01—Abstract
Summary
Summary of the 10-K/A filed March 15, 1994. Cited figures are marked; the original filing is the authoritative source.
AlliedSignal Inc. reported net sales of $11.83 billiona for 1993, down 2% from $12.04 billion in 1992, with income from operations rising to $954 million from $415 million.
Income before the cumulative effect of accounting changes was $656 millionb, or $2.31 a share, compared with $535 million, or $1.90 a share, in 1992. After a $245 million after-tax charge for adopting FASB No. 112 (postemployment benefits), net income was $411 million, or $1.45 a share, versus a net loss of $712 million in 1992. The company stated that excluding nonrecurring items and the FASB 112 impact, 1993 net income was $659 million, or $2.33 a share.
Management expects revenue growth in 1994 and profit increases "significantly" based on its growth strategy and productivity gains. By segment, Aerospace sales fell 8% to $4.53 billionc while adjusted net income was $228 million; Automotive sales were essentially flat at $4.51 billion with adjusted net income of $184 million (per the segment table, adjusted net income was $184 million against $226 million reported); and Engineered Materials sales rose 7% to $2.79 billion with adjusted net income of $272 million. The balance sheet showed total assets of $10.83 billion, cash of $892 million, total debt of $1.96 billion, and a long-term debt-to-capital ratio of 37.9%.
The company repurchased 6.7 million shares for $220 milliond in 1993 and declared a two-for-one stock split payable March 14, 1994, along with a 16% increase in the quarterly dividend to $0.1675 per post-split share beginning in the second quarter of 1994. The filing also details significant portfolio moves: the acquisition of Sundstrand's Data Control business for $195 million, the formation of truck brake ventures with Knorr-Bremse, a planned carpet fiber joint venture with BASF, and a pending environmental catalysts combination with General Motors. A pending Goodrich patent suit seeks damages of approximately $350 million before trebling, which the company believes is without merit, and management does not expect a material adverse effect on its financial position.
02—Key points
Key Highlights
- Net sales of $11.83 billion in 1993, down 2% from $12.04 billion in 1992, with the decline attributed to a stronger dollar and reduced volumes in Europe and aerospace.
- Income from operations of $954 million, up from $415 million in 1992; income before accounting changes was $656 million, or $2.31 a share.
- Net income of $411 million, or $1.45 a share, after a $245 million after-tax charge for adopting FASB No. 112; 1992 reported a net loss of $712 million.
- Two-for-one common stock split for shareowners of record February 22, 1994, and a 16% dividend increase to $0.1675 per post-split share starting in the second quarter of 1994.
- Balance sheet strengthened, with cash of $892 million, total debt of $1.96 billion, and long-term debt at 37.9% of total capital, down from 40.5% in 1992.
- Share repurchases of 6.7 million shares for $220 million in 1993, with authority remaining for 16.5 million more shares.
- Management expects revenue growth in 1994 and a significant profit increase, and cites a 1993 Sundstrand Data Control acquisition for $195 million and Knorr-Bremse truck brake ventures as growth initiatives.
03—Questions
Frequently Asked Questions
How did AlliedSignal's 1993 earnings compare with 1992?
Income before accounting changes rose to $656 million, or $2.31 a share, from $535 million, or $1.90 a share. Reported net income was $411 million, or $1.45 a share, compared with a net loss of $712 million in 1992, which was driven by accounting changes and streamlining charges. Excluding nonrecurring items and the FASB 112 impact, 1993 net income was $659 million, or $2.33 a share.
Which business segment performed best in 1993?
Engineered Materials showed the strongest adjusted improvement, with sales up 7% to $2.79 billion and adjusted net income of $272 million, versus $215 million in 1992, driven by fluorine products, laminates and productivity gains. Automotive had adjusted net income of $184 million on flat sales of $4.51 billion, while Aerospace sales fell 8% to $4.53 billion with adjusted net income of $228 million.
What is the outlook for dividends and share count?
The company's quarterly dividend is expected to rise 16%, from $0.145 to $0.1675 per post-split share, beginning with the second quarter 1994 payment. A two-for-one stock split was declared, payable March 14, 1994 to shareowners of record February 22, 1994, and the filing shows 283,833,506 common shares outstanding at December 31, 1993 after reflecting the split.
What major legal or regulatory risks did the filing disclose?
A B.F. Goodrich lawsuit alleges infringement of two aircraft brake patents related to the Boeing 777 and claimed damages of approximately $350 million before trebling at an October 1993 trial. The company believes the claim is without merit, and management does not expect these matters to have a material adverse effect on its consolidated financial position. The filing also notes environmental liabilities of $480 million at year-end 1993 and CFC phase-out rules requiring production elimination by December 31, 1995.
What strategic transactions did AlliedSignal complete or pursue in 1993?
The company acquired Sundstrand's Data Control business for $195 million and formed truck air-brake ventures with Knorr-Bremse, owning 65% of the North American venture and 35% of the European operations. It also acquired Praxair's U.S. sterilant gas business and AKZO's European carpet fiber business, and was discussing a 50/50 domestic carpet and textile fiber joint venture with BASF and a combination of its environmental catalysts business with General Motors.
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