UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): December 16, 2014
B/E AEROSPACE, INC.
(Exact name of registrant as specified in charter)
|
Delaware |
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0-18348 |
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06-1209796 |
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(State or other |
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(Commission File Number) |
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(I.R.S. Employer |
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jurisdiction of incorporation) |
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Identification No.) |
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1400 Corporate Center Way, Wellington, Florida |
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33414-2105 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (561) 791-5000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Introductory Note
The purpose of this Current Report on Form 8-K is solely to report the completion of the spin-off of KLX Inc. (“KLX”) that was previously reported in the Current Report on Form 8-K of B/E Aerospace, Inc. (“B/E Aerospace”) dated December 19, 2014 under Item 1.01 also under Item 2.01 and to file the pro forma financial information required in connection therewith.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On December 16, 2014, B/E Aerospace completed the previously announced spin-off of KLX by means of the transfer of its Consumables Management Segment businesses to KLX and the subsequent distribution to B/E Aerospace stockholders of all of the outstanding shares of KLX common stock (the “Spin-Off”). On December 15, 2014, B/E Aerospace entered into several agreements with KLX that govern the relationship of the parties following the Spin-Off, including a Separation and Distribution Agreement and a Tax Sharing and Indemnification Agreement. A summary of the material terms of these agreements can be found in the Information Statement, dated November 26, 2014, filed as Exhibit 99.1 to this Current Report on Form 8-K, under “Certain Relationships and Related Party Transactions—Agreements with B/E Aerospace Related to the Spin-Off,” which summary is incorporated herein by reference. The summary is qualified in its entirety by reference to the Separation and Distribution Agreement and Tax Sharing and Indemnification Agreement, filed as Exhibits 2.1 and 10.1, respectively, hereto, each of which is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(b) Pro forma financial information.
The following Unaudited Pro Forma Consolidated Financial Statements of B/E Aerospace are attached hereto as Exhibit 99.2 and incorporated herein by reference:
· Unaudited Pro Forma Consolidated Income Statements for the nine months ended September 30, 2014 and for each of the years ended December 31, 2013, 2012 and 2011 and the Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2014.
(d) Exhibits
|
Exhibit |
|
Exhibit Description |
|
2.1 |
|
Separation and Distribution Agreement, dated as of December 15, 2014, by and between KLX Inc. and B/E Aerospace, Inc. (incorporated by reference to Exhibit 2.1 to KLX Inc.’s Current Report on Form 8-K dated December 19, 2014, filed with the Securities and Exchange Commission on December 19, 2014 (File No. 001-3661)) |
|
10.1 |
|
Tax Sharing and Indemnification Agreement, dated as of December 15, 2014, by and between KLX Inc. and B/E Aerospace, Inc. (incorporated by reference to Exhibit 10.1 to KLX Inc.’s Current Report on Form 8-K dated December 19, 2014, filed with the Securities and Exchange Commission on December 19, 2014 (File No. 001-3661)) |
|
99.1 |
|
Information Statement of KLX Inc., dated November 26, 2014 (incorporated by reference to Exhibit 99.1 to KLX Inc.’s Amendment No. 4 to Registration Statement on Form 10 dated November 26, 2014, filed with the Securities and Exchange Commission on November 26, 2014 (File No. 001-36610)). |
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99.2 |
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Unaudited Pro Forma Consolidated Income Statements for the nine months ended September 30, 2014 and for each of the years ended December 31, 2013, 2012 and 2011 and Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2014. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: December 22, 2014
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B/E AEROSPACE, INC. | |
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| |
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| |
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By: |
/s/ Joseph T. Lower |
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|
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Name: Joseph T. Lower |
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|
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Title: Vice President and Chief Financial Officer |
EXHIBIT INDEX
|
Exhibit |
|
Event Description |
|
2.1 |
|
Separation and Distribution Agreement, dated as of December 15, 2014, by and between KLX Inc. and B/E Aerospace, Inc. (incorporated by reference to Exhibit 2.1 to KLX Inc.’s Current Report on Form 8-K dated December 19, 2014, filed with the Securities and Exchange Commission on December 19, 2014 (File No. 001-3661)) |
|
10.1 |
|
Tax Sharing and Indemnification Agreement, dated as of December 15, 2014, by and between KLX Inc. and B/E Aerospace, Inc. (incorporated by reference to Exhibit 10.1 to KLX Inc.’s Current Report on Form 8-K dated December 19, 2014, filed with the Securities and Exchange Commission on December 19, 2014 (File No. 001-3661)) |
|
99.1 |
|
Information Statement of KLX Inc., dated November 26, 2014 (incorporated by reference to Exhibit 99.1 to KLX Inc.’s Amendment No. 4 to Registration Statement on Form 10 dated November 26, 2014, filed with the Securities and Exchange Commission on November 26, 2014 (File No. 001-36610)). |
|
99.2 |
|
Unaudited Pro Forma Consolidated Income Statements for the nine months ended September 30, 2014 and for each of the years ended December 31, 2013, 2012 and 2011 and Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2014. |
Exhibit 99.2
B/E Aerospace, Inc.
Unaudited Pro Forma Consolidated Financial Information
On December 16, 2014, B/E Aerospace, Inc. (“B/E”) completed the previously announced distribution of 100% of the outstanding common stock of KLX Inc. (“KLX”) to B/E’s shareholders (the “Distribution”).
The following unaudited pro forma consolidated statements of earnings of B/E for the nine months ended September 30, 2014 and for each of the years ended December 31, 2013, 2012, and 2011 are presented as if the Distribution had occurred as of January 1, 2011. The following unaudited pro forma consolidated balance sheet of B/E as of September 30, 2014 assumes that the Distribution occurred on September 30, 2014.
The statements which are presented are based on information currently available, and do not purport to represent what B/E’s financial position and results of operations actually would have been had the Distribution occurred on the dates indicated, or to project B/E’s financial performance for any future period. Beginning in the fourth quarter of 2014, KLX’s historical financial results for periods prior to the Distribution will be reflected in B/E’s consolidated financial statements as discontinued operations.
The unaudited pro forma consolidated financial statements and the accompanying notes should be read in conjunction with (i) the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in B/E’s Form 10-K for the year ended December 31, 2013 and (ii) the unaudited condensed consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in B/E’s Form 10-Q for the nine months ended September 30, 2014. The results of operations for the nine months ended September 30, 2014 include material costs and expenses associated with business repositioning and the separation of the businesses, and as such, are not consistent with historical operating results.
The Historical column in the Unaudited Pro Forma Consolidated Statements of Earnings and in the Unaudited Pro Forma Consolidated Balance Sheet reflects B/E’s historical financial statements for the periods presented and do not reflect any adjustments related to the Distribution and related events.
The information in the KLX Separation column in the Unaudited Pro Forma Consolidated Statements of Earnings was derived from the annual and interim combined financial statements included in KLX’s Form 10. The information in the KLX Separation column in the Unaudited Pro Forma Consolidated Balance Sheet was derived from the pro forma condensed combined balance sheet included in KLX’s Form 10.
The Other column in the Unaudited Pro Forma Consolidated Statements reflects additional pro forma adjustments which are further described in the accompanying notes.
B/E AEROSPACE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
NINE MONTHS ENDED SEPTEMBER 30, 2014
(In Millions, Except Per Share Data)
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|
|
|
|
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Pro Forma |
| ||||
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|
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B/E |
| ||||
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KLX |
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|
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Continuing |
| ||||
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|
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Historical |
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Separation |
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Other |
|
Notes |
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Operations |
| ||||
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|
|
|
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|
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Revenues |
|
$ |
3,203.1 |
|
$ |
(1,255.0 |
) |
$ |
2.2 |
|
(a) |
|
$ |
1,950.3 |
|
|
Cost of sales |
|
2,053.4 |
|
(872.6 |
) |
1.9 |
|
(a) |
|
1,182.7 |
| ||||
|
Selling, general and administrative |
|
419.5 |
|
(167.2 |
) |
21.2 |
|
(b) |
|
273.5 |
| ||||
|
Research, development and engineering |
|
213.4 |
|
— |
|
|
|
|
|
213.4 |
| ||||
|
Operating earnings |
|
516.8 |
|
(215.2 |
) |
(20.9 |
) |
|
|
280.7 |
| ||||
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Interest expense |
|
96.5 |
|
— |
|
(23.9 |
) |
(c) |
|
72.6 |
| ||||
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Debt prepayment costs |
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— |
|
— |
|
244.9 |
|
(c) |
|
244.9 |
| ||||
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Earnings before income taxes |
|
420.3 |
|
(215.2 |
) |
(241.9 |
) |
|
|
(36.8 |
) | ||||
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Income tax expense |
|
100.5 |
|
(94.5 |
) |
(93.1 |
) |
(d) |
|
(87.1 |
) | ||||
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Net earnings |
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$ |
319.8 |
|
$ |
(120.7 |
) |
$ |
(148.8 |
) |
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|
$ |
50.3 |
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|
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Net earnings per share - basic |
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$ |
3.08 |
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|
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|
|
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$ |
0.48 |
| ||
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Net earnings per share - diluted |
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$ |
3.06 |
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|
|
|
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$ |
0.48 |
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|
| ||||
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Weighted average common shares - basic |
|
103.9 |
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|
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|
103.9 |
| ||||
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Weighted average common shares - diluted |
|
104.5 |
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|
|
|
|
|
|
104.5 |
| ||||
See accompanying notes.
B/E AEROSPACE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 2013
(In Millions, Except Per Share Data)
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Pro Forma |
| ||||
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B/E |
| ||||
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KLX |
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Continuing |
| ||||
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Historical |
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Separation |
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Other |
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Notes |
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Operations |
| ||||
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Revenues |
|
$ |
3,483.7 |
|
$ |
(1,291.6 |
) |
$ |
5.2 |
|
(a) |
|
$ |
2,197.3 |
|
|
Cost of sales |
|
2,154.8 |
|
(872.8 |
) |
4.5 |
|
(a) |
|
1,286.5 |
| ||||
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Selling, general and administrative |
|
478.7 |
|
(179.3 |
) |
31.6 |
|
(b) |
|
331.0 |
| ||||
|
Research, development and engineering |
|
220.9 |
|
— |
|
|
|
|
|
220.9 |
| ||||
|
Operating earnings |
|
629.3 |
|
(239.5 |
) |
(30.9 |
) |
|
|
358.9 |
| ||||
|
Interest expense |
|
122.5 |
|
— |
|
(25.4 |
) |
(c) |
|
97.1 |
| ||||
|
Earnings before income taxes |
|
506.8 |
|
(239.5 |
) |
(5.5 |
) |
|
|
261.8 |
| ||||
|
Income tax expense |
|
141.2 |
|
(89.1 |
) |
(2.1 |
) |
(d) |
|
50.0 |
| ||||
|
Net earnings |
|
$ |
365.6 |
|
$ |
(150.4 |
) |
$ |
(3.4 |
) |
|
|
$ |
211.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net earnings per share - basic |
|
$ |
3.54 |
|
|
|
|
|
|
|
$ |
2.05 |
| ||
|
Net earnings per share - diluted |
|
$ |
3.52 |
|
|
|
|
|
|
|
$ |
2.04 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average common shares - basic |
|
103.2 |
|
|
|
|
|
|
|
103.2 |
| ||||
|
Weighted average common shares - diluted |
|
103.9 |
|
|
|
|
|
|
|
103.9 |
| ||||
See accompanying notes.
B/E AEROSPACE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 2012
(In Millions, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
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Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
|
B/E |
| ||||
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|
|
|
|
KLX |
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|
|
|
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Continuing |
| ||||
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|
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Historical |
|
Separation |
|
Other |
|
Notes |
|
Operations |
| ||||
|
|
|
|
|
|
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|
|
|
|
|
| ||||
|
Revenues |
|
$ |
3,085.3 |
|
$ |
(1,180.7 |
) |
$ |
2.5 |
|
(a) |
|
$ |
1,907.1 |
|
|
Cost of sales |
|
1,921.2 |
|
(803.5 |
) |
2.2 |
|
(a) |
|
1,119.9 |
| ||||
|
Selling, general and administrative |
|
432.4 |
|
(159.5 |
) |
34.7 |
|
(b) |
|
307.6 |
| ||||
|
Research, development and engineering |
|
191.7 |
|
— |
|
|
|
|
|
191.7 |
| ||||
|
Operating earnings |
|
540.0 |
|
(217.7 |
) |
(34.4 |
) |
|
|
287.9 |
| ||||
|
Interest expense |
|
124.4 |
|
— |
|
(27.3 |
) |
(c) |
|
97.1 |
| ||||
|
Debt prepayment costs |
|
82.1 |
|
— |
|
|
|
|
|
82.1 |
| ||||
|
Earnings before income taxes |
|
333.5 |
|
(217.7 |
) |
(7.1 |
) |
|
|
108.7 |
| ||||
|
Income tax expense |
|
99.8 |
|
(80.8 |
) |
(2.7 |
) |
(d) |
|
16.3 |
| ||||
|
Net earnings |
|
$ |
233.7 |
|
$ |
(136.9 |
) |
$ |
(4.4 |
) |
|
|
$ |
92.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net earnings per share - basic |
|
$ |
2.29 |
|
|
|
|
|
|
|
$ |
0.90 |
| ||
|
Net earnings per share - diluted |
|
$ |
2.27 |
|
|
|
|
|
|
|
$ |
0.90 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average common shares - basic |
|
102.2 |
|
|
|
|
|
|
|
102.2 |
| ||||
|
Weighted average common shares - diluted |
|
102.9 |
|
|
|
|
|
|
|
102.9 |
| ||||
See accompanying notes.
B/E AEROSPACE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 2011
(In Millions, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
|
B/E |
| ||||
|
|
|
|
|
KLX |
|
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|
|
|
Continuing |
| ||||
|
|
|
Historical |
|
Separation |
|
Other |
|
Notes |
|
Operations |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Revenues |
|
$ |
2,499.8 |
|
$ |
(947.3 |
) |
$ |
2.0 |
|
(a) |
|
$ |
1,554.5 |
|
|
Cost of sales |
|
1,563.5 |
|
(635.9 |
) |
1.7 |
|
(a) |
|
929.3 |
| ||||
|
Selling, general and administrative |
|
349.7 |
|
(125.6 |
) |
34.9 |
|
(b) |
|
259.0 |
| ||||
|
Research, development and engineering |
|
158.6 |
|
— |
|
|
|
|
|
158.6 |
| ||||
|
Operating earnings |
|
428.0 |
|
(185.8 |
) |
(34.6 |
) |
|
|
207.6 |
| ||||
|
Interest expense |
|
105.0 |
|
— |
|
(7.9 |
) |
(c) |
|
97.1 |
| ||||
|
Earnings before income taxes |
|
323.0 |
|
(185.8 |
) |
(26.7 |
) |
|
|
110.5 |
| ||||
|
Income tax expense |
|
95.2 |
|
(69.3 |
) |
(10.3 |
) |
(d) |
|
15.6 |
| ||||
|
Net earnings |
|
$ |
227.8 |
|
$ |
(116.5 |
) |
$ |
(16.4 |
) |
|
|
$ |
94.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net earnings per share - basic |
|
$ |
2.25 |
|
|
|
|
|
|
|
$ |
0.94 |
| ||
|
Net earnings per share - diluted |
|
$ |
2.24 |
|
|
|
|
|
|
|
$ |
0.93 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average common shares - basic |
|
101.1 |
|
|
|
|
|
|
|
101.1 |
| ||||
|
Weighted average common shares - diluted |
|
101.9 |
|
|
|
|
|
|
|
101.9 |
| ||||
See accompanying notes.
B/E AEROSPACE, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2014
(In Millions, Except Per Share Data)
|
|
|
|
|
KLX |
|
|
|
|
|
Pro Forma |
| ||||
|
|
|
Historical |
|
Separation |
|
Other |
|
Notes |
|
B/E |
| ||||
|
|
|
|
|
|
|
|
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|
| ||||
|
ASSETS |
|
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|
| ||||
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|
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|
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|
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|
| ||||
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents |
|
$ |
289.3 |
|
$ |
(466.2 |
) |
$ |
506.0 |
|
(c) |
|
$ |
329.1 |
|
|
Accounts receivable |
|
676.9 |
|
(330.0 |
) |
|
|
|
|
346.9 |
| ||||
|
Inventories |
|
2,175.4 |
|
(1,298.0 |
) |
|
|
|
|
877.4 |
| ||||
|
Deferred income taxes |
|
32.2 |
|
(20.3 |
) |
|
|
|
|
11.9 |
| ||||
|
Other current assets |
|
122.7 |
|
(29.0 |
) |
|
|
|
|
93.7 |
| ||||
|
Total current assets |
|
3,296.5 |
|
(2,143.5 |
) |
506.0 |
|
|
|
1,659.0 |
| ||||
|
|
|
|
|
— |
|
|
|
|
|
|
| ||||
|
Property and equipment |
|
681.6 |
|
(295.2 |
) |
|
|
|
|
386.4 |
| ||||
|
Goodwill |
|
2,253.6 |
|
(1,380.3 |
) |
|
|
|
|
873.3 |
| ||||
|
Identifiable intangible assets |
|
651.5 |
|
(426.5 |
) |
|
|
|
|
225.0 |
| ||||
|
Other assets |
|
74.9 |
|
(28.7 |
) |
(15.4 |
) |
(c) |
|
30.8 |
| ||||
|
|
|
6,958.1 |
|
(4,274.2 |
) |
490.6 |
|
|
|
3,174.5 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Accounts payable |
|
$ |
463.2 |
|
$ |
(175.4 |
) |
|
|
|
|
$ |
287.8 |
| |
|
Accrued liabilities |
|
686.1 |
|
(163.8 |
) |
(26.8 |
) |
(c) |
|
495.5 |
| ||||
|
Total current liabilities |
|
1,149.3 |
|
(339.2 |
) |
(26.8 |
) |
|
|
783.3 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Long-term debt |
|
$ |
2,626.7 |
|
$ |
(1,200.0 |
) |
$ |
762.3 |
|
(c) |
|
$ |
2,189.0 |
|
|
Deferred income taxes |
|
200.4 |
|
(83.9 |
) |
|
|
|
|
116.5 |
| ||||
|
Other non-current liabilities |
|
92.0 |
|
(11.2 |
) |
|
|
|
|
80.8 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Preferred stock, $0.01 par value; 1.0 shares authorized; no shares outstanding |
|
— |
|
— |
|
— |
|
|
|
— |
| ||||
|
Common stock, $0.01 par value; 200.0 shares authorized; 105.9 shared issued as of September 30, 2014 |
|
1.1 |
|
(0.5 |
) |
|
|
|
|
0.6 |
| ||||
|
Additional paid-in capital |
|
1,722.7 |
|
(2,639.4 |
) |
|
|
|
|
(916.7 |
) | ||||
|
Retained earnings |
|
1,243.1 |
|
— |
|
(244.9 |
) |
(c) |
|
998.2 |
| ||||
|
Accumulated other comprehensive loss |
|
(77.2 |
) |
— |
|
|
|
|
|
(77.2 |
) | ||||
|
Total stockholders’ equity |
|
2,889.7 |
|
(2,639.9 |
) |
(244.9 |
) |
|
|
4.9 |
| ||||
|
|
|
$ |
6,958.1 |
|
$ |
(4,274.2 |
) |
$ |
490.6 |
|
|
|
$ |
3,174.5 |
|
See accompanying notes.
B/E AEROSPACE, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Note 1. Other Pro Forma Adjustments
a) Reflects the effects of intercompany sales from B/E to KLX that will be reflected as third party transactions subsequent to the Distribution.
b) Reflects the addition of corporate overhead costs previously allocated to KLX in the KLX financial statements.
c) Reflects 1) the issuance of $1.2 billion of senior unsecured notes by KLX, net of debt issuance costs of $21.0 million, and the distribution of $750.0 million of the proceeds thereof to B/E Aerospace, 2) the issuance of a $2.2 billion term loan by B/E, net of debt issuance costs and original issue discount of $27.2 million and $11.0 million, respectively, 3) the prepayment of $1,958.7 million of senior unsecured notes and settlement of related accrued interest by B/E and write-off of the corresponding debt issuance costs and unamortized premium of $42.6 million and $8.7 million, respectively, 4) the settlement of the balance drawn and related accrued interest on the revolving credit facility of $668.0 million by B/E and 5) the payment of $211.0 million of debt prepayment costs in connection with the prepayment of the senior unsecured notes.
d) The adjustments in the Other column were tax effected using an incremental tax rate of 38.5% based on the blended federal and statutory income tax rates.