<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) July 28, 1998
-------------------------
NAVIGANT INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 000-24387 52-2080967
- ------------------------------- ------------------------ -------------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
84 INVERNESS CIRCLE EAST
ENGLEWOOD, COLORADO 80112
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (303) 706-0800
--------------
Former name or former address, if changed since last report: Not Applicable
--------------
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSET
-----------------------------------
As previously reported, Navigant International, Inc., ("Navigant" or
the "Company") acquired on July 28, 1998 all of the common stock of Arrington
Travel Center, Inc. ("ATC"). This amended report on Form 8-K is filed to
include the financial statements listed in Item 7 relating to this acquisition.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(a) Financial Statements. The following financial statements are filed as
exhibits to this amendment to Report on Form 8-K and such exhibits are
incorporated herein by reference.
(1) Financial statements of Arrington Travel Center, Inc. as of
and for the year ended June 30, 1998. (Exhibit 99.1)
(b) Pro Forma Financial Information. Exhibit 99.2 contains an unaudited
pro forma balance sheet of the Company as of July 25, 1998 reflecting the
acquisition of ATC as though the acquisition occurred on July 25, 1998. This
Exhibit also contains unaudited pro forma combined statements of income for the
twelve months ended April 25, 1998, and for the three months ended July 25,
1998, reflecting the acquisition of ATC and certain other transactions as if
they occurred at the beginning of each period. The material in the Exhibit is
incorporated herein by reference.
(c) The following exhibits are filed with this report:
Exhibits Description
-------- -----------
99.1 Financial statements of Arrington Travel Center, Inc. as of
and for the year ended June 30, 1998.
99.2 Pro forma Combined Financial Statements of Navigant
International, Inc.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: October 8, 1998.
NAVIGANT INTERNATIONAL, INC.
a Delaware corporation
By: /s/ Robert C. Griffith
----------------------------
Name: Robert C. Griffith
Title: Chief Financial Officer and Treasurer (Principal Financial and
Accounting Officer)
2
<PAGE>
Exhibit 99.1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholder
of Arrington Travel Center, Inc.
In our opinion, the accompanying balance sheet and the related statements of
income and retained earnings and of cash flows present fairly, in all material
respects, the financial position of Arrington Travel Center, Inc. (the
"Company") at June 30, 1998, and the results of its operations and its cash
flows for the twelve months then ended in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
/s/PRICEWATERHOUSECOOPERS LLP
Denver, Colorado
September 30, 1998
<PAGE>
Arrington Travel Center, Inc.
Balance Sheet
June 30, 1998
- -------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 8,151,761
Receivables, less allowance for doubtful accounts of $90,000 906,378
Other receivables 1,865,401
Prepaid expenses and other current assets 120,400
-----------
Total current assets 11,043,940
Property and equipment, net 1,053,399
Prepaid expenses 145,535
-----------
Total assets $12,242,874
===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 72,000
Accrued liabilities:
Compensation 576,035
Rebates 354,744
Other 96,592
Customer deposits 154,701
Notes payable - current portion 789,616
Deferred income - current portion 200,000
-----------
Total current liabilities 2,243,688
Notes payable 23,731
Deferred income 300,000
-----------
Total liabilities 2,567,419
Commitments (Note 4)
Shareholder's equity:
Common stock (no par value; 1,000 shares authorized;
100 shares issued and outstanding) 10,000
Retained earnings 9,665,455
-----------
Total shareholder's equity 9,675,455
-----------
Total liabilities and shareholder's equity $12,242,874
===========
The accompanying notes are an integral
part of these financial statements.
<PAGE>
Arrington Travel Center, Inc.
Statement of Income and Retained Earnings
For the Twelve Months Ended June 30, 1998
- ---------------------------------------------------------------
Revenue $16,475,903
Operating expenses 11,576,849
-----------
Gross profit 4,899,054
General and administrative expenses 3,047,649
-----------
Operating income 1,851,405
Other (income) expenses:
Interest income (405,170)
Interest expense 77,077
-----------
Net income 2,179,498
Retained earnings at beginning of year 7,485,957
-----------
Retained earnings at end of year $ 9,665,455
===========
The accompanying notes are an integral
part of these financial statements.
<PAGE>
Arrington Travel Center, Inc.
Statement of Cash Flows
For the Twelve Months Ended June 30, 1998
- -------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,179,498
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 318,000
Deferred income (200,000)
Change in assets and liabilities:
Receivables (536,546)
Other assets (265,935)
Accounts payable 72,000
Accrued liabilities 121,382
----------
Net cash provided by operating activities 1,688,399
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (189,526)
----------
Net cash used in investing activities (189,526)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (28,553)
----------
Net cash used in financing activities (28,553)
----------
Net increase in cash and cash equivalents 1,470,320
Cash and cash equivalents at beginning of year 6,681,441
----------
Cash and cash equivalents at end of year $8,151,761
==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 77,077
==========
The accompanying notes are an integral
part of these financial statements.
<PAGE>
Arrington Travel Center, Inc.
Notes to Financial Statements
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1. REPORTING ENTITY AND BASIS OF ACCOUNTING
Arrington Travel Center, Inc. (the "Company") is a full-service provider of
travel reservation services and information to commercial, individual and
group customers. The Company has its headquarters in Chicago, Illinois in
addition to one full service branch office and twenty-six on-site offices at
customer locations. The Company's operations are primarily concentrated in
one market segment - airline travel - and the customers are geographically
concentrated in Illinois; management considers a downturn in this market
segment and geographical location to be unlikely.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
Commissions from ticketing, reservations and other transportation services
are recognized when the ticket is validated or reservation utilized. Revenue
from certain incentive plans offered by major airlines are accrued as earned.
The Company sells tours which it sponsors, as well as tours sponsored by
other companies. Commissions received from the sale of tours sponsored by
other companies are recognized, net of estimated cancellation adjustments,
when payment is made to the tour company. Income from Company-sponsored
tours are recognized upon the departure of the tour. Costs for tours which
have not yet departed are recorded in accounts receivable, and all related
customer receipts for such tours are recorded as a customer deposit liability
until paid.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. Cash
equivalents generally consist of money market accounts, for which cost
currently approximates fair value.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation and amortization are
computed using the straight-line method over the estimated useful lives of
the assets, which range from three to five years, and leasehold improvements
are amortized over the shorter of their economic useful lives or the lease
term. Depreciation expense for twelve months ended June 30, 1998 was
approximately $318,000.
DEFERRED INCOME
The Company received a one-time promotional support payment from the entity
that leases the Company its reservation system. The Company is required to
utilize the reservation system throughout the contract term and there is
substantial penalty for early termination of the contract. The Company has
deferred the payment and is recognizing income using the straight-line method
over the five year term of the contract.
INCOME TAXES
Effective July 1, 1987, the Company was granted S-Corporation reporting
status by the Internal Revenue Service. As a result, there is no federal or
state income tax liability reflected in the financial statements. Any
liability arising is the responsibility of the shareholder of the Company.
-1-
<PAGE>
Arrington Travel Center, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of the Company's financial instruments, including cash,
receivables and payables and notes payable, approximate their fair values.
USE OF ESTIMATES
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of certain assets and
liabilities. Actual results could differ from those estimates. Management
believes that the estimates used are reasonable.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at June 30, 1998:
Furniture and office equipment $ 2,022,806
Vehicles 1,189,719
Computer equipment 402,982
Capital lease - telephone equipment 139,374
Leasehold improvements 119,126
-----------
3,874,007
Less: accumulated depreciation (2,820,608)
-----------
Net property and equipment $ 1,053,399
===========
Accumulated depreciation for the telephone equipment under capital lease is
approximately $80,600 at June 30, 1998.
4. COMMITMENTS
The Company leases office space under various noncancelable operating leases
for several locations. Rent expense for the twelve months ended June 30, 1998
was approximately $607,000. Future minimum rental payments under these
operating leases as of June 30, 1998 are as follows:
<TABLE>
<CAPTION>
Net payments due
under operating
Gross Minimum Sublease ---------------
Periods Ending June 30, Rental Payments Payments leases
----------------------- --------------- -------- ------
<S> <C> <C> <C> <C>
1999 $ 550,500 $(53,280) $ 497,220
2000 412,875 (39,960) 372,915
--------------- -------- ---------------
Total $ 963,375 $(93,240) $ 870,135
=============== ======== ===============
</TABLE>
5. EMPLOYEE BENEFIT PLAN
The Company has established a profit sharing plan under Internal Revenue Code
section 401(k) based on a percentage of contributions made by eligible
employees. The Company does not make any matching contributions.
-2-
<PAGE>
Arrington Travel Center, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
6. INDEBTEDNESS
The Company's outstanding indebtedness at June 30, 1998 is comprised of the
following:
Note payable to Northern Trust Bank, interest at 8.5%, secured
by certain assets, payable monthly, with a balloon payment
due August 1, 1998. $760,000
Capital lease obligation, secured by certain assets,
payable in monthly installments of $2,463 principal
plus interest through 2000. 53,347
--------
813,347
Less current maturities 789,616
--------
Long-term portion of notes payable $ 23,731
========
Scheduled maturities at June 30 are as follows:
1999 $789,616
2000 23,731
--------
$813,347
========
7. SUBSEQUENT EVENT
Effective July 28, 1998, the Company was acquired by Navigant International,
Inc. Under the terms of the acquisition, a distribution of $9,409,523 of
certain assets was distributed to the shareholder, $8,703,000 of this
distribution was cash. In addition, the shareholder assumed a note payable in
the amount of $760,000.
-3-
<PAGE>
Exhibit 99.2
NAVIGANT INTERNATIONAL, INC.
PRO FORMA FINANCIAL INFORMATION
($ IN THOUSANDS)
(UNAUDITED)
In the first fiscal quarter ended July 25, 1998, Navigant International,
Inc. ("Navigant" or the "Company") made two acquisitions under the purchase
method for an aggregate purchase price of $20,372 in cash (the "First Quarter
Fiscal 1999 Purchase Acquisitions"). Additionally, the Company completed the
acquisition of Arrington Travel Center, Inc. ("ATC") on July 28, 1998 that will
be accounted for under the purchase method for an aggregate purchase price of
$17,098 in cash. The total assets related to these three acquisitions were
$44,184 including intangible assets of $37,251. The results of these
acquisitions have been or will be included in the Company's results from their
respective dates of acquisition.
In fiscal 1998, the Company made seven acquisitions accounted for under
the purchase method for an aggregate purchase price of $82,362, consisting of
3,802,367 shares of common stock with a market value of $83,780 and net of
$1,418 of cash acquired (the "Fiscal 1998 Purchase Acquisitions"). The total
assets related to these seven acquisitions were $104,776, including intangible
assets of $82,218. The results of these acquisitions have been included in the
Company's results from their respective dates of acquisition.
The unaudited pro forma combined financial statements which follows gives effect
to the impact of these acquisitions, the refinancing of all amounts that were
payable to U.S. Office Products Company ("USOP"), and the distribution of
10,969,000 shares of Navigant Common Stock to the former stockholders of USOP
which was completed on June 9, 1998 (the "Distribution"). The pro forma offering
adjustments further adjust such pro forma combined financial statements to give
effect to the June 9, 1998 stock offering of 2,000,000 shares of Common Stock
(the "Offering") and the use of the proceeds therefrom to repay debt. The pro
forma combined financial statements do not give effect to the acquisition of
World Express Travel, Inc. which occurred on September 17, 1998 for which a Form
8-K was filed on October 1, 1998 nor does it give effect to one other
acquisition which occurred subsequent to September 17, 1998 which is considered
insignificant.
The unaudited pro forma combined balance sheet as of July 25, 1998 gives effect
to the acquisition of ATC by the Company as if the transaction had occurred as
of the Company's most recent balance sheet date, July 25, 1998.
The unaudited pro forma combined statement of income for the fiscal year ended
April 25, 1998 gives effect to (i) the Fiscal 1998 Purchase Acquisitions; (ii)
the First Quarter Fiscal 1999 Purchase Acquisitions; (iii) the acquisition of
ATC; (iv) the refinancing of all amounts payable to USOP; (v) the Distribution;
and (vi) the Offering, as if all such transactions had occurred on April 27,
1997.
The unaudited pro forma combined statement of income for the fiscal year ended
April 25, 1998 includes (i) the audited financial information of the Company for
the fiscal year ended April 25, 1998; (ii) the unuadited financial information
of the Fiscal 1998 Purchase Acquisitions for the period from April 27, 1997
through their respective acquisition dates; (iii) the unaudited financial
information of the First Quarter Fiscal 1999 Purchase Acquisitions for the
period from April 27, 1997 through April 25, 1998; and (iv) the unaudited
financial information of ATC for the period from April 27, 1997 through
April 25, 1998.
The unaudited pro forma combined statement of income for the three months ended
July 25, 1998 gives effect to (i) the First Quarter Fiscal 1999 Purchase
Acquisitions; (ii) the acquisition of ATC; (iii) the refinancing of all amounts
payable to USOP; (iv) the Distribution; and (v) the Offering, as if all such
transactions had occurred on April 26, 1998.
1
<PAGE>
The unaudited pro forma combined statement of income for the three months ended
July 25, 1998 includes (i) the unaudited financial information of the Company
for the three months ended July 25, 1998; (iii) the unaudited financial
information of the First Quarter Fiscal 1999 Purchase Acquisitions for the
period from April 26, 1998 through their respective acquisition date; and (iv)
the unaudited financial information of ATC for the period from April 26, 1998
through July 25, 1998.
The unaudited pro forma adjustments are based upon preliminary estimates,
available information and certain assumptions that management deems appropriate.
The unaudited pro forma combined financial data presented herein does not
purport to represent what the Company's financial position or results of
operations would have been had the transactions which are the subject of pro
forma adjustments occurred on those dates, as assumed, and are not necessarily
representative of the Company's financial position or results of operations in
any future period. The pro forma combined financial statements should be read
in conjunction with the other financial statements and notes thereto included
elsewhere in this Current Report on Form 8-K and in the Company's Annual Report
on Form 10-K for the fiscal year ended April 25, 1998 and its Quarterly Report
on Form 10-Q for the three months ended July 25, 1998. The financial data for
the Fiscal 1998 Purchase Acquisitions is shown combined but is presented by
company in Navigant's Report on Form S-1.
2
<PAGE>
NAVIGANT INTERNATIONAL, INC.
PRO FORMA COMBINED BALANCE SHEET
JULY 25, 1998
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Arrington
Navigant Travel
International, Center, Pro Forma Pro Forma
Inc. Inc. Adjustments Combined
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 5,202 $ (1,268) (a) $ 3,934
Total receivables 22,271 $ 2,966 25,237
Due from U.S. Office Products 1,458 1,458
Prepaid and other assets 2,977 530 3,507
------------ ----------- ------------ ------------
Total current assets 31,908 3,496 (1,268) 34,136
Net property and equipment 18,402 428 18,830
Net intangible assets 107,990 16,147 (b) 124,137
Other assets 1,447 190 1,637
------------ ----------- ------------ ------------
Total assets $ 159,747 $ 4,114 $ 14,879 $ 178,740
============ =========== ============ ============
Short-term debt $ 1,180 $ 1,180
Payable to former shareholder $ 1,268 $ (1,268) (a) 0
Accounts payable 2,934 2,934
Accrued compensation 5,669 548 6,217
Accrued taxes 758 758
Other accrued liabilities 12,252 763 250 (b) 13,265
------------ ----------- ------------ ------------
Total current liabilities 22,793 2,579 (1,018) 24,354
Long-term debt 21,438 17,098 (b) 38,536
Other long-term liabilities 1,688 334 2,022
Deferred income taxes 97 97
------------ ----------- ------------ ------------
Total liabilities 46,016 2,913 16,080 65,009
Common stock 13 10 (10) (b) 13
Additional paid-in capital 111,843 111,843
Retained earnings 2,034 1,191 (1,191) (b) 2,034
Cumulative translation adjustment (159) (159)
------------ ----------- ------------ ------------
Total stockholders' equity 113,731 1,201 (1,201) 113,731
------------ ----------- ------------ ------------
Total liabilities and
stockholders' equity $ 159,747 $ 4,114 $ 14,879 $ 178,740
============ =========== ============ ============
</TABLE>
See accompanying notes to pro forma combined financial statements.
3
<PAGE>
NAVIGANT INTERNATIONAL, INC.
Pro Forma Combined Statement of Income
Three Months Ended July 25, 1998
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
First Quarter
Fical 1999
Purchase Pro Forma Pro Forma
Navigant Arrington Acquisitions Adjustments Combined
<S> <C> <C> <C> <C> <C>
Revenues $ 40,578 $ 4,278 $ 4,574 $ 49,430
Operating Expenses 23,155 2,438 2,479 28,072
-------- --------- --------- --------
Gross Profit 17,423 1,840 2,095 21,358
General and administrative expenses 12,054 1,033 1,460 $ (516) (c) 14,031
Amortization expense 712 242 (e) 954
Strategic restructuring costs 2,826 (2,826) (f)
-------- --------- --------- --------- --------
Operating Income 1,831 807 635 3,100 6,373
Other (Income) Expense 220 (89) (12) 553 (g) 672
-------- --------- --------- --------- --------
Income before provision
for income taxes 1,611 896 647 2,547 5,701
Provision for income taxes 878 21 1,570 (h) 2,469
-------- --------- --------- --------- --------
Net income $ 733 $ 896 $ 626 $ 977 $ 3,232
======== ========= ========= ========= ========
Weighted average shares (i)
Basic 13,183 12,978
Diluted 13,264 12,997
Net income per share
Basic $ 0.06 $ 0.25
Diluted $ 0.06 $ 0.25
</TABLE>
See accompanying notes to pro forma combined financial statements.
4
<PAGE>
NAVIGANT INTERNATIONAL, INC.
Pro Forma Combined Statement of Income
Twelve Months Ended April 25, 1998
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
First Quarter
Fiscal 1998 Fiscal 1999
Purchase Purchase Pro Forma Pro Forma
Navigant Arrington Acquisitions Acquisitions Adjustments Combined
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 120,424 $ 18,238 $ 36,618 $ 17,419 $192,699
Operating Expenses 69,643 10,396 19,372 9,468 108,879
--------- --------- --------- --------- --------
Gross Profit 50,781 7,842 17,246 7,951 83,820
General and administrative
expenses 38,531 5,597 11,935 6,146 $ (2,950) (c) 59,381
122 (d)
Amortization expense 2,353 111 1,466 (e) 3,930
Nonrecurring costs 2,263 (1,000) (f) 1,263
--------- --------- --------- --------- --------- --------
Operating income 7,634 2,245 5,200 1,805 2,362 19,246
Other (Income) Expense 176 (316) (24) 30 2,779 (g) 2,645
--------- --------- --------- --------- --------- --------
Income before provision
for income taxes 7,458 2,561 5,224 1,775 (417) 16,601
Provision for income taxes 4,081 12 303 44 3,312 (h) 7,752
--------- --------- --------- --------- --------- --------
Net income $ 3,377 $ 2,549 $ 4,921 $ 1,731 ($ 3,729) $ 8,849
========= ========= ========= ========= ========= ========
Weighted average shares (i)
Basic 11,956 12,978
Diluted 12,193 12,997
Net income per share
Basic $ 0.28 $ 0.68
Diluted $ 0.28 $ 0.68
</TABLE>
See accompanying notes to pro forma combined financial statements.
5
<PAGE>
NAVIGANT INTERNATIONAL, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(Unaudited)
($ In Thousands)
UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS
a) Adjustment to reflect the repayment of payable to former shareholder of ATC
as a result of the acquisition of ATC by the Company.
b) Adjustment to reflect purchase price adjustments associated with the
acquisition of ATC for $17,098 of cash. The portion of the consideration
assigned to goodwill ($16,147) in the transaction accounted for under the
purchase method represents the excess of the cost over the fair market value
of the net assets acquired. The Company amortizes goodwill over a period of
35 years. The recoverability of the unamortized goodwill will be assessed on
an ongoing basis by comparing anticipated undiscounted future cash flows from
operations to net book value.
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME ADJUSTMENTS
c) Adjustment to reflect reductions in executive compensation as a result of the
elimination of certain executive positions and the renegotiations of
executive compensation agreements resulting from certain acquisitions. The
Company believes that these reductions are expected to remain in place for
the foreseeable future and are not reasonably likely to affect the operating
performance of the Company.
d) Adjustment to reflect additional corporate overhead expenses to be incurred
as a stand-alone, publicly traded entity, rather than as a division of USOP.
e) Adjustment to reflect the increase in amortization expense relating to
goodwill recorded in purchase accounting related to the Fiscal 1998 Purchase
Acquisitions, First Quarter Fiscal 1999 Purchase Acquisitions and ATC
acquisition for the periods prior to the respective dates of acquisition. The
Company has recorded goodwill amortization in the historical financial
statements from the respective dates of acquisition forward. The goodwill is
being amortization over an estimate life of 35 years.
f) Adjustment to reflect the elimination of nonrecurring costs that were
associated with the Distribution.
g) Adjustment to reflect the increase in interest expense. Interest expense is
being calculated on an average pro forma debt outstanding during the
applicable periods at a weighted average interest rate of approximately
7.75%. The adjustment also reflects the reduction in interest income to zero
as the Company generally expects to use available cash to repay debt. Pro
forma interest expense will fluctuate $13 on an annual basis for each 0.125%
change in interest rates.
h) Adjustment to calculate the provision for income taxes on the pro forma
combined results. The difference between the effective tax rates and the
statutory tax rate of 35% relates primarily to non-deductible goodwill,
restructuring costs and state income taxes.
i) The weighted average shares outstanding used to calculate pro forma combined
earnings per share is calculated based upon the weighted average shares of
the Company, as adjusted to reflect the shares sold in the Offering, as if
the Offering had occurred on April 27, 1997.
6