EX-99.1 3 wpex991.htm WP PROFORMA FINANCIAL Exhibit 99.1  (W0662489.DOC;1)



Exhibit 99.1



UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Basis of Presentation

On February 21, 2013, Wausau Paper Corp. (the “Company”) announced its intent to close the Brainerd, Minnesota, technical specialty paper mill (the “Abandonment”), which subsequently ceased operations on March 29, 2013.  


On May 20, 2013, the Company, and its wholly-owned subsidiary, Wausau Paper Mills, LLC (“Paper Mills”) entered into an asset purchase agreement pursuant to which the Company would sell its specialty paper business, which is primarily conducted through its Paper Mills subsidiary, to a new company sponsored by KPS Capital Partners, LP (“KPS”).


The transaction (the “Sale”) was completed on June 26, 2013.  Total cash consideration received by the Company, subject to certain post-closing adjustments, was approximately $105 million, after settlement of transaction-related liabilities, transaction costs, and taxes.  In exchange for cash consideration, the Company and its Paper Mills subsidiary transferred substantially all of the assets and selected liabilities of the Paper Mills subsidiary to the KPS-sponsored buyer known as Expera Specialty Solutions, LLC.  Certain Paper Mills assets were excluded from the transaction, including Paper Mills manufacturing facility located in Brainerd, Minnesota.


As a result of the Sale and the Abandonment the Company has exited the specialty paper business.


The following unaudited pro forma condensed consolidated financial statements have been prepared to reflect the effect of the Sale as described in Item 2.01 of the Current Report on Form 8-K/A, with which this Exhibit 99.1 is filed, as well as the Abandonment.

 

The following unaudited pro forma financial statements of the Company are presented to comply with Article 11 of Regulation S-X and follow guidelines of the Securities and Exchange Commission (“SEC”). The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2013 and years ended December 31, 2012, 2011 and 2010 are based on the Company’s historical consolidated statements of comprehensive income (loss), and give effect to the Sale and Abandonment as if they had occurred on January 1, 2010.   The unaudited pro forma condensed consolidated balance sheet as of March 31, 2013 is based on the Company’s historical consolidated balance sheet as of that date, and gives effect to the Sale and Abandonment as if the Sale had occurred and Abandonment was fully completed on March 31, 2013.


The unaudited pro forma condensed consolidated financial statements presented below are based on the assumptions and adjustments set forth in the notes thereto. The unaudited pro forma adjustments made in the compilation of the unaudited pro forma condensed consolidated financial statements are directly attributable to the Sale and Abandonment, are factually supportable, are based upon available information and assumptions that the Company considers to be reasonable, and have been made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the SEC. The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and should not be considered indicative of actual results that would have been achieved had the Sale and Abandonment actually been consummated on the dates indicated and does not purport to be indicative of the financial condition as of any future date or results of operation for any future period.


The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC on March 4, 2013.



-1-







Wausau Paper Corp. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

(all amounts in thousands, except per share data)

 

Previously

Reported Three Months Ended March 31, 2013

 

Adjustments for Sale and Abandonment (a)

 

Other

Adjustments

 

 

 

Pro Forma Three Months Ended

March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

187,980 

 

$

(109,945)

 

$

–

 

 

 

$

78,035 

Cost of goods sold

 

 

209,217 

 

 

(142,408)

 

 

 –

 

 

 

 

66,809 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross (loss) profit

 

 

(21,237)

 

 

32,463 

 

 

–

 

 

 

 

11,226 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

 

21,393 

 

 

(6,225)

 

 

 –

 

 

 

 

15,168 

Restructuring

 

 

2,135 

 

 

(2,135)

 

 

 –

 

 

 

 

 – 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(44,765)

 

 

40,823 

 

 

–

 

 

 

 

(3,942)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest expense

 

 

(2,328)

 

 

– 

 

 

317

 

(c)

 

 

(2,011)

  Other, net

 

 

(5)

 

 

(10)

 

 

–

 

 

 

 

(15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations before income taxes

 

 

(47,098)

 

 

40,813 

 

 

317

 

 

 

 

(5,968)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit for income taxes

 

 

(17,426)

 

 

15,509 

 

 

120

 

(d)

 

 

(1,797)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

$

(29,672)

 

$ 

25,304 

 

$ 

197

 

 

 

$

(4,171)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per common share from                 continuing operations

 

$

(0.60)

 

$

0.51 

 

$

0.00

 

 

 

$

(0.09)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per common share from continuing operations

 

$

(0.60)

 

$

0.51 

 

$

0.00

 

 

 

$

(0.09)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic number of shares

 

 

49,364 

 

 

49,364 

 

 

49,364

 

 

 

 

49,364  

Diluted number of shares

 

 

49,364 

 

 

49,364 

 

 

49,364

 

 

 

 

49,364  

 


The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.



-2-






Wausau Paper Corp. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

(all amounts in thousands, except per share data)

 

Previously

Reported 2012

 

 

Adjustments for Sale and Abandonment (a)

 

 

Other

Adjustments

 

 

 

Pro Forma 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

822,169

 

 

$

(478,587

)

 

$

–

 

 

 

$

343,582

 

Cost of goods sold

 

 

731,335

 

 

 

(453,485

)

 

 

 –

 

 

 

 

277,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

90,834

 

 

 

(25,102

)

 

 

–

 

 

 

 

65,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

 

94,972

 

 

 

(24,681

)

 

 

 –

 

 

 

 

70,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss profit

 

 

(4,138

) 

 

 

(421

) 

 

 

–

 

 

 

 

(4,559

) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest expense

 

 

(3,360

)

 

 

–

 

 

 

164

 

(c)

 

 

(3,196

)

  Other, net

 

 

(12

)

 

 

(40

)

 

 

–

 

 

 

 

(52

) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations before income taxes

 

 

(7,510

 

)

 

 

(461

)

 

 

164

 

 

 

 

(7,807

) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit for income taxes

 

 

(3,665

)

 

 

(175

)  (b)

 

62

 

(d)

 

 

(3,778

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

$

(3,845

) 

 

$ 

(286

) 

 

$ 

102

 

 

 

$

(4,029

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per common share from                 continuing operations

 

$

(0.08

)

 

$

(0.00

)

 

$

0.00

 

 

 

$

(0.08

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per common share from continuing operations

 

$

(0.08

)

 

$

(0.00

) 

 

$

0.00

 

 

 

$

(0.08

) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic number of shares

 

 

49,312

 

 

 

49,312

 

 

 

49,312

 

 

 

 

49,312

 

Diluted number of shares

 

 

49,312

 

 

 

49,312

 

 

 

49,312

 

 

 

 

49,312

 


The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.



-3-






Wausau Paper Corp. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Pro Forma Condensed Consolidated Statement of Operations 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

(all amounts in thousands, except per share data)

 

Previously

Reported 2011

 

 

Adjustments for Sale and Abandonment (a)

 

 

Other

Adjustments

 

 

 

Pro Forma 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

823,089

 

 

$

(486,821

)

 

$

–

 

 

 

$

336,268

 

Cost of goods sold

 

 

692,603

 

 

 

(447,620

)

 

 

–

 

 

 

 

244,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

130,486

 

 

 

(39,201

)

 

 

–

 

 

 

 

91,285

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

 

68,278

 

 

 

(25,987

)

 

 

–

 

 

 

 

42,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

 

62,208

 

 

 

(13,214

)

 

 

–

 

 

 

 

48,994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest expense

 

 

(6,850

)

 

 

–

 

 

 

602

 

(c)

 

 

(6,248

)

  Loss on early extinguishment of debt

 

 

(666

)

 

 

 

 

 

 

 

 

 

 

 

(666

)

  Other, net

 

 

(61

)

 

 

13

 

 

 

–

 

 

 

 

(48

) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations before income taxes

 

 

54,631

 

 

 

(13,201

)

 

 

602

 

 

 

 

42,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

21,554

 

 

 

(5,016

)  (b)

 

229

 

(d)

 

 

16,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings from continuing operations

 

 $

33,077

 

 

$ 

(8,185

)

 

$ 

373

 

 

 

 $

25,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share from                 continuing operations

 

$

0.67

 

 

$

(0.17

)

 

$

0.01

 

 

 

$

0.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share from continuing operations

 

$

0.67

 

 

$

(0.17

)

 

$

0.01

 

 

 

$

0.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic number of shares

 

 

49,160

 

 

 

49,160

 

 

 

49,160

 

 

 

 

49,160

 

Diluted number of shares

 

 

49,413

 

 

 

49,413

 

 

 

49,413

 

 

 

 

49,413

 


The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.



-4-






Wausau Paper Corp. and Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 

 

(all amounts in thousands, except per share data)

 

Previously

Reported 2010

 

 

Adjustments for Sale and Abandonment (a)

 

 

Other

Adjustments

 

 

 

Pro Forma 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

812,235

 

 

$

(468,926

)

 

$

–

 

 

 

$

343,309

 

Cost of goods sold

 

 

696,971

 

 

 

(428,601

)

 

 

 –

 

 

 

 

268,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

115,264

 

 

 

(40,325

)

 

 

–

 

 

 

 

74,939

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expenses

 

 

75,243

 

 

 

(26,649

)

 

 

 –

 

 

 

 

48,594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

 

40,021

 

 

 

(13,676

) 

 

 

–

 

 

 

 

26,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Interest expense

 

 

(6,567

)

 

 

 –

 

 

 

623

 

(c)

 

 

(5,944

)

  Other, net

 

 

137

 

 

 

(157

)

 

 

–

 

 

 

 

(20

) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations before income taxes

 

 

33,591

 

 

 

(13,833

)

 

 

623

 

 

 

 

20,381

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Credit) provision for income taxes

 

 

(849

)

 

 

8,363

   (b) 

 

237

 

(d)

 

 

7,751

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings from continuing operations

 

$

34,440

 

 

$ 

(22,196

)

 

$ 

386

 

 

 

$

12,630

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share from                 continuing operations

 

$

0.70

 

 

$

(0.45

)

 

$

0.01

 

 

 

$

0.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share from continuing operations

 

$

0.70

 

 

$

(0.45

) 

 

$

0.01

 

 

 

$

0.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic number of shares

 

 

48,965

 

 

 

48,965

 

 

 

48,965

 

 

 

 

48,965

 

Diluted number of shares

 

 

49,292

 

 

 

49,292

 

 

 

49,292

 

 

 

 

49,292

 


The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements.




-5-





Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations

 

The unaudited pro forma condensed consolidated statements of operations include adjustments necessary to reflect the estimated effect of the Sale and Abandonment as if they had occurred on January 1, 2010, the beginning of the first fiscal year presented.

 

The previously reported 2012, 2011, and 2010 columns are derived from  the Company’s consolidated statements of comprehensive income (loss) for the years ended December 31, 2012, 2011, and 2010, as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.


The previously reported three months ended March 31, 2013 column is derived from the Company’s condensed consolidated statement of comprehensive income (loss) for the three months ended March 31, 2013, as presented in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2013.

 

The unaudited pro forma condensed consolidated statements of operations exclude the impact of the Abandonment and the Sale, the estimated charges resulting from the Sale, the Company’s costs to complete the Sale, and other non-recurring costs resulting from the Sale.


(a)  

Adjustments for Sale and Abandonment

 

Represents the elimination of the operating results of the business sold and business abandoned for the period or year presented.


(b)  

Income tax provision

 

Represents the tax impact of item (a) at the Company’s 38% statutory tax rate for the three months ended March 31, 2013 and the years ended December 31, 2012 and 2011.


For the year ending December 31, 2010, the adjustment represents the tax impact of item (a) and the impact of cellulosic biofuel credit attributable to operations of the business sold as reflected below:    


(all dollar amounts in thousands)

Provision at 38% statutory rate

$

5,256

 

Cellulosic biofuel credit attributable to operations of business sold

 

(13,619

) 

 

$

(8,363

) 


(c)  

Interest expense

 

Represents the estimated reduction in interest expense as if the Sale had occurred on January 1, 2010 and the proceeds of the Sale were utilized to repay the outstanding borrowings previously reported under the Company’s revolving credit and commercial paper agreements.


(d)

Income tax provision

 

Represents the tax impact of item (c) at the Company’s 38% statutory tax rate.    


The historical income tax rate as calculated in the unaudited pro forma consolidated statements of operations will differ from the actual income tax rate of continuing and discontinued operations.




-6-






Wausau Paper Corp. and Subsidiaries 

 

 

 

 

 

 

 

 

Unaudited Pro Forma Condensed Consolidated Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma Adjustments

 

 

 

 




(all dollar amounts in thousands)

 


Previously

Reported

March 31, 2013

Adjustments

for Sale and

Abandonment    

 (a)



Other

Adjustments

 



 Pro Forma

March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$              3,338

 

$         105,184 

 

$     (70,500)

  (b)

 $             38,022

 

Receivables, net

 

            74,073

 

          (47,963)

 

– 

 

 

               26,110

 

Refundable income taxes

 

               1,216

 

            – 

 

– 

 

 

1,216

 

Inventories, net

 

            66,326

 

(27,799)

 

– 

 

 

38,527

 

Spare parts

 

25,223

 

(16,150)

 

– 

 

9,073

 

Deferred income taxes

 

             8,762

 

     – 

 

(2,829)

  (c)

5,933

 

Other current assets

 

2,529

 

(312)

 

– 

 

2,217

 

Assets of discontinued  operations

 

–

 

13,602 

 

– 

 

13,602

 

    Total current assets

 

           181,467

 

26,562 

 

(73,329)

 

 

             134,700

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

429,521

 

         (139,254)

 

– 

 

 

             290,267

 

Deferred income taxes

 

             34,027

 

27,729 

 

(10,387)

  (d) 

51,369

 

Other assets

 

52,884

 

(918)

 

– 

 

51,966

 

    Total assets

 

$          697,899

 

$         (85,881)

 

$     (83,716)

 

 

$           528,302

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$            54,345

 

$         (25,320)

 

$                – 

     

 $             29,025

 

Accrued and other liabilities

 

            43,652

 

          (14,854)

 

6,900 

  (e)

35,698

 

Liabilities of discontinued operations -

 

       175

 

       6,812 

 

– 

    

         6,987

 

    Total current liabilities

 

            98,172

 

           (33,362)

 

6,900 

 

 

71,710

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

           220,500

 

                    – 

 

(70,500)

   (b)

             150,000

 

Post-retirement benefits

 

             91,956

 

                    – 

 

(41,000)

   (f)

               50,956

 

Pension

 

81,147

 

 – 

 

4,800 

  (g)

85,947

 

Other noncurrent liabilities

 

             28,368

 

     (7,278)

 

– 

 

 

               21,090

 

    Total liabilities

 

           520,143

 

           (40,640)

 

(99,800)

 

 

             379,703

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

           177,756

 

           (45,241)

 

16,084 

  (h)

            148,599

 

    Total liabilities and   stockholders’ equity

 

$          697,899

 

$         (85,881)

 

$     (83,716)

 

 

$           528,302

 

 

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.




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Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet

 

The unaudited pro forma condensed consolidated balance sheet includes adjustments necessary to reflect the estimated effect of the Company’s exit of the specialty paper business as if it had occurred on March 31, 2013.

 

The previously reported 2013 amounts reflect the Company’s condensed consolidated balance sheet as of March 31, 2013, as presented in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2013.

 

  (a)  

Adjustments for Sale and Abandonment

 

As a result of the Sale the related assets and liabilities of the sold business were eliminated.  The assets and liabilities of the abandoned business were not previously reported as a component of discontinued operations.  Effective with the Sale and exit of the specialty paper business, these assets and liabilities are reclassified to discontinued operations.  The adjustments are reflected as shown in the following table:



(all dollar amounts in thousands)

 



Sale

 



Abandonment

 


Pro Forma Adjustment

Receivables, net

$

     (44,626)

$

(3,337)

$

  (47,963)

Inventories, net

 

(24,085)

 

(3,714)

 

(27,799)

Spare Parts

 

(16,150)

 

                    – 

 

(16,150)

Other current assets

 

(261)

 

(51)

 

(312)

Assets of discontinued operations - current

 

– 

 

13,602 

 

13,602 

Property, plant and equipment, net

 

(132,754)

 

(6,500)

 

(139,254)

Other assets

 

(918)

 

  – 

 

(918)

Accounts payable

 

(21,868)

 

(3,452)

 

(25,320)

Accrued and other liabilities

 

(11,494)

 

(3,360)

 

(14,854)

Liabilities of discontinued operations - current

 

– 

 

6,812 

 

6,812 

Other noncurrent liabilities

 

(7,278)

 

– 

 

(7,278)

 

 

 

 

 

 

 

Estimated net assets sold as of March 31, 2013

 

(178,154)

 

– 

 

(178,154)

 

The proceeds, related tax accruals and other costs were adjusted as follows:

 

(all dollar amounts in thousands)

Cash and cash equivalents(1)

   $

105,184

 

Deferred income taxes - noncurrent(2)

 

27,729

 

Stockholders’ equity(3)

 

(45,241

) 

 

 (1)

Net cash proceeds, subject to certain post-closing adjustments, received on the date of Sale.

 (2)

Income tax benefit on the estimated net charges resulting from the Sale, calculated based on account balances as of March 31, 2013 and the Company’s statutory rate of 38%.

 (3)

Estimated charges resulting from the Sale, net of tax, calculated based on account balances as of March 31, 2013. The actual charges resulting from the Sale will be determined as of the Sale date and could be materially different than this estimate.


  (b)  

Cash


Reflects the application of cash proceeds to repay borrowings under the Company’s revolving credit and commercial paper agreements on previously reporting outstanding balances as of March 31, 2013.




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  (c)

Deferred income taxes – current


Reflects estimated recognition of deferred income tax assets and liabilities as a result of the Sale.


  (d)

Deferred income taxes – noncurrent


Reflects the estimated deferred tax impact as a result of the Sale as follows:


(all dollar amounts in thousands)

Estimated net valuation allowance for state net operating loss and credit carry forward as the Sale creates uncertainty about the realization of certain tax benefits in future years

$

(12,000)

Estimated recognition of deferred income tax assets and liabilities

 

5,451 

Estimated net tax obligation of other post-retirement benefit plan curtailment gain

 

(5,662)

Estimated net tax benefit of contractual termination benefits in defined benefit pension plan

 

1,824 

 

$

(10,387)


  (e) 

Accrued and other liabilities


Reflects the estimated severance and benefit continuation costs, contract termination and other contractual obligations incurred as a result of the Sale transaction.


  (f)  

Post-retirement benefits


Reflects the estimated elimination of certain other post-retirement benefits as a result of the Sale transaction.

 

  (g)

Pension


Reflects the estimated contractual termination benefits in defined benefit pension plan as a result of the Sale transaction.

 

  (h) 

Stockholders’ equity


Reflects the following adjustments as a result of the Sale transaction:

 

(all dollar amounts in thousands)

Estimated net Accumulated Other Comprehensive Income and earnings impact of other post-retirement benefit plan curtailment gain


$


35,338

 

Estimated net earnings impact of contractual termination benefits in defined benefit pension plan

 

(2,976

)

Estimated net earnings impact of severance and benefit continuation costs, contract terminations and other contractual obligations incurred on sale date

 


(4,278


)

Estimated net valuation allowance for state net operating loss and credit carry forward as sale creates uncertainty about the realization of certain tax benefits in future years

 


(12,000


)

 

$

16,084

 





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