SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 8-K/A
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
January 25, 1995
(Date of earliest event reported)
ITT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-5627 13-5158950
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification Number)
1330 Avenue of the Americas, New York, New York 10019-5490
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 258-1000
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
The undersigned registrant hereby amends the following
portion of its Current Report on Form 8-K dated February 6,
1995 as set forth below:
1. (b) PRO FORMA FINANCIAL INFORMATION
The following Unaudited Pro Forma Combined Balance Sheet as
of December 31, 1994 and the Unaudited Pro Forma Combined
Statement of Income for the twelve months ended December 31,
1994 give effect to the acquisition of Caesars World, Inc.
(CWI) accounted for under the purchase method of accounting.
The Unaudited Pro Forma Combined Financial Statements are
based on the historical Consolidated Financial Statements of
ITT Corporation (ITT) and CWI under the assumptions and
adjustments set forth in the accompanying Notes to the
Unaudited Pro Forma Combined Financial Statements.
The Unaudited Pro Forma Combined Balance Sheet assumes that
the Acquisition was consummated on December 31, 1994 and the
Unaudited Pro Forma Combined Statement of Income assumes the
acquisition was consummated on January 1, 1994. The fiscal
year of ITT ends on December 31, and the fiscal year of CWI
ends on July 31. For purposes of presenting the Unaudited
Pro Forma Combined Statement of Income, the historical
Statements of Income for CWI were compiled for the twelve
months ended October 31, 1994.
The Pro Forma adjustments are based on the Agreement and
Plan of Merger which provides for CWI stockholders to
receive $67.50 in cash for each share of CWI Common Stock.
ITT made cash payments totalling $1,754 million to CWI
shareholders and an estimated $10 million in expenses
of the transaction. For purposes of developing the Unaudited Pro
Forma Combined Balance Sheet, CWI's assets and liabilities
have been recorded at their estimated fair market values and
the excess purchase price has been assigned to goodwill.
These fair market values are based on preliminary estimates.
The Unaudited Pro Forma Combined Statement of Income
excludes any benefits that result from the acquisition due
to synergies that may be derived and the elimination of
duplicate efforts.
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UNAUDITED PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 1994
(in millions)
Historical Pro Forma Pro Forma
----------
ITT Caesars Adjust (note 1) Combined
--- ------ -------------- ---------
ASSETS
Cash $ 568 $ 156 $ - $ 724
Receivables, net 4,779 69 - 4,848
Inventories 1,049 28 - 1,077
Insurance Investments 32,453 - - 32,453
Reinsurance Recoverables 12,220 - - 12,220
Deferred Policy
Acquisition costs 2,525 - - 2,525
Plant, Property and
Equipment, net 5,346 623 150 6,119
Other Assets 5,261 147 1,086 6,494
Assets of Discontinued
Finance Operations 13,398 - - 13,398
Insurance Separate
Account Assets 23,255 - - 23,255
-------- ------ ------- --------
$100,854 $1,023 $ 1,236 $103,113
======== ====== ======= ========
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities -
Policy liabilities
and accruals $ 45,620 $ - $ - $45,620
Insurance debt 1,498 - - 1,498
Other debt 4,909 227 1,764 6,900
Accounts payable &
accrued liabilities 3,523 113 - 3,636
Other liabilities 3,856 102 53 4,011
Liabilities of Discontinued
Finance Operations 12,734 - - 12,734
Insurance separate
account liabilities 23,255 - - 23,255
------- ---- ----- -------
95,395 442 1,817 97,654
------- ---- ----- -------
Stockholders Equity -
Cumulative preferred stock 655 - - 655
Common stock and surplus 106 107 (107) 106
Deferred compensation -
ESOP (562) (27) 27 (562)
Cumulative translation
adjustment (113) - - (113)
Unrealized loss on
securities,
net of tax (1,376) - - (1,376)
Retained earnings 6,749 501 (501) 6,749
-------- -------- -------- --------
5,459 581 (581) 5,459
-------- -------- -------- --------
$100,854 $ 1,023 $ 1,236 $103,113
======== ======== ======== ========
See accompanying Notes to Unaudited Pro Forma Combined
Financial Statements.
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UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
(in millions except per share amounts)
Historical Pro Forma Pro Forma
--------------------
ITT Caesars Adjust (note 1) Combined
--- ------- --------------- ---------
Sales and Revenues
Insurance $11,102 $ - $ - $ 11,102
Products 7,647 - - 7,647
Services 4,871 1,000 - 5,871
------- ----------- --------- --------
23,620 1,000 - 24,620
Costs and Expenses
Insurance 10,291 - - 10,291
Products 7,145 - - 7,145
Services 4,559 866 27 5,452
Other 120 - - 120
------- ----------- -------- -------
1,505 134 (27) 1,612
Interest expense, net (208) (16) (119) (343)
Miscellaneous expense,
net (38) - - (38)
-------- ----------- -------- --------
1,259 118 (146) 1,231
Income tax (expense)
benefit (389) (45) 42 (392)
Minority equity (18) - - (18)
-------- ------------ -------- -------
Income (loss)
from Continuing
Operations $ 852 $ 73 $ (104) $ 821
======== =========== ======== ========
Earnings per Share -
Income from Continuing
Operations
Primary $7.10 $2.99 $6.83
Fully Diluted $6.66 $6.42
===== ====== ======
Weighted Average Shares Outstanding
Primary 115 25 115
Fully Diluted 125 125
====== ====== ======
See accompanying Notes to Unaudited Pro Forma Combined
Financial Statements.
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NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS
Balance Sheet
The accompanying Unaudited Pro Forma Combined Balance Sheet
was prepared to reflect the acquisition, which was accounted
for under the purchase method of accounting, as of December
31, 1994, ITT's fiscal year end. The assets, liabilities and
equity of Caesars World, Inc. (CWI) are reflected as of
October 31, 1994. The purchase price of $1,764 million
(including expenses directly attributable to the acquisition
of $10 million) was based on 100 percent of the CWI shares
outstanding as of the acquisition date (January 31, 1995)
and the purchase price as set forth in the Agreement and
Plan of Merger dated as of December 19, 1994 of $67.50 per
share.
The recorded values of CWI's assets and liabilities as of
October 31, 1994 are estimated to approximate fair market
value as of the acquisition date except for:
Land whose estimated fair value is $150 million in
excess of its recorded value. A deferred tax liability
reflecting the difference in the new book basis compared
with the carryover tax basis has been provided at the
statutory rate.
Goodwill has been reflected representing the excess of
the fair value over the assets acquired.
Statement of Income
- -------------------
The accompanying Unaudited Pro Forma Combined Statement of
Income was prepared to reflect the acquisition as of
January 1, 1994 and incorporated ITT's statement of income
for the twelve months ended December 31, 1994 and CWI's
statement of income for the twelve months ended October 31,
1994. Pro Forma adjustments included:
Amortization of goodwill generated on the excess of
fair value over the net assets acquired on a straight line
basis over 40 years. A federal income tax benefit was not
provided on goodwill amortization as no basis step-up is
anticipated for tax purposes.
Interest cost on the acquisition financing computed
based on ITT's estimated cost of debt of approximately 7
percent pretax. A federal income tax benefit computed at the
statutory rate is also reflected.
*******
The Unaudited Pro Forma Combined Financial Statements may
not be indicative of the results that would have occurred if
the Acquisition had been in effect on the dates indicated or
which may be obtained in the future. The Unaudited Pro Forma
Combined Financial Statements should be read in conjunction
with the historical Consolidated Financial Statements and
accompanying notes for ITT and CWI.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
ITT CORPORATION
By /s/ Jon F. Danski
------------------
Jon F. Danski
Senior Vice President and Controller
Dated: March 31, 1995
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