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 PITTSBURGH, Jan. 11 /PRNewswire/ -- Michael H. Jordan, Westinghouse Electric Corporation (NYSE: WX) chairman and chief executive officer, today announced a number of actions designed to improve operating performance, strengthen the company's financial position, and provide for growth.
 The actions include:
 -- a $750 million pre-tax charge ($500 million after-tax) to fourth quarter earnings;
 -- a $95 million after-tax charge to the APB 30 reserve related to discontinued operations;
 -- a planned $500 million preferred equity offering;
 -- a planned contribution of $200 million of the company's common stock to its pension plan; and
 -- a reduction in the annual dividend to 20 cents from 40 cents per common share.
 Mr. Jordan said the $750 million charge includes:
 -- $350 million in restructuring associated principally with corporate-wide layoffs of about 3,400 employees over the next two years. This reduction, coupled with attrition, is expected to result in a total corporate-wide workforce reduction of about 6,000.
 -- $215 million to provide for the divestiture and restructuring of certain non-core businesses which will provide additional liquidity and allow the company to focus resources on growing its core businesses.
 -- $185 million to facilitate amicable resolutions of certain legal disputes when in the best interest of the company, and to recognize costs related to a possible alternative environmental cleanup strategy at Bloomington, Ind., sites in anticipation of a possible revision to a 1985 consent decree.
 The after-tax charge to the APB 30 reserve of $95 million was taken to reflect the current status of the company's 1992 restructuring plan. With respect to this plan, the company has determined to accelerate the sale of Westinghouse Communities, previously scheduled for sale in 1995, into 1994.
 The company has also determined that its Knoll subsidiary is not for sale. A new management team under the leadership of Burton B. Staniar is expected to strengthen and grow the business, resulting in greater shareholder value under this strategy.
 To accelerate improvement in the company's financial position and increase its financial flexibility, Mr. Jordan also announced the following three-step program to build equity and reduce debt:
 -- During the first half of 1994, the company plans to issue approximately $500 million of preferred stock which will be mandatorily convertible into common stock. The offering will be made only be means of a prospectus. In that regard, the company will be seeking shareholder approval for additional common shares at its 1994 annual meeting.
 -- Additionally, the company plans to contribute approximately $200 million of common stock to its pension plan.
 -- And lastly, the company plans to reduce its annual dividend to 20 cents per common share. This will be reviewed periodically by the board in light of earnings levels and the company's success in rebuilding its equity.
 In addition, the company made the following required non-cash accounting adjustments:
 -- In accordance with the requirement in Statement of Financial Accounting Standards (SFAS) 87, Employers' Accounting for Pensions, to adjust pension discount rates in line with current interest rates, the company has reduced its assumed discount rate from 8 to 7.25 percent effective Dec. 31, 1993 (previously reduced from 9 to 8 percent, effective June 30, 1993). In addition, the company has reduced its expected long-term rate of return on plan assets from 10.5 to 9.75 percent and its expected rate of increase in future compensation levels from 5 to 4 percent. These changes in assumptions will result in an after-tax charge to equity of $255 million.
 -- Effective in 1993, the company adopted SFAS 112, Employers' Accounting for Postemployment Benefits, which will result in a one-time after-tax charge to fourth quarter 1993 earnings of $56 million. SFAS 112 requires employers to adopt accrual accounting for benefits provided to former or inactive employees after employment but before retirement such as severance, medical and life insurance continuation and disability benefits.
 Mr. Jordan said, "We are taking these actions to improve our operating performance, accelerate the divestiture of non-core businesses, rebuild our equity base, and improve financial flexibility. This will enable us to grow our core businesses and emerge a stronger international competitor in our key markets."
 He said the company has achieved tremendous progress over the past year in liquidating its financial services business and reducing its debt.
 "We are essentially out of the financial services business and have reduced our net debt by roughly $3.2 billion, from $8.4 billion at year-end of 1992 to an estimated $5.2 billion at year-end of 1993. After completing the sale of our distribution and control business, our net debt will be further reduced by approximately $1.1 billion. We are also in advanced discussions concerning the sale of the Westinghouse Electric Supply Company.
 "Additionally, we are making significant strides in achieving structural, operational and cultural changes necessary to improve our performance throughout the corporation," Mr. Jordan said.
 -0- 1/11/94
 /CONTACT: James P. Schmitt, in New York, 212-551-7410, or 212-551-7408, or Roy L. Morrow, 412-642-4642, both of Westinghouse/

CO: Westinghouse Electric Corporation; Westinghouse Communities;
 Westinghouse Electric Supply Company ST: Pennsylvania IN: OIL ARO CPR SU:

KC -- PG008 -- 0832 01/11/94 08:21 EST
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Publication:PR Newswire
Date:Jan 11, 1994

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