<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 (Date of earliest event reported): October 22, 1999
HARCOURT GENERAL, INC.
---------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-4925 04-1619609
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
27 Boylston Street, Chestnut Hill, Massachusetts 02467
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(617) 232-8200
- --------------------------------------------------------------
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On October 22, 1999, Harcourt General, Inc. ("Harcourt General") issued a
press release regarding the distribution of all of the shares of Class B Common
Stock, par value $.01 per share, of The Neiman Marcus Group, Inc. that Harcourt
General holds to the holders of Harcourt General Common Stock and Harcourt
General Class B Stock. A copy of this press release is attached hereto as
Exhibit 99.1. Such document is incorporated by reference into this Item 5 and
the foregoing description is qualified in its entirety by reference to such
Exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information.
The pro forma financial statements of Harcourt General filed as part
of this report are listed in the Financial Information Table of
Contents appearing on page F-1 hereof.
(c) Exhibits
Exhibit Description
- ------- -----------
99.1 Press Release, dated October 22, 1999, regarding the distribution of
shares of Class B Common Stock of The Neiman Marcus Group, Inc. to the
holders of Harcourt General Common Stock and Harcourt General Class B
Stock.
<PAGE> 3
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 hereunto duly authorized.
HARCOURT GENERAL, INC.
Dated: November 1, 1999 By: /s/ Eric P. Geller
---------------------------------------
Eric P. Geller
Senior Vice President, General Counsel and
Secretary
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FINANCIAL INFORMATION
TABLE OF CONTENTS
Unaudited Pro Forma Condensed Consolidated Statement of Earnings For The
Year Ended October 31, 1998 F-2
Unaudited Pro Forma Condensed Consolidated Statement of Earnings For The
Nine Months Ended July 31, 1999 F-3
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As Of July 31, 1999 F-4
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements F-6
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma financial information presented herein gives effect
to the Distribution (as defined in the Notes to Unaudited Pro Forma Condensed
Consolidated Financial Statements). The Unaudited Pro Forma Condensed
Consolidated Statements of Earnings reflect adjustments as if the Distribution
had occurred on November 1, 1997. The Unaudited Pro Forma Condensed Consolidated
Balance Sheet reflects adjustments as if the Distribution had occurred on July
31, 1999.
The pro forma adjustments are based upon available information and
assumptions that management believes are reasonable. The Unaudited Pro Forma
Condensed Consolidated Financial Statements do not purport to present what the
actual financial position or results of operations of Harcourt General would
have been had the Distribution occurred on the dates specified, nor are they
necessarily indicative of the financial position or results of operations that
may be achieved in the future.
The unaudited pro forma financial information is based on certain
assumptions and adjustments described in the Notes to the Unaudited Pro Forma
Condensed Consolidated Financial Statements provided below and should be read in
conjunction therewith and with the consolidated financial statements and related
notes of Harcourt General for the fiscal year ended October 31, 1998 and the
condensed consolidated financial statements of Harcourt General for the nine
months ended July 31, 1999, in each case as filed with the Securities and
Exchange Commission.
F-1
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HARCOURT GENERAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
HARCOURT
GENERAL AS PRO FORMA
REPORTED ADJUSTMENTS(1) PRO FORMA
-----------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C>
Revenues $ 4,235,254 ($2,373,347) $ 1,861,907
Costs applicable to revenues 2,233,627 (1,605,132) 628,495
Selling, general and administrative 1,555,906 (555,153) 1,000,753
Corporate expenses (2) 34,837 (16,726) 18,111
----------- ----------- -----------
Total operating earnings 410,884 (196,336) 214,548
Investment income 4,880 -- 4,880
Interest expense (108,298) 21,862 (86,436)
----------- ----------- -----------
Earnings from continuing operations before
income taxes and minority interest 307,466 (174,474) 132,992
Income tax expense (116,837) 70,887 (45,950)
----------- ----------- -----------
Earnings before minority interest 190,629 (103,587) 87,042
Minority interest 49,013 (49,572) (559)
----------- ----------- -----------
Net earnings from continuing operations $ 141,616 ($ 54,015) $ 87,601
=========== =========== ===========
Weighted average number of common and common
equivalent shares outstanding:
Basic 70,837 70,837
====== ======
Diluted 72,141 72,141
====== ======
Earnings per common share:
Basic $1.99 $1.23
===== =====
Diluted $1.96 $1.21
===== =====
</TABLE>
See Notes to Unaudited Pro Forma Financial Statements.
F-2
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HARCOURT GENERAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
NINE MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
HARCOURT GENERAL PRO FORMA
AS REPORTED ADJUSTMENTS (1) PRO FORMA
-----------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
Revenues $ 3,447,084 ($1,988,026) $ 1,459,058
Costs applicable to revenues 1,805,125 (1,331,205) 473,920
Selling, general and administrative 1,306,864 (477,502) 829,362
Corporate expenses (2) 28,323 (12,118) 16,205
----------- ----------- -----------
Total operating earnings 306,772 (167,201) 139,571
Investment income 11,969 -- 11,969
Interest expense (98,556) 19,185 (79,371)
----------- ----------- -----------
Earnings from continuing operations before
income taxes and minority interest 220,185 (148,016) 72,169
Income tax expense (83,670) 58,528 (25,142)
----------- ----------- -----------
Earnings before minority interest 136,515 (89,488) 47,027
Minority interest 39,097 (42,589) (3,492)
----------- ----------- -----------
Net earnings from continuing operations $ 97,418 ($ 46,899) $ 50,519
=========== =========== ===========
Weighted average number of common and
common equivalent shares outstanding:
Basic 71,093 71,093
====== ======
Diluted 72,160 72,160
====== ======
Earnings per common share:
Basic $1.36 $0.70
===== =====
Diluted $1.35 $0.70
===== =====
</TABLE>
See Notes to Unaudited Pro Forma Financial Statements.
F-3
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HARCOURT GENERAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
PRO FORMA
HARCOURT ADJUSTMENTS
GENERAL FOR THE OTHER PRO FORMA
AS REPORTED DISTRIBUTION-(1) ADJUSTMENTS(3) PRO FORMA
---------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash and equivalents $ 62,743 ($ 39,592) $ 23,151
Undivided interests in NMG Credit
Card Master Trust 185,268 (185,268) --
Accounts receivable, net 536,260 (63,535) 472,725
Inventories 800,747 (570,029) 230,718
Deferred income taxes 169,354 (24,058) 145,296
Other current assets 92,875 (43,887) 48,988
----------- ----------- -----------
Total current assets 1,847,247 (926,369) -- 920,878
Investment in NMG -- 96,329 28,385 124,714
Property and equipment, net 668,814 (521,268) 147,546
Prepublication costs, net 311,272 -- 311,272
Goodwill and other intangibles, net 1,711,990 (198,489) 1,513,501
Other 109,977 (24,247) 85,730
----------- ----------- -----------
Total other assets 2,133,239 (222,736) -- 1,910,503
----------- ----------- ----------- -----------
Total assets $ 4,649,300 ($1,574,044) $ 28,385 $ 3,103,641
=========== =========== =========== ===========
Notes payable and current maturities
of long-term liabilities $ 168,801 ($ 13,132) $ 155,669
Accounts payable 361,682 ($ 174,855) 186,827
Other current liabilities 789,346 (232,979) 556,367
----------- ----------- -----------
Total current liabilities 1,319,829 (420,966) -- 898,863
Notes and debentures 1,644,170 (319,634) 1,324,536
Other long-term liabilities 259,817 (80,053) 179,764
Deferred income taxes 118,162 (37,139) 10,786 91,809
----------- ----------- ----------- -----------
Total long-term liabilities 2,022,149 (436,826) 10,786 1,596,109
Minority interest 321,445 (302,190) 19,255
Preferred stock 894 -- 894
Class B Stock 20,021 20,021
</TABLE>
F-4
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<TABLE>
<S> <C> <C> <C> <C>
Common stock 51,098 -- 51,098
Paid in capital 747,905 (414,062) 333,843
Accumulated other comprehensive
(loss) gain (12,886) -- 17,599 4,713
Retained earnings 178,845 -- -- 178,845
----------- ----------- ----------- -----------
Total shareholders' equity 985,877 (414,062) 17,599 589,414
----------- ----------- ----------- -----------
Total liabilities and shareholders'
equity $ 4,649,300 ($1,574,044) $ 28,385 $ 3,103,641
=========== =========== =========== ===========
</TABLE>
See Notes to Unaudited Pro Forma Financial Statements.
F-5
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On May 14, 1999, the Board of Directors of Harcourt General approved a plan
to spin-off most of Harcourt General's controlling equity position in The Neiman
Marcus Group, Inc. ("NMG") to its common stockholders in a tax-free distribution
(the "Distribution"). In order for the Distribution to be tax-free to Harcourt
General and its stockholders, a recapitalization plan for NMG was effected (the
"Recapitalization"), pursuant to which Harcourt General's 26,429,502 shares of
NMG common stock were converted into 4,988,542 shares of Class A Common Stock,
par value $.01 per share, of NMG (the "Class A Common Stock") and 21,440,960
shares of Class B Common Stock, par value $.01 per share, of NMG (the "Class B
Common Stock").
On September 30, 1999, the Board of Directors of Harcourt General declared
a dividend of all of the shares of Class B Common Stock held by Harcourt General
to be distributed to holders of record of Harcourt General Common Stock and
Harcourt General Class B Stock as of October 12, 1999. The Distribution was
effected on October 22, 1999, and each holder of record received .3013 of a
share of Class B Common Stock for each share of Harcourt General Common Stock
and Harcourt General Class B Stock held. As a result of the Distribution,
Harcourt General now owns 4,988,542 shares of Class A Common Stock (the
"Retained Shares"), representing 18.1% of the total outstanding shares of Class
A Common Stock, no shares of Class B Common Stock, and 10.2% of the total
outstanding shares of Class A Common Stock and Class B Common Stock.
(1) Adjusted to give effect to the Distribution and the Retained Shares.
(2) Harcourt General and NMG are parties to an Amended and Restated
Intercompany Services Agreement pursuant to which Harcourt General provides
certain accounting, financial, legal, tax and other corporate services to
NMG.
(3) Adjusted to give effect to unrealized holding gains on the Retained Shares
and the related deferred taxes thereon. The Retained Shares will be
considered available-for-sale securities.
F-6
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EXHIBIT INDEX
Exhibit Description
99.1 Press Release, dated October 22, 1999, regarding the distribution
of shares of Class B Common Stock of The Neiman Marcus Group,
Inc. to the holders of Harcourt General Common Stock and Harcourt
General Class B Stock.
<PAGE> 1
Peter Farwell EXHIBIT 99.1
Vice President
Corporate Relations
(617) 232-8200 FOR IMMEDIATE RELEASE
HARCOURT GENERAL COMPLETES DISTRIBUTION
OF THE NEIMAN MARCUS GROUP CLASS B SHARES
CHESTNUT HILL, Mass., October 22, 1999 -- Harcourt General, Inc. (NYSE: H)
today announced that it has completed the tax-free distribution to its
shareholders of 21,440,960 shares of Class B Common Stock of The Neiman Marcus
Group (NYSE: NMG.A and NMG.B). Harcourt General shareholders are receiving
0.3013 shares of Class B NMG common stock for each share of Harcourt General
common stock and for each share of Harcourt General Class B stock held on the
record date, October 12, 1999. Harcourt General shareholders will receive cash
in lieu of fractional shares of The Neiman Marcus Group.
Harcourt General, a leading global multiple-media publisher, provides
educational, training and assessment products and services to classroom,
corporate, professional and consumer markets. The Neiman Marcus Group includes
Neiman Marcus Stores, NM Direct and Bergdorf Goodman.
