<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 033-58891
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* *
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. *
* THESE SECURITIES MAY NOT BE DELIVERED WITHOUT THE DELIVERY OF A FINAL *
* PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS. THIS PROSPECTUS *
* SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS SHALL NOT CONSTITUTE AN *
* OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE *
* BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, *
* SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR *
* QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. *
* *
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PRELIMINARY PROSPECTUS SUPPLEMENT
(Subject to Completion, Issued September 7, 1995)
(To Prospectus dated June 23, 1995)
$300,000,000
[BROWNING-FERRIS INDUSTRIES, INC. LOGO]
Browning-Ferris Industries, Inc.
% DEBENTURES DUE SEPTEMBER 15, 2035
------------------------
Interest payable March 15 and September 15
------------------------
The % Debentures due September 15, 2035 (the "Debentures") will mature on
September 15, 2035. Interest on the Debentures is payable semiannually on
March 15 and September 15 of each year, beginning March 15, 1996. The
Debentures will not be subject to any sinking fund. The Debentures will be
redeemable as a whole or in part, at the option of the Company at any
time, at a redemption price equal to the greater of (i) 100% of their
principal amount and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon
discounted to maturity on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Yield
(as defined herein) plus 20 basis points, plus in each case
accrued interest to the date of redemption. The Debentures
will be issued only in book-entry form through the
facilities of The Depository Trust Company (the
"Depositary"). See "Description of the Debentures" herein.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------
PRICE % AND ACCRUED INTEREST
---------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
--------- ------------ -------------
<S> <C> <C> <C>
Per Debenture........... % % %
Total................... $ $ $
</TABLE>
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(1) Plus accrued interest from September , 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company estimated at $ .
------------------------
The Debentures are offered, subject to prior sale, when, as and if accepted
by the Underwriters named herein and subject to approval of certain legal
matters by Vinson & Elkins L.L.P., counsel for the Underwriters. It is expected
that delivery of the Debentures will be made on or about September , 1995
through the book-entry facilities of the Depositary against payment therefor in
immediately available funds.
------------------------
MORGAN STANLEY & CO.
Incorporated
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
J.P. MORGAN SECURITIES INC.
September , 1995
<PAGE> 2
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, IN
CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
DO NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANY PERSON IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFER OR SOLICITATION.
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE OF THE PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS.
----------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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PROSPECTUS SUPPLEMENT
Selected Financial Data................................................................ S-3
Application of Proceeds................................................................ S-5
Description of the Debentures.......................................................... S-5
Underwriting........................................................................... S-8
PROSPECTUS
Available Information.................................................................. 2
Incorporation of Certain Documents by Reference........................................ 2
The Company............................................................................ 3
Application of Proceeds................................................................ 3
Description of Debt Securities......................................................... 3
Capital Stock.......................................................................... 13
Description of Warrants................................................................ 15
Description of Stock Purchase Contracts and Stock Purchase Units....................... 16
Plan of Distribution................................................................... 17
Legal Opinions......................................................................... 17
Experts................................................................................ 18
</TABLE>
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
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SELECTED FINANCIAL DATA
The following is a summary of certain consolidated financial information
regarding the Company for the periods indicated. The selected financial
information set forth below for the years ended September 30, 1990 through 1994
is summarized or derived from the Company's audited consolidated financial
statements for such periods. The financial information set forth for the nine
months ended June 30, 1994 and 1995 is summarized or derived from the Company's
unaudited consolidated financial statements for such periods, which have been
prepared on a basis substantially consistent with the audited consolidated
financial statements, and reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to a fair
presentation of the financial position and results of operations for such
periods. The results for the nine months ended June 30, 1995 are not necessarily
indicative of the results for the full year. The data presented below should be
read in conjunction with the Company's consolidated financial statements and the
notes thereto and other financial information incorporated by reference herein.
See "Incorporation of Certain Documents by Reference" in the accompanying
Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
JUNE 30, YEAR ENDED SEPTEMBER 30,
----------------- --------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
------ ------ ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT FOR RATIOS AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT DATA:
Revenues(1)................... $4,252 $3,073 $4,315 $3,479 $3,278 $3,175 $2,958
Income from continuing
operations before special
charges and extraordinary
item........................ $ 289 $ 202 $ 284 $ 214 $ 176 $ 222 $ 298
Income from continuing
operations before
extraordinary item.......... $ 289 $ 202 $ 284 $ 197 $ 176 $ 65 $ 257
Net income (loss)............. $ 289 $ 196 $ 279 $ 197 $ 176 $ 65 $ (45)
Income (loss) per common and
common equivalent share --
Income from continuing
operations before
extraordinary item....... $ 1.45 $ 1.10 $ 1.52 $ 1.15(2) $ 1.11 $ .42(3) $ 1.68(4)
Net income (loss)........... $ 1.45 $ 1.07(5) $ 1.49(5) $ 1.15 $ 1.11 $ .42 $ (.29)
Cash dividends per common
share....................... $ .51 $ .51 $ .68 $ .68 $ .68 $ .68 $ .64
CASH FLOW DATA:
Capital
expenditures -- continuing
operations.................. $ 616 $ 470 $ 694 $ 606 $ 531 $ 478 $ 441
Cash flows from operating
activities.................. $ 693 $ 484 $ 694 $ 614 $ 577 $ 686 $ 593
BALANCE SHEET DATA:
Property and equipment, net... $3,545 $2,957 $3,050 $2,516 $2,264 $2,140 $1,988
Total assets.................. $7,263 $5,563 $5,797 $4,296 $4,068 $3,656 $3,574
Senior long-term debt,
excluding current
maturities.................. $1,533 $ 556 $ 714 $ 334 $ 349 $ 407 $ 448
Convertible subordinated
debentures.................. $ 745 $ 745 $ 745 $ 745 $ 745 $ 745 $ 745
Common stockholders' equity... $2,722 $2,289 $2,392 $1,533 $1,460 $1,114 $1,162
OTHER DATA:
Ratio of earnings to fixed
charges(6).................. 4.13 4.32 4.25 3.31(7) 3.08 1.76(8) 4.21
</TABLE>
(See notes on following page)
S-3
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(1) Certain reclassifications have been made in prior period amounts to conform
to the current year presentation.
(2) $1.25 per share before a special charge of $.10 per share taken in fiscal
1993 to cover the estimated expense of reorganizing the Company's regional
structure in the United States.
(3) $1.44 per share before a special charge of $1.02 per share taken in fiscal
1991 to establish additional landfill closure and post-closure accruals.
(4) $1.94 per share before special charges of $.27 per share taken in fiscal
1990 to provide primarily for additional landfill market development
reserves and in connection with the settlement of a series of private civil
lawsuits.
(5) Includes extraordinary charge of $5 million, net of tax ($.03 per share)
related to the loss on early retirement of debt in fiscal 1994.
(6) For the purposes of computing the ratio of earnings to fixed charges,
"earnings" has been calculated by adding to the caption "income before
income taxes, minority interest and extraordinary item", fixed charges,
excluding capitalized interest, and by deducting equity in earnings of
affiliates less than 50% owned. "Fixed charges" consists of interest expense
whether capitalized or expensed, amortization of debt costs, and one-third
of rental expense, which the Company considers representative of the
interest factor in the rentals. The interest expense portion of fixed
charges includes interest expense and interest costs capitalized related to
the Company's proportionate share of unconsolidated 50%-owned subsidiaries
and has been reduced by capitalized interest income earned on proceeds
primarily from tax-exempt financings of certain of such 50%-owned
subsidiaries.
(7) Excluding the effects of the fiscal 1993 reorganization charge of $27.0
million, the ratio of earnings to fixed charges for fiscal 1993 was 3.51.
(8) Excluding the effects of the fiscal 1991 special charge of $246.5 million,
the ratio of earnings to fixed charges for fiscal 1991 was 3.63.
S-4
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APPLICATION OF PROCEEDS
The net proceeds received by the Company from the sale of the Debentures
(estimated at $ ) will be used to repay short-term indebtedness
associated with various acquisitions, including the acquisition of Attwoods plc.
Such indebtedness bears interest at a current weighted average interest rate of
%. Pending such use, the proceeds will be used to purchase short-term
investments.
DESCRIPTION OF THE DEBENTURES
The following description of the particular terms of the Debentures offered
hereby (referred to herein as the "Debentures" and in the Prospectus as the
"Offered Debt Securities") supplements, and to the extent inconsistent
therewith, replaces, the description of the general terms and provisions of Debt
Securities set forth in the Prospectus, to which description reference is hereby
made. The Debentures will be issued under the Senior Indenture. Except as
otherwise defined herein, capitalized terms used herein have the meanings
specified in the accompanying Prospectus.
GENERAL
The Debentures offered hereby will be limited to $300,000,000 aggregate
principal amount, will mature on September 15, 2035, and will bear interest at
the rate per annum stated on the cover page of this Prospectus Supplement.
Interest on the Debentures will accrue from September , 1995 and is to be
payable semiannually on March 15 and September 15, commencing March 15, 1996, to
holders of record at the close of business on the last day of the month
immediately preceding the month in which such interest payment is due, except as
otherwise provided in the Senior Indenture.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made in same-day funds. All payments
of principal and interest will be made by the Company in immediately available
funds. To the extent any Debentures are held by The Depository Trust Company
(the "Depositary"), such Debentures will trade in the Depositary's Same-Day
Funds Settlement System until maturity, and therefore the Depositary will
require secondary trading activity in the Debentures to be settled in
immediately available funds. Secondary trading in long-term notes and debentures
of corporate issuers is generally settled in clearing-house or next-day funds.
No assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Debentures.
BOOK-ENTRY, DELIVERY AND FORM
The Debentures will be issued in the form of one or more fully registered
Global Debentures (referred to herein as the "Global Debentures" and in the
Prospectus as the "Global Securities") which will be deposited with, or on
behalf of, the Depositary and registered in the name of the Depositary's
nominee. Except as set forth below, each Global Debenture may be transferred, in
whole and not in part, only to another nominee of the Depositary or to a
successor of the Depositary or its nominee.
The Depositary has advised the Company and the Underwriters as follows: the
Depositary is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The Depositary was created to hold securities
of its Participants and to facilitate the clearance and settlement of securities
transactions among its Participants in such securities through electronic
book-entry changes in accounts of the Participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's Participants
include securities brokers and dealers (including the Underwriters), banks
(including the Trustee), trust companies, clearing corporations and certain
other organizations, some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also
S-5
<PAGE> 6
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly.
Neither the Company, the Trustee, any Paying Agent nor the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Debenture, or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
See "Description of Debt Securities -- Provisions Applicable to Both Senior
and Subordinated Debt Securities -- Global Securities" in the accompanying
Prospectus for additional information concerning the arrangements for book-entry
registration and transfer of the Debentures.
OPTIONAL REDEMPTION
The Debentures will be redeemable as a whole or in part, at the option of
the Company at any time, at a redemption price equal to the greater of (i) 100%
of their principal amount and (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to
maturity on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Yield plus 20 basis points, plus in each case
accrued interest to the date of redemption.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Debentures, which prior to 2006 will be deemed to be a
30-year Treasury security, that would be utilized, at the time of selection and
in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the
Debentures. "Independent Investment Banker" means Morgan Stanley & Co.
Incorporated or, if such firm is unwilling or unable to select the Comparable
Treasury Issue, an independent investment banking institution of national
standing appointed by the Trustee.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Reference
Treasury Dealer at 5:00 p.m. on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means each of Morgan Stanley & Co.
Incorporated, CS First Boston Corporation, Goldman, Sachs & Co., Lehman Brothers
Inc. and J.P. Morgan Securities Inc. and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Company shall substitute therefor another Primary Treasury Dealer.
Holders of Debentures to be redeemed will receive notice thereof by
first-class mail at least 30 and not more than 60 days prior to the date fixed
for redemption.
S-6
<PAGE> 7
DEFEASANCE
The Company at any time may satisfy its obligations with respect to
payments of principal of and interest on the Debentures by depositing in trust
with the Trustee money or U.S. government obligations or a combination thereof
sufficient to make such payments when due. All obligations of the Company with
respect to the Debentures and the Senior Indenture insofar as they relate to the
Debentures will be discharged and terminated (except as to the Company's
obligations to compensate, reimburse and indemnify the Trustee pursuant to the
Senior Indenture) only if (i) such deposit is sufficient to pay when due the
principal of and premium, if any, and interest on all outstanding Debentures,
and (ii) the Company delivers to the Trustee an opinion of counsel to the effect
that the holders of the Debentures will not recognize income, gain or loss for
United States federal income tax purposes as a result of such treatment of such
holder's principal and interest payments on the Debentures (such opinion must be
based on a ruling of the Internal Revenue Service or a change in United States
federal income tax law occurring after the date hereof, since such a result
would not occur under current tax law). In the event of any such defeasance,
holders of the Debentures would be able to look only to such trust fund for
payments of principal of and interest on the Debentures until maturity.
S-7
<PAGE> 8
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below, and each of the Underwriters has severally agreed to
purchase, the principal amount of Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
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<S> <C>
Morgan Stanley & Co. Incorporated..................................... $
CS First Boston Corporation...........................................
Goldman, Sachs & Co. .................................................
Lehman Brothers Inc. .................................................
J.P. Morgan Securities Inc. ..........................................
------------
Total............................................................ $300,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to pay for and accept delivery of the Debentures are subject to the
approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters are committed to take and pay for all of the
Debentures if any are taken.
The Underwriters propose initially to offer part of the Debentures directly
to the public at the public offering price set forth on the cover page hereof
and part to certain dealers at a price that represents a concession not in
excess of . % of the principal amount of the Debentures. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of . % of the
principal amount of the Debentures to certain other dealers. After the initial
offering of the Debentures, the offering price and other selling terms may from
time to time be varied by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Company does not intend to apply for listing of the Debentures on a
national securities exchange, but has been advised by the Underwriters that they
presently intend to make a market in the Debentures, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the Debentures and any such market making may be discontinued at any
time at the sole discretion of the Underwriters. Accordingly, no assurance can
be given as to the liquidity of, or trading markets for, the Debentures.
Each Underwriter engages in transactions with and performs services for the
Company in the ordinary course of business.
S-8
