduced further to $280 million. The renegotiated
Credit Facility makes funds available for a term of four years from the
renegotiation date.
The Corporation continues to fund its capital and operating needs with
cash flows from operations augmented by borrowings under the credit
facility and other sources.
In 1992, the Corporation established a $175 million medium-term
note program providing for the issuance of notes with maturities ranging
from 9 months to 30 years. To date, the Corporation has not issued any
notes pursuant to this program.
Capital expenditures in 1993 totaled $39 million, compared to $47
million in 1992 and $40 million in 1991. These funds were used to
expand manufacturing capacity, reduce costs, produce new products and
increase efficiency at existing facilities. In 1993, the Corporation
began a major expansion of its ceramic chip capacitor manufacturing
facility in Roanoke, Virginia. In 1992, the Corporation expanded its
principal warehouse facility in Byhalia, Mississippi, and completed a
new manufacturing facility in Singapore. In 1991 the Corporation
completed expansion of its ceramic chip capacitor manufacturing facility
in Germany and constructed a new electrical/electronic manufacturing
facility in Japan.
The Corporation maintains a portfolio of marketable securities and
cash equivalents in Puerto Rico, which at year-end 1993 was valued at
$91.2 million. Although these investments represent currently available
funds, a portion is held to obtain favorable, partially tax-exempt
status on earnings generated in Puerto Rico.
In the third quarter of 1993, the Omnibus Budget Reconciliation Act
of 1993 was signed into law, increasing the corporate tax rate from 34
percent to 35 percent. While this change did not have a significant
effect on the Corporation's effective tax rate, changes made by the Act
to the method of determining future tax credits when doing business in
Puerto Rico will reduce available tax credits by 40 percent in 1994
rising to 60 percent over the succeeding 4 years.
With the acquisition of American Electric, the Corporation acquired
certain manufacturing facilities that are currently being remediated or
investigated for possible remediation under applicable environmental
laws and regulations. Reserves have been provided and arrangements made
with third parties to cover the costs of remediation. The Corporation
believes the costs of such remediation will not be material to the
Corporation's financial position.
In the first quarter of 1993, the Corporation adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes,"
and No. 106, "Employers' Accounting for Post-retirement Benefits Other
Than Pensions," the cost of which is being amortized over the lives of
the respective employees. The effects of adopting these Standards were
not significant.
In November 1992 and May 1993, the Financial Accounting Standards
Board issued Statements No. 112, "Employers Accounting for
Postemployment Benefits", and No. 115, "Accounting for Certain
Investments in Debt and Equity Securities". Both Statements are
effective for fiscal years beginning after December 15, 1993, and
neither is expected to have a significant effect on earnings.
PART II, ITEM 8 (pages 18 through 29 of Annual Report)
CONSOLIDATED BALANCE SHEET
Thomas & Betts Corporation
January 2, December 31,
1994 1992
In thousands
Assets
Current Assets
Cash and cash equivalents $ 72,509 $ 41,764
Marketable securities 31,543 56,568
Receivables, less allowance for
doubtful accounts and cash
discounts of $5,164 in 1993
and $5,103 in 1992 165,162 146,765
Inventories
Finished goods 97,795 97,759
Work in process 34,389 25,039
Raw materials 68,118 74,074
200,302 196,872
Deferred income taxes 13,884 15,238
Prepaid expenses 5,691 6,256
Total Current Assets 489,091 463,463
Property, Plant and Equipment
Land 13,274 19,544
Buildings 137,558 130,285
Machinery and equipment 420,443 387,731
571,275 537,560
Less accumulated depreciation 275,271 241,422
296,004 296,138
Intangible Assets-Net 311,059 314,298
Other Assets 37,028 43,164
Total Assets $1,133,182 $1,117,063
See Notes to Consolidated Financial Statements
January 2, December 31,
1994 1992
Liabilities and Shareholders' Equity
Current Liabilities
Short-term bank borrowings $ 20,539 $ 24,200
Current maturities of long-term debt 7,358 19,087
Accounts payable 81,571 65,290
Accrued liabilities 78,637 74,873
Income taxes 6,791 4,702
Dividends payable 10,569 10,507
Total Current Liabilities 205,465 198,659
Long-term liabilities 393,502 420,345
Other long-term liabilities 28,615 25,074
Deferred income taxes 24,768 9,923
Shareholders' Equity
Common stock 9,463 9,403
Additional paid-in capital 125,400 119,050
Retained earnings 348,597 334,278
Foreign currency translation adjustment 961 3,054
Cost of treasury stock (3,589) (2,723)
Total Shareholders' Equity 480,832 463,062
Total Liabilities and Shareholders' Equity $1,133,182 $1,117,063
CONSOLIDATED STATEMENT OF EARNINGS
Thomas & Betts Corporation
1993 1992 1991
In thousands (except per share data)
Net Sales $1,075,903 $1,051,076$ 566,442
Costs and Expenses
Cost of sales 710,089 683,141 342,209
Marketing, general and administrative 225,883 215,668 130,846
Research and development 22,564 20,969 14,961
Provision for restructured operations - 15,000 -
958,536 934,778 488,016
Earnings from operations 117,367 116,298 78,426
Other expense-net 38,923 46,543 10,438
Earnings before income taxes 78,444 69,755 67,988
Income taxes 23,533 18,832 19,538
Earnings before cumulative effect
of change in accounting for
income taxes 54,911 50,923 48,450
Cumulative effect of change in
accounting for income taxes 1,628 - -
Net earnings $ 56,539 $ 50,923$ 48,450
Share Data
Earnings before cumulative effect
of change in accounting for
income taxes $ 2.91 $ 2.72$ 2.84
Cumulative effect of change in
accounting for income taxes .09 - -
Earnings per share $ 3.00 $ 2.72$ 2.84
Cash dividends declared per share $ 2.24 $ 2.24 $ 2.21
Average shares outstanding 18,837 18,717 17,053
See Notes to Consolidated Financial Statements
/TABLE
CONSOLIDATED STATEMENT OF CASH FLOWS
Thomas & Betts Corporation
(In thousands) 1993 1992 1991
Cash Flows From Operating Activities
Net earnings $ 56,539 $ 50,923 $ 48,450
Adjustments:
Depreciation and amortization 57,906 54,731 35,087
Cumulative effect of change in accounting
for income tax (1,628) - -
Changes in assets and liabilities,
excluding acquisitions:
Receivables (20,297) 648 4,918
Inventories (6,131) 4,498 7,296
Accounts payable 16,732 7,403 (6,486)
Accrued liabilities 1,048 (7,676) (6,293)
Other 4,396 404 (10,218)
Net cash provided by operating activities 108,565 110,931 72,754
Cash Flows From Investing Activities
Purchases of property, plant and equipment (38,555) (47,434) (40,292)
Purchases of businesses - (357,793) (1) -
Proceeds from sale of property, plant and equipment10,519 28,915 (2) 1,307
Marketable securities acquired (22,486) (37,131) (13,537)
Proceeds from matured marketable securities 50,219 12,065 12,947
Other (1,280) (1,299) (228)
Net cash used in investing activities (1,583) (402,677) (39,803)
Cash Flows From Financing Activities
Increase (decrease) in borrowings with original
maturities less than 90 days 2,181 (5,046) (6,562)
Proceeds from long-term debt and other borrowings 27,447 455,928 90,157
Repayment of long-term debt and other borrowings (70,295) (140,213) (63,332)
Stock options exercised 4,082 3,232 1,969
Cash dividends paid (42,158) (41,007) (37,153)
Net cash (used in) provided by financing activities (78,743) 272,894 (14,921)
Effect of Exchange Rate Changes on Cash 2,506 893 865
Net increase (decrease) in cash and cash equivalents 30,745 (17,959) 18,895
Cash and cash equivalents - beginning of year 41,764 59,723 40,828
Cash and cash equivalents - end of year $ 72,509 $ 41,764 $59,723
<FN>
(1) Excludes $89.6 million, the value of common stock issued to purchase American Electric.
(2) Includes $22.7 million received for the sale and partial leaseback of the
Corporation's principal executive office facility.
See Notes to Consolidated Financial Statements
/TABLE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Thomas & Betts Corporation
Additional Cumulative
Common Stock Paid-In Retained Translation Treasury Stock
In thousands (except per share data) Shares Amount Capital Earnings Adjustment Shares Amount
Balance at December 31, 1990 17,091 $8,546 $24,936 $314,561 $6,749 (89) $(4,202)
Net earnings - - - 48,450 - - -
Dividends declared ($2.21 per share) - - - (37,708) - - -
Stock options and incentive awards 1 1 (738) - - 78 3,643
Translation adjustments, net of
income taxes of $435 - - - - (844) - -
Balance at December 31, 1991 17,092 8,547 24,198 325,303 5,905 (11) (559)
Net earnings - - - 50,923 - - -
Dividends declared ($2.24 per share) - - - (41,948) - - -
Stock options and incentive awards 150 74 6,597 - - (32) (2,164)
Business acquisitions 1,564 782 88,255 - - - -
Translation adjustments, net of
income taxes of $1,468 - - - - (2,851) - -
Balance at December 31, 1992 18,806 9,403 119,050 334,278 3,054 (43) (2,723)
Net earnings - - - 56,539 - - -
Dividends declared ($2.24 per share) - - - (42,220) - - -
Stock options and incentive awards 120 60 6,350 - - (10) (866)
Translation adjustments, net of
income taxes of $1,059 - - - - (2,093) - -
Balance at January 2, 1994 18,926 $9,463 $125,400 $348,597 $961 (53) $(3,589)
Preferred Stock: Authorized 500,000 shares without par value. To date none of these shares has been issued.
Common Stock: Authorized 40,000,000 shares, par value $.50 per share.
See Notes to Consolidated Financial Statements
/TABLE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the
Corporation and its domestic and foreign subsidiaries, all wholly owned.
All significant intercompany balances and transactions have been
eliminated in consolidation.
Fiscal Year
Beginning in 1993, the Corporation prospectively changed its financial
reporting year from a calendar year to a fiscal year consisting of 52
and 53 weeks ending on the Sunday closest to the end of the calendar
year. Results for 1993 are for the 52 weeks ended January 2, 1994.
Marketable Securities
Marketable securities are carried at cost. At January 2, 1994, the
market value of these securities exceeded their cost by approximately
$2.8 million.
Foreign Exchange Contracts
The Corporation enters into foreign exchange contracts to reduce its
exposure on certain foreign exchange transactions. Gains and losses on
these contracts are intended to offset losses and gains on the
transactions being hedged.
At January 2, 1994 and at December 31, 1992, the Corporation had
outstanding contracts to sell approximately $36 million of principally
European currencies for U.S. dollars and to buy the equivalent of $5.6
million and $2.5 million, respectively, of European currencies, all
maturing within 90 days. Additional contracts were held to sell $2.4
million and $4.4 million, respectively, of European currencies maturing
at various dates through 1995. The recorded value of these foreign
currency contracts approximated their fair value at January 2, 1994.
Inventories
Inventories are stated at lower of cost or market. Cost is determined
using the last-in, first-out (LIFO) method for most domestic
inventories, and the first-in, first-out (FIFO) method for other
inventories.
Inventories valued using the LIFO method represented approximately
60 percent of total inventories at January 2, 1994 and December 31,
1992. The LIFO values of inventories held at January 2, 1994
approximated their current values.
Effective January 1, 1992, the Corporation changed the method of
valuing certain of its domestic electrical inventories from the FIFO to
the LIFO method. The effect of this change on the results of operations
was not significant.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Expenditures for
maintenance and repair are charged to costs and expenses as incurred.
Significant renewals and betterments that extend the lives of assets are
capitalized. Depreciation is computed principally on the straight-line
method over the estimated useful lives of the assets which range
principally from 10 to 25 years for land improvements, 10 to 45 years
for buildings, and 3 to 15 years for machinery and equipment.
Intangible Assets
Intangible assets consist principally of the excess of cost over the
fair value of net assets acquired in business combinations accounted for
as purchases. These assets are being amortized on a straight-line basis
over periods of 5 to 40 years.
As of January 2, 1994 and December 31, 1992, accumulated
amortization of intangible assets was $29,336,000 and $27,852,000,
respectively.
Income Taxes
Effective January 1, 1993, the Corporation changed from the deferred
method of accounting for income taxes under APB Opinion No. 11, to the
provisions of Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes." Prior years' financial statements
have not been restated. SFAS No. 109 requires the asset and liability
method of accounting for income taxes. Under this method, the
Corporation provides deferred income taxes to record temporary
differences determined by applying enacted statutory tax rates
applicable to future years, to differences between the financial
statement carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are not provided on undistributed net earnings of foreign
subsidiaries, approximately $12,000,000 at January 2, 1994, to the
extent that those earnings are expected to be permanently reinvested in
the subsidiaries. It is estimated that taxes ultimately payable on the
distribution of these earnings would not be significant.
Earnings per Share
Earnings per share is computed by dividing net earnings by the weighted
average shares of common stock outstanding during the year. The effect
on earnings per share resulting from the assumed exercise of outstanding
options is not material.
Cash Flow Information
Cash equivalents consist of investments with maturities at date of
purchase of less than 90 days that have a low risk of change in value
due to interest rate changes. Foreign currency cash flows have been
converted to U.S. dollars at appropriately weighted average exchange
rates or the exchange rates in effect at the time of the cash flows,
where determinable.
Net cash provided by operating activities for the years 1993, 1992
and 1991, respectively, reflect cash payments for interest of
$29,900,000, $27,575,000, and $13,038,000, respectively, and income
taxes of $14,024,000, $25,447,000, and $24,261,000, respectively.
2. Acquisitions
On January 2, 1992, the Corporation acquired FL Industries Holdings,
Inc. ("FLIH" or "American Electric") for consideration of $436.8
million. The consideration consisted of $89.6 million (1,564,434
shares) of newly issued common stock, $17.1 million in cash and $330.1
million to retire certain long-term debt of FLIH. The acquisition has
been accounted for using the purchase method of accounting and therefore
the accompanying financial statements include the accounts of FLIH since
the date of acquisition.
If the acquisition had occurred on January 1, 1991, management
estimates that on an unaudited pro forma basis, net sales, net earnings
and earnings per share would have been $1,023 million, $28 million and
$1.51, respectively, for the year ended December 31, 1991.
Other acquisitions accounted for as purchase transactions in 1993
and 1992 totaled $3 million and $13 million, respectively.
3. Income Taxes
Effective January 1, 1993, the Corporation adopted the provisions of
SFAS No. 109 "Accounting for Income Taxes." Prior years were not
restated. The cumulative effect of this change was a credit to earnings
of $1,628,000.
The components of earnings before income taxes are as follows:
In thousands 1993 1992 1991
Domestic $63,176 $52,380 $35,793
Foreign 15,268 17,375 32,195
Total $78,444 $69,755 $67,988
The components of income tax expense are as follows:
In thousands 1993 1992 1991
Current
Federal $8,722 $10,560 $ 7,744
Foreign 6,915 8,271 12,052
State and local 2,500 1,200 600
Total current 18,137 20,031 20,396
Deferred
Federal 5,612 (1,444) (845)
Foreign (216) 245 (13)
Total deferred 5,396 (1,199) (858)
$23,533 $18,832 $19,538
The reconciliation between the Federal statutory tax rate and the
Corporation's effective tax rate is as follows:
1993 1992 1991
Federal statutory tax rate 35.0% 34.0% 34.0%
Increase (reduction)
resulting from:
State tax--net of Federal
tax benefit 2.1 1.1 .6
Partially tax-exempt
income (14.1) (13.9) (10.5)
Goodwill and other
deductions 4.7 5.6 .4
Losses providing no current
tax benefit - 3.3 .9
Taxes in excess of the U.S.
tax rate on foreign earnings .7 .5 1.3
Alternative Minimum Tax - (3.8) 1.7
Change in valuation allowance .9 - -
Other .7 .2 .3
Effective tax rate 30.0% 27.0% 28.7%
Under SFAS No. 109, as a result of legislation enacted in 1993
increasing the Corporate tax rate from 34% to 35%, the Corporation
was required to increase its U.S. deferred tax assets and
liabilities. The net effect of this change was not material.
The components of the Corporation's net deferred tax liability at
January 2, 1994 were:
In thousands
Deferred tax assets:
Accrued liabilities and reserves $ 19,239
Accrued employee benefits 8,241
Foreign tax credits and loss carry forwards 10,602
Other 4,130
Valuation allowance (10,602)
Net deferred tax assets 31,610
Deferred tax liabilities:
Property, plant and equipment (32,020)
Other (10,474)
Total deferred tax liabilities (42,494)
Net deferred tax liability $10,884
Under SFAS No. 109, the value of certain assets and liabilities
acquired in the January 2, 1992 acquisition of American Electric
were adjusted to reflect gross fair values rather than the net of
tax values previously recorded. This revaluation will increase
depreciation expense by $2.8 million each year and decrease tax
expense by an offsetting amount over the lives of the assets.
The net change in the valuation allowance for deferred tax
assets was an increase of $915,000 in 1993. The change relates to
loss carry forwards recorded and recovered in 1993. Income taxes
currently payable for 1993 were reduced by $876,000 through
utilization of loss carry forwards. Of the $10,602,000 of foreign
tax credits and carry forwards available, $263,000 will expire in
1997.
4. Long-Term Debt
The Corporation's long-term debt at January 2, 1994 and December
31, 1992 is as follows:
January 2, December 31,
In thousands 1994 1992
Revolving credit facility with
a weighted average interest
rate of 3.43% (1) $ 55,000 $150,000
Other borrowings with
a weighted average interest
rate of 3.65% (1) (2) 126,000 74,000
Notes payable:
5.10%, due February 23, 1996 20,000 -
8.76%, due April 1993 - 11,000
8.25%, due January 2004 124,230 124,154
International borrowings with
a weighted average interest
rate of 7.08% at January 2,
1994, due through 2005. 45,676 50,890
Industrial revenue bonds with a
weighted average interest rate
of 2.55%, due from 2001-2005 22,505 22,505
Other 7,449 6,883
400,860 439,432
Less current portion 7,358 19,087
$393,502 $420,345
(1) Several interest rate swaps and caps act to the benefit of the
Corporation if interest rates increase. The Corporation receives
interest on $25 million at the one-month LIBOR rate in exchange for
7.50% through March 1997; interest on $25 million at the three-
month LIBOR rate in exchange for 5.30% through June 1994; interest
on $25 million at the three-month LIBOR rate in exchange for 7.092%
through April 1997; interest on $25 million at the three-month
LIBOR rate in exchange for 3.985% through September 1995; and
interest on $25 million at the six-month LIBOR rate in exchange for
4.485% through December 1996.
(2) Committed credit available under the revolving credit facility
provides the ability to refinance this debt on a long-term basis.
Principal payments on long-term debt due in the five years
subsequent to January 2, 1994, are $7,358,000, $5,294,000, $39,283,000,
$185,008,000, and $3,891,000, respectively.
In May 1993, the Corporation renegotiated its revolving term credit
facility. The facility was voluntarily reduced in size from $300
million to $280 million. This revised facility makes funds available
for a term of four years from the renegotiation date. The Corporation
has the option, at the time of drawing funds under the facility, of
selecting an interest rate based on a number of benchmarks including
LIBOR, the certificate of deposit rate and the prime rate of Morgan
Guaranty Trust Company. This credit facility includes covenants, among
which are limitations on the amount of future indebtedness and the
maintenance of certain financial ratios. Dividends are permitted to
continue at the current rate and may be increased, provided the dividend
payout does not exceed 50 percent of earnings.
In January 1992, the Corporation completed the sale of $125 million
of 12-year debt securities through a public offering. The net proceeds
from this sale were used to reduce bank debt incurred to finance the
acquisition of FLIH.
Based on the latest quoted price prior to January 2, 1994, the
market value of the 12-year debt securities due 2004 was $12.1 million
over carrying value. The carrying value of all other long-term debt
approximated fair value. Based on current quotes at January 2, 1994,
the payment required to settle interest rate swap and cap agreements was
$4.2 million.
5. Stock Option and Incentive Plans
The Corporation has stock option plans that provide for the purchase of
the Corporation's common stock by key employees of the Corporation and
its subsidiaries. Under the 1980, 1985 and 1990 stock option plans, no
further options may be granted and remaining options outstanding are
exercisable at various dates until 1999. In 1993, the shareholders of
the Corporation approved the Management Stock Ownership Plan (1993
MSOP). This plan provides that for each calendar year up to 1-1/4% of
the issued and outstanding Common Stock of the Corporation shall be
available for issuance as grants or awards. This plan provides for
granting stock options at a price equal to the fair market value on the
date of grant, with a term not to exceed ten years.
Following is a summary of the option transactions for the years
1991, 1992 and 1993:
Average
Per Share
Shares Option Price
Balance at December 31, 1990 563,881 $47.26
Granted 140,250 56.38
Exercised (83,176) 36.64
Terminated (30,831) 54.54
Balance at December 31, 1991 590,124 50.54
Granted 147,300 59.94
Exercised (149,678) 43.23
Terminated (36,694) 57.44
Balance at December 31, 1992 551,052 54.58
Granted 151,625 69.55
Exercised (120,133) 51.81
Terminated (8,975) 66.41
Balance at January 2, 1994 573,569 58.94
Exercisable at
January 2, 1994 427,819 $55.32
At January 2, 1994, a total of 1,111,725 shares was reserved for
issuance under stock options already granted or available for future
grant.
The Corporation's 1988 Restricted Stock Incentive Plan provided for the
issuance of common stock as incentive compensation to key employees.
The awards are subject to certain restrictions, including one that
provides for full vesting if the recipient remains in the employ of the
Corporation three years after receipt of the award. The value of the
awards is deductible by the Corporation as compensation expense. Shares
plus cash payments for federal and state taxes awarded under this plan
were 19,077 shares plus $460,000 in 1993, 17,315 shares plus $354,000 in
1992, and 16,806 shares plus $262,000 in 1991.
The Corporation's 1988 Restricted Stock Incentive Plan expired on April
1, 1993 and was replaced with the 1993 MSOP. No restricted stock awards
were granted under the 1993 MSOP during the year.
The Corporation has a Restricted Stock Plan for Nonemployee Directors,
under which each director receives 100 restricted shares of common stock
annually for a full year of service. These shares remain restricted
during the director's term. Shares issued under this plan were 942
shares in 1993 and 1,000 shares in 1992.
6. Postretirement Benefits
The Corporation and its subsidiaries have several noncontributory
pension plans covering substantially all employees. These plans
generally provide pension benefits that are based on compensation levels
and years of service. The Corporation's funding policy for qualified
U.S. plans is to contribute amounts sufficient to maintain a benefit-
security ratio (fair value of plan assets over accumulated benefit
obligation) of at least 125 percent. The funding policy for non-U.S.
plans is to conform to government laws and regulations. Plan assets are
primarily invested in equity securities, fixed income securities, cash
equivalents and real estate.
Net periodic pension cost for 1993, 1992 and 1991 for the
Corporation's defined benefit pension plans included the following
components:
In thousands 1993 1992 1991
Service cost--benefits earned during
the period $5,317 $ 5,113 $ 3,446
Interest cost on projected benefit
obligation 9,627 9,242 6,284
Actual return on assets (10,470) (9,976) (14,249)
Net amortization and deferral (2,529) (2,493) 3,415
Net periodic pension cost (income) $1,945 $ 1,886 $(1,104)
Assumptions used in developing the net periodic pension cost
were:
U.S. Plans Non-U.S. Plans
1993 1992 1991 1993 1992 1991
Discount rate 8.0% 8.5% 9.0% 8.2% 8.7% 8.3%
Rate of increase in
compensation level 5.5% 6.0% 6.5% 6.0% 6.6% 6.3%
Expected long-term rate of
return on plan assets 8.5% 8.5% 8.5% 8.9% 9.3% 9.2%
Non-U.S. rates are weighted averages.
The following table sets forth the funded status of the Corporation's
defined benefit plans as of December 1, 1993 and 1992 and amounts
recognized in the Corporation's balance sheet:
January 2, December 31,
In thousands 1994 1992
Actuarial present value of projected
benefits based on employment service
to date and present pay levels:
Vested employees $119,800 $ 99,758
Non-vested employees 5,216 5,560
Accumulated benefit obligation 125,016 105,318
Additional amounts related to
projected pay increases 10,359 14,559
Projected benefit obligation 135,375 119,877
Plan assets at fair value 147,278 143,614
Plan assets in excess of projected
benefit obligation 11,903 23,737
Unrecognized transition assets (9,270) (10,165)
Unrecognized net gain (1,916) (13,200)
Unrecognized prior service cost 2,635 2,096
Prepaid pension cost (included in
other assets in the balance sheet)$ 3,352 $ 2,468
The above table includes plans with accumulated benefit obligations
exceeding plan assets by $3,258,000 at January 2, 1994 and $4,816,000 at
December 31, 1992.
The present value of projected benefits for U.S. plans for December
1, 1993 was determined using a discount rate of 7.5% and an assumed rate
of increase in compensation of 5.0%.
In 1993 the Corporation implemented a non-qualified supplemental
pension plan covering certain key executives, which provides for benefit
payments in addition to those subject to the limitations of income tax
regulations. The projected benefit obligation relating to this unfunded
plan was $7,695,000 at January 2, 1994. Pension expense for this plan
was $1,284,000 in 1993.
The Corporation also sponsors defined contribution 401(K) savings
plans for its U.S. employees where the Corporation's contributions are
based on a percentage of employee contributions. The cost of these
plans was $2,800,000 in 1993, $2,400,000 in 1992, and $1,700,000 in
1991.
Other pension costs, primarily for non-U.S. defined contribution
plans and plans of insignificant size, amounted to $900,000 in 1993,
$800,000 in 1992 and $1,100,000 in 1991.
Effective January 1, 1993, the Corporation adopted the provisions
of SFAS No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions." This Statement required changing from a cash to
an accrual basis in accounting for retiree health and life insurance
costs.
The Corporation provides certain health care and life insurance
benefits to retired employees and certain active employees who meet age
and length of service requirements. The Corporation is recognizing the
estimated current liability for these benefits over the lives of the
individuals covered. Adoption of this Standard did not have a
significant effect on earnings and cash flows when compared to the "pay-
as-you-go" method previously used. The Corporation is not funding this
liability.
The net periodic cost for postretirement health care and life
insurance benefits in 1993 includes the following components:
Net Periodic Cost (in thousands)
Service cost-benefits earned during the period 36
Interest cost on accumulated benefit 1,151
Amortization of transition obligation (over 13-17 years) 1,035
Net cost 2,222
The following table shows the Corporation's accumulated
postretirement benefit obligation in total and the amount recognized in
the balance sheet at January 2, 1994.
Accumulated Postretirement Benefit Obligation (in thousands)
Retirees 18,545
Fully eligible active participants 525
Other active participants 2,171
Total 21,241
Unrecognized transition liability (19,236)
Unrecognized net loss (1,766)
Accrued postretirement benefit costs 239
The weighted average discount rate used in determining the
accumulated postretirement benefit obligation was 7.5%. An increase in
the cost of covered health care benefits of 14% for employees under age
65 and 10% for those over 65 was assumed for the fiscal year 1993. This
rate was assumed to decrease incrementally to 6.0% after fifteen years
and to remain at that level thereafter. A 1% increase in the health
care cost trend rate would increase the accumulated postretirement
benefit obligation by $1.9 million at January 2, 1994 and the net
periodic cost by $0.3 million for the year then ended.
Prior to adoption of SFAS No. 106, postretirement health care and
life insurance benefits paid were $2.1 million in 1992 and $2.4 million
in 1991.
7. Commitments
The Corporation and its subsidiaries are parties to various leases
relating to plants, warehouses, office facilities, automobiles, and
other equipment, principally data processing. All leases expire prior
to the year 2022. Real estate taxes, insurance, and maintenance
expenses are normally obligations of the Corporation. It is expected
that in the normal course of business the majority of the leases will
be renewed or replaced by other leases. The Corporation has certain
capitalized leases consisting principally of leases for warehouses and
equipment. At January 2, 1994 and December 31, 1992, net property,
plant and equipment include $9.3 million and $10.6 million,
respectively, for capital leases.
Future minimum payments under capital and noncancelable operating
leases consisted of the following at January 2, 1994:
In thousands Capital Operating
1994 $ 3,316$ 14,260
1995 1,741 9,835
1996 7096,023
1997 4595,065
1998 4373,563
Thereafter 4,399 23,854
Total minimum lease payments 11,061$ 62,600
Less amounts representing interest 2,205
Present value of future minimum lease payments $ 8,856
Rent expense for operating leases was $21,579,000 in 1993,
$20,071,000 in 1992, and $11,946,000 in 1991.
8. Other Financial Data
The 1992 provision of $15 million for restructured operations
included charges primarily to combine the operations of American
Electric (acquired January 2, 1992) and the Electrical Division of the
Corporation into one consolidated operation and to consolidate certain
other unrelated facilities.
Other expense--net consists of the following:
In thousands 1993 1992 1991
Investment income $ 4,840 $ 5,874 $ 6,500
Interest expense (30,247) (33,405) (12,376)
Amortization of intangibles (11,780) (13,498) (4,154)
Net currency losses (813) (1,072) (603)
Other (923) (4,442) 195
$(38,923) $(46,543) $(10,438)
Accrued liabilities include salaries, fringe benefits, and
other compensation amounting to $24,124,000 in 1993 and
$22,060,000 in 1992.
9. Information Relating to Operations in Different Geographic Areas
The Corporation is engaged in the design, manufacture, and
marketing of electrical and electronic connectors, components and
systems. Operations are conducted in three principal areas:
Domestic, Europe and Other International locations. Transfers
between geographic areas are priced on a basis that yields an
appropriate rate of return based on assets employed, risk and other
factors.
Financial Information Relating to Operations in Different
Geographic Areas
In thousands 1993 1992 1991
Sales to Unaffiliated Customers:
Domestic $ 815,944 $773,464 $302,185
Europe 164,159 186,165 179,518
Other International 95,800 91,447 84,739
Total 1,075,903 $1,051,076 566,442
Sales or Transfers Between Geographic Areas:
Domestic 50,303 44,806 38,237
Europe 4,854 3,358 3,449
Other International 8,563 7,287 4,288
Total 63,720 55,451 45,974
Earnings Before Income Taxes:
Domestic 60,061 45,434 30,401
Europe 7,525 10,159 20,475
Other International 12,823 13,693 16,343
Adjustments and eliminations (1,965) 469 769
Consolidated 78,444 69,755 67,988
Identifiable Assets:
Domestic 815,817 784,944 273,543
Europe 113,722 130,129 144,041
Other International 88,181 78,495 69,548
Corporate assets (principally
cash and investments) 119,726 124,087 114,084
Adjustments and eliminations (4,264) (592) (1,544)
Total $1,133,182 $1,117,063 $599,672
COMPANY REPORT ON FINANCIAL STATEMENTS
To the Shareholders of Thomas & Betts Corporation:
The accompanying financial statements, as well as all financial data in
this annual report, have been prepared by the Corporation in accordance
with generally accepted accounting principles consistently applied. As
such, they include certain amounts that are based on the Corporation's
estimates and judgments. The Corporation has systems of internal
control that are designed to provide reasonable assurance that the
financial records are reliable for preparing financial statements and
maintaining accountability for assets and that assets are safeguarded
against loss from unauthorized use or disposition. These systems are
augmented by the positive attitude of management in maintaining a sound
control environment, communication of established written policies and
procedures, the maintenance of a qualified internal auditing group, the
selection and training of qualified personnel, and an organizational
structure that provides appropriate delegation of authority, segregation
of duties, and regular review of financial performance by management.
In addition to our systems of internal control, additional safeguards
are provided by our independent auditors and the Audit Committee of our
Board of Directors. The independent auditors, whose report is set forth
opposite, perform an objective, independent audit of our financial
statements taken as a whole. The Audit Committee, composed entirely of
outside directors, meets periodically with our independent auditors,
director of internal auditing, and members of management to review
matters relating to the quality of financial reporting and internal
accounting control, and the nature, extent and results of audit efforts.
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of
Thomas & Betts Corporation:
We have audited the consolidated balance sheets of Thomas & Betts
Corporation and subsidiaries as of January 2, 1994 and December 31,
1992, and the related consolidated statements of earnings, cash flows,
and shareholders' equity for each of the years in the three-year period
ended January 2, 1994. These consolidated financial statements are the
responsibility of the Corporation's management. Our responsibility is
to express an opinion on these consolidated 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 consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Thomas & Betts Corporation and subsidiaries at January 2, 1994 and
December 31, 1992, and the results of their operations and their cash
flows for each of the years in the three-year period ended January 2,
1994, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK
Short Hills, New Jersey
February 3, 1994
(See Part II, Item 5 above for Quarterly Review (page 29 of Annual
Report))