<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: June 11, 1998
----------------
FEDERAL-MOGUL CORPORATION
-------------------------
(Exact name of registrant as specified in its charter)
Michigan
--------
(State or other jurisdiction of incorporation)
1-1511 38-0533580
------ ----------
(Commission File Number) (IRS Employer Identification Number)
26555 Northwestern Highway, Southfield, Michigan 48034
- ------------------------------------------------ -----
(Address of prinicipal executive offices) (Zip Code)
(248) 354-7700
---------------
(Registrant's telephone number including area code)
The total number of pages is 10
<PAGE> 2
INFORMATION TO BE INCLUDED IN THE REPORT
FORM 8-K
Unaudited Consolidating Condensed Financial Information of Guarantor
Subsidiaries
Certain subsidiaries of the Company (as listed below, collectively the
"Guarantor Subsidiaries") have guaranteed fully and unconditionally, on a joint
and several basis, the obligation to pay principal and interest under the
Company's Senior Credit Agreement with The Chase Manhattan Bank, NA, ("Chase").
<TABLE>
<CAPTION>
T&N Holding Companies FM Subsidiaries Fel-Pro Subsidiaries
- --------------------- --------------- -------------------
<S> <C> <C>
Federal-Mogul Dutch Holdings Inc. Federal-Mogul Venture Corporation Fel-Pro Chemical Products LP
Federal-Mogul UK Holdings Inc. Federal-Mogul Global Properties, Inc. Felt Products Mfg. Co.
Federal-Mogul Global Inc. Carter Automotive Fel-Pro Management Co.
Federal-Mogul Worldwide Inc.
</TABLE>
The Company plans to issue publicly a new series of notes ("New Notes") pursuant
to the Company's Shelf Registration Statement which will be guaranteed by the
Guarantor Subsidiaries. When the New Note Series are issued, the Guarantor
Subsidiaries will also guarantee the Company's existing publicly registered
Medium-term notes and Senior notes (the "Notes").
The T&N Holding Companies (as listed above) are wholly owned subsidiaries of the
Company and were incorporated in January 1998 in order to effectuate the
Company's acquisition of T&N plc. These subsidiaries have no operations and act
solely as holding companies of subsidiaries which will not provide a guarantee
fully and unconditionally on a joint and several basis, the obligation to pay
principal and interest of the New Notes or the Notes (the "Guarantees").
In addition, certain other wholly owned subsidiaries of the Company, the FM
subsidiaries (as listed above), will provide the Guarantees. The FM Subsidiaries
are included in the Company's consolidated financial statements for all periods
presented in the Company's Annual Report on Form 10-K dated December 31, 1997.
The Fel-Pro Subsidiaries (as listed above) were acquired on February 24, 1998,
are wholly owned subsidiaries of the Company and also will provide the
Guarantees.
The financial statements of Felt Products Mfg. Co. were filed with the
Securities and Exchange Commission on Form 8-K on April 17, 1998, since the
stock of Felt Products Mfg. Co. was pledged as collateral for the Notes. On June
10, 1998, Felt Products Mfg. Co. declared a dividend to the Company whereby
substantially all of its assets were transferred to the Company. As a result of
the dividend to its parent, Felt Products Mfg. no longer meets the substantial
collateral threshold of Rule 3-10 of the Securities and Exchange Commission's
Regulation S-X. Therefore, the Company will no longer file separate financial
statements of Felt Products Mfg Co.
2
<PAGE> 3
In lieu of providing separate audited financial statements for the Guarantor
Subsidiaries, the Company has included the accompanying unaudited consolidating
condensed financial statements based on the Company's understanding of the SEC's
interpretation and application of Rule 3-10 of the Securities and Exchange
Commission's Regulation S-X and Staff Accounting Bulletin 53. Management does
not believe that separate financial statements of the Guarantor Subsidiaries are
material to investors. Therefore, separate financial statements and other
disclosures concerning the Guarantor Subsidiaries are not presented.
Item 7.
1 Financial Statements and Exhibits
(A) Financial Statements
(1) The Unaudited Consolidating Condensed Financial Statements of
Federal-Mogul Corporation and Subsidiaries.
(B) Exhibits
None
3
<PAGE> 4
SIGNATURE
FEDERAL-MOGUL CORPORATION
By: /s/ Kenneth P. Slaby
-------------------------------------
Kenneth P. Slaby
Title: Vice President,
Controller
Dated: June 11, 1998
4
<PAGE> 5
FEDERAL-MOGUL CORPORATION
UNAUDITED CONSOLIDATING CONDENSED BALANCE SHEET
MARCH 31, 1998
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
(UNCONSOLIDATED)
---------------------------------------------
GUARANTOR NON-GUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and equivalents $ 14.2 $ 0.1 $ 87.2 $ - $ 101.5
Accounts receivable 88.1 63.3 577.2 - 728.6
Investment in accounts receivable
securitization - - 86.0 - 86.0
Inventories 195.9 36.1 465.5 - 697.5
Prepaid expenses and income tax benefits 126.2 4.2 130.6 - 261.0
Acquired businesses to be divested - 50.1 393.7 - 443.8
--------------------------------------------------------------------------
Total current assets 424.4 153.8 1,740.2 - 2,318.4
Property, plant and equipment 173.9 76.4 1,218.8 - 1,469.1
Goodwill 298.3 209.8 2,167.8 - 2,675.9
Other intangible assets 125.6 17.7 236.1 - 379.4
Business investments and other assets 68.5 29.7 457.7 - 555.9
Investment in subsidiaries 3,139.1 730.4 - (3,869.5) -
Intercompany accounts, net (505.4) 1,502.0 (996.6) - -
--------------------------------------------------------------------------
Total assets $3,724.4 $2,719.8 $4,824,0 (3,869.5) 7,398.7
==========================================================================
Current liabilities:
Short-term debt, including current portion of
long-term debt $ 541.5 $ 1.5 $ 294.8 $ - $ 837.8
Accounts payable 84.0 18.4 315.8 - 418.2
Accrued compensation 24.3 27.9 110.0 - 162.2
Restructuring and rationalization reserves 14.9 - 173.7 - 188.6
Payable to T&N plc shareholders - - 60.3 - 60.3
Current portion of asbestos liability - - 100.0 - 100.0
Other accrued liabilities 90.2 44.3 209.0 - 343.5
--------------------------------------------------------------------------
Total current liabilities 754.9 92.1 1,263.6 - 2,110.6
Long-term debt 2,201.4 - 72.3 - 2,273.7
Long-term portion of asbestos liability - - 1,251.4 - 1,251.4
Postemployment benefits 164.8 43.5 243.7 - 452.0
Other accrued liabilities 9.4 11.2 63.7 - 84.3
Minority interest in consolidated subsidiaries 7.9 - 57.8 - 65.7
Minority interest - preferred securities of affiliate - - 575.0 - 575.0
Shareholders' equity 586.0 2,573.0 1,296.5 (3,869.5) 586.0
--------------------------------------------------------------------------
Total liabilities and shareholders' equity $3,724.4 $2,719.8 $4,824.0 $(3,869.5) $7,398.7
==========================================================================
</TABLE>
5
<PAGE> 6
FEDERAL-MOGUL CORPORATION
UNAUDITED CONSOLIDATING CONDENSED BALANCE SHEET
DECEMBER 31, 1997
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
(UNCONSOLIDATED)
--------------------------------------------
GUARANTOR NON-GUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and equivalents $ 504.9 $ 0.1 $ 36.4 $ - $ 541.4
Accounts receivable 47.1 - 111.8 - 158.9
Investment in accounts receivable
securitization - - 48.7 - 48.7
Inventories 166.3 - 110.7 - 277.0
Prepaid expenses and income tax benefits 99.9 - 13.3 - 113.2
--------------------------------------------------------------------------
Total current assets 818.2 0.1 320.9 - 1,139.2
Property, plant and equipment 162.5 2.0 149.4 - 313.9
Goodwill 107.0 - 36.8 - 143.8
Other intangible assets 28.3 - 20.1 - 48.4
Business investments and other assets 61.9 - 94.9 - 156.8
Investment in subsidiaries 503.1 5.8 - (508.9) -
Intercompany accounts, net (702.8) 9.7 693.1 - -
--------------------------------------------------------------------------
Total assets $ 978.2 $17.6 $1,315.2 $(508.9) $1,802.1
==========================================================================
Current liabilities:
Short-term debt, including current portion of
long-term debt $ 16.8 $ - $ 11.8 $ - $ 28.6
Accounts payable 60.5 - 41.8 - 102.3
Accrued compensation 27.7 - 9.1 - 36.8
Restructuring and rationalization reserves 19.9 - 11.6 - 31.5
Other accrued liabilities 39.7 13.3 77.4 - 130.4
--------------------------------------------------------------------------
Total current liabilities 164.6 13.3 151.7 - 329.6
Long-term debt 266.7 - 6.4 - 273.1
Postemployment benefits 164.0 - 26.9 - 190.9
Other accrued liabilities - - 50.6 - 50.6
Minority interest in consolidated subsidiaries 13.6 - - - 13.6
Minority interest - preferred securities
of affiliate - - 575.0 - 575.0
Shareholders' equity 369.3 4.3 504.6 (508.9) 369.3
--------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 978.2 $17.6 $1,315.2 $(508.9) $1,802.1
==========================================================================
</TABLE>
6
<PAGE> 7
FEDERAL-MOGUL CORPORATION
UNAUDITED CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
UNCONSOLIDATED
----------------------------------
GUARANTOR NON-GUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $280.1 $36.2 $367.4 $(25.7) $658.0
Cost of products sold 203.4 23.1 295.9 (25.7) 496.7
---------------------------------------------------------------
Gross margin 76.7 13.1 71.5 -- 161.3
Selling, general and administrative expenses (48.0) (7.5) (41.7) -- (98.1)
Amortization (2.8) (0.6) (7.6) -- (10.1)
Purchased in-process research and development charge -- -- (18.6) -- (18.6)
Restructuring charges (5.6) -- (4.9) -- (10.5)
Adjustment of assets held for sale to fair value -- -- (20.0) -- (20.0)
Interest expense (18.2) (1.5) (7.5) 11.7 (15.5)
Interest income 6.7 7.7 4.0 (11.7) 6.7
International currency exchange losses (0.1) -- (1.0) -- (1.1)
Net gain on British pound currency option and forward contract 13.3 -- -- -- 13.3
Other expense, net (0.6) 6.1 (11.3) (5.8)
---------------------------------------------------------------
Earnings (loss) before income taxes 21.4 17.3 (37.1) -- 1.6
Income tax expense 3.1 6.9 (1.2) -- 8.8
---------------------------------------------------------------
Net earnings (loss) $ 18.3 $ 10.4 $(35.9) $ -- $ (7.2)
===============================================================
</TABLE>
7
<PAGE> 8
FEDERAL-MOGUL CORPORATION
UNAUDITED CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
UNCONSOLIDATED
-----------------------------------
GUARANTOR NON-GUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales $289.6 $ -- $226.1 $(30.1) $485.6
Cost of products sold 224.3 -- 179.3 (30.1) 373.5
---------------------------------------------------------------
Gross margin 65.3 -- 46.8 -- 112.1
Selling, general and administrative expenses (45.1) -- (30.8) -- (75.9)
Amortization (2.0) -- (0.5) -- (2.5)
Interest expense (7.5) -- (4.3) 2.0 (9.8)
Interest income 2.7 -- -- (2.0) 0.7
International currency exchange losses (0.2) -- 0.1 (0.1)
Other expense, net (4.0) 2.4 (0.4) (2.0)
---------------------------------------------------------------
Earnings before income taxes 9.2 2.4 10.9 -- 22.5
Income tax expense 3.5 0.9 4.2 8.6
---------------------------------------------------------------
Net earnings $ 5.7 $ 1.5 $ 6.7 $ -- $ 13.9
===============================================================
</TABLE>
8
<PAGE> 9
FEDERAL-MOGUL CORPORATION
UNAUDITED CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
UNCONSOLIDATED
---------------------------------------
GUARANTOR NON-GUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Cash Provided From (Used By)
Operating Activities $ 57.5 $ 3.7 $ 21.5 $ - $ 82.7
Expenditures for property, plant and equipment (6.7) (1.1) (11.7) - (19.5)
Proceeds from sale of business investments 3.4 - 45.9 - 49.3
Proceeds from sale of options - 39.5 - 39.5
Business acquisitions, net of cash acquired (513.7) - (2,142.1) - (2,655.8)
-----------------------------------------------------------------------
Net Cash Provided From (Used By) Investing Activities (517.0) (1.1) (2,068.4) - (2,586.5)
Net increase (decrease) in debt 2,117.5 1.5 (7.3) - 2,111.7
Fees paid for debt issuance (33.3) - - - (33.3)
Contributions paid to affiliates (2,217.4) (565.4) 2,782.8 -
Contributions received from affiliates - 2,217.4 565.4 (2,782.8) -
Change in intercompany accounts 110.5 (1,656.1) 1,545.6 - -
Other (8.5) - (6.0) - (14.5)
-----------------------------------------------------------------------
Net Cash Provided From (Used By) Financing Activities (31.2) (2.6) 2,097.7 - 2,063.9
-----------------------------------------------------------------------
Net Increase (Decrease) in Cash $ (490.7) $ - $ 50.8 $ - $ (439.9)
=======================================================================
</TABLE>
9
<PAGE> 10
FEDERAL-MOGUL CORPORATION
UNAUDITED CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
UNCONSOLIDATED
--------------------------------------
GUARANTOR NON-GUARANTOR
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Cash Provided From (Used in) Operating
Activities $ 30.1 $ (1.6) $ (0.4) $ - $ 28.1
Expenditures for property, plant and equipment (6.5) - (1.9) - (8.4)
Proceeds from sale of business investments - - 10.4 - 10.4
--------------------------------------------------------------------
Net Cash Provided From (Used By) Investing Activities (6.5) - 8.5 - 2.0
Net increase (decrease) in debt (15.3) - (8.0) - (23.3)
Change in intercompany accounts 10.4 1.7 (12.1) - -
Other (6.5) (0.1) (0.3) - (6.9)
---------------------------------------------------------------------
Net Cash Provided From (Used By) Financing Activities (11.4) 1.6 (20.4) - (30.2)
---------------------------------------------------------------------
Net Increase (Decrease) In Cash $ 12.2 $ -- $ (12.3) $ - $ (0.1)
=====================================================================
</TABLE>
10
