Printer Friendly

WESTINGHOUSE ADJUSTS PENSION DISCOUNT RATE, ACCOUNTING FOR DISCONTINUED OPERATIONS

 PITTSBURGH, Aug. 13 /PRNewswire/ -- Due to the continuing decline in long-term interest rates, Westinghouse (NYSE: WX) has adopted a more conservative discount rate for the calculation of pension plan liabilities.
 The adjustment, determined to be appropriate by Westinghouse, will reduce the rate to 8 percent from 9 percent, effective June 30, 1993.
 The average pension discount rate for the nation's top 100 industrial firms is about 8.4 percent. "By moving now to this lower rate, we believe the financial community will view this as an improvement in the corporation's quality of earnings," said Warren H. Hollinshead, executive vice president and chief financial officer.
 "Pension liability as of June 30, 1993, will increase by approximately $600 million. The corporation plans approximately $250 million of contributions to the pension fund in 1993 and plans contributions in future years at levels higher than legally required," Mr. Hollinshead said.
 In separate action, as a result of discussions with the staff of the Securities and Exchange Commission (SEC) on accounting policy interpretation, Westinghouse will temporarily return The Knoll Group and Westinghouse Communities, Inc. (WCI), to continuing operations for accounting purposes only.
 In November 1992, Westinghouse announced a financial and strategic plan that included the divestiture of four operations over three years. These businesses were classified as "discontinued operations" through the application of Accounting Principles Board Opinion 30 (APB 30). Returning these two businesses to continuing operations has the effect of increasing earnings per share for 1992 by $.02 and decreasing earnings per share for the first six months of 1993 by $.01. It also increases the previously reported 1992 provision for the estimated loss on discontinued operations of $1.280 billion by $103 million.
 Westinghouse and its independent accountants, Price Waterhouse, believe that the company's previous method appropriately accounted for these operations, given the company's intent, which is to sell them as part of the plan announced in November 1992.
 Westinghouse adopted the new treatment at the request of the accounting staff of the Securities and Exchange Commission.
 "This new accounting treatment in no way alters our intent to divest these businesses, nor the economics of the plan," said Mr. Hollinshead.
 While 1993 operating results will now increase through the inclusion of Knoll and WCI as continuing operations, those earnings will be somewhat offset by increased pension expense as a result of the change in the discount rate.
 Neither of these accounting changes will have any affect on the corporation's cash flow, Mr. Hollinshead added.
 /delval/
 -0- 8/13/93
 /CONTACT: Jim Schmitt of Westinghouse, 412-642-4642/
 (WX)


CO: Westinghouse Electric Corporation ST: Pennsylvania IN: ARO TLS CPR SU:

DM -- PG008 -- 2772 08/13/93 19:05 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 13, 1993
Words:443
Previous Article:BARKER STEEL COMPANY PLEADS GUILTY TO CONSPIRACY TO DEFRAUD GOVERNMENT
Next Article:THE CONTINUUM COMPANY, INC. ANNOUNCES PAXUS ACQUISITION AND FIRST QUARTER RESULTS
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters