-----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, NBSrinww4FkezaWCgXyYHSf9XujSwUIDIHmfIJGNGnPIp9HpmWLrDxCIVyNtFehI v54ywObpcOC5sPBzlK2OeQ== 0000810868-00-000021.txt : 20000417 0000810868-00-000021.hdr.sgml : 20000417 ACCESSION NUMBER: 0000810868-00-000021 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000414 ITEM INFORMATION: FILED AS OF DATE: 20000414 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEGG MASON INC CENTRAL INDEX KEY: 0000704051 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 521200960 STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08529 FILM NUMBER: 602205 BUSINESS ADDRESS: STREET 1: 100 LIGHT ST CITY: BALTIMORE STATE: MD ZIP: 21202-1476 BUSINESS PHONE: 4105390000 MAIL ADDRESS: STREET 1: 100 LIGHT ST CITY: BALTIMORE STATE: MD ZIP: 21202-1476 8-K 1 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): April 14, 2000 --------------------------- LEGG MASON, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Maryland 1-8529 52-1200960 - --------------------------------- ----------- ------------------------------ (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File No.) Identification No.) 100 Light Street, Baltimore, Maryland 21202 - -------------------------------------------------------------------------------- (Address of Principal Executive Office) (Zip Code) Registrant's Telephone Number, Including Area Code: (410) 539-0000 --------------------------- Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events ------------ On April 14, 2000, Unaudited Pro Forma Combined Financial Statements of Legg Mason, Inc. (the "Company") giving effect to the proposed acquisition of Perigee Inc. and utilizing previously reported Legg Mason information were included in an information circular that was distributed to Perigee stockholders in accordance with Canadian requirements. The Company is filing this report containing those Unaudited Pro Forma Combined Financial Statements in the United States solely for informational purposes. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits ------------------------------------------------------------------ (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. 99 Unaudited Pro Forma Combined Financial Statements 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. LEGG MASON, INC. Date: April 14, 2000 By: /s/ Robert F. Price ------------------------------------------ Robert F. Price Senior Vice President EXHIBIT INDEX Exhibit - ------- 99 Unaudited Pro Forma Combined Financial Statements EX-99 2 UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The following Unaudited Pro Forma Combined Statement of Financial Condition combines the historical financial position of Legg Mason as of December 31, 1999 and the historical financial position of Perigee as of December 31, 1999, giving effect to the Arrangement as if it had been consummated on December 31, 1999. The following Unaudited Pro Forma Combined Statements of Earnings combine the historical results of operations of Legg Mason for the year ended March 31, 1999 and the historical results of operations of Perigee for the year ended December 31, 1998 and the historical results of operations of Legg Mason for the nine months ended December 31, 1999 and the historical results of operations of Perigee for the nine months ended December 31, 1999, in each case, after giving effect to the Arrangement as if it had been consummated on April 1, 1998. These Unaudited Pro Forma Combined Financial Statements have been prepared by Legg Mason with the assistance of Perigee. These Unaudited Pro Forma Combined Financial Statements are not necessarily indicative of the operating results and financial position that might have been achieved had the Arrangement occurred as of the beginning of the earliest period presented nor are they necessarily indicative of operating results and financial position which may occur in the future. PRO FORMA COMBINED STATEMENT OF EARNINGS (UNAUDITED) Year Ended March 31, 1999 (U.S. dollars in thousands, except per share amounts) Legg Mason Perigee As Reported As Reported Pro Forma March 31, 1999 December 31, 1998 Combined ----------------------------------------------- Revenues Investment advisory and related fees $ 390,216 $ 23,726 $ 413,942 Commissions 279,136 - 279,136 Principal transactions 94,105 - 94,105 Investment banking 76,118 - 76,118 Interest 160,292 269 160,561 Other 46,139 - 46,139 ---------------------------------------------- Total revenues 1,046,006 23,995 1,070,001 Interest expense 94,910 60 94,970 ---------------------------------------------- Net revenues 951,096 23,935 975,031 ---------------------------------------------- Non-Interest Expenses Compensation and benefits 584,830 - 584,830 Occupancy and equipment rental 64,289 311 64,600 Communications 47,963 - 47,963 Floor brokerage and clearing fees 6,677 - 6,677 Non-cash deferred compensation 10,352 - 10,352 Other 88,210 - 88,210 General and administrative - 10,107 15,544 ----------------------------------------------- Total non-interest expenses 802,321 10,418 818,176 ----------------------------------------------- Earnings Before Income Taxes 148,775 13,517 156,855 Income tax provision 59,441 6,083 63,536 ---------------------------------------------- Net Earnings $ 89,334 $ 7,434 $ 93,319 ============================================== Earnings Per Common Share Basic $ 1.64 $ 1.57 Diluted $ 1.55 $ 1.49 See Notes to Pro Forma Combined Financial Statements (Unaudited)
PRO FORMA COMBINED STATEMENT OF EARNINGS (UNAUDITED) Nine Months Ended December 31, 1999 (U.S. dollars in thousands, except per share amounts) Legg Mason Perigee As Reported As Reported Pro Forma December 31, 1999 December 31, 1999 Combined ---------------------------------------------------- Revenues Investment advisory and related fees $ 385,890 $ 21,114 $ 407,004 Commissions 248,250 - 248,250 Principal transactions 86,636 - 86,636 Investment banking 47,327 - 47,327 Interest 156,359 174 156,533 Other 34,484 - 34,484 ---------------------------------------------------- Total revenues 958,946 21,288 980,234 Interest expense 93,101 44 93,145 ---------------------------------------------------- Net revenues 865,845 21,244 887,089 ---------------------------------------------------- Non-Interest Expenses Compensation and benefits 533,513 - 533,513 Occupancy and equipment rental 58,415 247 58,662 Communications 39,600 - 39,600 Floor brokerage and clearing fees 5,796 - 5,796 Non-cash deferred compensation (1,063) - (1,063) Other 71,330 - 71,330 General and administrative - 8,359 9,239 ---------------------------------------------------- Total non-interest expenses 707,591 8,606 717,077 ---------------------------------------------------- Earnings Before Income Taxes 158,254 12,638 170,012 Income tax provision 63,770 5,687 69,456 ---------------------------------------------------- Net Earnings $ 94,484 $ 6,951 $ 100,556 ==================================================== Earnings Per Common Share: Basic $ 1.67 $ 1.63 Diluted $ 1.56 $ 1.53 See Notes to Pro Forma Combined Financial Statements (Unaudited)
PRO FORMA COMBINED STATEMENT OF FINANCIAL CONDITION (UNAUDITED) December 31, 1999 (U.S. dollars in thousands) Legg Mason Perigee As Reported As Reported Pro Forma December 31, 1999 December 31, 1999 Combined - ---------------------------------------------------------------------------------------------------------------- Assets Cash and cash equivalents $ 583,730 $ 4,165 $ 587,895 Cash and securities segregated for regulatory purposes 1,421,657 - 1,421,657 Resale agreements 85,401 - 85,401 Receivables: Customers 1,205,781 7,056 1,212,837 Brokers, dealers and clearing organizations 173,055 - 173,055 Others 64,935 - 64,935 Securities borrowed 468,108 - 468,108 Securities inventory, at market value 55,342 - 55,342 Investment securities, at market value 18,852 - 18,852 Investments of finance subsidiaries 244,212 - 244,212 Equipment and leasehold improvements, net 62,037 695 62,732 Intangible assets, net 130,250 - 145,976 Other 108,602 453 109,055 - ---------------------------------------------------------------------------------------------------------------- $ 4,621,962 $ 12,369 $ 4,650,057 ================================================================================================================ Liabilities and Stockholders' Equity Liabilities Payable: Customers $ 2,634,830 $ - $ 2,634,830 Brokers and dealers 8,659 - 8,659 Securities loaned 508,735 - 508,735 Short-term borrowings 152,583 - 152,583 Securities sold, but not yet purchased, at market value 9,730 - 9,730 Accrued compensation 140,450 - 140,450 Other 135,465 7,250 146,366 Notes payable of finance subsidiaries 245,106 - 245,106 Senior notes 99,711 - 99,711 - ---------------------------------------------------------------------------------------------------------------- 3,935,269 7,250 3,946,170 - ---------------------------------------------------------------------------------------------------------------- Stockholders' Equity Common stock 5,741 1,551 6,261 Additional paid-in capital 236,603 - 255,603 Deferred compensation and employee note receivable (5,265) - (5,265) Employee stock trust (26,394) - (26,394) Deferred compensation employee stock trust 26,394 - 26,394 Retained earnings 450,283 3,568 447,957 Accumulated other comprehensive income, net (669) - (669) - ----------------------------------------------------------------------------------------------------------------- 686,693 5,119 703,887 - ----------------------------------------------------------------------------------------------------------------- $ 4,621,962 $ 12,369 $ 4,650,057 ================================================================================================================= See Notes to Pro Forma Combined Financial Statements (Unaudited)
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Basis of Presentation The Merger Agreement provides for the combination of Legg Mason and Perigee in an Arrangement in which each Perigee Shareholder will receive 0.387 of an Exchangeable Share for each Perigee Share held. Each Exchangeable Share will be exchangeable at any time at the option of the holder, on a one-for-one basis, for a Legg Mason Share. The Arrangement is expected to be accounted for as a "pooling-of-interests", and accordingly Legg Mason's historical consolidated financial statements presented in future reports will be restated to include the accounts and results of Perigee. The pro forma statement of financial condition gives effect to the Arrangement as if it had been consummated on December 31, 1999. The pro forma statements of earnings give effect to the Arrangement as if it had been consummated on April 1, 1998. In the pro forma financial statements, Perigee's financial position as of its fiscal period-end and its results of operations for its fiscal periods are deemed indicative of its financial position at Legg Mason's respective fiscal period-end and its results of operations for Legg Mason's respective fiscal periods. Perigee's financial position and results of operations have been translated into United States dollars based on the period-end and average exchange rates reported by Bloomberg, respectively. Note 2. Accounting Policy Adjustments Certain adjustments to conform Perigee accounting policies to those of Legg Mason have been reflected in the pro forma financial statements. These adjustments pertain to differences between Canadian and U.S. GAAP with respect to business combinations and the related recognition and amortization of intangible assets; and treatment of shareholder distributions made prior to Perigee's initial public offering. These adjustments had the effect of reducing net earnings by U.S.$3.4 million and U.S.$0.9 million in the year ended March 31, 1999 and for the nine months ended December 31, 1999, respectively, and increasing intangible assets by U.S.$16.0 million and stockholders' equity by U.S.$15.7 million. Both companies are completing reviews of their respective accounting policies and differences between U.S. GAAP and Canadian GAAP and do not expect any further adjustments that would be significant to the pro forma combined financial position or results of operations. Note 3. Merger Adjustments Upon consummation of the Arrangement, Legg Mason Canada will issue approximately 5.2 million Exchangeable Shares, subject to possible adjustment in certain circumstances. Estimated after-tax merger costs of U.S. $3.6 million (U.S.$4.0 million on a pre-tax basis) have been included as an adjustment to the pro forma statement of financial condition. Note 4. Earnings Per Common Share The pro forma basic and diluted earnings per common share for the periods presented is based on the weighted average common shares and share equivalents of Legg Mason and Perigee. The number of Perigee Shares and share equivalents are based on the Exchangeable Shares (each having economic rights equivalent to a Legg Mason Share) that Shareholders would have received had the Arrangement been effected April 1, 1998. Note 5. Post-Arrangement Events The pro forma financial statements do not include integration costs, or other transactions or events that the combined entity may undertake or experience as a result of the Arrangement. As such, any restructuring charges, anticipated increase in revenues, or unexpected cost savings are not presented in the pro forma financial statements. -----END PRIVACY-ENHANCED MESSAGE-----