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Previous: AMERICAN BRANDS INC /DE/, 10-K, 1995-03-29 |
Next: SUNGARD DATA SYSTEMS INC, 10-K, 1995-03-29 |
UNITED STATES
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
March 28, 1995 (March 28, 1995)
---------------------------------------------------------------------------
Date of Report (Date of earliest event reported)
AMERICAN BRANDS, INC.
---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-9076 13-3295276
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
l700 East Putnam Avenue, Old Greenwich, Connecticut 06870-0811
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 698-5000
----------------------
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events.
------ ------------------------------------
Filed herewith is certain pro forma financial information of Registrant
relating to the previously reported sales by Registrant of The American Tobacco
Company and American Franklin Company.
Item 7. Financial Statements, Pro Forma
------ Financial Information and Exhibits.
----------------------------------
(b) Pro Forma Financial Information.
-------------------------------
The following unaudited pro forma financial information of
Registrant is attached hereto as Appendix A:
(i) Introductory paragraphs;
(ii) Pro Forma Condensed Balance Sheet (Unaudited) at December
31, 1994;
(iii) Pro Forma Condensed Statement of Income (Unaudited) for
the year ended December 31, 1993;
(iv) Pro Forma Condensed Statement of Income (Unaudited) for
the year ended December 31, 1994; and
(v) Notes to Unaudited Pro Forma Condensed Financial
Statements.
<PAGE>
This Current Report shall not be construed as a waiver of the right to
contest the validity or scope of any or all of the provisions of the Securities
Exchange Act of 1934 under the Constitution of the United States, or the
validity of any rule or regulation made or to be made under such Act.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report to be signed on its
behalf by the undersigned thereunto duly authorized.
AMERICAN BRANDS, INC.
---------------------
(Registrant)
By Joseph J. Griffin
--------------------------------
Joseph J. Griffin
Vice President and
Controller
Date: March 28, 1995
-2-
<PAGE>
APPENDIX A
AMERICAN BRANDS, INC.
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed financial statements are presented
for informational purposes only and do not purport to be indicative of the
financial position which would actually have existed or the results of
operations which would actually have been obtained if the transactions had
occurred in the periods indicated below or which may exist or be obtained in the
future. The ultimate use of the proceeds may differ from the assumptions used
herein.
The following unaudited pro forma condensed statements of income for the years
ended December 31, 1993 and 1994 give effect to: (i) the elimination of the
results of operations and the 1994 gain on the sale of The American Tobacco
Company ("American Tobacco"), a wholly-owned subsidiary of American Brands, Inc.
("American Brands"), which was sold in December 1994, as described in Note (A),
and (ii) the pro forma adjustments related to the sale of American Tobacco and
American Franklin Company ("Franklin"), as described in the Notes thereto.
Franklin was sold in January 1995 and has been accounted for as a discontinued
operation in the historical consolidated financial statements. The pro forma
results of operations are presented as though these disposals occurred on
January 1, 1993.
The following unaudited pro forma condensed balance sheet as of December 31,
1994 reflects the pro forma adjustments as to the assumed use of the proceeds on
the sale of American Tobacco and Franklin, as described in the Notes thereto, as
though these transactions occurred at December 31, 1994. These statements should
be read in conjunction with the Notes thereto and with the historical financial
statements of American Brands and the notes thereto.
1
<PAGE>
<TABLE>
AMERICAN BRANDS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET (Unaudited)
DECEMBER 31, 1994
(IN MILLIONS)
<CAPTION>
AMERICAN PRO FORMA
BRANDS ADJUSTMENTS PRO FORMA
-------- ----------- ---------
<S> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 110.1 $ 110.1
Accounts receivable, net 1,067.9 1,067.9
Inventories 2,015.7 2,015.7
Net assets of discontinued operations 1,170.0 $(1,170.0) (H) -
Other current assets 307.2 307.2
-------- --------- --------
Total current assets 4,670.9 (1,170.0) 3,500.9
-------- --------- --------
Property, plant & equipment, net 1,212.7 1,212.7
Intangibles resulting from business
acquisitions, net 3,549.1 3,549.1
Other assets 361.7 361.7
-------- --------- --------
Total assets $9,794.4 $(1,170.0) $8,624.4
======== ========= ========
</TABLE>
See Accompanying Notes to Unaudited Condensed Financial Statements.
2
<PAGE>
<TABLE>
AMERICAN BRANDS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET (Unaudited)
DECEMBER 31, 1994
(IN MILLIONS)
<CAPTION>
AMERICAN PRO FORMA
BRANDS ADJUSTMENTS PRO FORMA
-------- ----------- ---------
<S> <C> <C> <C>
Liabilities and stockholders' equity
Current liabilities
Notes payable to banks $ 77.3 $ (77.3) (H) $ -
375.0 (A)
Commercial paper 103.3 (478.3) (H) -
Accounts payable and accrued
expenses and other liabilities 1,327.6 1,327.6
Accrued excise and other taxes 1,082.1 1,082.1
Current portion of long-term debt 525.2 (239.4) (H) 285.8
-------- --------- ---------
Total current liabilities 3,115.5 (420.0) 2,695.5
-------- --------- ---------
Long-term debt 1,512.1 1,512.1
Deferred income taxes 133.0 133.0
Postretirement and other liabilities 396.3 396.3
-------- --------- ---------
Total liabilities 5,156.9 (420.0) 4,736.9
-------- --------- ---------
Convertible preferred stock
redeemable at Company's option 15.7 15.7
-------- ---------
Common stockholders' equity
Common stock, par value $3.125 per
share, 229.6 shares issued 717.4 717.4
Paid-in capital 174.6 174.6
Foreign currency adjustments (249.0) (249.0)
Retained earnings 4,724.4 4,724.4
(375.0) (A)
Treasury stock, at cost (745.6) (375.0) (H) (1,495.6)
-------- --------- ---------
Total Common stockholders' equity 4,621.8 (750.0) 3,871.8
-------- --------- ---------
Total liabilities and stockholders' equity $9,794.4 $(1,170.0) $ 8,624.4
======== ========= =========
</TABLE>
See Accompanying Notes to Unaudited Condensed Financial Statements.
3
<PAGE>
<TABLE>
AMERICAN BRANDS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF INCOME (Unaudited)
YEAR ENDED DECEMBER 31, 1993
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
AMERICAN AMERICAN PRO FORMA
BRANDS TOBACCO ADJUSTMENTS PRO FORMA
-------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $12,630.5 $(1,501.5) $11,129.0
--------- --------- ---------
Cost of products sold 3,587.6 (345.3) 3,242.3
Excise taxes on products sold 5,413.9 (360.9) 5,053.0
--------- --------- ---------
9,001.5 (706.2) 8,295.3
--------- --------- ---------
Gross profit 3,629.0 (795.3) 2,833.7
--------- --------- ---------
Advertising, selling and
administrative expenses 2,315.2 (626.1) 1,689.1
Amortization of intangibles 92.4 92.4
Restructuring charges 40.8 40.8
--------- --------- ---------
2,448.4 (626.1) 1,822.3
--------- --------- ---------
Operating income 1,180.6 (169.2) 1,011.4
--------- --------- ---------
$ (37.5) (C)
Interest and related charges 227.6 (1.6) (47.7) (J) 140.8
Corporate administrative expenses 78.1 78.1
Other (income) expenses, net (0.5) 1.1 0.6
--------- --------- ------- ---------
305.2 (0.5) (85.2) 219.5
--------- --------- ------- ---------
Income from continuing operations
before income taxes 875.4 (168.7) 85.2 791.9
13.1 (D)
Income taxes 334.2 (46.6) 16.7 (K) 317.4
--------- --------- ------- ---------
Income from continuing operations $ 541.2 $ (122.1) $ 55.4 $ 474.5
========= ========= ======= =========
Income from continuing operations
Per Common share
Primary $2.67 $2.60 (L)
========= =========
Fully diluted $2.63 $2.56 (L)
========= =========
Average number of Common shares
outstanding
Primary 201.8 181.8 (L)
========= =========
Fully diluted 213.7 193.7 (L)
========= =========
</TABLE>
See Accompanying Notes to Unaudited Condensed Financial Statements.
4
<PAGE>
<TABLE>
AMERICAN BRANDS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF INCOME (Unaudited)
YEAR ENDED DECEMBER 31, 1994
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
AMERICAN AMERICAN PRO FORMA
BRANDS TOBACCO ADJUSTMENTS PRO FORMA
-------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $13,146.5 $(1,594.7) $11,551.8
--------- --------- ---------
Cost of products sold 3,765.1 (351.4) 3,413.7
Excise taxes on products sold 5,656.8 (425.3) 5,231.5
--------- --------- ---------
9,421.9 (776.7) 8,645.2
--------- --------- ---------
Gross profit 3,724.6 (818.0) 2,906.6
--------- --------- ---------
Advertising, selling and
administrative expenses 2,315.9 (570.4) 1,745.5
Amortization of intangibles 96.3 - 96.3
--------- --------- ---------
2,412.2 (570.4) 1,841.8
--------- --------- ---------
Operating income 1,312.4 (247.6) 1,064.8
--------- --------- ---------
$ (37.5) (C)
Interest and related charges 212.1 (1.2) (47.7) (J) 125.7
Corporate administrative expenses 69.9 69.9
Other (income) expenses, net 12.1 0.7 12.8
--------- --------- ------- ---------
294.1 (0.5) (85.2) 208.4
--------- --------- ------- ---------
1,018.3 (247.1) 85.2 856.4
--------- --------- ------- ---------
Gain on disposal of businesses, net 332.9 (577.9) (F) (245.0)
--------- --------- ------- ---------
Income from continuing operations
before income taxes 1,351.2 (247.1) (492.7) 611.4
13.1 (D)
(69.6) (G)
Income taxes 466.1 (99.9) 16.7 (K) 326.4
--------- --------- ------- ---------
Income from continuing operations $ 885.1 $ (147.2) $(452.9) $ 285.0
========= ========= ======= =========
Income from continuing operations
Per Common share
Primary $4.38 $1.56 (L)
========= =========
Fully diluted $4.24 $1.55 (L)
========= =========
Average number of Common shares
outstanding
Primary 201.6 181.6 (L)
========= =========
Fully diluted 213.7 185.8 (L)
========= =========
</TABLE>
See Accompanying Notes to Unaudited Condensed Financial Statements.
5
<PAGE>
AMERICAN BRANDS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The American Brands column in the pro forma condensed balance sheet at December
31, 1994 reflects the sale of American Tobacco and includes American Brands'
gain on the sale and initial reduction of debt with the proceeds. The American
Brands column also reflects the disposal of Franklin on a discontinued
operations basis and American Brands' loss on the sale. The "Net assets of
discontinued operations" represents the $1.17 billion proceeds received from the
sale on January 31, 1995.
The American Brands column in the pro forma condensed statement of income for
the year ended December 31, 1993 includes American Tobacco's results for the
full period and for the year ended December 31, 1994 includes American Tobacco's
results up to its sale date of December 22, 1994 and American Brands' gain on
the sale. The American Brands columns for the years ended December 31, 1993 and
1994 do not include Franklin's results or American Brands' loss on the sale
since the transaction represented a disposal of a business segment and was
treated as a discontinued operation and as such was reported below "Income from
continuing operations." The American Tobacco column in the pro forma condensed
financial statements reflects the amounts which are included in the American
Brands columns.
THE AMERICAN TOBACCO COMPANY
----------------------------
(A) On December 22, 1994, American Brands sold American Tobacco to
Brown & Williamson Tobacco Corporation, a wholly-owned subsidiary of B.A.T
Industries p.l.c., for $1 billion in cash. The proceeds on the sale were
initially used to reduce short-term debt. In connection with the sale, the Board
of Directors of American Brands authorized the purchase of up to 10 million
shares of its Common stock. The pro forma adjustments column reflects a purchase
of 10 million shares of American Brands' Common stock, at a cost of $37.50 per
share (closing market price on December 30, 1994), or $375 million. The share
purchase is reflected as an increase in Treasury stock, at cost, with an
offsetting increase in short-term debt. Retained earnings reflects a gain of
$508.3 million (net of $69.6 million of taxes) on the sale in the American
Brands column.
(B) The pro forma condensed statements of income pro forma adjustments
columns for the years ended December 31, 1993 and 1994 reflect the related
interest expense adjustment on the short-term debt reduction of $625 million as
follows:
Year ended December 31,
-----------------------
1993 1994
---- ----
(In millions)
(C) Reduction in interest
expense at an assumed average
interest rate of 6%. $ 37.5 $ 37.5
====== ======
(D) Increase income taxes
relates to the reduction in interest
expense. $ 13.1 $ 13.1
====== ======
6
<PAGE>
(E) The pro forma condensed statements of income pro forma adjustments
column for the year ended December 31, 1994, reflects the elimination of
American Brands' gain on the sale of American Tobacco as follows:
Year ended December 31,
----------------------
1994
----
(In millions)
(F) Reduction in gain on
disposal of businesses, net for
elimination of gain on sale $ 577.9
=======
(G) Decrease in income taxes
relates to elimination of gain on sale $ 69.6
=======
AMERICAN FRANKLIN COMPANY
-------------------------
(H) On January 31, 1995, American Brands sold Franklin to American
General Corporation for $1.17 billion in cash. Such transaction represents a
disposal of a business segment and was treated as a discontinued operation. In
connection with the sale, the Board of Directors of American Brands authorized
the purchase of up to 10 million shares of its Common stock. The pro forma
condensed balance sheet pro forma adjustments column reflects a $1.17 billion
reduction in "Net assets of discontinued operations" and assumes a $795 million
reduction of short-term debt and a purchase of 10 million shares of American
Brands' Common stock, at a cost of $37.50 per share (closing market price on
December 30, 1994), or $375 million. The share purchase is reflected as an
increase in Treasury stock, at cost. Retained earnings in the American Brands
column reflects a loss of $206.8 million on the sale.
(I) The pro forma condensed statements of income pro forma adjustments
columns for the years ended December 31, 1993 and 1994 reflect the related
interest expense adjustment on the $795 million short-term debt reduction as
follows:
Year ended December 31,
-----------------------
1993 1994
---- ----
(In millions)
(J) Reduction in interest
expense at an assumed average
interest rate of 6%. $ 47.7 $ 47.7
====== ======
(K) Increase in income taxes
relates to the reduction in interest
expense. $ 16.7 $ 16.7
====== ======
The pro forma condensed statements of income do not reflect the loss,
including net income during the phase-out period from November 30 through the
January 31, 1995 date of sale, of $206.8 million. Such loss is included in "Net
income (loss) from discontinued operations" which is not shown in pro forma
condensed statements of income since it is reflected below "Income from
continuing operations".
7
<PAGE>
(L) Pro forma income from continuing operations per Common share and
Average number of Common shares outstanding also reflect the assumed purchase of
20 million Common shares.
Anti-dilutive shares are excluded from the calculation of fully diluted
earnings per Common share in 1994.
8
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