SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------- FORM 8-K/A-1 CURRENT REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Dates of Reports: June 6, 1997 and July 11, 1997 ------------------------------ AMERITRUCK DISTRIBUTION CORP. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 33-99716 75-2619368 - -------------------------------------------------------------------------------- (State or Other (Commission File (I.R.S. Employer Jurisdiction of Number) Identification No.) Incorporation) City Center Tower II, Suite 1101 301 Commerce Street, Fort Worth, TX 76102-5384 ----------------------------------------------- Address of principal executive offices Registrant's telephone number, including area code: (817) 332-6020 -------------- ================================================================================ Item 7. Financial Statements, Pro Forma Financial Information and Exhibits Exhibit Number Description ------- ----------- (a) Financial Statements of Business Acquired ----------------------------------------- (i) Audited: A. Monfort Transportation Company and Lynn Transportation Co., Inc. Report of Independent Accountants Combined Balance Sheets as of May 26, 1996 and May 28, 1995 Combined Statements of Operations for the Years Ended May 26, 1996, May 28, 1995 and May 29, 1994 Combined Statements of Assets in Excess of Liabilities for the Years Ended May 26, 1996, May 28, 1995 and May 29, 1994 Combined Statements of Cash Flows for the Years Ended May 26, 1996, May 28, 1995 and May 29, 1994 Notes to Combined Financial Statements B. Tran-Star, Inc./1// Report of Independent Accountants Balance Sheets at December 31, 1995 and December 31, 1996 Statements of Income, Stockholders Equity and Cash Flows for the years ended December 31, 1994, 1995 and 1996 Notes to Financial Statements - ------------------------------ 1/ The audited financial statements listed in this section were previously filed as part of AmeriTruck Distribution Corp.'s Form 8-K filed on July 11, 1997. (ii) Unaudited: Monfort Transportation Company and Lynn Transportation Co., Inc. Unaudited Combined Balance Sheet as of March 23, 1997 Unaudited Combined Statements of Operations for the Ten Months Ended March 23, 1997 and March 24, 1996 Unaudited Combined Statements of Cash Flow for the Ten Months Ended March 23, 1997 and March 24, 1996 Notes to Combined Financial Statements Tran-Star, Inc. Unaudited Balance Sheet as of March 31, 1997 Unaudited Statements of Operations for the Three Months Ended March 31, 1997 and 1996 Unaudited Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996 Notes to Financial Statements (b) Pro Forma Financial Information ------------------------------- Unaudited Pro Forma Statement of Operations for the Three Months Ended March 31, 1997 Unaudited Pro Forma Statement of Operations for the Year Ended December 31, 1996 Unaudited Pro Forma Balance Sheet as of March 31, 1997 Notes to Unaudited Pro Forma Financial Statements (c) Exhibits -------- (i) Monfort Transportation Company and Lynn Transportation Co., Inc./2// - 2 Stock Purchase Agreement, dated as of April 28, 1997, among AmeriTruck Distribution Corp., Monfort, Inc. and ConAgra Poultry Company. 10 Transportation Services Agreement, dated as of April 28, 1997, among AmeriTruck Distribution Corp., Monfort Transportation Company, Lynn Transportation Company, Inc., Monfort, Inc., ConAgra Poultry Company, and Swift-Eckrich, Inc. (ii) Tran-Star, Inc. /3// - 2 Stock Purchase Agreement, dated as of June 27, 1997, among AmeriTruck Distribution Corp., Allways Services, Inc., and Transtar Services, Inc. - ------------------------ /2// The exhibits listed in this section were previously filed as part of - AmeriTruck Distribution Corp.'s Form 8-K filed on June 6, 1997. /3// The exhibits listed in this section were previously filed as part of - AmeriTruck Distribution Corp.'s Form 8-K filed on July 11, 1997. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. AMERITRUCK DISTRIBUTION CORP. Dated: August 6, 1997 By: /s/ Kenneth H. Evans, Jr. ------------------------- Kenneth H. Evans, Jr., Executive Vice President and Chief Financial Officer TABLE OF CONTENTS Page(s) AUDITED: Monfort Transportation Company and Lynn Transportation Co., Inc.: Report of Independent Accountants F-1 Combined Financial Statements: Combined Balance Sheets as of May 26, 1996 and May 28, 1995 F-2 Combined Statements of Operations for the Years Ended May 26, 1996, May 28, 1995 and May 29, 1994 F-3 Combined Statements of Assets in Excess of Liabilities for the Years Ended May 26, 1996, May 28, 1995 and May 29, 1994 F-4 Combined Statements of Cash Flows for the Years Ended May 26, 1996, May 28, 1995 and May 29, 1994 F-5 Notes to Combined Financial Statements F-6 - F-13 UNAUDITED: Monfort Transportation Company and Lynn Transportation Co., Inc.: Unaudited Combined Balance Sheet as of March 23, 1997 F-14 Unaudited Combined Statements of Operations for the Ten Months Ended March 23, 1997 and March 24, 1996 F-15 Unaudited Combined Statement of Liabilities in Excess of Assets for the Ten Months Ended March 23, 1997 F-16 Unaudited Combined Statements of Cash Flows for the Ten Months Ended March 23, 1997 and March 24, 1996 F-17 Notes to Combined Financial Statements F-18 TABLE OF CONTENTS (Continued) Page(s) UNAUDITED, continued: Trans-Star, Inc.: Unaudited Balance Sheet as of March 31, 1997 F-19 Unaudited Statements of Operations for the Three Months Ended March 31, 1997 and 1996 F-20 Unaudited Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996 F-21 Notes to Financial Statements F-22 PRO FORMA FINANCIAL INFORMATION: Unaudited Pro Forma Statement of Operations for the Three Months Ended March 31, 1997 F-24 Unaudited Pro Forma Statement of Operations for the Year Ended December 31, 1996 F-25 Unaudited Pro Forma Balance Sheet as of March 31, 1997 F-26 Notes to Unaudited Pro Forma Financial Statements F-27 - F-28 Report of Independent Accountants To the Board of Directors and Stockholders of Monfort Transportation Company and Lynn Transportation Co., Inc. We have audited the accompanying combined balance sheets of Monfort Transportation Company and Lynn Transportation Co., Inc. as of May 26, 1996 and May 28, 1995, and the related combined statements of operations, assets in excess of liabilities, and cash flows for the years ended May 26, 1996, May 28, 1995 and May 29, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the 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 evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of Monfort Transportation Company and Lynn Transportation Co., Inc. as of May 26, 1996 and May 28, 1995, and the combined results of their operations and their cash flows for the years ended May 26, 1996, May 28, 1995 and May 29, 1994 in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Fort Worth, Texas May 23, 1997 F-1 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. COMBINED BALANCE SHEETS May 26, 1996 and May 28, 1995 (in thousands) ASSETS May 26, May 28, 1996 1995 --------- --------- Current assets: Accounts receivable: Trade, net of allowance for doubtful accounts of $132 and $295, respectively $ 4,491 $ 3,582 Affiliate 2,696 1,995 Repair parts and supplies 350 306 Prepaid expenses 621 834 Deferred income taxes 1,103 1,604 --------- --------- Total current assets 9,261 8,321 Property and equipment, net 21,608 18,479 --------- --------- Total assets $ 30,869 $ 26,800 ========= ========= LIABILITIES AND ASSETS IN EXCESS OF LIABILITIES Current liabilities: Accounts payable $ 1,456 $ 618 Accrued expenses 3,019 2,327 Claims and insurance accruals 2,689 3,759 Current portion of capital lease obligations 6,816 4,938 --------- --------- Total current liabilities 13,980 11,642 Capital lease obligations 13,244 12,063 Deferred income taxes 26 89 --------- --------- Total liabilities 27,250 23,794 Commitments and contingencies (Note 7) Assets in excess of liabilities 3,619 3,006 --------- --------- Total liabilities and assets in excess of liabilities $ 30,869 $ 26,800 ========= ========= The accompanying notes are an integral part of the combined financial statements. F-2 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. COMBINED STATEMENTS OF OPERATIONS for the years ended May 26, 1996, May 28, 1995 and May 29, 1994 (in thousands) Year Ended ------------------------------------- May 26, May 28, May 29, 1996 1995 1994 ---------- ---------- ----------- Revenues: Customer $ 38,962 $ 37,301 $ 45,922 Affiliate 49,225 47,571 50,661 ----------- ----------- ----------- Operating revenue 88,187 84,872 96,583 ----------- ----------- ----------- Operating expenses: Salaries, wages and fringe benefits 11,265 11,403 8,934 Purchased transportation 52,925 52,059 65,440 Operating supplies and expenses 9,338 7,169 6,833 Depreciation and amortization of capital leases 5,118 3,901 3,297 Claims and insurance 1,076 2,729 1,988 Operating taxes and licenses 1,536 1,916 1,773 General supplies and expenses 2,106 2,025 2,284 (Gain) loss on disposal of property and equipment (1,030) 163 135 ----------- ----------- ----------- Total operating expenses 82,334 81,365 90,684 ----------- ----------- ----------- Operating income 5,853 3,507 5,899 Interest expense, net 1,895 1,286 1,321 ----------- ----------- ----------- Income before income taxes 3,958 2,221 4,578 Income tax expense 1,534 841 1,752 ----------- ----------- ----------- Net income $ 2,424 $ 1,380 $ 2,826 =========== =========== =========== The accompanying notes are an integral part of the combined financial statements. F-3 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. COMBINED STATEMENTS OF ASSETS IN EXCESS OF LIABILITIES for the years ended May 26, 1996, May 28, 1995 and May 29, 1994 (in thousands) Year Ended ------------------------------------- May 26, May 28, May 29, 1996 1995 1994 ---------- ---------- ----------- Balance, beginning of year $ 3,006 $ 3,735 $ 2,227 Net income 2,424 1,380 2,826 Change in due from parents (1,811) (2,109) (1,318) ---------- ---------- ----------- Balance, end of year $ 3,619 $ 3,006 $ 3,735 ========== ========== =========== The accompanying notes are an integral part of the combined financial statements. F-4 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. COMBINED STATEMENTS OF CASH FLOWS for the years ended May 26, 1996, May 28, 1995 and May 29, 1994 (in thousands) Year Ended -------------------------------- May 26, May 28, May 29, 1996 1995 1994 ---------- --------- --------- Cash flows from operating activities: Net income $ 2,424 $ 1,380 $ 2,826 Adjustments to reconcile net income to net cash provided by operating activities: Net (gain) loss on disposal of property and equipment (1,030) 163 135 Depreciation and amortization of capital leases 5,118 3,901 3,297 Deferred income taxes 438 (10) 161 Provision for doubtful accounts (9) 45 285 Changes in assets and liabilities: Accounts receivable - trade (900) 1,480 91 Accounts receivable - affiliate (701) (486) (369) Repair parts and supplies (44) 269 3 Prepaid expenses 213 120 27 Accounts payable and accrued expenses 1,530 (1,015) (970) Claims and insurance accruals (1,070) (134) (1,209) ---------- --------- --------- Net cash provided by operating activities 5,969 5,713 4,277 Cash flows from investing activities: Purchases of property and equipment (1,703) (566) (496) Proceeds from disposal of property and equipment 2,484 904 693 ---------- --------- --------- Net cash provided by investing activities 781 338 197 ---------- --------- --------- Cash flows from financing activities: Principal repayments of capital lease obligations (4,939) (3,942) (3,156) Change in due from parents (1,811) (2,109) (1,318) ---------- --------- --------- Net cash used in financing activities (6,750) (6,051) (4,474) Net change in cash 0 0 0 Cash at beginning of year 0 0 0 ---------- --------- --------- Cash at end of year $ 0 $ 0 $ 0 ========== ========= ========= Supplemental disclosure of cash flow information: Cash paid for interest $ 1,837 $ 1,233 $ 1,233 Supplemental schedule of noncash investing activities: Additions to capital lease obligations 7,998 7,139 6,311 The accompanying notes are an integral part of the combined financial statements. F-5 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. NOTES TO COMBINED FINANCIAL STATEMENTS (in thousands) 1. Summary of Significant Accounting Policies: Monfort Transportation Company ("Monfort") and Lynn Transportation Co., Inc. ("Lynn") generally operate in specialized areas of the transportation services industry, including time-sensitive delivery, special handling, dedicated fleets and temperature control. Monfort (a Colorado corporation) is headquartered in Greeley, CO. Lynn (an Iowa corporation) is headquartered in El Dorado, AR, with operating divisions located in Osklaloosa, IA and Sacramento, CA. Basis of Presentation Monfort Transportation Company and Lynn Transportation Co., Inc. (the "Companies") are divisions of Monfort, Inc. and ConAgra Poultry Company (the "Parents"), respectively, both of which in turn are wholly-owned subsidiaries of ConAgra, Inc. ("ConAgra"). All significant accounts and transactions between divisions have been eliminated in combination. The financial statements have been prepared from the historical books and records of the Companies and Parents. The combined financial statements reflect the "carve-out" financial position of the Companies as of May 26, 1996 and May 28, 1995 and the results of operations and cash flows of the Companies for the years ended May 26, 1996, May 28, 1995 and May 29, 1994. The combined financial statements have been prepared as if the Companies had operated as a stand-alone entity for all periods presented, and include those assets, liabilities, revenues and expenses directly attributable to the Companies' operations. Certain corporate general and administrative expenses of the Parents have been allocated to the Companies (see Note 6) on various bases which, in the opinion of management, are reasonable and reflect all of the costs of doing business. Cash generated by the Companies is held by the Parents for cash management purposes. Repair Parts and Supplies Repair parts and supplies consists of fuel, tires until placed in service, tubes, replacement parts and supplies and are valued at the lower of average cost or market. Prepaid Expenses Prepaid expenses include prepaid licenses, rentals and taxes other than income tax. F-6 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. NOTES TO COMBINED FINANCIAL STATEMENTS, Continued (in thousands) 1. Summary of Significant Accounting Policies, continued: Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the property and equipment as follows: Tractors 3 - 4 years Trailers 5 - 7 years Building and improvements 7 - 30 years Office furniture and equipment 3 - 7 years Automobiles 3 - 5 years Machinery and equipment 3 - 5 years Major additions and betterments are capitalized, while maintenance and repairs that do not improve or extend the life of the asset are charged to expense as incurred. Gains and losses on dispositions are included in operating income. Claims and Insurance Accruals Claims and insurance accruals reflect the estimated costs of liabilities and claims not covered by insurance. The liability for self-insurance is accrued on claims incurred and on estimates of both unasserted and unsettled claims which are assessed based on management's evaluation of the nature and severity of individual claims and on the Companies' past claims experience. Income Taxes Under Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, income taxes are provided based on earnings reported for tax return purposes in addition to a provision for deferred income taxes. The provision for income taxes includes deferred taxes determined by the change in the deferred tax liability (or asset) which is computed based on the differences between the financial statement and income tax bases of assets and liabilities and net operating loss carryforwards, all of which are measured by applying enacted tax laws and rates. Deferred tax expense is the result of changes in the deferred tax liability or asset. The Companies file a consolidated tax return with their Parents. However, for the purposes of these combined financial statements, the provision for income taxes has been prepared as if the Companies had filed a separate tax return on a stand-alone basis. F-7 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. NOTES TO COMBINED FINANCIAL STATEMENTS, (Continued) (in thousands) 1. Summary of Significant Accounting Policies, continued: Income Taxes, continued In connection with the sale of the Companies as discussed in Note 8, tax liabilities incurred prior to the date of sale of the Companies will remain with the Parents. Revenue Recognition Freight revenue is recognized upon the delivery of freight. Fair Value of Financial Instruments The carrying amounts of accounts receivable, accounts payable and accrued expenses reflected in the financial statements approximate fair value due to the short-term maturity of these instruments. The Companies are not active participants in financial derivative transactions. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses in the reporting periods. Actual results could differ from those estimates. 2. Property and Equipment: Property and equipment are summarized as follows: May 26, 1996 May 28, 1995 ------------ ------------ Revenue equipment $ 39,575 $ 31,860 Structures 1,249 1,249 Service equipment and other 1,135 1,041 Office furniture and equipment 267 251 Land and leasehold improvements 239 239 ------------ ------------ 42,465 34,640 Less accumulated depreciation 20,857 16,161 ------------ ------------ $ 21,608 $ 18,479 ============ ============ F-8 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. NOTES TO COMBINED FINANCIAL STATEMENTS, (Continued) (in thousands) 2. Property and Equipment, continued: Property and equipment includes gross assets acquired under capital leases of $39,208 and $31,377 at May 26, 1996 and May 28, 1995, respectively. Related amounts included in accumulated depreciation and amortization were $19,029 and $14,210 at May 26, 1996 and May 28, 1995, respectively. As part of the continuing operations of the Companies, lease agreements are entered into for the use of revenue equipment and certain leased assets are purchased and subsequently sold by the Companies. During the year ended May 26, 1996, these sales resulted in a gain in the amount of $1,030, due to the sale of certain revenue equipment for approximately $1,085. 3. Capital Lease Obligations: Capital lease obligations are collateralized by revenue equipment and mature through 2002 with interest rates ranging from 5.2% to 9.5%. Outstanding balances related to these obligations were as follows: May 26, May 28, 1996 1995 --------- --------- Capital lease obligations $ 20,060 $ 17,001 Less current portion 6,816 4,938 --------- --------- Long-term portion of capital leases $ 13,244 $ 12,063 ========= ========= 4. Income Taxes: Income tax expense was as follows: May 26, May 28, May 29, 1996 1995 1994 -------- -------- -------- Current: Federal $ 921 $ 714 $ 602 State 174 137 113 -------- -------- -------- 1,095 851 715 -------- -------- -------- Deferred: Federal 370 (8) 873 State 69 (2) 164 -------- -------- -------- 439 (10) 1,037 -------- -------- -------- Total $ 1,534 $ 841 $ 1,752 ======== ======== ======== F-9 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. NOTES TO COMBINED FINANCIAL STATEMENTS, (Continued) (in thousands) 4. Income Taxes, continued: A reconciliation of the federal statutory income tax rate to the effective income tax rate was as follows: May 26, May 28, May 29, 1996 1995 1994 -------- -------- -------- Federal statutory income tax rate 34.0 % 34.0 % 34.0 % State income taxes, net of federal 4.1 4.0 4.0 tax benefit Other, net .7 - .3 -------- -------- -------- Effective tax rate 38.8 % 38.0 % 38.3 % ======== ======== ======== The components of deferred tax assets and liabilities were as follows: (See Note 8) May 26, May 28, 1996 1995 --------- --------- Deferred tax liabilities: Depreciation and amortization $ (26) $ (89) --------- --------- Total deferred tax liabilities (26) (89) --------- --------- Deferred tax assets: Accrued expenses and reserves 1,103 1,604 --------- --------- Total deferred tax assets 1,103 1,604 --------- --------- Net deferred tax asset $ 1,077 $ 1,515 ========= ========= Current deferred income tax asset $ 1,103 $ 1,604 Noncurrent deferred income tax liability (26) (89) --------- --------- Net deferred tax asset $ 1,077 $ 1,515 ========= ========= F-10 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. NOTES TO COMBINED FINANCIAL STATEMENTS, (Continued) (in thousands) 5. Employee Benefit Plans: The Companies participate in a ConAgra sponsored 401(k) defined contribution plan. The plan covers substantially all salaried and hourly employees. Participants may voluntarily contribute to the plan up to the maximum limits imposed by Internal Revenue Service regulations. The Companies annually match between 50% and 66% of the participants' contributions up to 5% or 6% of the participants' compensation. Participants are immediately vested in the amount of their direct contributions and vest over a five year period, as defined by the plan, with respect to the Companies' contribution. The Companies' 401(k) matching contributions were $53, $40 and $17 for the years ended May 26, 1996, May 28, 1995 and May 29, 1994, respectively. See Note 8. Lynn also participates in a ConAgra sponsored defined benefit pension plan. The plan covers all hourly employees and ConAgra pays the entire cost of the plan. Participants are vested after five years of continuous service or at age 65. Participants receive twenty dollars per month for every year of credited service and may receive reduced benefits beginning at age 55. Plan expenses allocated to Lynn by ConAgra were $34, $35 and $25 for the years ended May 26, 1996, May 28, 1995 and May 29, 1994, respectively. 6. Transactions With Affiliates: The financial statements include allocations to the Companies of certain administrative costs incurred by the Parents related to management information systems, accounting, utilities, human resources and certain other corporate expenses. For the years ended May 26, 1996, May 28, 1995 and May 29, 1994, these allocated costs were $912, $877 and $747, respectively. Expenses charged to the Companies for these services are allocated based on management's estimates of the Companies' proportionate share of the total group's expenses. In the opinion of management, these allocations of expenses were made on a reasonable basis. However, they are not necessarily indicative of the levels of expenses which may have been experienced on a stand-alone basis. The amounts that would have or will be incurred on a separate company basis could differ significantly from the allocated amounts due to economies of scale, differences in management and operational practices or other factors. F-11 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. NOTES TO COMBINED FINANCIAL STATEMENTS, (Continued) (in thousands) 7. Commitments and Contingencies: Self-Insurance The Companies are self-insured for all collision damages to revenue equipment and for liability coverage up to its deductible amount which is $2,000. Furthermore, the Companies are self-insured for workers' compensation claims. Litigation The Companies are parties to various claims, legal actions, and complaints arising in the ordinary course of business. In the opinion of management, all such matters are without merit or are of such kind, or involve such amounts, that an unfavorable disposition would not have a material effect on the financial position, results of operations or liquidity of the Companies. See Note 8. Leases The Companies lease various equipment and buildings under capital and noncancelable operating leases with an initial term in excess of one year. As of May 26, 1996, future minimum rental payments required under these capital and operating leases are summarized as follows: Capital Operating Leases Leases ---------- ----------- 1997 $ 7,859 $ 1,102 1998 7,167 1,053 1999 4,195 1,048 2000 1,884 1,048 2001 1,777 968 Thereafter 249 626 ---------- ----------- Total 23,131 $ 5,845 =========== Less amount representing interest 3,071 ---------- Present value of minimum lease payments $ 20,060 ========== Certain of the Companies' capital assets are subleased to third parties. Sublease income was $1,668, $794 and $596 for the years ended May 26, 1996, May 28, 1995 and May 29, 1994. Rental expense under operating leases was $332, $1,398 and $2,994 for the years ended May 26, 1996, May 28, 1995 and May 29, 1994. Future minimum sublease rentals under noncancelable subleases as of May 26, 1996 were $1,072 for 1997, $1,490 for 1998 and $466 for 1999. F-12 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. NOTES TO COMBINED FINANCIAL STATEMENTS, Continued (in thousands) 8. Subsequent Event: The Parents signed a definitive stock purchase agreement with AmeriTruck Distribution Corp. (AmeriTruck) dated April 28, 1997, to sell all of the outstanding shares of the capital stock of Monfort and Lynn for approximately $15,000, subject to adjustments. The sale of the Companies was completed May 23, 1997. Under the terms of the agreement, the Parents entered into a Transportation Services Agreement with the Companies and AmeriTruck to guarantee certain designated lanes, minimum annual volumes and pricing. The Transportation Services Agreement has a four-year term, with pricing fixed for the first two years and to be adjusted for the third and fourth years. In connection with the stock purchase agreement, the parties thereto entered into a Disaffiliation Tax Sharing Agreement ("Tax Agreement"). Under the Tax Agreement, the Parents shall be jointly and severally responsible for all federal and state income taxes of the Companies, including any taxes attributable to the Section 338(h)(10) election discussed below. Additionally, the Tax Agreement states that at the request of AmeriTruck, the Parents and AmeriTruck will join in making an election under Section 338(h)(10) of the Internal Revenue Code to allow the stock purchase to be treated as a purchase of assets for tax purposes. As such, all deferred tax assets and liabilities would become current and remain with the Parents. Additionally, under the stock purchase agreement, the Parents have agreed to indemnify AmeriTruck for any actual or alleged liabilities arising prior to the close of the sale related to environmental, insurance, employee benefit plans or litigation. As such, employees of the Companies after the closing of the sale will no longer be eligible to actively participate in any former benefit plans of the Companies and instead, will be eligible to participate in AmeriTruck's plans after meeting participation requirements. Also, certain assets and (liabilities) included in the financial statements will not be part of the acquired business. These balances as of May 26, 1996 were as follows: Net deferred tax asset $ 1,077 Accounts receivable - affiliate $ 2,696 Claims and insurance accruals $ (2,689) F-13 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. UNAUDITED COMBINED BALANCE SHEET as of March 23, 1997 (in thousands) ASSETS Current assets: Accounts receivable less allowance for doubtful accounts of $148 $ 4,031 Repair parts and supplies 149 Prepaid expenses 726 Deferred income taxes 1,087 -------- Total current assets 5,993 Property and equipment, net 17,325 -------- Total assets $ 23,318 ======== LIABILITIES AND LIABILITIES IN EXCESS OF ASSETS Current liabilities: Accounts payable and accrued expenses $ 2,265 Due to affiliate 2,889 Claims and insurance accruals 2,610 Current portion of capital lease obligations 5,437 -------- Total current liabilities 13,201 Capital lease obligations 10,566 Deferred income taxes 51 -------- Total liabilities 23,818 Liabilities in excess of assets (500) -------- Total liabilities and liabilities in excess of assets $ 23,318 ======== The accompanying notes are an integral part of these combined financial statements. F-14 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. UNAUDITED COMBINED STATEMENTS OF OPERATIONS for the ten months ended March 23, 1997 and March 24, 1996 (in thousands) Ten Months Ended ------------------------ March 23, March 24, 1997 1996 --------- --------- Operating revenue $ 69,056 $ 72,655 -------- -------- Operating expenses: Salaries, wages and fringe benefits 9,598 9,144 Purchased transportation 42,388 43,988 Operating supplies and expenses 7,142 7,064 Depreciation and amortization of capital leases 3,919 4,263 Claims and insurance 2,396 1,230 Operating taxes and licenses 1,017 1,271 General supplies and expenses 1,704 2,030 (Gain) loss on disposal of property and equipment (332) (379) -------- -------- Total operating expenses 67,832 68,611 -------- -------- Operating income 1,224 4,044 Interest expense, net 1,341 1,523 -------- -------- Income (loss) before income taxes (117) 2,521 Income tax expense (benefit) (40) 960 -------- -------- Net income (loss) $ (77) $ 1,561 ======== ======== The accompanying notes are an integral part of these combined financial statements. F-15 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. UNAUDITED COMBINED STATEMENT OF LIABILITIES IN EXCESS OF ASSETS for the ten months ended March 23, 1997 (in thousands) Balance, May 26, 1996 $ 3,619 Net loss (77) Change in due from parents (4,042) -------- Balance, March 23, 1997 $ (500) ======== The accompanying notes are an integral part of the combined financial statements. F-16 MONFORT TRANSPORTATION COMPANY AND LYNN TRANSPORTATION CO., INC. UNAUDITED COMBINED STATEMENTS OF CASH FLOWS for the ten months ended March 23, 1997 and March 24, 1996 (in thousands) Ten Months Ended ------------------------------- March 23, March 24, 1997 1996 -------------- -------------- Cash flows from operating activities: Net income (loss) $ (77) $ 1,561 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Net (gain) loss on disposal of property and equipment (332) (379) Depreciation and amortization of capital leases 3,919 4,263 Deferred income taxes 40 438 Provision for doubtful accounts 101 228 Changes in assets and liabilities: Accounts receivable 3,054 1,046 Repair parts and supplies 201 (55) Prepaid expenses (104) 13 Accounts payable and accrued expenses (2,209) (167) Due to affiliate 2,889 110 Claims and insurance accruals (79) (1,130) ------------- ------------- Net cash provided by operating activities 7,403 5,928 ------------- ------------- Cash flows from investing activities: Purchases of property and equipment (1,579) (811) Proceeds from disposal of property and equipment 2,275 1,002 ------------- ------------- Net cash provided by investing activities 696 191 ------------- ------------- Cash flows from financing activities: Principal repayments of capital lease obligations (4,057) (4,115) Change in due from parents (4,042) (2,004) ------------- ------------- Net cash used in financing activities (8,099) (6,119) ------------- ------------- Net change in cash 0 0 Cash at beginning of period 0 0 ------------- ------------- Cash at end of period $ 0 $ 0 ============= ============= Supplemental disclosure of cash flow information: Cash paid for interest $ 1,293 $ 1,476 Supplemental schedule of noncash investing activities: Additions to capital lease obligations - $ 3,831 The accompanying notes are an integral part of these combined financial statements. F-17 Monfort Transportation Company and Lynn Transportation Co., Inc. Notes to Combined Financial Statements (Unaudited) 1. Accounting Policies and Interim Results This Current Report on Form 8-K/A-1 of AmeriTruck Distribution Corp. includes the audited combined financial statements of Monfort Transportation Company and Lynn Transportation Co., Inc. as of May 26, 1996 and May 28, 1995 and the related statements of operations and cash flows for the years ended May 26, 1996, May 28, 1995 and May 29, 1994. Such audited combined financial statements include a summary of significant accounting policies and should be read in conjunction with these interim financial statements. The statements for the periods presented are condensed and do not contain all information required by generally accepted accounting principles to be included in a full set of financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of March 23, 1997 and the results of operations and cash flows for the ten-month periods ended March 23, 1997 and March 24, 1996 have been included. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the entire year. F-18 TRAN-STAR, INC. UNAUDITED BALANCE SHEET as of March 31, 1997 (in thousands) ASSETS Current assets: Accounts and notes receivable, less allowance for doubtful accounts of $310 $ 7,026 Due from affiliates 27 Prepaid expenses 926 Repair parts and supplies 460 Deferred income taxes 1,721 Other current assets 120 ------------ Total current assets 10,280 Other assets 204 Property and equipment, net 32,699 ------------ Total assets $ 43,183 ============ LIABILITIES AND SHAREHOLDER'S DEFICIT Current liabilities: Accounts payable and accrued expenses $ 5,418 Due to Norfolk Southern Corporation 775 Due to affiliate 154 Claims and insurance accruals 3,320 Current portion of long-term debt 11,167 ------------ Total current liabilities 20,834 Long-term debt 18,284 Deferred income taxes 4,712 Other liabilities 117 ------------ Total liabilities 43,947 ------------ Shareholder's deficit: Common stock; $.01 par value, 3,503 shares issued and outstanding 4 Paid-in-capital 6,119 Accumulated deficit (6,887) ------------ Total shareholder's deficit (764) ------------ Total liabilities and shareholder's deficit $ 43,183 ============ The accompanying notes are an integral part of these financial statements. F-19 TRAN-STAR, INC. UNAUDITED STATEMENTS OF OPERATIONS for the three months ended March 31, 1997 and 1996 (in thousands) Three Months Ended -------------------------- March 31, March 31, 1997 1996 ----------- ----------- Operating revenue $ 16,936 $ 17,371 ----------- ----------- Operating expenses: Salaries, wages and fringe benefits 6,623 6,608 Purchased transportation 1,377 924 Operating supplies and expenses 5,158 5,123 Depreciation and amortization of capital leases 1,521 2,011 Claims and insurance 1,207 1,280 Operating taxes and licenses 516 580 General supplies and expenses 1,268 1,068 ----------- ----------- Total operating expenses 17,670 17,594 ----------- ----------- Operating loss (734) (223) Interest expense, net (701) (734) ----------- ----------- Loss before income taxes (1,435) (957) Income tax benefit (523) (322) ----------- ----------- Net loss $ (912) $ (635) =========== =========== The accompanying notes are an integral part of these financial statements. F-20 TRAN-STAR, INC. UNAUDITED STATEMENTS OF CASH FLOWS for the three months ended March 31, 1997 and 1996 (in thousands) Three Months Ended ------------------ March 31, March 31, 1997 1996 -------- -------- Cash flows from operating activities: Net loss $ (912) $ (635) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization of capital leases 1,521 2,007 Deferred income taxes (522) (321) Provision for doubtful accounts 122 (17) Changes in assets and liabilities: Accounts and notes receivable (331) 272 Due from affiliates (1) (91) Repair parts and supplies 27 (20) Prepaid expenses (267) 441 Other current assets 110 (8) Accounts payable and accrued expenses 868 (314) Due to Norfolk Southern Corporation (266) Due to affiliate (374) Claims and insurance accruals 347 827 Other liabilities (705) -------- -------- Net cash provided by operating activities 588 1,170 -------- -------- Cash flows from investing activities: Purchases of property and equipment (41) (24) Net advances to affiliate 1,216 -------- -------- Net cash (used in) provided by investing activities (41) 1,192 -------- -------- Cash flows from financing activities: Proceeds from issuance of debt 470 2,123 Principal payments on debt (2,919) (3,250) -------- -------- Net cash used in financing activities (2,449) (1,127) -------- -------- Net change in cash (1,902) 1,235 Cash at beginning of period 1,902 2,688 -------- -------- Cash at end of period $ 0 $ 3,923 ======== ======== Supplemental disclosure of cash flow information: Cash paid for interest $ 617 $ 721 Cash paid for taxes 380 385 The accompanying notes are an integral part of these financial statements. F-21 Tran-Star, Inc. Notes to Financial Statements (Unaudited) 1. Accounting Policies and Interim Results The Current Report on Form 8-K dated July 11, 1997 for AmeriTruck Distribution Corp. includes the audited financial statements of Tran-Star, Inc. as of December 31, 1996 and 1995, and the related statement of operations and cash flows for the years ended December 31, 1996, 1995 and 1994, respectively. Such audited financial statements include a summary of significant accounting policies and should be read in conjunction with these interim financial statements. The statements for the periods presented are condensed and do not contain all information required by generally accepted accounting principles to be included in a full set of financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of March 31, 1997 and the results of operations and cash flows for the three-month periods ended March 31, 1997 and 1996 have been included. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the entire year. F-22 UNAUDITED PRO FORMA FINANCIAL STATEMENTS The following unaudited pro forma financial statements ("the Pro Forma Financial Statements") give effect to the acquisition of the capital stock of Monfort Transportation Company and Lynn Transportation Co., Inc. (collectively "Monfort and Lynn"), subsidiaries of ConAgra, Inc. ("ConAgra") and the acquisition of the capital stock of Tran-Star, Inc. ("Tran-Star"), a subsidiary of Allways Services, Inc. by AmeriTruck Distribution Corp. ("AmeriTruck"). The Pro Forma Financial Statements are based on the audited consolidated financial statements of AmeriTruck, the audited combined financial statements of Monfort and Lynn, and the audited financial statements of Tran-Star. Such audited financial statements of the AmeriTruck and Tran-Star are incorporated by reference and the financial statements of Monfort and Lynn are included elsewhere in this Form 8- K/A-1. Monfort and Lynn's fiscal year end for 1996 was May 26. The pro forma amounts for the year ended December 31, 1996 include (i) the operations of AmeriTruck and Tran-Star for the year ended December 31, 1996 and (ii) the operations of Monfort and Lynn for the twelve months ended March 23, 1997. The pro forma amounts for the three months ended March 31, 1997 include (i) the operations of AmeriTruck and Tran-Star for the three months ended March 31, 1997 and (ii) the operations of Monfort and Lynn for the three months ended March 23, 1997, which are duplicative with a portion of the full year results. The unaudited pro forma statements of operations for the year ended December 31, 1996 and the three months ended March 31, 1997 have been prepared to illustrate the effects of the acquisitions of Monfort and Lynn and Tran-Star (the "Acquisitions") as if such transactions had occurred on January 1, 1996. The unaudited pro forma balance sheet as of March 31, 1997, has been prepared to illustrate the effects of the Acquisitions as if such transactions had occurred on that date. The Pro Forma Financial Statements and accompanying notes should be read in conjunction with the financial statements and other financial information incorporated by reference or included elsewhere in this Form 8-K/A- 1. The unaudited pro forma adjustments are based upon available information and certain assumptions that Management of AmeriTruck believes are reasonable. The Pro Forma Financial Statements are prepared for illustrative purposes only and are not necessarily indicative of the financial position or results of operations that might have occurred had the applicable transactions actually taken place on the dates indicated, or of future results of operations or financial position of AmeriTruck. The unaudited pro forma adjustments do not reflect any potential increases in operating income, or one-time costs to achieve such increases, which may arise from the Acquisitions. The Acquisitions will be accounted for under the purchase method of accounting. Under this method of accounting, the purchase price has been allocated to the assets acquired and liabilities assumed based on preliminary estimates of their fair values and could change as additional information becomes available. F-23 AMERITRUCK DISTRIBUTION CORP. UNAUDITED PRO FORMA STATEMENT OF OPERATIONS Three months ended March 31, 1997 (in thousands) Historical ------------------------------------ Monfort and Pro Forma Pro Forma AmeriTruck Lynn Tran-Star Adjustments Total ---------- ---------- ----------- ----------- ----------- Operating revenue $ 55,668 $ 19,120 $ 16,936 $ 6,709 (a) $ 98,433 ---------- ---------- ----------- ----------- ----------- Operating expenses: Salaries, wages and fringe benefits 19,216 2,476 6,623 28,315 Purchased transportation 13,009 11,613 1,377 25,999 Operating supplies and expenses 11,096 1,865 5,158 $ 5,750 (a) 23,601 (268)(b) Depreciation and amortization of capital leases 3,718 1,176 1,521 (641)(c) 5,774 Claims and insurance 2,318 754 1,207 4,279 Operating taxes and licenses 1,283 203 516 2,002 General supplies and expenses 3,074 548 1,268 (372)(d) 4,518 Amortization of intangibles 293 225 (e) 518 (Gain)loss on disposal of property and equipment 46 (149) (103) ---------- ---------- ----------- ----------- ----------- Total operating expenses 54,053 18,486 17,670 4,694 94,903 ---------- ---------- ----------- ----------- ----------- Operating income (loss) 1,615 634 (734) 2,015 3,530 Interest expense, net 4,494 411 701 268 (f) 5,860 (14)(g) Other income (expense), net (41) (41) ---------- ---------- ----------- ----------- ----------- Income (loss) before income taxes (2,920) 223 (1,435) 1,761 (2,371) Income tax expense (benefit) (1,168) 85 (523) 704 (h) (902) ---------- ---------- ----------- ----------- ----------- Net income (loss) $ (1,752) 138 (912) $ 1,057 $ (1,469) ========== ========== =========== =========== =========== See accompanying Notes to Unaudited Pro Forma Financial Statements F-24 AMERITRUCK DISTRIBUTION CORP. UNAUDITED PRO FORMA STATEMENT OF OPERATIONS Year Ended December 31, 1996 (in thousands) Historical ---------------------------------------- Monfort and Pro Forma Pro Forma AmeriTruck Lynn Tran-Star Adjustments Total ------------ ------------- ----------- ------------- ----------- Operating revenue $ 224,257 $ 84,588 $ 68,476 $ 27,226 (a) $ 404,547 ------------ ------------- ----------- ------------- ----------- Operating expenses: Salaries, wages and fringe benefits 71,996 11,719 27,330 111,045 Purchased transportation 57,413 51,326 3,818 112,557 Operating supplies and expenses 40,946 9,415 23,706 23,000 (a) 96,157 (910)(b) Depreciation and amortization of capital leases 14,211 4,773 8,045 (2,563)(c) 24,466 Claims and insurance 8,806 2,243 3,123 14,172 Operating taxes and licenses 4,988 1,281 2,214 8,483 General supplies and expenses 11,215 1,781 1,397 (754)(d) 13,639 Amortization of intangibles 1,130 899 (e) 2,029 Gain on disposal of property and equipment (1,267) (983) (14) (2,264) ------------ ------------- ----------- ------------- ----------- Total operating expenses 209,438 81,555 69,619 19,672 380,284 ------------ ------------- ----------- ------------- ----------- Operating income (loss) 14,819 3,033 (1,143) 7,554 24,263 Interest expense, net 16,677 1,712 2,645 1,071 (f) 22,050 (55)(g) Other income (expense), net (34) (34) ------------ ------------- ----------- ------------- ----------- Income (loss) before income taxes and extraordinary items (1,892) 1,321 (3,788) 6,538 2,179 Income tax expense (benefit) 340 534 (1,520) 2,615 (h) 1,969 ------------ ------------- ----------- ------------- ----------- Income (loss) before extraordinary items (2,232) 787 (2,268) 3,923 210 Extraordinary items, loss on early retirement of debt (230) (230) ------------ ------------- ----------- ------------- ----------- Net income (loss) $ (2,462) $ 787 $ (2,268) $ 3,923 $ (20) ============ ============= =========== ============= =========== See accompanying Notes to Unaudited Pro Forma Financial Statements F-25 AMERITRUCK DISTRIBUTION CORP. UNAUDITED PRO FORMA COMBINED BALANCE SHEET March 31, 1997 (in thousands) Historical ---------------------------------------- Monfort and Pro Forma Pro Forma Assets AmeriTruck Lynn Tran-Star Adjustments Total ------------ ------------- ----------- ------------- ----------- Current assets: Cash and cash equivalents $ 2,110 $ 2,110 Accounts and notes receivable, net 27,854 $ 4,031 $ 7,026 38,911 Prepaid expenses 8,140 726 926 $ 2,967 (i) 12,759 Repair parts and supplies 1,286 149 460 1,895 Deferred income taxes 1,467 1,087 1,721 (2,808)(j) 1,467 Other current assets 1,313 120 1,433 Due from affiliates 27 (27)(j) 0 ------------ ------------- ----------- ------------- ----------- Total current assets 42,170 5,993 10,280 132 58,575 Property and equipment, net 100,201 17,325 32,699 (7,032)(k) 143,193 Goodwill, net 39,140 13,491 (l) 52,631 Other assets 8,409 204 2,250 (m) 10,863 ------------ ------------- ----------- ------------- ----------- Total assets $ 189,920 $ 23,318 $ 43,183 $ 8,841 $ 265,262 ============ ============= =========== ============= =========== Liabilities and Stockholders' Equity (Deficiency) Current liabilities: Current portion of capital lease obligations/long-term debt $ 10,704 $ 5,437 $ 11,167 $ 51 (n) $ 27,359 Accounts payable and accrued expenses 17,030 2,265 5,418 1,006 (r) 25,719 Claims and insurance accruals 1,594 2,610 3,320 (2,610)(j) 4,914 Other current liabilities 542 542 Due to affiliates 2,889 929 (3,818)(j) 0 ------------ ------------- ----------- ------------- ----------- Total current liabilities 29,870 13,201 20,834 (5,371) 58,534 Long-term debt 155,497 18,284 12,600 (o) 186,492 111 (n) Capital lease obligations 10,566 10,566 Deferred income taxes 7,403 51 4,712 (4,763)(j) 7,403 Other liabilities 2,726 117 2,843 ------------ ------------- ----------- ------------- ----------- Total liabilities 195,496 23,818 43,947 2,577 265,838 ------------ ------------- ----------- ------------- ----------- Redeemable preferred stock 3,000 (q) 3,000 ------------ ------------- ----------- ------------- ----------- Stockholders' equity (deficiency): Common stock 35 4 (4)(p) 42 7 (q) Additional paid-in capital 898 6,119 (6,119)(p) 2,891 1,993 (q) Loans to stockholders (1,880) (1,880) Accumulated deficit (4,629) (6,887) 6,887 (p) (4,629) Liabilities in excess of assets (500) 500 (p) 0 ------------ ------------- ----------- ------------- ----------- Total stockholders' equity (deficiency) (5,576) (500) (764) 3,264 (3,576) ------------ ------------- ----------- ------------- ----------- Total liabilities and stockholders' equity (deficiency) $ 189,920 $ 23,318 $ 43,183 $ 8,841 $ 265,262 ============ ============= =========== ============= =========== See accompanying Notes to Pro Forma Financial Statements F-26 AMERITRUCK DISTRIBUTION CORP. Notes to Unaudited Pro Forma Financial Statements (amounts in thousands) (a) Operating revenue and operating supplies and expenses have been adjusted to record revenue and related expenses as a result of the Transportation Services Agreement, dated as of April 28, 1997, entered into with subsidiaries of ConAgra in connection with the acquisition of Monfort and Lynn. Under the terms of this agreement, certain ConAgra subsidiaries have agreed to tender freight to AmeriTruck and its subsidiaries in designated lanes and minimum annual volumes with pricing fixed for the first two years. The agreement has a four-year term. The agreement also increases rates on other traffic lanes operated by Monfort and Lynn. (b) Operating supplies and expenses have been adjusted to conform the accounting policies for the capitalization of tires by removing tires from property and equipment and establishing a prepaid tire balance to be amortized over a period of 10 - 18 months. (See (i) below). (c) Depreciation and amortization of capital leases has been adjusted to reflect the change in depreciation expense resulting from the adjustment of the property and equipment to their fair values and the conformity of accounting policies for the depreciable lives of the assets. (d) General supplies and expenses have been adjusted to reflect the reversal of certain allocated costs from the former parent company not expected to recur, as well as the reversal of certain other costs associated with the separation of the operations of one of the acquired companies from its sister company to facilitate the acquisition. (e) Amortization of intangibles has been adjusted to reflect the increase in amortization expense on the goodwill of $13,491 recorded as a result of the Acquisitions. Goodwill is being amortized on a straight-line basis over an estimated life of 40 years. The increase in amortization expense associated with goodwill was $84 for the three months ended March 31, 1997 and $337 for the year ended December 31, 1996. Additionally, amortization of intangibles has been increased to record the amortization of the value of the Transportation Services Agreement described in (a) above on a straight-line basis over the contract life of 4 years. The increase in amortization expense associated with the Transportation Services Agreement was $ 141 for the three months ended March 31, 1997 and $562 for the year ended December 31, 1996. (f) Interest expense was adjusted to reflect the additional interest expense associated with the borrowings to partially fund the Acquisitions at an assumed rate of 8.5%. (g) Interest expense was adjusted as a result of the recording of debt at fair value. (h) Income tax expense was adjusted to reflect the increase in federal and state income taxes resulting from the pro forma adjustments at a statutory rate of 40%. (i) Prepaid expenses has been adjusted to conform the accounting policies for the capitalization of tires by establishing a prepaid tire balance to be amortized over 10 - 18 months. (See (b) above). (j) To eliminate historical deferred taxes, due to/from affiliates and claims and insurance accruals not assumed by AmeriTruck in connection with the Acquisitions. (k) Property and equipment has been adjusted to its appraised market values. F-27 AMERITRUCK DISTRIBUTION CORP. Notes to Unaudited Pro Forma Financial Statements (amounts in thousands) (l) Goodwill has been adjusted to reflect the goodwill resulting from the excess of the purchase price over the fair value of the net assets acquired by AmeriTruck. This amount will be amortized on a straight-line basis over an estimated life of 40 years. (m) Other assets were adjusted to reflect the capitalization of the value of the Transportation Services Agreement described in (a) above and will be amortized on a straight-line basis over the 4-year life of the agreement. (n) Debt and capital leases have been adjusted to fair value. (o) Long-term debt has been adjusted to reflect the borrowings necessary to partially fund the Acquisitions. (p) Adjustments have been made to eliminate the equity/(deficit) of the acquired companies. (q) Redeemable preferred stock and stockholders' equity has also been adjusted to reflect the issuance of common stock and preferred stock to partially fund the Acquisitions. (r) Accounts payable and accrued expenses has been adjusted to include certain nonrecurring costs and expenses associated with integrating the businesses acquired through the Acquisitions. Such adjustment includes nonrecurring costs related to employee severances and relocation costs for employees of the acquired companies and other integration costs. In the near future additional nonrecurring costs may be incurred, related to the elimination of duplicative facilities, computer systems and other assets. The effect of any additional adjustment would be to adjust the goodwill recognized as a result of the Acquisitions. F-28