-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fIu+5l5kgXt9kdpdgwiqZHvYN9Jimp2vhHCx9mNTuBZoQNdO7iMFwdetVVTSixDH 8uw1hZ35vZdX/IytVwZZ3Q== 0000950129-94-000077.txt : 19940214 0000950129-94-000077.hdr.sgml : 19940214 ACCESSION NUMBER: 0000950129-94-000077 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROWNING FERRIS INDUSTRIES INC CENTRAL INDEX KEY: 0000014827 STANDARD INDUSTRIAL CLASSIFICATION: 4953 IRS NUMBER: 741673682 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 33 SEC FILE NUMBER: 033-51879 FILM NUMBER: 94506464 BUSINESS ADDRESS: STREET 1: 757 N ELDRIDGE CITY: HOUSTON STATE: TX ZIP: 77079 BUSINESS PHONE: 7138708100 424B2 1 DOMESTIC AND INT'L SUPPLEMENTS TO BFI S-3 1 *************************************************************************** * * * Information contained in this prospectus supplement is subject to * * completion or amendment. A final prospectus supplement and * * accompanying prospectus will be delivered to purchasers. This * * prospectus supplement and accompanying prospectus shall not * * constitute an offer to sell or the solicitation of an offer to buy * * nor shall there be any sale of these securities in any State in which * * such offer, solicitation or sale would be unlawful prior to * * registration or qualification under the securities laws of any such * * state. * * * *************************************************************************** SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1994 PRELIMINARY PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY 19, 1994 12,000,000 SHARES {BFI LOGO} BROWNING-FERRIS INDUSTRIES, INC. COMMON STOCK (PAR VALUE $.16 2/3 PER SHARE) --------------------- Of the 12,000,000 shares of Common Stock offered hereby, 9,000,000 shares are being offered in the United States and 3,000,000 shares are being offered in a concurrent international offering outside the United States. The initial public offering price and the aggregate underwriting discount per share will be identical for both offerings. See "Underwriting." The last reported sale price of the Common Stock on the New York Stock Exchange on February 10, 1994, was $28 1/2 per share. The shares trade under the symbol "BFI." See "Price Range of Common Stock and Dividends." --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO OFFERING PRICE DISCOUNT(1) COMPANY(2) ------------------- --------------- ------------ Per Share......................... $ $ $ Total(3).......................... $ $ $
- --------------- (1) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. (2) Before deducting estimated expenses of $ payable by the Company. (3) The Company has granted the U.S. Underwriters an option for 30 days to purchase up to an additional 1,350,000 shares at the initial public offering price per share, less the underwriting discount, solely to cover over-allotments. The Company has also granted a 30-day over-allotment option with respect to an additional 450,000 shares as part of the international offering. If such options are exercised in full, the total initial public offering price, underwriting discount and proceeds to the Company will be $ , $ and $ , respectively. See "Underwriting." --------------------- The shares offered hereby are offered severally by the U.S. Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in full or in part. It is expected that certificates for the shares will be ready for delivery at the offices of Goldman, Sachs & Co., New York, New York, on or about , 1994. GOLDMAN, SACHS & CO. CS FIRST BOSTON SMITH BARNEY SHEARSON INC. --------------------- The date of this Prospectus Supplement is March , 1994. 2 IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OR OTHER SECURITIES OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, THE CHICAGO STOCK EXCHANGE, THE PACIFIC STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. S-2 3 PROSPECTUS SUPPLEMENT SUMMARY The following summary is qualified in its entirety by, and shall be read in conjunction with, the other information appearing elsewhere in this Prospectus Supplement, in the accompanying Prospectus and in the documents incorporated by reference therein. Unless otherwise indicated, all share amounts and as adjusted amounts have been calculated assuming no exercise of the over-allotment options. The Company's operations are conducted through its subsidiaries and affiliates. The terms "BFI" and "Company" refer to Browning-Ferris Industries, Inc., a Delaware corporation, and its subsidiaries and affiliates, unless the context requires otherwise. THE COMPANY The Company is one of the largest publicly-held companies engaged in providing waste services. The Company collects, transports, treats and/or processes, recycles and disposes of commercial, residential and municipal solid waste and industrial wastes. The Company is also involved in resource recovery, medical waste services, portable restroom services and municipal and commercial sweeping operations. The Company operates in approximately 430 locations in North America and approximately 250 locations outside of North America (including 17 locations of unconsolidated affiliates), and employs approximately 36,000 persons (including approximately 3,000 employees of unconsolidated affiliates). In addition to operations in the United States, Canada and Puerto Rico, the Company has operations in Australia, Finland, Germany, Hong Kong, Italy, Kuwait, the Netherlands, New Zealand, Spain, the United Kingdom and Venezuela. The business strategies currently being implemented by BFI management are designed to: - Continue expansion of the core businesses domestically and internationally through an aggressive market development program. - Capitalize on opportunities resulting from regulatory, legislative, competitive and economic developments. - Expand participation and pursue new opportunities in evolving waste stream business segments. - Continue to improve both operating efficiencies and management of costs while effectively allocating resources. THE OFFERINGS Shares of Common Stock Offered United States Offering................... 9,000,000 International Offering................... 3,000,000 ------------ Total............................ 12,000,000 ------------ ------------ Common Stock Outstanding Before the Offerings(1)............... 178,814,956 After the Offerings................... 190,814,956 Use of Proceeds............................ Repayment of indebtedness incurred to acquire a 50% interest in Otto Waste Services and redemption of the Company's 8 1/2% Sinking Fund Debentures. See "Use of Proceeds." New York Stock Exchange Symbol............. BFI
- --------------- (1) As of February 9, 1994. The offering of the 9,000,000 shares of Common Stock initially being offered in the United States (the "United States Offering") and the offering of the 3,000,000 shares of Common Stock initially being offered outside the United States (the "International Offering") are collectively referred to in this Prospectus Supplement as the "Offerings." S-3 4 SUMMARY FINANCIAL DATA The following is a summary of certain consolidated financial information regarding the Company for the periods indicated. The selected financial information set forth below for the years ended September 30, 1989 through 1993 is summarized or prepared from the Company's audited consolidated financial statements for such periods. The financial information set forth for the three months ended December 31, 1992 and 1993 is summarized or prepared from the Company's unaudited consolidated financial statements for such periods, which have been prepared on a basis substantially consistent with the audited consolidated financial statements, and reflects, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to a fair presentation of the financial position and results of operations for such periods. Operating statement and cash flow data presented for periods prior to the second quarter of fiscal year 1990 have been restated as a result of the Company's decision to discontinue its hazardous waste operations in April 1990. The results for the three months ended December 31, 1993 are not necessarily indicative of the results for the full year. The data presented below should be read in conjunction with the Company's consolidated financial statements and the notes thereto incorporated by reference in the accompanying Prospectus. See "Incorporation of Certain Documents by Reference" in the accompanying Prospectus.
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED SEPTEMBER 30, ------------------- ------------------------------------------------------- 1993 1992 1993 1992 1991 1990 1989 ------- ------- ------- ------- ------- ------- ------- (IN MILLIONS, EXCEPT FOR PER SHARE AMOUNTS) OPERATING STATEMENT DATA: Revenues....................... $ 935 $ 848 $ 3,495 $ 3,287 $ 3,183 $ 2,967 $ 2,491 Income from continuing operations before special charges...................... 59 52 214 176 222 298 278 Income from continuing operations................... 59 52 197 176 65 257 278 Net income (loss).............. 59 52 197 176 65 (45) 263 Income (loss) per common and common equivalent share -- Income from continuing operations................. $ .34 $ .31 $ 1.15(1) $ 1.11 $ .42(2) $ 1.68(3) $ 1.84 Net income (loss)............ .34 .31 1.15 1.11 .42 (.29) 1.74 Cash dividends per common share.. .17 .17 .68 .68 .68 .64 .56 CASH FLOW DATA: Capital Expenditures -- continuing operations........ $ 156 $ 127 $ 606 $ 534 $ 478 $ 441 $ 443 Cash flows from operating activities................... 141 182 614 577 686 593 528 BALANCE SHEET DATA: Property and equipment, net.... $ 2,615 $ 2,260 $ 2,516 $ 2,264 $ 2,140 $ 1,988 $ 1,909 Total assets................... 4,382 4,080 4,296 4,068 3,656 3,574 3,017 Senior long-term debt, excluding current maturities................... 352 392 334 349 407 448 600 Convertible subordinated debentures................... 745 745 745 745 745 745 345 Common stockholders' equity.... 1,546 1,430 1,533 1,460 1,114 1,162 1,242
- --------------- (1) $1.25 per share before a special charge of $.10 per share taken to cover the estimated expense of reorganizing the Company's regional structure in the United States. (2) $1.44 per share before a special charge of $1.02 per share taken to establish additional landfill closure and post-closure reserves. (3) $1.94 per share before special charges of $.27 per share taken to provide primarily for additional landfill market development reserves and in connection with the settlement of a series of private civil lawsuits. S-4 5 THE COMPANY GENERAL The Company is one of the largest publicly-held companies engaged in providing waste services. The Company collects, transports, treats and/or processes, recycles and disposes of commercial, residential and municipal solid waste and industrial wastes. The Company is also involved in resource recovery, medical waste services, portable restroom services and municipal and commercial sweeping operations. The Company operates in approximately 430 locations in North America and approximately 250 locations outside of North America (including 17 locations of unconsolidated affiliates), and employs approximately 36,000 persons (including approximately 3,000 employees of unconsolidated affiliates). In addition to operations in the United States, Canada and Puerto Rico, the Company has operations in Australia, Finland, Germany, Hong Kong, Italy, Kuwait, the Netherlands, New Zealand, Spain, the United Kingdom and Venezuela. The business strategies currently being implemented by BFI management are designed to: - Continue expansion of the core businesses domestically and internationally through an aggressive market development program. - Capitalize on opportunities resulting from regulatory, legislative, competitive and economic developments. - Expand participation and pursue new opportunities in evolving waste stream business segments. - Continue to improve both operating efficiencies and management of costs while effectively allocating resources. The table below reflects the total revenues contributed by the Company's principal lines of business for the periods indicated.
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED SEPTEMBER 30,(1) -------------- ----------------------------- 1993 1992(1) 1993 1992 1991 ----- ----- ------- ------- ------- (IN MILLIONS) NORTH AMERICAN OPERATIONS Collection Services -- Solid Waste........ $ 570 $ 520 $ 2,138 $ 2,038 $ 2,027 Disposal and Transfer -- Solid Waste...... 199 196 790 757 740 Medical Waste Services.................... 39 35 146 119 97 Recycling Services........................ 71 55 240 175 99 Services Group and Other.................. 21 25 90 114 118 Elimination of Affiliated Companies' Revenues................................ (86) (81) (339) (304) (279) ----- ----- ------- ------- ------- Total North American Operations........... 814 750 3,065 2,899 2,802 INTERNATIONAL OPERATIONS(2)............... 121 98 430 388 381 ----- ----- ------- ------- ------- Total Company................... $ 935 $ 848 $ 3,495 $ 3,287 $ 3,183 ----- ----- ------- ------- ------- ----- ----- ------- ------- -------
- --------------- (1) Certain reclassifications have been made in prior years' amounts to conform to the current year presentation. (2) Revenues from Canadian operations are excluded from international revenues and are combined with North American revenues. SOLID WASTE SERVICES Collection BFI collects solid waste in approximately 500 operating locations in 45 states, Australia, Canada, Finland, Germany, Italy, Kuwait, the Netherlands, New Zealand, Puerto Rico, Spain, the United Kingdom and Venezuela. These operations provide solid waste collection services for numerous commercial establishments, industrial plants and governmental and residential units. BFI uses approximately 921,000 S-5 6 steel containers and approximately 13,000 specially equipped collection trucks in its waste collection operations. Transfer and Disposal BFI operates 94 solid waste transfer stations, 40 of which it owns, where solid wastes are compacted for transfer to final disposal facilities. Transfer stations are more conveniently located near residential and commercial collection routes so that the collection vehicles can discharge their comparatively low volume solid waste loads for reloading into larger volume transfer trailers for transportation to disposal facilities. This reduces fuel and labor costs and minimizes energy use. Sanitary landfilling is the primary method employed by the Company for final disposal of the solid waste stream which is not recycled. BFI currently operates 100 solid waste sanitary landfill sites in North America, 72 of which are wholly-owned. Four are either owned jointly with others or partially owned and partially leased; the remainder are leased or operated pursuant to various agreements. BFI currently operates 51 solid waste sanitary landfill sites in its international operations (including those operated through unconsolidated affiliates). MEDICAL WASTE The Company is the largest provider of medical waste services in North America. Approximately 105 of the Company's operating locations provide medical waste services involving the collection and disposal of infectious and pathological waste materials from approximately 97,000 customers. In the last four years, most states have enacted laws regulating medical waste, and the Company is pursuing related opportunities to provide a needed service. The Company owns or operates 27 medical waste treatment sites using either incineration or autoclaving (steam decontamination) technology. One additional treatment site is in the engineering and construction stage. The Company is pursuing the development of various healthcare-related markets, including but not limited to pharmaceutical returns and mail disposal. RECYCLING The Company provides recycling collection services for certain materials streams in approximately 230 of its North American operating locations for approximately 3.6 million households, including curbside customers. Recycling continued as the fastest-growing part of the Company's business in fiscal 1993. The Company's recycling business has 83 recycleries in North America and 38 such facilities in its international operations. The Company also engages in the organic materials recycling and/or disposal business and tire recycling business. OTHER SERVICES The Company is also involved in street and parking lot sweeping and the rental and servicing of portable restroom facilities. During fiscal 1993 and the first quarter of fiscal 1994, the Company sold a portion of its portable restroom and sweeping businesses, but has retained most of those operations located on the southern and western coasts of the United States. These locations are operated as part of the solid waste regions. INTERNATIONAL OPERATIONS The Company is involved in waste collection, processing and/or disposal operations in approximately 250 locations (including 17 locations of unconsolidated affiliates) in Australia, Finland, Germany, Italy, Hong Kong, Kuwait, the Netherlands, New Zealand, Spain, the United Kingdom and Venezuela. RESOURCE RECOVERY The Company and Air Products and Chemicals, Inc. jointly market their combined capabilities to design, build, own and operate facilities that burn unprocessed solid waste and recover energy and other S-6 7 materials under the name American Ref-Fuel CompanyTM ("American Ref-Fuel"). American Ref-Fuel currently operates four facilities and is evaluating a number of other domestic and international development projects. CERTAIN LEGAL AND ENVIRONMENTAL MATTERS The Company is involved in a number of legal, administrative and other proceedings relating to various matters, including environmental matters. While the final resolution of any such matter may have an impact on the Company's consolidated financial results for a particular reporting period, the Company believes that the ultimate disposition of these matters will not have a materially adverse effect upon the consolidated financial position of the Company. For additional information respecting legal and environmental matters, see the discussion under "Item 3. Legal Proceedings" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1993, which is incorporated by reference in the accompanying Prospectus. RECENT DEVELOPMENTS On February 3, 1994, the Company acquired from Otto Holding International B.V. ("Otto Holding") fifty percent of the stock of Otto Waste Services, a market leader on a national basis in the solid waste services business in Germany, marking the Company's entry into the German solid waste market. Otto Waste Services is primarily engaged in providing collection and recycling services under long-term contracts to municipalities in the third largest economy in the world. The consolidated annualized revenues of Otto Waste Services and its subsidiaries are estimated to be approximately $500 million. In addition, the annualized revenues of Otto Waste Services' unconsolidated affiliates are estimated to be approximately $65 million. Otto Waste Services has approximately $300 million of indebtedness and capitalized leases. The purchase price for the fifty percent interest in Otto Waste Services was approximately $400 million, including approximately 3.9 million shares of Common Stock. See "Use of Proceeds." Changes within the German waste services industry, including consolidation, government recycling mandates and increased activity in the waste-to-energy business, have provided, and will continue to provide, Otto Waste Services with substantial opportunities for rapid growth. In addition, an accelerating trend towards privatization of waste services is anticipated due to increasing industry capital requirements and the re-unification of Germany. BFI intends to pursue vigorously these opportunities through Otto Waste Services over the coming years. USE OF PROCEEDS The net proceeds from the sale of shares of Common Stock offered in the Offerings (assuming an initial public offering price of $28.50 per share) are estimated to be approximately $330.9 million ($380.5 million if the over-allotment options are exercised in full). The Company will use approximately $106 million of the net proceeds to redeem its $100 million 8 1/2% Sinking Fund Debentures due 2017. The balance of the proceeds will be used to repay indebtedness associated with the acquisition of the fifty percent interest in Otto Waste Services. Such indebtedness bears interest at a current weighted average interest rate of 3.2% and is generally issued for terms of less than 60 days. Pending such uses, the proceeds will be used to purchase short-term investments. S-7 8 PRICE RANGE OF COMMON STOCK AND DIVIDENDS The Common Stock is listed on the New York, Chicago and Pacific Stock Exchanges and traded under the symbol "BFI." The Common Stock is also listed on The International Stock Exchange of the United Kingdom and Republic of Ireland Ltd. The following table sets forth, for the periods indicated, (i) the high and low sales prices of the Common Stock as reported on the New York Stock Exchange Composite Tape, and (ii) the dividends declared on the Common Stock.
PRICE RANGE ----------------- HIGH LOW DIVIDENDS ------ ------ --------- Fiscal Year Ended September 30, 1992 First Quarter........................................... $22 1/8 $16 7/8 $.17 Second Quarter.......................................... 25 20 7/8 .17 Third Quarter........................................... 22 3/8 19 1/2 .17 Fourth Quarter.......................................... 25 1/4 21 1/2 .17 Fiscal Year Ended September 30, 1993 First Quarter........................................... $27 1/8 $21 5/8 $.17 Second Quarter.......................................... 28 5/8 25 3/4 .17 Third Quarter........................................... 28 24 .17 Fourth Quarter.......................................... 27 7/8 22 3/8 .17 Fiscal Year Ending September 30, 1994 First Quarter........................................... $27 3/8 $20 7/8 $.17 Second Quarter (through February 10, 1994).............. 30 1/4 25 5/8
For a recent closing sales price for the Common Stock, as reported on the New York Stock Exchange, see the cover page of this Prospectus Supplement. As of February 8, 1994, the approximate number of holders of record of Common Stock was 21,000. The Company has paid cash dividends on its Common Stock each year since 1950 and intends to continue the payment of dividends, although future dividend payments will depend upon the Company's level of earnings, financial requirements and other relevant factors, including dividend restrictions contained in the Company's debt instruments. The amount available for payment of dividends on the Common Stock pursuant to the most restrictive of such limits was approximately $615 million at December 31, 1993, after giving effect to cash dividends paid or declared through December 31, 1993. See Note 3 of Notes to Consolidated Financial Statements in the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1993, incorporated by reference in the accompanying Prospectus. S-8 9 UNDERWRITING Subject to the terms and conditions of the Underwriting Agreement, the Company has agreed to sell to each of the U.S. Underwriters named below the ("U.S. Underwriters"), and each of such U.S. Underwriters, for whom Goldman, Sachs & Co., CS First Boston Corporation and Smith Barney Shearson Inc. are acting as representatives, has severally agreed to purchase from the Company the respective number of shares of Common Stock set forth opposite its name below:
NUMBER OF SHARES OF COMMON U.S. UNDERWRITER STOCK ---------------------------------------------------------------- --------- Goldman, Sachs & Co............................................. CS First Boston Corporation..................................... Smith Barney Shearson Inc....................................... --------- Total................................................. 9,000,000 --------- ---------
Under the terms and conditions of the Underwriting Agreement, the U.S. Underwriters are committed to take and pay for all of the shares offered hereby, if any are taken. The U.S. Underwriters propose to offer the shares of Common Stock in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of $ per share to certain brokers and dealers. After the shares of Common Stock are released for sale to the public, the offering price and other selling terms may from time to time be varied by the representatives. The Company has entered into an underwriting agreement (the "International Underwriting Agreement") with the underwriters of the International Offering (the "International Underwriters") providing for the concurrent offer and sale of 3,000,000 shares of Common Stock in the International Offering outside the United States. The initial public offering price and aggregate underwriting discounts and commissions per share for the Offerings are identical. The closing of the United States Offering is a condition to the closing of the International Offering, and vice versa. The representatives of the International Underwriters are Goldman Sachs International Limited, CS First Boston Limited and Smith Barney Shearson Inc. Pursuant to an agreement between the U.S. and International Underwriting Syndicates (the "Agreement Between Syndicates") relating to the two Offerings, each of the U.S. Underwriters named herein has agreed that, as a part of the distribution of the shares offered hereby and subject to certain exceptions, it will offer, sell or deliver the shares offered hereby and other shares of Common Stock, directly or indirectly, only in the United States of America (including the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction (the "United States") and to U.S. persons, which term shall mean, for purposes of this paragraph: (i) any individual who is a resident of the United States or (ii) any corporation, partnership or other entity organized in or under the laws of the United States or any political subdivision thereof and whose office most directly involved with the S-9 10 purchase is located in the United States. Each of the International Underwriters has agreed or will agree pursuant to the Agreement Between Syndicates that, as a part of the distribution of the shares offered as a part of the International Offering and subject to certain exceptions, it (i) will not, directly or indirectly, offer, sell or deliver shares of Common Stock (a) in the United States or to any U.S. persons or (b) to any person whom it believes intends to reoffer, resell or deliver the shares in the United States or to any U.S. persons, and (ii) will cause any dealer to whom it may sell such shares at any concession to agree to observe a similar restriction. Pursuant to the Agreement Between Syndicates, sales may be made between the U.S. Underwriters and the International Underwriters of such number of shares of Common Stock as may be mutually agreed. The price of any shares so sold shall be the initial public offering price, less an amount not greater than the selling concession. The Company has granted the U.S. Underwriters an option exercisable for 30 calendar days after the date of this Prospectus Supplement to purchase up to an aggregate of 1,350,000 additional shares of Common Stock to cover over-allotments, if any, at the initial public offering price less the underwriting discount, as set forth on the cover page of the Prospectus Supplement. If the U.S. Underwriters exercise their over-allotment option, the U.S. Underwriters have severally agreed, subject to certain conditions, to purchase approximately the same percentage thereof that the number of shares to be purchased by each of them, as shown in the foregoing table, bears to the 9,000,000 shares of Common Stock offered hereby. The U.S. Underwriters may exercise such option only to cover over-allotments in connection with the sale of the 9,000,000 shares of Common Stock offered hereby. The Company has granted the International Underwriters an option exercisable for 30 calendar days to purchase up to an aggregate of 450,000 additional shares of Common Stock, solely to cover over-allotments, if any, at the initial public offering price less the underwriting discount, as set forth on the cover page of the Prospectus Supplement. The Company, its executive officers and directors and Otto Holding have agreed not to offer, sell, contract to sell or otherwise dispose of any shares of Common Stock or any rights to purchase or acquire Common Stock without the prior written consent of the representatives of the Underwriters for a period of 90 days after the date of this Prospectus Supplement, except pursuant to the conversion of existing convertible securities, the Company's Dividend Reinvestment Plan, existing employee benefit or stock option plans or the acquisition of any business or properties in the Company's ongoing acquisition program and except for the shares of Common Stock offered in connection with the Offerings. The Company has agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. S-10 11 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH THEY RELATE OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ------------------------ TABLE OF CONTENTS
PAGE ----- PROSPECTUS SUPPLEMENT Prospectus Supplement Summary........ S-3 The Company.......................... S-5 Recent Developments.................. S-7 Use of Proceeds...................... S-7 Price Range of Common Stock and Dividends.......................... S-8 Underwriting......................... S-9 PROSPECTUS Available Information................ 3 Incorporation of Certain Documents by Reference.......................... 3 The Company.......................... 4 Application of Proceeds.............. 4 Description of Debt Securities....... 4 Capital Stock........................ 13 Description of Warrants.............. 15 Plan of Distribution................. 16 Legal Opinions....................... 17 Experts.............................. 17
12,000,000 SHARES BROWNING-FERRIS INDUSTRIES, INC. COMMON STOCK (PAR VALUE $.16 2/3 PER SHARE) ------------------------------------ {BFI LOGO} ------------------------------------ GOLDMAN, SACHS & CO. CS FIRST BOSTON SMITH BARNEY SHEARSON INC. REPRESENTATIVES OF THE U.S. UNDERWRITERS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 12 *************************************************************************** * * * Information contained in this prospectus is subject to completion or * * amendment. A final prospectus supplement and accompanying prospectus * * will be delivered to purchasers. This prospectus supplement and * * accompanying prospectus shall not constitute an offer to sell or the * * solicitation of an offer to buy nor shall there be any sale of these * * securities in any State in which such offer, solicitation or sale * * would be unlawful prior to registration or qualification under the * * securities laws of any such state. * * * *************************************************************************** SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1994 PRELIMINARY PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JANUARY 19, 1994 12,000,000 SHARES {BFI LOGO} BROWNING-FERRIS INDUSTRIES, INC. COMMON STOCK (PAR VALUE $.16 2/3 PER SHARE) --------------------- Of the 12,000,000 shares of Common Stock offered hereby, 3,000,000 shares are being offered in an international offering outside the United States and 9,000,000 shares are being offered in a concurrent United States offering. The initial public offering price and the aggregate underwriting discount per share will be identical for both offerings. See "Underwriting." The last reported sale price of the Common Stock on the New York Stock Exchange on February 10, 1994, was $28 1/2 per share. The shares trade under the symbol "BFI." See "Price Range of Common Stock and Dividends." --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO OFFERING PRICE DISCOUNT(1) COMPANY(2) ------------------- --------------- --------------- Per Share......................... $ $ $ Total(3).......................... $ $ $
- --------------- (1) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. (2) Before deducting estimated expenses of $ payable by the Company. (3) The Company has granted the International Underwriters an option for 30 days to purchase up to an additional 450,000 shares at the initial public offering price per share, less the underwriting discount, solely to cover over-allotments. The Company has also granted a 30-day over-allotment option with respect to an additional 1,350,000 shares as part of the United States offering. If such options are exercised in full, the total initial public offering price, underwriting discount and proceeds to the Company will be $ , $ and $ , respectively. See "Underwriting." --------------------- The shares offered hereby are offered severally by the International Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in full or in part. It is expected that certificates for the shares will be ready for delivery at the offices of Goldman, Sachs & Co., New York, New York, on or about , 1994. GOLDMAN SACHS INTERNATIONAL LIMITED CS FIRST BOSTON SMITH BARNEY SHEARSON INC. --------------------- The date of this Prospectus Supplement is March , 1994. 13 CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS The following is a discussion of certain United States federal income and estate tax consequences of the ownership and disposition of the Common Stock by a Non-United States Holder of such Common Stock. For the purpose of this discussion, a "Non-United States Holder" is any person who is, for United States federal income tax purposes, a foreign corporation, a nonresident alien individual, a foreign partnership or a foreign estate or trust. This discussion does not address all aspects of United States income and estate taxation and does not deal with foreign, state and local tax consequences that may be relevant to Non-United States Holders in light of their particular circumstances. Furthermore, the following discussion is based on current provisions of the United States Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations promulgated thereunder, and administrative and judicial interpretations as of the date hereof, all of which are subject to change, possibly on a retroactive basis. Prospective foreign investors are urged to consult their tax advisors regarding the United States federal, state, local and non-United States income and other tax consequences of owning and disposing of Common Stock. DIVIDENDS The Company currently pays a quarterly dividend of $.17 on shares of Common Stock. See "Price Range of Common Stock and Dividends." Such dividends paid to a Non-United States Holder of Common Stock generally will be subject to United States withholding tax at a rate of 30% of the gross amount of the dividend, or such lower rate as may be specified by an applicable income tax treaty, unless the dividends are effectively connected with the conduct of a trade or business of the Non-United States Holder within the United States. Dividends received by a Non-United States Holder that are effectively connected with a United States trade or business conducted by such Non-United States Holder are exempt from such withholding tax. However, such effectively connected dividends, net of certain deductions, are taxed at the same graduated rates applicable to United States persons. However, if such effectively connected dividends are not attributable to or effectively connected with a permanent establishment of the Non-United States Holder in the United States (or in some cases, if such Non-United States Holder does not have a permanent establishment in the United States), the gross amount of the dividends may be taxed at such lower rates as may be specified by an applicable income tax treaty. In addition to the graduated tax described above, the after-tax amount of dividends received by a corporate Non-United States Holder that are effectively connected with a United States trade or business of the corporate Non-United States Holder may also be subject to a branch profits tax at a rate of 30%. However, an applicable income tax treaty may eliminate, alter the calculation of, or reduce the rate of, the branch profits tax. Under current United States Treasury regulations, dividends paid to an address outside the United States are presumed to be paid to a resident of such country for purposes of the withholding discussed above and, under the current United States Internal Revenue Service ("IRS") position, for purposes of determining the applicability of a tax treaty rate. However, under proposed United States Treasury regulations not currently in effect, a Non-United States Holder of Common Stock who wishes to claim the benefit of an applicable treaty rate would be required to satisfy applicable certification and other requirements, including providing the holder's name and address. A Non-United States Holder may claim exemption from withholding under the effectively connected income exception by filing Form 4224 (or a similar statement) with the Company or its paying agent. A Non-United States Holder of Common Stock eligible for a reduced rate of United States withholding tax pursuant to a tax treaty may apply for a refund of any excess amounts withheld by filing an appropriate claim for refund with the IRS. SALE OF COMMON STOCK A Non-United States Holder generally will not be subject to United States federal income tax on any gain realized upon the sale or other disposition of the Common Stock unless (i) such gain is effectively S-9 14 connected with a United States trade or business of the Non-United States Holder (or, if an applicable income tax treaty so provides, such gain is attributable to or effectively connected with a permanent establishment of the Non-United States Holder in the United States), (ii) the Non-United States Holder is an individual who is present in the United States for a period or periods aggregating 183 days or more (as calculated under the Code) during the individual's taxable year in which such sale occurs, and either (a) such individual's "tax home," within the meaning of Section 911(d)(3) of the Code, is in the United States or (b) the gain is attributable to an office or other fixed place of business maintained in the United States by such individual, or (iii) the Company is or has been a "United States real property holding corporation" for federal income tax purposes as discussed under "Foreign Investment in United States Real Property Tax Act" below. Non-United States Holders who would be subject to United States federal income tax with respect to gain recognized on a sale or other disposition of Common Stock should consult applicable treaties, which may provide for different rules. FOREIGN INVESTMENT IN UNITED STATES REAL PROPERTY TAX ACT A foreign person who disposes of a United States real property interest is generally required to recognize gain or loss under Section 897 of the Code. A United States real property interest includes stock in a United States real property holding corporation (within the meaning of Section 897(c)(2) of the Code). Where, however, a class of stock is regularly traded on an established securities market, shares of such class will constitute a United States real property interest only with respect to a foreign person who holds or held (during the five-year period preceding a disposition of such shares), directly or indirectly, more than 5% of such class of stock. Also, where a class of stock is so regularly traded, the provisions of Section 1445 of the Code requiring withholding of tax on the sale of an interest in a United States real property holding corporation do not apply. Although the Company has not determined whether in fact it is a United States real property holding corporation, management of the Company believes that the Company may be such a corporation. If the Company is a United States real property holding corporation, a Non-United States Holder of the Common Stock who sells or exchanges all or any portion of his shares thereof will generally be subject to tax under Section 897 of the Code if either (a) the Common Stock is not regularly traded on the New York Stock Exchange or another established securities market at any time during the year of such sale or exchange or (b) the Non-United States Holder owns at the time of disposition or owned during the preceding five-year period, directly or indirectly, more than 5% of the Common Stock. INFORMATION REPORTING AND BACKUP WITHHOLDING Under Treasury regulations, the Company must report annually to the IRS and to each Non-United States Holder the amount of dividends paid to such holder and the tax withheld with respect to such dividends. These information reporting requirements apply even if withholding was not required because the dividends were effectively connected with a trade or business of the Non-United States Holder in the United States or withholding was reduced by an applicable income tax treaty. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the Non-United States Holder resides under the provisions of an applicable income tax treaty or exchange of information treaty. Backup withholding (which generally is imposed at the rate of 31% on certain payments made to persons who fail to furnish certain information required under the United States information reporting requirements) will generally not apply to dividends paid to Non-United States Holders at an address outside the United States unless the payor has knowledge that the payee is a United States person. Backup withholding and information reporting generally will apply to dividends paid to addresses inside the United States on shares of Common Stock to beneficial owners that are not "exempt recipients" and that fail to provide in the manner required certain identifying information. As a general matter, backup withholding and information reporting will not apply to a payment of the proceeds of a sale of Common Stock by or through a foreign office of a foreign broker. Information S-10 15 reporting requirements (but not backup withholding) will apply, however, to a payment of the proceeds of a sale of Common Stock by or through a foreign office of a foreign broker that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the United States, or that is a "controlled foreign corporation" (generally, a foreign corporation controlled by United States shareholders) with respect to the United States, unless the broker has documentary evidence in its records that the holder is a Non-United States Holder and certain other conditions are met, or the holder otherwise establishes an exemption. Payment by a United States office of a broker of the proceeds of a sale of Common Stock is subject to both backup withholding and information reporting unless the holder certifies under penalties of perjury that it is a Non-United States Holder, or otherwise establishes an exemption. Amounts withheld under the backup withholding rules do not constitute a separate United States federal income tax. Rather, any amounts withheld under the backup withholding rules will be allowed as a refund or credit against such holder's United States federal income tax liability, provided the required information is furnished to the IRS. These backup withholding and information reporting rules are under review by the United States Treasury, and their application to the Common Stock could be changed prospectively by future regulations. ESTATE TAX Common Stock owned, or treated as owned, by an individual who, at the time of his death, is neither a citizen of nor domiciled in the United States will be included in such holder's gross estate for United States federal estate tax purposes, unless an applicable estate tax treaty provides otherwise. UNDERWRITING Subject to the terms and conditions of the International Underwriting Agreement, the Company has agreed to sell to each of the International Underwriters named below (the "International Underwriters"), and each of such International Underwriters, for whom Goldman Sachs International Limited, CS First Boston Limited and Smith Barney Shearson Inc. are acting as representatives, has severally agreed to purchase from the Company the respective number of shares of Common Stock set forth opposite its name below:
NUMBER OF SHARES OF COMMON INTERNATIONAL UNDERWRITER STOCK ---------------------------------------------------------------- --------- Goldman Sachs International Limited............................. CS First Boston Limited......................................... Smith Barney Shearson Inc. ..................................... --------- Total................................................. 3,000,000 --------- ---------
Under the terms and conditions of the International Underwriting Agreement, the International Underwriters are committed to take and pay for all of the shares offered hereby, if any are taken. The International Underwriters propose to offer the shares of Common Stock in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement, and in part to certain securities dealers at such price less a concession of $ per share. The International S-11 16 Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per share to certain brokers and dealers. After the shares of Common Stock are released for sale to the public, the offering price and other selling terms may from time to time be varied by the representatives. The Company has entered into an underwriting agreement (the "U.S. Underwriting Agreement") with the underwriters of the United States Offering (the "U.S. Underwriters") providing for the concurrent offer and sale of 9,000,000 shares of Common Stock in the United States. The initial public offering price and aggregate underwriting discounts and commissions per share for the Offerings are identical. The closing of the International Offering is a condition to the closing of the United States Offering, and vice versa. The representatives of the U.S. Underwriters are Goldman, Sachs & Co., CS First Boston Corporation and Smith Barney Shearson Inc. Pursuant to an agreement between the U.S. and International Underwriting Syndicates (the "Agreement Between Syndicates") relating to the Offerings, each of the International Underwriters named herein has agreed that, as a part of the distribution of the shares offered hereby and subject to certain exceptions, it will (i) not, directly or indirectly, offer, sell or deliver shares of Common Stock (a) in the United States or to any U.S. persons (as defined below) or (b) to any person whom it believes intends to reoffer, resell or deliver the shares in the United States or to any U.S. persons, and (ii) cause any dealer to whom it may sell such shares at any concession to agree to observe a similar restriction. Each of the U.S. Underwriters has agreed pursuant to the Agreement Between Syndicates that, as a part of the distribution of the shares offered as a part of the United States Offering, and subject to certain exceptions, it will offer, sell or deliver shares offered hereby and other shares of Common Stock, directly or indirectly, only in the United States of America (including the District of Columbia), its territories, possessions and other areas subject to its jurisdiction (the "United States") and to U.S. persons, which term shall mean (a) any individual who is a resident of the United States or (b) any corporation, partnership or other entity organized in or under the laws of the United States or any political subdivision thereof and whose office most directly involved with the purchase is located in the United States. Pursuant to the Agreement Between Syndicates, sales may be made between the International Underwriters and the U.S. Underwriters of such number of shares of Common Stock as may be mutually agreed. The price of any shares so sold shall be the initial public offering price, less an amount not greater than the selling concession. The Company has granted the International Underwriters an option exercisable for 30 calendar days after the date of this Prospectus Supplement to purchase up to an aggregate of 450,000 additional shares of Common Stock to cover over-allotments, if any, at the initial public offering price less the underwriting discount, as set forth on the cover page of this Prospectus Supplement. If the International Underwriters exercise their over-allotment option, the International Underwriters have severally agreed, subject to certain conditions, to purchase approximately the same percentage thereof that the number of shares to be purchased by each of them, as shown in the foregoing table, bears to the 3,000,000 shares of Common Stock offered hereby. The International Underwriters may exercise such option only to cover over-allotments in connection with the sale of the 3,000,000 shares of Common Stock offered hereby. The Company has granted the U.S. Underwriters an option exercisable for 30 calendar days to purchase up to an aggregate of 1,350,000 additional shares of Common Stock solely to cover over-allotments, if any, at the initial public offering price less the underwriting discount, as set forth on the cover page of this Prospectus Supplement. The Company, its executive officers and directors and Otto Holding have agreed not to offer, sell, contract to sell or otherwise dispose of any shares of Common Stock or any rights to purchase or acquire Common Stock without the prior written consent of the representatives of the Underwriters for a period of 90 days after the date of this Prospectus Supplement, except pursuant to the conversion of existing convertible securities, the Company's Dividend Reinvestment Plan, existing employee benefit or stock option plans or the acquisition of any business or properties in the Company's ongoing acquisition program and except for the shares of Common Stock offered in connection with the Offerings. S-12 17 Each International Underwriter has agreed that (i) it has not offered or sold, and it will not offer or sell, directly or indirectly, any shares of Common Stock in Great Britain except in circumstances which do not constitute an offer to the public within the meaning of the Companies Act 1985 of Great Britain and (ii) it has complied with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the Common Stock in, from or otherwise involving the United Kingdom and, furthermore, it has only issued or passed on and will only issue or pass on to any person in the United Kingdom any document received by it in connection with the issue of Common Stock if that person is of the kind who falls within Article 9(3) of the Financial Services Act 1986 (Investment Advertisement) (Exemptions) Order 1988 (as amended). Purchasers of the shares offered hereby may be required to pay stamp taxes and other charges in accordance with the laws and practices of the country of purchase in addition to the offering price set forth on the cover page hereof. The Company has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. S-13 18 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH THEY RELATE OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. IN THIS PROSPECTUS SUPPLEMENT, REFERENCES TO "DOLLARS" AND "$" ARE TO UNITED STATES DOLLARS. --------------------- TABLE OF CONTENTS
PAGE ----- PROSPECTUS SUPPLEMENT Prospectus Supplement Summary......... S-3 The Company........................... S-5 Recent Developments................... S-7 Use of Proceeds....................... S-7 Price Range of Common Stock and Dividends........................... S-8 Certain United States Tax Consequences to Non-United States Holders........ S-9 Underwriting.......................... S-11 PROSPECTUS Available Information................. 3 Incorporation of Certain Documents by Reference........................... 3 The Company........................... 4 Application of Proceeds............... 4 Description of Debt Securities........ 4 Capital Stock......................... 13 Description of Warrants............... 15 Plan of Distribution.................. 16 Legal Opinions........................ 17 Experts............................... 17
12,000,000 SHARES BROWNING-FERRIS INDUSTRIES, INC. COMMON STOCK (PAR VALUE $.16 2/3 PER SHARE) ------------------------------------ {BFI LOGO} ------------------------------------ GOLDMAN SACHS INTERNATIONAL LIMITED CS FIRST BOSTON SMITH BARNEY SHEARSON INC. REPRESENTATIVES OF THE INTERNATIONAL UNDERWRITERS - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----