UNITED STATES
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 quarterly period ended April 30, 2004
OR
| ¨ |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
For the transition period from to
Commission File Number 1-566
GREIF, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 31-4388903 | |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 425 Winter Road, Delaware, Ohio | 43015 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (740) 549-6000
Not Applicable
Former name, former address and former fiscal year, if changed since last report.
Indicated 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes x No ¨
The number of shares outstanding of each of the issuer’s classes of common stock at the close of business on April 30, 2004 was as follows:
|
Class A Common Stock |
10,797,605 shares |
|
|
Class B Common Stock |
11,661,189 shares |
PART I. FINANCIAL INFORMATION
GREIF, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars in thousands, except per share amounts)
Six months ended
April 30,
Net sales
Costs of products sold
Gross profit
Selling, general and administrative expenses
Restructuring charges
Gain on sale of assets
Operating profit
Interest expense, net
Other income, net
Income (loss) before income tax expense (benefit) and equity in earnings of affiliates and minority interests
Income tax expense (benefit)
Equity in earnings of affiliates and minority interests
Income (loss) before cumulative effect of change in accounting principle
Cumulative effect of change in accounting principle
Net income (loss)
Basic and diluted earnings (loss) per share:
Class A Common Stock (before cumulative effect)
Class A Common Stock (after cumulative effect)
Class B Common Stock (before cumulative effect)
Class B Common Stock (after cumulative effect)
See
accompanying Notes to Consolidated Financial Statements
2
GREIF, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
April 30,
2004
Current assets
Cash and cash equivalents
Trade accounts receivable, less allowance of $12,013 in 2004 and $11,225 in 2003
Inventories
Net assets held for sale
Deferred tax assets
Other current assets
Long-term assets
Goodwill, net of amortization
Other intangible assets, net of amortization
Investment in affiliates
Other long-term assets
Properties, plants and equipment
Timber properties, net of depletion
Land
Buildings
Machinery and equipment
Capital projects in progress
Accumulated depreciation
See
accompanying Notes to Consolidated Financial Statements
3
GREIF, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
April 30,
2004
October 31,
2003
Current liabilities
Accounts payable
Accrued payrolls and employee benefits
Restructuring reserves
Short-term borrowings
Current portion of long-term debt
Other current liabilities
Long-term liabilities
Long-term debt
Deferred tax liability
Postretirement benefit liability
Other long-term liabilities
Minority interest
Shareholders’ equity
Common stock, without par value
Treasury stock, at cost
Retained earnings
Accumulated other comprehensive loss:
- foreign currency translation
- interest rate derivatives
- minimum pension liability
See
accompanying Notes to Consolidated Financial Statements
4
GREIF, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in thousands)
For the six months ended April 30,
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization
Asset impairments
Deferred income taxes
Gain on disposals of properties, plants and equipment, net
Equity in earnings of affiliates, net of dividends received, and minority interests
Cumulative effect of change in accounting principle
Increase (decrease) in cash from changes in certain assets and liabilities:
Trade accounts receivable
Inventories
Other current assets
Other long-term assets
Accounts payable
Accrued payroll and employee benefits
Restructuring reserves
Other current liabilities
Postretirement benefit liability
Other long-term liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of properties, plants and equipment
Proceeds on disposals of properties, plants and equipment
Net cash used in investing activities
Cash flows from financing activities:
Payments on long-term debt
Proceeds from short-term borrowings
Dividends paid
Acquisitions of treasury stock
Exercise of stock options
Net cash used in financing activities
Effects of exchange rates on cash
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
See
accompanying Notes to Consolidated Financial Statements
5
GREIF, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2004
NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The information furnished herein reflects all adjustments which are, in
the opinion of management, necessary for a fair presentation of the consolidated balance sheets as of April 30, 2004 and October 31, 2003, the consolidated statements of operations for the three-month and six-month periods ended April 30, 2004 and
2003 and cash flows for the six-month periods ended April 30, 2004 and 2003 of Greif, Inc. and subsidiaries (the “Company”). These consolidated financial statements should be read in conjunction with the consolidated financial statements
and notes thereto included in the Company’s Annual Report on Form 10-K for its fiscal year ended October 31, 2003 (the “2003 Form 10-K”).
The Company’s fiscal year begins on November 1 and ends on October 31 of the following year. Any references to the year 2004 or 2003, or to any
quarter of those years, relates to the fiscal year or quarter, as the case may be, ending in that year.
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management
to make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates.
Certain prior year amounts have been reclassified to conform to the 2004
presentation.
Stock-Based Compensation
At April 30, 2004, the Company had various stock-based
compensation plans as described in Note 10 to the Notes to Consolidated Financial Statements in the 2003 Form 10-K. The Company applies Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and related
interpretations in accounting for its stock option plans. If compensation cost would have been determined based on fair values at the date of grant under Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for
Stock-Based Compensation,” pro forma net income (loss) and earnings (loss) per share would have been as follows (Dollars in thousands, except per share amounts):
6
NOTE 2 — RECENT ACCOUNTING STANDARDS
In December 2003, the Financial Accounting Standards Board (“FASB”) issued a revision to SFAS No. 132,
“Employers Disclosures about Pensions and Other Postretirement Benefits.” The revision relates to employers’ disclosures about pension plans and other postretirement benefit plans. It does not alter the measurement or recognition
provisions of the original SFAS No. 132. It requires additional disclosures regarding assets, obligations, cash flows and net periodic benefit costs of pension plans and other defined benefit postretirement plans. Excluding certain disclosure
requirements, the revised Statement is effective for financial statements with fiscal years ended after December 15, 2003. Interim period disclosures are effective for interim periods beginning after December 15, 2003 and have been included in Note
14 to the Notes to Consolidated Financial Statements in this Form 10-Q.
In December 2003, the FASB issued a revision to Interpretation No. 46, “Consolidation of Variable Interest Entities.” This Interpretation defines when a business enterprise must consolidate a variable interest entity. The
Interpretation provisions are effective for variable interest entities commonly referred to as special-purpose entities for periods ending after March 15, 2004. The Company does not have any material unconsolidated variable interest entities as of
April 30, 2004 that would require consolidation. Adoption of the subsequent provisions of the Interpretation did not have a material impact on the Company’s financial position or results of operations.
7
NOTE 3 — INVENTORIES
Inventories are summarized as follows (Dollars in thousands):
Finished goods
Raw materials and work-in-process
Reduction to state inventories on last-in, first-out basis
NOTE 4 — NET ASSETS HELD
FOR SALE
Net assets held for sale represent land,
buildings and land improvements less accumulated depreciation for locations that have been closed. As of April 30, 2004, there were 16 facilities held for sale. The net assets held for sale are being marketed for sale and it is the Company’s
intention to complete the sales within the upcoming year.
NOTE 5 —
GOODWILL AND OTHER INTANGIBLE ASSETS
The Company
periodically reviews goodwill and indefinite-lived intangible assets for impairment as required by SFAS No. 142, “Goodwill and Other Intangible Assets.” The Company has performed the required impairment tests and has concluded that no
impairment exists at this time.
Changes to the carrying amount
of goodwill for the six-month period ended April 30, 2004 are as follows (Dollars in thousands):
The goodwill acquired
relates to refinements to the allocation of the investment in CorrChoice, Inc. in the Paper, Packaging & Services segment.
The goodwill adjustment was recorded to recognize the cash surrender value of reinsurance contracts that are used to fund pension payments in Europe. The
adjustment, which relates to the Van Leer Industrial Packaging acquisition, was recorded in the second quarter of 2004.
8
All other intangible assets for the periods presented, except for $3.4 million, net, related to the
Tri-Sure Trademark, are subject to amortization and are being amortized using the straight-line method over periods that range from two to 20 years. The detail of other intangible assets by class as of April 30, 2004 and October 31, 2003 are as
follows (Dollars in thousands):
During the first six
months of 2004, there were no significant acquisitions of other intangible assets. Amortization expense for the six months ended April 30, 2004 and 2003 was $2.0 million. Amortization expense for the next five years is expected to be $4.0 million in
2004, $3.6 million in 2005, $2.9 million in 2006, $2.5 million in 2007 and $2.4 million in 2008.
In accordance with the transition provisions of SFAS No. 141, “Business Combinations,” the Company recorded a $4.8 million gain as a cumulative
effect of change in accounting principle for its remaining unamortized negative goodwill upon the adoption of SFAS No. 142 in the first quarter of 2003.
NOTE 6 — INVESTMENT IN AFFILIATES
The Company has investments in Socer-Embalagens, Lda. (25%) and Balmer Lawrie-Van Leer (40%) that are accounted for under the equity method. The
Company’s share of earnings for these affiliates is included in income as earned.
The summarized unaudited financial information below represents the combined results of those entities accounted for by the equity method (Dollars in thousands):
Three months
ended April 30,
Six months
ended April 30,
Net sales
Gross profit
Net income
9
NOTE 7 — RESTRUCTURING CHARGES
During 2003, the Company began its transformation initiatives, initially referred to as the performance improvement plan,
which are expected to enhance long-term organic sales growth and productivity and achieve permanent cost reductions. As a result, the Company incurred restructuring charges of $60.7 million in 2003 and incurred $27.5 million during the first six
months of 2004. The Company anticipates incurring additional restructuring charges of approximately $17.5 million to $22.5 million during the remainder of 2004.
As part of the transformation initiatives, the Company closed four company-owned plants (three in the Industrial Packaging & Services segment and
one in the Paper, Packaging & Services segment) during the six months ended April 30, 2004. All of the plants are located in North America. In addition, administrative staff reductions have continued throughout the world. As a result of the
transformation initiatives, during the first six months of 2004, the Company recognized pre-tax restructuring charges of $27.5 million, consisting of $9.0 million in employee separation costs, $2.3 million in asset impairments and $16.2 million in
other costs, which were primarily for consulting services in connection with the transformation initiatives. The asset impairment charges, which relate to the write-down to fair value of buildings and equipment, are based on recent buy offers,
market comparables and/or data obtained from the Company’s commercial real estate broker. A total of approximately 922 employees have been terminated in connection with the transformation initiatives, 315 of which were terminated during the six
months ended April 30, 2004. For each of the Company’s business segments, amounts incurred in the second quarter of 2004, the cumulative amounts incurred from the start of the transformation initiatives through April 30, 2004 and the total
amounts expected to be incurred in connection with the transformation initiatives are as follows (Dollars in thousands):
10
Following is a reconciliation of the beginning and ending restructuring reserve balances for the
six-month period ended April 30, 2004 (Dollars in thousands):
NOTE 8 — LONG-TERM DEBT
Long-term debt is summarized as follows (Dollars in
thousands):
$550 million Amended and Restated Senior Secured Credit Agreement
8
7
/
8
%
Senior Subordinated Notes
Trade accounts receivable credit facility
Other long-term debt
Current portion
$550 million Amended and Restated
Senior Secured Credit Agreement
On August 23, 2002, the
Company and certain of its non-United States subsidiaries entered into a $550 million Amended and Restated Senior Secured Credit Agreement with a syndicate of lenders. The Amended and Restated Senior Secured Credit Agreement originally provided for
a $300 million term loan and a $250 million revolving multicurrency credit facility. The revolving multicurrency credit facility is available for working capital and general corporate purposes, and has been permanently reduced to $240 million. On
February 11, 2004, the Company amended its term loan under the Amended and Restated Senior Secured Credit Agreement. As a result of the amendment, the term loan was increased from its balance then outstanding of $226 million to $250 million, and the
applicable margin was lowered by 50 basis points while maintaining the existing maturity schedule. The incremental borrowings under the term loan were used to reduce borrowings under the revolving multicurrency credit facility. The term loan
periodically reduces through its maturity date of August 23, 2009 and the revolving multicurrency credit facility matures on February 28, 2006.
11
8
7
/
8
% Senior Subordinated Notes
On July 31, 2002, the Company issued Senior Subordinated Notes in the aggregate principal amount of $250 million, receiving net proceeds of approximately $248 million before expenses. At April 30, 2004, the outstanding balance of $251.3
million included gains on fair value hedges the Company has in place to hedge interest rate risk. Interest on the Senior Subordinated Notes is payable semi-annually at the annual rate of 8.875%. The Senior Subordinated Notes do not have required
principal payments prior to maturity on August 1, 2012. However, the Senior Subordinated Notes are redeemable at the option of the Company beginning August 1, 2007, at the redemption prices set forth below (expressed as percentages of principal
amount), plus accrued interest, if any, to the redemption date:
Year
2007
2008
2009
2010 and thereafter
In addition, prior to
August 1, 2007, the Company may redeem the Senior Subordinated Notes by paying a specified “make-whole” premium.
A description of the guarantors of the Senior Subordinated Notes by the Company’s United States subsidiaries is included in Note 16.
Trade Accounts Receivable Credit Facility
On October 31, 2003, the Company entered into a five-year, up to $120
million credit facility with an affiliate of a bank in connection with the securitization of certain of the Company’s U.S. trade accounts receivable. The credit facility is secured by certain of the Company’s U.S. trade accounts receivable
and bears interest at a variable rate based on the London InterBank Offered Rate (“LIBOR”) plus a margin or other agreed upon rate (1.40% interest rate as of April 30, 2004). The Company also pays a commitment fee. The Company can
terminate this facility at any time upon 60 days prior written notice. In connection with this transaction, the Company established Greif Receivables Funding LLC, which is included in the Company’s consolidated financial statements. This entity
purchases and services the Company’s trade accounts receivable that are subject to this credit facility.
NOTE 9 — FINANCIAL INSTRUMENTS
The Company had interest rate swap agreements with an aggregate notional amount of $345 million at April 30, 2004, with various maturities through 2012. Under certain of these agreements, the Company receives interest
quarterly from the counterparties equal to the LIBOR rate and pays interest at a weighted average rate of 5.6% over the life of the contracts. The Company is also party to agreements in which the Company receives interest semi-annually from the
counterparty equal to a fixed rate of 8.875% and pays interest based on the LIBOR rate plus a spread. At
12
April 30, 2004, a net liability for the loss on interest rate swap contracts, which represented their fair values at that time, in the amount of $12.3
million ($8.5 million net of tax) was recorded.
At April 30,
2004, the Company had outstanding foreign currency forward contracts in the notional amount of $30.8 million. The fair value of these contracts at April 30, 2004 resulted in a loss of $0.1 million recorded in the consolidated statement of
operations. The purpose of these contracts is to hedge short-term intercompany loan balances with foreign businesses.
While the Company may be exposed to credit losses in the event of nonperformance by the counterparties to its derivative financial instrument contracts,
its counterparties are established banks and financial institutions with high credit ratings. The Company has no reason to believe that such counterparties will not be able to fully satisfy their obligations under these contracts.
The fair values of all derivative financial instruments are estimated based
on current settlement prices of comparable contracts obtained from dealer quotes. The values represent the estimated amounts the Company would pay or receive to terminate the agreements at the reporting date.
NOTE 10 — CAPITAL STOCK
Class A Common Stock is entitled to cumulative dividends of 1 cent a share
per year after which Class B Common Stock is entitled to non-cumulative dividends up to ½ cent per share per year. Further distribution in any year must be made in proportion of 1 cent a share for Class A Common Stock to 1 ½ cents a share
for Class B Common Stock. The Class A Common Stock has no voting rights unless four quarterly cumulative dividends upon the Class A Common Stock are in arrears. The Class B Common Stock has full voting rights. There is no cumulative voting for the
election of directors.
The following table summarizes the
Company’s Class A and Class B common and treasury shares at the specified dates:
13
NOTE 11 — DIVIDENDS PER SHARE
The following dividends per share were paid during the periods indicated:
Three months
ended April 30,
Six months
ended April 30,
Class A Common Stock
Class B Common Stock
NOTE 12 — CALCULATION OF
EARNINGS (LOSS) PER SHARE
The Company has two classes
of common stock and, as such, applies the “two-class method” of computing earnings (loss) per share as prescribed in SFAS No. 128, “Earnings Per Share.” In accordance with the Statement, earnings (losses) are allocated first to
Class A and Class B Common Stock to the extent that dividends are actually paid and the remainder allocated assuming all of the earnings (losses) for the period have been distributed in the form of dividends.
The following is a reconciliation of the average shares used to calculate
basic and diluted earnings (loss) per share:
There were 20,000
stock options that were antidilutive for the three-month and six-month periods ended April 30, 2004 (18,000 and 8,000 for the three-month and six-month periods, respectively, ended April 30, 2003).
14
NOTE 13 — COMPREHENSIVE INCOME
Comprehensive income is comprised of net income (loss) and other charges and credits to equity that are not the result of
transactions with the Company’s owners. The components of comprehensive income, net of tax, are as follows (Dollars in thousands):
NOTE 14 — RETIREMENT PLANS
AND POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
The
components of net periodic pension cost include the following (Dollars in thousands):
Three months
ended April 30,
Six months
ended April 30,
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost, initial net asset and net actuarial gain
The Company made $2.4 million in
pension contributions in the first half of 2004. Based on minimum funding requirements, pension contributions for the entire 2004 fiscal year are estimated at $11.2 million.
The components of net periodic cost for postretirement benefits include the following (Dollars in thousands):
On December 8, 2003, the
“Medicare Prescription Drug Improvement and Modernization Act of 2003” (the “Act”) was signed into law. The Act introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree health care
benefit plans that provide a benefit that is at least “actuarially equivalent” to Medicare Part D.
15
A proposed FASB Staff Position 106-b (“FSP 106-b”) was issued providing guidance on accounting for the effects
of the Act for employers that sponsor postretirement health care plans providing prescription drug benefits. FSP 106-b supersedes FSP FAS 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and
Modernization Act of 2003.”
The guidance in FSP 106-b applies only to the
sponsor of a single-employer defined benefit postretirement health plan for which the employer has concluded that prescription drug benefits available under the plan are actuarially equivalent and thus qualify for the subsidy under the Act and the
expected subsidy will offset or reduce the employer’s share of the costs of postretirement prescription drug coverage provided by the plan. FSP 106-b is effective for the first interim or annual period beginning after June 15, 2004.
The Company has determined that its plan is actuarially equivalent and has compared the
Medicare Part D plan to its retiree prescription drug coverage using actuarial equivalencies and reflecting the retiree premiums and cost sharing provisions of the various plans. This analysis shows the Company’s plans provide more valuable
benefits to retirees than the Medicare Part D plan. As permitted in FSP FAS 106-1, the Company has elected to defer recognition of the expected subsidy from the Medicare Act. The adjustment will not have a material impact on the Company’s
financial position or results of operations.
NOTE 15 — BUSINESS
SEGMENT INFORMATION
The Company operates in three
business segments: Industrial Packaging & Services; Paper, Packaging & Services; and Timber.
The Company’s reportable segments are strategic business units that offer different products. The accounting policies of the reportable segments are
the same as those described in the “Description of Business and Summary of Significant Accounting Policies” note (see Note 1) in the 2003 Form 10-K, except that the Company accounts for inventories on a first-in, first-out basis at the
segment level compared to a last-in, first-out basis at the consolidated level for most locations in the United States.
16
The following segment information is presented for the periods indicated (Dollars in thousands):
17
The following table presents net sales to external customers by geographic area (Dollars in thousands):
The following table
presents total assets by geographic area (Dollars in thousands):
Assets:
North America
Europe
Other
Total assets
NOTE 16 — SUMMARIZED
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
The
Senior Subordinated Notes, more fully described in Note 8 – Long-Term Debt, are fully guaranteed, jointly and severally, by the Company’s United States subsidiaries (“Guarantor Subsidiaries”). The Company’s non-United States
subsidiaries are not guaranteeing the Senior Subordinated Notes (“Non-Guarantor Subsidiaries”). Presented below are summarized condensed consolidating financial statements of Greif, Inc. (the “Parent”), which includes certain of
the Company’s operating units, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries and the Company on a consolidated basis.
These summarized condensed consolidating financial statements are prepared using the equity method. Separate financial statements for the Guarantor
Subsidiaries are not presented based on management’s determination that they do not provide additional information that is material to investors.
18
Condensed Consolidating
Statement of Operations
Six months ended April 30, 2004
Guarantor
Subsidiaries
Non-Guarantor
Subsidiaries
Net sales
Cost of products sold
Gross profit
Selling, general and administrative expenses
Restructuring charges
Gain on sale of assets
Operating profit (loss)
Interest expense, net
Other income (expense), net
(1)
Income (loss) before income tax expense (benefit) and equity in earnings of affiliates and minority interests
Income tax expense (benefit)
Equity in earnings of affiliates and minority interests
Net income (loss)
19
Condensed Consolidating Statement of Operations
Three months ended April 30, 2003
Condensed Consolidating
Statement of Operations
Six months ended April 30, 2003
Net sales
Cost of products sold
Gross profit
Selling, general and administrative expenses
Restructuring charges
Gain on sale of assets
Operating profit (loss)
Interest expense (income), net
Other income (expense), net
(1)
ITEM 1.
CONSOLIDATED FINANCIAL STATEMENTS
Three months ended
April 30,
2004
2003
2004
2003
$
542,189
$
470,807
$
1,011,049
$
905,485
452,928
388,564
852,338
747,513
89,261
82,243
158,711
157,972
55,745
59,000
106,770
118,501
12,278
17,449
27,537
18,988
1,122
1,934
5,231
2,345
22,360
7,728
29,635
22,828
10,716
13,923
22,963
27,477
694
2,138
916
2,362
12,338
(4,057
)
7,588
(2,287
)
3,800
(1,298
)
2,337
(732
)
(89
)
(1,654
)
(168
)
(2,749
)
8,449
(4,413
)
5,083
(4,304
)
—
—
—
4,822
$
8,449
$
(4,413
)
$
5,083
$
518
$
0.30
$
(0.16
)
$
0.18
$
(0.15
)
$
0.30
$
(0.16
)
$
0.18
$
0.02
$
0.45
$
(0.24
)
$
0.27
$
(0.23
)
$
0.45
$
(0.24
)
$
0.27
$
0.02
October 31,
2003
(Unaudited)
ASSETS
$
29,592
$
49,767
306,462
294,957
160,407
167,157
14,330
6,311
8,898
10,875
60,393
54,390
580,082
583,457
242,707
252,309
28,701
30,654
5,395
4,421
64,262
47,995
341,065
335,379
88,367
86,437
103,183
100,615
315,275
320,229
822,212
831,815
44,498
36,522
1,373,535
1,375,618
(492,283
)
(463,243
)
881,252
912,375
$
1,802,399
$
1,831,211
(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
$
158,906
$
158,333
34,603
43,126
18,911
15,972
20,200
15,605
—
3,000
66,708
76,282
299,328
312,318
624,114
643,067
159,778
159,825
48,683
48,504
85,930
93,047
918,505
944,443
1,532
1,886
17,975
12,207
(63,772
)
(64,228
)
678,353
681,043
(10,549
)
(15,314
)
(10,270
)
(12,938
)
(28,703
)
(28,206
)
583,034
572,564
$
1,802,399
$
1,831,211
2004
2003
$
5,083
$
518
52,807
43,527
2,252
1,698
3,851
5,136
(5,231
)
(2,345
)
(1,328
)
161
—
(4,822
)
(8,200
)
1,601
8,153
(7,459
)
(5,615
)
12,921
(6,674
)
(658
)
(2,167
)
(2,299
)
(8,423
)
(9,797
)
2,939
6,018
(11,502
)
(3,932
)
179
(1,520
)
(4,607
)
(9,942
)
21,517
28,806
(28,096
)
(22,988
)
5,666
4,826
(22,430
)
(18,162
)
(21,952
)
(8,220
)
4,252
7,877
(7,774
)
(7,770
)
(29
)
(1,031
)
6,166
—
(19,337
)
(9,144
)
75
(6,704
)
(20,175
)
(5,204
)
49,767
25,396
$
29,592
$
20,192
April 30,
2004
October 31,
2003
$
53,626
$
44,894
138,132
153,482
191,758
198,376
(31,351
)
(31,219
)
$
160,407
$
167,157
2004
2003
2004
2003
$
4,259
$
4,036
$
8,191
$
7,395
$
928
$
850
$
1,806
$
1,600
$
157
$
174
$
296
$
274
April 30,
2004
October 31,
2003
$
299,565
$
308,783
251,251
251,380
72,972
85,406
326
498
624,114
646,067
—
(3,000
)
$
624,114
$
643,067
Redemption
Price
104.438
%
102.958
%
101.479
%
100.000
%
2004
2003
2004
2003
$
0.14
$
0.14
$
0.28
$
0.28
$
0.21
$
0.21
$
0.41
$
0.41
2004
2003
2004
2003
$
3,070
$
2,783
$
6,140
$
5,567
6,110
5,620
12,221
11,240
(7,069
)
(6,580
)
(14,138
)
(13,161
)
749
228
1,498
456
$
2,860
$
2,051
$
5,721
$
4,102
April 30,
2004
October 31,
2003
$
1,194,695
$
1,253,983
414,486
389,171
193,218
188,057
$
1,802,399
$
1,831,211
Parent
Eliminations
Consolidated
$
322,689
$
283,979
$
524,091
$
(119,710
)
$
1,011,049
280,059
245,141
446,848
(119,710
)
852,338
42,630
38,838
77,243
—
158,711
47,961
9,443
49,366
—
106,770
5,049
18,991
3,497
—
27,537
—
4,901
330
—
5,231
(10,380
)
15,305
24,710
—
29,635
19,518
1,489
1,956
—
22,963
(19,042
)
14,614
5,344
—
916
(48,940
)
28,430
28,098
—
7,588
(15,073
)
8,756
8,654
—
2,337
38,950
—
(168
)
(38,950
)
(168
)
$
5,083
$
19,674
$
19,276
$
(38,950
)
$
5,083
(1)
Parent column other expense amount and a related amount of other income in the Guarantor
Subsidiaries column primarily relate to an intercompany royalty arrangement.
Parent
Guarantor
Subsidiaries
Non-Guarantor
Subsidiaries
Eliminations
Consolidated
$
342,195
$
253,362
$
422,181
$
(112,253
)
$
905,485
293,280
212,188
354,298
(112,253
)
747,513
48,915
41,174
67,883
—
157,972
51,227
17,665
49,609
—
118,501
3,534
10,058
5,396
—
18,988
34
1,693
618
—
2,345
(5,812
)
15,144
13,496
—
22,828
24,789
(372
)
3,060
—
27,477
(20,345
)
22,627
80
—
2,362