-----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, AIg8covjKePTaZNaPTn1UBwqAmCCi7BOlRFW+Um5fIApJBeiFWZ5FvUrnlycI/3C qGr8iIPTDgQptOXM2VcKrQ== 0000950124-94-001393.txt : 19940822 0000950124-94-001393.hdr.sgml : 19940822 ACCESSION NUMBER: 0000950124-94-001393 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940819 ITEM INFORMATION: Other events FILED AS OF DATE: 19940819 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KMART CORP CENTRAL INDEX KEY: 0000056824 STANDARD INDUSTRIAL CLASSIFICATION: 5331 IRS NUMBER: 380729500 STATE OF INCORPORATION: MI FISCAL YEAR END: 0129 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00327 FILM NUMBER: 94545116 BUSINESS ADDRESS: STREET 1: 3100 W BIG BEAVER RD CITY: TROY STATE: MI ZIP: 48084 BUSINESS PHONE: 3136431000 MAIL ADDRESS: STREET 1: 3100 W. BIG BEAVER ROAD CITY: TROY STATE: MI ZIP: 48084 FORMER COMPANY: FORMER CONFORMED NAME: KRESGE S S CO DATE OF NAME CHANGE: 19770921 8-K 1 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported) August 19, 1994 KMART CORPORATION (Exact Name of Registrant as Specified in Its Charter) Michigan (State or Other Jurisdiction of Incorporation) 1-327 38-0729500 (Commission File Number) (I.R.S Employer Identification No.) 3100 West Big Beaver Road, Troy, Michigan 48084 (Address of Principal Executive Offices) (Zip Code) (810) 643-1000 (Registrant's Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changed Since Last Report) 2 Item 5. Other Events. KMART CORPORATION UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA Kmart Corporation announced plans for public offerings of shares in three of Kmart's specialty retail businesses. A sale of a majority interest in the Borders-Walden Group, OfficeMax, Inc., and The Sports Authority, Inc., will be made through Initial Public Offerings (IPO's). OfficeMax Inc., will be the first IPO and is expected to be filed within the next few weeks. Others will follow in an orderly manner dependent upon market conditions. The consolidated pro forma statements of income give effect to the planned sale of at least a 51% interest in the Borders-Walden Group, OfficeMax, Inc. and The Sports Authority, Inc. if such transaction occurs as of January 26, 1993 and the consolidated pro forma balance sheet, if such transaction occurs, as of July 27, 1994. The pro forma statements of consolidated income and consolidated balance sheets are provided for informational purposes only and should not be construed to be indications of Kmart Corporation's results of operations or the percentage of ownership Kmart Corporation will have in Borders-Walden Group, OfficeMax, Inc., or The Sports Authority, Inc. had the transactions described above been consummated on the dates assumed and do not project Kmart Corporation's results of operations or financial position or those of the Borders-Walden Group, OfficeMax, Inc., or The Sports Authority, Inc. on a stand alone basis.
KMART CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME FISCAL YEAR ENDED JANUARY 26, 1994 (DOLLARS IN MILLIONS) HISTORICAL ADJUSTMENTS PRO FORMA Sales $34,156 ($3,399) (1) $30,757 Licensee fees and rental income 291 (2) 289 Equity in income of affiliated retail companies 110 (37) (2) 73 ------- ------- ------- 34,557 (3,438) 31,119 ------- ------- ------- Cost of merchandise sold, includes buying and occupancy costs 25,646 (2,570) (1) 23,076 Selling, general, and administrative expenses 7,636 (740) (1) 6,896 Store restructuring and other charges 1,348 (218) 1,130 Interest expense Debt--net 285 (1) (1) 284 Capital lease obligations 192 192 ------- ------- ------- 35,107 (3,529) 31,578 ------- ------- ------- Income (loss) from continuing retail operations before income taxes, extraordinary item and the effect of accounting changes (550) 91 (459) Income taxes (222) 52 (1) (170) ------- ------- ------- Net income (loss) from continuing retail operations before extraordinary item and the effect of accounting changes ($328) $39 (1) ($289) ======= ======= =======
See accompanying notes to the Unaudited Pro Forma Consolidated Financial Data. - -2- 3
Sales $16,638 ($1,783) (1) $14,855 Licensee fees and rental income 133 133 Equity in income of affiliated retail companies 33 (2) 33 ------- ------- ------- 16,804 (1,783) 15,021 ------- ------- ------- Cost of merchandise sold, includes buying and occupancy costs 12,477 (1,365) (1) 11,112 Selling, general, and administrative expenses 3,916 (407) (1) 3,509 Interest expense Debt--net 124 (1) (1) 123 Capital lease obligations 116 116 ------- ------- ------- 16,633 (1,773) 14,860 ------- ------- ------- Income from continuing retail operations before income taxes 171 (10) 161 Income taxes 59 (9) (1) 50 ------- ------- ------- Net income from continuing retail operations $112 ($1) (1) $111 ======= ======= =======
See accompanying notes to the Unaudited Pro Forma Consolidated Financial Data. 4 KMART CORPORATION UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET JULY 27, 1994 (DOLLARS IN MILLIONS)
HISTORICAL JULY 27, 1994 ADJUSTMENTS (3) PRO FORMA ASSETS Current Assets Cash $318 ($46) $272 Merchandise Inventories 8,328 (1,085) 7,243 Accounts receivable and other current assets 1,407 (135) 1,272 Discontinued operations 672 672 -------- -------- -------- Total current assets 10,725 (1,266) 9,459 -------- -------- -------- Investment in Affiliated Retail Companies 615 1,421 2,036 Property and Equipment, net 6,174 (405) 5,769 Other Assets and Deferred Charges 322 (47) 275 Goodwill, net of accumulated amortization 686 (661) 25 -------- -------- -------- $18,522 ($958) $17,564 ======== ======= ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Long-term debt due within one year $229 ($4) $225 Notes payable 1,585 1,585 Accounts payable-trade 3,541 (521) 3,020 Accrued payrolls and other liabilities 1,220 (312) 908 Taxes other than income taxes 407 (37) 370 -------- -------- -------- Total Current liabilities 6,982 (874) 6,108 -------- -------- -------- Capital lease obligations 1,791 1,791 Long-term debt 2,042 2,042 Other long-term liabilities 1,696 (84) 1,612 Shareholders' equity 6,011 6,011 -------- -------- -------- $18,522 ($958) $17,564 ======== ======= ========
See accompanying notes to the Unaudited Pro Froma Consolidated Financial Data. 5 NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA (1) Gives effect to the deconsolidation of the fiscal year ended January 26, 1994 and the twenty-six weeks ended July 27, 1994 historical results of operations of the Borders-Walden Group, OfficeMax, Inc. and The Sports Authority, Inc. (2) Gives effect to the sale of 51% of the Borders-Walden Group, OfficeMax, Inc. and The Sports Authority, Inc. as if they occurred as of January 28, 1993. Because management and the Board of Directors have not yet determined the actual interest to be sold (at least 51%) or proceeds to be received, no adjustments to reflect the proceeds of the sales of these three companies has been reflected in these pro forma consolidated statements of income other than to reflect Kmart Corporation's proportionate income (loss) of the operations of each of these three companies. For the fiscal year ended January 26, 1994, and for the twenty-six week period ended July 27, 1994, the net income (loss) for these three companies was $(76) million and $1 million, respectively. Assuming a sale of 51% interest, Kmart Corporation's proportionate share of the three companies' net income (loss) for the fiscal year ended January 26, 1994 and the twenty-six week period ended July 27, 1994 would be $(37) million and $0.49 million, respectively. Each incremental 10% change in interest over 51% would decrease equity earnings for the fiscal year ended January 26, 1994 and the twenty-six weeks ended July 27, 1994 by $8 million and $0.1 million, respectively. (3) Gives effect to deconsolidation of the Borders-Walden Group, OfficeMax, Inc. and The Sports Authority, Inc., as of July 27, 1994, excluding the effect of any proceeds of at least a 51% sale of the Borders-Walden Group, OfficeMax, Inc., or The Sports Authority, Inc. as the amounts of proceeds or percentage to be sold has not yet been determined by the Board of Directors of Kmart Corporation or management. The adjustment of $1,421 million to Investment in Affiliated Retail Companies represents the net book value of the Borders-Walden Group, OfficeMax, Inc. and The Sports Authority, Inc. as of July 27, 1994. 6 SIGNATURES 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. KMART CORPORATION (Registrant) Date: August 19, 1994 By: /s/ NANCIE W. LADUKE Vice President and Secretary -3- -----END PRIVACY-ENHANCED MESSAGE-----