SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
January 2, 1998
(Date of earliest event reported)
PETER KIEWIT SONS', INC.
(Exact name of registrant as specified in its charter)
Delaware 47-0210602
(State of incorporation) (I.R.S. Employer
Identification No.)
0-15658
(Commission File Number)
1000 Kiewit Plaza
Omaha, Nebraska 68131
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code
(402) 342-2052
Item 2. Acquisition or Disposition of Assets
On January 2, 1998, Kiewit Diversified Group Inc. ("KDG"), a Peter Kiewit
Sons', Inc. ("the Company") subsidiary, completed the previously announced
sale (the "CalEnergy Transaction") to CalEnergy Company, Inc. ("CalEnergy")
of (i) its stock and option interests in CalEnergy, (ii) its interests in
certain joint ventures with CalEnergy (the "Joint Venture Energy Projects")
which own power plants in the Philippines and Indonesia, and (iii) its 30%
equity interest in Northern Electric plc, one of twelve regional electricity
companies created by the privatization of the electric utility industry in the
United Kingdom in 1990. The CalEnergy Transaction was
accomplished through the sale by KDG to CalEnergy of all of the stock of
Kiewit Energy Company ("Kiewit Energy") and the sale by Kiewit Energy to
CalEnergy of the stock of certain Kiewit Energy subsidiaries.
The net proceeds of the CalEnergy Transaction to KDG were approximately $1.16
billion. The CalEnergy Transaction resulted in a one-time after tax gain in
1998 to the Company and KDG of approximately $300 million, and elimination
of KDG net income attributable to CalEnergy, the Joint Venture Energy
Projects and Northern Electric plc, which was $8 million in 1996 and is
expected to be approximately $37 million, prior to
the effect of one-time events, in 1997. The CalEnergy Transaction has
substantially increased (by approximately $960 million) the cash, cash
equivalents and other short-term investments held by KDG. KDG expects to
use substantially all of these funds in
connection with its previously announced plans to expand its information
services business.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The following pro forma financial information of the Company has been
prepared to give effect to the CalEnergy Transaction.
The pro forma financial information includes pro forma consolidated condensed
statements of earnings for the year ended December 28, 1996 and the nine
month period ended September 30, 1997, and a pro forma consolidated condensed
balance sheet as of September 30, 1997. The pro forma financial information
should be read in conjunction with the historical consolidated financial
statements and the notes thereto of the Company, appearing in the Company's
Annual Report on Form 10-K for the year ended December 28, 1996 and on Form
10-Q for the nine month period ended September 30, 1997,
and the notes to the pro forma consolidated condensed financial statements
of the Company that follow.
The pro forma financial information is not intended to reflect results of
operations or financial position of the Company which would have actually
resulted had the sale been completed on the dates indicated. Moreover, the
pro forma financial information is not intended to be indicative of the
future results of operations or financial position of the Company.
(1) Basis of Reporting
The accompanying pro forma consolidated condensed financial statements of the
Company are presented based upon the historical consolidated financial
statements and the notes thereto of the Company, as adjusted to remove the
earnings statement and the balance sheet accounts of Kiewit Energy and to
give effect to certain other elements of the CalEnergy Transaction. Such
pro forma financial statements should be read in conjunction with the
separate historical consolidated financial statements and the
notes thereto of the Company appearing in the Company's Annual Report on
Form 10-K for the year ended December 28, 1996 and on Form 10-Q for the nine
month period ended September 30, 1997. Such pro forma financial statements
are not necessarily indicative of the future results of operations or
financial position.
Completion of the sale has been assumed to be as of September 30, 1997 in
the pro forma consolidated condensed balance sheet and as of January 1, 1996,
in the pro forma consolidated condensed statements of earnings for the year
ended December 28, 1996 and December 29, 1996, for the nine months ended
September 30, 1997.
KDG expects to invest substantially all of the proceeds from the CalEnergy
Transaction in its information services business. Therefore, the pro forma
consolidated condensed statements of earnings contain no adjustments that
recognize investment income for the fiscal year ended December 28, 1996 and
for the nine month period ended September 30, 1997 relative to the proceeds
received from the sale.
The significant accounting policies followed by the Company, described in the
notes to its historical consolidated financial statements included in the
Company's Annual Report on Form 10-K, have been used in preparing the
accompanying pro forma consolidated condensed financial statements.
(2) Statements of Earnings Pro Forma Adjustments
As described in Note 1, the 1996 historical consolidated condensed
statements of earnings for the Company have been adjusted to remove the
income and expenses of Kiewit Energy. The 1997 historical consolidated
statement of earnings reflects the income and expenses of Kiewit Energy
as discontinued operations.
Material nonrecurring charges or credits and related tax effects which result
directly from the sale, such as the estimated gain from the sale, were not
considered in the pro forma consolidated condensed statements of earnings.
(3) Balance Sheet Pro Forma Adjustments
As described in Note 1, the historical consolidated condensed balance sheet
of the Company has been adjusted to remove the balance sheet accounts of
Kiewit Energy and to give effect to certain other elements of the sale.
The other adjustment made in preparation of the Company's Pro Forma
Consolidated Condensed Balance Sheet is as follows: an adjustment to record
the cash proceeds on the sale of Kiewit Energy along
with the estimated tax liability resulting from the estimated taxable gain
on the sale and the resulting after tax proceeds to be received by the Company.
In order to fund the CalEnergy Transaction, CalEnergy sold, in October 1997,
approximately 19.1 million shares of its common stock. It is the Company's
policy to recognize gains on the sale of stock by its investees. The
Company expects to recognize an after-tax gain of approximately $50 million
in the fourth quarter of 1997 from the sale by CalEnergy of its common stock.
The income from this sale and the additional equity earnings attributable to
these assets recognized by the Company in the fourth quarter of 1997 will
reduce the net gain reflected in the Pro Forma Consolidated Condensed
Balance Sheet.
<TABLE>
PETER KIEWIT SONS', INC. AND SUBSIDIARIES
Pro Forma Consolidated Condensed Balance Sheet
September 30, 1997
(Unaudited)
<CAPTION>
Kiewit Other
(dollars in millions) Historical Energy Adjustments Pro Forma
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 522 $ - $ 1,159 (a) $ 1,681
Marketable securities 373 - - 373
Restricted securities 22 - - 22
Receivables, less allowance
of $15 463 - - 463
Costs and earnings in
excess of billings on
uncompleted contracts 118 - - 118
Investment in construction
joint ventures 148 - - 148
Deferred income taxes 46 - - 46
Other 51 - - 51
Total Current assets 1,743 - 1,159 2,902
Property, Plant and Equipment,
less accumulated depreciation
and amortization of $665 391 - - 391
Investments 531 - - 531
Investments in Discontinued
Operations 597 - (597) (a) -
Intangible Assets 55 - - 55
Other Assets 43 - - 43
$ 3,360 $ - $ 562 $ 3,922
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable $ 268 $ - $ - $ 268
Current portion of
long-term debt 11 - - 11
Accrued costs and billings
in excess of revenue on
completed contracts 302 - - 302
Accrued insurance costs 86 - - 86
Other 83 - 197 (a) 280
Total Current Liabilities 750 - 197 947
Long-Term Debt, less current
portion 151 - - 151
Deferred Income taxes 158 - - 158
Retirement Benefits 40 - - 40
Accrued Reclamation Costs 100 - - 100
Other Liabilities 182 - - 182
Minority Interest 11 - - 11
Stockholders' Equity:
Preferred stock, no par
value, authorized 250,000
shares:
no shares outstanding in
1997 - - - -
Common stock, $.0625 par
value, aggregate redemption
value $1.8 billion historical;
$2.1 billion pro forma:
Class B, authorized 8,000,000 shares:
-0- outstanding - - - -
Class C, authorized
125,000,000 shares:
10,082,829 outstanding 1 - - 1
Class D, authorized
50,000,000 shares:
25,386,725 outstanding 1 - - 1
Additional paid-in capital 317 - - 317
Foreign currency adjustment (8) - - (8)
Net unrealized holding gain 18 - - 18
Retained earnings 1,639 - 365 (a) 2,004
Total Stockholders' Equity 1,968 - 365 2,333
$ 3,360 $ - $ 562 $ 3,922
</TABLE>
The accompanying notes are an integral part of these pro forma
financial statements.
<TABLE>
PETER KIEWIT SONS', INC. AND SUBSIDIARIES
Pro Forma Consolidated Condensed Statements of Earnings
Year Ended December 28, 1996
and Nine Months Ended September 30, 1997
(Unaudited)
<CAPTION>
Year Ended Nine Months Ended
December 28, 1996 September 30, 1997
(dollars in millions,
except per share data) Kiewit Other Kiewit Other
Historical Energy Adjustments Pro Forma Historical Energy Adjustments Pro Forma
(Audited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $ 2,904 $ - $ - $ 2,904 $ 2,180 $ - $ - $ 2,180
Cost of Revenue (2,412) - - (2,412) (1,877) - - (1,877)
492 - - 492 303 - - 303
General and Administrative
Expenses (260) 1 - (259) (147) - - ( 147)
Operating Earnings 232 1 - 233 156 - - 156
Other Income
(Expense):
Equity Earnings,
net 12 (14) - (2) (17) - - ( 17)
Investment Income,
net 72 (2) - 70 34 - - 34
Interest Expense,
net (37) - - (37) (13) - - ( 13)
Other, net 26 (2) - 24 29 - - 29
73 (18) - 55 33 - - 33
Income from Continuing
Operations Before
Income Taxes and
Minority Interest 305 (17) - 288 189 - - 189
Provision for Income
Taxes (84) 9 - (75) (73) - - ( 73)
Minority Interest in
Net Losses of
Subsidiaries - - - - 2 - - 2
Income from
Continuing Operations
$ 221 $ (8) $ - $ 213 $ 118 $ - $ - $ 118
Earnings Attributable
to:
Class C Stock $ 108 $ 108 $ 84 $ 84
Class D Stock $ 113 $ 105 $ 34 $ 34
Earnings Per Share:
Class C Stock
Primary $ 10.13 $ 10.13 $ 8.76 $ 8.76
Fully
Diluted $ 9.82 $ 9.82 $ 1.40 $ 1.40
Class D Stock
Primary $ 4.85 $ 4.49 $ 8.42 $ 8.42
Fully
Diluted $ 4.85 $ 4.48 $ 1.40 $ 1.40
Weighted Average Shares
Outstanding:
Class C Stock
Primary 10,655,886 10,655,886 9,570,079 9,570,079
Fully
Diluted 11,026,045 11,026,045 24,513,018 24,513,018
Class D Stock
Primary 23,263,688 23,263,688 10,006,912 10,006,912
Fully
Diluted 23,273,775 23,273,775 24,513,018 24,513,018
</TABLE>
The accompanying notes are an integral part of these pro
forma financial statements.
(c) Exhibits.
Exhibit
Number Description
2 Stock Purchase Agreement by and between CalEnergy Company, Inc. and
Kiewit Diversified Group Inc. dated September 10, 1997. (Exhibit
2 to the Form 8-K Current Report of CalEnergy dated
September 10, 1997)
SIGNATURE
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 thereunto duly authorized.
Dated: January 15, 1998.
PETER KIEWIT SONS', INC.
BY: /s/ Matthew J. Johnson
Matthew J. Johnson
Vice President
