SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
June 19, 1998
(Date of Report, date of earliest event reported)
VALHI, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-5467 87-0110150
(State or other (Commission (IRS Employer
jurisdiction or File Number) Identification
incorporation) No.)
5430 LBJ Freeway, Suite 1700, Dallas, TX 75240-2697
(Address of principal executive offices) (Zip Code)
(972) 233-1700
(Registrant's telephone number, including area code)
Not applicable
(Former name or address, if changed since last report)
Item 2: Acquisition or Disposition of Assets
On June 19, 1998, Valhi purchased 2,948,031 shares of Tremont Corporation common
stock, representing approximately 43.8% of the total outstanding common shares
of Tremont, from Contran Corporation and certain of Contran's subsidiaries at a
cash price of $56 per share, or an aggregate of $165.1 million, in a privately-
negotiated transaction. Contran and related entities own, directly and
indirectly, approximately 93% of Valhi's outstanding common stock. A special
committee of Valhi's board of directors, with the assistance of their own legal
and financial advisors, negotiated the terms of the transaction on behalf of
Valhi.
The total amount of funds required by Valhi to purchase the Tremont shares was
$165.6 million, including fees and expenses. Such funds were provided by
Valhi's available cash on hand and the cancellation of approximately $106.6
million of principal and accrued interest owed by Contran to Valhi which was
outstanding under a $120 million revolving line of credit between Valhi and
Contran. Such revolving line of credit was subsequently terminated.
Item 7: Financial Statements, Pro Forma Financial Information
and Exhibits
(b) Financial statements of business acquired
Financial statements of Tremont Corporation are not required to be
included herein pursuant to the provisions of Rule 3.05(b) of
Regulation S-X.
(b) Pro forma financial information
Pro forma condensed consolidated financial statements of the
Registrant required pursuant to Article 11 of Regulation S-X, which
present the pro forma effects of the transactions described in Item
2 above, assuming such transactions had occurred as of the dates set
forth in the accompanying notes, are included herein as Exhibit
99.1.
(c) Exhibit
Item No. Exhibit Index
10.1 Stock Purchase Agreement dated June 19, 1998 by and
between Contran Corporation, Valhi Group, Inc. and
National City Lines, Inc., as the Sellers, and Valhi,
Inc., as the Purchaser.
99.1 Pro forma financial information of the Registrant.
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.
VALHI, INC.
(Registrant)
By: /s/ Bobby D. O'Brien
Bobby D. O'Brien
Vice President
Date: June 19, 1998
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered into as
of the 19 day of June, 1998, by and between (i) Contran Corporation, a Delaware
corporation ("Contran"), Valhi Group, Inc., a Nevada corporation ("VGI"), and
National City Lines, Inc., a Delaware corporation ("National" and together with
Contran and VGI, the "Sellers"), on the one hand, and (ii) Valhi, Inc., a
Delaware corporation (the "Purchaser") on the other hand.
Recitals
A. Contran is the beneficial owner of 236,371 shares (the "Contran
Shares") of the common stock, $1.00 par value per share ("Tremont Common
Stock"), of Tremont Corporation, a Delaware corporation ("Tremont"), VGI is the
record and beneficial owner of 2,361,300 shares (the "VGI Shares") of Tremont
Common Stock and National is the record and beneficial owner of 350,360 shares
(the "National Shares") of Tremont Common Stock (the Contran Shares, the VGI
Shares and the National Shares (being a total of 2,948,031 shares of Tremont
Common Stock) shall collectively be referred to in this Agreement as the
"Shares").
B. Each of Contran, VGI and National wish to sell the Contran, VGI and
National Shares, respectively, to the Purchaser, and the Purchaser wishes to
purchase all of the Shares, on the terms and subject to the conditions of this
Agreement (the "Transaction").
Agreement
The parties agree as follows:
ARTICLE I.
THE TRANSACTION
Section 1.1. Purchase and Sale of Shares. Against payment of the purchase
price therefor as specified in Section 1.2, on the date hereof, each of Contran,
VGI and National hereby sells, transfers, assigns and delivers to the Purchaser
the Contran Shares, VGI Shares and National Shares, respectively. Certificates
representing the VGI Shares and the National Shares are hereby delivered
accompanied by stock powers duly endorsed in blank. Delivery of the Contran
Shares shall be in accordance with Section 1.3.
Section 1.2. Purchase Price and Payment. The Purchaser hereby purchases
all of the Shares for a purchase price of $56.00 per Share, payment for which is
hereby made as follows:
(a) as the purchase price for the Contran Shares, a transfer of
$13,236,776.00 in the manner specified by Contran; and
(b) as the purchase price for the VGI Shares, a transfer of
$132,232,800.00 in the manner specified by VGI; and
(c) as the purchase price for the National Shares, a transfer of
$19,620,160.00 in the manner specified by National.
Section 1.3. Delivery of the Contran Shares. The Contran Deferred
Compensation Trust No. 2, a trust formed by Contran under the laws of the state
of Texas, is the record owner of the Contran Shares. As soon as practicable,
and no later than 10 business days, following the date of this Agreement,
Contran shall cause instructions to be given for the transfer and delivery of
the Contran Shares to the Purchaser.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby individually represents and warrants to the
Purchaser as of the date of this Agreement as follows:
Section 2.1. Authority. It is a corporation validly existing and in good
standing under the laws of the state of its incorporation. It has full corporate
power and authority, without the consent or approval of any other person, to
execute and deliver this Agreement and to consummate the Transaction. All
corporate action required to be taken by or on behalf of it to authorize the
execution, delivery and performance of this Agreement has been duly and properly
taken.
Section 2.2. Validity. This Agreement is duly executed and delivered by
it and constitutes its lawful, valid and binding obligation, enforceable in
accordance with its terms. The execution and delivery of this Agreement and the
consummation of the Transaction by it are not prohibited by, do not violate or
conflict with any provision of, and do not result in a default under (a) its
charter or bylaws; (b) any material contract, agreement or other instrument to
which it is a party or by which it is bound; (c) any order, writ, injunction,
decree or judgment of any court or governmental agency applicable to it; or (d)
any law, rule or regulation applicable to it, except in each case for such
prohibitions, violations, conflicts or defaults that would not have a material
adverse consequence to the Transaction.
Section 2.3. Ownership of Shares. It is the beneficial owner of its
Shares and upon consummation of the transactions contemplated by this Agreement,
the Purchaser will acquire good and marketable title to its Shares, free and
clear of any liens, encumbrances, security interests, restrictive agreements,
claims or imperfections of any nature whatsoever, other than restrictions on
transfer imposed by applicable securities laws.
Section 2.4. Hart-Scott-Rodino. Sellers have duly filed under the Hart-
Scott-Rodino Antitrust Improvement Act of 1976 with respect to the acquisition
by Contran and/or any of its controlled subsidiaries, including Purchaser, of in
excess of 50% of Tremont and the waiting period with respect to such filing
terminated without further action by the Federal Trade Commission on March 9,
1998.
Section 2.5. SEC Documents. To the knowledge of the officers of the
Sellers, Tremont has filed all required reports, forms, statements and other
documents with the Securities and Exchange Commission since January 1, 1997 (the
"SEC Documents"). To the knowledge of the officers of the Sellers, as of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933 and the Securities Exchange Act of
1934 and the rules and regulations thereunder. To the knowledge of the officers
of the Sellers, the financial statements contained in the SEC Documents were
prepared in accordance with generally accepted accounting practices applied on a
consistent basis and fairly present the consolidated financial position of
Tremont as of the dates thereof and for the periods then ended. Except as
reflected in the SEC Documents, to the knowledge of the officers of the Sellers,
Tremont does not have any liabilities, individually or in the aggregate, which
would have a material adverse effect on Tremont.
Section 2.6. Absence of Material Adverse Changes. Except as disclosed in
the SEC Documents or otherwise disclosed in widely disseminated news sources, or
as otherwise disclosed to Purchaser's investment bankers, there has not been any
material adverse change in Tremont's financial condition, business or prospects.
Section 2.7. Information Supplied. To the knowledge of the officers of the
Sellers, none of the information provided to Purchaser, or any of Purchaser's
representatives (including its investment bankers), by Sellers, Tremont or any
of their officers or representatives or any officers or representatives of NL
Industries, Inc. or Titanium Metals Corporation contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
or necessary in order to make the information, in light of the circumstances
under which the information was provided, not misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to each of the Sellers as of
the date of this Agreement as follows:
Section 3.1. Authority. It is a corporation validly existing and in good
standing under the laws of the State of Delaware. It has full corporate power
and authority, without the consent or approval of any other person, to execute
and deliver this Agreement and to consummate the Transaction. All corporate and
other actions required to be taken by or on behalf of it to authorize the
execution, delivery and performance of this Agreement have been duly and
properly taken.
Section 3.2. Validity. This Agreement is duly executed and delivered by
it and constitutes its lawful, valid and binding obligation, enforceable in
accordance with its terms. The execution and delivery of this Agreement and the
consummation of the Transaction by it are not prohibited by, do not violate or
conflict with any provision of, and do not result in a default under (a) its
charter or bylaws; (b) any material contract, agreement or other instrument to
which it is a party or by which it is bound; (c) any order, writ, injunction,
decree or judgment of any court or governmental agency applicable to it; or (d)
any law, rule or regulation applicable to it, except in each case for such
prohibitions, violations, conflicts or defaults that would not have a material
adverse consequence to the Transaction.
Section 3.3. Purchase for Investment. It is purchasing the Shares sold
and delivered to it hereunder for investment solely for its own account and not
with a view to, or for resale in connection with, the distribution thereof. It
understands that such Shares are restricted securities under the Securities Act
of 1933, as amended (the "Securities Act"), and that such Shares must be held
indefinitely unless they are registered under the Securities Act and any
applicable state securities or blue sky laws or an exemption from such
registration is available.
Section 3.4. Nature of Purchaser. It has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the purchase of the Shares.
ARTICLE IV.
GENERAL PROVISIONS
Section 4.1. Additional Purchases. Each of the Sellers agrees not to make
or cause to be made for its account, nor permit any entity controlled by it,
directly or indirectly (other than Purchaser and entities controlled (currently
or in the future) by Purchaser), to make or cause to be made for its account any
purchases of shares of Tremont Common Stock until such time as the Purchaser and
entities controlled by Purchaser holds more than 50% of the outstanding shares
of Tremont Common Stock (prompt notice of which shall be given by the Purchaser
to each of the Sellers), unless the Purchaser shall first decline to purchase
such Shares as may be offered. If prior to such time any Seller or entity
controlled by such Seller shall be offered shares of Tremont Common Stock for
purchase, such Seller or entity controlled by such Seller shall promptly inform
the Purchaser of that opportunity so that the Purchaser may elect to purchase
for itself all or part of such additional shares of Tremont Common Stock.
Section 4.2. Restricted Shares. The Purchaser hereby consents to the
placing of a legend on any stock certificates evidencing the Shares stating that
the Shares are restricted securities and to Tremont' s issuance of stop transfer
instructions in connection with the Shares.
Section 4.3. Access to Information. Each of the Sellers and the Purchaser
shall provide the other party and its respective representatives access to all
information with respect to the business of Tremont possessed by such party and
reasonably requested by the other party.
Section 4.4. Survival. The representations and warranties set forth in
this Agreement shall survive the execution of this Agreement and the
consummation of the transactions contemplated herein. The covenants and other
agreements set forth in this Agreement shall terminate on the tenth anniversary
of this Agreement.
Section 4.5. Amendment and Waiver. No amendment or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in a writing referring to this Agreement and signed by the parties
hereto, and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
Section 4.6. Parties and Interest. This Agreement shall bind and inure to
the benefit of the parties named herein and their respective heirs, successors
and assigns.
Section 4.7. Entire Transaction. This Agreement contains the entire
understanding among the parties with respect to the transactions contemplated
hereby and supersedes all other agreements and understandings among the parties
with respect to the subject matter of this Agreement.
Section 4.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
Section 4.9. Severability. If any provision of this Agreement is found to
violate any statute, regulation, rule, order or decree of any governmental
authority, court, agency or exchange, such invalidity shall not be deemed to
effect any other provision hereof or the validity of the remainder of this
Agreement and such invalid provision shall be deemed deleted to the minimum
extent necessary to cure such violation.
Section 4.10. Notice. All notices, requests, demands and other
communications hereunder shall be in writing and shall be sent by registered or
certified mail, postage prepaid as follows:
If to Contran: Contran Corporation
5430 LBJ Freeway
Three Lincoln Centre, Suite 1700
Dallas, Texas 75240-2697
Attention: Secretary
If to National: National City Lines, Inc.
5430 LBJ Freeway
Three Lincoln Centre, Suite 1700
Dallas, Texas 75240-2697
Attention: Secretary
If to VGI: Valhi Group, Inc.
5430 LBJ Freeway
Three Lincoln Centre, Suite 1700
Dallas, Texas 75240-2697
Attention: Secretary
If to the Purchaser: Valhi, Inc.
5430 LBJ Freeway
Three Lincoln Centre, Suite 1700
Dallas, Texas 75240-2697
Attention: General Counsel
Section 4.11. Headings. The sections and other headings contained in this
Agreement are for reference purposes only and shall not effect in any way the
meaning or interpretation of this Agreement.
Section 4.12. Expenses. Except as otherwise expressly provided herein,
each party to this Agreement shall pay its own costs and expenses in connection
with the transactions contemplated hereby.
The parties hereto have caused this Agreement to be executed by their duly
authorized officers as of the date first written above.
CONTRAN CORPORATION
By: /s/ Steven L. Watson
Steven L. Watson, Vice President
NATIONAL CITY LINES, INC.
By: /s/ Steven L. Watson
Steven L. Watson, Vice President
VALHI GROUP, INC.
By: /s/ Steven L. Watson
Steven L. Watson, Vice President
VALHI, INC.
By: /s/ Bobby D. O'Brien
Bobby D. O'Brien, Vice President
Exhibit 99.1
VALHI, INC. AND SUBSIDIARIES
INDEX TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page
--------
Pro Forma Condensed Consolidated Balance Sheet - March 31, 1998 F-2/F-3
Notes to Pro Forma Condensed Consolidated Balance Sheet F-4
Pro Forma Condensed Consolidated Statements of Income:
Year ended December 31, 1997 F-5
Three months ended March 31, 1998 F-6
Notes to Pro Forma Condensed Consolidated Statements of Income F-7
The following Pro Forma Condensed Consolidated Financial Statements of
Valhi, Inc. and Subsidiaries reflect the consolidated financial position and
results of operations of Valhi under the assumptions set forth in the
respective notes. These pro forma condensed consolidated financial
statements should be read in conjunction with the historical consolidated
financial statements of Valhi, Inc. These pro forma condensed consolidated
financial statements are not necessarily indicative of Valhi's consolidated
financial position or results of operations as they may be in the future.
F-1
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1998
(Unaudited)
(In millions)
<TABLE>
<CAPTION>
Pro forma adjustments
Valhi -------------------------
ASSETS historical I II Pro forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $544.3 ($165.6) $99.0 $477.7
Accounts and other receivables 199.6 - - 199.6
Inventories 184.6 - - 184.6
Prepaid expenses 5.0 - - 5.0
Deferred income taxes 5.2 - - 5.2
----------- ----------- ----------- -----------
938.7 (165.6) 99.0 872.1
----------- ----------- ----------- -----------
Other assets:
Marketable securities 286.9 - - 286.9
Investment in affiliates and joint ventures 193.5 165.6 - 359.1
Loan to Contran Corporation 99.0 - (99.0) -
Other loans and notes receivable 82.4 - - 82.4
Mining properties 15.5 - - 15.5
Goodwill 256.4 - - 256.4
Other assets 50.3 - - 50.3
----------- ----------- ----------- -----------
984.0 165.6 (99.0) 1,050.6
----------- ----------- ----------- -----------
Property and equipment, net 505.9 - - 505.9
----------- ----------- ----------- -----------
$2,428.6 $ - $ - $2,428.6
=========== =========== =========== ===========
</TABLE>
F-2
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
March 31, 1998
(Unaudited)
(In millions)
<TABLE>
<CAPTION>
Pro forma adjustments
Valhi -------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY historical I II Pro forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Current liabilities:
Notes payable & current long-term debt $56.3 $ - $ - $56.3
Accounts payable & accrued liabilities 188.7 - - 188.7
Income taxes 91.4 - - 91.4
Deferred income taxes 0.6 - - 0.6
----------- ----------- ----------- -----------
337.0 - - 337.0
----------- ----------- ----------- -----------
Noncurrent liabilities:
Long-term debt 861.5 - - 861.5
Deferred income taxes 302.9 - - 302.9
Other 263.4 - - 263.4
----------- ----------- ----------- -----------
1,427.8 - - 1,427.8
----------- ----------- ----------- -----------
Minority interest 76.8 - - 76.8
----------- ----------- ----------- -----------
Stockholders' equity:
Common stock and paid-in capital 43.3 - - 43.3
Retained earnings 513.6 - - 513.6
Adjustments:
Marketable securities 130.4 - - 130.4
Currency translation (24.9) - - (24.9)
Pension liabilities (1.5) - - (1.5)
Treasury stock (73.9) - - (73.9)
----------- ----------- ----------- -----------
587.0 - - 587.0
----------- ----------- ----------- -----------
$2,428.6 $ - $ - $2,428.6
=========== =========== =========== ===========
</TABLE>
See accompanying notes to pro forma condensed consolidated balance sheet.
F-3
VALHI, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
Note 1 - Basis of presentation:
The Pro Forma Condensed Consolidated Balance Sheet assumes the following
transactions, more fully described in Item 2 of this Current Report on Form
8-K dated June 19, 1998, occurred on March 31, 1998:
I - Valhi purchases 2,948,031 shares of Tremont Corporation common stock
for a cash price of $56 per share. Valhi will account for its 43.8%
interest in Tremont by the equity method.
II - Contran Corporation repays the outstanding balance of its revolving
line of credit owed to Valhi ($99 million at March 31, 1998).
Note 2 - Pro forma adjustments:
I - Reflect the purchase of 2,948,031 shares of Tremont Corporation
common stock as follows:
<TABLE>
<CAPTION>
Amount
-------------
(In millions)
<S> <C>
Aggregate cash purchase price for 2,948,031 shares of Tremont
Corporation common stock at a cash price of $56 per share $165.1
Plus estimated fees and expenses 0.5
-------------
Aggregate purchase price $165.6
=============
</TABLE>
II - Reflect Contran Corporation's repayment of the outstanding balance of
its revolving line of credit owed to Valhi.
F-4
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year ended December 31, 1997
(Unaudited)
(In millions, except per share data)
<TABLE>
<CAPTION>
Pro forma adjustments
Valhi -------------------------
historical I II Pro forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues and other income:
Net sales $1,093.1 $ - $ - $1,093.1
Interest and other, net 124.8 - (9.4)(a) 115.4
----------- ----------- ----------- -----------
1,217.9 - (9.4) 1,208.5
----------- ----------- ----------- -----------
Costs and expenses:
Cost of goods sold 804.5 - - 804.5
Selling, general and administrative 227.1 - - 227.1
Interest 118.9 - - 118.9
----------- ----------- ----------- -----------
1,150.5 - - 1,150.5
----------- ----------- ----------- -----------
Income of consolidated companies
before income taxes 67.4 - (9.4) 58.0
Equity in Waste Control Specialists (12.7) - - (12.7)
Equity in Tremont Corporation - 3.7 (a) - 3.7
----------- ----------- ----------- -----------
Income before income taxes 54.7 3.7 (9.4) 49.0
Provision for income taxes 27.6 1.3 (b) (3.3)(b) 25.6
----------- ----------- ----------- -----------
Income from continuing operations $27.1 $2.4 ($6.1) $23.4
=========== =========== =========== ===========
Basic earnings per share from
continuing operations $0.24 $0.20
=========== ===========
Weighted average common shares outstanding 115.0 115.0
=========== ===========
</TABLE>
See accompanying notes to pro forma condensed consolidated statements of income.
F-5
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Three months ended March 31, 1998
(Unaudited)
(In millions, except per share data)
<TABLE>
<CAPTION>
Pro forma adjustments
Valhi -------------------------
historical I II Pro forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues and other income:
Net sales $267.4 $ - $ - $267.4
Gain on:
Disposal of business unit 330.2 - - 330.2
Reduction in interest in subsidiary 67.9 - - 67.9
Interest and other, net 20.6 - (2.8)(a) 17.8
----------- ----------- ----------- -----------
686.1 - (2.8) 683.3
----------- ----------- ----------- -----------
Costs and expenses:
Cost of goods sold 187.6 - - 187.6
Selling, general and administrative 49.2 - - 49.2
Interest 25.4 - - 25.4
----------- ----------- ----------- -----------
262.2 - - 262.2
----------- ----------- ----------- -----------
Income of consolidated companies
before income taxes 423.9 - (2.8) 421.1
Equity in Waste Control Specialists (3.2) - - (3.2)
Equity in Tremont Corporation - 6.6 - 6.6
----------- ----------- ----------- -----------
Income before income taxes and
minority interest 420.7 6.6 (2.8) 424.5
Provision for income taxes 181.6 2.3 (b) (1.0)(b) 182.9
Minority interest 34.4 - - 34.4
----------- ----------- ----------- -----------
Income from continuing operations $204.7 $4.3 ($1.8) $207.2
=========== =========== =========== ===========
Basic earnings per share from
continuing operations $1.78 $1.80
=========== ===========
Weighted average common shares outstanding 115.1 115.1
=========== ===========
</TABLE>
See accompanying notes to pro forma condensed consolidated statements of income.
F-6
VALHI, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Note 1 - Basis of presentation:
The Pro Forma Condensed Consolidated Statements of Income assumes the
transactions described in Item 2 of this Current Report on Form 8-K dated
June 19, 1998 occurred as of the beginning of 1997.
Valhi will account for its 43.8% interest in Tremont by the equity
method.
Note 2 - Pro forma adjustments:
I - (a) Reflect Valhi's equity in earnings of Tremont for its 43.8% interest
in Tremont, including amortization of purchase accounting basis
differences.
(b) Income taxes for pro forma adjustment (a), using the 35% U.S.
federal statutory income tax rate.
II -(a) Reflect reduction in interest income resulting from the use of
$165.6 million to purchase the Tremont shares, at an average
interest rate of 5.7% in 1997 and 6.7% in 1998.
(b) Income taxes for pro forma adjustment (a), using the 35% U.S.
federal statutory income tax rate.
F-7
