-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q5Bpm9N1Mggeo5m/506nUhi2DN9Fo45Vx1Jvvpse+R0pNF4w3FfjCC0nk9Z1yGMl xcSjkQYm/Sb6NxYCAC8P4A== 0000052477-99-000007.txt : 19990506 0000052477-99-000007.hdr.sgml : 19990506 ACCESSION NUMBER: 0000052477-99-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990327 FILED AS OF DATE: 19990505 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IBP INC CENTRAL INDEX KEY: 0000052477 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 420838666 STATE OF INCORPORATION: DE FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06085 FILM NUMBER: 99610706 BUSINESS ADDRESS: STREET 1: IBP AVE STREET 2: P O BOX 515 CITY: DAKOTA CITY STATE: NE ZIP: 68731 BUSINESS PHONE: 4024942061 MAIL ADDRESS: STREET 1: IBP AVE STREET 2: P O BOX 515 CITY: DAKOTA CITY STATE: NE ZIP: 68731 FORMER COMPANY: FORMER CONFORMED NAME: IOWA BEEF PROCESSORS INC /PRED/ DATE OF NAME CHANGE: 19821109 FORMER COMPANY: FORMER CONFORMED NAME: IOWA BEEF PACKERS INC DATE OF NAME CHANGE: 19701130 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ____________________________ [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the 13 weeks ended March 27, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-6085 ____________________________ IBP, inc. a Delaware Corporation I.R.S. Employer Identification No. 42-0838666 800 Stevens Port Drive Dakota Dunes, South Dakota 57049 Telephone 605-235-2061 ____________________________ Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] As of May 1, 1999, the registrant had outstanding 92,276,797 shares of its common stock ($.05 par value). PART I. FINANCIAL INFORMATION IBP, inc. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 27, December 26, 1999 1998 ----------- ------------ (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 31,683 $ 27,254 Marketable securities 6,400 1,400 Accounts receivable, less allowance for doubtful accounts of $5,354 and $12,111 617,617 599,999 Inventories 444,064 405,418 Deferred income tax benefits and prepaid expenses 65,762 62,744 --------- --------- TOTAL CURRENT ASSETS 1,165,526 1,096,815 Property, plant and equipment, less accumulated depreciation of $868,677 and $843,937 1,090,792 1,072,093 Goodwill, net of accumulated amortization of $164,304 and $158,808 718,621 724,089 Other assets 99,452 115,099 --------- --------- $3,074,391 $3,008,096 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable to banks $ 198,694 $ 140,967 Accounts payable 301,648 315,861 Deferred income taxes and other current liabilities 373,338 408,984 --------- --------- TOTAL CURRENT LIABILITIES 873,680 865,812 Long-term debt and capital lease obligations 574,693 575,522 Deferred income taxes and other liabilities 170,009 165,848 STOCKHOLDERS' EQUITY: Common stock at par value 4,750 4,750 Additional paid-in capital 403,315 405,278 Retained earnings 1,122,316 1,067,725 Accumulated other comprehensive income (13,340) (16,456) Treasury stock (61,032) (60,383) --------- --------- TOTAL STOCKHOLDERS' EQUITY 1,456,009 1,400,914 --------- --------- $3,074,391 $3,008,096 ========= ========= See accompanying notes to condensed consolidated financial statements. -2- IBP, inc. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) 13 Weeks Ended -------------------------- March 27, March 28, 1999 1998 ---------- ---------- Net sales $3,097,652 $3,224,944 Cost of products sold 2,918,504 3,121,115 --------- --------- Gross profit 179,148 103,829 Selling, general and administrative expense 78,463 69,185 --------- --------- EARNINGS FROM OPERATIONS 100,685 34,644 Interest expense, net 8,887 12,745 --------- --------- Earnings before income taxes and extraordinary item 91,798 21,899 Income tax expense 34,900 8,300 --------- --------- Earnings before extraordinary item 56,898 13,599 Extraordinary loss on early extinguishment of debt, less applicable taxes - (14,815) --------- --------- NET EARNINGS (LOSS) $ 56,898 $ (1,216) ========= ========= Earnings (loss) per share: Earnings before extraordinary item $ .62 $ .15 Extraordinary item - (.16) ---- ---- Net earnings (loss) $ .62 $(.01) ==== ==== Earnings (loss) per share - assuming dilution: Earnings before extraordinary item $ .61 $ .15 Extraordinary item - (.16) ---- ---- Net earnings (loss) $ .61 $(.01) ==== ==== Dividends per share $.025 $.025 ==== ==== See accompanying notes to condensed consolidated financial statements. -3- IBP, inc. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) 13 Weeks Ended -------------------------- March 27, March 28, 1999 1998 --------- ----------- Inflows(outflows) NET CASH FLOWS USED BY OPERATING ACTIVITIES $ (35,067) $ (82,392) -------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (43,064) (31,721) Purchases of marketable securities (19,400) (101,174) Proceeds from disposals of marketable securities 14,400 83,669 Investment in life insurance contracts - (33,000) Other investing activities, net 1,988 102 Net cash flows used by -------- --------- investing activities (46,076) (82,124) -------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase in borrowings under revolving credit agreements 58,000 170,000 Net change in checks in process of clearance 33,276 37,053 Principal payments on long-term obligations (845) (112,742) Proceeds from issuance of long-term debt - 49,793 Premiums paid on early retirement of debt - (20,636) Other financing activities, net (5,191) (3,623) Net cash flows provided by -------- --------- financing activities 85,240 119,845 Effect of exchange rate on cash -------- --------- and cash equivalents 332 86 -------- --------- Net change in cash and cash equivalents 4,429 (44,585) Cash and cash equivalents at beginning of period 27,254 69,022 Cash and cash equivalents at end of -------- --------- period $ 31,683 $ 24,437 ======== ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the periods for: Interest, net of amounts capitalized $ 11,137 $ 12,258 Income taxes, net of refunds received 30,776 (870) Depreciation and amortization expense 25,165 25,285 Amortization of intangible assets 5,814 6,820 See accompanying notes to condensed consolidated financial statements. -4- IBP, inc. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A. GENERAL The condensed consolidated balance sheet of IBP, inc. and subsidiaries ("IBP" or "the company") at December 26, 1998 has been taken from audited financial statements at that date and condensed. All other condensed consolidated financial statements contained herein have been prepared by IBP and are unaudited. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in IBP's Annual Report on Form 10-K for the year ended December 26, 1998. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of IBP at March 27, 1999 and the results of its operations and its cash flows for the periods presented herein. B. OTHER IBP's interim operating results of its Fresh Meats segment may be subject to substantial fluctuations which do not necessarily occur or recur on a seasonal basis. Such fluctuations are normally caused by competitive and other conditions in the cattle and hog markets over which IBP has little or no control. Therefore, the results of operations for the interim periods presented are not necessarily indicative of the results to be attained for the full fiscal year. C. INVENTORIES Inventories, valued at the lower of first-in, first-out cost or market, are comprised of the following: March 27, December 26, 1999 1998 --------- ------------ (In thousands) Product inventories: Raw materials $ 26,823 $ 22,552 Work in process 73,500 69,790 Finished goods 166,555 148,542 ------- ------- 266,878 240,884 Livestock 101,868 89,321 Supplies 75,318 75,213 ------- ------- $444,064 $405,418 ======= ======= -5- D. EARNINGS PER SHARE (in thousands, except per share amounts) For the Thirteen Weeks Ended March 27, 1999 ------------------------------------------- Earnings Shares Per Share (Numerator) (Denominator) Amount ----------- ------------- --------- Basic EPS: Net earnings $56,898 92,296 $ .62 Effect of dilutive ====== ==== securities: Employee stock plans 1,029 ------ Diluted EPS $56,898 93,325 $ .61 ====== ====== ==== For the Thirteen Weeks Ended March 28, 1998 ------------------------------------------- Earnings Shares Per Share (Numerator) (Denominator) Amount ----------- ------------- --------- Basic EPS: Earnings before extraordinary item $13,599 92,567 $ .15 Effect of dilutive ====== ==== securities: Employee stock plans 954 ------ Diluted EPS $13,599 93,521 $ .15 ====== ====== ==== The summary below lists stock options outstanding at the end of the fiscal quarters which were not included in the computations of diluted EPS because the options' exercise price was greater than the average market price of the common shares. These options had varying expiration dates. 1999 1998 ------ ------ Stock options excluded from diluted EPS computation 905 1,556 Average option price per share $25.66 $24.72 E. COMPREHENSIVE INCOME Comprehensive income consists of net earnings and foreign currency translation adjustments. Management considers its foreign investments to be permanent in nature and does not provide for taxes on currency translation adjustments arising from converting the investment in a foreign currency to U.S. dollars. Comprehensive income for the quarters ended March 27, 1999 and March 28, 1998 was as follows (unaudited): 13 Weeks Ended ---------------------- March 27, March 28, 1999 1998 --------- --------- (in thousands) NET EARNINGS (LOSS) $56,898 $(1,216) Other comprehensive income: Foreign currency translation adjustments 3,116 2,602 ------ ------ COMPREHENSIVE INCOME $60,014 $ 1,386 ====== ====== -6- F. COMMITMENTS AND CONTINGENCIES IBP is involved in numerous disputes incident to the ordinary course of its business. In the opinion of management, any liability for which provision has not been made relative to the various lawsuits, claims and administrative proceedings pending against IBP, including that described below, will not have a material adverse effect on its consolidated results of operations, financial position or liquidity. In July 1996, a lawsuit was filed against IBP by certain cattle producers in the U.S. District Court, Middle District of Alabama, seeking certification of a class of all cattle producers. The complaint alleges, inter alia, that IBP has used its market power and alleged "captive supply" agreements to reduce the prices paid to producers for cattle. Plaintiffs have disclosed that, in addition to declaratory relief, they seek actual and punitive damages, although plaintiffs have not specified the amounts they seek. The original motion for class certification was denied by the District Court; plaintiffs then amended their motion, defining a narrower class consisting of only those cattle producers who sold cattle directly to IBP from 1994 through the date of certification. The District Court approved this narrower class on April 28, 1999. However, the Court noted, in response to concerns raised about conflicts within the class and about plaintiffs' ability to prove their theory on a class-wide basis, that it could decertify the class as discovery proceeds. IBP also will seek to appeal the certification ruling. Management continues to believe that the company has acted properly and lawfully in its dealings with cattle producers. G. BUSINESS SEGMENTS The company is managed and operated as two divisions, Fresh Meats and Enterprises, and, accordingly, has two business segments. IBP's Fresh Meats operation relates principally to the meat processing industry and primarily involves cattle and hog carcass production, beef and pork fabrication and related allied product processing activities. This segment markets its products to food retailers, distributors, wholesalers, restaurant and hotel chains, other food processors and leather makers, as well as manufacturers of pharmaceuticals and animal feeds. The Enterprises segment consists of two IBP subsidiaries, Foodbrands America, Inc. ("Foodbrands") and The Bruss Company ("Bruss"). The Enterprises group produces, markets and distributes a variety of frozen and refrigerated products to the "away from home" food preparation market, including pizza toppings and crusts, value- added beef and pork-based products, ethnic specialty foods, appetizers, soups, sauces and side dishes as well as deli meats and processed beef, pork and poultry products. Enterprises also produces portion-controlled premium beef and pork products for sale to restaurants and foodservice customers in domestic and international markets. The company operates principally in the United States. Intersegment sales have been recorded at amounts approximating market. Earnings from operations are comprised of net sales less all identifiable operating expenses, allocated corporate selling, general and administrative expenses, and goodwill amortization. Net interest expense and income taxes have been excluded from segment operations. -7- 13 Weeks Ended ------------------------ March 27, March 28, 1999 1998 --------- --------- (in thousands) NET SALES - --------- Sales to unaffiliated customers: Fresh Meats $2,812,863 $2,953,110 Enterprises 284,789 271,834 --------- --------- $3,097,652 $3,224,944 --------- --------- Intersegment sales: Fresh Meats 69,978 55,254 Intersegment elimination (69,978) (55,254) --------- --------- - - --------- --------- Net sales: Fresh Meats 2,882,841 3,008,364 Enterprises 284,789 271,834 Intersegment elimination (69,978) (55,254) --------- --------- $3,097,652 $3,224,944 ========= ========= EARNINGS FROM OPERATIONS - ------------------------ Fresh Meats $ 83,923 $ 22,431 Enterprises 16,762 12,213 ------- ------- Total earnings from operations 100,685 34,644 Net interest expense (8,887) (12,745) ------- ------- Pre-tax earnings $ 91,798 $ 21,899 ======= ======= NET SALES BY LOCATION OF CUSTOMERS - --------------------- United States $2,616,690 $2,728,849 Japan 201,435 212,103 Canada 108,203 114,302 Korea 42,581 20,276 Mexico 40,730 40,946 Other foreign countries 88,013 108,468 --------- --------- $3,097,652 $3,224,944 ========= ========= -8- MANAGEMENT'S DISCUSSION AND ANALYSIS ------------------------------------ The matters discussed herein contain forward-looking statements. Specifically, these forward-looking statements include risks and uncertainties. Thus, actual results may differ materially from those expressed or implied in those statements. Those risks and uncertainties include, without limitation, risks of changing market conditions with regard to livestock supplies and demand for the company's products, domestic and international legal and regulatory risks, the costs of environmental compliance, the impact of governmental regulations, operating efficiencies, as well as competitive and other risks over which IBP has little or no control. Moreover, past financial performance should not be considered a reliable indicator of future performance. The company makes no commitment to update any forward-looking statement, or to disclose any facts, events or circumstances after the date hereof that may affect the accuracy of any forward-looking statement. ACQUISITIONS - ------------ Early in the second quarter 1999, the company acquired the outstanding stock of two companies, H&M Food Systems Company, Inc. ("H&M") and Zemco Industries, Inc., owner of the Russer Foods business. Both of these companies will be operated as part of Foodbrands. H&M is a leading producer of custom- formulated pre-cooked meat products and prepared foods with two plants in Texas. Russer Foods produces and markets a variety of premium deli meats, with production facilities in New York and Massachusetts. The combined annual sales of these two companies are expected to total approximately $350 million. RESULTS OF OPERATIONS - --------------------- Fresh Meats' operating earnings improved to 3.0% of net sales in the first quarter 1999 versus 0.8% in the first quarter 1998. Both beef and pork operations focused on maximizing margins at the expense of slight market share losses, resulting in improved profitability. The first quarter 1999 results were reduced by $.03 per diluted share for the write-down of current and non-current receivables related to a customer currently in bankruptcy proceedings. The write-downs also reduced the allowance for doubtful accounts by $7 million. Enterprises' operating earnings increased to 5.9% of net sales compared to 4.5% in the first quarter 1998 on strong performances in the foodservice and pizza ingredients markets. According to the latest United States Department of Agriculture ("USDA") estimates, beef production in 1999 will be close to 1998 levels and higher than earlier expected. Thus, it appears that live cattle supplies will be abundant for most of this year. The USDA also forecasted 1999 pork production to be down only slightly from 1998 and chicken production up 6% from 1998. -9- During the first quarter 1998, the company completed its purchase of all of Foodbrands' $112 million outstanding 10.75% Senior Subordinated Notes. Net prepayment premiums, accelerated amortization of unamortized deferred financing costs, and transaction expenses totaled $23.9 million, before applicable income tax benefit of $9.1 million, and was accounted for as an extraordinary loss in the condensed consolidated statement of operations. COMPARATIVE SEGMENT RESULTS --------------------------- 13 Weeks Ended ------------------------- March 27, March 28, 1999 1998 % Change ---------- ---------- -------- Net Sales: Fresh Meats $2,812,863 $2,953,110 -5% Enterprises 284,789 271,834 5% --------- --------- Total $3,097,652 $3,224,944 -4% ========= ========= Earnings from Operations: Fresh Meats $ 83,923 $ 22,431 274% Enterprises 16,762 12,213 37% --------- --------- Total $ 100,685 $ 34,644 191% ========= ========= SALES The 5% decrease in Fresh Meats' net sales was due primarily to lower average selling prices of beef and pork, partially offset by increased volumes sold. The lower selling prices were reflective of continued significant red meat and other competing meat supplies and continued weakness in international markets. Enterprises' 1999 net sales increased over the first three months of 1998 due in part to the fourth quarter 1998 acquisition of DFG Foods. In addition, sales volume increased at Bruss and other Foodbrands divisions, reduced somewhat by lower selling prices resulting from lower raw material costs passed through to customers. Net export sales decreased 4% in the first quarter 1999 from the year earlier although pounds sold increased 5% from the prior year. Net sales into Korea more than doubled in the first quarter 1999 versus 1998 due to increased hides and boxed beef volume. However, net export sales to Japan, Russia and Canada in the first quarter 1999 were lower than a year ago. Net export sales accounted for 13% of total net sales in the first quarters of 1999 and 1998. -10- COST OF PRODUCTS SOLD In the Fresh Meats segment, the cost of products sold in the first quarter 1999 decreased 7% from the first quarter 1998. A combination of lower average live hog and cattle prices and reduced beef volume were the principal reasons for the lower 1999 costs. Additionally, first quarter 1998 results included an impairment write-down for the Luverne, Minnesota, carcass production facility which ceased operations in March 1998. This write-down of fixed assets and goodwill reduced 1998 net earnings by $0.03 per share. Enterprises' first quarter 1999 cost of products sold increased 2% from the first quarter 1998. The higher costs resulted from an increased volume of products sold, due primarily to Bruss sales growth, and was only partially offset by lower raw material costs. SELLING, GENERAL AND ADMINISTRATIVE EXPENSE First quarter 1999 expense increased 13% over the first quarter 1998 chiefly as a result of the DFG Foods acquisition by Foodbrands in the fourth quarter 1998, increased earnings-based incentive compensation and automation-related research and development costs. INTEREST EXPENSE The 30% decrease in 1999 net interest expense versus the first quarter 1998 was due primarily to a 10% decrease in average borrowings in 1999, a lower 1999 average effective interest rate and a higher amount of capitalized interest in 1999. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Total outstanding borrowings averaged $751 million in the first three months of 1999 compared to $835 million in the comparable 1998 period. The lower 1999 average outstanding borrowings versus the first quarter 1998 were due to more favorable operating cash flows. Borrowings outstanding under committed and uncommitted credit facilities at March 27, 1999 totaled $374 million compared to $316 million at December 26, 1998, and available unused credit capacity under committed facilities at March 27, 1999 was $414 million. The acquisitions of Russer Foods and H&M in April 1999 required initial cash payments totaling $280 million, am amount which is subject to change depending on subsequent working capital changes. The cash payments were funded with available unused credit facilities. At the end of fiscal April, the company had $105 million of available unused credit capacity under committed facilities. The company will likely secure longer-term financing for some or all of the acquisition cost at a later date. -11- Year-to-date capital expenditures through March 27, 1999 totaled $43 million compared to $32 million in the first three months of 1998. Approximately one half of the 1999 spending was for revenue enhancement or cost-saving projects, while the remainder went toward upgrades and replacements of existing equipment and facilities. The purchase of Foodbrands' 10.75% Notes in the first quarter 1998 by IBP, inc. was funded with available credit facilities and will likely be refinanced under the company's $300 million Medium-Term Notes program when management deems market conditions to be favorable. The company invested $33 million during the first quarter 1998 in life insurance contracts for key employees. Among other advantages, expected changes in the cash value of these contracts are intended to effectively act as a hedge against changes in the company's deferred compensation liabilities. YEAR 2000 - --------- The "Year 2000" problem relates to computer systems that have time and date-sensitive programs that were designed to read years beginning with "19," but may not properly recognize the year 2000. If a computer system or other equipment with embedded chips or processors (collectively, "Business Systems") used by the company or a third party dealing with the company fails because of the inability of the system or application to properly read the year "2000," the results could conceivably have a material adverse effect on the company. This Year 2000 issue can arise at any point in the company's supply, manufacturing, processing, distribution, and financial chains. The company has an internal team responsible for assessing the impact of Year 2000 and leading and monitoring the company's state of readiness with respect to this issue. The assessment and planning phase is essentially complete, the implementation phase is over 90% complete, and the verification phase is approximately 75% complete. All phases are expected to be completed during 1999. A significant portion of the company's Business Systems is internally developed and has been or is in the process of being remediated. The Business Systems considered most critical to continuing operations are being given the highest priority. The company's other information technology projects have not experienced any consequential delays as a result of implementation of the Year 2000 readiness program. As part of the Year 2000 readiness program, significant service providers, vendors, suppliers, customers, and governmental entities ("Key Business Partners") that are considered critical to business operations around January 1, 2000, have been identified and steps are being undertaken to reasonably ascertain their stage of Year 2000 readiness as it relates directly or indirectly to the company. -12- The possible consequences of the company or its Key Business Partners not being fully Year 2000 compliant by January 1, 2000 include, among other things, temporary plant closings, delays in the delivery of products and/or receipt of supplies, invoice and collection errors and inventory and supply obsolescence. However, the company believes that its Year 2000 readiness program, including the measures discussed below, should significantly reduce the adverse effect any such disruptions may have. The company currently has no formal contingency plan in place. However, the progress of the Year 2000 readiness program is being closely monitored and additional measures will be taken as risks arise. Certain readily available measures may reduce the risk of impact as an alternative to formalized contingency planning. These measures may include stockpiling critical supplies and packaging materials, securing alternate sources of supplies or services, and other appropriate measures. It is currently estimated that the aggregate cost of the company's Year 2000 efforts will be approximately $14 million, of which $8 million has been spent. The budgeted $14 million includes approximately $8 million, of which $4 million has been spent, for computer hardware, substantially all of which will be capitalized. The remaining $6 million is primarily for computer software maintenance, all of which will be expensed as incurred and funded with operating cash flows. Approximately $4 million has been expensed to date. The company's Year 2000 readiness program is an ongoing process and the estimates of costs and completion dates for various components of the Year 2000 readiness program described above are subject to change. IMPACT OF NEW ACCOUNTING PRONOUNCEMENT - -------------------------------------- In June 1998, Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" was issued, and is effective no later than the first quarter of fiscal 2000. Based upon the company's current level of derivatives activity, management expects that this standard will not materially affect the company's financial position or results of operations. -13- PART II. OTHER INFORMATION Item 5. Other Information In connection with its Medium-Term Notes program, the company hereby reports the following computations: 13 Weeks Ended ----------------------- March 27, March 28, 1999 1998 --------- --------- Earnings before income taxes and extraordinary item $ 91,798 $ 21,899 Total fixed charges 13,646 17,069 Capitalized interest (2,197) (1,575) Earnings before fixed charges, income taxes and extraordinary ------- ------- item $103,247 $ 37,393 ======= ======= Ratio of earnings to fixed charges 7.6 2.2 === === Item 6. Exhibits and Reports on Form 8-K (b) Reports on Form 8-K No reports on Form 8-K were filed by the company during the quarter ended March 27, 1999. -14- SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IBP, inc. ----------------------------- (Registrant) May 5, 1999 /s/ Robert L. Peterson ----------------- ----------------------------- (date) Robert L. Peterson Chairman of the Board and Chief Executive Officer /s/ Larry Shipley ----------------------------- Larry Shipley Chief Financial Officer and President of IBP Enterprises /s/ Craig J. Hart ----------------------------- Craig J. Hart Vice President and Controller -15- EX-27 2
5 1,000 3-MOS DEC-25-1999 MAR-27-1999 31,683 6,400 622,971 5,354 444,064 1,165,526 1,959,469 868,677 3,074,391 873,680 574,693 0 0 4,750 1,451,259 3,074,391 3,097,652 3,097,652 2,918,504 2,918,504 78,463 0 8,887 91,798 34,900 56,898 0 0 0 56,898 .62 .61
-----END PRIVACY-ENHANCED MESSAGE-----