Attached files
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| 8-K/A - FORM 8-K AMENDMENT - Jefferies Financial Group Inc. | mm03-0512_8ka1.htm |
EXHIBIT 99.1
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On December 30, 2011, the Company completed the acquisition of 78.9% of National Beef for aggregate net cash consideration of $867,869,000 (the "Acquisition"), pursuant to a Membership Interest Purchase Agreement (the “Agreement”) among the Company, National Beef, U.S. Premium Beef, LLC (“USPB”), NBPCo Holdings, LLC (“NBPCo”), TKK Investments, LLC (“TKK”), TMKCo, LLC (“TMKCo”) and TMK Holdings (“TMK”). The Agreement provided that the following transactions occur in sequence on the closing date and are reflected in the unaudited pro forma financial information.
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1.
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The Company purchased 76.1% of National Beef from USPB and NBPCo for aggregate cash consideration of $875,369,000.
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2.
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TKK and TMKCo exercised their put rights with respect to their aggregate 5.1% interest in National Beef and National Beef redeemed such interest for aggregate cash consideration of $75,947,000. National Beef borrowed funds under its revolving credit facility to finance this redemption. Upon completion of the redemption, the Company’s interest in National Beef increased to 79.6%.
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3.
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TMK purchased a 0.7% interest in National Beef from the Company for cash consideration of $7,500,000, reducing the Company’s interest to 78.9%.
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The accompanying unaudited pro forma consolidated statement of operations for the year ended December 31, 2011 (the “Pro Forma Financial Statement”) is presented to reflect the Acquisition as if it had occurred on January 1, 2011. Historically, National Beef’s fiscal year has consisted of the 52 or 53 week period ending on the last Saturday in August, while the Company’s fiscal year is the calendar year. In order to prepare the Pro Forma Financial Statement, National Beef’s historical consolidated operating results for the 52 week period ending November 26, 2011 were added to the Company’s historical consolidated statement of operations for the year ended December 31, 2011. The preparation of pro forma financial information is governed by Article 11 of Regulation S-X, which requires a recasting of National Beef’s fiscal year end to a date that is within 93 days of the Company’s year end.
The accompanying Pro Forma Financial Statement should be read in conjunction with the Company's audited historical consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and the audited historical consolidated financial statements and notes thereto of National Beef, which were previously filed on the Company’s Current Report on Form 8K/A on February 13, 2012. The Pro Forma Financial Statement is presented for informational purposes only and is not necessarily indicative of actual results had the foregoing transactions occurred as described above, nor does it purport to represent results of future operations.
The Pro Forma Financial Statement has been prepared based upon a preliminary purchase price allocation for National Beef. Differences between the preliminary and final purchase price allocation, if any, could result in adjustments to acquired working capital amounts and offsetting adjustments to goodwill.
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Leucadia National Corporation and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
For the year ended December 31, 2011
(In thousands, except per share amounts)
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The Company
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National Beef
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Pro Forma
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Pro Forma
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Historical
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Historical
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Adjustments
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As Adjusted
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Revenues:
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Beef processing
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$ | – | $ | 7,037,862 | $ | 7,037,862 | ||||||||||||
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Manufacturing
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244,918 | 244,918 | ||||||||||||||||
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Oil and gas drilling services
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133,782 | 133,782 | ||||||||||||||||
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Gaming entertainment
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117,217 | 117,217 | ||||||||||||||||
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Investment and other income
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433,375 | 674 | 434,049 | |||||||||||||||
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Net securities gains
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641,476 | 641,476 | ||||||||||||||||
| 1,570,768 | 7,038,536 | $ | – | 8,609,304 | ||||||||||||||
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Expenses:
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Cost of sales:
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Beef processing
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6,701,108 | 6,701,108 | ||||||||||||||||
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Manufacturing
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215,963 | 215,963 | ||||||||||||||||
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Direct operating expenses:
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Oil and gas drilling services
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100,639 | 100,639 | ||||||||||||||||
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Gaming entertainment
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84,795 | 84,795 | ||||||||||||||||
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Interest
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111,877 | 11,400 | 1,671 |
(c)
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123,574 | |||||||||||||
| (1,374 | ) |
(d)
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Salaries and incentive compensation
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83,171 | 26,424 |
(e)
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109,595 | ||||||||||||||
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Depreciation and amortization
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75,480 | 49,272 | (49,272 | ) |
(f)
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152,995 | ||||||||||||
| 77,515 |
(g)
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Selling, general and other expenses
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217,855 | 52,364 | (26,424 | ) |
(e)
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243,795 | ||||||||||||
| 889,780 | 6,814,144 | 28,540 | 7,732,464 | |||||||||||||||
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Income from continuing operations before income
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taxes and loss related to associated companies
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680,988 | 224,392 | (28,540 | ) | 876,840 | |||||||||||||
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Income tax provision
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270,253 | 2,757 | 64,605 |
(h)
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337,615 | |||||||||||||
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Income from continuing operations before loss related
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to associated companies
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410,735 | 221,635 | (93,145 | ) | 539,225 | |||||||||||||
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Loss related to associated companies, net of income tax
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(394,041 | ) | (394,041 | ) | ||||||||||||||
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Income from continuing operations
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16,694 | 221,635 | (93,145 | ) | 145,184 | |||||||||||||
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(Income) loss from continuing operations attributable to the
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noncontrolling interest
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275 | (564 | ) | (41,215 | ) |
(i)
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(41,504 | ) | ||||||||||
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Income from continuing operations attributable to
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Leucadia National Corporation common shareholders
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$ | 16,969 | $ | 221,071 | $ | (134,360 | ) | $ | 103,680 | |||||||||
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Basic earnings per common share attributable to
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Leucadia National Corporation common shareholders:
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Income from continuing operations
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$ | 0.07 | $ | 0.42 | ||||||||||||||
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Number of shares used in calculation
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244,425 | 244,425 | ||||||||||||||||
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Diluted earnings per common share attributable to
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Leucadia National Corporation common shareholders:
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Income from continuing operations
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$ | 0.07 | $ | 0.42 | ||||||||||||||
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Number of shares used in calculation
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244,573 | 244,573 | ||||||||||||||||
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Notes to Unaudited Pro Forma Consolidated Statement of Operations
(Dollars in thousands)
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(a)
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Cash paid to Sellers
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$ | 875,369 | ||
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Less cash received on sale of 0.7% to TMK
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(7,500 | ) | |||
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Aggregate net cash consideration
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$ | 867,869 | |||
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The Company used cash and cash equivalents and sold securities from its current investment portfolio to fund the purchase price.
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(b)
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The purchase price has preliminarily been allocated to acquired assets and liabilities as indicated in the chart below. If applicable, estimated useful lives and amortization periods are shown next to the amount allocated to the particular asset; all intangible and tangible assets are depreciated on the straight-line method over their respective lives.
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Amount
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Useful Life
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Intangible assets, net and goodwill:
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Noncontractual customer relationships
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$ | 405,180 |
18 years
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Tradename
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260,059 |
20 years
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Cattle supply contracts
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143,500 |
15 years
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Non-compete agreements
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830 |
10 years
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Goodwill
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8,915 | ||||||
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Total intangible assets, net and goodwill
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818,484 | ||||||
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Property, equipment and leasehold improvements, net:
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Buildings and improvements
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178,680 |
15 to 25 years
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Machinery and equipment
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218,306 |
3 to 8 years
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Other
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49,180 | ||||||
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Total property, equipment and leasehold improvements, net
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446,166 | ||||||
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Working capital accounts and other assets and liabilities, net
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243,342 | ||||||
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Long-term debt
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(328,267 | ) | |||||
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Fair value of net assets acquired
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$ | 1,179,725 | |||||
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Redeemable noncontrolling interest in subsidiary:
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Fair value of net assets acquired
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$ | 1,179,725 | |||||
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Less, cash paid to Sellers
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(875,369 | ) | |||||
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Initial redeemable noncontroling interest
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304,356 | ||||||
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Redemption of TKK and TMK interests
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(75,947 | ) | |||||
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Sale of LUK interest to TMK
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7,500 | ||||||
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Redeemable noncontrolling interest in subsidiary
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$ | 235,909 | |||||
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(c)
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Reflects additional interest expense for the borrowing under National Beef’s revolving credit facility to redeem the TKK and TMK interests. A change in the interest rate of 0.125% would have changed pro forma, as adjusted income from continuing operations attributable to Leucadia National Corporation common shareholders by approximately $50,000.
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(d)
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Eliminates amortization expenses related to National Beef’s historical deferred debt issuance costs.
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(e)
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Reclassifies National Beef’s historical salaries and incentive compensation expenses to conform to the Company’s classification.
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(f)
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Eliminates the historical depreciation and amortization expenses of National Beef
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(g)
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Records depreciation and amortization expenses based on the preliminary purchase price allocations and useful lives in note (b) above.
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(h)
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Records a tax provision for the pro forma adjustments and for National Beef’s historical pre-tax income using a combined statutory income tax rate of 40%. A tax provision needs to be applied to National Beef’s historical results since National Beef did not provide income tax expense on substantially all of its income as it is a pass-thru entity for income tax purposes. However, due to the availability of the Company’s net operating loss carryforwards, no federal income tax would have been due and payable. Income tax expense has not been provided on income attributable to the noncontrolling interest since National Beef remains a pass thru entity for income tax purposes.
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(i)
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Records an adjustment for National Beef’s historical income, net of pro forma adjustments, attributable to the noncontrolling interest since the Company is not purchasing 100% of National Beef as described in note (a) above.
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