Fleming Companies, Inc. (NYSE:FLM) today reported a 36.6% increase in the 13-week fourth quarter 2000 net earnings to $21.2 million, or $0.53 per share after adjustments to exclude strategic plan charges and one-time items, compared to $15.5 million, or $0.40 per share, in the 12-week fourth quarter of 1999.

The company previously provided guidance of $0.52 per share. Fourth quarter adjusted EBITDA, or earnings before interest, taxes, depreciation, amortization, equity investment results, LIFO, and strategic plan and one-time charges, was $118.4 million, or 3.27% of sales, up 40 basis points compared to the prior year's 2.87% of sales. The EBITDA result represents a 17.6% increase over the prior year.

"We are very pleased with our fourth quarter results because they validate our strategic initiatives," said Mark Hansen, chairman of the board and chief executive officer of Fleming. "Our focus on the distribution and price impact retail businesses, paired with the benefits of our central procurement and low-cost pursuit initiatives, are proving to be the key drivers of Fleming's earnings momentum."

Total company net sales for the 13-week fourth quarter increased to $3.63 billion from $3.50 billion in the 12-week fourth quarter of 1999. Distribution segment net sales were $2.87 billion in the fourth quarter, up from $2.63 billion in the prior year. The increase was due primarily to the additional week in the 2000 fourth quarter as well as growth in sales to both independent food retail and new retail channel customers. Incorporated in the numbers is the existing Kmart supply business, which was initiated in the third quarter of 1999 and fully cycled by the fourth quarter of 2000. The 2000 results also reflect the previously disclosed loss of the United Supermarkets account and difficult comparisons following 1999's strong sales resulting from customers' preparations for Y2K. During the fourth quarter the company adopted a recent accounting rule on revenues, EITF 99-19, and restated total company and distribution segment sales for the current and prior year. The adoption of EITF 99-19 had no affect on gross margins or earnings.

Retail segment sales declined to $759 million from $871 million in the prior year's fourth quarter and total retail food group same store sales declined 6.2%. Same store sales at ongoing operations were substantially better than the average. During the quarter, the company reached an agreement to sell the 16-store Baker's operations to Kroger Co., which is expected to be completed during the first quarter of 2001 and will include a three-year supply arrangement for these stores.

Operating expenses declined for the total company, falling 7.5% to $272.2 million from $294.3 million. Operating expenses in the distribution and retail segments decreased as efficiencies were gained and low-cost pursuit initiatives were realized. Operating expenses from support services increased, representing the continuing consolidation of accounting, human resources and information technology into the Shared Services Center and the centralization of procurement into the Customer Support Center. The consolidation and centralization of these functions are reducing system-wide expenses.

Adjusted operating earnings were sharply higher for both the distribution and retail segments of the business. Distribution earnings increased from $78.3 million to $97.4 million, reflecting increased efficiencies and improvements resulting from the strategic initiatives undertaken by the company. Retail earnings improved from $11.0 million to $31.1 million. Excellent earnings at the Food4Less and Rainbow stores combined with the sale of underperforming operations generated the higher retail earnings.

Strategic plan charges for the fourth quarter totaled $98.1 million pre-tax, including $72.7 million of cash-related charges and $25.4 million of non-cash charges. Most of these charges relate to the planned and actual disposition of company-owned conventional retail stores, particularly the ABCO and Sentry operations, including asset write-downs, reserves for lease liabilities, and severance. In 2001, the company expects charges to be down substantially to approximately $20 million. Before giving effect to the strategic plan adjustments, the fourth quarter loss was $37.4 million, or $0.96 per share.

Results for the Year

For the full year, net sales were $14.44 billion, a 1.2% increase over 1999's sales of $14.27 billion. Distribution segment sales in 2000, adjusted to reflect the sales on a comparable 52-week basis, increased 3.8% to $10.95 billion from $10.55 billion. Net earnings excluding strategic plan charges and one-time items were $62.2 million, or $1.56 per share, up 43.2% compared to $43.4 million, or $1.12 per share, in the prior year. At 3.16% of sales, the 2000 adjusted EBITDA of $456.0 million represents a 10.9% increase over the prior year. Unadjusted, the net loss was $122.1 million, or $3.15 per share.

About Fleming Companies, Inc.

Fleming is an industry leader in distribution and has a growing presence in price impact retail. Fleming's primary business is buying and selling merchandise. Through our distribution group, we distribute products to customers that operate approximately 3,000 supermarkets, 3,000 convenience stores, and nearly 1,000 supercenters, discount, limited assortment, drug, specialty, and other stores across the United States.

Safe-Harbor Statement

This release, including the attached tables, includes statements that (a) predict or forecast future events or results, (b) depend on future events for their accuracy, or (c) embody projections and assumptions which may prove to have been inaccurate, including expectations for years 2001 and beyond. The projections were not prepared with a view to compliance with the guidelines established by the American Institute of Certified Public Accountants regarding projections. These projections, forward-looking statements and the company's business and prospects are subject to a number of factors that could cause actual results to differ materially, including: the ability to achieve the expected synergies and anticipated cost savings from the Kmart alliance; unanticipated transition and start-up costs related to the Kmart alliance; the ability to obtain capital or obtain it on acceptable terms; unanticipated problems in the supply chain due to the increased volumes from the Kmart alliance; adverse effects of the changing industry environment and increased competition; sales declines and loss of customers disruption caused by implementation of strategic alternatives regarding conventional retail; exposure to litigation and other contingent losses unanticipated charges related to the strategic initiatives plan or failure to achieve the expected results of such plan; failure of the company to achieve necessary cost savings; and negative effects of the company's substantial indebtedness and the limitations imposed by restrictive covenants contained in the company's debt instruments. These and other factors are described in the company's periodic reports available from the Securities and Exchange Commission.

Recent Achievements

Total Company:

  • Adjusted earnings increased 37% in the fourth quarter 2000 compared to 1999.
  • Adjusted earnings totaled $0.53 per share, beating earlier guidance of $0.52 per share.
  • Adjusted earnings per share guidance was given for 2001, 2002, and 2003 of $1.90, $2.50, and $3.30, respectively, representing a projected compound annual earnings growth rate of more than 30% from 1999 through 2003.

Distribution:

  • Distribution segment adjusted operating earnings totaled $97.4 million, or 3.40% of sales, up from $78.3 million, or 2.98% of sales, in 1999's fourth quarter.
  • Fleming and Kmart entered into a 10-year, $4.5 billion alliance that redefines the traditional retail business model. Fleming will procure and distribute substantially all of the food and consumable products in all current and future Kmart and Kmart supercenter stores. The supply arrangement includes grocery, meat, produce, frozen foods, dairy, and other grocery items, as well as Fleming's BestYet store brand product. The alliance may be further expanded to include an agreement on health and beauty products and related categories.
  • Over $1.2 billion in annualized new business was added to the distribution segment during 2000, exceeding the sales goal of $1 billion.
  • Distribution operations benefited from economies of scale. Four distribution divisions exceeded $1 billion in volume at the end of 2000. The average volume per distribution center increased 14.8 percent year-over-year from $479.4 million in 1999 to $550.2 million in 2000.
  • Retail sales of Fleming's private label products exceeded $1 billion in 2000, a record level. In addition, Fleming's BestYet brand received four prestigious "Addy" awards, honoring BestYet for outstanding advertising production.
  • The transition of independent retailers from the Minneapolis distribution center to the LaCrosse and Superior distribution centers was completed. This positions the Minneapolis distribution center as the exclusive supplier to Fleming's Rainbow stores.
  • Sales to convenience store operators increased 30% during 2000. During the fourth quarter, Fleming completed the successful transition of the Clark Oil Co. business to its new convenience store distribution center in Romeoville, Illinois.

Retail:

  • Retail segment adjusted operating earnings totaled $31.1 million, or 4.10% of sales, up from $11.0 million, or 1.26% of sales, in 1999's fourth quarter. Markedly higher earnings at the Rainbow and Food4Less operations accounted for substantially all of the higher segment earnings.
  • Fleming reached an agreement to sell 16 Bakers Supermarkets to Kroger Co. and will implement a three-year supply agreement upon successful completion of the transaction. The transaction should be finalized in the first quarter of 2001.
  • Eleven ABCO stores, located in Phoenix and Tucson, are to be sold by Fleming to Safeway. The transaction should be finalized in the first quarter of 2001.
  • Fleming announced plans to enter Texas with its price impact operation. The company signed a lease for its first Texas-based store in Lubbock.
  • Fleming is accelerating the growth of its price impact operations. Up to 25 price impact stores will be opened in 2001. Up to 100 price impact stores will be opened over the coming three years. The new price impact store openings will result from a combination of new building, conversions of existing retail stores, and acquisitions.
  • Fleming's newest retail operation, Yes!Less, opened for business in 2000. A concept-stage operation, Yes!Less features a limited assortment of food and general merchandise products in approximately 12,000 square feet of space. Six Yes!Less stores were open at year end 2000.

Support Services:

  • The transition and consolidation of procurement into the Lewisville-based Customer Service Center is approximately two-thirds complete and expected to be finalized by the end of 2001.
  • Consolidation of administrative functions, such as accounting and information technology, continues on plan in Oklahoma City.

Other:

  • Total debt, including capitalized leases, was $1.669 billion at year end 2000. This is down $24 million from $1.694 billion at the end of 1999.
  • Adjusted EBITDA to interest was 2.61x at the end of 2000, compared to 2.49x at the end of 1999.
  • Capital expenditures for 2000 totaled $153 million. Projected capital spending for 2001 is anticipated to be approximately $225 million, including up to $50 million in capital expenditures related to the Kmart alliance.
  • Amortization of goodwill, which is a non-cash item, totaled $0.53 per share in 1999 and 2000. Excluding the impact of goodwill amortization, adjusted earnings were $1.65 in 1999 and $2.09 in 2000.
  • On February 7, 2001, Fleming announced that The Yucaipa Companies will make a $50 million investment in Fleming. Yucaipa will hold approximately 3.8 million newly issued common shares, representing 8.7% of Fleming's outstanding stock. In addition, Yucaipa has a 12-month option to purchase an additional $50 million of Fleming's common stock at the then-current average market price of Fleming's stock.

                       Fleming Companies, Inc.
           Consolidated Condensed Statements of Operations
               For the 13 weeks ended December 30, 2000,
               and the 12 weeks ended December 25, 1999
               (In thousands, except per share amounts)
                                 2000

                                 Reported Adjustments      Adjusted
                                             (A)
Net sales                      $3,624,784       $217     $3,625,001
 % change                                                       3.5%

Costs and expenses:
 Cost of sales                  3,289,126    (10,690)     3,278,436
 Selling and administrative       293,219    (21,045)       272,174
 Interest expense                  42,910                    42,910
 Interest income                   (7,495)                   (7,495)
 Equity investment results          2,352                     2,352
 Impairment/restructuring charge   66,331    (66,331)             0

   Total costs and expenses     3,686,443    (98,066)     3,588,377

Income (loss) before taxes        (61,659)    98,283         36,624
Taxes on income (loss)            (24,298)    39,755         15,457

Net income (loss)                ($37,361)   $58,528        $21,167

Earnings (loss) per share:
 Basic                             ($0.96)     $1.50          $0.54
 Diluted                           ($0.96)                    $0.53
  % change                                                     32.5%
Dividends paid per share            $0.02                     $0.02
Weighted average shares outstanding:
 Basic                             38,934                    38,934
 Diluted                           38,934                    40,024

Additional information:
 Depreciation/amortization, net of
  amounts in interest expense     $39,116      ($168)       $38,948
   Goodwill amortization
   (included above)                $4,734         $0         $4,734
    EBITDA  (B)                   $20,304    $98,115       $118,419
     % of sales                                                3.27%
     % change                                                  17.6%

                                 1999

                                 Reported Adjustments      Adjusted
                                             (A)
Net sales                      $3,503,337        $24     $3,503,361
 % change

Costs and expenses:
 Cost of sales                  3,158,199     (2,335)     3,155,864
 Selling and administrative       306,081    (11,801)       294,280
 Interest expense                  37,940                    37,940
 Interest income                  (16,999)     9,157         (7,842)
 Equity investment results          1,841       (713)         1,128
 Impairment/restructuring charge   23,656    (23,656)             0

   Total costs and expenses     3,510,718    (29,348)     3,481,370

Income (loss) before taxes         (7,381)    29,372         21,991
Taxes on income (loss)             (3,578)    10,074          6,496

Net income (loss)                 ($3,803)   $19,298        $15,495

Earnings (loss) per share:
 Basic                             ($0.10)     $0.50          $0.40
 Diluted                           ($0.10)                    $0.40
  % change
Dividends paid per share            $0.02                     $0.02
Weighted average shares outstanding:
 Basic                             38,470                    38,470
 Diluted                           38,470                    38,949

Additional information:
 Depreciation/amortization, net of
  amounts in interest expense     $37,711         $0        $37,711
   Goodwill amortization
   (included above)                $5,345         $0         $5,345
    EBITDA  (B)                   $72,173    $28,540       $100,713
     % of sales                                                2.87%
     % change

    (A) -- Adjustments relate to the strategic plan which was
announced in December, 1998 and one-time adjustments. One-time
adjustments for 1999 included: $31.0 million in charges relating to
closing certain company-owned retail stores, $22.0 million income from
extinguishing a portion of the self insured worker's compensation
liability, and $9.2 million interest income relating to refunds in
federal income taxes from prior years. All remaining charges relate to
the strategic plan which includes non-cash impairments of asset values
and cash restructuring costs for severance, lease termination, real
estate disposition costs for discontinued operations and other related
expenses.
    (B) -- EBITDA is earnings before interest expense, income taxes,
depreciation and amortization, equity investment results, and LIFO
($2,415 income in 2000  and $2,062 charge in 1999).

                   Segment Information Income (Loss)
              For the 13 weeks ended December 30, 2000,
               and the 12 weeks ended December 25, 1999
               (In thousands, except per share amounts)
                                 2000

                                 Reported Adjustments      Adjusted
Distribution

Gross sales                    $3,278,989       $217     $3,279,206
 Intersegment elimination       (413,606)          0       (413,606)

  Net sales                    $2,865,383       $217     $2,865,600
   % change                                                     8.9%

Gross margin                     $157,641     $8,210       $165,851
 % of distribution gross sales                                 5.06%
Selling and administrative        (66,099)    16,348        (49,751)
 % of distribution gross sales                                -1.52%
Intersegment elimination          (18,674)         0        (18,674)

 Operating earnings               $72,868    $24,558        $97,426
  % of distribution net sales                                  3.40%

 EBITDA                           $92,574    $31,933       $124,507
  % of distribution net sales                                  4.34%
  % change                                                     23.7%

Retail

Net sales                        $759,401         $0       $759,401
 % change                                                     -12.8%

Gross margin                     $177,900     $1,719       $179,619
 % of retail sales                                            23.65%
Selling and administrative       (170,113)     2,925       (167,188)
 % of retail sales                                           -22.02%
Intersegment profit                18,674          0         18,674

 Operating earnings               $26,461     $4,644        $31,105
  % of retail sales                                            4.10%

 EBITDA                          ($13,821)   $60,467        $46,646
  % of retail sales                                            6.14%
  % change                                                     49.0%

Support Services

Operating earnings               ($56,890)    $2,750       ($54,140)
 % of total company sales                                     -1.49%

EBITDA                            ($58,449)   $5,715       ($52,734)
 % of total company sales                                     -1.45%

                                 1999

                                 Reported Adjustments      Adjusted
Distribution

Gross sales                    $3,152,990        $24     $3,153,014
 Intersegment elimination        (520,885)         0       (520,885)

  Net sales                    $2,632,105        $24     $2,632,129
   % change

Gross margin                     $159,182     $1,473       $160,655
 % of distribution gross sales                                 5.10%
Selling and administrative        (61,907)       551        (61,356)
 % of distribution gross sales                                -1.95%
Intersegment elimination          (20,959)         0        (20,959)

 Operating earnings               $76,316     $2,024        $78,340
  % of distribution net sales                                  2.98%

 EBITDA                           $96,317     $4,350       $100,667
  % of distribution net sales                                  3.82%
  % change

Retail

Net sales                        $871,232         $0       $871,232
 % change

Gross margin                     $191,524       $904       $192,428
 % of retail sales                                            22.09%
Selling and administrative       (235,243)    32,810       (202,433)
 % of retail sales                                           -23.24%
Intersegment profit                20,959          0         20,959

 Operating earnings              ($22,760)   $33,714        $10,954
  % of retail sales                                            1.26%

 EBITDA                          ($20,605)   $51,913        $31,308
  % of retail sales                                            3.59%
  % change

Support Services

Operating earnings               ($14,499)  ($21,578)      ($36,077)
 % of total company sales                                     -1.03%

EBITDA                            ($3,539)  ($27,723)      ($31,262)
 % of total company sales                                     -0.89%

           Consolidated Condensed Statements of Operations
               For the 53 weeks ended December 30, 2000,
               and the 52 weeks ended December 25, 1999
               (In thousands, except per share amounts)
                               2000

                                 Reported Adjustments      Adjusted
                                              (A)
Net sales                     $14,443,815    ($6,455)   $14,437,360
 % change                                                       1.2%

Costs and expenses:
Cost of sales                  13,096,915    (56,990)    13,039,925
Selling and administrative      1,185,003    (45,060)     1,139,943
Interest expense                  174,569                   174,569
Interest income                   (32,662)                  (32,662)
Equity investment results           8,034       (315)         7,719
Impairment/restructuring charge   212,845   (212,845)             0

 Total costs and expenses      14,644,704   (315,210)    14,329,494

Income (loss) before taxes       (200,889)   308,755        107,866
Taxes on income (loss)            (78,747)   124,447         45,700

Net income (loss)               ($122,142)  $184,308        $62,166

Earnings (loss) per share:
 Basic                             ($3.15)     $4.76          $1.61
 Diluted                           ($3.15)                    $1.56
  % change                                                     39.3%
Dividends paid per share            $0.08                     $0.08
Weighted average shares outstanding:
 Basic                             38,716                    38,716
 Diluted                           38,716                    39,936

Additional information:
Depreciation/amortization, net of
 amounts in interest expense     $169,190    ($6,830)      $162,360
Goodwill amortization
 (included above)                 $20,591         $0        $20,591
EBITDA  (B)                      $154,389   $301,610       $455,999
 % of sales                                                    3.16%
 % change                                                      10.9%

                                 1999

                                 Reported Adjustments      Adjusted
                                             (A)

Net sales                     $14,272,036    ($5,506)   $14,266,530
 % change

Costs and expenses:
Cost of sales                  12,834,869    (17,806)    12,817,063
Selling and administrative      1,261,631    (24,090)     1,237,541
Interest expense                  165,180                   165,180
Interest income                   (40,318)     9,157        (31,161)
Equity investment results          10,243       (832)         9,411
Impairment/restructuring charge   103,012   (103,012)             0

 Total costs and expenses      14,334,617   (136,583)    14,198,034

Income (loss) before taxes        (62,581)   131,077         68,496
Taxes on income (loss)            (17,853)    42,938         25,085

Net income (loss)                ($44,728)   $88,139        $43,411

Earnings (loss) per share:
 Basic                             ($1.17)     $2.30          $1.13
 Diluted                           ($1.17)                    $1.12
  % change
Dividends paid per share            $0.08                     $0.08
Weighted average shares outstanding:
 Basic                             38,305                    38,305
 Diluted                           38,305                    38,699

Additional information:
Depreciation/amortization, net of
 amounts in interest expense     $157,510         $0       $157,510
Goodwill amortization
 (included above)                 $20,563         $0        $20,563
EBITDA  (B)                      $281,089   $130,245       $411,334
 % of sales                                                    2.88%
 % change

    (A) -- Adjustments relate to the strategic plan which was
announced in December, 1998 and one-time adjustments. One-time
adjustments for 2000 include: an $8.6 million gain from the sale of a
facility, $10.4 million in charges relating to closing certain
company-owned retail stores, and $1.9 million net income from
litigation settlements. One-time adjustments for 1999 include: A $5.6
million gain from the sale of a facility, $31.0 million in charges
relating to closing certain company-owned retail stores, $22 million
income from extinguishing a portion of the self insured worker's
compensation liability, and $9.2 million interest income relating to
refunds in federal income taxes from prior years. All remaining
charges relate to the strategic plan which includes non-cash
impairments of asset values and cash restructuring costs for
severance, lease termination, real estate disposition costs for
discontinued operations and other related expenses.
    (B) -- EBITDA is earnings before interest expense, income taxes,
depreciation and amortization, equity investment results, and LIFO
charge ($3,485 in 2000 and $10,737 in 1999).

                  Segment Information Income (Loss)
               For the 53 weeks ended December 30, 2000,
               and the 52 weeks ended December 25, 1999
               (In thousands, except per share amounts)
                               2000


                                 Reported Adjustments      Adjusted
Distribution

Gross sales                   $12,926,083    ($6,455)   $12,919,628
Intersegment elimination       (1,757,547)         0     (1,757,547)

Net sales                     $11,168,536    ($6,455)   $11,162,081
 % change                                                       5.8%

Gross margin                     $606,925    $30,053       $636,978
 % of distribution gross sales                                 4.93%
Selling and administrative       (243,499)    18,634       (224,865)
 % of distribution gross sales                                -1.74%
Intersegment elimination          (66,427)         0        (66,427)

 Operating earnings              $296,999    $48,687       $345,686
  % of distribution net sales                                  3.10%

 EBITDA                          $362,928    $84,213       $447,141
  % of distribution net sales                                  4.01%
  % change                                                     13.2%

Retail

Net sales                      $3,275,279         $0     $3,275,279
 % change                                                     -11.9%

Gross margin                     $754,821    $10,518       $765,339
 % of retail sales                                            23.37%
Selling and administrative       (759,352)    16,645       (742,707)
 % of retail sales                                           -22.68%
Intersegment profit                66,427          0         66,427

 Operating earnings               $61,896    $27,163        $89,059
   % of retail sales                                           2.72%

 EBITDA                           ($7,772)  $174,712       $166,940
  % of retail sales                                            5.10%
  % change                                                     30.9%

Support Services

Operating earnings              ($196,998)   $19,745      ($177,253)
 % of total company sales                                     -1.23%

EBITDA                          ($200,767)   $42,685      ($158,082)
 % of total company sales                                     -1.09%

                                 1999

                                 Reported Adjustments      Adjusted
Distribution

Gross sales                   $12,717,749    ($5,506)   $12,712,243
Intersegment elimination       (2,164,615)       0       (2,164,615)

Net sales                     $10,553,134    ($5,506)   $10,547,628
 % change

Gross margin                     $627,272     $4,270       $631,542
 % of distribution gross sales                                 4.97%
Selling and administrative       (269,136)     7,912       (261,224)
 % of distribution gross sales                                -2.05%
Intersegment elimination          (68,297)         0        (68,297)

 Operating earnings              $289,839    $12,182       $302,021
  % of distribution net sales                                  2.86%

 EBITDA                          $353,334    $41,726       $395,060
  % of distribution net sales                                  3.75%
  % change

Retail

Net sales                      $3,718,902         $0     $3,718,902
 % change

Gross margin                     $827,680     $8,030       $835,710
 % of retail sales                                            22.47%
Selling and administrative       (897,506)    35,940       (861,566)
 % of retail sales                                           -23.17%
Intersegment profit                68,297          0         68,297

 Operating earnings               ($1,529)   $43,970        $42,441
   % of retail sales                                           1.14%

 EBITDA                           $26,380   $101,192       $127,572
  % of retail sales                                            3.43%
  % change

Support Services

Operating earnings              ($112,774)  ($19,762)     ($132,536)
 % of total company sales                                     -0.93%

EBITDA                           ($98,625)  ($12,673)     ($111,298)
 % of total company sales                                     -0.78%

           Analysis of Impairment and Restructuring Charges
               (In millions, except per share amounts)

   (Amounts through 2000 are final, all other amounts are estimates)
                           1998                  1999
                         Full Year Qtr 1  Qtr 2  Qtr 3  Qtr 4   Full
                                                                Year
Impairment of Assets
 Goodwill                     $372    $22     $0    $14     $0    $36
 Other assets                  218     2       1     16      7     26
  Total impairment of assets   590     24      1     30      7     62

Other restructuring charges     63     13      5      6     17     41

Total impairment and
restructuring charges          653     37      6     36     24    103

Other periodic disposition
and exit costs affecting:
 Net sales                       0      0      0      0      0      0
 Cost of sales                   9      6      7      3      2     18
 Selling and administrative      6      3      3      6      4     16
  Total                         15      9     10      9      6     34

Total charges before taxes     668     46     16     45     30    137

Income tax benefit             125     14      4     17     10     45

Total charges after taxes     $543    $32    $12    $28    $20    $92

Negative effect on EPS      $14.33  $0.84  $0.31  $0.73  $0.50  $2.39

Non-cash charges (pre-tax)    $594    $29     $6    $35     $9    $79
Cash Charges (pre-tax)          74     17     10     10     21     58
 Total                        $668    $46    $16    $45    $30   $137

Cash Expended                  $10    $16    $16    $10    $15    $57

                                         2000
                            Qtr 1 Qtr 2 Qtr 3 Qtr 4 Full  2001   2002
                                                    Year
Impairment of Assets
 Goodwill                      $0    $0    $3    $0    $3    $0    $0
 Other assets                   2     1    78     7    88     0     0
  Total impairment of assets    2     1    81     7    91     0     0

Other restructuring charges    41    20     2    59   122    13     3

Total impairment and
restructuring charges          43    21    83    66   213    13     3

Other periodic disposition
and exit costs affecting:
 Net sales                      0     1     1     0     2     0     0
 Cost of sales                 13    22    11    11    57     5     1
 Selling and administrative     8     2     6    21    37     2     0
  Total                        21    25    18    32    96     7     1

Total charges before taxes     64    46   101    98   309    20     4

Income tax benefit             26    19    41    40   126     8     2

Total charges after taxes     $38   $27   $60   $58  $183   $12    $2

Negative effect on EPS      $0.98 $0.71 $1.53 $1.45 $4.58 $0.29 $0.06

Non-cash charges (pre-tax)    $12    $6   $85   $25  $128    $5    $0
Cash Charges (pre-tax)         52    40    16    73   181    15     4
 Total                        $64   $46  $101   $98  $309   $20    $4

Cash Expended                 $35   $46   $26   $11  $118   $56   $27

                                 Total for yrs
                                  1998 - 2002

Impairment of Assets
 Goodwill                                $411
 Other assets                             332
  Total impairment of assets              743

Other restructuring charges               242

Total impairment and
restructuring charges                     985

Other periodic disposition
and exit costs affecting:
 Net sales                                  2
 Cost of sales                             90
 Selling and administrative                61
  Total                                   153

Total charges before taxes              1,138

Income tax benefit                        306

Total charges after taxes                $832

Negative effect on EPS                 $21.66

Non-cash charges (pre-tax)               $806
Cash Charges (pre-tax)                    332
 Total                                 $1,138

Cash Expended                            $268