<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) JUNE 10, 1999
YORK INTERNATIONAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 001-10863 13-3473472
(State or Other Jurisdiction (Commission) (I.R.S. Employer
of Incorporation) File Number) Identification No.)
631 S. Richland Avenue
York, Pennsylvania 17403
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (717) 771-7890
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 10, 1999, York International Corporation (the "Company")
acquired all of the outstanding capital stock of Sabroe A/S ("Sabroe") from J.
Lauritzen Holding A/S and the other shareholders of Sabroe. The purchase price
was $407.1 million in cash, plus the assumption of $216.0 million of debt of
Sabroe. The Company financed the acquisition through issuance of commercial
paper, supported by $500 million and $400 million revolving credit facilities.
Sabroe is a supplier of industrial and marine refrigeration systems
and products, with markets for its refrigeration products primarily in Europe,
Latin America and Asia. Sabroe also provides refrigeration contracting services,
which include customized refrigeration solutions for industrial food processing
and marine customers. The Company intends to integrate the business of Sabroe
into the Company's existing refrigeration group.
The Company is not aware of any material relationship between the
sellers of the shares of Sabroe and the Company or any of the Company's
affiliates, or any director or officer of the Company or any associate of any
such director or officer.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
Financial Statements of Sabroe for the years ended December 31,
1998 and 1997:
- Auditors' Report
- Accounting Policies
- Profit and Loss Account - Group for the years ended December
31, 1998 and 1997
- Balance Sheet - Group as at December 31, 1998 and 1997
- Cash Flow Statement - Group for the years ended December 31,
1998 and 1997
- Profit and Loss Account - Parent Company for the years ended
December 31, 1998 and 1997
- Balance Sheet - Parent Company as at December 31, 1998 and
1997
- Notes to Financial Statements as of December 31, 1998 and
1997
- The Companies in the Sabroe Group
- 2 -
<PAGE>
(b) Pro Forma Financial Information.
- Unaudited Pro Forma Condensed Combined Statement of
Operations Information -year ended December 31, 1998 and six
months ended June 30, 1999
(c) Exhibits
23.1 Consent of KPMG C. Jespersen and Deloitte & Touche Company
of State Authorised Public Accountants
- 3 -
<PAGE>
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.
YORK INTERNATIONAL CORPORATION
CORPORATION
/s/ Charles F. Cargile
------------------------------
Date: August 23, 1999 By: Charles F. Cargile
Title: Corporate Controller
(Principal Accounting Officer)
- 4 -
<PAGE>
FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
INDEX
Financial Statements of Sabroe for the years ended December 31, 1998 and 1997
<TABLE>
<S> <C>
Auditors' Report.................................................... F-2
Accounting Policies................................................. F-3
Profit and Loss Account - Group..................................... F-8
Balance Sheet - Group............................................... F-9
Group Cash Flow Statement........................................... F-11
Profit and Loss Account - Parent Company............................ F-12
Balance Sheet - Parent Company...................................... F-13
Notes............................................................... F-15
The Companies in the Sabroe Group................................... F-24
Pro Forma Financial Information
York International Corporation and Sabroe
Pro Forma Financial Information..................................... F-32
Unaudited Pro Forma Condensed Combined Statement of Operations
Information for year ended December 31, 1998 and six months
ended June 30, 1999................................................. F-34
</TABLE>
F-1
<PAGE>
Auditors' report
We have audited the 1998 Group accounts and annual accounts for Sabroe
Refrigeration A/S as prepared by the Management.
Basis of opinion
We have planned and conducted the audit in accordance with generally accepted
auditing standards, so as to obtain all the information and explanations which
we considered necessary in order to provide us with sufficient evidence to give
reasonable assurance that the accounts are free from material misstatements.
Based on an evaluation of materiality and risk, we have, during the audit,
verified the basis and documentation for the amounts and other information
disclosed in the accounts. We have assessed the accounting policies applied and
the accounting estimates made, as well as evaluated the overall adequacy of the
presentation of information in the accounts. Our audit has not given rise to any
qualifications.
Opinion
In our opinion, the Group accounts and annual accounts have been prepared in
accordance with the accounting provisions of Danish legislation, and give a true
and fair view of the parent company's and Group's assets and liabilities,
financial position and profit for the year.
Arhus, 12 March 1998
KPMG C. Jespersen DELOITTE & TOUCHE
Company of State Authorised Public
Accountants
<TABLE>
<S> <C> <C> <C>
Henning Olesen Erik Dybdahl Karsten Mumm Jesper Meto
State Authorised State Authorised State Authorised State Authorised
Public Accountant Public Accountant Public Accountant Public Accountant
</TABLE>
F-2
<PAGE>
Accounting policies
The accounts of the Group and of the parent company have been prepared in
accordance with the Danish Company Accounts Act, and are presented on the basis
of the same accounting policies as last year.
Group accounts
The Group accounts include the accounts of the parent company, Sabroe
Refrigeration A/S, and its subsidiaries. The companies that are not
subsidiaries, but in which Sabroe Refrigeration A/S or a subsidiary owns 20% or
more of the voting rights, are considered associated undertakings.
The annual accounts of the Group companies have been prepared in overall
conformity with the accounting policies used by the parent company.
The Group accounts have been prepared by adding identical items, and then
eliminating internal income and expense items, internal shareholdings, inter-
company balances and internal profit on stocks.
Newly acquired companies are included in the Group result from the time of
acquisition. Companies sold off are included in the profit and loss account
until the date of their disposal, except in the case of companies where the
decision to sell them was already taken in 1996 as part of the overall strategy
for setting up the present structure of ownership and the current organisational
structure. Such companies are left out of the consolidation process, and are
included in a separate item in the profit and loss account.
When the Group takes over new companies, goodwill is calculated as the
difference between the purchase price and the intrinsic value of the newly
acquired company at the date of acquisition, calculated in accordance with the
Group's accounting policies, and after any possible value adjustments of assets
and liabilities. The goodwill statement includes provisions for restructuring
costs agreed at the date of acquisition, and paid as a consequence of the
acquisition. Goodwill is amortised over five years. In the case of larger-scale
strategic acquisitions with long-term effects on earnings, goodwill is amortised
over a maximum of twenty years.
The minority shareholders' proportional share of the profit and equity of the
subsidiaries is stated separately, and is not included in the Group result or
Group equity.
Foreign currencies
Assets and liabilities are translated into Danish kroner (DKK) at the rates of
exchange on 31
F-3
<PAGE>
December or, in such cases where forward contracts have been entered into, at
the forward rate.
Materialised and non-materialised exchange gains/losses on outstanding accounts,
etc., in foreign currencies are included in the profit and loss account under
financial items. Foreign exchange gains/losses on financial contracts purchased
to hedge customer orders are entered in the profit and loss account on the day
the orders are settled.
The annual accounts of foreign subsidiaries are converted into Danish kroner
(DKK) using the rates of exchange on 31 December for balance sheet items, and
using the rates of exchange on the transaction date for profit and loss account
items. The difference between the rate on the transaction date and the year-end
rate is entered directly in the equity account. Differences in exchange rates
arising from the conversion of the foreign subsidiaries' equity at the beginning
of the year and that at year-end are regulated via the equity account. Exchange
gains/losses from the hedging of foreign subsidiaries' equity are
correspondingly regulated via the equity account.
Profit and loss account
Net turnover
The net turnover is calculated according to the completed contract method.
For large orders on the account of a third party, the percentage-of-completion
method has been used, which means that the value of the part of the orders that
has been completed has been included at the estimated sales value of the work
carried out.
Cost of sales
Cost of sales include costs inclusive of depreciation and the salaries incurred
to achieve the net turnover of the financial year. The sales companies include
the cost of goods sold, and the production companies include the manufacturing
costs corresponding to the turnover of the financial year. Cost of sales also
includes R&D costs.
Distribution costs
Distribution costs include the cost of sales personnel, advertising and
exhibitions, etc., inclusive of depreciation.
Administrative costs
Administrative costs include the cost of administrative personnel, the
management, office premises, office expenses, etc., inclusive of depreciation.
Financial items
Financial items include interest income/expenses, materialised and non-
materialised foreign exchange gains related to receivables and payables in
foreign currencies.
F-4
<PAGE>
Profits/losses of subsidiaries and associated undertakings
The proportional share of the profits/losses of the individual subsidiaries less
non-materialised internal profit and less amortisation on consolidated goodwill
is entered in the profit and loss account of the parent company as income. The
share of the tax of subsidiaries is charged to the tax item of the profit and
loss account.
The proportional share of the profits/losses of the associated undertakings less
non-materialised internal profit is entered in the profit and loss account of
the parent company and the Group as income. The share of the tax of associated
undertakings is charged to the tax item of the profit and loss account.
Tax
Tax is charged as the tax payable on the result for the year, plus any change in
deferred taxation.
Sabroe Refrigeration A/S is jointly taxed with the Danish companies within the
Sabroe Group, along with certain foreign companies within the Group. In the
jointly taxed Group, the tax payable by the subsidiary companies is paid to the
parent company as a joint taxation contribution. The joint taxation contribution
is entered as income in the parent company's accounts.
Extraordinary items
Extraordinary items include income and expenses related to matters other than
the ordinary activities.
Balance Sheet
Intangible fixed assets
Intangible fixed assets are stated at purchase price less accumulated
amortisation. Amortisation is carried out on a straight line basis over the
expected useful life of the asset, up to a maximum of five years.
In the case of larger-scale strategic acquisitions with long-term effects on
earnings, goodwill is amortised over a maximum of twenty years.
Tangible fixed assets
Tangible fixed assets are stated at purchase price or cost price less
accumulated depreciation. Depreciation is carried out on a straight line basis
over the estimated useful life of the assets, which is 20-30 years for buildings
and 3-6 years for technical plant and machinery, etc.
Assets with a purchase price or cost price of less than DKK 25,000 per unit are
entered as
F-5
<PAGE>
expenditure in the year of acquisition.
Financial fixed assets
Investments in subsidiaries and associated undertakings are recorded in the
annual accounts of the parent company using the equity method. The investments
are valued at the pro rata share of the companies' equity, with the addition of
consolidated goodwill and less non-materialised intra-group profit and
amortisation on consolidated goodwill.
Net assets in non-continuing companies are included in a separate item under
financial fixed assets.
Other financial fixed assets are valued at purchase price less any write-downs.
Stocks
Raw materials and consumables are valued at purchase price.
Work in progress and stocks are valued at cost, which includes costs directly
attributable to the cost price of the raw materials and consumables, plus the
cost of processing these, and any other costs arising directly or indirectly
from the production of the goods in question.
For stocks whose expected selling price less any completion and sales costs (the
net realisable value) is lower than the purchase price or the cost price
respectively, the price is written down to the net realisable value.
Large orders on the account of a third party have been valued at the sales value
of the part of the orders that has been executed as at the balance sheet date
(the percentage-of-completion method). In the case of loss-making orders,
provision is made for any foreseeable losses.
Cost and purchase prices are calculated using the FIFO method.
Any pre-payments received from customers are set off against work in progress
for the account of third parties to the extent that these pre-payments
correspond to the value of work in progress.
Receivables
A provision for receivables is made on the basis of an individual assessment of
each receivable.
Provisions
Pension commitments that are not covered by insurance are calculated as the
capitalised value of the actual pensions concerned.
F-6
<PAGE>
Deferred tax is provided for as the difference between the book values and the
taxable values, apart from such differences between capital shares in subsidiary
companies and associated undertakings, since the intention is that these
holdings will be retained over a longer period of time.
Guarantee provisions include provisions for general and specific guarantee
commitments.
Other provisions are made to the extent that unclarified risks of claims related
to specific cases are outstanding at the end of the financial year, inclusive of
provisions concerning loss-making projects. Moreover, provisions are made for
restructuring initiatives that have been decided upon but are yet to be
completed, and where there is uncertainty as to the final costs or the time at
which said costs are to be met.
Group cash flow statement
The cash flow statement shows the Group's cash flow for the year, along with the
Group's liquid assets at the beginning and end of the financial year. The cash
flow is shown divided up by activity, involving operations, investments and
financing.
The cash flow statement is laid out using the indirect method, on the basis of
the operating profit.
The cash flow from operations is calculated on the basis of the operating profit
adjusted for non-liquid operating items, changes in net working capital, and
paid-up financial items and corporation taxes. The net working capital includes
stocks, current assets and short-term debt related to operating activities.
The cash flow from investments includes the sale and purchase of fixed assets,
including participating interests in other companies.
The cash flow from financing activities includes payments to and from
shareholders, and the raising and repayment of both long-term and short-term
interest-bearing debt.
Cash and cash equivalents include cash in hand and bank deposits.
F-7
<PAGE>
PROFIT AND LOSS ACCOUNT - GROUP
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note 1998 1997
<S> <C> <C>
1 NET TURNOVER 4,635,801 3,594,031
2 Cost of sales -3,718,095 -2,874,115
----------- -----------
GROSS PROFIT 917,706 719,916
2 Distribution costs -390,970 -311,123
2 Administrative costs -325,208 -277,878
----------- -----------
OPERATING PROFIT 201,528 130,915
6 Goodwill amortisation -50,200 -30,298
9 Income from associated companies 7,003 7,144
4 Net interest expense -68,365 -50,110
----------- -----------
PROFIT ON ORDINARY ACTIVITIES 89,966 57,651
Result from sold companies - -383
----------- -----------
PROFIT BEFORE TAX 89,966 57,268
5 Tax -11,520 -8,473
----------- -----------
PROFIT BEFORE MINORITY INTERESTS 78,446 48,795
Minority interests 1,912 8,077
----------- -----------
SABROE'S SHARE OF NET PROFIT 80,358 56,872
=========== ===========
</TABLE>
F-8
<PAGE>
BALANCE SHEET AS AT 31 DECEMBER - GROUP
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note 1998 1997
<S> <C> <C>
ASSETS
FIXED ASSETS
6 INTANGIBLE FIXED ASSETS
Goodwill 949,717 854,621
------------- -------------
7 TANGIBLE FIXED ASSETS
Land and buildings 351,064 348,967
Plant and machinery 133,778 115,947
Other fixtures, fittings and equipment 74,181 74,314
Work in course of construction 42,961 17,023
------------- -------------
601,984 556,251
------------- -------------
FINANCIAL FIXED ASSETS
9 Participating interests in associated companies 31,768 26,619
------------- -------------
TOTAL FIXED ASSETS 1,583,469 1,437,491
------------- -------------
CURRENT ASSETS
STOCKS
Raw materials and consumables 114,917 129,834
Work in progress 136,797 122,412
Finished goods 124,759 117,602
10 Work in progress on behalf of third parties 253,673 238,233
Stock prepayments 14,384 9,332
------------- -------------
644,530 617,413
------------- -------------
11 RECEIVABLES
Trade receivables 1,077,438 830,669
Other receivables 88,794 167,421
Prepayments and accrued income 44,517 24,640
------------- -------------
1,210,749 1,022,730
------------- -------------
CASH AT BANK AND IN HAND 199,087 267,062
------------- -------------
TOTAL CURRENT ASSETS 2,054,366 1,907,205
------------- -------------
TOTAL ASSETS 3,637,835 3,344,696
============= =============
</TABLE>
F-9
<PAGE>
BALANCE SHEET AS AT 31 DECEMBER - GROUP
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note 1998 1997
<S> <C> <C>
LIABILITIES
12 CAPITAL AND RESERVES
Share capital 380,000 380,000
Share premium account 0 227,980
Profit and loss account 342,755 99,967
------------- -------------
SABROE'S CAPITAL AND RESERVES 722,755 707,947
------------- -------------
MINORITY INTERESTS 9,812 9,462
------------- -------------
THE GROUP'S CAPITAL AND RESERVES 732,567 717,409
------------- -------------
13 SUBORDINATED LOAN CAPITAL 17,248 16,498
------------- -------------
PROVISIONS
Provisions for pension 42,054 48,200
Provisions for deferred tax 4,856 20,234
Guarantee provisions 110,875 106,520
14 Other provisions 124,714 167,742
------------- -------------
282,499 342,696
------------- -------------
DEBT
15 LONG-TERM DEBT
Mortgage on land and buildings 231,343 168,593
Debt owed to banks 663,807 728,168
------------- -------------
895,150 896,761
------------- -------------
CURRENT DEBT
Short-term share of long-term debt 75,969 78,511
Debt owed to banks 418,447 275,919
Payments received on account 172,657 131,124
Trade payables 561,549 390,611
Bills of exchange payable 14,709 30,797
Corporation tax 15,635 7,489
16 Other payables 451,405 456,881
------------- -------------
1,710,371 1,371,332
------------- -------------
TOTAL DEBT 2,605,521 2,268,093
------------- -------------
TOTAL LIABILITIES 3,637,835 3,344,696
============= =============
17 PLEDGES AND CONTINGENT LIABILITIES
</TABLE>
F-10
<PAGE>
GROUP CASH FLOW STATEMENT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in 1,000 DKK
Note 1998 1997
<S> <C> <C>
NET TURNOVER 4,635,801 3,594,031
Operating charges -4,434,273 -3,463,116
------------ ------------
OPERATING PROFIT 201,528 130,915
Financial items -68,365 -50,110
Depreciation exclusive of goodwill 76,812 68,454
Exchange adjustments etc -17,900 12,829
Change in provisions for pension and guarantees etc -13,145 -9,836
------------ ------------
NET CASH INFLOW BEFORE CHANGE IN
NET WORKING CAPITAL 178,930 152,252
Change in stocks and received prepayments 11,203 -50,840
Change in debtors -104,290 -31,276
Change in trade creditors and other creditors 88,657 -95,632
------------ ------------
NET CASH INFLOW/OUTFLOW FROM
ORDINARY ACTIVITIES 174,500 -25,496
Tax paid -20,635 -15,969
------------ ------------
NET CASH INFLOW/OUTFLOW FROM
------------ ------------
OPERATING ACTIVITIES 153,865 -41,465
------------ ------------
Acquisition and disposal of tangible fixed assets -131,488 -65,462
18 Acquisition and disposal of businesses -93,601 -637,441
Restructuring expenditure, acquired businesses -51,133 -47,801
Dividend received from associated companies 1,426 600
------------ ------------
NET CASH OUTFLOW FROM INVESTING ACTIVITIES -274,796 -750,104
------------ ------------
Change in long-term debt 2,234 508,191
Change in subordinated loan capital 750 1,000
Change in current debt 68,416 83,528
Settlement of warrants programme -31,458 0
Shareholders' capital injection 0 183,000
------------ ------------
NET CASH INFLOW FROM FINANCING 39,942 775,719
------------ ------------
CHANGE IN CASH AND CASH EQUIVALENTS -80,989 -15,850
------------ ------------
CASH AND CASH EQUIVALENTS AT 1 JAN 267,062 91,127
------------ ------------
Cash and cash equivalents related to
acquisition and disposal of companies 13,014 191,785
------------ ------------
CASH AND CASH EQUIVALENTS AT 31 DEC 199,087 267,062
============ ============
</TABLE>
The group cash flow statement cannot be directly derived
from the published set of accounts.
F-11
<PAGE>
PROFIT AND LOSS ACCOUNT - PARENT COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note 1998 1997
<S> <C> <C>
1 NET TURNOVER 865,060 808,273
2 Cost of sales -709,938 -645,283
----------- -----------
GROSS PROFIT 155,122 162,990
2 Distribution costs -54,056 -51,066
2 Administrative costs -73,537 -65,203
----------- -----------
OPERATING PROFIT 27,529 46,721
3 Income from subsidiaries 87,734 33,332
9 Income from associated companies 2,870 4,616
4 Financial items -26,536 -20,943
----------- -----------
PROFIT ON ORDINARY ACTIVITIES 91,597 63,726
Result from sold companies - -383
----------- -----------
PROFIT BEFORE TAX 91,597 63,343
5 Tax -11,239 -6,471
----------- -----------
NET PROFIT 80,358 56,872
=========== ===========
amount which the Board recommends
be appropriated as follows:
Transferred to subsidiary reserve 71,738
Transferred to profit and loss
account 8,620
-----------
Total to be carried forward to next
year 80,358
===========
</TABLE>
F-12
<PAGE>
BALANCE SHEET AS AT 31 DECEMBER - PARENT COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note 1998 1997
<S> <C> <C>
ASSETS
FIXED ASSETS
7 TANGIBLE FIXED ASSETS
Land and buildings 105,939 103,955
Plant and machinery 64,575 45,731
Other fixtures, fittings and equipment 15,415 14,092
Work in course of construction 37,478 9,502
------------- -------------
223,407 173,280
------------- -------------
FINANCIAL FIXED ASSETS
8 Participating interests in subsidiaries 1,182,650 1,074,768
9 Participating interests in associated companies 21,253 20,539
------------- -------------
1,203,903 1,095,307
------------- -------------
TOTAL FIXED ASSETS 1,427,310 1,268,587
------------- -------------
CURRENT ASSETS
STOCKS
Raw materials and consumables 23,835 30,531
Work in progress 77,780 73,171
Finished goods 27,995 22,748
10 Work in progress on behalf of third parties 73,055 58,078
------------- -------------
202,665 184,528
------------- -------------
11 RECEIVABLES
Trade receivables 151,417 145,956
Amounts owed by affiliated undertakings 370,862 271,691
Dividend receivable 17,239 17,524
Other receivables 15,803 97,996
Prepayments and accrued income 4,196 3,453
------------- -------------
559,517 536,620
------------- -------------
CASH AT BANK AND IN HAND 32,042 9,983
------------- -------------
TOTAL CURRENT ASSETS 794,224 731,131
------------- -------------
TOTAL ASSETS 2,221,534 1,999,718
============= =============
</TABLE>
F-13
<PAGE>
BALANCE SHEET AS AT 31 DECEMBER - PARENT COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note 1998 1997
<S> <C> <C>
LIABILITIES
12 CAPITAL AND RESERVES
Share capital 380,000 380,000
Share premium account 0 227,980
Subsidiary reserve 62,426 6,830
Profit and loss account 280,329 93,137
------------- -------------
722,755 707,947
------------- -------------
13 SUBORDINATED LOAN CAPITAL 17,248 16,498
------------- -------------
PROVISIONS
Guarantee provisions 42,330 37,152
14 Other provisions 72,390 118,829
------------- -------------
114,720 155,981
------------- -------------
DEBT
15 LONG-TERM DEBT
Mortgage on land and buildings 97,769 49,899
Debt owed to banks 551,990 603,273
------------- -------------
649,759 653,172
------------- -------------
SHORT-TERM DEBT
Short-term share of long-term debt 54,312 54,952
Debt owed to banks 217,382 174,058
Payments received on account 46,851 30,535
Trade payables 93,027 56,896
Amounts owed to affiliated undertakings 153,211 14,555
16 Other payables 152,269 135,124
------------- -------------
717,052 466,120
------------- -------------
TOTAL DEBT 1,366,811 1,119,292
------------- -------------
TOTAL LIABILITIES 2,221,534 1,999,718
============= =============
17 PLEDGES AND CONTINGENT LIABILITIES
</TABLE>
F-14
<PAGE>
NOTES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000 Group Parent company
------------------- --------------------
Note 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C>
1 NET TURNOVER
Denmark 372,031 386,548 96,230 62,043
Foreign 4,263,769 3,207,483 768,830 746,230
-------------------- --------------------
4,635,801 3,594,031 865,060 808,273
==================== ====================
With reference to section 64c of the
Danish Company Accounts Act, no
further allocation is shown
2 STAFF COSTS
Remuneration to the Board of Directors - - 1,250 1,250
Remuneration to the Management - - 5,931 5,358
Wages and salaries 1,086,185 945,816 244,710 236,811
Pension and social security costs 205,733 135,158 9,407 8,533
-------------------- --------------------
1,291,918 1,080,974 261,298 251,952
==================== ====================
The parent company has in 1998 settled
the Management's warrants programme by
buying the rights.
Reference is made to notes 12 and 17.
Average number of employees 4,435 3,872 856 868
==================== ====================
Number of employees at year end 4,765 4,463 838 833
==================== ====================
2 FEE TO AUDITORS APPOINTED BY THE
GENERAL MEETING
KPMG :
Audit fee 1,072 850
Other services 1,587 4,564
--------------------
2,659 5,414
====================
Deloitte & Touche :
Audit fee 125 -
Other services - -
--------------------
125 0
====================
2,784 5,414
====================
</TABLE>
F-15
<PAGE>
NOTES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000 Group Parent company
------------------- --------------------
Note 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C>
3 INCOME FROM SUBSIDIARIES
Profit before tax, subsidiaries 122,977 51,538
Profit before tax, minority interests 1,632 6,860
Amortisation of goodwill -36,875 -25,066
--------------------
87,734 33,332
====================
4 NET INTEREST EXPENSE
Income
Interest income, subsidiaries - - 13,832 6,186
Interest income, other 21,092 16,515 5,617 5,502
------------------- --------------------
21,092 16,515 19,449 11,688
------------------- --------------------
Expenses
Interest expenses, subsidiaries - - -740 -318
Interest expenses, other -87,115 -61,981 -48,566 -32,358
------------------- --------------------
-87,115 -61,981 -49,306 -32,676
------------------- --------------------
Exchange adjustment, net -2,342 -4,644 3,321 45
------------------- --------------------
-68,365 -50,110 -26,536 -20,943
=================== ====================
5 TAX
Tax on profit on ordinary activities -13,778 -6,158 421 124
Joint taxation contribution from - - 5,308 3,963
subsidiaries
Tax subsidiaries exclusive of minority
interests' share - - -20,135 -8,978
Adjustment related to previous years 4,139 0 4,139 0
Tax associated companies -1,881 -2,315 -972 -1,580
------------------- --------------------
-11,520 -8,473 -11,239 -6,471
=================== ====================
Tax paid in 1998 on profit on ordinary
activities:
Domestic 972 1,190 0 0
Foreign 19,663 14,779 0 0
------------------- --------------------
20,635 15,969 0 0
=================== ====================
</TABLE>
F-16
<PAGE>
NOTES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000 Group Parent company
------------------- --------------------
Note 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C>
6 INTANGIBLE FIXED ASSETS
Goodwill
Cost at 1 Jan 894,785 295,983
Additions 145,296 635,119
Disposals 0 -36,317
--------------------
Cost at 31 Dec 1,040,081 894,785
--------------------
Amortisation and write-down at 1 Jan 40,164 9,866
Amortisation 50,200 30,298
--------------------
Amortisation and write-down at 31 Dec 90,364 40,164
--------------------
Book value at 31 Dec 949,717 854,621
====================
</TABLE>
F-17
<PAGE>
NOTES
- --------------------------------------------------------------------------------
Amounts in DKK 1,000
Note
TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
Other fix- Plant un-
GROUP Land and Plant and tures and der con-
buildings machinery fittings struction Total
<S> <C> <C> <C> <C> <C>
Cost at 1 Jan 98 480,039 412,925 245,366 17,023 1,155,353
Exchange adjustments -892 -18,729 -5,930 -124 -25,675
Additions from acquired comp. 9,282 11,345 5,762 0 26,389
Additions 12,404 41,522 37,184 52,059 143,169
Transferred 5,887 18,426 1,678 -25,991 0
Disposals -17,733 -25,484 -60,096 -6 -103,319
-------------------------------------------------------------
Cost at 31 Dec 98 488,987 440,005 223,964 42,961 1,195,917
-------------------------------------------------------------
Depreciation/write-down 1 Jan 98 131,072 296,978 171,052 0 599,102
Exchange adjustments -2,797 -11,197 -794 0 -14,788
Additions from acquired comp. 159 7,108 2,490 0 9,757
Depreciation 13,897 33,479 29,436 0 76,812
Disposals -4,408 -20,141 -52,401 0 -76,950
-------------------------------------------------------------
Depreciation/write-down 31 Dec 98 137,923 306,227 149,783 0 593,933
-------------------------------------------------------------
Book value at 31 Dec 98 351,064 133,778 74,181 42,961 601,984
=============================================================
Book value at 31 Dec 97 348,967 115,947 74,314 17,023 556,251
=============================================================
</TABLE>
Official assessment value at 1 Jan 98 for land and buildings located in
Denmark amounts to DKK 221.320 (1997: DKK 221.280) vs book value of DKK
216.357 (1997: DKK 215.075)
<TABLE>
<CAPTION>
Other fix- Plant un-
PARENT COMPANY Land and Plant and tures and der con-
buildings machinery fittings struction Total
<S> <C> <C> <C> <C> <C>
Cost at 1 Jan 98 162,106 165,905 60,304 9,502 397,817
Additions 6,881 28,798 5,477 33,361 74,517
Transferred 0 3,969 1,416 -5,385 0
Disposals 0 -3,839 -22,716 0 -26,555
-------------------------------------------------------------
Cost at 31 Dec 98 168,987 194,833 44,481 37,478 445,779
-------------------------------------------------------------
Depreciation/write-down 1 Jan 98 58,151 120,174 46,212 0 224,537
Depreciation 4,897 13,498 5,028 0 23,423
Disposals 0 -3,414 -22,174 0 -25,588
-------------------------------------------------------------
Depreciation/write-down 31 Dec 98 63,048 130,258 29,066 0 222,372
-------------------------------------------------------------
Book value 31 Dec 98 105,939 64,575 15,415 37,478 223,407
=============================================================
Book value 31 Dec 97 103,955 45,731 14,092 9,502 173,280
=============================================================
</TABLE>
Official assessment value at 1 Jan 98 for land and buildings located in
Denmark amounts to DKK 102.020 (1997: DKK 105.030) vs book value of DKK
105.939 (1997: DKK 103.955)
F-18
<PAGE>
NOTES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000 Group Parent company
--------------------- ---------------------
Note 1998 1997 1998 1997
<S> <C> <C> <C> <C>
7 Depreciation is included in the
following
profit and loss account items:
Cost of sales 47,705 42,407 14,090 13,089
Distribution costs 7,816 7,113 359 639
Administrative costs 21,291 18,934 8,974 7,838
--------------------- ---------------------
76,812 68,454 23,423 21,566
===================== =====================
8 PARTICIPATING INTERESTS IN SUBSIDIARIES
Cost at 1 Jan 1,110,998 549,559
Additions 75,232 562,575
Disposal of subsidiaries 0 -1,136
---------------------
Cost at 31 Dec 1,186,230 1,110,998
---------------------
Adjustments at 1 Jan -36,230 -36,080
Exchange adjustments -21,737 9,622
Profit before tax 87,734 33,332
Tax -15,996 -8,978
Dividend from subsidiaries -16,142 -24,781
Disposal of subsidiaries 0 -12,045
Other adjustments -1,209 2,700
---------------------
Adjustments at 31 Dec -3,580 -36,230
---------------------
Value of subsidiaries at 31 Dec 1,182,650 1,074,768
=====================
Consolidated goodwill amounts to 682,267 676,977
=====================
</TABLE>
F-19
<PAGE>
NOTES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000 Group Parent company
------------------------- -------------------------
Note 1998 1997 1998 1997
<S> <C> <C> <C> <C> <C>
9 PARTICIPATING INTERESTS IN
ASSOCIATED COMPANIES
Cost at 1 Jan 16,269 20,959 10,870 11,415
Additions 1,144 2,047 0 2,179
Disposals -458 -6,737 0 -2,724
------------------------- ------------------------
Cost at 31 Dec 16,955 16,269 10,870 10,870
------------------------- ------------------------
Adjustments at 1 Jan 10,350 9,022 9,669 7,233
Exchange adjustments 767 -2,901 16 0
Profit before tax 7,003 7,144 2,870 4,616
Tax -1,881 -2,315 -972 -1,580
Dividend -1,426 -600 -1,200 -600
------------------------- ------------------------
Adjustments at 31 Dec 14,813 10,350 10,383 9,669
------------------------- ------------------------
Book value at 31 Dec 31,768 26,619 21,253 20,539
========================= ========================
10 WORK IN PROGRESS ON BEHALF
OF THIRD PARTIES
Work in progress 917,295 714,759 176,424 76,514
Prepayments received -663,622 -476,526 -103,369 -18,436
------------------------- ------------------------
253,673 238,233 73,055 58,078
========================= ========================
On account profit included in
work in progress 19,418 12,476 4,585 2,629
========================= ========================
11 RECEIVABLES
Trade receivables due after more
than one year 6,571 6,437 1,150 432
========================= ========================
</TABLE>
F-20
<PAGE>
NOTES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note Group Parent company
----------------------- --------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C> <C>
12 CAPITAL AND RESERVES
Share capital
Share capital at 1 Jan 380,000 265,625 380,000 265,625
Increase of capital 0 114,375 0 114,375
----------------------- ------------------------
Share capital at 31 Dec 380,000 380,000 380,000 380,000
----------------------- ------------------------
Share premium account
Share premium account at 1 Jan 227,980 159,355 227,980 159,355
Increase of capital 0 68,625 0 68,625
Transferred to profit and loss account -227,980 0 -227,980 0
----------------------- ------------------------
Share premium account at 31 Dec 0 227,980 0 227,980
----------------------- ------------------------
Subsidiary reserve
Balance at 1 Jan - - 6,830 0
Allocated from profit of the year - - 71,738 24,354
Dividend transferred to profit and loss - - -16,142 -17,524
account
----------------------- ------------------------
Subsidiary reserve at 31 Dec - - 62,426 6,830
----------------------- ------------------------
Profit and loss account
Balance at 1 Jan 99,967 33,874 93,137 33,874
Transferred from subsidiary reserve - - 16,142 17,524
Transferred from share premium account 227,980 0 227,980 0
Exchange adjustment of subsidiaries etc -20,493 9,221 -20,493 9,221
Settlement of warrants programme -45,057 - -45,057 -
Allocated from profit of the year 80,358 56,872 8,620 32,518
----------------------- ------------------------
Balance at 31 Dec 342,755 99,967 280,329 93,137
----------------------- ------------------------
TOTAL CAPITAL AND RESERVES 722,755 707,947 722,755 707,947
======================= ========================
</TABLE>
The share capital consists of 3,800,000 shares of DKK 100 each
F-21
<PAGE>
NOTES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note Group Parent company
---------------------- -----------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C> <C>
13 SUBORDINATED LOAN CAPITAL
Convertible bonds 17,248 16,498 17,248 16,498
====================== =======================
As at 31 Dec 97 convertible bonds have been
issued to the Group Management as subor-
dinated loan capital totalling DKK 17.248.
The conversion price is 160 for DKK 16.498
and 250 for DKK 750.
14 OTHER PROVISIONS
Restructuring 90,422 120,266 67,390 113,829
Other provisions 34,292 47,476 5,000 5,000
====================== =======================
124,714 167,742 72,390 118,829
====================== =======================
15 LONG-TERM DEBT
Long-term debt falling due after more
than five years 253,778 342,523 85,944 171,777
====================== =======================
16 OTHER PAYABLES
Payables related to employees 205,680 153,519 51,546 34,987
Other 245,725 303,362 100,723 100,137
====================== =======================
451,405 456,881 152,269 135,124
====================== =======================
</TABLE>
F-22
<PAGE>
NOTES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amounts in DKK 1,000
Note Group Parent company
---------------------- --------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C> <C>
17 PLEDGES AND CONTINGENT
LIABILITIES
Contingent liabilities
Guarantee commitments 0 1,000 203,949 97,747
Annual lease rentals amount to 63,227 45,518 1,435 342
Share option 31,933 34,158 31,933 34,158
Discounted bills 4,183 16,706 0 0
Pledges
Bank deposit 13,660 39,504 0 0
Shares in and amounts owed by subsidiary 0 0 11,159 16,580
In addition the Group has provided security of
DKK 50 million for debt related to hypothecated
assets with a book value of DKK 42,000.
The parent company has settled the
Management's warrants programme. The final
consideration has not been fixed yet. The
contingent liability is estimated not to exceed
DKK 25,000.
The Group is a party to various cases the
outcome of which is not expected to be of
importance for the result of the year and the
financial position.
The parent company is jointly taxed with
the Danish group companies.
18 ACQUISITIONS AND DISPOSALS OF
BUSINESSES
Intangible fixed assets 152,483 598,802
Tangible fixed assets 1,944 75,111
Financial fixed assets 686 1,966
Current assets 135,063 919,256
Provisions -29,334 -210,242
Long-term debt 0 -102,935
Current debt -167,241 -644,517
------------------------
Cash acquisition price, net 93,601 637,441
========================
</TABLE>
F-23
<PAGE>
The Companies in the Sabroe Group
Scandinavia
Sabroe Refrigeration A/S
Hojbjerg, Denmark
Tel. +45 86 27 12 66
Fax +45 86 27 44 74
Sabroe Refrigeration AB
Norrkoping, Sweden
Tel. +46 11 21 4000
Fax +46 11 10 2342
Shareholding: 100%
Sabroe S.A.R.L.
Chambery, France
Tel. +33 4 79 627570
Fax +33 4 79 626226
Shareholding: 100%
Russel Refrigeration Ltd
Edinburgh, Scotland
Tel. +44 131 652 0030
Fax +44 131 661 0550
Shareholding: 100%
Sabroe de Mexico S.A. de C.V.
Guadalajara - Jalisco
Mexico
Tel. +52 3 823 7500
Fax +52 3 823 4607
Shareholding: 100%
Sabroe + Soby Koleteknik A/S
Hornslet, Denmark
Tel. +45 86 99 44 33
Fax +45 86 99 41 70
Shareholding: 100%
Sabroe Marine AB
Norrkoping, Sweden
Tel. +46 11 21 4500
Fax +46 11 13 3160
Shareholding: 100%
Sabroe BV
Apeldoorn, The Netherlands
Tel. +31 55 538 1600
Fax +31 55 541 4317
Shareholding: 100%
F-24
<PAGE>
Ryan Refrigeration Ltd
Glasgow, Scotland
Tel. +44 141 336 2222
Fax +44 141 336 2318
Shareholding: 100%
Sabroe del Peru S/A
Lima, Peru
Tel. +51 1 221 1839
Fax +51 1 221 3946
Shareholding: 100%
Sabroe Controls A/S
Viby, Denmark
Tel. +45 86 28 79 11
Fax +45 86 28 71 44
Shareholding: 100%
Sabroe Svenska AB
Stockholm, Sweden
Tel. +46 8 619 6360
Fax +46 8 618 1142
Shareholding: 100%
Inham-Refrigeration BV
Dordrecht, The Netherlands
Tel. +31 78 651 1966
Fax +31 78 651 1144
Shareholding: 100%
S & R Refrigeration Ltd
Bradford, England
Tel. +44 1274 737 070
Fax +44 1274 722 004
Shareholding: 100%
Sabroe de Colombia Ltda
Bogota, Colombia
Tel. +57 1 540 0773
Fax +57 1 540 0775
Shareholding: 60%
Sabroe Stoberi A/S
Hornslet, Denmark
Tel. +45 86 99 60 66
Fax +45 86 99 65 66
Shareholding: 100%
Bonus Energi AB
Brakne-Hoby, Sweden
Tel. +46 457 81820
F-25
<PAGE>
Fax +46 457 81829
Shareholding: 100%
Sabroe UK Ltd
Birmingham, England
Tel. +44 121 683 7800
Fax +44 121 683 7810
Shareholding: 100%
Stafford Refrigeration Ltd
West Midlands, England
Tel. +44 121 526 5252
Fax +44 121 568 6953
Shareholding: 100%
Sabroe de Argentina S.A.
Buenos Aires, Argentina
Tel. +54 11 4303 1714
Fax +54 11 4303 2023
Shareholding: 100%
Retech Refrigeration Technologies A/S
Hornslet, Denmark
Tel. +45 86 99 42 00
Fax +45 86 99 42 01
Shareholding: 100%
Europe
Novenco B.V.
Bergschenhoek, The Netherlands
Tel. +31 10 521 4144
Fax +31 10 521 3586
Shareholding: 100%
Stal Refrigeration Ltd
Middlesex, England
Tel. +44 1895 44 6561/8
Fax +44 1895 42 0781
Shareholding: 100%
Sabroe Oy
Tallinn, Estonia
Tel. +372 605 2340
Fax +372 605 2341
Shareholding: 50%
Australia & Oceania
Sabroe Limited
F-26
<PAGE>
Auckland, New Zealand
Tel. +64 9 444 6434
Fax +64 9 444 2092
Shareholding: 100%
Novenco A/S
Naestved, Denmark
Tel. +45 70 12 42 22
Fax +45 55 75 65 50
Shareholding: 100%
Sabroe Industriekalte GmbH
Glinde, Germany
Tel. +49 40 727 740
Fax +49 40 727 74427
Shareholding: 100%
Ice-Tech Ltd
Merseyside, England
Tel. +44 151 630 1800
Fax +44 151 638 6465
Shareholding: 100%
North America
Sabroe - M & M Refrigeration, Inc. Canada
Dartmouth, Canada
Tel. +1 902 481 2850
Fax +1 902 481 2860
Shareholding: 100%
Sabroe Thermfresh Pty Ltd
Victoria, Australia
Tel. +61 3 9544 1166
Fax +61 3 9562 7061
Shareholding: 100%
Novenco Hi-Pres A/S
Naestved, Denmark
Tel. +45 70 12 07 00
Fax +45 55 75 65 65
Shareholding: 100%
Sabroe Kalteanlagen GmbH
Vienna, Austria
Tel. +43 1 333 2060
Fax +43 1 333 206020
Shareholding: 100%
Coolrite Refrigeration Ltd
Tyne & Wear, England.
F-27
<PAGE>
Tel. +44 191 491 0096
Fax +44 191 482 0514
Shareholding: 100%
Sabroe Refrigeration Inc
Seattle, USA
Tel. +1 206 285 0904
Fax +1 206 285 0965
Shareholding: 50%
Asia
Sabroe Refrigeration India Ltd
Pune, India
Tel. +91 212 353 864
Fax +91 212 353 874
Shareholding: 100%
Novenco A.S.
Oslo, Norway
Tel. +47 22 650 100
Fax +47 22 649 163
Shareholding: 100%
Sabroe Italia S.r.l.
Vezzano Ligure, Italy
Tel. +39 0187 952522
Fax +39 0187 952519
Shareholding: 100%
Herbert Refrigeration Ltd
Kent, England
Tel. +44 1795 472 361
Fax +44 1795 427 602
Shareholding: 100%
M & M Refrigeration Inc
Maryland, USA
Tel. +1 410 754 8005
Fax +1 410 754 5813
Shareholding: 50%
Sabroe South East Asia Pte Ltd
Singapore
Tel. +65 382 9033
Fax +65 382 0734
Shareholding: 100%
Sabroe Finland Oy
Helsinki, Finland
Tel. +358 9 6131 5521
F-28
<PAGE>
Fax +358 9 6131 5500
Shareholding: 50%
Samifi Freezers S.r.l.
Melzo - Milano, Italy
Tel. +39 02 9573 1183
Fax +39 02 9573 1202
Shareholding: 100%
Nottingham Refrigeration Ltd
Nottingham, England
Tel. +44 115 986 1046
Fax +44 115 986 4004
Shareholding: 100%
South America
Sabroe do Brasil Ltda
Sao Paulo, Brazil
Tel. +55 11 837 6700
Fax +55 11 3641 4951
Shareholding: 100%
Sabroe Philippines Inc.
Manila, The Philippines
Tel. +63 2 820 4258
Fax +63 2 820 6540
Shareholding: 100%
Oy Novenco AB
Raisio, Finland
Tel. +358 2 432 8500
Fax +358 2 432 8501
Shareholding: 100%
Sabroe de Espana S.A.
Barcelona, Spain
Tel. +34 93 640 6204
Fax +34 93 640 6666
Shareholding: 100%
Rock Refrigeration Ltd
Manchester, England
Tel. +44 161 202 1714
Fax +44 161 203 4112
Shareholding: 100%
SAR Sul Americana Refrigeracao Ltda
Porto Alegre, Brazil
Tel. +55 51 228 6066
Fax +55 51 228 0286
F-29
<PAGE>
Shareholding : 100%
Sabroe (Thailand) Co. Ltd.
Samutsakorn, Thailand
Tel. +66 34 823 725-9
Fax +66 34 422 634
Shareholding: 49%
Sabroe Kulde A/S
Voyenenga, Norway
Tel. +47 67 17 1100
Fax +47 67 17 1101
Shareholding: 100%
Rotor Kalteanlagen GmbH
Budapest, Hungary
Tel. +36 1 375 4682
Fax +36 1 202 7006
Shareholding: 50%
Tynes Tees Forth-UDEC Ltd
Tyne & Wear, England
Tel. +44 191 416 4525
Fax +44 191 416 8317
Shareholding: 100%
Sabroe de Chile S/A
Santiago, Chile
Tel. +56 2 23 33 088
Fax +56 2 33 55 776
Shareholding: 100%
Nippon Sabroe Co. Ltd.
Tokyo, Japan
Tel. +81 3 3597 0536
Fax +81 3 3597 0436
Shareholding: 100%
Sabroe (China) Limited
Hong Kong
Tel. +852 2147 0233
Fax +852 2147 0113
Shareholding: 75%
Sabroe Refrigeration (Shanghai) Company Limited
Shanghai, China
Tel. +86 21 6326 9305
Fax +86 21 6326 9307
Shareholding: 75%
Novenco Nippon Ltd
Kobe, Japan
F-30
<PAGE>
Tel. +81 78 334 2991
Fax +81 78 334 2993
Shareholding: 50%
Africa
Sabroe South Africa (Pty.) Ltd.
Halfway House, South Africa
Tel. +27 11 312 2170
Fax +27 11 312 2156
Shareholding: 100%
Associated companies:
Jernstoberiet Dania A/S
Aars, Denmark
Tel. +45 98 62 19 11
Fax +45 98 62 27 56
Shareholding: 40%
Sabroe Russ Closed Joint Stock Company
St. Petersburg, Russia
Tel. +7 812 542 7017
Fax +7 812 316 4997
Shareholding: 43%
Tabrid Sabroe Maghreb S.A.
Casablanca, Marocco
Tel. +212 2 676606
Fax +212 2 278922
Shareholding: 20%
Stal Nissin Corp.
Osaka, Japan
Tel. +81 6 6393 1358
Fax +81 6 6350 1512
Shareholding: 50%
Hi-Pres Korea Co. Ltd.
Kyungnam, Korea
Tel. +82 525 46 3500
Fax +82 525 46 3501
Shareholding: 20%
Airvenco Sdn. Bhd.
Selangor, Malaysia
Tel. +60 3703 5885
Fax +60 3703 3448
Shareholding: 20%
F-31
<PAGE>
YORK INTERNATIONAL CORPORATION AND SABROE
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information reflects the
combined results of operations of York International Corporation ("York") and
Sabroe A/S ("Sabroe") as if the June 10, 1999 acquisition of Sabroe by York had
occurred on January 1, 1998 with respect to the information for the year ended
December 31, 1998 and January 1, 1999 with respect to the six months ended June
30, 1999. The results of operations are derived from York's historical
consolidated statement of operations and Sabroe's historical consolidated
statement of operations.
The unaudited pro forma financial information should be read in
conjunction with the historical consolidated financial statements of York and of
Sabroe. The effect of restructuring, acquisition and integration charges
expected to be taken in connection with the acquisition has not been reflected
in the pro forma financial information, as the amount of such charges has not
yet been determined. The unaudited pro forma financial information does not
give effect to anticipated cost savings and revenue enhancement opportunities
that may result from the acquisition. For purposes of the unaudited pro forma
financial information, the Sabroe assets and liabilities are accounted for at
fair values, based on independent appraisals and other information. York is
developing a plan for restructuring and integrating Sabroe into the York
Refrigeration Group. As restructuring plans are finalized and actions
implemented, the amount of unallocated excess of cost over net assets acquired
and other accruals may vary from such amounts included for purposes of the
unaudited pro forma financial information.
The unaudited pro forma financial information is for informational
purposes only and may not be considered as necessarily indicative of what actual
results will be in the future.
The pro forma adjustments reflected in the accompanying unaudited pro
forma financial information are as follows:
Unaudited Pro Forma Condensed Combined Statement of Operations
Information:
(a) Amortize unallocated excess of cost over net assets acquired of
$449.5 million over a period of 30 years.
(b) Amortize trademarks and trade names acquired of $35.5 million
over a period of 30 years.
(c) Amortize Patents and Proprietary technology acquired of $2.1
million over a period of 15 years.
(d) Recognize net additional interest expense for borrowings related
to the acquisition at historical rates.
F-32
<PAGE>
(e) Adjust depreciation expense as a result of new fixed asset bases
and depreciable lives.
(f) Acquisition and integration expenses primarily relating to the
cost and loss on an option to fix the price of the acquisition.
Additional restructuring, acquisition and integration expenses
have not yet been determined.
(g) Record as expense an U.S. GAAP adjustment for a Sabroe
acquisition reserve established and subsequently reversed into
income during the first quarter 1999.
(h) Record adjustment to reflect income tax effect of adjustments.
F-33
<PAGE>
YORK INTERNATIONAL CORPORATION AND SABROE A/S
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS INFORMATION
YEAR ENDED DECEMBER 31, 1998
(unaudited)
<TABLE>
<CAPTION>
(in thousands of U.S. dollars) Historical Pro forma
------------ -----------
York Sabroe Adjustments Combined
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 3,289,201 $ 692,454 $ - $ 3,981,655
Cost of goods sold 2,566,265 543,922 (1,865) (e) 3,108,322
----------- ------------ ----------- -----------
Gross profit 722,936 148,532 1,865 873,333
Selling, general & administrative expenses 494,232 125,992 7,397 (a,b,c,e) 627,621
----------- ------------ ----------- -----------
Income from operations 228,704 22,540 (5,532) 245,712
Interest expense, net 41,527 9,862 23,840 (d) 75,229
Affiliate earnings (126) (765) - (891)
----------- ------------ ----------- -----------
Income before income taxes 187,303 13,443 (29,372) 171,374
Income taxes 50,810 3,647 (7,968) (h) 46,489
----------- ------------ ----------- -----------
Net income $ 136,493 $ 9,796 $ (21,404) $ 124,885
=========== ============ =========== ===========
Basic earnings per share $ 3.38 $ 3.09
Diluted earnings per share $ 3.36 $ 3.07
Weighted average shares common shares
and common equivalents outstanding:
Basic 40,402 40,402
Diluted 40,622 40,622
</TABLE>
F-34
<PAGE>
YORK INTERNATIONAL CORPORATION AND SABROE A/S
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS INFORMATION
SIX MONTHS ENDED JUNE 30, 1999
(unaudited)
<TABLE>
<CAPTION>
(in thousands of U.S. dollars) Historical Pro forma
------------ -----------
York Sabroe Adjustments Combined
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 1,794,821 $ 233,572 $ - $ 2,028,393
Cost of goods sold 1,397,825 193,390 (1,053) (e) 1,590,162
----------- ----------- ----------- -----------
Gross profit 396,996 40,182 1,053 438,231
Selling, general & administrative expenses 276,758 52,177 3,587 (a,b,c,e,g) 332,522
Acquisition and integration expenses 12,958 - (12,958) (f) -
----------- ----------- ----------- -----------
Income from operations 107,280 (11,995) 10,424 105,709
Interest expense, net 22,672 4,253 8,905 (d) 35,830
Affiliate earnings (3,042) (196) - (3,238)
----------- ----------- ----------- -----------
Income before income taxes 87,650 (16,052) 1,519 73,117
Income taxes 28,924 (5,297) 502 (h) 24,129
----------- ----------- ----------- -----------
Income before cumulative effect
of accounting change 58,726 (10,755) 1,017 48,988
Cumulative effect of accounting changes:
Write-off of start-up activities (net
of $442 income tax benefit) 897 - - 897
----------- ----------- ----------- -----------
Net income $ 57,829 $ (10,755) $ 1,017 $ 48,091
=========== =========== =========== ===========
Basic earnings per share $ 1.45 $ 1.21
Diluted earnings per share $ 1.44 $ 1.20
Weighted average shares common shares
and common equivalents outstanding:
Basic 39,777 39,777
Diluted 40,041 40,041
</TABLE>
F-35
<PAGE>
EXHIBIT INDEX
Exhibit Description Page Number
Number
23.1 Consent of KPMG C. Jespersen and Deloitte & Touche 6
Company of State Authorised Public Accountants
- 5 -
<PAGE>
EXHIBIT 23.1
Accountants' Consent
The Board of Directors
SABROE Refrigeration A/S:
We consent to the inclusion of our report dated 12 March 1999, with respect to
the 1998 Group accounts and annual accounts of Sabroe Refrigeration A/S, which
report appears in the Form 8-K/A of York International Corporation dated August
23, 1999.
Aarhus, 19 August 1999
KPMG C. Jespersen DELOITTE & TOUCHE
Company of State Authorized
Public
Accountants
<TABLE>
<S> <C> <C> <C>
Henning Olesen Erik Dybdahl Karsten Mumm Jesper Meto
State Authorized State Authorized State Authorized State Authorized
Public Accountant Public Accountant Public Accountant Public Accountant
</TABLE>
- 6 -
