<PAGE>
THIS DOCUMENT IS A COPY OF THE REGISTRANT'S FORM 8-K
FILED ON MARCH 24, 1994 PURSUANT TO A RULE 201 TEMPORARY
HARDSHIP EXEMPTION.
(NOTE: ONLY EXHIBITS EX-28.1 AND EX-28.2 PREVIOUSLY WERE
NOT FILED ELECTRONICALLY ON MARCH 24, 1994.)
Page 1
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 (Date of earliest event reported): March 15, 1994
Transamerica Finance Corporation
(Exact name of registrant as specified in its charter)
Delaware 1-6798 95-1077235
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1150 South Olive Street
Los Angeles, California 90015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (213) 742-4321
Not applicable
(Former name or former address, if changed since last report.)
<PAGE>
Page 2
Item 2. Acquisition of Assets
On February 13, 1994, Transamerica Container Acquisition Corporation
("Transamerica" or "Purchaser"), entered into an Asset Purchase Agreement
(the "Agreement") with Tiphook plc, a London-based transportation equipment
rental company, and certain of its affiliated companies ("Tiphook" or
"Sellers") pursuant to which Transamerica agreed to purchase certain dry cargo
containers, tank containers, chassis, operating leases and other assets of
Tiphook (collectively the "Container Operations"). Purchaser is a newly
formed subsidiary of Transamerica Finance Corporation ("Registrant").
On March 15, 1994, the transaction was completed and Transamerica
acquired substantially all the operating assets of the Container Operations of
Tiphook. Transamerica assumed certain specified liabilities of the Container
Operations including trade accounts payable. Transamerica did not assume any
borrowings, tax liabilities or contingent liabilities of the Sellers or the
Tiphook Group. In accordance with the Agreement, Transamerica paid to Tiphook
673 million pounds sterling, with further payments to be made upon release of
escrows, delivery of bills of sale and releases of liens, and delivered
34.5 million pounds sterling to escrow agents for the establishment of a
general escrow account (27.5 million pounds sterling) and a repairs escrow
account (7.0 million pounds sterling). When completed, payments to the
Sellers may total up to 722 million pounds sterling (about $1,065 million).
Claims may be made against the general escrow account by Transamerica for
any claim for indemnity (see below) including for breach of warranty. The
Agreement provides that any amounts owed to Transamerica by Tiphook in respect
of any purchase price adjustment shall be paid directly to Transamerica by
Tiphook rather than from the escrowed funds. Only if Tiphook is prohibited by
law from making the payment (or otherwise does not make the payment) will the
funds be paid from the general escrow account, in which case Tiphook is
required under the Agreement to replenish such account to the extent of any
funds so withdrawn by Transamerica. No amounts will be released from the
general escrow to the Sellers until March 31, 1995. The amount released on
March 31, 1995 will be minus (i) any purchase price adjustments (following the
examination of the net assets at closing) deducted from the general escrow and
not replenished; and (ii) any amounts paid to Transamerica in settlement of
any claim covered by the general escrow, and then only to the extent not
necessary to cover any pending claims lodged by Transamerica.
Claims may be made against the repairs escrow account to the extent that
the amounts required to repair certain containers exceed the amounts accrued
by the Sellers in respect of such repairs. Transamerica may also claim
against this escrow if any purchase price adjustment arising from the post-
closing audit is not paid directly by Tiphook. No amounts will be released to
Tiphook from the repairs escrow until the end of the six month anniversary of
the closing. The amount paid will be minus (i) any purchase price adjustments
(following the audit of the net assets at closing) deducted from the repairs
escrow and not replenished and (ii) any amount paid to Transamerica in
settlement of any claim covered by the repairs escrow and not replenished, and
then only to the extent not necessary to cover any pending repair claims
lodged by Transamerica. Fifty per cent of the amount remaining in the repairs
escrow (and not necessary to cover any pending claims) will be released
earlier than the six month anniversary if the net assets audit is completed
and agreed to before then and certain other conditions are satisfied.
<PAGE>
Page 3
Adjustments to the purchase price, if any, will be determined on
completion of examination of the closing balance sheet of the Container
Operations as at the closing date by Transamerica's auditors and Tiphook's
auditors, respectively. Any unresolved dispute will be referred to an
independent auditor.
The Sellers have given representations and warranties as to the assets
including the contracts and operating leases sold and as to Tiphook's
container rental business and agreed to indemnify Transamerica for any
breaches of the Sellers' representations or warranties. Claims for breach of
representations or warranties must be brought within two years of closing
(other than those relating to taxation and environmental matters which survive
for the applicable statutes of limitation). The liability of the Sellers for
indemnification is limited to the purchase price paid by Transamerica to the
Sellers plus the amounts paid into the escrow accounts. The indemnification
provisions cover among other matters breaches of warranty, contingent
liabilities, if any, of the Container Operations, taxation liabilities, the
conduct of the business of the Container Operations prior to the closing and
environmental liabilities.
Tiphook, at the closing, entered into a non-compete agreement with
Transamerica prohibiting Tiphook and its affiliates from competing with the
Container Operations for a period of seven years. After the closing, Sellers
are providing certain transitional services to Transamerica pursuant to the
terms of a transitional services agreement.
Tiphook has granted Transamerica an exclusive, perpetual license to the
name "Tiphook" in the business of leasing containers (on a worldwide basis)
and tank chassis (in the United States).
Item 7. Financial Statements, Pro forma Financial Information and Exhibits.
(a) Financial statements of Tiphook Container Rental Company Limited and
Tiphook Rentals Limited
The following audited combined financial statements of Tiphook Container
Rental Company Limited and Tiphook Rentals Limited (hereinafter referred
to as the Container Rental Businesses) prepared in conformity with United
Kingdom standard accounting practices are filed as Exhibit 28.1 hereto,
and are incorporated by reference in this report.
Independent Auditors' Report
Combined Profit and Loss Statement - Year
ended April 30, 1993
Combined Statement of Total Recognised Gains
and Losses - Year ended April 30, 1993
Combined Balance Sheet - April 30, 1993
Combined Cash Flow Statement - Year ended
April 30, 1993
Notes to the Combined Financial Statements -
Year ended April 30, 1993
<PAGE>
Page 4
The following unaudited interim financial statements of the Container
Rental Businesses prepared in conformity with United Kingdom standard
accounting practices are filed as Exhibit 28.2 hereto, and are
incorporated by reference in this report.
Combined Profit and Loss Statement - Six months
ended October 31, 1993 and 1992
Combined Statement of Total Recognised Gains
and Losses - Six months ended October 31,
1993 and 1992
Combined Balance Sheet - October 31, 1993
Combined Cash Flow Statement - Six months ended
October 31, 1993 and 1992
Notes to the Unaudited Combined Interim Financial
Information - Six months ended October 31, 1993
(b) Pro forma Financial Information
The Pro forma Condensed Consolidated Balance Sheet of Transamerica
Finance Corporation as of December 31, 1993 reflects the financial
position of Transamerica Finance Corporation after giving effect to the
acquisition of the assets and assumption of the liabilities discussed in
Item 2. The pro forma consolidated balance sheet assumes the acquisition
took place on December 31, 1993 and is based upon the October 31, 1993
balance sheet of the Container Rental Businesses. The Pro forma
Condensed Consolidated Statement of Income for the year ended
December 31, 1993 reflects adjustments to the cost of borrowings at
Transamerica Finance Corporation and the Container Rental Businesses,
using rates in effect had the acquisition occurred December 31, 1993, as
if the acquisition had occurred on January 1, 1993 and based upon the
operations of the Container Rental Businesses for the twelve month period
ended October 31, 1993. No adjustments have been made to reflect
potential operating efficiencies from the consolidation of these
operations.
Pro forma Condensed Consolidated Balance
Sheet as of December 31, 1993 ............. Page F-1
Pro forma Condensed Consolidated Income
Statement - Year ended December 31, 1993 .. Page F-2
Notes to Pro forma Financial Information .... Page F-3
The unaudited pro forma financial statements and accompanying notes
reflect the purchase of assets and the assumption of certain liabilities
of the Container Rental Businesses. The purchase price will be allocated
to the Container Rental Businesses assets acquired and liabilities
assumed based on their relative estimated fair values at the closing
date. As described in the accompanying notes, the amounts allocated to
the Container Rental Businesses assets and liabilities have been
combined with the recorded values of the assets and liabilities of
Transamerica Finance Corporation. However, changes to the adjustments
already included in the unaudited pro forma financial statements are
expected as evaluations of assets and liabilities are completed and as
additional information becomes available. In addition, the results of
<PAGE>
Page 5
operations of the Container Rental Businesses subsequent to October 31,
1993 will affect the allocation of the purchase price. Accordingly, the
final combined amounts will differ from those set forth in the unaudited
pro forma financial statements.
The unaudited pro forma financial statements have been prepared by
Transamerica Finance Corporation based upon assumptions deemed proper by
it. The unaudited pro forma financial statements presented herein are
shown for illustrative purposes only and are not necessarily indicative
of the future financial position or future results of operations of the
combined company, or of the financial position or results of operations
of the combined company that would have actually occurred had the
transaction been in effect as of the date or for the period presented.
In addition, it should be noted that Transamerica Finance Corporation's
financial statements will reflect the acquisition only from March 15,
1994, the closing date of the transaction.
The unaudited pro forma financial statements should be read in
conjunction with the historical financial statements of Transamerica
Finance Corporation and the Container Rental Businesses financial
statements and related notes.
<PAGE>
Page 6
<TABLE>
Page F-1
PRO FORMA FINANCIAL INFORMATION
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET*
December 31, 1993
(Unaudited)
<CAPTION>
Transamerica Container
Finance Rental
Corporation Businesses
Historical Historical Pro forma Pro forma
Amounts Amounts Adjustments Consolidated
<S> <C> <C> <C> <C>
ASSETS
Finance receivables, net
of allowance for losses
and unearned fees $6,071,578 $ 6,071,578
Equipment held for lease, net
of accumulated depreciation 1,306,458 $ 929,294 $ 104,083 -C 2,339,835
Other 1,653,334 282,623 (195,299)-B 1,724,422
(16,236)-B
__________ __________ __________ ___________
$9,031,370 $1,211,917 $ (107,452) $10,135,835
========== ========== ========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Notes payable $7,031,503 $ 872,865 $ (872,865)-B $ 8,016,503
985,000 -D
Other liabilities 550,246 123,691 (84,226)-B 589,711
__________ __________ __________ ___________
7,581,749 996,556 27,909 8,606,214
Shareholder's equity 1,449,621 215,361 80,000 -A 1,529,621
(215,361)-B
__________ __________ __________ ___________
$9,031,370 $1,211,917 $ (107,452) $10,135,835
========== ========== ========== ===========
<FN>
(Amounts in thousands)
*Assuming the acquisition had been consummated on December 31, 1993.
See notes on Page F-3.
</TABLE>
<PAGE>
Page 7
<TABLE>
Page F-2
PRO FORMA FINANCIAL INFORMATION
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT*
Year ended December 31, 1993
(Unaudited)
<CAPTION>
Transamerica Container
Finance Rental
Corporation Businesses
Historical Historical Pro forma Pro forma
Amounts Amounts Adjustments Consolidated
<S> <C> <C> <C> <C>
REVENUES
Finance charges $ 929,464 $ 929,464
Leasing revenues 388,327 $250,172 638,499
Other 74,335 74,335
__________ ________ __________
1,392,126 250,172 1,642,298
EXPENSES
Interest and debt expense 414,556 55,168 $ 53,559 -D 468,115
(55,168)-D
Depreciation on equipment held
for lease 102,538 67,116 30,576 -C 200,230
Salaries and other operating
expenses 512,652 109,450 622,102
Other 144,142 5,310 (5,310)-F 144,142
__________ ________ ________ __________
1,173,888 237,044 23,657 1,434,589
__________ ________ ________ __________
Income before income taxes 218,238 13,128 (23,657) 207,709
Income taxes 95,357 13,571 (17,783)-E 91,145
__________ ________ ________ __________
Income before extraordinary item $ 122,881 $ (443) $ (5,874) $ 116,564
========== ======== ======== ==========
<FN>
(Amounts in thousands)
*Assuming the acquisition had been consummated on January 1, 1993.
See notes on Page F-3.
</TABLE>
<PAGE>
Page 8
Page F-3
PRO FORMA FINANCIAL INFORMATION
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL INFORMATION
December 31, 1993
(Unaudited)
Note A - Basis of Presentation
The pro forma financial information was prepared using the Container
Rental Businesses balance sheet as of October 31, 1993 and income
statement for the year ended October 31, 1993 converted at an
exchange rate of 1.0 pound sterling = $1.475. The income statement
was prepared by combining the interim period results for the six
month periods ended April 30, 1993 and October 31, 1993.
The following adjustments have been made to convert the Container
Rental Businesses financial statements, which are prepared in
conformity with United Kingdom standard accounting practices, to a
basis in conformity with accounting principles generally accepted in
the United States:
October 31, 1993 balance sheet:
Goodwill $195,299
========
Deferred income tax liability $ 84,226
========
Year ended October 31, 1993 income statement:
Foreign currency translation expense $ 2,212
========
Goodwill amortization $ 5,310
========
Deferred income tax provision $ 13,571
========
(Amounts in thousands)
The following summarizes the total purchase price:
Cash purchase price $1,065,000
==========
Cash purchase price obtained through:
Issuance of notes payable $ 985,000
Capital contribution from
Transamerica Corporation 80,000
__________
$1,065,000
==========
(Amounts in thousands)
<PAGE>
Page 9
Page F-4
PRO FORMA FINANCIAL INFORMATION
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL INFORMATION (Continued)
December 31, 1993
(Unaudited)
Note A - Basis of Presentation (Continued)
Under purchase accounting, the assets purchased and liabilities
assumed in the transaction, as described in item 2, are required to
be adjusted to estimated fair values based upon an allocation of the
purchase price. For the purposes of preparing the December 31, 1993
pro forma balance sheet, the assets of the Container Rental
Businesses as of October 31, 1993 were valued based on the
information obtained during due diligence conducted by Transamerica
prior to execution of the Asset Purchase Agreement. The Container
Rental Businesses assets acquired and liabilities assumed will be
recorded based upon fair values as of March 15, 1994, the actual date
of acquisition.
Note B - Allocation of Purchase Price
The purchase price has been allocated as described in the table
below:
Increase (decrease) to the Container
Rental Businesses net asset value at
October 31, 1993 as a result of
estimated fair value adjustments:
Equipment held for lease $ 104,083
Other assets (16,236)
__________
Total estimated fair value
adjustments 87,847
Net assets of Container Rental
Businesses at October 31, 1993 215,361
Elimination of goodwill not acquired (195,299)
Elimination of notes payable not assumed 872,865
Elimination of deferred taxes not assumed 84,226
__________
$1,065,000
==========
(Amounts in thousands)
<PAGE>
Page 10
Page F-5
PRO FORMA FINANCIAL INFORMATION
TRANSAMERICA FINANCE CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL INFORMATION (Continued)
December 31, 1993
(Unaudited)
Note C - Equipment Held for Lease
Equipment held for lease has been adjusted to reflect the allocation
of the purchase price not otherwise allocated to the fair value of
nonlease assets. Depreciation expense has been adjusted to reflect
depreciation of the allocated balance using the methodology followed
by Transamerica Finance Corporation.
Note D - Notes Payable
Notes payable have been adjusted to eliminate the Container Rental
Businesses notes payable not assumed and to reflect the debt to be
issued by Transamerica Finance Corporation in connection with the
acquisition. Interest expense has been adjusted to reflect current
interest rates on the related Transamerica Finance Corporation notes.
Note E - Income Tax Expense
Income taxes have been calculated based on the effective income tax
rate for Transamerica Finance Corporation's leasing operations.
Note F - Goodwill Amortization
The Container Rental Businesses financial statements include
goodwill amortization. The goodwill was not included in the assets
acquired and accordingly the associated expense has been eliminated.
<PAGE>
Page 11
(c) Exhibits
EX-2 Asset Purchase Agreement dated as of February 13, 1994
between Transamerica Container Acquisition Corporation
and Tiphook plc and certain of its affiliated companies
(incorporated by reference to Exhibit EX-2 of the
Registrant's Annual Report on Form 10-K (File
No. 1-6798) for the year ended December 31, 1993).
EX-2.1 Amendment and Supplement to Asset Purchase Agreement
dated as of March 15, 1994 between Transamerica Container
Acquisition Corporation and Tiphook plc and certain of
its affiliated companies (incorporated by reference to
Exhibit EX-2.1 of the Registrant's Annual Report on
Form 10-K (File No. 1-6798) for the year ended
December 31, 1993).
EX-23 Consent of Touche Ross & Co. to the incorporation by
reference of their report dated February 14, 1994
(March 23, 1994 as to certain post balance sheet events)
on the Tiphook plc Container Rental Businesses financial
statements for the year ended April 30, 1993 in the
Registrant's Registration Statement on Form S-3 (File
Nos. 33-40236 and 33-49763).
EX-28.1 Tiphook plc Container Rental Businesses audited financial
statements for the year ended April 30, 1993.
EX-28.2 Tiphook plc Container Rental Businesses unaudited
financial statements as of October 31, 1993 and for the
six month periods ended October 31, 1993 and 1992.
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.
TRANSAMERICA FINANCE CORPORATION
(Registrant)
David H. Hawkins
Senior Vice President and Treasurer
Date: March 24, 1994
<PAGE>
Page 12
Difference Between Temporary Hardship Filed Document and the Electronically
Filed Document
1. The symbol # has been used in the financial statements in
Exhibits EX-28.1 and EX-28.2 in the electronically filed document to
denote pounds sterling. In the temporary hardship filed document, the
proper pounds sterling sign was used.
<PAGE>
EXHIBIT EX-23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration Statements Nos.
33-40236 and 33-49763 on Form S-3 of Transamerica Finance Corporation of our
report dated February 14, 1994 (March 23, 1994 as to certain post balance
sheet events) with respect to the combined financial statements of the Tiphook
plc Container Rental Businesses appearing in this Form 8-K of Transamerica
Finance Corporation.
TOUCHE ROSS & CO.
London, England
March 24, 1994
<PAGE>
EXHIBIT EX-28.1
TIPHOOK PLC CONTAINER RENTAL
BUSINESSES
Combined Financial Statements
APRIL 30, 1993
Touche Ross & Co.
Peterborough Court
133 Fleet Street
London EC4A 2TR
<PAGE>
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
INDEX TO COMBINED FINANCIAL STATEMENTS
Independent auditors' report 1
Combined profit and loss statement 3
Combined statement of total recognised gains and losses 3
Combined balance sheet 4
Combined cash flow statement 5
Notes to the combined financial statements 6
<PAGE>
Page 1
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Tiphook plc
We have audited the accompanying combined balance sheet of Tiphook
Container Rental Company Limited and its subsidiaries (excluding Grampian
Containers Limited) and Tiphook Rentals Limited (together, the "Container
Rental Businesses") as of April 30, 1993 and the related combined
statements of profit and loss and cash flows for the year then ended,
which have been prepared following the Basis of Combination set out on
page 6 under Accounting Policies. These combined financial statements
are the responsibility of the Container Rental Businesses' management.
Our responsibility is to express an opinion on these combined financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and
perform our audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluation of the overall financial statements
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, these combined financial statements present fairly, in
all material respects, the financial position of the Container Rental
Businesses at April 30, 1993, and the results of its operations and cash
flows for the year then ended in conformity with accounting principles
generally accepted in the United Kingdom (which differ in certain
material respects from accounting principles generally accepted in the
United States - see note 24).
The accompanying combined financial statements have been prepared on the
assumption that the companies comprising the Container Rental Businesses
will continue as going concerns. These companies are dependent on the
continued financial support of Tiphook plc ("the Tiphook plc Group") to
meet their obligations as they fall due. The matters discussed in note
23 with respect to the Tiphook plc Group raised substantial doubt about
the Tiphook plc Group's ability to continue as a going concern, and,
therefore, raise substantial doubt about the ability of these companies
to continue as going concerns. No adjustment has been made in these
financial statements that might result from the outcome of this
uncertainty.
<PAGE>
Page 2
As explained more fully in note 23, substantially all the assets and
certain specified liabilities of the Container Rental Businesses were
sold on March 15, 1994.
TOUCHE ROSS & CO
London, England
February 14, 1994
(March 23, 1994 as to note 23)
<PAGE>
Page 3
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
COMBINED PROFIT AND LOSS STATEMENT
Year ended April 30, 1993
Note 1993
#m
TURNOVER from continuing operations 2 168.6
Cost of sales (71.3)
_____
GROSS PROFIT 97.3
Distribution costs (8.5)
Administrative expenses (21.2)
Other operating income 6 2.2
_____
OPERATING PROFIT from continuing operations 7 69.8
Investment income 0.2
Net interest payable 8 (35.1)
_____
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 34.9
Tax on profit on ordinary activities 9 -
_____
PROFIT ON ORDINARY ACTIVITIES AFTER
TAXATION 34.9
Dividends paid to the Tiphook plc Group 10 (40.0)
_____
RETAINED LOSS (5.1)
=====
COMBINED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended April 30, 1993
1993
#m
Profit on ordinary activities after taxation 34.9
Currency translation differences 21 (3.9)
_____
Total recognised gains and losses 31.0
=====
Movements in shareholders' funds are set out in note 21.
<PAGE>
Page 4
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
COMBINED BALANCE SHEET
April 30, 1993
Note 1993
#m
Fixed Assets
Tangible assets 11 613.7
Investments 12 1.0
_____
614.7
_____
Current Assets
Debtors 13 60.8
Cash at bank and in hand 2.8
_____
63.6
CREDITORS - amounts falling due within one year
Borrowings 15 (451.6)
Other Creditors 16 (162.4)
_____
(614.0)
_____
NET CURRENT LIABILITIES (550.4)
_____
TOTAL ASSETS LESS CURRENT LIABILITIES 64.3
CREDITORS - amounts falling due after more than
one year 16 (0.2)
_____
64.1
=====
CAPITAL AND RESERVES
Called up share capital 20 144.7
Share premium account 21 0.1
Foreign exchange fluctuation reserve 21 (7.6)
Profit and loss account 21 72.3
_____
GROSS SHAREHOLDERS' FUNDS 209.5
Goodwill write off reserve 21 (145.4)
_____
NET SHAREHOLDERS' FUNDS 64.1
=====
<PAGE>
Page 5
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
COMBINED CASH FLOW STATEMENT
Year ended April 30, 1993
Note 1993
#m
Net cash inflow from operating activities 3 180.4
Returns on investments and servicing of finance
Net interest paid (1.3)
Interest paid to the Tiphook plc Group (35.1)
Ordinary dividends paid to the Tiphook plc Group (45.0)
_____
Net outflows from returns on investments and servicing of
finance (81.4)
Taxation (0.1)
_____
Net cash inflow before investing and financing 98.9
_____
Investing activities
Purchase of tangible fixed assets 11 (101.3)
Sale of tangible fixed assets 8.6
_____
Net cash outflow from investing activities (92.7)
_____
Net cash inflow before financing 6.2
_____
Financing
New finance 15 80.3
Finance repayments 15 (82.6)
_____
Net cash outflow from financing (2.3)
_____
Increase in cash and cash equivalents 14 3.9
=====
<PAGE>
Page 6
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
1. Accounting Policies
Basis of Combination
The accompanying combined financial statements aggregate the audited
consolidated financial statements of Tiphook Container Rental Company Limited
("TCR") and the audited financial statements of Tiphook Rentals Limited
("Rentals") (together "the Container Rental Businesses"). Turnover and
profits arising on trading between companies within the Container Rental
Businesses are excluded. All companies within the Container Rental Businesses
made up their statutory financial statements to April 30, 1993. Grampian
Containers Ltd, the only UK subsidiary of Tiphook Container Rental Company
Limited, has been excluded from the financial information as its inclusion
would not be material for the purpose of giving a true and fair view of the
Container Rental Businesses. Tiphook plc and its subsidiaries other than the
Container Rental Businesses are hereinafter referred to as "the Tiphook plc
Group.
The accompanying combined financial statements as at April 30, 1993 have been
prepared in accordance with generally accepted accounting principles in the
United Kingdom ("UK GAAP") which differ in certain material respects from
generally accepted accounting principles in the United States ("US GAAP") -
see note 24. The accompanying financial statements do not represent the
statutory financial statements of the companies comprising the Container
Rental Businesses. The statutory financial statements for these companies for
the year ended April 30, 1993, on which the auditors' report was unqualified
but contained explanatory paragraphs concerning matters that raise substantial
doubt about the Container Rental Businesses' ability to continue as going
concerns, have been delivered to the Registrar of Companies in England and
Wales. Amounts in the accompanying combined financial statements are stated
in pounds sterling (#), the currency of the country in which the companies
comprising the Container Rental Businesses are incorporated.
This presentation of the Container Rental Businesses differs from that
presented in the circular to shareholders of Tiphook plc dated February 14,
1994, principally in respect of financing related adjustments which were
allocated to the Container Rental Businesses. This presentation is a pure
aggregation of the financial statements of the legal entities comprising the
Container Rental Businesses.
<PAGE>
Page 7
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
1. Accounting Policies (continued)
The combined financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards generally
accepted in the United Kingdom. The principal accounting policies are
described below.
Foreign exchange
The functional currency of the Container Rental Businesses is sterling.
Transactions in other currencies are recorded at average rates of exchange
ruling during the periods in which the transactions take place. Exchange
differences arising on such transactions are dealt with in the Profit and Loss
Statement.
Gains and losses on forward currency contracts which hedge future currency
exposures are reported with the related transactions to leave them stated at
the forward contract rate. Differences arising on the translation of the
financial statements into pounds sterling (#), the Container Rental
Businesses' reporting currency, are dealt with in the Foreign Exchange
Fluctuation Reserve.
Turnover
Turnover from trading activities is the amount derived from the provision of
goods and services falling within the Container Rental Businesses' ordinary
activities after excluding trade discounts and value added tax.
Operating leases
Operating lease rentals are charged to the Profit and Loss Account as
incurred.
Pension costs
The companies within the Container Rental Businesses are members of the
Tiphook Group Retirement Benefit Scheme, a defined benefit funded pension
scheme operated by Tiphook plc. The expected pension cost is charged to the
Profit and Loss Account so as to spread the cost of pensions over the service
lives of employees in the scheme. The pension cost is assessed in accordance
with the advice of qualified actuaries. Actuarial surpluses and deficits are
spread over the expected remaining service lives of current employees in the
scheme.
<PAGE>
Page 8
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
1. Accounting Policies (continued)
Maintenance costs
Expenditure relating to the maintenance of containers in respect of general
wear and tear is written off in the year in which it is incurred.
Taxation
Deferred taxation is not provided in respect of significant timing differences
unless it is probable that such tax will become payable in the foreseeable
future.
Advance corporation tax is written off unless it can either be set against
provisions for taxation or is recoverable against tax liabilities in respect
of the following period in which case it is deferred.
No allowance is made for taxation that might arise on the remittance of
retained profits by overseas subsidiaries subsequent to the balance sheet
date.
Tangible fixed assets and depreciation
For all tangible fixed assets, depreciation is calculated to write down their
cost to estimated residual value over their estimated useful economic lives by
equal annual instalments.
The estimated useful lives and residual values of tangible fixed assets are as
follows:
Estimated Estimated
useful lives residual
value
Dry freight containers 15 years 15% of cost
Tank containers 25 years 20% of cost
Office equipment and motor vehicles 5 years nil
<PAGE>
Page 9
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
2. Analysis of Turnover, Profit and Capital Employed
Turnover, operating profit and capital employed derives from the Container
Rental Businesses' main business of container rental. The business, which is
located principally in the United Kingdom, is carried out on an international
basis. Assets are centrally controlled and contracts allow customers to use
and return equipment anywhere within its worldwide network. Revenue and
assets cannot, therefore, be attributed to a particular geographical area and
accordingly, the directors do not consider it practical or meaningful to
provide such an analysis.
3. Reconciliation of Operating Profit to Net Cash Inflow from Operating
Activities
Year
ended
April 30,
1993
#m
Operating profit 69.8
Depreciation charge 38.7
Profit on sale of tangible fixed assets (1.5)
Provision against fixed assets 0.8
Increase in debtors (0.2)
Increase in creditors 2.9
Decrease in provisions (1.9)
Increase in amount due to the Tiphook plc Group 71.8
_____
Net cash inflow from operating activities 180.4
=====
Changes in working capital are stated after excluding movements due to
foreign exchange.
<PAGE>
Page 10
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
4. Employees
The average weekly number of employees of the Container Rental Businesses,
excluding directors, was:
Year
ended
April 30
1993
No.
Sales and distribution staff 219
Administration Staff 51
_____
270
=====
#m
The costs incurred in respect of these employees were:
Wages and salaries 6.1
Social security costs 0.3
Other pension costs 0.2
_____
6.6
=====
The companies within the Container Rental Businesses are members of the
Tiphook plc Group Retirement Benefit Scheme. The funds of the scheme are
administered by trustees and are independent of the Tiphook plc Group's
finances. The pension charge for the Container Rental Businesses each year is
based on an appropriate proportion of the pension cost across the Tiphook plc
Group as a whole.
The Tiphook plc Group's pension charge is assessed in accordance with the
advice of professionally qualified actuaries using the projected unit method
of valuation. The last valuation was carried out on May 1, 1992, the main
actuarial assumption being that future investment returns would exceed salary
increases by 1.5 per cent. At that date the market value of the scheme's
assets was estimated at #3.8 million, covered 74 per cent of the accrued
benefits and showed an actuarial deficit of #1.3 million. From May 1, 1993
the contribution rate paid by the Tiphook plc Group increased by 3 per cent to
meet this deficit.
The Container Rental Businesses does not provide any post retirement benefits
other than pensions.
<PAGE>
Page 11
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
5. Directors
Emoluments of directors of the Container Rental Businesses were as follows:
Year
ended
April 30,
1993
#'000
Management remuneration 497
Pension costs 27
Compensation for loss of office 41
____
565
====
The emoluments of directors, excluding pension
contributions and compensation for loss of
office, were as follows:
Chairman -
====
Highest paid director 125
====
Others No.
# 0 - # 5,000 3
# 10,001 - # 15,000 1
# 55,001 - # 60,000 2
# 70,001 - # 75,000 1
# 80,001 - # 85,000 1
# 85,001 - # 90,000 1
====
6. Other Operating Income
Year
ended
April 30,
1993
#m
Commission received 0.7
Loss on sale of fixed assets (0.4)
Profit on lease purchase contracts 1.9
____
2.2
====
<PAGE>
Page 12
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
7. Operating Profit
Operating profit is arrived at after charging:
Year
ended
April 30,
1993
#m
Depreciation of tangible fixed assets:
Assets held under finance leases and hire
purchase contracts 32.7
Own assets 6.0
Operating lease rentals:
Plant and machinery 0.4
Other 0.6
Auditors' remuneration:
Audit services 0.1
====
8. Net Interest Payable
Year
ended
April 30,
1993
#m
Interest payable:
Bank loans and overdrafts due within five years (0.6)
Third party finance leases (0.1)
Finance leases with the Tiphook plc Group (12.4)
Hire purchase contracts with the Tiphook plc Group (10.2)
Loans from the Tiphook plc Group companies due within five years (13.8)
____
(37.1)
Interest receivable:
Short-term bank deposits 0.1
Receivable from the Tiphook plc Group 1.5
Other third party interest receivable 0.4
____
(35.1)
====
<PAGE>
Page 13
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
9. Tax on Profit on Ordinary Activities
Year
ended
April 30,
1993
#m
Tax on profit on ordinary Activities -
====
The UK operating subsidiaries of the Container Rental Businesses receive
allowances against profits subject to corporation tax on qualifying
capital expenditures and lease payments in the year in which such
expenditures or payments arise or, where the allowances and lease
payments exceed the profits which would otherwise be liable to
corporation tax, in the subsequent years. Allowances against corporation
tax in the year ended April 30, 1993 represented more than the sum of the
Container Rental Businesses' profit which would otherwise have been
taxable. Accordingly, the Container Rental Businesses had no profits
attracting UK corporation tax in this fiscal year and the surplus
allowances have been carried forward for relief in the future. Deferred
taxation was not provided because, on the basis of anticipated levels of
capital expenditure, capital allowances thereon were expected to continue
to exceed depreciation for the next several years.
The Container Rental Businesses has a number of subsidiaries resident in
overseas tax jurisdictions and in each jurisdiction allowances for tax,
depreciation and lease rentals paid have, in the most part to date,
exceeded profits which would otherwise be subject to corporation tax.
Surplus allowances are carried forward for offset in future years to the
extent that local laws allow.
10. Dividends
Year
ended
April 30,
1993
#m
Dividends payable on:
TCR Ordinary shares 40.0
____
40.0
====
<PAGE>
Page 14
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
11. Tangible Fixed Assets
<TABLE>
<CAPTION>
Containers used for rental Office
_______________________________________ equipment
Hire Finance Sub and motor
Owned purchase lease Total vehicles Total
#m #m #m #m #m #m
<S> <C> <C> <C> <C> <C> <C>
Cost
At May 1, 1992 100.8 147.1 372.7 620.6 5.7 626.3
Exchange differences 4.8 26.4 47.9 79.1 0.2 79.3
Additions 57.6 - - 57.6 1.7 59.3
Transfers (69.8) 79.9 (10.1) - - -
Disposals (8.8) - (8.7) (17.5) (0.1) (17.6)
_____ _____ _____ _____ ____ _____
At April 30, 1993 84.6 253.4 401.8 739.8 7.5 747.3
_____ _____ _____ _____ ____ _____
Depreciation
At May 1, 1992 20.0 3.9 62.2 86.1 2.0 88.1
Exchange differences 0.4 1.4 9.5 11.3 - 11.3
Charge for the year 5.1 10.9 21.8 37.8 0.9 38.7
Provisions - - - - 0.8 0.8
Transfers 3.6 - (3.6) - - -
Disposals (2.9) - (2.4) (5.3) - (5.3)
_____ _____ _____ _____ ____ _____
At April 30, 1993 26.2 16.2 87.5 129.9 3.7 133.6
_____ _____ _____ _____ ____ _____
Net book value
At April 30, 1993 58.4 237.2 314.3 609.9 3.8 613.7
===== ===== ===== ===== ==== =====
</TABLE>
The net book value at April 30, 1993 of fixed assets financed by hire
purchase or finance leases from the Tiphook plc Group is #545.5 million.
<PAGE>
Page 15
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
11. Tangible Fixed Assets (continued)
Year
ended
April 30,
1993
Capital commitments #m
Contracted but not provided for 25.7
=====
Year
ended
April 30,
1993
Cash flow reconciliation #m
Balance sheet additions 59.3
Net decrease of creditors 42.0
_____
Cash flow 101.3
=====
12. Fixed Assets Investments
Year
ended
April 30,
1993
#m
Shares in fellow Tiphook plc Group companies at cost 1.0
=====
The subsidiaries of the Container Rental Businesses, all of which are wholly
owned, are shown below. The principal country of operation is the country of
incorporation or registration. The principal activity of all of the
subsidiaries is the provision of containers for rental.
<PAGE>
Page 16
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
12. Fixed Assets Investments (continued)
Tiphook Container Leasing
(Gibraltar) Ltd Incorporated in Gibraltar
Tiphook Container Rental
(Australasia) Ltd Incorporated in New Zealand
Tiphook Container Rental
(Hong Kong) Ltd Incorporated in Hong Kong
Grampian Containers Ltd Registered in Scotland
Tiphook Container Rental Inc. Incorporated in USA
Tiphook Container Rental (Singapore)
Plc Ltd Incorporated in Singapore
Tiphook Container Rental (Italia) SrL Incorporated in Italy
Tiphook Container Rental (South
America) Ltd Incorporated in Brazil
Tiphook Container Leasing (Gibraltar) Ltd, was wound up on April 29, 1993
and the value of the Container Rental Businesses' investment written off.
All assets and liabilities were transferred to the Container Rental
Businesses on that date.
The investment in Grampian Containers Ltd which cost #1.3 million, has
been included in the financial statements at #nil value at the combined
balance sheet date due to a permanent diminution in value. The results,
assets and liabilities of Grampian Containers Ltd have not been
consolidated.
<PAGE>
Page 17
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
12. Fixed Assets Investments (continued)
Set out below is a brief summary of the net liabilities of Grampian
Containers Ltd.
At
April 30,
1993
#m
Fixed assets 0.8
Current assets 1.0
Creditors - amounts falling due within one year (3.5)
____
Net liabilities (1.7)
====
Creditors comprise amounts due to the Tiphook plc Group of #3.5 million.
The results for the year ended April 30, 1993 of Grampian Containers Ltd
are immaterial in the context of the Container Rental Businesses'
combined profit and loss statements.
<PAGE>
Page 18
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
13. Debtors
At
April 30,
1993
#m
Amounts falling due within
one year:
Trade debtors 45.5
Amounts owed by the Tiphook plc Group 1.3
Other debtors 4.5
Taxation and social security 1.0
Prepayments and accrued income 2.3
____
54.6
====
Amounts falling due after more
than one year:
Other debtors 5.5
Prepayments and accrued income 0.7
____
6.2
____
60.8
====
14. Analysis of Changes in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Cash at Cash and
bank and Bank cash
in hand overdrafts equivalents
#m #m #m
<S> <C> <C> <C>
At April 30, 1992 3.7 (3.3) 0.4
Net cash inflow/(outflow) before adjustment
for effect of foreign exchange rate changes (0.9) 4.8 3.9
Effect of foreign exchange rate changes - (1.5) (1.5)
____ ____ ____
At April 30, 1993 2.8 - 2.8
==== ==== ====
</TABLE>
<PAGE>
Page 19
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
15. Borrowings
At
April 30,
1993
#m
Bank loans (secured) 0.9
Obligations under finance
leases 220.1
Obligations under hire purchase
contracts 230.6
_____
Total borrowings 451.6
=====
Analysed:
Amounts falling due within one year 451.6
Less cash at bank and in hand (2.8)
_____
Net borrowings 448.8
=====
Bank loans of #0.9 million at April 30, 1993 falling due within one year
are secured by means of a fixed charge and mortgage over certain assets
of the Container Rental Businesses.
<PAGE>
Page 20
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
15. Borrowings (continued)
Year
ended
April 30,
1993
#m
Movement in net borrowings:
Cash and cash equivalents
At beginning of year 0.4
Exchange differences (1.5)
Cash inflow 3.9
_____
At end of year 2.8
=====
Other debt
At beginning of year 401.0
New finance 80.3
Exchange differences 52.9
Repayments (82.6)
_____
At end of year 451.6
=====
Net borrowings
At beginning of year 400.6
Movement 48.2
_____
At end of year 448.8
=====
<PAGE>
Page 21
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
15. Borrowings (continued)
Finance leases and hire purchase obligations although classified in
current liabilities (see note 23 post balance sheet events and going
concern), are repayable by instalments as follows:
Hire purchase
Finance leases obligations
1993 1993
#m #m
April 30, 1994 67.5 28.7
April 30, 1995 61.0 31.2
April 30, 1996 49.6 34.0
April 30, 1997 26.5 37.0
April 30, 1998 12.2 40.2
April 30, 1999 1.2 43.8
April 30, 2000 1.2 8.7
April 30, 2001 0.9 3.0
April 30, 2002 - 3.3
April 30, 2003 - 0.7
_____ _____
220.1 230.6
===== =====
Finance leases with the Tiphook plc Group amount to #216.3 million at
April 30, 1993.
All hire purchase obligations are to the Tiphook plc Group.
16. Other Creditors
At
April 30,
1993
#m
Amounts falling due within one year:
Trade creditors 5.1
Container purchases 2.1
Amounts owed to the Tiphook plc Group 104.6
Other creditors 1.0
Taxation and social security 0.2
Dividends owed to the Tiphook plc Group 40.0
Accruals and deferred income 9.4
_____
162.4
=====
Amounts falling due after more than one year:
Accruals and deferred income 0.2
=====
<PAGE>
Page 22
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
17. Operating Lease Obligations
At April 30, 1993, there were annual commitments under non-cancellable
operating leases as set out below:
Land and
buildings Other
1993 1993
#m #m
Operating leases which expire:
Within one year - 0.1
In two to five years - 0.5
After five years 0.6 -
___ ___
0.6 0.6
=== ===
18. Provisions for Liabilities and Charges
Refurbishment provision:
The refurbishment provision was established on the acquisition of assets
from Sea Containers Limited in 1991.
At
April 30,
1993
#m
Balance brought forward 1.9
Utilisation (1.9)
___
Balance carried forward -
===
<PAGE>
Page 23
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
19. Deferred taxation
The full potential liability, for which no provision has been made,
comprises:
At
April 30,
1993
#m
Capital allowances in excess of depreciation 53.2
Other timing differences (0.1)
_____
53.1
=====
20. Called up Share Capital
At
April 30,
1993
#m
Authorised, allotted and fully paid:
TCR Ordinary shares of #1 each 1.8
Rentals Ordinary shares of #1 each 142.9
_____
144.7
=====
<PAGE>
Page 24
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
21. Movements in Shareholders' Funds
<TABLE>
<CAPTION>
Foreign Goodwill
Share Exchange Profit Write
Share Premium Fluctuation and Loss Off
GROUP Capital Account Reserve Account Reserve Total
#m #m #m #m #m #m
<S> <C> <C> <C> <C> <C> <C>
At April 30, 1992 144.7 0.1 (3.7) 77.4 (145.4) 73.1
Profit attributable to
Shareholders - - - 34.9 - 34.9
Ordinary dividends - - - (40.0) - (40.0)
Exchange adjustments - - (3.9) - - (3.9)
_____ ___ ____ _____ ______ _____
At April 30, 1993 144.7 0.1 (7.6) 72.3 (145.4) 64.1
===== === ==== ===== ====== =====
</TABLE>
22. Contingencies
TCR guarantees the borrowings of subsidiaries and fellow subsidiaries of
the Tiphook plc Group in the normal course of business.
TCR, Tiphook plc and the main operating companies of the Tiphook plc
Group jointly and severally unconditionally guarantee as to principal and
interest the US $700 million Notes described below, issued in the US
Public Market, during the year ended April 30, 1993, by Tiphook Finance
Corporation, a fellow Tiphook plc Group company.
$150 million 10 3/4 % Notes Due 2002
$350 million 8 % Notes Due 2000
$200 million 7 l/8 % Notes Due 1998
<PAGE>
Page 25
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
23. Post Balance Sheet Events and Going Concern Matters
(a) Transamerica transaction
Tiphook plc completed the sale of substantially all the assets and certain
specified liabilities of the Container Rental Businesses ("the Sale") to
Transamerica Container Acquisition Corporation ("Transamerica") on March 15,
1994.
Sale proceeds of #673 million were received on March 15, 1994 with further
amounts receivable upon the procuring of title to certain assets and release
of escrows, resulting in a maximum total consideration of up to #722 million.
The purchase price is subject to adjustment on the basis of a post-completion
audit of the adjusted net assets at completion (as defined in the Asset
Purchase Agreement).
The Sale will be reflected in the statutory financial statements of Tiphook
Container Rental Company Limited and Tiphook Rentals Limited for the year
ending April 30, 1994 as will the repayment of these companies' finance.
Tiphook plc's Container Rental Businesses ceased trading as of March 15, 1994.
(b) Going concern and other matters
The unaudited combined financial statements have been prepared from the
statutory financial statements of Tiphook Container Rental Company Limited and
Tiphook Rentals Limited which were prepared under the assumption that the
companies would continue as going concerns. The Container Rental Businesses
includes legal entities which are dependent on the Tiphook plc Group to meet
their obligations as they fall due. The matters discussed below with respect
to the Tiphook plc Group raise substantial doubt about the Tiphook plc Group's
ability to continue as a going concern, and, therefore, raise substantial
doubt about the ability of the legal entities comprising the Container Rental
Businesses to continue as going concerns.
On October 7, 1993 Tiphook published an announcement advising of revised
financial forecasts which indicated a loss for the six months ended October
31, 1993. This weaker than expected performance coupled with the write-offs
incurred in the year ended April 30, 1993 have resulted in higher than
forecast current and projected levels of borrowings and gearing.
<PAGE>
Page 26
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
23. Post Balance Sheet Events and Going Concern Matters (continued)
On November 15, 1993 Tiphook announced that it was likely to incur a loss in
the six months ending April 30, 1994 and that it did not expect to pay
dividends for the financial year ending April 30, 1994. The announcement
also contained details of the on demand facilities made available to the
Tiphook plc Group by its principle bankers ("the Banks") and stated that the
Tiphook plc Group was in breach of certain of its banking covenants.
Breaches of covenants and classification of debt
The Tiphook plc Group's circumstances resulted in actual and prospective
breaches of covenants contained in a number of the Tiphook plc Group's
financing agreements. As a result, all borrowings and liabilities under
forward foreign exchange contracts and interest rate swap agreements of the
Tiphook plc Group at October 31, 1993 have been classified in current
liabilities until final completion of the Sale and the future financing of the
Tiphook plc Group is determined.
Liquidity requirements
The Tiphook plc Group's Banks have made available to the Tiphook plc Group
facilities ("the New Bank Facilities") which, subject to the terms of the
agreement, are available to the Tiphook plc Group to meet immediate working
capital requirements, certain equipment purchase requirements and servicing of
the Tiphook plc Group's borrowings. The amount made available under the New
Bank Facilities has been agreed by Tiphook plc with the Banks on the basis of
a business plan submitted to the Banks. The business plan contains a number
of assumptions including completion of the refinancing arrangements,
satisfactory agreement of the purchase price adjustment with Transamerica,
receipt of the forecast amount of the escrow balances, no liability being
incurred under the class action litigation referred to below and the
shareholders approving a special resolution to adopt a new borrowing limit
under Tiphook plc's Articles of Association. The amounts made available to
the Tiphook plc Group by the Banks are restricted to the amounts forecast as
being required with a narrow margin for contingencies, particularly with
regard to covenants contained in the New Bank Facilities. Any deterioration
in trading performance from that predicted in the forecast or other
unanticipated cash requirements could lead to the Tiphook plc Group being
unable to trade within the proposed facility.
<PAGE>
Page 27
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
23. Post Balance Sheet Events and Going Concern Matters (continued)
Future commitments
In addition to working capital requirements, the Tiphook plc Group requires
further financing to meet its future capital expenditure commitments, beyond
the current financial year under the trailer fleet realignment programme
amounting at October 31, 1993 to #177.5 million net of advance payments of
#62.4 million. The Tiphook plc Group has renegotiated its commitments but the
fulfilment of these commitments will still depend on future finance being
available from 1996 onwards. The contracts which provide for substantial
damages, including loss of a substantial portion of the advance payments made,
if the Tiphook plc Group does not fulfil its commitments.
Increase in borrowing limit
At an Extraordinary General Meeting on October 25, 1993 Tiphook plc's
shareholders approved an increase to the borrowing limit in its Articles of
Association from five times Tiphook plc's adjusted capital and reserves, as
shown in the previous audited financial statements, to #1.3 billion. This
increased limit applies until the day after the next Annual General Meeting.
Based on the forecast adjusted capital and reserves, after giving effect to
the completion of the Sale and the application of the proceeds thereof, it is
presently expected that the Tiphook plc Group will have borrowings of
significantly greater than five times its adjusted capital and reserves in the
foreseeable future and will require shareholders' approval to adopt a new
borrowing limit. For this reason it is intended that an Extraordinary General
Meeting will be convened for the day of the 1994 annual general meeting at
which a resolution will be proposed to adopt a new borrowing limit appropriate
to the Tiphook plc Group's future borrowing requirements.
Litigation
In October 1993, four purported shareholder class actions were brought in the
United States District Court for the District of New Jersey against Tiphook
plc and certain of its directors. On January 17, 1994, the plaintiffs served
the defendants with a consolidated amended complaint, in which violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder and Sections 11 and 15 of the Securities Act of 1933 are alleged
against Tiphook plc, certain of its directors, Tiphook Finance Corporation and
the underwriters (Salomon Brothers Inc., Shearson Lehman Brothers Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation and NatWest Capital
Markets Limited) of the Notes issued in November 1992, and March and April
1993 aggregating $700 million. This litigation (the "Class Action
<PAGE>
Page 28
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
23. Post Balance Sheet Events and Going Concern Matters (continued)
Litigation") is a purported class action brought on behalf of persons who
purchased Tiphook American Depository Receipts and Notes between October 8,
1992 and November 15, 1993. The allegations of false and misleading
statements relate to press announcements and filings made by Tiphook plc with
the Securities and Exchange Commission during the alleged class period, and
the registration statements for the issuance of the Notes. The complaint also
contains assertions that insider trading occurred, although there is no claim
for relief based on insider trading. Although the complaint with respect to
this litigation does not specify an amount of damages sought, Section 11 of
the United States Securities Act of 1933 provides that a purchaser of
securities may seek damages in an amount up to the price at which such
securities were issued to the public if the registration statement pursuant to
which such securities were issued contained an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein not misleading. Accordingly, a successful claim under Section 11 with
respect to the Notes could result in liability to Tiphook plc of up to
$699,061,000, the aggregate of the prices at which each Series of Notes was
offered to the public. Tiphook plc intends to defend vigorously the claims
alleged in this litigation. Tiphook plc has made provision in its October 31,
1993 interim financial information for legal costs to be incurred with respect
to defending Tiphook plc in this litigation but not for the potential cost of
any judgement or settlement. There can be no assurance as to the final
outcome of this litigation or that it will not have a material adverse effect
on the Tiphook plc Group and therefore the Container Rental Businesses.
Exceptional costs and write offs
On February 14, 1994 Tiphook plc announced an unaudited interim loss of #179.7
million for the six months ended October 31, 1993. These results included
exceptional charges totalling #154.6 million. These charges arise principally
from the deterioration in the Tiphook plc Group's financial position
subsequent to April 30, 1993 referred to above and from a review of the
carrying value of certain of its assets in the light of these changed
financial circumstances and against the background of persisting difficulties
in some segments of the Tiphook plc Group's markets. As part of a package of
measures to address those difficulties and secure the support of the Banks the
Tiphook plc Group has taken steps to reduce current and future expenditure and
commitments, maximize cash generation and reduce debt through asset sales.
The various actions taken to achieve these goals have led to additional costs
being incurred or to a need to provide for the foreseeable cost of proposed
actions in the future.
<PAGE>
Page 29
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
23. Post Balance Sheet Events and Going Concern Matters (continued)
Included in these exceptional costs is #4.5 million as provision for
permanent diminution in the value of operating assets of the Container Rental
Businesses. Included in these exceptional costs and write offs is an amount
of #16 million in relation to a former associated company of Tiphook plc and
related parties.
Tiphook plc reached agreement by way of a Deed of Settlement to terminate
substantially all its commitments in respect of IAF Group PLC ("IAF") (a
former associated company) and various related parties. In 1992, Tiphook plc
sold to Galaxy Management Limited ("Galaxy") its 50% interest in IAF (then
known as TAF Group Limited). The sale contract provided for the purchase
price of #3 million to be paid on deferred terms of which #1.8 million remains
unpaid. Under the Deed of Settlement, Tiphook plc agreed to accept #1.25
million from Galaxy in full and final settlement of Galaxy's payment and other
obligations under the sale contract but only if Galaxy procured the release
of, or a counter indemnity in respect of, guarantees and letters of credit
which were provided or procured by Tiphook plc pursuant to obligations under
the sale contract. Tiphook plc's maximum contingent liability under these
guarantees and letters of credit is #12.3 million.
The Deed of Settlement provided for Tiphook plc to accept #0.75 million from
IAF in full and final settlement of all amounts due from IAF and its
subsidiaries and related parties under various contracts. The settlement and
release is conditional on performance by IAF and its related companies of
various obligations including those of Galaxy referred to above. IAF agrees
to assist Tiphook plc in finding a purchaser for the property at 12 Curzon
Street, London and to assist Tiphook plc in terminating various leases of
containers which are to be include in the Sale. Under the Deed of Settlement,
Tiphook plc terminates various arrangements it has with Darwen Leasing (a
company of which the Chairman of IAF is a director) including arrangements
between the companies for the lease of a small aircraft. As a result of these
arrangements, provisions and write offs totalling #16 million were made in the
accounts to October 31, 1993.
<PAGE>
Page 30
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
24. Summary of Differences between UK GAAP and US GAAP
These combined financial statements are prepared in accordance with UK
generally accepted accounting principles ("GAAP") which differs in certain
significant respects from US GAAP. Differences which have a significant
effect on the combined profit and shareholders' funds are discussed and
quantified in a table of adjustments below. While this is not a comprehensive
summary of all differences between UK GAAP and US GAAP, other differences are
considered unlikely to have a significant effect on the profit and
shareholders funds of the Container Rental Businesses.
(a) Deferred income taxes
Under UK GAAP, deferred taxes are provided on timing differences only where it
is considered probable that such taxes will become payable in the foreseeable
future. Under US GAAP, deferred tax must be provided on all timing
differences (including those arising from other US GAAP adjustments)
irrespective of the amount and timing of future tax payments.
(b) Goodwill
Under UK GAAP, the Container Rental Businesses have adopted the conservative
accounting treatment of writing off goodwill against shareholders' funds in
the year in which it arises. US GAAP requires that goodwill is capitalised
and amortised through the profit and loss account over the estimated period of
benefit. For US GAAP purposes goodwill is amortised on a straight line basis
over 40 years.
(c) Foreign currency translation and forward contracts
Under UK GAAP substantially all of the Container Rental Businesses' operating
assets have been denominated in foreign currency to match related foreign
currency financing of such assets. Differences resulting from translation of
such net assets into pounds sterling are taken directly to shareholders'
equity. Under US GAAP, such assets would be denominated in the functional
currency, pounds sterling, and differences on foreign currency liabilities
would be included in the determination of net income.
<PAGE>
Page 31
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
24. Summary of Differences between UK GAAP and US GAAP (continued)
The Container Rental Businesses have entered into forward foreign currency
contracts with a fellow subsidiary under which a significant portion of net
foreign currency earnings were sold forward into pounds sterling. These
contracts would not qualify as hedges under US GAAP and, as such, unrealised
gains or losses on open contracts would be included in the determination of
net income. Since there were no such open contracts at April 30, 1993, this
difference between US and UK GAAP has no impact on net income or shareholders'
equity as of, or for, the year ended April 30, 1993.
UK/US GAAP Reconciliation:
1. Profit on ordinary activities after taxation
The following is a summary of the significant items, net of applicable tax,
which reconcile the combined profit and loss account reported under UK GAAP to
that which would have been reported had US GAAP been applied.
Year
ended
April 30,
1993
#m
Profit on ordinary activities after taxation under UK 34.9
US GAAP adjustments:
Translation of foreign currency balances (3.9)
Deferred tax (8.0)
Goodwill (3.6)
____
Profit on ordinary activities after taxation
under US GAAP 19.4
====
<PAGE>
Page 32
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE COMBINED FINANCIAL STATEMENTS
Year ended April 30, 1993
UK/US GAAP Reconciliation (continued):
2. Shareholders' funds
The following is a summary of the significant items, net of applicable tax,
which reconcile shareholders' funds reported under UK GAAP to that which
would have been reported had US GAAP been applied.
#m
Shareholders' funds under UK GAAP 64.1
US GAAP adjustments:
Deferred tax (53.1)
Goodwill 134.2
_____
Shareholders' funds under US GAAP 145.2
=====
<PAGE>
<PAGE>
EXHIBIT EX-28.2
TIPHOOK PLC CONTAINER RENTAL
BUSINESSES
Unaudited Combined Interim
Financial Information
October 31, 1993
Touche Ross & Co.
Peterborough Court
133 Fleet Street
London EC4A 2TR
<PAGE>
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
INDEX TO UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
Page
Unaudited combined profit and loss statement 2
Unaudited combined statement of total recognised gains and losses 3
Unaudited combined balance sheet 4
Unaudited combined cash flow statement 5
Notes to the unaudited combined interim financial information 6
<PAGE>
Page 1
This page intentionally left blank
<PAGE>
Page 2
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
COMBINED PROFIT AND LOSS STATEMENT
Six months ended October 31, 1993
Note Six months Six months
ended ended
October 31, October 31,
1992 1993
(unaudited) (unaudited)
#m #m
TURNOVER from continuing operations 2 87.1 88.1
COST OF SALES
Operating depreciation (18.7) (21.9)
Exceptional operating asset writedowns - (4.5)
Other cost of sales (18.1) (18.4)
_____ _____
Total cost of sales (36.8) (44.8)
_____ _____
GROSS PROFIT 50.3 43.3
Distribution costs (3.7) (7.1)
Administrative expenses (4.7) (11.1)
Other operating income/(expenses) 1.8 (0.2)
_____ _____
OPERATING PROFIT from continuing operations 43.7 24.9
Investment income - 0.2
Net interest payable (16.4) (18.7)
_____ _____
RETAINED PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 27.3 6.4
Tax on profit on ordinary activities 5 - -
_____ _____
RETAINED PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 27.3 6.4
===== =====
<PAGE>
Page 3
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
COMBINED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Six months ended October 31, 1993
Six months Six months
ended ended
October 31, October 31,
1992 1993
(unaudited) (unaudited)
#m #m
Profit on ordinary activities after
taxation 27.3 6.4
Currency translation differences (0.7) 0.2
____ ___
Total recognised gains and losses 26.6 6.6
==== ===
Movements in shareholders's funds are set out in note 11.
<PAGE>
Page 4
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
COMBINED BALANCE SHEET
October 31, 1993
Note April 30, October 31,
1993 1993
(unaudited)
#m #m
FIXED ASSETS
Tangible assets 6 613.7 630.0
Investments 7 1.0 1.0
_____ _____
614.7 631.0
_____ _____
CURRENT ASSETS
Debtors 60.8 56.4
Cash at bank and in hand 2.8 1.8
_____ _____
63.6 58.2
CREDITORS - amounts falling due within
one year
Bank overdrafts and working capital
facilities 8 - (0.4)
Other borrowings 8 (451.6) (436.0)
Other creditors (162.4) (182.1)
_____ _____
(614.0) (618.5)
_____ _____
NET CURRENT LIABILITIES (550.4) (560.3)
_____ _____
TOTAL ASSETS LESS CURRENT LIABILITIES 64.3 70.7
CREDITORS - amounts falling due after more than
one year (0.2) -
_____ _____
64.1 70.7
===== =====
CAPITAL AND RESERVES
Called up share capital 10 144.7 144.7
Reserves 11 64.8 71.4
_____ _____
GROSS SHAREHOLDERS' FUNDS 209.5 216.1
Goodwill write off reserve (145.4) (145.4)
_____ _____
NET SHAREHOLDERS' FUNDS 64.1 70.7
===== =====
<PAGE>
Page 5
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
COMBINED CASH FLOW STATEMENT
Six months ended October 31, 1993
Note Six months Six months
ended ended
October 31, October 31,
1992 1993
(unaudited) (unaudited)
#m #m
Net cash inflow from operating activities 3 47.2 99.0
Returns on investments and servicing of
finance
Net interest paid (0.4) (0.2)
Interest paid to the Tiphook plc Group (18.3) (18.4)
Ordinary dividends paid (30.0) (40.0)
_____ ____
Net outflows from returns on investments
and servicing of finance (48.7) (58.6)
_____ ____
Net cash (outflow)/inflow before investing and
financing (1.5) 40.4
Investing activities
Purchase of tangible fixed assets (81.5) (7.4)
Sale of tangible fixed assets 6.9 5.8
_____ ____
Net cash outflow from investing activities (74.6) (1.6)
_____ ____
Net cash (outflow)/inflow before
financing (76.1) 38.8
Financing
New financing from group companies 117.6 10.4
Scheduled finance repayments (1.5) (1.4)
Scheduled finance repayments to group
companies (38.2) (49.4)
_____ ____
Net cash inflow/(outflow) from financing 77.9 (40.4)
_____ ____
Increase/(decrease) in cash and cash
equivalents 4 1.8 (1.6)
===== ====
<PAGE>
Page 6
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
1. Accounting Policies
Basis of Combination
The accompanying unaudited combined interim financial information aggregates
the unaudited interim consolidated financial information of Tiphook Container
Rental Company Limited ("TCR") and the unaudited interim financial information
of Tiphook Rentals Limited ("Rentals") (together "the Container Rental
Businesses"). Turnover and profits arising on trading between companies
within the Container Rental Businesses are excluded. Grampian Containers
Ltd, the only UK subsidiary of Tiphook Container Rental Company Limited, has
been excluded from the financial information as its inclusion would not be
material. Tiphook plc and its subsidiaries other than the Container Rental
Businesses are hereinafter referred to as "the Tiphook plc Group".
The accompanying unaudited combined interim financial information as at
October 31, 1993 has been prepared in accordance with generally accepted
accounting principles in the United Kingdom ("UK GAAP") which differ in
certain material respects from generally accepted accounting principles in the
United States ("US GAAP") - see Note 14. The accompanying financial
information does not represent the statutory financial statements of the
companies comprising the Container Rental Businesses. The statutory financial
statements for these companies for the year ended April 30, 1993, on which the
auditors' report was unqualified but contained explanatory paragraphs
concerning matters that raise substantial doubt about the Container Rental
Businesses' ability to continue as going concerns, have been delivered to the
Registrar of Companies in England and Wales. Amounts in the accompanying
combined interim financial information are stated in pounds sterling (#), the
currency of the country in which the companies comprising the Container Rental
Businesses are incorporated.
The interim financial information of the Container Rental Businesses reflect
all adjustments which are, in the opinion of management, necessary for a fair
statement of the combined results for the periods presented.
This presentation of the Container Rental Businesses differs from that
presented in the circular to shareholders of Tiphook plc dated February 14,
1994, principally in respect of financing related adjustments which were
allocated to the Container Rental Businesses. This presentation is a pure
aggregation of the financial statements of the legal entities comprising the
Container Rental Businesses.
<PAGE>
Page 7
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
1. Accounting Policies (continued)
The unaudited combined interim financial information has been prepared under
the historical cost convention and in accordance with applicable accounting
standards generally accepted in the United Kingdom. The principal accounting
policies are described below.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to rules and regulations of the
Securities and Exchange Commission. This unaudited combined interim financial
information should be read in conjunction with the audited combined financial
statements and notes thereto of the Container Rental Businesses for the year
ended April 30, 1993.
Foreign exchange
The functional currency of the Container Rental Businesses is sterling.
Transactions in other currencies are recorded at average rates of exchange
ruling during the periods in which the transactions take place. Exchange
differences arising on such transactions are dealt with in the Profit and Loss
Statement.
Gains and losses on forward currency contracts which hedge future currency
exposures are reported with the related transactions to leave them stated at
the forward contract rate. Differences arising on the translation of the
financial statements into pounds sterling (#), the Container Rental
Businesses' reporting currency, are dealt with in the Foreign Exchange
Fluctuation Reserve.
Turnover
Turnover from trading activities is the amount derived from the provision of
goods and services falling within the Container Rental Businesses' ordinary
activities after excluding trade discounts and value added tax.
Operating leases
Operating lease rentals are charged to the Profit and Loss Account as
incurred.
<PAGE>
Page 8
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
1. Accounting Policies (continued)
Pension costs
The companies within the Container Rental Businesses are members of the
Tiphook Group Retirement Benefit Scheme, a defined benefit funded pension
scheme operated by Tiphook plc. The expected pension cost is charged to the
Profit and Loss Account so as to spread the cost of pensions over the service
lives of employees in the scheme. The pension cost is assessed in accordance
with the advice of qualified actuaries. Actuarial surpluses and deficits are
spread over the expected remaining service lives of current employees in the
scheme.
Maintenance costs
Expenditure relating to the maintenance of containers in respect of general
wear and tear is written off in the year in which it is incurred.
Taxation
Deferred taxation is not provided in respect of significant timing differences
unless it is probable that such tax will become payable in the foreseeable
future.
Advance corporation tax is written off unless it can either be set against
provisions for taxation or is recoverable against tax liabilities in respect
of the following period in which case it is deferred.
No allowance is made for taxation that might arise on the remittance of
retained profits by overseas subsidiaries subsequent to the balance sheet
date.
Tangible fixed assets and depreciation
For all tangible fixed assets, depreciation is calculated to write down their
cost to estimated residual value over their estimated useful economic lives by
equal annual instalments.
<PAGE>
Page 9
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
1. Accounting Policies (continued)
The estimated useful lives and residual values of tangible fixed assets are as
follows:
Estimated Estimated
useful lives residual value
Dry freight containers 15 years 15% of cost
Tank containers 25 years 20% of cost
Office equipment and motor vehicles 5 years nil
2. Analysis of Turnover, Profit and Capital Employed
Turnover, operating profit and capital employed derives from the Container
Rental Businesses' main business of container rental. The business, which is
located principally in the United Kingdom, is carried out on an international
basis. Assets are centrally controlled and contracts allow customers to use
and return equipment anywhere within its worldwide network. Revenue and
assets cannot, therefore, be attributed to a particular geographical area and
accordingly, the directors do not consider it practical or meaningful to
provide such an analysis.
3. Reconciliation of Operating Profit to Net Cash Inflow from Operating
Activities
Six months Six months
ended ended
October 31, October 31,
1992 1993
(unaudited) (unaudited)
#m #m
Operating profit 43.7 24.9
Depreciation charge 19.2 22.4
Profit on sale of tangible fixed assets (0.2) (0.3)
Provision against fixed assets - 4.7
(Increase)/Decrease in debtors (6.0) 8.7
(Decrease)/Increase in creditors (1.0) 1.3
(Decrease)/Increase in amount due to the
Tiphook plc Group (4.3) 37.3
Decrease in provisions (1.9) -
Operating costs capitalised (2.3) -
____ ____
Net cash inflow from operating activities 47.2 99.0
==== ====
<PAGE>
Page 10
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
3. Reconciliation of Operating Profit to Net Cash Inflow from Operating
Activities (continued)
Changes in working capital are stated after excluding movements due to foreign
exchange.
4. Analysis of Change in Cash and Cash Equivalents
Cash at Cash and
bank and Bank cash
in hand overdrafts equivalents
(unaudited) (unaudited) (unaudited)
#m #m #m
At April 30, 1993 2.8 - 2.8
Net cash inflow/(outflow) before
adjustment for effect of foreign
exchange rate changes (1.0) (0.6) (1.6)
Effect of foreign exchange rate changes - 0.2 0.2
___ ___ ___
At October 31, 1993 1.8 (0.4) 1.4
=== === ===
5. Tax on Profit on Ordinary Activities
Six months Six months
ended ended
October 31, October 31,
1992 1993
(unaudited) (unaudited)
#m #m
Tax on profit on ordinary activities - -
=== ===
The UK operating subsidiaries of the Container Rental Businesses receive
allowances against profits subject to corporation tax on qualifying capital
expenditures and lease payments in the year in which such expenditures or
payments arise or, where the allowances and lease payments exceed the profits
which would otherwise be liable to corporation tax, in the subsequent years.
Allowances against corporation tax in the year ended April 30, 1993
represented more than the sum of the Container Rental Businesses' profit which
<PAGE>
Page 11
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
5. Tax on Profit on Ordinary Activities (continued)
would otherwise have been taxable. Accordingly, the Container Rental
Businesses had no profits attracting UK corporation tax in this fiscal year
and it is anticipated that there will be no UK corporation tax charge for the
six months ended October 31, 1993 the surplus allowances have been carried
forward for relief in the future. Deferred taxation was not provided because,
on the basis of anticipated levels of capital expenditure, capital allowances
thereon were expected to continue to exceed depreciation for the next several
years.
The Container Rental Businesses has a number of subsidiaries resident in
overseas tax jurisdictions and in each jurisdiction allowances for tax,
depreciation and lease rentals paid have, in the most part to date, exceeded
profits which would otherwise be subject to corporation tax. Surplus
allowances are carried forward for offset in future years to the extent that
local laws allow.
6. Tangible Fixed Assets
Office
Containers equipment
used for and motor
rental vehicles Total
(unaudited) (unaudited) (unaudited)
#m #m #m
Cost
At May 1, 1993 739.8 7.5 747.3
Exchange differences 41.2 0.1 41.3
Additions 15.5 0.4 15.9
Disposals (9.8) (0.2) (10.0)
_____ ___ _____
At October 31, 1993 786.7 7.8 794.5
===== === =====
Depreciation
At May 1, 1993 129.9 3.7 133.6
Exchange differences 5.6 - 5.6
Charge for the period 21.9 0.5 22.4
Provisions 4.5 - 4.5
Transfers - - -
Disposals (1.6) - (1.6)
_____ ___ _____
At October 31, 1993 160.3 4.2 164.5
===== === =====
<PAGE>
Page 12
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
6. Tangible Fixed Assets (continued)
Office
Containers equipment
used for and motor
rental vehicles Total
(unaudited) (unaudited) (unaudited)
#m #m #m
Net book value
At October 31, 1993 626.4 3.6 630.0
===== === =====
Net book value
At April 30, 1993 609.9 3.8 613.7
===== === =====
The net book value at October 31, 1993 of fixed assets financed by hire
purchase or finance leases from the Tiphook plc Group is #491.0 million.
Six months
ended
October 31,
1993
(unaudited)
#m
Cash flow reconciliation
Balance sheet additions 15.9
Net increase in creditors (8.5)
____
Cash flow 7.4
====
7. Fixed Asset Investments
At April 30, At October 31,
1993 1993
(unaudited)
#m #m
Shares in fellow Tiphook plc group companies at cost 1.0 1.0
=== ===
<PAGE>
Page 13
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
7. Fixed Asset Investments (continued)
The subsidiaries of TCR, all of which are wholly owned, are shown below. The
principal country of operation is the country of incorporation or
registration. The principal activity of all of the subsidiaries is the
provision of containers for rental.
Tiphook Container Leasing
(Gibraltar) Ltd Incorporated in Gibraltar
Tiphook Container Rental
(Australasia) Ltd Incorporated in New Zealand
Tiphook Container Rental
(Hong Kong) Ltd Incorporated in Hong Kong
Grampian Containers Ltd Registered in Scotland
Tiphook Container Rental Inc. Incorporated in USA
Tiphook Container Rental (Singapore)
Plc Ltd Incorporated in Singapore
Tiphook Container Rental (Italia) SrL Incorporated in Italy
Tiphook Container Rental (South
America) Ltd Incorporated in Brazil
Tiphook Container Leasing (Gibraltar) Ltd, was wound up on April 29, 1993 and
the value of TCR's investment written off. All assets and liabilities were
transferred to TCR on that date.
The investment in Grampian Containers Ltd which cost #1.3 million, has been
included in the financial statements at #nil value at each balance sheet date
due to a permanent diminution in value. The results, assets and liabilities
of Grampian Containers Ltd have not been consolidated. Set out below is a
brief summary of the net liabilities of Grampian Containers Ltd.
At April 30, At October 31,
1993 1993
(unaudited)
#m #m
Fixed assets 0.8 0.6
Current assets 1.0 0.6
Creditors-amounts falling due within one year (3.5) (3.0)
___ ___
Net liabilities (1.7) (1.8)
=== ===
<PAGE>
Page 14
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
7. Fixed Asset Investments (continued)
Included in creditors at October 31, 1993 are amounts due to the Tiphook plc
Group of #3.0 million.
The result for the six months ended October 31, 1993 of Grampian Containers
Ltd are immaterial in the context of the Container Rental Businesses' combined
profit and loss statement.
8. Borrowings
At April 30, At October 31,
1993 1993
(unaudited)
#m #m
Bank overdrafts - 0.4
Bank loans (secured) 0.9 -
Obligations under finance leases 220.1 197.3
Obligations under hire purchase contracts 230.6 238.7
_____ _____
Total borrowings 451.6 436.4
===== =====
Analysed:
Amounts falling due within one year 451.6 436.4
Less cash at bank and in hand (2.8) (1.8)
_____ _____
Net borrowings 448.8 434.6
===== =====
<PAGE>
Page 15
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
8. Borrowings (continued)
At October
31,
1993
(unaudited)
#m
Movement in net borrowings:
Cash and cash equivalents
At May 1, 1993 2.8
Exchange differences 0.2
Cash outflow (1.6)
_____
At October 31, 1993 1.4
=====
Other debt
At May 1, 1993 451.6
New finance 10.4
Exchange differences 24.8
Repayments (50.8)
_____
At October 31, 1993 436.0
=====
Net borrowings
At beginning of period 448.8
Movement (14.2)
_____
At end of period 434.6
=====
Finance leases with the Tiphook plc Group amount to #193.8 million at
October 31, 1993.
All hire purchase obligations are to the Tiphook plc Group.
All borrowings have been classified as falling due within one year as a
consequence of matters explained in note 13: Post balance sheet events and
going concern matters - classification of debt.
<PAGE>
Page 16
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
9. Deferred Taxation
The full potential liability, for which no provision has been made, comprises:
At April 30, At October 31,
1993 1993
(unaudited)
#m #m
Capital allowances in excess of depreciation 53.2 57.1
Other timing differences (0.1) -
____ ____
53.1 57.1
==== ====
10. Called up Share Capital
At April 30, At October 31,
1993 1993
(unaudited)
#m #m
Authorised, alloted and fully paid:
TCR Ordinary shares of #1 each 1.8 1.8
Rentals Ordinary shares of #1 each 142.9 142.9
_____ _____
144.7 144.7
===== =====
<PAGE>
Page 17
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
11. Movements in Shareholders' Funds
<TABLE>
<CAPTION>
Foreign Goodwill
Share Exchange Profit Write
Share Premium Fluctuation and Loss Off
GROUP Capital Account Reserve Account Reserve Total
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
#m #m #m #m #m #m
<S> <C> <C> <C> <C> <C> <C>
At April 30, 1993 144.7 0.1 (7.6) 72.3 (145.4) 64.1
Profit attributable to
Shareholders - - - 6.4 - 6.4
Exchange adjustments - - 0.2 - - 0.2
_____ ___ ____ ____ ______ ____
At October 31, 1993 144.7 0.1 (7.4) 78.7 (145.4) 70.7
===== === ==== ==== ====== ====
</TABLE>
12. Contingent Liabilities
The Container Rental Businesses guarantees the borrowings of subsidiaries and
fellow subsidiaries in the normal course of business.
The Container Rental Businesses, Tiphook plc and the main operating companies
of the Tiphook plc Group jointly and severally unconditionally guarantee as to
principal and interest the US$700 million Notes described below, issued in the
US public market, during the year ended April 30, 1993, by Tiphook Finance
Corporation, a fellow group company,
$150 million 10 3/4% Notes Due 2002
$350 million 8% Notes Due 2000
$200 million 7 1/8% Notes Due 1998
<PAGE>
Page 18
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
13. Post Balance Sheet Events and Going Concern Matters
(a) Transamerica transaction
Tiphook plc completed the sale of substantially all the assets and certain
specified liabilities of the Container Rental Businesses ("the Sale") to
Transamerica Container Acquisition Corporation ("Transamerica") on March 15,
1994.
Sale proceeds of #673 million were received on March 15, 1994 with further
amounts receivable upon the procuring of title to certain assets and release
of escrows, resulting in a maximum total consideration of up to #722 million.
The purchase price is subject to adjustment on the basis of a post-completion
audit of the adjusted net assets at completion (as defined in the Asset
Purchase Agreement).
The Sale will be reflected in the statutory financial statements of Tiphook
Container Rental Company Limited and Tiphook Rentals Limited for the year
ending April 30, 1994 as will the repayment of these companies' finance.
Tiphook plc's Container Rental Businesses ceased trading as of March 15, 1994.
(b) Going concern and other matters
The unaudited combined interim financial statements have been prepared from
unaudited interim financial information of Tiphook Container Rental Company
Limited and Tiphook Rentals Limited which were prepared under the assumption
that the companies would continue as going concerns. The Container Rental
Businesses includes legal entities which are dependent on the Tiphook plc
Group to meet their obligations as they fall due. The matters discussed below
with respect to the Tiphook plc Group raise substantial doubt about the
Tiphook plc Group's ability to continue as a going concern, and, therefore,
raise substantial doubt about the ability of the legal entities comprising the
Container Rental Businesses to continue as a going concern.
On October 7, 1993 Tiphook plc published an announcement advising of revised
financial forecasts which indicated a loss for the six months ended October
31, 1993. This weaker than expected performance coupled with the write-offs
incurred in the year ended April 30, 1993 resulted in higher than forecast
current and projected levels of borrowings and gearing.
<PAGE>
Page 19
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
13. Post Balance Sheet Events and Going Concern Matters (continued)
On November 15, 1993 Tiphook plc announced that it was likely to incur a loss
in the six months ending April 30, 1994 and that it did not expect to pay
dividends for the financial year ending April 30, 1994. The announcement also
contained details of the on demand facilities made available to the Tiphook
plc Group by its principal bankers ("the Banks") and stated that the Tiphook
plc Group was in breach of certain of its banking covenants.
Breaches of covenants and classification of debt
These changes in the Tiphook plc Group's circumstances resulted in actual and
prospective breaches of covenants contained in a number of the Tiphook plc
Group's financing agreements. As a result, all borrowings and liabilities
under forward foreign exchange contracts and interest rate swap agreements of
the Tiphook plc Group at October 31, 1993 have been classified in current
liabilities until final completion of the Sale and the future financing of the
Tiphook plc Group is determined.
Liquidity requirements
The Tiphook plc Group's Banks have made available to the Tiphook plc Group
facilities ("the New Bank Facilities") which, subject to the terms of the
agreement, are available to the Tiphook plc Group to meet immediate working
capital requirements, certain equipment purchase requirements and servicing of
the Tiphook plc Group's borrowings. The amount made available under the New
Bank Facilities has been agreed by Tiphook plc with the Banks on the basis of
a business plan submitted to the Banks. The business plan contains a number
of assumptions including completion of the refinancing arrangements,
satisfactory agreement of the purchase price adjustment with Transamerica,
receipt of the forecast amount of the escrow balances, no liability being
incurred under the class action litigation referred to below and the
shareholders approving a special resolution to adopt a new borrowing limit
under Tiphook plc's Articles of Association. The amounts made available to
the Tiphook plc Group by the Banks are restricted to the amounts forecast as
being required with a narrow margin for contingencies, particularly with
regard to covenants contained in the New Bank Facilities. Any deterioration
in trading performance from that predicted in the forecast or other
unanticipated cash requirements could lead to the Tiphook plc Group being
unable to trade within the proposed facility.
<PAGE>
Page 20
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
13. Post Balance Sheet Events and Going Concern Matters (continued)
Future commitments
In addition to working capital requirements, the Tiphook plc Group requires
further financing to meet its future capital expenditure commitments, beyond
the current financial year under the trailer fleet realignment programme
amounting at October 31, 1993 to #177.5 million net of advance payments of
#62.4 million. The Tiphook plc Group has renegotiated its commitments but the
fulfillment of these commitments will still depend on future finance being
available from 1996 onwards. The contracts provide for substantial damages,
including loss of a substantial portion of the advance payments made, if the
Tiphook plc Group does not fulfil its commitments.
Increase in borrowing limit
At an Extraordinary General Meeting on October 25, 1993 Tiphook plc's
shareholders approved an increase to the borrowing limit in its Articles of
Association from five times Tiphook plc's adjusted capital and reserves, as
shown in the previous audited financial statements, to #1.3 billion. This
increased limit applies until the day after the next Annual General Meeting.
Based on the forecast adjusted capital and reserves, after giving effect to
the completion of the Sale and the application of the proceeds thereof, it is
presently expected that the Tiphook plc Group will have borrowings of
significantly greater than five times its adjusted capital and reserves in the
foreseeable future and will require shareholders' approval to adopt a new
borrowing limit. For this reason it is intended that an Extraordinary General
Meeting will be convened for the day of the 1994 annual general meeting, at
which a resolution will be proposed to adopt a new borrowing limit appropriate
to the Tiphook plc Group's future borrowing requirements.
Litigation
In October 1993, four purported shareholder class actions were brought in the
United States District Court for the District of New Jersey against Tiphook
plc and certain of its directors. On January 17, 1994, the plaintiffs served
the defendants with a consolidated amended complaint in which violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder and Sections 11 and 15 of the Securities Act of 1933 are alleged
against Tiphook plc, certain of its directors, Tiphook Finance Corporation and
<PAGE>
Page 21
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
13. Post Balance Sheet Events and Going Concern Matters (continued)
the underwriters (Salomon Brothers Inc., Shearson Lehman Brothers Inc.,
Donaldson, Lufkin & Jenrette Securities Corporation and NatWest Capital
Markets Limited) of the Notes issued in November 1992, and March and April
1993 aggregating $700 million. This litigation (the "Class Action
Litigation") is a purported class action brought on behalf of persons who
purchased Tiphook American Depository Receipts and Notes between October 8,
1992 and November 15, 1993. The allegations of false and misleading
statements relate to press announcements and filings made by Tiphook plc with
the Securities and Exchange Commission during the alleged class period, and
the registration statements for the issuance of the Notes. The complaint also
contains assertions that insider trading occurred, although there is no claim
for relief based on insider trading. Although the complaint with respect to
this litigation does not specify an amount of damages sought, Section 11 of
the United States Securities Act of 1933 provides that a purchaser of
securities may seek damages in an amount up to the price at which such
securities were issued to the public if the registration statement pursuant to
which such securities were issued contained an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein not misleading. Accordingly, a successful claim under Section 11 with
respect to the Notes could result in liability to Tiphook plc of up to
$699,061,000, the aggregate of the prices at which each Series of Notes was
offered to the public. Tiphook plc intends to defend vigorously the claims
alleged in this litigation. Tiphook plc has made provision in its October
31, 1993 interim financial information for legal costs to be incurred with
respect to defending Tiphook plc in this litigation but not for the potential
cost of any judgment or settlement. There can be no assurance as to the final
outcome of this litigation or that it will not have a material adverse effect
on the Tiphook plc Group and therefore the Container Rental Businesses.
Exceptional costs and write offs
On February 14, 1994 Tiphook plc announced an unaudited interim loss of
#179.7 million for the six months ended October 31, 1993. These results
included exceptional charges totalling #154.6 million. These charges arise
principally from the deterioration in the Tiphook plc Group's financial
position subsequent to April 30, 1993 referred to above and from a review of
the carrying value of certain of its assets in the light of these changed
financial circumstances and against the background of persisting difficulties
in some segments of the Tiphook plc Group's markets. As part of a package of
<PAGE>
Page 22
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
13. Post Balance Sheet Events and Going Concern Matters (continued)
measures to address those difficulties and secure the support of the Banks the
Tiphook plc Group has taken steps to reduce current and future expenditure
and commitments, maximize cash generation and reduce debt through asset sales.
The various actions taken to achieve these goals have led to additional costs
being incurred or to a need to provide for the foreseeable cost of proposed
actions in the future. Included in these exceptional costs is #4.5 million as
provision for permanent diminution in the value of operating assets of the
Container Rental Businesses. Included in these exceptional costs and write
offs is an amount of #16 million in relation to a former associated company of
Tiphook plc and related parties.
Tiphook plc reached agreement by way of a Deed of Settlement to terminate
substantially all its commitments in respect of IAF Group PLC ("IAF") (a
former associated company) and various related parties. In 1992, Tiphook plc
sold to Galaxy Management Limited ("Galaxy") its 50% interest in IAF (then
known as TAF Group Limited). The sale contract provided for the purchase
price of #3 million to be paid on deferred terms of which #1.8 million remains
unpaid. Under the Deed of Settlement, Tiphook plc agreed to accept #1.25
million from Galaxy in full and final settlement of Galaxy's payment and other
obligations under the sale contract but only if Galaxy procured the release
of, or a counter indemnity in respect of, guarantees and letters of credit
which were provided or procured by Tiphook plc pursuant to obligations under
the sale contract. Tiphook plc's maximum contingent liability under these
guarantees and letters of credit is #12.3 million.
The Deed of Settlement provided for Tiphook plc to accept #0.75 million from
IAF in full and final settlement of all amounts due from IAF and its
subsidiaries and related parties under various contracts. The settlement and
release is conditional on performance by IAF and its related companies of
various obligations including those of Galaxy referred to above. IAF agrees
to assist Tiphook plc in finding a purchaser for the property at 12 Curzon
Street, London and to assist Tiphook plc in terminating various leases of
containers which are to be included in the Sale. Under the Deed of
Settlement, Tiphook plc terminates various arrangements it has with Darwen
Leasing (a company of which the Chairman of IAF is a director) including
arrangements between the companies for the lease of a small aircraft. As a
result of these arrangements, provisions and write offs totalling #16 million
were made in the accounts to October 31, 1993.
<PAGE>
Page 23
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
14. Summary of Differences between UK GAAP and US GAAP
This unaudited combined interim financial information is prepared in
accordance with UK generally accepted accounting principles ("GAAP") which
differs in certain significant respects from US GAAP. Differences which have
a significant effect on combined profit and shareholders' funds are discussed
and quantified in a table of adjustments below. While this is not a
comprehensive summary of all differences between UK GAAP and US GAAP, other
differences are considered unlikely to have a significant effect on the profit
and shareholders' funds of the Container Rental Businesses.
(a) Deferred income taxes
Under UK GAAP, deferred taxes are provided on timing differences only where it
is considered probable that such taxes will become payable in the foreseeable
future. Under US GAAP deferred tax must be provided on all timing differences
(including those arising from other US GAAP adjustments) irrespective of the
amount and timing of future tax payments.
(b) Goodwill
Under UK GAAP, the Container Rental Businesses has adopted the conservative
accounting treatment of writing off goodwill against shareholders' funds in
the year in which it arises. US GAAP requires that goodwill is capitalised
and amortised through the profit and loss account over the estimated period of
benefit. For US GAAP purposes goodwill is amortised on a straight line basis
over 40 years.
(c) Foreign currency translation and forward contracts
Under UK GAAP substantially all of the Container Rental Businesses' operating
assets have been denominated in foreign currency to match related foreign
currency financing of such assets. Differences resulting from translation of
such net assets into pounds sterling are taken directly to shareholders'
equity. Under US GAAP, such assets would be denominated in the functional
currency, pounds sterling, and differences on foreign currency liabilities
would be included in the determination of net income.
The Container Rental Businesses have entered into forward foreign currency
contracts with a fellow subsidiary under which a significant portion of net
foreign currency earnings were sold forward into pounds sterling. These
<PAGE>
Page 24
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
14. Summary of Differences between UK GAAP and US GAAP (continued)
contracts would not qualify as hedges under US GAAP and, as such, unrealised
gains or losses on open contracts would be included in the determination of
net income. Since there were no such open contracts at April 30, 1993 and
October 31, 1993, this difference between US and UK GAAP has no impact on net
income or shareholder's equity as of or for the year ended April 30, 1993 or
as of or for the six months ended October 31, 1993. At October 31, 1992, the
Container Rental Businesses had open forward contracts of #34.5 million.
UK/US GAAP Reconciliation
1. Profit on Ordinary Activities After Taxation
The following is a summary of the significant items, net of applicable tax,
which reconcile the combined profit on ordinary activities after taxation
reported under UK GAAP to that which would have been reported had US GAAP been
applied.
Six months Six months
ended ended
October 31, October 31,
1992 1993
(unaudited) (unaudited)
#m #m
Profit on ordinary activities after taxation
27.3 6.4
US GAAP adjustments:
Translation of foreign currency balances (0.7) 0.2
Unrealised loss on open forward contracts (1.9) -
Deferred tax (2.8) (4.0)
Goodwill (1.8) (1.8)
____ ___
Profit on ordinary activities after taxation
under US GAAP 20.1 0.8
==== ===
<PAGE>
Page 25
TIPHOOK PLC CONTAINER RENTAL BUSINESSES
NOTES TO THE UNAUDITED COMBINED INTERIM FINANCIAL INFORMATION
for the six months ended October 31, 1993
UK/US GAAP Reconciliation (continued)
2. Shareholders' Funds
The following is a summary of the significant items, net of applicable tax,
which reconcile shareholders' funds reported under UK GAAP to that which would
have been reported had US GAAP been applied.
Six months
ended
April 30, October 31,
1993 1993
(unaudited)
#m #m
Shareholders' Funds under UK GAAP 64.1 70.7
US GAAP Adjustments:
Deferred tax (53.1) (57.1)
Goodwill 134.2 132.4
_____ _____
Shareholders' Funds under US GAAP 145.2 146.0
===== =====
<PAGE>
