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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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The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Form 8-K dated March 31, 1998
relating to the divestiture of the Company's operations outside North America
to SITA, a Paris-based waste services company, and certain common stock
repurchases pursuant to the Company's common stock buyback program.
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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 an approximate 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 issuance of 11.5 million shares of common stock
to the holders of the Company's Automatic Common Exchange Securities in June of
1998 for proceeds of approximately $410 million, (iii) 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 (iv) the
purchase of approximately 41 million additional shares of the Company's common
stock on the open market through September 30, 1998 at a cost of approximately
$1,415 million under the Company's stock buyback program. The original $1
billion stock buyback program was increased by $500 million in late March 1998
and by an additional $750 million in early July 1998. The pro forma statement
of operations does not reflect the earnings associated with the Company's
equity investment in SITA for the period prior to the consummation of the sale
of the international operations. Included in equity in earnings of
unconsolidated affiliates is $7.8 million which represents the Company's shares
of SITA's earnings for the six months ended September 30, 1998. In addition,
this pro forma statement does not give effect to the $250 million of shares not
yet repurchased as of September 30, 1998 under the existing stock buyback
program announced in July 1998, that the Company expects to complete by
September 30, 1999.
The unaudited pro forma consolidated statement of operations for the year ended
September 30, 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, 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 YEAR ENDED SEPTEMBER 30, 1998
(IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Year Ended September 30, 1998
-------------------------------------------
Pro Forma Company
Company Adjustments Pro Forma
---------- ----------- ----------
<S> <C> <C> <C>
Revenues $4,745,748 $ (632,966) (A) $4,112,782
Cost of operations 3,437,661 (493,644) (A) 2,944,017
---------- ---------- ----------
Gross profit 1,308,087 (139,322) 1,168,765
Selling, general and
administrative expense 683,284 (89,355) (A) 593,929
Special charges (credits), net (21,464) 17,919 (A) (3,545)
---------- ---------- ----------
Income from operations 646,267 (67,886) 578,381
Interest expense, net 118,277 (12,241) (A) 118,088
(25,875) (B)
55,594 (C)
(17,667) (D)
Equity in earnings of
unconsolidated
affiliates (60,078) 8,870 (A) (51,208)
---------- ---------- ----------
Income before income
taxes, minority interest,
extraordinary item and
cumulative effects of changes
in accounting principles 588,068 (76,567) 511,501
Income taxes 232,089 (25,806) (A) 201,462
10,350 (B)
(22,238) (C)
7,067 (D)
Minority interest in income
of consolidated subsidiaries 6,606 (4,373) (A) 2,233
---------- ---------- ----------
Income before extraordinary
item and cumulative effects of
changes in accounting principles $ 349,373 $ (41,567) $ 307,806
========== ========== ==========
Earnings per share before
extraordinary item and
cumulative effects of
changes in accounting
principles (E):
Basic $ 1.94 $ 1.91
========== ==========
Diluted $ 1.93 $ 1.89
========== ==========
Number of common shares
used in computing earnings
per share:
Basic 180,153 161,313
========== ==========
Diluted 181,298 162,457
========== ==========
</TABLE>
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(A) To remove the accounts for the Company's operations outside of North
America which were either merged into SITA or otherwise disposed of 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 $1,415 million under the Company's stock buyback program. These stock
purchases have been funded principally through debt issuances.
(D) To reflect changes in interest expense and related income taxes associated
with the $409.7 million cash proceeds received in connection with the issuance
of 11.5 million shares of common stock to the holders of the Company's
Automatic Common Exchange Securities.
(E) Excluding special credits, extraordinary item and cumulative effects of
changes in accounting principles, earnings per share amounts for the year ended
September 30, 1998 were:
<TABLE>
<CAPTION>
Company
Company Pro Forma
-------- ---------
<S> <C> <C>
Basic $ 1.87 $ 1.89 (i)
======== =========
Diluted $ 1.86 $ 1.88 (i)
======== =========
</TABLE>
(i) Pro forma amounts give no effect to earnings from the Company's
ownership interest in SITA on a pro forma basis for the periods
prior to consummation of the sale of the international
operations. Included in equity in earnings of unconsolidated
affiliates is $7.8 million which represents the Company's share
of SITA's earnings for the six months ended September 30, 1998.
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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)
December 23, 1998. By: /s/Jeffrey E. Curtiss
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Jeffrey E. Curtiss
Senior Vice President and
Chief Financial Officer
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