SALOMON INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
Dollars in millions, except per share amounts Six months
- ------------------------------------------------------------------------------------------------
Period ended June 30, 1997 1996
- ------------------------------------------------------------------------------------------------
Revenues from continuing operations:
Interest and dividends $ 3,045 $ 3,008
Principal transactions 927 1,235
Investment banking 441 432
Commissions 199 165
Other 27 22
- ------------------------------------------------------------------------------------------------
Total revenues 4,639 4,862
Interest expense 2,527 2,401
- ------------------------------------------------------------------------------------------------
Revenues, net of interest expense 2,112 2,461
- ------------------------------------------------------------------------------------------------
Noninterest expenses:
Compensation and employee-related 1,111 1,096
Technology 115 96
Professional services and business development 90 92
Occupancy 82 85
Clearing and exchange fees 40 34
Other 45 45
- ------------------------------------------------------------------------------------------------
Total noninterest expenses 1,483 1,448
- ------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes 629 1,013
Income tax expense 236 405
- ------------------------------------------------------------------------------------------------
Income from continuing operations 393 608
Loss from discontinued operations, net of taxes - (41)
- ------------------------------------------------------------------------------------------------
Net income $ 393 $ 567
================================================================================================
Earnings available for fully diluted earnings per common share
from continuing operations $ 378 $ 593
================================================================================================
Per common share:
Primary earnings from continuing operations $ 3.34 $ 5.41
Primary earnings 3.34 5.02
Fully diluted earnings from continuing operations* 3.14 4.89
Fully diluted earnings* 3.14 4.55
Cash dividends 0.32 0.32
================================================================================================
Weighted average shares of common stock outstanding (in thousands):
For primary earnings per common share 108,800 106,000
For fully diluted earnings per common share 120,300 121,200
================================================================================================
<FN>
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements
and the Unaudited Consolidated Summary of Options and Contractual Commitments
are integral parts of this statement.
* Assumes conversion of redeemable preferred stock unless such assumption
results in higher earnings per share than determined under the primary method.
</FN>
1
SALOMON INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(unaudited)
Dollars in millions
- -----------------------------------------------------------------------------------------------
ASSETS June 30, 1997
- -----------------------------------------------------------------------------------------------
Cash and interest bearing equivalents $ 2,081
Financial instruments and contractual commitments:
Government and government agency securities - U.S. $ 53,364
Government and government agency securities - non-U.S. 43,407
Corporate debt securities 14,235
Equity securities 7,851
Options and contractual commitments 7,145
Mortgage loans and collateralized mortgage securities 3,234
Other 3,612
------------
132,848
Commodities and related products and instruments:
Physical commodities inventory 1,366
Options and contractual commitments 167
------------
1,533
Collateralized short-term financing agreements:
Securities purchased under agreements to resell 62,547
Securities borrowed and other 28,773
------------
91,320
Receivables 6,638
Assets securing collateralized mortgage obligations 337
Property, plant and equipment, net 505
Net realizable value of discontinued operations (Note 3) -
Other assets, including intangibles 691
- -----------------------------------------------------------------------------------------------
Total assets $ 235,953
===============================================================================================
<FN>
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements
and the Unaudited Consolidated Summary of Options and Contractual Commitments
are integral parts of this statement.
</FN>
2
SALOMON INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(unaudited)
Dollars in millions
- -----------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY June 30, 1997
- -----------------------------------------------------------------------------------------------------
Collateralized short-term financing agreements:
Securities sold under agreements to repurchase $ 105,999
Securities loaned 2,815
------------
$ 108,814
Short-term borrowings 8,036
Financial and commodities-related instruments sold,
not yet purchased, and contractual commitments:
Government and government agency securities - U.S. 31,857
Government and government agency securities - non-U.S. 36,126
Financial options and contractual commitments 10,037
Equity securities 7,027
Corporate debt securities and other 1,834
Commodities, including options and contractual commitments 177
------------
87,058
Payables and accrued liabilities 9,785
Collateralized mortgage obligations 327
Term debt 16,080
-----------
Total liabilities 230,100
Commitments and contingencies (Note 4)
Redeemable preferred stock, Series A 420
Guaranteed preferred beneficial interests in Company subordinated
debt securities (Note 5) 345
Stockholders' equity:
Preferred stock, Series D and E 450
Common stock 159
Additional paid-in capital 438
Retained earnings 5,811
Cumulative translation adjustments (1)
Common stock held in treasury, at cost (1,769)
------------
Total stockholders' equity 5,088
- -----------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 235,953
=====================================================================================================
<FN>
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements
and the Unaudited Consolidated Summary of Options and Contractual Commitments
are integral parts of this statement.
</FN>
3
SALOMON INC AND SUBSIDIARIES
CONSOLIDATED SUMMARY OF OPTIONS AND CONTRACTUAL COMMITMENTS
(unaudited)
June 30, 1997 December 31, 1996
------------------------------------ ------------------------------------
Current Market or Current Market or
Notional Fair Value Notional Fair Value
------------------------ ------------------------
Dollars in billions Amounts Assets Liabilities Amounts Assets Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Exchange-issued products:
Futures contracts (a) $ 567.5 $ - $ - $ 525.3 $ - $ -
Other exchange-issued products:
Equity contracts 15.1 .2 .5 12.9 .1 .2
Fixed income contracts 89.4 - - 59.0 - -
Foreign exchange contracts .1 - - - - -
Commodities-related contracts 4.0 - - 4.9 - -
- -----------------------------------------------------------------------------------------------------------------------------------
Total exchange-issued products 676.1 .2 .5 602.1 .1 .2
- -----------------------------------------------------------------------------------------------------------------------------------
Over-the-counter ("OTC") swaps, swap options,
caps and floors:
Swaps (b) 1,057.2 852.4
Swap options written 15.5 9.7
Swap options purchased 30.8 23.3
Caps and floors 137.6 114.4
- -----------------------------------------------------------------------------------------------------------------------------------
Total OTC swaps, swap options, caps and floors 1,241.1 3.7 6.2 999.8 4.2 6.5
- -----------------------------------------------------------------------------------------------------------------------------------
OTC foreign exchange contracts and options:
Forward currency contracts (b) 82.3 .6 .4 68.3 .5 .5
Options written 26.8 - .3 31.6 - .2
Options purchased 29.9 .5 - 32.9 .4 -
- -----------------------------------------------------------------------------------------------------------------------------------
Total OTC foreign exchange contracts and options 139.0 1.1 .7 132.8 .9 .7
- -----------------------------------------------------------------------------------------------------------------------------------
Other options and contractual commitments:
Options, warrants and forwards on equities
and equity indices (c) 57.0 1.8 2.5 45.6 1.1 1.8
Options and forward contracts on fixed-income
securities (c) 244.6 .3 .1 179.0 .3 .2
Commodities-related contracts (d) 16.5 .2 .2 22.0 .3 .3
- -----------------------------------------------------------------------------------------------------------------------------------
Total $2,374.3 $ 7.3 $ 10.2 $1,981.3 $ 6.9 $ 9.7
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
(a) Margin on futures contracts is included in receivables or payables on the
Condensed Consolidated Statement of Financial Condition.
(b) Includes notional values of swap agreements or forward currency contracts
for non-trading activities (primarily related to the Company's fixed-rate
long-term debt, TRUPS and preferred stock) of $18.9 billion and $1.7
billion at June 30, 1997 and $15.5 billion and $1.3 billion at December 31,
1996, respectively.
(c) The fair value of such instruments recorded as assets includes
approximately $1.0 billion at June 30, 1997 and $.6 billion at December 31,
1996, respectively, of over-the-counter instruments, primarily with
investment grade counterparties. The remainder consists primarily of highly
liquid instruments actively traded on organized exchanges.
(d) A substantial majority of these over-the-counter contracts are with
investment grade counterparties.
</FN>
4
CONSOLIDATED CREDIT EXPOSURE, NET OF SECURITIES AND CASH COLLATERAL ON OTC
SWAPS, SWAP OPTIONS, CAPS AND FLOORS AND OTC FOREIGN EXCHANGE CONTRACTS AND
OPTIONS, BY RISK CLASS*
Note: Amounts represent current exposure and do not include potential
credit exposure that may result from factors that influence market risk.
Transactions
with over
Dollars in billions All Transactions 3 years to
maturity
- ----------------------------------------------------------------------------------------------------------------------------------
Other Major
Derivatives Financial Governments/ Year-to-date
June 30, 1997 Dealers Corporates Institutions Supranationals Other Total Average Total
- --------------------------------------------------------------------------------------------------------------------- ------------
Swaps, swap options, caps
and floors:
Risk classes 1 and 2 $ .4 $ - $ .5 $ - $ - $ .9 $ 1.0 $ .8
Risk class 3 .7 .2 .1 - .1 1.1 1.1 .6
Risk classes 4 and 5 .3 .1 .2 - .1 .7 .7 .4
Risk classes 6, 7 and 8 - - - - - - - -
------------ ---------- ----------- ------------- ----------- ---------- --------------- ------------
$ 1.4 $ .3 $ .8 $ - $ .2 $ 2.7 $ 2.8 $ 1.8
------------ ---------- ----------- ------------- ----------- ---------- --------------- ------------
Foreign exchange contracts
and options:
Risk classes 1 and 2 $ .5 $ - $ - $ .1 $ - $ .6 $ .8 $ -
Risk class 3 .3 - .1 - - .4 .3 -
Risk classes 4 and 5 .1 - - - - .1 .1 -
------------ ---------- ----------- ------------- ----------- ---------- --------------- ------------
$ .9 $ - $ .1 $ .1 $ - $ 1.1 $ 1.2 $ -
------------ ---------- ----------- ------------- ----------- ---------- --------------- ------------
<FN>
* To monitor credit risk, the Company utilizes a series of eight internal
designations of counterparty credit quality. These designations are analogous
to external credit ratings whereby risk classes one through three are high
quality investment grades. Risk classes four and five include counterparties
ranging from the lowest investment grade to the highest non-investment grade
level. Risk classes six, seven and eight represent higher risk
counterparties.
</FN>
5
SALOMON INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
Dollars in millions
- ----------------------------------------------------------------------------------------------------------------------
Six months ended June 30, 1997 1996
- ----------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income adjusted for noncash and non-operating activities -
Net income $ 393 $ 567
Depreciation, amortization and other 42 57
- ----------------------------------------------------------------------------------------------------------------------
Cash items included in net income 435 624
- ----------------------------------------------------------------------------------------------------------------------
Net (increase) decrease in operating assets -
Financial instruments and contractual commitments (20,362) 11,422
Commodities and related products and instruments (223) 292
Collateralized short-term financing agreements (18,622) (6,234)
Receivables (1,535) (157)
Other (71) (72)
- ----------------------------------------------------------------------------------------------------------------------
Net (increase) decrease in operating assets (40,813) 5,251
- ----------------------------------------------------------------------------------------------------------------------
Increase (decrease) in operating liabilities -
Collateralized short-term financing agreements 29,687 (16,448)
Short-term borrowings 1,219 (3,014)
Financial and commodities-related instruments sold,
not yet purchased, and contractual commitments 3,551 14,175
Payables and accrued liabilities 3,733 (1,011)
- ----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in operating liabilities 38,190 (6,298)
- ----------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (2,188) (423)
- ----------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of term debt 4,055 2,621
Issuance of preferred stock, Series E - 250
Employee stock purchase and option plans 5 -
Term debt maturities and repurchases (1,192) (1,969)
Collateralized mortgage obligations (63) (284)
Purchase of common stock for treasury (103) (49)
Dividends on common stock (34) (34)
Dividends on preferred stock* (30) (35)
- ----------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 2,638 500
- ----------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Assets securing collateralized mortgage obligations 63 351
Proceeds from sale of Basis Petroleum 365 -
Property, plant and equipment (27) (69)
- ----------------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities 401 282
- ----------------------------------------------------------------------------------------------------------------------
Net increase in cash and interest bearing equivalents 851 359
Cash and interest bearing equivalents at January 1, 1,230 1,454
- ----------------------------------------------------------------------------------------------------------------------
Cash and interest bearing equivalents at June 30, $ 2,081 $ 1,813
======================================================================================================================
<FN>
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements
and the Unaudited Consolidated Summary of Options and Contractual Commitments
are integral parts of this statement.
* For the six months ended June 30, 1997 and 1996, dividends on preferred stock
were reduced by the aftertax impact ( $8 million and $12 million) of interest
rate swaps that effectively convert the Company's fixed-rate obligations to
variable-rate obligations.
</FN>
6
Salomon Inc and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 1997
1. Basis of Presentation
The Unaudited Condensed Consolidated Financial Statements are prepared
in accordance with generally accepted accounting principles in the U.S.
and prevailing industry practice, both of which require the use of
management's best judgment and estimates. Estimates, including the fair
value of financial instruments, may vary from actual results. In the
opinion of management, the statements of income, financial condition
and cash flows include all normal recurring adjustments necessary for a
fair presentation for the periods presented. Certain reclassifications
have been made from amounts previously reported to conform to the
current year presentation. The Unaudited Condensed Consolidated
Financial Statements include the accounts of Salomon Inc and all
majority-owned subsidiaries (collectively, the "Company"), with the
exception of Basis Petroleum, Inc. ("Basis"), which is presented as
discontinued operations as discussed in Note 3. The Unaudited Condensed
Consolidated Financial Statements should be read in conjunction with
the Audited Consolidated Financial Statements included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.
2. Accounting Policies
Derivatives Used for Trading Purposes
Derivative instruments ("derivatives" or "contractual commitments")
used for trading purposes are carried on the balance sheet at either
market value or, when market prices are not readily available, fair
value, with changes in value recognized currently in earnings.
Contractual commitments used for trading purposes include interest rate
swap agreements, swap options, caps and floors, options, warrants,
futures and forward contracts as well as commodity swaps, options,
futures and forward contracts. Contractual commitments in a net
receivable position, as well as options owned and warrants held, are
reported as assets in "Options and contractual commitments." Similarly,
contractual commitments in a net payable position, as well as options
written and warrants issued, are reported as liabilities in "Financial
options and contractual commitments" or "Commodities, including options
and contractual commitments." This category also includes the Company's
long-term obligations that have principal repayments directly linked to
equity securities of unaffiliated issuers for which the Company holds
in inventory a note exchangeable for the same equity securities. Margin
on futures contracts is included in "Receivables" and "Payables and
accrued liabilities." The market values (unrealized gains and losses)
associated with contractual commitments are reported net by
counterparty, provided a legally enforceable master netting agreement
exists, and are netted across products and against cash collateral when
such provisions are stated in the master netting agreement. Revenues
generated from derivative instruments used for trading purposes are
reported as "Principal transactions" and include realized gains and
losses as well as unrealized gains and losses resulting from changes in
the market or fair value of such instruments.
Derivatives Used for Non-Trading Purposes
Non-trading derivative instruments which are designated as hedges must
be effective at reducing the risk associated with the exposure being
hedged and must be designated as a hedge at the inception of the
derivative contract. Accordingly, changes in the market or fair value
of the derivative instrument must be highly correlated with changes in
the market or fair value of the underlying hedged item. The Company
monitors the effectiveness of its hedges by periodically comparing the
change in value of the derivative instrument with the change in value
of the underlying hedged item. Contractual commitments used as hedges
include interest rate swaps, cross currency swaps and forward currency
contracts.
7
Interest rate swaps, including cross currency swaps, are utilized to
effectively convert the Company's fixed rate preferred stock and
guaranteed preferred beneficial interests in Company subordinated debt
securities ("TRUPS"), a portion of its short-term borrowings and the
majority of its fixed rate term debt to variable rate instruments.
These swaps are recorded "off-balance sheet," with accrued inflows and
outflows reflected as adjustments to interest expense and/or dividends,
as appropriate. Adjustments to preferred stock dividends are recorded
on an after tax basis. Upon early termination of an underlying
hedged instrument, the derivative is accounted for at market or fair
value. The impact of recording the market or fair value of the
derivative instrument "on-balance sheet" is recognized immediately
in earnings. Changes in market or fair value of such instruments, or
realized gains or losses resulting from the termination of such
instruments, are recognized currently in earnings.
The Company utilizes forward currency contracts to hedge a portion of
the currency exchange rate exposure relating to non-U.S. dollar term
debt issued by Salomon Inc (Parent Company). The impact of translating
the forward currency contracts and the related debt to prevailing
exchange rates is recognized currently in earnings. The Company also
utilizes forward currency contracts to hedge certain investments in
subsidiaries with functional currencies other than the U.S. dollar. The
impact of marking open contracts to prevailing exchange rates and the
impact of realized gains or losses on maturing contracts, both net of
the related tax effects, are included in "Cumulative translation
adjustments" in Stockholders' equity as is the impact of translating
the investments being hedged. Upon the disposition of an investment in
a subsidiary with a functional currency other than the U.S. dollar,
accumulated gains or losses previously included in "Cumulative
translation adjustments" are recognized immediately in earnings.
Derivative instruments that do not meet the criteria to be designated
as a hedge are considered trading derivatives and are recorded at
market or fair value.
3. Discontinued Operations
On May 1, 1997, the Company completed the sale of all of the
outstanding stock of Basis Petroleum, Inc. to Valero Energy Corporation
("Valero"). Upon closing, the Company received cash proceeds of $365
million and Valero common stock with a market value of $120 million. In
July 1997, the Company paid Valero $3 million in connection with the
final determination of working capital. In addition, the Company is
entitled to participation payments based on a fixed notional throughput
and the difference, if any, between an average market crackspread, as
defined, and a base crackspread, as defined, over each of the next ten
years, but subject to the limitation that the total of the
participation payments is capped at $200 million, with a maximum of $35
million per year. Basis is classified as a discontinued operation in
the Company's Condensed Consolidated Financial Statements.
4. Commitments and Contingencies
Outstanding legal matters are discussed in Note 17 to the Audited
Consolidated Financial Statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996. Management of
the Company, after consultation with outside legal counsel, believes
that the ultimate resolution of legal proceedings and environmental
matters (taking into consideration applicable reserves) will not have a
material adverse effect on the Company's financial condition; however,
there could be a material adverse impact on operating results in future
periods depending in part on the results for such periods. Additional
information on legal proceedings is included in "Item 1. Legal
Proceedings."
8
The Company's ongoing process of upgrading its financial and operating
systems is focused on: supporting the multi-entity, multi-currency,
multi-time zone aspects of its businesses; improving control over
complex, cross-entity transactions; facilitating standardized
technology platforms, operating procedures, and fungibility of
resources around the world; eliminating redundant regional
applications; reducing future technology and operations costs; and
efficiently meeting market and regulatory changes. Additionally, in
order to adapt systems for Year 2000 processing and the European
Monetary Union, the Company anticipates incurring $100 million to $150
million in additional expenses through the Year 2000.
5. Guaranteed preferred beneficial interests in Company subordinated debt
securities
The Company has $345 million, or 13,800,000 TRUPS units, outstanding.
Each TRUPS unit includes a 9 1/4% mandatorily redeemable preferred
security of the SI Financing Trust I (the "Trust") and a purchase
contract which requires the holder to purchase, in 2021 (or earlier if
the Company elects to accelerate the contract), one depositary share
representing a one-twentieth interest in a share of Salomon Inc's 9
1/2% Cumulative Preferred Stock, Series F. The Trust, which is a
wholly-owned subsidiary of the Company, was established for the sole
purpose of issuing the 9 1/4% preferred securities and common
securities and investing the proceeds in $356 million aggregate
principal amount of 9 1/4% subordinated debt securities issued by
Salomon Inc due June 30, 2026.
6. Net Capital
Certain U.S. and non-U.S. subsidiaries are subject to securities and
commodities regulations and capital adequacy requirements promulgated
by the regulatory and exchange authorities of the countries in which
they operate. The Company's principal regulated subsidiaries are
discussed below.
Salomon Brothers Inc ("SBI") is registered as a broker-dealer with the
U.S. Securities and Exchange Commission ("SEC") and is subject to the
SEC's Uniform Net Capital Rule, Rule 15c3-1, which requires net
capital, as defined under the alternative method, of not less than the
greater of 2% of aggregate debit items arising from customer
transactions, as defined, or 4% of funds required to be segregated for
customers' regulated commodity accounts, as defined. Although net
capital, aggregate debit items and funds required to be segregated
change from day to day, at June 30, 1997, SBI's net capital was $1.0
billion, $938 million in excess of regulatory requirements.
Salomon Brothers International Limited ("SBIL") is authorized to
conduct investment business in the United Kingdom by the Securities and
Futures Authority ("SFA") in accordance with the Financial Services Act
1986. The SFA requires SBIL to have available at all times financial
resources, as defined, sufficient to demonstrate continuing compliance
with its rules. At June 30, 1997, SBIL's financial resources were $483
million in excess of regulatory requirements.
Salomon Brothers Asia Limited ("SBAL") and Salomon Brothers AG ("SBAG")
are also subject to requirements to maintain specified levels of net
capital or its equivalent. At June 30, 1997, SBAL's net capital was
$305 million above the minimum required by Japan's Ministry of Finance.
SBAG's net capital was $1 million above the minimum required by
Germany's Banking Supervisory Authority.
In addition, in order to maintain its triple-A rating, Salomon Swapco
Inc ("Swapco") must maintain minimum levels of capital in accordance
with agreements with its rating agencies. At June 30, 1997,
9
Swapco was in compliance with all such agreements. Swapco's capital
requirements are dynamic, varying with the size and concentration of
its counterparty receivables.
7. Summary of Revenues from Continuing Operations
The following tables present revenues, net of interest expense for the six
months ended June 30, 1997 and 1996.
Six Months Ended June 30, 1997
Principal
Transactions
& Net
Interest and Investment
(Dollars in millions) Dividends Banking Commissions Other Total
- ----------------------------------------------------------------------------------------------------------------------------------
Fixed income sales and trading $ 1,046 $ - $ 5 $ - $ 1,051
Equity sales and trading 278 - 194 - 472
Global investment banking - 441 - - 441
Commodities trading 116 - - - 116
Asset management 8 - - 29 37
Other (3) - - (2) (5)
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues, net of interest expense $ 1,445 $ 441 $ 199 $ 27 $ 2,112
==================================================================================================================================
Six Months Ended June 30, 1996
Principal
Transactions
& Net
Interest and Investment
(Dollars in millions) Dividends Banking Commissions Other Total
- ----------------------------------------------------------------------------------------------------------------------------------
Fixed income sales and trading $ 1,430 $ - $ 8 $ - $ 1,438
Equity sales and trading 175 - 157 - 332
Global investment banking - 432 - - 432
Commodities trading 217 - - - 217
Asset management 1 - - 22 23
Other 19 - - - 19
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues, net of interest expense $ 1,842 $ 432 $ 165 $ 22 $ 2,461
==================================================================================================================================
8. Impact of New Accounting Standards
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." The Company
is currently assessing these statements, which are effective for fiscal
years beginning after December 15, 1997 and establish standards for
the reporting and display of comprehensive income and disclosure
related to segments.
10