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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: March 31, 1998
(Date of earliest event reported)
BROWNING-FERRIS INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Commission file number 1-6805
Delaware 74-1673682
(State of Incorporation) (I.R.S. Employer Identification No.)
757 N. Eldridge
Houston, Texas 77079
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (281)870-8100.
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This Current Report on Form 8-K/A amends Item 7(b) of the Current Report on Form
8-K filed on April 15, 1998.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
BROWNING-FERRIS INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
In November 1997, the Company entered into an agreement to merge its operations
outside North America with SITA, a subsidiary of Suez Lyonnaise des Eaux. On
March 31, 1998, the Company announced that this transaction had been completed.
Under the terms of the agreement, the Company received cash totaling U.S. $950
million and shares of SITA stock amounting to approximately a 19.2 percent
equity interest in SITA. Suez Lyonnaise des Eaux owns more than 50 percent of
SITA.
The following unaudited pro forma consolidated statement of operations gives
effect to (i) the divestiture of the Company's operations outside of North
America associated with the SITA transaction as discussed above and the
disposition of the remainder of these operations as a result of this transaction
with SITA, (ii) the repurchase of 15 million shares of common stock of the
Company ($585 million) as a result of a Dutch auction tender offer which was
completed in October 1997 and (iii) the purchase of approximately 11 million
additional shares of the Company's common stock on the open market through March
31, 1998 at a cost of approximately $370 million under the Company's $1 billion
stock buyback program. The pro forma statement of operations does not reflect
the earnings associated with the Company's equity investment in SITA. In
addition, this pro forma statement does not give effect to (i) the remaining $45
million of shares of the Company's common stock to be purchased under its $1
billion stock buyback program, (ii) the $500 million increase in the existing
stock buyback program that the Company expects to complete by December 31, 1998,
or (iii) the issuance of common stock associated with the automatic common
exchange security units in June 1998 for cash of approximately $410 million.
The unaudited pro forma consolidated statement of operations for the six months
ended March 31, 1998 was prepared assuming that the transactions described above
were consummated on October 1, 1997.
The pro forma financial results are not necessarily indicative of the actual
results of operations that would have occurred had these transactions occurred
on October 1, 1997, nor are they indicative of future results. The unaudited pro
forma consolidated statement of operations should be read in conjunction with
the Company's historical consolidated financial statements and related notes
thereto included in its Annual Report on Form 10-K for the fiscal year ended
September 30, 1997 and its Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
The pro forma adjustments included in the following pro forma statement of
operations represent the total cash proceeds and estimates of costs associated
with the merger of the Company's international operations with SITA. These cost
estimates will be revised as additional information concerning the valuation of
these amounts becomes available.
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BROWNING-FERRIS INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Six Months Ended March 31, 1998
--------------------------------------------
Pro Forma Company
Company Adjustments Pro Forma
----------- ----------- -----------
<S> <C> <C> <C>
Revenues $ 2,650,459 $ (632,966)(A) $ 2,017,493
Cost of operations 1,938,083 (493,644)(A) 1,444,439
----------- ----------- -----------
Gross profit 712,376 (139,322) 573,054
Selling, general and
administrative expense 377,450 (89,355)(A) 288,095
Special charges (credits), net (21,464) 17,919 (A) (3,545)
----------- ----------- -----------
Income from operations 356,390 (67,886) 288,504
Interest expense, net 72,242 (12,241)(A) 42,618
(25,875)(B)
8,492 (C)
Equity in earnings of
unconsolidated
affiliates (25,094) 8,870 (A) (16,224)
----------- ----------- -----------
Income before income
taxes, minority interest,
extraordinary item and
cumulative effects of changes
in accounting principles 309,242 (47,132) 262,110
Income taxes 123,697 (25,806)(A) 104,844
10,350 (B)
(3,397)(C)
Minority interest in income
of consolidated subsidiaries 5,444 (4,373)(A) 1,071
----------- ----------- -----------
Income before extraordinary
item and cumulative effects
of changes in accounting
principles $ 180,101 $ (23,906) $ 156,195
=========== =========== ===========
Earnings per share before
extraordinary item and
cumulative effects of changes
in accounting principles (D):
Basic $ 0.96 $ 0.87
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Diluted $ 0.95 $ 0.86
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Number of common shares
used in computing earnings
per share:
Basic 188,110 179,556
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Diluted 189,338 180,784
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</TABLE>
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(A) To remove the accounts of the Company's operations outside of North
America which are to be either merged into SITA or otherwise disposed as
a result of the SITA transaction.
(B) To reflect changes in interest expense and related income taxes associated
with the estimated net cash proceeds of $900 million after considering
income taxes and other costs related to the SITA transaction. It is
assumed that the proceeds were used to pay down debt balances.
(C) To reflect increased interest expense and related income taxes associated
with the repurchase of the Company's common stock in connection with the
Company's Dutch auction tender offer of $585 million and open market
purchases of $370 million under the Company's $1 billion stock buyback
program. These stock purchases have been funded principally through debt
issuances.
(D) Excluding special credits, extraordinary items and cumulative effects of
changes in accounting principles, earnings per share amounts for the six
months ended March 31, 1998 were:
<TABLE>
<CAPTION>
Company
Company Pro Forma
------- ---------
<S> <C> <C>
Basic $ 0.89 $ 0.86(i)
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Diluted $ 0.88 $ 0.85(i)
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</TABLE>
(i) Pro forma amounts give no effect to earnings from the Company's
ownership interest in SITA. Had estimated earnings from the Company's
equity investment in SITA been considered in the Company pro forma
earnings per share amounts presented above, management believes that
such amounts would have exceeded the related historical earnings per
share amounts.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
BROWNING-FERRIS INDUSTRIES, INC.
(Registrant)
May 29, 1998 By: /s/ Jeffrey E. Curtiss
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Jeffrey E. Curtiss
Senior Vice President and
Chief Financial Officer
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