NABISCO GROUP HOLDINGS CORP.
(CURRENTLY RJR NABISCO HOLDINGS CORP.)
RESTATED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1999 MARCH 31, 1998
-------------- --------------
NET SALES........................................................................ $ 1,855 $ 1,962
------- -------
Costs and expenses:
Cost of products sold.......................................................... 1,027 1,125
Selling, advertising, administrative and general expenses...................... 641 598
Amortization of trademarks and goodwill........................................ 53 56
------- -------
OPERATING INCOME............................................................. 134 183
Interest and debt expense........................................................ (98) (104)
Other income (expense), net...................................................... (10) (9)
------- -------
INCOME BEFORE INCOME TAXES................................................... 26 70
Provision for income taxes....................................................... 9 27
------- -------
INCOME BEFORE MINORITY INTEREST IN INCOME OF NABISCO HOLDINGS................ 17 43
Less minority interest in income of Nabisco Holdings............................. 7 11
------- -------
INCOME FROM CONTINUING OPERATIONS............................................ 10 32
Income (loss) from operations of discontinued businesses, net of income taxes.... 66 (52)
------- -------
NET INCOME (LOSS)............................................................ $ 76 $ (20)
------- -------
------- -------
BASIC NET INCOME (LOSS) PER SHARE:
Income from continuing operations.............................................. .02 .06
Income (loss) from discontinued operations..................................... .20 (.16)
Net income (loss)............................................................ .22 (.10)
DILUTED NET INCOME (LOSS) PER SHARE:
Income from continuing operations.............................................. .02 .06
Income (loss) from discontinued operations..................................... .20 (.16)
Net income (loss)............................................................ .22 (.10)
DIVIDENDS PER SHARE OF COMMON STOCK.............................................. $ .5125 $ .5125
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1999 MARCH 31, 1998
--------------- ---------------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income (loss).............................................................. $ 76 $ (20)
Less (income) loss from discontinued operations................................ (66) 52
----- -----
Income from continuing operations.............................................. 10 32
----- -----
Adjustments to reconcile net income (loss) to net cash flows used in operating
activities:
Depreciation and amortization.............................................. 120 124
Deferred income tax expense................................................ 16 23
Changes in working capital items, net...................................... (342) (372)
Other, net................................................................. 10 6
----- -----
Total adjustments........................................................ (196) (219)
----- -----
Net cash flows used in continuing operating activities....................... (186) (187)
Net cash flows with discontinued operations.................................. 150 152
----- -----
Net cash flows used in operating activities.................................. (36) (35)
----- -----
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Capital expenditures........................................................... (47) (78)
Disposition of businesses and certain assets................................... 2 3
Repurchases of Nabisco Holdings' Class A common stock.......................... -- (26)
Proceeds from exercise of Nabisco Holdings' Class A common stock options....... 2 15
----- -----
Net cash flows used in investing activities.................................. (43) (86)
----- -----
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Net borrowings (repayments) of long-term debt.................................. (7) 990
Increase (decrease) in short-term borrowings................................... 238 (751)
Dividends paid on common and preferred stock................................... (183) (191)
Other, net..................................................................... 23 55
----- -----
Net cash flows from financing activities..................................... 71 103
----- -----
Effect of exchange rate changes on cash and cash equivalents..................... (6) (4)
----- -----
Net change in cash and cash equivalents...................................... (14) (22)
Cash and cash equivalents at beginning of period................................. 112 127
----- -----
Cash and cash equivalents at end of period....................................... $ 98 $ 105
----- -----
----- -----
Income taxes paid, net of refunds................................................ $ 11 $ 53
Interest paid.................................................................... $ 104 $ 85
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
2
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN MILLIONS)
MARCH 31, 1999 DECEMBER 31, 1998
-------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents................................................... $ 98 $ 112
Accounts and notes receivable, net.......................................... 488 522
Inventories................................................................. 803 753
Prepaid expenses and excise taxes........................................... 69 70
Net assets of discontinued businesses....................................... 6,600 6,696
------- -------
TOTAL CURRENT ASSETS.................................................... 8,058 8,153
------- -------
Property, plant and equipment, net............................................ 2,859 2,947
Trademarks, net............................................................... 3,335 3,368
Goodwill, net................................................................. 3,132 3,182
Other assets and deferred charges............................................. 98 94
------- -------
$ 17,482 $ 17,744
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings....................................................... $ 67 $ 68
Accounts payable and accrued liabilities.................................... 1,369 1,638
Current maturities of long-term debt........................................ 265 118
Income taxes accrued........................................................ 8 20
------- -------
TOTAL CURRENT LIABILITIES............................................... 1,709 1,844
------- -------
Long-term debt (less current maturities)...................................... 3,692 3,619
Minority interest in Nabisco Holdings......................................... 727 752
Other noncurrent liabilities.................................................. 964 962
Deferred income taxes......................................................... 1,225 1,226
Contingencies (note 5)
Nabisco Group Holdings' obligated mandatorily redeemable preferred securities
of subsidiary trusts holding solely junior subordinated debentures*......... 1,327 1,327
Stockholders' equity:
ESOP preferred stock........................................................ 201 205
Common stock (1999--328,729,048 shares issued, 1998--328,385,148 shares
issued)................................................................... 3 3
Paid-in capital............................................................. 8,842 9,004
Retained earnings (accumulated deficit)..................................... (501) (577)
Accumulated other comprehensive income (loss)............................... (566) (460)
Treasury stock, at cost..................................................... (100) (100)
Other stockholders' equity.................................................. (41) (61)
------- -------
TOTAL STOCKHOLDERS' EQUITY............................................ 7,838 8,014
------- -------
$ 17,482 $ 17,744
------- -------
------- -------
- ------------------------
* The sole assets of the subsidiary trusts are junior subordinated debentures
of Nabisco Group Holdings Corp. The outstanding junior subordinated
debentures have aggregate principal amounts of approximately $978 and $385
million, annual interest rates of 10% and 9 1/2%, respectively and mature in
December, 2044 and September, 2047, respectively. The preferred securities
will be mandatorily redeemed upon redemption of the junior subordinated
debentures. See note 6 for discussion regarding the partial tender and
redemption of these securities.
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
3
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1 -- INTERIM REPORTING
GENERAL
The consolidated condensed financial statements include the accounts of
Nabisco Group Holdings Corp. ("NGH"--currently named RJR Nabisco Holdings
Corp.), and its majority-owned subsidiaries, including 80.5% of Nabisco Holdings
Corp. ("Nabisco Holdings") and its wholly-owned subsidiary, Nabisco, Inc.
("Nabisco").
In management's opinion, the accompanying unaudited consolidated condensed
financial statements (the "Consolidated Condensed Financial Statements") of NGH
contain all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results for the interim periods presented.
The Consolidated Condensed Financial Statements should be read in conjunction
with the restated consolidated financial statements and footnotes of NGH for the
year ended December 31, 1998.
For interim reporting purposes, certain costs and expenses are charged to
operations in proportion to the estimated total annual amount expected to be
incurred.
Certain prior period amounts have been reclassified to conform to the
current period presentation.
The account balances and activities of R.J. Reynolds Tobacco Holdings, Inc.
("RJR"--formerly named RJR Nabisco, Inc.), which included R.J. Reynolds
International ("Reynolds International"), R.J. Reynolds Tobacco Company
("Reynolds Tobacco") and corporate headquarters, are segregated and reported as
discontinued operations in the accompanying consolidated financial statements.
See note 6 for further discussion.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
On January 1, 1999, NGH adopted SOP No. 98-5, Reporting on the Costs of
Start-Up Activities. SOP No. 98-5 established standards on accounting for
start-up and organization costs and, in general, requires such costs to be
expensed as incurred. The adoption of SOP No. 98-5 did not have a material
effect on NGH's financial position or results of operations.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
During the second quarter of 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 133, Accounting
for Derivative Instruments and Hedging Activities ("SFAS No. 133"), which must
be adopted by January 1, 2000, with early adoption permitted. On May 20, 1999,
the FASB issued an exposure draft, which would amend SFAS No. 133 to delay its
effective date one year. SFAS No. 133 requires that all derivative instruments
be recorded on the consolidated balance sheet at their fair value. Changes in
the fair value of derivatives will be recorded each period in earnings or other
comprehensive income, depending on whether a derivative is designated as part of
a hedge transaction and, if it is, the type of hedge transaction. NGH has not
yet determined the timing of adoption or the impact that adoption or subsequent
application of SFAS No. 133 will have on its financial position or results of
operations.
COMPREHENSIVE INCOME
Total comprehensive income for the three months ended March 31, 1999 and
1998 was $(30) million and $(20) million, respectively. Total comprehensive
income includes net income (loss), foreign currency translation adjustments and
minimum pension liability adjustments.
1998 RESTRUCTURING EXPENSES
In the second and fourth quarters of 1998, Nabisco recorded restructuring
expenses of $406 million ($216 million after-tax, net of minority interest) and
$124 million ($75 million after-tax, net of minority
4
NOTE 1 -- INTERIM REPORTING (CONTINUED)
interest), respectively. These restructuring programs were undertaken to
streamline operations and improve profitability and will result in a workforce
reduction of approximately 6,500 employees of which 3,825 positions were
eliminated as of March 31, 1999. The restructuring programs will require cash
expenditures of approximately $205 million, of which $16 million was paid in the
first quarter of 1999, primarily for severance and benefits. In addition, the
programs will require additional expenses of approximately $134 million, of
which $15 million ($7 million after-tax, net of minority interest) was incurred
in the first quarter of 1999. These additional expenses are principally for
implementation and integration of the programs and include costs for relocation
of employees and equipment and training.
For the three months ended March 31, 1999, $33 million of the accrual was
utilized as follows: $17 million for severance and benefits, $9 million for the
disposal of assets and $7 million for other exit costs.
1996 RESTRUCTURING EXPENSE
The 1996 restructuring program, which was undertaken to streamline
operations and improve Nabisco's profitability, has been completed and the
balance remaining at December 31, 1998 of $2 million for severance costs was
paid during the first quarter of 1999.
NOTE 2 -- INVENTORIES
The major classes of inventory are as follows:
MARCH 31, DECEMBER 31,
1999 1998
------------- ---------------
Finished products............................................... $ 472 $ 457
Raw materials................................................... 202 164
Other........................................................... 129 132
------ -----
$ 803 $ 753
------ -----
------ -----
NOTE 3 -- EARNINGS PER SHARE
THREE MONTHS ENDED MARCH 31,
--------------------------------------------------
1999 1998
------------------------ ------------------------
BASIC DILUTED BASIC DILUTED
----------- ----------- ----------- -----------
Income (loss) from continuing operations applicable to common stock:
Income from continuing operations.................................. $ 10 $ 10 $ 32 $ 32
Preferred stock dividends.......................................... (4) (4) (11) (11)
----------- ----------- ----------- -----------
$ 6 $ 6 $ 21 $ 21
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number of common and common equivalent shares
outstanding (in thousands):
Common shares...................................................... 324,053 324,053 323,798 323,798
Assumed exercise of NGH's stock options............................ -- 248 -- 1,696
----------- ----------- ----------- -----------
324,053 324,301 323,798 325,494
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Shares of ESOP convertible preferred stock of 12,543,347 and 13,432,872 were
not included in computing diluted earnings per share for 1999 and 1998,
respectively, because the effect would have been antidilutive. Common shares
also exclude approximately 949,100 and 966,000 shares of restricted stock as the
vesting provisions had not been met at March 31, 1999 and 1998, respectively.
5
NOTE 4 -- SEGMENT REPORTING
NGH is a holding company whose subsidiaries are engaged principally in the
manufacture, distribution and sale of cookies, crackers, and other food
products. NGH is organized and reports its results of operations in three
operating segments: Nabisco Biscuit, the U.S. Foods Group and the International
Food Group which are segregated by both product and geographic location.
NGH's management evaluates the performance of its operating segments based
upon ongoing Operating Company Contribution ("OCC"). OCC for each reportable
segment is operating income before amortization of trademarks and goodwill,
restructuring expenses and other items deemed unusual by management. These items
include restructuring related costs in 1999.
SEGMENT PROFIT/(LOSS) INFORMATION:
THREE MONTHS ENDED MARCH 31 1999 1998
- -------------------------------------------------------------------------------------------- --------- ---------
Net sales from external customers:
Nabisco Biscuit........................................................................... $ 867 $ 850
U.S. Foods Group.......................................................................... 435 530
International Food Group.................................................................. 553 582
--------- ---------
Consolidated net sales from external customers.......................................... $ 1,855 $ 1,962
--------- ---------
--------- ---------
Ongoing OCC:
Nabisco Biscuit........................................................................... $ 121 $ 143
U.S. Foods Group.......................................................................... 49 63
International Food Group.................................................................. 32 32
Other..................................................................................... -- 1
--------- ---------
Consolidated OCC........................................................................ $ 202 $ 239
--------- ---------
--------- ---------
A reconciliation of consolidated OCC to consolidated income before income
taxes is as follows:
THREE MONTHS ENDED MARCH 31 1999 1998
- -------------------------------------------------------------------------------------------- --------- ---------
Ongoing OCC................................................................................. $ 202 $ 239
Items excluded from OCC:
Goodwill and trademark amortization....................................................... (53) (56)
Interest and debt expense................................................................. (98) (104)
Other income (expense), net............................................................... (10) (9)
Restructuring related costs............................................................... (15) --
--------- ---------
Income before income taxes.............................................................. $ 26 $ 70
--------- ---------
--------- ---------
NOTE 5 -- CONTINGENCIES
TOBACCO LITIGATION
As of May 27, 1999, NGH was a defendant in 17 lawsuits arising out of the
tobacco business conducted by Reynolds Tobacco or its subsidiaries. In two
additional cases, NGH has been voluntarily dismissed subject to plaintiffs'
discretion to restore NGH to the case within a limited period of time. These 17
cases name NGH on a variety of theories, not always specifically pled, that seek
to impose liability on NGH for injuries allegedly caused by the use, sale,
distribution, manufacture, development, advertising, marketing or health effects
of, exposure to, or research, statements or warnings regarding cigarettes.
Most of these 17 active suits were brought in state courts by union
health-benefit trust funds -- and, in one instance, a Native American tribe --
seeking to recover the health-care costs they claim to have incurred for their
members whose illnesses are allegedly related to cigarettes. Three of the cases
are non-union class action suits, one in Pennsylvania federal court, one in
Indiana state court and one in Missouri state court. A fourth purported class
action is pending in Nigeria. NGH's defenses in all the cigarette cases in which
it is named include the merits defenses of Reynolds Tobacco plus separate
arguments that NGH is
6
NOTE 5 -- CONTINGENCIES (CONTINUED)
a holding company that does not engage in any of the activities for which
plaintiffs seek to impose liability. NGH also seeks to be dismissed from some of
these cases based on the fact that it has no presence in the state in which a
particular case is pending and therefore should not be subject to the
jurisdiction of the applicable court.
In the union health-care cost-recovery cases of the kind noted above,
defendants also argue that the case should be dismissed because of the settled
law that one who pays an injured person's medical expenses is legally too remote
to maintain an action against the person allegedly responsible for the injury.
Most courts that have decided motions to dismiss based on this argument,
including the federal courts of appeals for the Second and Third Circuits, have
granted the motions to dismiss on these "remoteness" grounds. In another case,
in which NGH was named and which proceeded to trial before a jury, NGH as well
as RJR were dismissed from the case on a directed verdict after plaintiffs had
presented their case.
As of May 27, 1999, no case in which NGH is a named defendant was scheduled
for trial in 1999. Two cases in which Reynolds Tobacco is a defendant are in the
process of being tried and it is likely that several more will be tried during
the course of the year.
NGH's litigation defense costs as well as any liabilities it might incur as
a result of the cases pending against it are to be paid by RJR and Reynolds
Tobacco under the indemnification provisions of an agreement between NGH, RJR
and Reynolds Tobacco. NGH's costs of defense, as well as any liabilities
incurred as a result of the case pending in Nigeria, are also subject to an
indemnity from Japan Tobacco Inc. as provided under the sale agreement among
Japan Tobacco, Reynolds Tobacco and RJR. If RJR and Reynolds Tobacco and Japan
Tobacco cannot fulfill their respective indemnity obligations, NGH could be
required to make the relevant payments itself.
In addition to the cases pending against NGH, there are several hundred
lawsuits relating to cigarettes in which Reynolds Tobacco, and sometimes RJR,
are named defendants. If Reynolds Tobacco and RJR are unable to satisfy their
payment obligations for any adverse judgments against them in some or all of
these cases, it is possible that plaintiffs in these cases would seek to recover
the unsatisfied obligations from the assets of NGH by bringing lawsuits on
various theories.
Some of the claims against NGH seek recovery of hundreds of millions and
possibly billions of dollars. This is also true of the litigation pending
against Reynolds Tobacco and RJR. Litigation is subject to many uncertainties.
Management is unable to predict the outcome of the litigation against NGH, or to
derive a meaningful estimate of the amount or range of any possible loss in any
quarterly or annual period or in the aggregate.
NOTE 6 -- THE REORGANIZATION
DISCONTINUED OPERATIONS
On March 9, 1999, RJR and Reynolds Tobacco entered into a definitive
agreement to sell the international tobacco business for approximately $8
billion, including the assumption of approximately $200 million of net debt, to
Japan Tobacco Inc. The sale was completed on May 12, 1999, except to the extent
that local regulatory approvals for this sale are still pending. Under the terms
of the agreement, Japan Tobacco acquired substantially all of the business
including intellectual property rights of Reynolds International, including the
international rights to the CAMEL, WINSTON and SALEM brand names. Proceeds from
the sale were used to reduce debt and for general corporate purposes.
Also on March 9, 1999, NGH announced that its board of directors had
approved a plan to separate the domestic tobacco business conducted by Reynolds
Tobacco, from the food business conducted by Nabisco's operating subsidiaries.
Under the plan, the separation will be accomplished by the transfer of RJR's
80.5% interest in Nabisco, together with approximately $1.6 billion in after-tax
proceeds from the international tobacco sale, to NGH through a merger
transaction that is intended to be tax-free and which
7
NOTE 6 -- THE REORGANIZATION (CONTINUED)
occurred on May 18, 1999, followed by a spin-off to NGH stockholders of shares
in RJR that is intended to be tax-free. On May 12, 1999, NGH's board of
directors approved the spin-off, which is expected to occur on or about June 14,
1999.
Upon completion of the spin-off, NGH will be legally renamed Nabisco Group
Holdings Corp. and continue to exist as a holding company, owning 80.5% of
Nabisco. The re-named Nabisco Group Holdings Corp. (symbol: NGH) and Nabisco
(symbol: NA) will each continue to trade as separate companies on The New York
Stock Exchange. Shares of RJR (symbol: RJR), as the owner of 100% of Reynolds
Tobacco, will also trade separately under the changed name of R.J. Reynolds
Tobacco Holdings, Inc.
NGH, RJR and Reynolds Tobacco have entered into, or will enter into, several
agreements governing the relationships among the parties after the distribution
of RJR's shares to NGH stockholders, including the provision of intercompany
services by Nabisco to NGH, certain tax matters, indemnification rights and
obligations and other matters between the parties.
On April 13, 1999, NGH offered to purchase any and all of its 9 1/2% trust
preferred securities and sought consents from the holders of those securities to
waive certain covenants that might have prevented some of the transactions
described above. The consent offer expired on May 17, 1999. As of that date,
approximately $276 million of the total $374 million trust preferred securities
were tendered. The total cost to tender the preferred securities, including
accrued interest, premium fees and consent fees will total approximately $314
million. NGH intends to invest approximately $100 million in highly rated
short-term commercial paper to service future principal and interest payments on
the trust securities not tendered.
On May 18, 1999, NGH called for redemption all of its $949 million 10% trust
preferred securities outstanding. NGH expects to complete this redemption on
June 18, 1999.
On or about May 18, 1999, NGH called for redemption all of its outstanding
ESOP convertible preferred stock at $16.25 per share, plus accrued dividends, at
a total cost of approximately $200 million. NGH expects to complete this
transaction on June 10, 1999.
Reynolds International's, corporate headquarters' and Reynolds Tobacco's
account balances and activities are segregated and reported as discontinued
operations in the accompanying consolidated condensed financial statements.
Prior period financial statements have been reclassified to conform to the
current year presentation.
Summarized operating results of the discontinued businesses are as follows:
THREE MONTHS
ENDED MARCH 31,
--------------------
1999 1998
--------- ---------
Net sales.................................................................. $ 2,366 $ 1,985
Provision (benefit) for income taxes....................................... 61 (5)
Net income (loss).......................................................... 66 (52)
8
NOTE 6 -- THE REORGANIZATION (CONTINUED)
Assets and liabilities of the discontinued businesses are as follows:
MARCH 31, DECEMBER 31,
1999 1998
----------- ------------
Current assets...................................................... $ 3,029 $ 2,987
Property, plant and equipment, net.................................. 2,321 2,351
Trademarks and goodwill, net........................................ 12,060 12,165
Other assets and deferred charges................................... 340 341
Current liabilities................................................. (2,975) (2,859)
Long-term debt (less current maturities)............................ (4,938) (5,036)
Deferred income taxes............................................... (1,924) (1,936)
Other noncurrent liabilities........................................ (1,313) (1,317)
----------- ------------
Net assets of discontinued businesses............................. $ 6,600 $ 6,696
----------- ------------
----------- ------------
----------------------------
The unaudited pro forma information below reflects adjustments to the
historical results of operations and financial condition of NGH. The unaudited
pro forma balance sheet gives effect to the following transactions as if they
occurred on March 31, 1999, as applicable:
- the sale of Reynolds International and application of a portion of the net
proceeds to reduce debt and for general corporate purposes;
- the issuance of $1.25 billion of debt securities by RJR;
- the transfer of RJR's interest in Nabisco to NGH, together with
approximately $1.6 billion of the net cash proceeds from the international
tobacco sale, through a merger transaction;
- the redemption of $1.23 billion of trust originated preferred securities
and the repurchase of approximately $200 million of ESOP preferred stock;
and
- the spin-off of RJR to NGH stockholders.
The unaudited pro forma income statement gives effect to the above
transactions and the adjustment to selling, advertising, administrative and
general expenses to reflect the estimated level of corporate headquarters'
administrative expenses after the completion of the RJR spin-off, as if the
transactions occurred on January 1, 1999. No adjustment has been made for
one-time or non-recurring items in the unaudited pro forma income statement.
Management believes that the assumptions used provide a reasonable basis on
which to present the pro forma consolidated financial data based on transactions
and events that are currently probable to occur. NGH has provided the unaudited
pro forma consolidated condensed financial statements for informational purposes
only. You should not construe them to be indicative of the results of operations
or financial position had the transactions and events described above been
consummated on the dates assumed and do not project the results of operations or
financial position for any future date or period.
9
NOTE 6 -- THE REORGANIZATION (CONTINUED)
MARCH 31, 1999
-----------------
(UNAUDITED)
ASSETS
Cash and cash equivalents...................................................................... $ 143
Accounts and other receivables, net............................................................ 488
Inventories.................................................................................... 803
Prepaid expenses and excise taxes.............................................................. 69
-------
Total current assets....................................................................... 1,503
-------
Property, plant and equipment, net............................................................. 2,859
Trademarks, net................................................................................ 3,335
Goodwill, net.................................................................................. 3,132
Other assets and deferred charges.............................................................. 200
-------
Total assets............................................................................... $ 11,029
-------
-------
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings.......................................................................... $ 67
Accounts payable and accrued liabilities....................................................... 1,369
Current maturities of long-term debt........................................................... 265
Income taxes accrued........................................................................... 8
-------
Total current liabilities.................................................................. 1,709
-------
Long-term debt (less current maturities)....................................................... 3,692
Minority interest in Nabisco Holdings.......................................................... 727
Other noncurrent liabilities................................................................... 706
Deferred income taxes.......................................................................... 1,270
NGH's obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely
junior subordinated debentures................................................................ 98
Total stockholders' equity..................................................................... 2,827
-------
Total liabilities and stockholders' equity................................................. $ 11,029
-------
-------
THREE MONTHS
ENDED
MARCH 31, 1999
-----------------
(UNAUDITED)
Net sales...................................................................................... $ 1,855
Costs and expenses............................................................................. 1,671
Amortization of trademarks and goodwill........................................................ 53
-------
Operating income........................................................................... 131
Interest expense and other income (expense), net............................................... (77)
Income tax provision........................................................................... 21
Minority interest.............................................................................. (7)
-------
Loss from continuing operations............................................................ $ 26
-------
-------
------------------------
10