<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 31, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
-------------------
NABISCO HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1-13556 13-3077142
(State or other (Commission file (I.R.S. Employer
jurisdiction of number) Identification No.)
incorporation or
organization)
</TABLE>
NABISCO, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
NEW JERSEY 1-1021 13-1841519
(State or other (Commission file (I.R.S. Employer Identification
jurisdiction of number) No.)
incorporation or
organization)
</TABLE>
7 CAMPUS DRIVE
PARSIPPANY, NEW JERSEY 07054
(973) 682-5000
(Address, including zip code, and telephone number, including area code,
of the principal executive offices of Nabisco Holdings Corp. and Nabisco, Inc.)
------------------------
INDICATE BY CHECK MARK WHETHER THE REGISTRANTS (1) HAVE FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANTS WERE REQUIRED TO FILE SUCH REPORTS), AND (2) HAVE BEEN SUBJECT TO
SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO __
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANTS'
CLASSES OF COMMON STOCK AS OF THE LATEST PRACTICABLE DATE: SEPTEMBER 30, 1997:
<TABLE>
<C> <S>
NABISCO HOLDINGS CORP.: 51,819,653 SHARES OF CLASS A COMMON STOCK, PAR VALUE $.01 PER
SHARE
213,250,000 SHARES OF CLASS B COMMON STOCK, PAR VALUE $.01 PER
SHARE
NABISCO, INC.: 100 SHARES OF COMMON STOCK, PAR VALUE $2.50 PER SHARE
</TABLE>
-------------------
NABISCO, INC. MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(A)
AND (B) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE
---------
<S> <C> <C>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Statements of Income--Three Months Ended
September 30, 1997 and 1996................................................................. 1
Consolidated Condensed Statements of Income--Nine Months Ended
September 30, 1997 and 1996................................................................. 2
Consolidated Condensed Statements of Cash Flows--Nine Months Ended September 30, 1997 and
1996........................................................................................ 3
Consolidated Condensed Balance Sheets--September 30, 1997 and
December 31, 1996........................................................................... 4
Notes to Consolidated Condensed Financial Statements.......................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations....................................................................... 7
PART II-- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.............................................................. 11
Signatures............................................................................................... 12
</TABLE>
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
NABISCO HOLDINGS CORP.
NABISCO, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
----------------------- -----------------------
NABISCO NABISCO
HOLDINGS NABISCO HOLDINGS NABISCO
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
NET SALES............................................................. $ 2,203 $ 2,203 $ 2,238 $ 2,238
---------- ----------- ---------- -----------
Costs and expenses:
Cost of products sold............................................... 1,249 1,249 1,332 1,332
Selling, advertising, administrative and general expenses........... 653 653 642 642
Amortization of trademarks and goodwill............................. 57 57 56 56
---------- ----------- ---------- -----------
OPERATING INCOME................................................ 244 244 208 208
Interest and debt expense............................................. (82) (82) (83) (83)
Other income (expense), net........................................... (7) (7) (7) (7)
---------- ----------- ---------- -----------
Income before income taxes...................................... 155 155 118 118
Provision for income taxes............................................ 63 63 48 48
---------- ----------- ---------- -----------
NET INCOME...................................................... $ 92 $ 92 $ 70 $ 70
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE..................... $ .34 $ .26
---------- ----------
---------- ----------
Dividends declared per common share................................... $ .175 $ .155
---------- ----------
---------- ----------
Average number of common and common equivalent shares outstanding (in
thousands).......................................................... 268,957 266,799
---------- ----------
---------- ----------
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
1
<PAGE>
NABISCO HOLDINGS CORP.
NABISCO, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
------------------------ ------------------------
NABISCO NABISCO
HOLDINGS NABISCO HOLDINGS NABISCO
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES............................................................ $ 6,299 $ 6,299 $ 6,406 $ 6,406
----------- ----------- ----------- -----------
Costs and expenses:
Cost of products sold.............................................. 3,597 3,597 3,785 3,785
Selling, advertising, administrative and general expenses.......... 1,828 1,828 1,829 1,829
Amortization of trademarks and goodwill............................ 170 170 170 170
Restructuring expense.............................................. -- -- 428 428
----------- ----------- ----------- -----------
OPERATING INCOME............................................... 704 704 194 194
Interest and debt expense............................................ (245) (245) (248) (248)
Other income (expense), net.......................................... (23) (23) (22) (22)
----------- ----------- ----------- -----------
Income (loss) before income taxes.............................. 436 436 (76) (76)
Provision for income taxes........................................... 177 177 17 17
----------- ----------- ----------- -----------
NET INCOME (LOSS).............................................. $ 259 $ 259 $ (93) $ (93)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE............. $ .96 $ (.35)
----------- -----------
----------- -----------
Dividends declared per common share.................................. $ .505 $ .4475
----------- -----------
----------- -----------
<CAPTION>
Average number of common and common equivalent shares outstanding (in
thousands)......................................................... 268,695 265,038
<S> <C> <C> <C> <C>
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
2
<PAGE>
NABISCO HOLDINGS CORP.
NABISCO, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
------------------------ ------------------------
<S> <C> <C> <C> <C>
NABISCO NABISCO
HOLDINGS NABISCO HOLDINGS NABISCO
----------- ----------- ----------- -----------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income (loss)............................................... $ 259 $ 259 $ (93) $ (93)
Adjustments to reconcile net income to net cash flows from
operating activities:
Depreciation of property, plant and equipment............... 209 209 196 196
Amortization of intangibles................................. 170 170 170 170
Deferred income tax provision (benefit)..................... 19 19 (108) (108)
Restructuring expense, net of cash payments................. (107) (107) 392 392
Changes in working capital items, net....................... (355) (355) (305) (305)
Other, net.................................................. (36) (36) 28 28
----- ----- ----- -----
Net cash flows from operating activities...................... 159 159 280 280
----- ----- ----- -----
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Capital expenditures............................................ (233) (233) (306) (306)
Acquisition of businesses....................................... -- -- (174) (174)
Proceeds from sale of businesses................................ 50 50 -- --
Other, net...................................................... 15 15 10 10
----- ----- ----- -----
Net cash flows (used in) investing activities................. (168) (168) (470) (470)
----- ----- ----- -----
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Net proceeds from the issuance of long-term debt................ 242 242 155 155
Repayments of long-term debt.................................... (111) (111) (62) (62)
Increase in notes payable....................................... 19 19 172 172
Dividends paid on common stock.................................. (129) (129) (114) (114)
----- ----- ----- -----
Net cash flows from financing activities...................... 21 21 151 151
----- ----- ----- -----
Effect of exchange rate changes on cash and cash equivalents...... (3) (3) (1) (1)
----- ----- ----- -----
Net change in cash and cash equivalents....................... 9 9 (40) (40)
Cash and cash equivalents at beginning of period.................. 93 93 121 121
----- ----- ----- -----
Cash and cash equivalents at end of period........................ $ 102 $ 102 $ 81 $ 81
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
3
<PAGE>
NABISCO HOLDINGS CORP.
NABISCO, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 DECEMBER 31, 1996
---------------------- ----------------------
<S> <C> <C> <C> <C>
NABISCO NABISCO
HOLDINGS NABISCO HOLDINGS NABISCO
----------- --------- ----------- ---------
ASSETS
Current assets:
Cash and cash equivalents.......................................... $ 102 $ 102 $ 93 $ 93
Accounts receivable, net........................................... 547 547 556 556
Deferred income taxes.............................................. 15 15 55 55
Inventories........................................................ 956 956 879 879
Prepaid expenses................................................... 76 76 46 46
----------- --------- ----------- ---------
TOTAL CURRENT ASSETS........................................... 1,696 1,696 1,629 1,629
----------- --------- ----------- ---------
Property, plant and equipment, net................................... 3,261 3,261 3,287 3,287
Trademarks, net...................................................... 3,753 3,753 3,856 3,856
Goodwill, net........................................................ 3,371 3,371 3,451 3,451
Other assets and deferred charges.................................... 72 72 67 67
----------- --------- ----------- ---------
$ 12,153 $ 12,153 $ 12,290 $ 12,290
----------- --------- ----------- ---------
----------- --------- ----------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable...................................................... $ 263 $ 263 $ 251 $ 251
Accounts payable and accrued liabilities........................... 1,276 1,266 1,582 1,572
Current maturities of long-term debt............................... 22 22 24 24
Income taxes accrued............................................... 106 106 112 112
----------- --------- ----------- ---------
TOTAL CURRENT LIABILITIES...................................... 1,667 1,657 1,969 1,959
----------- --------- ----------- ---------
Long-term debt (less current maturities)............................. 4,344 4,344 4,213 4,213
Other noncurrent liabilities......................................... 688 688 708 708
Deferred income taxes................................................ 1,288 1,288 1,316 1,316
Stockholders' equity:................................................
Class A common stock (51,819,653 shares issued and outstanding at
September 30, 1997).............................................. 1 -- 1 --
Class B common stock (213,250,000 shares issued and outstanding at
September 30, 1997).............................................. 2 -- 2 --
Paid-in capital.................................................... 4,087 4,141 4,087 4,141
Retained earnings.................................................. 168 125 43 --
Cumulative translation adjustment.................................. (90) (90) (47) (47)
Notes receivable on common stock purchases......................... (2) -- (2) --
----------- --------- ----------- ---------
TOTAL STOCKHOLDERS' EQUITY..................................... 4,166 4,176 4,084 4,094
----------- --------- ----------- ---------
$ 12,153 $ 12,153 $ 12,290 $ 12,290
----------- --------- ----------- ---------
----------- --------- ----------- ---------
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
4
<PAGE>
NABISCO HOLDINGS CORP.
NABISCO, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1--INTERIM REPORTING AND RESULTS OF OPERATIONS
For interim reporting purposes, certain costs and expenses are charged to
operations in proportion to the estimated total annual amount expected to be
incurred.
Certain prior year amounts have been reclassified to conform to the 1997
presentation.
In management's opinion, the accompanying unaudited consolidated condensed
financial statements (the "Consolidated Condensed Financial Statements") of
Nabisco Holdings Corp. ("Nabisco Holdings") and Nabisco, Inc. ("Nabisco" and
together with Nabisco Holdings, the "Registrants") contain all adjustments,
consisting only of normal recurring adjustments, necessary for a fair statement
of the results for the interim periods presented. The Consolidated Condensed
Financial Statements should be read in conjunction with the consolidated
financial statements and footnotes included in the Annual Report on Form 10-K of
Nabisco Holdings and Nabisco for the year ended December 31, 1996.
In June 1997, Nabisco sold certain domestic regional brands for $50 million
that resulted in a $32 million gain ($19 million after tax). In addition,
non-recurring expenses of $31 million ($18 million after tax) were recognized
which included a $14 million provision for an additional write-down of a
business held for sale; $10 million expense for the reorganization of the U.S.
Foods Group selling organization; and $7 million expense for international
headquarters relocation. The net $1 million pre-tax gain from these items is
included in selling, advertising, administrative and general expenses in the
Consolidated Condensed Financial Statements.
NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share, which established
new standards for computing and presenting net income per common share and
replaced the standards previously found in Accounting Principles Board Opinion
No. 15, Earnings Per Share. Nabisco Holdings will begin reporting net income per
common share and net income per common share assuming dilution according to this
new standard in the fourth quarter of 1997. For Nabisco Holdings, net income per
common share and net income per common share assuming dilution, for the first
quarter of 1997 and all prior periods presented, computed under the new
standard, are equal to the corresponding net income per common share amounts
reported under the previous standard. Net income per common share is one cent
per common share higher under the new standard than the corresponding amounts
under the previous standard for the second and third quarters of 1997 and the
first six months of 1997, and two cents per common share higher for the first
nine months of 1997. Net income per common share assuming dilution is one cent
per common share higher under the new standard than the corresponding amounts
under the previous standard for the second quarter of 1997, the first six and
nine months of 1997, and the same for the third quarter of 1997.
RESTRUCTURING EXPENSE
In 1996, Nabisco Holdings recorded a restructuring expense of $428 million
($300 million after tax), including cash expenditures of approximately $230
million, related to a program announced on June 24, 1996. The restructuring
program, which was undertaken to streamline operations and improve
profitability, will be substantially completed by the end of 1997. After
completion of the restructuring program, pre-tax savings are expected to be
approximately $200 million annually.
The major components of the $428 million restructuring expense are domestic
and international severance and related benefits associated with workforce
reductions totaling approximately 6,000 employees (approximately $194 million),
estimated losses from disposals of equipment and packaging materials related to
product line rationalizations which will eliminate production of more than 300
SKU's (stock keeping units) of slow-moving products (approximately $116
million), estimated loss to write-down the
5
<PAGE>
carrying value of several non-strategic product lines prior to sale
(approximately $51 million), estimated costs to terminate manufacturing supply
and distribution contracts (approximately $45 million) and estimated losses from
disposals of property related to international plant closures and domestic and
international facility reorganizations (approximately $22 million).
As of September 30, 1997, approximately $315 million of the restructuring
accruals were utilized as follows: $170 million for severance and related
benefits, $110 million for product line rationalizations, $27 million for
contract terminations and $8 million for plant closures.
NOTE 2--INVENTORIES
The major classes of inventory are shown in the table below:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
--------------- ---------------
<S> <C> <C>
Finished products....................................................... $ 602 $ 536
Raw materials........................................................... 193 199
Other................................................................... 161 144
----- -----
$ 956 $ 879
----- -----
----- -----
</TABLE>
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of Nabisco Holdings' financial
condition and results of operations should be read in conjunction with the
historical financial information included in the Consolidated Condensed
Financial Statements.
The food business is conducted by operating subsidiaries of Nabisco
Holdings. Nabisco's businesses in the United States are comprised of the Nabisco
Biscuit Company and the U.S. Foods Group (collectively, the "Domestic Food
Group"). The U.S. Foods Group is comprised of Specialty Products, LifeSavers,
Planters, Tablespreads and Food Service Companies. Nabisco's businesses outside
the United States are conducted by Nabisco Ltd and Nabisco International, Inc.
("Nabisco International" and together with Nabisco Ltd, the "International Food
Group").
RESULTS OF OPERATIONS
Summarized financial data for Nabisco Holdings is as follows:
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------------------- ---------------------------------
1997 1996 % CHANGE 1997 1996 % CHANGE
--------- --------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Millions)
Net Sales:
Biscuit........................................... $ 920 $ 961 (4%) $ 2,628 $ 2,746 (4%)
U.S. Foods Group.................................. 623 617 1% 1,797 1,819 (1%)
--------- --------- --------- ---------
Domestic Food Group............................... 1,543 1,578 (2%) 4,425 4,565 (3%)
International Food Group.......................... 660 660 -- 1,874 1,841 2%
--------- --------- --------- ---------
Total Nabisco Holdings............................ $ 2,203 $ 2,238 (2%) $ 6,299 $ 6,406 (2%)
--------- --------- --------- ---------
--------- --------- --------- ---------
Operating Company Contribution (1):
Biscuit (2)....................................... $ 172 $ 141 22% $ 489 $ 412 19%
U.S. Foods Group (3).............................. 71 67 6% 229 211 9%
--------- --------- --------- ---------
Domestic Food Group............................... 243 208 17% 718 623 15%
International Food Group (4)...................... 58 56 4% 156 169 (8%)
--------- --------- --------- ---------
Total Nabisco Holdings............................ $ 301 $ 264 14% $ 874 $ 792 10%
--------- --------- --------- ---------
--------- --------- --------- ---------
Operating Income (5):
Domestic Food Group............................... $ 192 $ 158 22% $ 566 $ 118 380%
International Food Group.......................... 52 50 4% 138 76 82%
--------- --------- --------- ---------
Total Nabisco Holdings............................ $ 244 $ 208 17% $ 704 $ 194 263%
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
- ------------------------
(1) Operating income before amortization of trademarks and goodwill and
exclusive of restructuring expense.
(2) Includes $11 million and $15 million, respectively, of restructuring related
expenses associated with the June 1996 restructuring program for the three
and ninth months ended September 30, 1996.
(3) Includes $5 million and $11 million, respectively, of restructuring related
expenses associated with the June 1996 restructuring program for the three
and nine months ended September 30, 1996. The nine months ended September
30, 1997 includes a $32 million gain and non-recurring expenses of $24
million.
(4) Each 1996 period includes $1 million of restructuring related expenses
associated with the June 1996 restructuring program. The nine months ended
September 30, 1997 include $7 million of non-recurring expense.
(5) The nine months ended September 30, 1996 include the June restructuring
expense of $428 million, consisting of $353 million for the Domestic Food
Group and $75 million for the International Food Group.
7
<PAGE>
Nabisco Holdings reported net sales of $2.20 billion in the third quarter of
1997, a decrease of 2% from the third quarter 1996 level of $2.24 billion, and
$6.30 billion in the first nine months of 1997, a decrease of 2% from the first
nine months 1996 level of $6.41 billion. The Domestic Food Group's net sales
were 2% lower in the third quarter and 3% lower for the first nine months, while
the International Food Group's sales were flat in the third quarter and 2%
higher for the first nine months of 1997. Within the Domestic Food Group,
Nabisco Biscuit net sales declined 4% in the third quarter and 4% in the first
nine months versus the prior year, primarily due to volume declines in
SnackWell's and breakfast snacks, which more than offset volume increases in
core cookie and cracker brands. The U.S. Foods Group's net sales increased 1% in
the third quarter primarily due to higher volume for nuts and gum, which was
partially offset by lower sales volume for tablespreads and certain other
products and the impact from the sale of certain domestic regional brands in the
second quarter of 1997. The 1% decline in net sales for the first nine months of
1997 was primarily due to lower sales volume for tablespreads and condiments,
partially offset by higher sales volume for nuts, candy and gum. The
International Food Group's net sales increase for the first nine months was
primarily driven by second half 1996 business acquisitions, principally Lucky in
Taiwan and Fontaneda in Spain, and improved results in Mexico and China.
Partially offsetting these items were volume declines in Brazil, resulting from
aggressive competitive activity in the biscuit and milk categories, and
Argentina, due to a competitive biscuit market.
Nabisco Holdings' operating company contribution was $301 million in the
third quarter of 1997, an increase of 14% from the third quarter 1996 level of
$264 million, and $874 million in the first nine months of 1997, an increase of
10% versus the $792 million generated in the first nine months of 1996. The
Domestic Food Group's operating company contribution increased 17% and 15%
versus the third quarter and first nine months of last year, respectively, while
the International Food Group's operating company contribution increased 4% and
decreased 8%, respectively. Operating company contribution for the third quarter
and first nine months of 1996 includes $16 million and $26 million of
restructuring related expenses in the Domestic Food Group (Nabisco Biscuit $11
million and $15 million and U.S. Foods Group $5 million and $11 million)
associated with implementation of the June 1996 restructuring program. Operating
company contribution for the first nine months of 1997 includes a $32 million
gain from the sale of certain U.S. Foods Group regional brands and non-recurring
expenses of $31 million. The non-recurring expenses for the U.S. Foods Group
totalled $24 million consisting of a $14 million provision for the additional
write-down of a business held for sale and $10 million of expense for the
reorganization of its selling organization. The International Food Group's
results for the first nine months included a $7 million non-recurring expense to
relocate its headquarters from New York City to New Jersey. Excluding the 1997
non-recurring items and the 1996 restructuring related expenses, Nabisco
Holdings' and the Domestic Food Group's respective operating company
contributions were $301 million and $243 million in the third quarter of 1997
versus $281 million and $224 million in the third quarter of 1996, an increase
of 7% and 8%, respectively. For the first nine months of 1997, Nabisco Holdings
and the Domestic Food Group generated operating company contribution of $873
million and $710 million, respectively, versus $819 million and $649 million in
the first nine months of 1996, an increase of 7% and 9%, respectively. On the
same basis, the International Food Group had a 2% increase in operating company
contribution for the third quarter and a 4% decrease for the first nine months
of 1997.
Excluding the impact of the 1996 restructuring related expenses, the
operating company contribution for Nabisco Biscuit increased $20 million, or
13%, for the third quarter of 1997 and increased $62 million, or 15%, for the
first nine months of 1997. These increases resulted largely from restructuring
driven margin improvements and on-going productivity initiatives. Excluding the
1997 non-recurring items and the 1996 restructuring related expense, the U.S.
Foods Group's operating company contribution decreased $1 million for the third
quarter and first nine months of 1997. The quarter's and first nine months' flat
profit performance was primarily due to restructuring efficiencies offset by
reduced sales of higher margin products. On the same basis, the International
Food Group's operating company contribution increased $1 million for the third
quarter. This flat performance was principally due to improved results in
Canada, Asia and Mexico, partially offset by lower earnings in Latin America,
most notably Brazil, due to lower sales,
8
<PAGE>
and Argentina, due to lower sales and increased marketing expenses. The
International Food Group's 4% decline in operating company contribution for the
first nine months of 1997 was primarily attributable to lower earnings in Brazil
resulting from lower sales, and Argentina, due to lower sales and higher
marketing expenses, partially offset by profitable sales growth in Mexico and
productivity driven earnings improvements in Canada.
Nabisco Holdings' operating income in the first nine months of 1996 includes
$428 million of restructuring expense. Excluding the June 1996 restructuring
expense and an additional $27 million of related restructuring implementation
expenses incurred in the first nine months of 1996 and the 1997 non-recurring
items, operating income was $244 million for the third quarter of 1997 and $703
million for the first nine months of 1997, compared to the respective 1996
amounts of $225 million and $649 million, an increase of 8% over each comparable
1996 period. The increase in operating income for both periods reflects higher
operating company contribution.
RESTRUCTURING EXPENSE
In 1996, Nabisco Holdings recorded a restructuring expense of $428 million
($300 million after tax), including cash expenditures of approximately $230
million, related to a program announced on June 24, 1996. The restructuring
program, which was undertaken to streamline operations and improve
profitability, is expected to be substantially completed by the end of 1997.
After completion of the restructuring program, pre-tax savings are expected to
be approximately $200 million annually. The restructuring program is discussed
further in Note 1 to the Consolidated Condensed Financial Statements.
INTEREST AND DEBT EXPENSE
Consolidated interest and debt expense of $82 million in the third quarter
of 1997 decreased $1 million, or 1%, from the same 1996 period primarily as a
result of lower borrowing levels. The $245 million expense for the first nine
months of 1997 decreased $3 million from the same 1996 period as a result of
slightly lower borrowing levels and lower borrowed interest rates partially
offset by lower capitalized interest in 1997.
PROVISION FOR INCOME TAXES
The effective tax rate for the first nine months of 1996 is higher than the
40.6% rate for the first nine months of 1997 as a result of the June 1996
restructuring program. Excluding the restructuring program expense and related
tax benefit, the effective rate was 41.2% for 1996.
NET INCOME (LOSS)
Nabisco Holdings' net income for the third quarter and net loss for the
first nine months of 1996 include after-tax restructuring and restructuring
related expenses of $10 million and $316 million related to the June 1996
restructuring program. Excluding the effects of this program and the second
quarter 1997 non-recurring net gain of $1 million, third quarter 1997 net income
of $92 million was 15% higher than the 1996 third quarter level of $80 million,
and net income of $258 million in the first nine months of 1997 increased 16%
from the 1996 first nine months level of $223 million, reflecting improved
operating income.
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share, which established
new standards for computing and presenting net income per common share and
replaced the standards previously found in Accounting Principles Board Opinion
No. 15, Earnings Per Share. Nabisco Holdings will begin reporting net income per
common share and net income per common share assuming dilution according to this
new standard in the fourth quarter
9
<PAGE>
of 1997. For Nabisco Holdings, net income per common share and net income per
common share assuming dilution, for the first quarter of 1997 and all prior
periods presented, computed under the new standard, are equal to the
corresponding net income per common share amounts reported under the previous
standard. Net income per common share is one cent per common share higher under
the new standard than the corresponding amounts under the previous standard for
the second and third quarters of 1997 and the first six months of 1997, and two
cents per common share higher for the first nine months of 1997. Net income per
common share assuming dilution is one cent per common share higher under the new
standard than the corresponding amounts under the previous standard for the
second quarter of 1997, the first six and nine months of 1997, and the same for
the third quarter of 1997.
LIQUIDITY AND FINANCIAL CONDITION
Net cash flows from operating activities amounted to $159 million for the
first nine months of 1997 compared to $280 million for the first nine months of
1996. The decrease in net cash flows from operating activities primarily
reflects higher 1997 payments related to the restructuring program of $84
million and higher working capital requirements.
Cash flows used in investing activities for the first nine months of 1997
decreased $302 million to $168 million from the first nine months of 1996,
primarily because there was no spending on business acquisitions in 1997, in
contrast to the $174 million spent in 1996. Other contributing factors included
a decrease in capital expenditures from 1996 to 1997 of $73 million and the
collection in 1997 of $50 million of proceeds from the sale of certain regional
brands.
Capital expenditures were $233 million in the first nine months of 1997.
Management expects that the current level of capital expenditures planned for
1997 will be approximately $400 million, which is sufficient to support the
strategic and operating needs of Nabisco Holdings' businesses. Management also
expects that cash flow from operations will be sufficient to support its planned
capital expenditures in 1997.
Cash flows from financing activities for the first nine months of 1997
decreased $130 million to $21 million from the first nine months of 1996,
principally due to reduced net borrowings resulting from a decrease in investing
activities.
In August 1997, Nabisco issued $200 million of floating rate notes due 2009.
These notes contain a put option exercisable at the end of two years. The net
proceeds from the issuance of the notes were used to repay commercial paper.
The credit agreement, dated October 31, 1996, among Nabisco Holdings,
Nabisco and various financial institutions, provides lending commitments of $1.5
billion for five years and permits the issuance of up to $300 million of
irrevocable letters of credit. Availability is reduced by the aggregate amount
of borrowings outstanding and letters of credit issued and by the amount of
outstanding Nabisco commercial paper in excess of the aggregate commitments of
the commercial paper facility described below. At September 30, 1997, the full
$1.5 billion remained available. Effective October 31, 1997 the credit agreement
was amended to extend the term for one year and reduce the lending commitments
from $1.5 billion to $1.46 billion in the fifth year.
The commercial paper facility, dated October 31, 1996, among Nabisco
Holdings, Nabisco and various financial institutions, provides a 364 day $1.5
billion credit facility primarily to support the issuance of commercial paper
borrowings. Availability is reduced by an amount equal to the aggregate amount
of outstanding Nabisco commercial paper. At September 30, 1997, approximately
$1.032 billion of commercial paper was outstanding. Accordingly, $468 million
was available under the commercial paper facility. At the end of the 364 day
period, any bank borrowing outstanding under the commercial paper facility is
convertible into a three-year term loan at Nabisco's option. Effective October
30, 1997, the commercial paper facility was extended for 364 days providing a
$1.38 billion credit facility.
10
<PAGE>
The Registrants believe that they are currently in compliance with all
covenants and restrictions imposed by the terms of their indebtedness.
At September 30, 1997, Nabisco Holdings' total debt (notes payable and
long-term debt, including current maturities) and total capital (total debt and
total stockholders' equity) amounted to approximately $4.63 billion and $8.80
billion, respectively, of which total debt is higher by $141 million and total
capital is higher by $223 million than their respective balances at December 31,
1996. Approximately $4.23 billion of this debt was issued by Nabisco, of which
$56 million was secured debt. The $402 million balance was issued by various
Nabisco subsidiaries. Nabisco Holdings' ratios of total debt to total
stockholders' equity and total debt to total capital at September 30, 1997 were
1.11 to 1 and .53 to 1, respectively.
On June 5, 1997, Nabisco Holdings announced a 13% increase in its quarterly
dividend to an annual rate of $.70 per share from $.62 per share. At that rate,
the aggregate amount of dividends to be paid would be approximately $175 million
during 1997.
------------------------
The foregoing discussion in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Note 1 to the Consolidated
Condensed Financial Statements" contains forward-looking statements concerning,
among other things, the level and sufficiency of funding for capital
expenditures, the adequacy of cash flows from operations to fund such
expenditures and the amount of future savings expected as a result of the 1996
restructuring program. These statements reflect management's current views with
respect to future events and financial performance. These forward-looking
statements are based on many assumptions and factors including competitive
pricing for products, commodity prices, success of new product innovations and
acquisitions, economic conditions in countries where Nabisco Holdings'
subsidiaries do business, the effects of currency fluctuations and the effects
of government regulation. Any changes in such assumptions or factors could
produce significantly different results.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
*10.1 Performance Unit Agreement between Nabisco Holdings Corp. and H. John
Greeniaus (1997 grant--1 year period), dated February 26, 1997.
<S> <C>
*11 Nabisco Holdings Corp. Computation of Earnings Per Share for the three months
and nine months ended September 30, 1997 and 1996.
*12 Nabisco, Inc. Computation of Ratio of Earnings to Fixed Charges for the nine
months ended September 30, 1997.
*27.1 Nabisco Holdings Corp. Financial Data Schedule.
*27.2 Nabisco, Inc. Financial Data Schedule.
</TABLE>
- ------------------------
* Filed herewith.
(b) Reports on Form 8-K
None.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
NABISCO HOLDINGS CORP.
NABISCO, INC.
(Registrants)
Date: October 31, 1997 /s/ JAMES E. HEALEY
...........................................................................................
James E. Healey
Executive Vice President and
Chief Financial Officer
/s/ ROBERT A. SCHIFFNER
...........................................................................................
Robert A. Schiffner
Senior Vice President and Controller
</TABLE>
12
<PAGE>
Exhibit 10.1
Performance NA
RSU - 1997
Special - One Year
NABISCO HOLDINGS CORP.
1994 LONG TERM INCENTIVE PLAN
GRANT AGREEMENT
DATE OF GRANT: FEBRUARY 26, 1997
WITNESSETH:
1. GRANT. Pursuant to the 1994 Long Term Incentive Plan (the "Plan"),
Nabisco Holdings Corp. (the "Company") on the above date has granted to
H. JOHN GREENIAUS (THE "GRANTEE"),
subject to the terms and conditions of this Agreement and the Plan,
918 PERFORMANCE UNITS
AND
4,026 RESTRICTED STOCK UNITS
A copy of the Plan is attached and constitutes an integral part of this
Agreement. All undefined capitalized terms in this Agreement have the same
meaning as in the Plan or, if not defined therein, the Annual Incentive Award
Plan ("AIAP").
2. PERFORMANCE UNITS. Each Performance Unit has an initial value of
$1,000. The Committee will value each Performance Unit at the end of 1997 using
the performance measures set forth in the grid attached as Exhibit A, but the
Committee has the discretion to reduce the resulting valuation. You agree that
these Performance Units are in lieu of an award under the Annual Incentive Award
Plan for 1997.
<PAGE>
3. RESTRICTED STOCK UNITS.
(a) The Restricted Stock Units ("RSUs") have a three-year term commencing
January 1, 1997 and ending December 31, 1999 (the "Restriction Period"). The
value of the RSUs as of January 1, 1997 is $38.00. Thereafter, the value of the
RSUs on any date will be equal to the average closing price of the Company's
Class A Common Stock for the 30 trading days immediately preceding such date.
The Committee has the discretion to reduce the resulting valuations and, on the
basis of the Company's performance in 1997, to cancel some or all of the RSUs.
(b) In the event that participants in the AIAP are permitted to elect to
acquire additional RSUs ("Discount RSUs") in lieu of all or a portion of their
AIAP cash award for 1997, you will also be permitted to elect to acquire
Discount RSUs in lieu of all or a portion of the cash that you receive for your
Performance Units pursuant to Section 5 below, subject to such terms and
conditions as apply to participants in the AIAP generally.
4. VESTING.
(a) Performance Units vest on December 31, 1997. If your employment is
involuntarily terminated without Cause, or by reason of your death, Disability
or Retirement, your Performance Units will vest in proportion to the ratio of
(i) the number of partial or complete months of employment during 1997, to (ii)
12 months and will be paid based on their initial value. If termination is
voluntary or with Cause, the Performance Units will be canceled immediately.
(b) RSUs granted pursuant to Section 1 vest on December 31, 1999 or, if
earlier, your death, Disability or Retirement. If your employment is
involuntarily terminated without Cause, these RSUs will vest in proportion to
the ratio of (i) the number of partial or complete months of employment between
January 1, 1998 and December 31, 1999, to (ii) 24 months. If termination is
voluntary or with Cause, these RSUs will be canceled immediately. Discount RSUs
acquired pursuant to Section 3(b) will be fully vested upon acquisition.
5. PAYMENT OF AWARDS.
(a) Subject to Section 5(b), the Company will pay you the value of your
vested Performance Units and RSUs as soon as practicable after the end of 1997
and 1999, respectively.
(b) If your employment terminates before you receive payment for your
vested RSUs granted pursuant to Section 1, you will receive payment in an amount
equal to the value of the RSUs as of the date of termination. Payment will be
made as soon as practicable. Payment of Discount RSUs acquired pursuant to
Section 3(b) will be made on the same terms and conditions as apply to
participants in the AIAP generally.
<PAGE>
(c) All payments will be in cash and in exchange for the Performance Units
and RSUs, as applicable. You may not obtain payment for them in Common Stock or
other Company securities, and they do not give you any rights as a holder of
such securities.
6. DEFERRAL.
(a) You may elect to defer payment of Performance Units as of December 31,
1997 and RSUs as of December 31, 1999. Your election must be in writing, signed
by you and delivered to the Company on or before the foregoing dates. Your
election will be irrevocable and must specify the percentage (from 5% to 100%,
in 5% increments) of the Performance Units and RSUs (collectively, the "Grants")
which will be paid (i) as soon as practicable after the year your death,
Retirement, Disability or other termination of employment occurs or (ii) in
January of any designated future year. If your employment with the Company and
its subsidiaries terminates before the designated year, your Grants will be paid
as of January of the year following termination. Common Stock credits will not
be paid until at least six months after the date of deferral. The Company will
contribute an additional 3% to the amount deferred on account of the 3% company
match that you would have received under the Capital Investment Plan if you had
not deferred payment.
(b) You must specify, on the notice electing deferred payment pursuant to
Section 6(a)(i), whether payment of the Grants will be deferred by cash credit,
Common Stock credit, or a combination of the two. If you elect to defer payment
pursuant to Section 6(a)(ii) or fail to choose a mode of deferral, your deferral
will be by means of a cash credit. Cash credits and stock credits will be
recorded in accounts established in your name on the books of the Company. At
the direction of the Company, your accounts may be consolidated on the books of
the Company or any of its subsidiaries.
(i) If your deferral is wholly or partly a cash credit, your cash
credit account will be credited, as of January 1 of the year that
payment of the Grants would have been made, with the dollar
amount of the portion of the Grants deferred by means of a cash
credit. In addition, your cash credit account will be credited
as of the last day of each calendar quarter with an interest
equivalent in an amount determined by applying to the current
balance in the account an interest rate equal to the average
prime rate of Morgan Guaranty Trust Company of New York during
the quarter. Interest will be credited for the actual number of
days in the quarter using a 365-day year.
(ii) If the deferral is wholly or partly a Common Stock credit, your
Common Stock credit account will be credited, as of January 1 of
the year that payment of the Grants would have been made, with
the Common Stock equivalent of the number of shares of Common
Stock (including fractions of a share) that could have been
purchased with
<PAGE>
the portion of the Grants deferred by means of a Common Stock
credit at the closing price of the Common Stock on the date that
payment of the Grants would otherwise have been made. As of the
date any dividend is paid to shareholders of Common Stock, your
Common Stock credit account will also be credited with an
additional Common Stock equivalent equal to the number of shares
of Common Stock (including fractions of a share) that could have
been purchased at the Closing Price on such date with the
dividend paid on the number of shares of Common Stock to which
your Common Stock credit account is then equivalent. If
dividends are paid in property, the dividend will be deemed to be
the fair market value of the property at the time of distribution
of the dividend, as determined by the Committee.
(c) Payment of deferred Grants will be made in a single cash payment;
provided, however, that if you elect in writing before December 31 of the year
your employment terminates due to Retirement or Disability, payment will be made
in substantially equal annual installments (not to exceed ten) commencing on the
January following the Retirement or Disability. Notwithstanding any election
under Section 6(b) to defer awards by means of a Common Stock credit, your
Common Stock credit account, if you elect to receive installment payments, will
be converted into a cash credit account as of January 1 of the year in which
such installment payments commence.
(d) At your one-time election in writing to the Committee, all or any
designated portion of your Common Stock credit account may be converted to, and
you will be credited with, a cash credit account as of the first business day of
the calendar quarter following the quarter in which the election is made. The
amount credited to the cash credit account will be determined by multiplying the
number of shares of Common Stock to which your Common Stock credit account is
then equivalent and as to which such election has been made by the Closing Price
on the first business day of the calendar quarter following the quarter in which
the election is made. Any Common Stock credits attributable to dividends paid
on Common Stock during the calendar quarter in which the election is made will
be credited before making the conversion. You may make this election at any
time prior to the end of the calendar year in which termination of employment
occurs. An election by you under this Section 6(d) will be irrevocable.
(e) If the number of outstanding shares of Common Stock is increased as
the result of any stock dividend, subdivision or reclassification of shares, the
number of shares of Common Stock to which your Common Stock credit account is
equivalent will be increased in proportion to the increase in the number of
outstanding shares of Common Stock. If the number of outstanding shares of
Common Stock is decreased as the result of any combination or reclassification
of shares, the number of shares of Common Stock to which your Common Stock
credit account is equivalent will be decreased in proportion to the decrease in
the number of outstanding shares of Common Stock. In the event the Company is
consolidated with or merged into any other corporation and holders of the
Company's Common Stock receive common shares of the
<PAGE>
resulting or surviving corporation, your Common Stock credit account, in place
of the shares then credited thereto, will be credited with a stock equivalent
determined by multiplying the number of common shares of stock given in exchange
for a share of Common Stock upon such consolidation or merger, by the number of
shares of Common Stock to which your account is then equivalent. If in such a
consolidation or merger, holders of the Company's Common Stock receive any
consideration other than common shares of the resulting or surviving
corporation, the Committee will determine the appropriate change in your
account. In the event of any extraordinary dividend, including any spin-off,
the Committee will make appropriate adjustments to your Common Stock credit
account.
(f) If you die, whether before or after termination of employment, any
cash credit account and Common Stock credit account to which you are entitled,
including any award approved after your death as to which an election to defer
was made, will be distributed in cash (unless the Committee otherwise provides)
to your beneficiaries pursuant to Section 7.
7. BENEFICIARIES. If you die, the Company will make payments pursuant to
this Agreement to the beneficiary designated in writing by you specifically for
the Plan or, if there is no such designation or the named beneficiary is dead,
to the beneficiary most recently designated by you to receive the proceeds of
any Company-paid group life insurance coverage provided to you. Otherwise, the
distribution will be made to default beneficiaries as provided under the
Company-paid group life insurance plan. Only you may change or revoke your
designation.
8. TAX WITHHOLDING. The Company or one of its subsidiaries will deduct
any taxes required to be withheld by federal, state, local or foreign
governments from the awards that you receive pursuant to this Agreement.
9. TRANSFER. Except as set forth in this Agreement, you may not transfer,
pledge or encumber your Grants or any other benefits that you receive pursuant
to this Agreement. Except as required by law, creditors may not attach or seize
such Grants or benefits.
10. INTERPRETATION. The Committee has the power to interpret this
Agreement and complete discretion in making valuations and determinations and
taking other action pursuant to the Agreement. All interpretations,
determinations and actions by the Committee will be final and binding on all
parties. The Company, the Board of Directors, the Committee and the officers
and employees of the Company and its subsidiaries will not be liable for any
action taken in good faith in interpreting and performing this Agreement.
<PAGE>
11. NO RIGHT TO EMPLOYMENT. The execution, delivery and performance of
this Agreement do not constitute an agreement or understanding, express or
implied, on the part of the Company or its subsidiaries to employ you for any
specific period or in any specific capacity and do not prevent the Company or
its subsidiaries from terminating your employment at any time with or without
Cause. "Termination of employment" under this Agreement means termination from
active employment; it does not mean the termination of pay and benefits at the
end of salary continuation or other forms of severance pay or pay in lieu of
salary.
12. NOTICES. Any notices to the Company pursuant to this Agreement should
be addressed to: The Secretary, Nabisco Holdings Corp., 7 Campus Drive,
Parsippany, NJ 07054. Any notice to you pursuant to this Agreement will be
sent to your address as shown on Company records.
13. CHANGE OF CONTROL. In the event of a Change of Control: (i) all
unvested RSUs and Performance Units issued to you will vest if you are
terminated without Cause within two years after the date of the Change of
Control, and (ii) the value of the RSUs will not be less than the Closing Price
of Class A Common Stock on the date of the Change of Control.
14. YOUR OBLIGATIONS.
(a) You agree that, until the third anniversary of (i) your last day of
employment with the Company or any of its subsidiaries, or (ii) the last date on
which you receive any payment pursuant to this Agreement, whichever is later:
(A) you will personally provide reasonable assistance and cooperation to the
Company or any of its subsidiaries in activities related to the prosecution or
defense of any pending or future lawsuits or claims involving the Company or any
of its subsidiaries; (B) you will promptly notify the Company upon receipt of
any requests from anyone other than an employee or agent of the Company for
information regarding the Company or any of its subsidiaries or if you become
aware of any potential claim or proposed litigation against the Company or any
of its subsidiaries; (C) you will refrain from providing any information related
to any claim or potential litigation against the Company or any of its
subsidiaries to any non-Company representatives unless you have the Company's
written permission or are required to provide information pursuant to legal
process; (D) you will not disclose or misuse any confidential information or
material concerning the Company or any of its subsidiaries; and (E) you will not
engage in any activity contrary or harmful to the interests of the Company or
any of its subsidiaries. You agree that if required by law to provide sworn
testimony regarding any matter relating to the Company or any of its
subsidiaries: you will consult with and have Company-designated legal counsel
present for such testimony (the Company will be responsible for the costs of
this counsel); you will confine your testimony to items about which you have
knowledge rather than speculation, unless otherwise directed by legal process;
and you will assist the efforts of the Company's attorneys to hold all
privileged attorney-client matters in strictest confidence, especially matters
you have been privy to.
<PAGE>
(b) If the Company reasonably determines that you have materially violated
any of your obligations under this Agreement, then the Grants hereunder shall
terminate, effective no later than the date on which such violations began. In
that event, you agree to return to the Company on its demand any amounts paid to
you pursuant to this Agreement. If you fail to do so, the Company may deduct
from any amounts the Company owes to you (including, but not limited to, wages
or other compensation), or commence judicial proceedings against you, to recover
these amounts and related attorneys' fees and expenses. In addition, you agree
that the Company may pursue any other remedies available in law or at equity,
including injunctive relief, for any breach of this Section 14.
NABISCO HOLDINGS CORP.
By
----------------------------
Authorized Signatory
- -----------------------------
GRANTEE
Grantee's Taxpayer Identification Number:
- -----------------------------
Grantee's Home Address
- -----------------------------
- -----------------------------
Date:
------------------------
<PAGE>
EXHIBIT 11
NABISCO HOLDINGS CORP.
COMPUTATION OF EARNINGS PER SHARE
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
----------------------- -----------------------
<S> <C> <C> <C> <C>
FULLY FULLY
PRIMARY DILUTED PRIMARY DILUTED
--------- ------------ --------- ------------
Average number of common and common equivalent shares
outstanding during the period (in thousands):
Common Stock issued and outstanding at beginning of period... 265,070 265,070 265,055 265,055
Average number of shares of common stock issued during the
period..................................................... -- -- -- --
Average number of stock options outstanding during the
period..................................................... 3,887 4,151 1,744 1,744
--------- ------------ --------- ------------
Average number of common and common equivalent shares
outstanding during the period.............................. 268,957 269,221 266,799 266,799
--------- ------------ --------- ------------
--------- ------------ --------- ------------
Net income applicable to common stock.......................... $92 $92 $70 $70
--------- ------------ --------- ------------
--------- ------------ --------- ------------
Net income per common and common equivalent share.............. $.34 $.34 $.26 $.26
--------- ------------ --------- ------------
--------- ------------ --------- ------------
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996(A)
----------------------- -----------------------
<S> <C> <C> <C> <C>
FULLY FULLY
PRIMARY DILUTED PRIMARY DILUTED
--------- ------------ --------- ------------
Average number of common and common equivalent shares
outstanding during the period (in thousands):
Common Stock issued and outstanding at beginning of period... 265,070 265,070 265,000 265,000
Average number of shares of common stock issued during the
period..................................................... -- -- 38 38
Average number of stock options outstanding during the
period..................................................... 3,625 3,774 -- 1,908
--------- ------------ --------- ------------
Average number of common and common equivalent shares
outstanding during the period.............................. 268,695 268,844 265,038 266,946
--------- ------------ --------- ------------
--------- ------------ --------- ------------
Net income (loss) applicable to common stock................... $259 $259 $(93) $(93 )
--------- ------------ --------- ------------
--------- ------------ --------- ------------
Net income (loss) per common and common equivalent share....... $.96 $.96 $(.35) $(.35 )
--------- ------------ --------- ------------
--------- ------------ --------- ------------
</TABLE>
- ------------------------
(A) The calculation of fully diluted earnings per share for the nine months
ended September 30, 1996 is presented in accordance with Regulation S-K item
601(b)(11) and includes the average number of common equivalent shares
although it is contrary to paragraph 40 of APB Opinion No. 15 because it
produces an antidilutive result for this net loss period.
<PAGE>
EXHIBIT 12
NABISCO, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1997
---------------------
<S> <C>
Earnings before fixed charges:
Net income.................................................................................. $ 259
Provision for income taxes.................................................................. 177
-----
Income before income taxes.................................................................. 436
Interest and debt expense................................................................... 245
Interest portion of rental expense.......................................................... 20
-----
Earnings before fixed charges................................................................. $ 701
-----
-----
Fixed charges:
Interest and debt expense................................................................... $ 245
Interest portion of rental expense.......................................................... 20
Capitalized interest........................................................................ 4
-----
Total fixed charges....................................................................... $ 269
-----
-----
Ratio of earnings to fixed charges............................................................ 2.6
-----
-----
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF NABISCO HOLDINGS CORP., WHICH
WERE FILED WITH SEC FROM 10-Q, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000932130
<NAME> NABISCO HOLDINGS CORP.
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 102
<SECURITIES> 0
<RECEIVABLES> 547
<ALLOWANCES> 0
<INVENTORY> 956
<CURRENT-ASSETS> 1,696
<PP&E> 3,261
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,153
<CURRENT-LIABILITIES> 1,667
<BONDS> 4,344
0
0
<COMMON> 3
<OTHER-SE> 4,163
<TOTAL-LIABILITY-AND-EQUITY> 12,153
<SALES> 6,299
<TOTAL-REVENUES> 6,299
<CGS> 3,597
<TOTAL-COSTS> 3,597
<OTHER-EXPENSES> 170
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 245
<INCOME-PRETAX> 436
<INCOME-TAX> 177
<INCOME-CONTINUING> 259
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 259
<EPS-PRIMARY> .96
<EPS-DILUTED> .96
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF NABISCO, INC. WHICH WERE FILED
WITH SEC FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000069526
<NAME> NABISCO, INC.
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 102
<SECURITIES> 0
<RECEIVABLES> 547
<ALLOWANCES> 0
<INVENTORY> 956
<CURRENT-ASSETS> 1,696
<PP&E> 3,261
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,153
<CURRENT-LIABILITIES> 1,657
<BONDS> 4,344
0
0
<COMMON> 0
<OTHER-SE> 4,176
<TOTAL-LIABILITY-AND-EQUITY> 12,153
<SALES> 6,299
<TOTAL-REVENUES> 6,299
<CGS> 3,597
<TOTAL-COSTS> 3,597
<OTHER-EXPENSES> 170
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 245
<INCOME-PRETAX> 436
<INCOME-TAX> 177
<INCOME-CONTINUING> 259
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 259
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
