<PAGE>
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 (Date of earliest event reported) October 6, 1995
---------------
United States Filter Corporation
--------------------------------
(Exact name of registration as specified in its charter)
Delaware 1-10728 33-0266015
- ------------------------ --------------- -------------------
(State or other juris- (Commission (IRS Employer
diction of incorporation File Number) Identification No.)
73-710 Fred Waring Drive, Suite 222, Palm Desert, California 92260
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 340-0098
--------------
<PAGE>
Item 5. As previously reported on its Current Report on Form 8-K dated May 4,
1995 and filed with the U.S. Securities and Exchange Commission (the
"Commission") on May 19, 1995, United States Filter Corporation (the
"Company") completed the acquisition of all of the outstanding capital
stock of Arrowhead Industrial Water, Inc. ("AIW") from The BFGoodrich
Company pursuant to a stock purchase agreement dated as of February 27,
1995, as amended. Audited financial statements for AIW were filed at
that time as required by the Commission's regulations. Subsequent to
that filing, the Company engaged KPMG Peat Marwick LLP, the Company's
independent public accountants, to perform an audit of the financial
statements of AIW as of December 31, 1994 and 1993 and for each of the
years in the two year period then ended. Such amended financial
statements and the report of KPMG Peat Marwick LLP thereon are filed
herewith.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired:
Report of Independent Public Accountants;
Statements of Assets Acquired and Liabilities Assumed as of
December 31, 1994 and 1993;
Statements of Revenues and Expenses for the years ended
December 31, 1994 and 1993; and
Notes to Financial Statements.
(b) Pro Forma Financial Information:
Pro Forma Combined Balance Sheet, Statements of Operations and
Notes thereto.
(c) Exhibits:
None.
<PAGE>
SIGNATURE
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 hereunto duly authorized.
UNITED STATES FILTER CORPORATION
By: /s/ Kevin L. Spence
-------------------------------
Kevin L. Spence
Vice President and Chief
Financial Officer
Date: October 6, 1995
<PAGE>
Independent Auditors' Report
Board of Directors
Arrowhead Industrial Water Inc.:
We have audited the accompanying statements of assets acquired and liabilities
assumed of Arrowhead Industrial Water Inc. as of December 31, 1994 and 1993, and
the related statements of revenues and expenses, for the years then ended. These
statements of assets acquired and liabilities assumed and statements of revenues
and expenses 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 audits in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statements of assets acquired and liabilities assumed and
statements of revenues and expenses were prepared as described in note 1 and are
not intended to be a complete presentation of Arrowhead Industrial Water Inc.'s
assets, liabilities, revenues, and expenses.
In our opinion, the statements of assets acquired and liabilities assumed and
statements of revenues and expenses referred to above present fairly, in all
respects, the financial position of Arrowhead Industrial Water Inc. as of
December 31, 1994 and 1993 and the revenues and expenses for the years then
ended in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
September 29, 1995
1
<PAGE>
ARROWHEAD INDUSTRIAL WATER INC.
Statements of Assets Acquired and Liabilities Assumed
December 31, 1994 and 1993
(dollars in thousands)
Assets 1994 1993
------ -------- ------
Current assets:
Accounts receivable, trade, less allowance
for doubtful accounts of $343 and $100 at
December 31, 1994 and 1993, respectively $ 6,787 6,653
Inventories 825 716
Prepaid expenses 416 342
Deposits 52 36
-------- ------
Total current assets 8,080 7,747
-------- ------
Property, plant and equipment at cost:
Land 3,473 3,473
Buildings and improvement 3,969 3,667
Furniture, fixtures and vehicles 4,469 3,641
Membranes and resins 8,466 8,698
Filtration equipment 60,659 44,098
Construction in progress 2,899 8,764
-------- ------
83,935 72,341
Less accumulated depreciation and amortization 23,953 17,925
-------- ------
Net property, plant and equipment 59,982 54,416
-------- ------
Other assets:
Intangible assets (net of accumulated amortization
of $1,794 and $1,942 at December 31, 1994 and 1993,
respectively)(note 3) 8,643 9,660
Other assets 307 48
-------- ------
8,950 9,708
-------- ------
Total assets $ 77,012 71,871
-------- ------
Liabilities
-----------
Current liabilities:
Account payable - trade 4,322 2,663
Accrued expenses:
Salaries, wages, and vacation pay 408 381
Management incentive compensation 345 463
Taxes other than income taxes 394 306
Accrued replacement costs 1,164 1,143
Workers compensation 320 259
Other 968 1,034
-------- ------
Total current liabilities 7,921 6,249
-------- ------
Net assets $ 69,091 65,622
-------- ------
See accompanying notes to financial statements.
2
<PAGE>
ARROWHEAD INDUSTRIAL WATER INC.
Statements of Revenues and Expenses
For the years ended December 31, 1994 and 1993
(dollars in thousands)
1994 1993
-------- ------
Revenues:
Services $ 39,471 34,433
Sales of equipment 4,458 3,977
-------- ------
Total revenues 43,929 38,410
Cost of sales 30,789 26,643
-------- ------
Gross profit 13,140 11,767
-------- ------
Operating expenses:
Depreciation/amortization 8,650 8,076
General and administrative 6,070 5,317
-------- ------
Total operating expenses 14,720 13,393
-------- ------
Loss from operations (1,580) (1,626)
Interest expense 1,830 1,245
-------- ------
Loss before income taxes $ (3,410) (2,871)
-------- ------
See accompanying notes to financial statements.
3
<PAGE>
ARROWHEAD INDUSTRIAL WATER INC.
Notes to Financial Statements
December 31, 1994 and 1993
(dollars in thousands)
- --------------------------------------------------------------------------------
(1) Operations and Basis of Presentation
Operations
Arrowhead Industrial Water Inc. ("AIW" or the "Company") is wholly owned
subsidiary of B.F. Goodrich ("BFG"). The Company's primary business is in
water purification systems and services. AIW provides customers with cost-
effective reverse osmosis water purification systems owned by the Company
and managed on-site by Company employees under long-term service
agreements, generally of five to ten years with renewal options. AIW also
operates a fleet of mobile water treatment units that provide emergency
and temporary water treatment services. In addition, the Company sells
water purification systems.
Basis of Presentation
As of February 27, 1995, B.F. Goodrich entered into a Stock Purchase
Agreement (the "Agreement") with United States Filter Corporation, whereby
United States Filter Corporation agreed to purchase AIW, other than certain
assets and liabilities to be retained by BFG as defined in the Agreement.
Assets and liabilities to be retained by BFG primarily consist of those
related to BFG's water treatment chemical business, cash, deferred income
tax assets, and liabilities for defined benefit pension and postretirement
arrangements. Therefore, the financial statements reflect only those assets
acquired and liabilities assumed and the related revenues and expenses.
AIW is included in the consolidated Federal income tax return of BFG for
1994 and 1993. BFG's policy is to account for all income taxes at the
parent company level. Consequently, no income tax expense or benefit and no
deferred tax assets of liabilities have been included in the accompanying
financial statements.
BFG provides various treasury functions for AIW and maintains a cash
management program under which cash generated by AIW is transferred to BFG
and working capital requirements of AIW are paid by BFG. Incident to this
system, BFG maintains an interest bearing intercompany account to record
the net amount owed to or due from AIW. Interest expense in the
accompanying Statement of Revenues and Expenses represents the interest
charged to AIW by BFG on this intercompany account balance at a below
market variable rate of interest.
Certain costs have been allocated to AIW based upon methods which
management of BFG believes are reasonable; however, these allocations are
not necessarily indicative of the expenses that would have been incurred
had AIW been operated as a stand-alone business. BFG allocates costs
related to defined benefit pension and postretirement plans based on
actuarial valuations. In addition, BFG performs certain services on a
centralized basis and allocates the cost of these services to its divisions
based on usage, a percentage of sales or other methods. These services
include administration, human resources management, computer support,
accounting and financial reporting, legal services, engineering and
research and development. Allocated costs (including allocations related to
defined benefit pension and postretirement plant) included in the
Statements of Revenues and Expenses were $1,372 and $1,324 for the years
ended December 31, 1994 and 1993, respectively.
(Continued}
4
<PAGE>
ARROWHEAD INDUSTRIAL WATER INC.
Notes to Financial Statements
(dollars in thousands)
- --------------------------------------------------------------------------------
(2) Significant Accounting Policies
Revenues Recognition
Revenue for services is recognized when the service is performed. Revenue
related to sales of equipment and merchandise is recognized when shipped.
Inventory
Inventory consists primarily of chemicals, membranes, resins, equipment
parts, and work-in-process. Inventory is valued at cost which is not in
excess of market.
Property, Plant and Equipment
Property, plant and equipment is stated at cost and is depreciated using
the straight-line method over the estimated useful lives of individual
assets ranging from three to twenty-five years. Customized equipment
related to Pure Water Management Programs are depreciated over the
customer's contract period. Assets deemed obsolete or unusable are charged
off to operations. Repairs and maintenance costs are expensed as incurred.
Certain components of water purification equipment (i.e. resins and
membranes) require replacement in periods shorter than the life of the
total equipment. The Company accrues this replacement cost over the
estimated period, generally three to five years, and charges the cost of
replacement components as a reduction of the accrual.
Depreciation and amortization expense was $8,196 and $7,622 for the years
ended December 31, 1994 and 1993, respectively.
Goodwill and Identifiable Intangible Assets
Arrowhead Industrial Water Inc., was acquired by BFG in 1989. Goodwill was
recorded for the excess of the 1989 purchase price over the fair value of
the net tangible assets and identifiable intangible assets acquired.
Goodwill is amortized using the straight-line method over forty years.
Identifiable intangible assets were recorded at estimated fair value. These
assets include primarily patents, proprietary technology and trademarks,
and are amortized using the straight-line method over estimated periods
benefited of eight to forty years.
(Continued)
5
<PAGE>
ARROWHEAD INDUSTRIAL WATER INC.
Notes to Financial Statements
(dollars in thousands)
(3) Goodwill and Identifiable Intangible Assets
Goodwill and identifiable intangible assets consisted of the following at
December 31, 1994 and 1993:
1994 1993
-------- ------
Intangibles:
Goodwill $ 8,647 8,647
Patents and technology 790 1,955
Trademarks 1,000 1,000
Noncompete agreement - 48
-------- ------
Total $ 10,437 11,650
-------- ------
Amortization expense was $454 for the years ended December 31, 1994 and
1993.
(4) Leases
The Company leases certain plant facilities, office space and equipment
under operating leases. The future minimum lease payments, by year and in
the aggregate, under operating leases with initial or remaining
noncancelable lease terms in excess of one year, consisted of the following
at December 31, 1994.
1994 $ -
1995 636
1996 598
1997 419
1998 341
1999 176
Thereafter 74
-------
$ 2,244
-------
Rent expenses for the years ended December 31, 1994 and 1993 was for non-
cancellable leases $701 and $744, respectively and for cancellable leases
$1,362 and $1,491, respectively.
(Continued)
6
<PAGE>
ARROWHEAD INDUSTRIAL WATER INC.
Notes to Financial Statements
(dollars in thousands)
- --------------------------------------------------------------------------------
(5) Retirement Savings Plan
Substantially all employees of the Company are eligible to participate in
BFG's voluntary retirement savings plan. Under provisions of this plan,
eligible employees can receive Company matching contributions on up to the
first 6 percent of their eligible earnings. The Company matches one dollar
for each one dollar of employee contributions (up to 6 percent of earnings)
invested in BFG common stock, or 50 cents for each one dollar of eligible
employee contributions invested in other available investment options.
Company contributions for the years ended December 31, 1994 and 1993
amounted to $558 and $484, respectively.
(6) Contingencies
There are pending or threatened against the Company various claims and
lawsuits, all arising from the normal course of business. The Company
believes that any liability that may finally be determined should not have
a material effect on net assets.
7
<PAGE>
(b)
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial data presents the Pro
Forma Combined Balance Sheet at December 31, 1994, giving effect to the
acquisition of AIW and the April 3, 1995 acquisition of the Permutit Group
(the "Acquisitions") as if they were consummated on that date. Also
presented are the Pro Forma Combined Statements of Operations for the
fiscal year ended March 31, 1994, and the nine months ended December 31,
1994, after giving effect to the Acquisitions as if they were consummated
as of the beginning of the respective periods presented. The Company's
fiscal year ends on March 31 and AIW's fiscal year ends on December 31. Pro
forma combined statement of operations information for the year ended March
31, 1994 combines the results of the Company for the year ended March 31,
1994 with the results of AIW for the year ended December 31, 1993, and pro
forma combined statement of operations information for the nine months
ended December 31, 1994 combines the resulted of each of the Company and
AIW for such nine month period. AIW had revenues of approximately
$11,000,000 and a loss before income taxes of approximately $203,000 for
the three months ended March 31, 1994. The Permutit Group's fiscal year is
March 31 and, as such, the pro forma combined statements of operations
information combines the results of each of the Company and The Permutit
Group for each such twelve and nine-month period.
The pro forma data is based on the historical combined statements of the
Company, AIW and The Permutit Group, giving effect to the Acquisitions
under the purchase method of accounting and the assumptions and adjustments
outlined in the accompanying Notes to Pro Forma Combined Financial Data.
Under the purchase accounting method, assets acquired and liabilities
assumed will be recorded at their estimated fair value at the date of
Acquisition. The pro forma adjustments set forth in the following pro forma
combined financial statements are estimates and may differ from the actual
adjustments when they become known.
The following Unaudited Pro Forma Combined Financial Data also gives effect
to the issuance by the Company of 6,900,000 shares of its common stock in a
public offering completed May 3, 1995 at $15 per share. The Pro Forma
Combined Balance Sheet at December 31, 1994 gives effect to the issuance of
the common stock as if the offering had been consummated on that date. The
Pro Forma combined Statements of Operations for the fiscal year March 31,
1994 and the nine months ended December 31, 1994 gives effect to the
issuance of the common stock as if the offering had been consummated as of
the beginning of the respective periods presented.
The unaudited pro forma data is provided for comparative purposes only. It
does not purport to be indicative of the results that actually would have
occurred if the Acquisitions had been consummated on the dates indicated or
which may be obtained in the future. The pro forma combined financial data
should be read in conjunction with the notes thereto and the audited
financial statements of AIW contained elsewhere herein and The Permutit
Company Limited (a member of The Permutit Group) and the related notes
thereto filed in the Company's report on Form 8-K dated April 3, 1995 and
the audited consolidated financial statements of the Company and the
related notes thereto filed in the Company's report on Form 10-K for the
year ended March 31, 1994.
8
<PAGE>
PRO FORMA COMBINED BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
December 31, 1994
-------------------------------------------------------------------------------------
Pro Forma
---------------------------------------
Historical Adjustments
------------------------------------------- increase Adjustments
Company AIW The Permutit Group (Decrease) Reference Combined
---------- --------- ------------------ ----------- ----------- --------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 11,893 - $771 (2,751) a (i) $ 9,913
Short-term investments 7,624 - - (7,624) a (i) -
Accounts receivable, net 87,325 6,787 3,350 97,462
Cost and estimated earnings in
excess of billings on uncompleted
contracts 20,206 - - 20,206
Inventories 36,623 825 1,356 38,804
Prepaid expenses 4,853 416 194 5,463
Deferred taxes 2,598 - - 2,598
Other current assets 2,097 52 329 2,478
-------- -------- -------- --------
Total current assets 173,219 8,080 6,000 176,924
-------- -------- -------- --------
Property, plant and equipment, net 63,460 59,982 1,479 124,901
Investment in leasehold interest, net 21,834 - - 21,634
Goodwill, net 97,510 8,643 17,905 a(ii) 124,058
Other assets 17,960 307 281 18,548
-------- -------- -------- --------
$373,763 $77,012 $7,760 $466,065
======== ======== ======== ========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C> <C>
Current liabilities:
Accounts payable $ 28,812 $ 4,322 $1,712 $ 34,846
Accrued liabilities 40,567 3,599 953 45,119
Current portion of long-term debt 1,078 - - 1,078
Notes payable 23,818 - - (17,518) d 6,300
Billings in excess of costs and
estimated earnings on uncompleted
contracts 15,715 - - 15,715
Other current liabilities 7,769 - 1,355 9,124
-------- -------- -------- --------
Total current liabilities 117,759 7,921 4,020 112,182
-------- -------- -------- --------
Long-term debt, excluding current portion 7,936 - - 7,936
Convertible subordinated debt 105,000 - - 105,000
Loan (receivable) payable - Parent - (5,295) 5,295 b -
Deferred income 5,774 - - 5,774
Other liabilities 3,620 - 361 3,981
-------- -------- -------- --------
Total liabilities 240,089 7,921 (914) 234,873
-------- -------- -------- --------
Shareholders' equity:
Convertible preferred stock 25,577 - - 26,577
Common Stock 150 - - 69 d 219
Additional paid-in capital 128,496 69,091 9,380 18,978 c, d 225,945
Transaction adjustment 215 - - 215
Accumulated deficit (20,764) - (706) 706 c (20,764)
-------- -------- -------- --------
Total shareholders' equity 133,674 69,091 8,674 231,192
-------- -------- -------- --------
$373,763 $77,012 $7,760 $466,065
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these pro forma combined
financial data.
9
<PAGE>
PRO FORMA COMBINED Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Fiscal Year Ended March 31, 1994
-------------------------------------------------------------------------------------
Pro Forma
---------------------------------------
Historical Adjustments
------------------------------------------- Increase Adjustments
Company AIW The Permutit Group (Decrease) Reference Combined
---------- --------- ------------------ ----------- ----------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Revenues $180,421 $38,410 $19,896 $238,727
Cost of sales 132,811 28,643 12,545 2,113 e (i) 174,112
Depreciation and amortization - 8,076 - (8,076) e (i) -
-------- ------- ------- --------
Gross profit 47,610 3,691 7,351 64,615
Selling, general and
administrative expenses 52,484 5,317 8,601 6,403 e (i) 72,805
-------- ------- ------- --------
Operating loss (4,874) (1,626) (1,250) (8,190)
-------- ------- ------- --------
Other Income (expense):
Interest expense (2,077) (1,245) (109) 2,122 e (ii) (1,309)
Other 1,174 - 50 1,224
-------- ------- ------- --------
(903) (1,245) (59) (85)
-------- ------- ------- --------
Loss before income taxes (5,777) (2,871) (1,309) (8,275)
Income tax benefit (3,236) - (364) ($3,600)
-------- ------- ------- --------
Net loss ($2,541) ($2,871) ($945) ($4,675)
======== ======= ======= ========
Net loss per common share ($0.26) ($0.28)
======== ========
Weighted average number of
shares outstanding 12,453 19,353
======== ========
</TABLE>
The accompanying notes are an integral part of these pro forma combined
financial data.
10
<PAGE>
PRO FORMA COMBINED Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended December 31, 1994
-------------------------------------------------------------------------------------
Pro Forma
---------------------------------------
Historical Adjustments
------------------------------------------- Increase Adjustments
Company AIW The Permutit Group (Decrease) Reference Combined
---------- --------- ------------------ ----------- ----------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Revenues $194,453 $32,851 $13,916 $241,220
Cost of sales 139,164 23,317 8,587 1,902 e (i) 172,970
Depreciation and amortization - 6,675 - (6,675) e (i) -
-------- ------- ------- --------
Gross profit 55,289 2,859 5,329 68,250
Selling, general and
administrative expenses 45,819 4,575 5,300 5,098 e (i) 60,792
-------- ------- ------- --------
Operating income (loss) 9,470 (1,716) 29 7,458
-------- ------- ------- --------
Other income (expense):
Interest expense (3,632) (1,491) (65) (2,148) e (ii) (3,040)
Other 1,641 - 6 1,647
-------- ------- ------- --------
(1,991) (1,491) (59) (1,393)
-------- ------- ------- --------
Income (loss) before
income taxes 7,479 (3,207) (30) 6,065
Provision for income taxes 2,056 - (119) (240) e (iii) 1,697
-------- ------- ------- --------
Net income (loss) $ 5,423 ($3,207) $ 89 $ 4,368
======== ======= ======= ========
Net income per common share $0.33 $0.18
======== ========
Weighted average number of
shares outstanding 14,881 21,781
======== ========
</TABLE>
The accompanying notes are an integral part of these pro forma combined
financial data.
11
<PAGE>
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
a. The pro forma combined balance sheet has been prepared to reflect the
acquisitions by the Company of AIW and The Permutit Group (the
"Acquisitions") for aggregate estimated all-cash purchase prices comprised
of the following:
(in thousands)
AIW $80,000
The Permutit Group 10,000
Estimated transaction costs 375
-------
$90,375
=======
The estimated tangible net book values, as adjusted, of AIW and The Permutit
Group are assumed to be $69,091,000 and $3,379,000, respectively. The fair
values of the net assets of AIW and The Permutit Group as of the closing
date are assumed to be equal to their respective estimated tangible net book
values, as adjusted. The difference between the estimated purchase prices
and the estimated fair values of the net assets of AIW the The Permutit
Group is approximately $17,905,000, which has been recorded as goodwill
attributable to the Acquisitions in the accompanying pro forma combined
balance sheet and will be amortized over 40 years.
For the fiscal year ended March 31, 1994, the historical results of
operations of AIW reflect AIW's operations for the twelve months ended
December 31, 1993.
The pro forma combined balance sheet has been adjusted to reflect the above
as follows:
(i) To record the payment of cash and estimated transaction
costs;
(ii) To adjust goodwill for the difference between the
estimated purchase prices and the estimated fair values of
the net assets acquired;
b. The pro forma combined balance sheet has been adjusted to eliminate the net
loan receivable of The Permutit Company Limited from its parent company.
c. The pro forma combined balance sheet has been adjusted to eliminate the
equity of AIW and The Permutit Group.
d. The pro forma combined balance sheet has been adjusted to reflect the net
proceeds received by the Company from the issuance of 6,900,000 shares of
Company common stock in a public offering completed May 3, 1995 at $15 per
share.
12
<PAGE>
e. The proforma combined statements of operations give effect to the following
pro forma adjustments as follows:
<TABLE>
<CAPTION>
Fiscal Year Nine Months
Ended Ended
March 31, December 31,
1994 1994
----------- ------------
(In thousands)
<S> <C> <C>
(i) Selling, general and administrative
expenses:
- To allocate AIW's depreciation and
amortization between costs of sales
and selling, general and administrative
expenses $ 553 $ 459
- To allocate a portion of AIW's cost of
sales to selling, general and
administrative expenses for consistency
with Company historical presentation 5,410 4,314
- To adjust goodwill amortization 440 325
------- ------
$6,403 $5,098
======= ======
(ii) To adjust interest expense for the effect of the
net proceeds received by the Company related to
the issuance of 6,900,000 shares of Company
common stock May 3, 1995 at $15 per share after
the all-cash purchase price payments made for the
Acquisitions, net of interest expense recorded
by AIW, which interest expense has been
eliminated. ($2,122) ($2,148)
======= ======
(iii) To adjust the provision for income taxes to
reflect the combined results of operations. - ($240)
======= ======
</TABLE>
13
