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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of Earliest Event Reported): August 21, 2001
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LEUCADIA NATIONAL CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
NEW YORK
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(State or Other Jurisdiction of Incorporation)
1-5721 13-2615557
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(Commission File Number) (I.R.S. Employer Identification No.)
315 PARK AVENUE SOUTH, NEW YORK, NEW YORK 10010
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(Address of Principal Executive Offices) (Zip Code)
(212) 460-1900
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
As more fully described in Leucadia National Corporation's (the
"Company") Form 8-K dated August 21, 2001, on that date the Company acquired an
indirect 25% equity interest in The FINOVA Group Inc. ("Finova"), which it owns
through its interest in Berkadia LLC ("Berkadia"), and entered into certain
agreements in connection with the acquisition of its interest in Finova and the
$5.6 billion loan by Berkadia (the "Berkadia Loan") to FINOVA Capital
Corporation used to fund a portion of Finova's chapter 11 reorganization plan
(collectively, the "Finova transactions"). This Form 8-K/A amends the
aforementioned Form 8-K by including the financial statements and exhibits set
forth under Item 7.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired:
Note: Audited annual and unaudited interim financial
statements of Berkadia LLC for the relevant periods are not
applicable as the entity was formed in February 2001 and had
no assets, liabilities or operating results throughout such
periods.
(1) Audited consolidated financial statements of The FINOVA Group
Inc. for the year ended December 31, 2000 described below,
incorporated by reference to Item 14 of Finova's Annual Report
to Stockholders on Form 10-K for the fiscal year ended
December 31, 2000
o Report of Independent Auditors
o Consolidated Balance Sheets as of December 31, 2000
and 1999
o Statements of Consolidated Operations for the years
ended December 31, 2000, 1999 and 1998
o Statements of Consolidated Shareowners' Equity
o Statements of Consolidated Cash Flows
o Notes to Consolidated Financial Statements
(2) Unaudited consolidated financial statements of The FINOVA
Group Inc. for the six months ended June 30, 2001 described
below, incorporated by reference to Item 1 of Finova's
Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2001
o Condensed Consolidated Balance Sheet as of June 30,
2001
o Condensed Statements of Consolidated Operations for
the three and six months ended June 30, 2001 and 2000
o Condensed Statements of Consolidated Cash Flows for
the six months ended June 30, 2001 and 2000
(b) Pro forma financial information:
The accompanying unaudited pro forma consolidated balance sheet
information as of June 30, 2001 and unaudited pro forma consolidated income
statements for the year ended December 31, 2000 and the six months ended June
30, 2001 are presented to reflect the Finova transactions as if they had
occurred on the dates indicated below.
The accompanying unaudited pro forma consolidated income statements
should be read in conjunction with the Company's historical consolidated
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2000 and its Quarterly
Report on Form 10-Q for the period ended June 30, 2001 and the historical
consolidated financial statements and notes thereto of Finova, which are
referenced in Item 7 hereof and are incorporated into this Report. The unaudited
pro forma consolidated financial statements are presented for informational
purposes only and are not necessarily indicative of actual results had the
Finova transactions occurred as described in the preceding paragraph, nor do
they purport to represent results of future operations.
If the Finova transactions had occurred on June 30, 2001, the Company's
unaudited consolidated balance sheet would have reflected the receipt of $30
million for its 50% share of a funding fee paid by Finova in connection with the
Berkadia Loan and recognition of the related deferred income as further
described in note (c) to the unaudited pro forma consolidated income statements.
The pro forma consolidated income statements present the Company's
historical consolidated income statements for the year ended December 31, 2000
and the six months ended June 30, 2001 adjusted to give effect to the FINOVA
transactions as if they had occurred on January 1, 2000.
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Leucadia National Corporation and Subsidiaries
Unaudited Pro Forma Consolidated Income Statement
For the year ended December 31, 2000
(In thousands, except earnings per share amounts)
Pro forma Pro forma as
Historical Adjustments Adjusted
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Revenues:
Insurance revenues and commissions $108,494 $108,494
Manufacturing 65,019 65,019
Finance 89,007 89,007
Investment and other income 300,449 $4,000 (a) 304,449
Equity in income of associated companies 29,293 11,200 (b) (23,173)
30,916 (c)
(94,582)(d)
Net securities gains 123,225 123,225
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715,487 (48,466) 667,021
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Expenses:
Provision for insurance losses and policy benefits 150,066 150,066
Amortization of deferred policy acquisition costs 26,289 26,289
Manufacturing cost of goods sold 40,650 40,650
Interest 57,713 57,713
Salaries 58,982 58,982
Selling, general and other expenses 188,485 188,485
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522,185 0 522,185
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Income before income taxes, minority expense
of trust preferred securities and extraordinary
gain 193,302 (48,466) 144,836
Income taxes 72,756 (16,963)(e) 55,793
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Income before minority expense of trust
preferred securities and extraordinary gain 120,546 (31,503) 89,043
Minority expense of trust preferred securities, net
of taxes 5,521 0 5,521
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Income before extraordinary gain $115,025 $(31,503) $83,522
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Basic earnings per common share:
Income before extraordinary gain $2.07 $1.50
Number of shares in calculation 55,529 55,529
Diluted earnings per common share:
Income before extraordinary gain $2.07 $1.50
Number of shares in calculation 55,598 55,598
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Leucadia National Corporation and Subsidiaries
Unaudited Pro Forma Consolidated Income Statement
For the six months ended June 30, 2001
(In thousands, except earnings per share amounts)
Pro forma Pro forma as
Historical Adjustments Adjusted
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Revenues:
Insurance revenues and commissions $41,828 $41,828
Manufacturing 26,261 26,261
Finance 56,610 56,610
Investment and other income 113,355 $662(a) 114,017
Equity in income of associated companies 26,824 5,600(b) 47,882
15,458(c)
0(d)
Net securities gains 17,952 17,952
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282,830 21,720 304,550
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Expenses:
Provision for insurance losses and policy benefits 85,508 85,508
Amortization of deferred policy acquisition costs 16,965 16,965
Manufacturing cost of goods sold 18,034 18,034
Interest 29,221 29,221
Salaries 28,010 28,010
Selling, general and other expenses 90,253 90,253
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267,991 0 267,991
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Income before income taxes, minority expense
of trust preferred securities, extraordinary gain
and cumulative effect of a change in accounting
principle 14,839 21,720 36,559
Income taxes 6,102 7,602(e) 13,704
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Income before minority expense of trust
preferred securities, extraordinary gain
and cumultive effect of a change in accounting
principle 8,737 14,118 22,855
Minority expense of trust preferred securities, net
of taxes 2,761 0 2,761
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Income before extraordinary gain and cumulative
effect of a change in accounting principle $5,976 $14,118 $20,094
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Basic earnings per common share:
Income before extraordinary gain and cumulative
effect of a change in accounting principle $0.11 $0.36
Number of shares in calculation 55,309 55,309
Diluted earnings per common share:
Income before extraordinary gain and cumulative
effect of a change in accounting principle $0.11 $0.36
Number of shares in calculation 55,635 55,635
Notes to Unaudited Pro Forma Consolidated Income Statements
The amounts described in notes (b), (c) and (d) are recorded
under the equity method of accounting and are reflected in the caption "Equity
in income of associated companies."
(a) Represents the Company's 50% share of the annual
management fee. For the six months ended June 30,
2001, the pro forma adjustment is for two months, as
four months were reflected in the historical
financial statements.
(b) Represents the Company's 10% share of income related
to the Berkadia Loan. The income on the Berkadia Loan
is based on the interest rate differential between
the Berkadia Loan and Berkadia's borrowing costs,
estimated to be 200 basis points. The income estimate
assumes that the Berkadia Loan's $5.6 billion
outstanding principal balance remains unchanged under
the assumption that any available cash generated by
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Finova would have been used to make the cash
distribution to Finova's creditors required under the
plan of reorganization. However, if cash is available
to repay any portion of the Berkadia Loan, the
Company's actual share of the related income will be
less than the pro forma amount shown.
(c) Represents the Company's share of the straight-line
amortization of debt discount relating to the
Berkadia Loan. The total initial amount of the debt
discount recorded by Berkadia is the sum of the
amount allocated to its investment in Finova's common
stock (approximately $189 million), plus the $60
million commitment fee and $60 million funding fee
received by Berkadia in connection with the Berkadia
Loan. The Company received 50% of the cash fees and
recognizes 50% of the discount amortization.
(d) Represents the Company's share of losses recorded by
Berkadia under the equity method attributable to its
common stock investment in Finova. Berkadia's
recognition of its share of Finova's losses is
suspended once Berkadia's equity interest in Finova
is reduced to zero. Berkadia's initial investment in
Finova is based upon the number of common shares of
Finova owned by Berkadia valued at $3.10 per share,
representing the closing market price on August 21,
2001 (the date the Finova transactions were
consummated), discounted to reflect an estimate for
marketability restrictions. Although the Company has
no cash investment in Berkadia, since it has
guaranteed 10% of the third party financing provided
to Berkadia, the Company will record its share of any
losses recorded by Berkadia up to the amount of the
Company's guarantee.
(e) Adjustment of income taxes to reflect pro forma
adjustments.
(c) Exhibits.
23.1 Consent of Ernst & Young LLP
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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 hereunto duly authorized.
LEUCADIA NATIONAL CORPORATION
By: /s/ Barbara L. Lowenthal
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Barbara L. Lowenthal
Vice President
Date: November 5, 2001
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EXHIBIT INDEX
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Exhibit Number Description
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23.1 Consent of Ernst & Young LLP