Attached files
| file | filename |
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| EX-99.1 - PRESS RELEASE - MEADWESTVACO Corp | d342792dex991.htm |
| 8-K - FORM 8-K - MEADWESTVACO Corp | d342792d8k.htm |
Exhibit 99.2
MEADWESTVACO CORPORATION
and Consolidated Subsidiary Companies
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Introduction
The following unaudited pro forma consolidated financial statements give effect to the spin-off of MeadWestvaco Corporation’s (the “Company” or “MeadWestvaco”) Consumer & Office Products business and subsequent merger of that business with ACCO Brands Corporation (“ACCO Brands”).
Effective May 1, 2012, MeadWestvaco completed the spin-off of its Consumer & Office Products business and subsequent merger of that business with ACCO Brands (the “Transaction”). As a result of the Transaction, MeadWestvaco shareholders received 0.32986547 shares of ACCO Brands for each share of MeadWestvaco they owned of record as of April 24, 2012, resulting in their collective ownership on May 1, 2012 of 50.5% of the issued and outstanding shares of ACCO Brands. Under the terms of the Transaction, including a working capital adjustment, MeadWestvaco received aggregate consideration of $433 million on a tax-free basis, subject to certain potential post-closing adjustments.
The unaudited pro forma consolidated statements of operations for the three months ended March 31, 2012 and 2011 and for the three years ended December 31, 2011, 2010 and 2009 are based on the historical consolidated statements of operations and give effect to the Transaction as if it had occurred at the beginning of the earliest period presented. The unaudited pro forma consolidated balance sheet is based on the historical consolidated balance sheet as of March 31, 2012, and gives effect to the Transaction as if it had occurred on March 31, 2012.
The unaudited pro forma consolidated financial statements are based on the assumptions and adjustments described in the accompanying notes and do not reflect any adjustments for non-recurring items or changes in operating strategies arising as a result of the Transaction. However, in the opinion of management, all adjustments necessary to present fairly the unaudited pro forma consolidated financial statements have been made. The unaudited pro forma consolidated statements of operations are presented for illustrative purposes and do not purport to represent what results of operations actually would have been if the events described above had occurred as of the dates indicated or what such results would be for any future periods.
The unaudited pro forma consolidated financial statements, and the accompanying notes, should be read in conjunction with the Company’s historical consolidated financial statements and related note disclosures, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the three months ended March 31, 2012.
MEADWESTVACO CORPORATION
and Consolidated Subsidiary Companies
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
| In millions, except per share amounts | Three Months Ended March 31, 2012 |
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| Historical Balances (g) |
Discontinued Operations Adjustments (a) |
Pro Forma Balances |
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| Net sales |
$ | 1,420 | $ | (107 | ) | $ | 1,313 | |||||
| Cost of sales |
1,113 | (73 | ) | 1,040 | ||||||||
| Selling, general and administrative expenses |
197 | (36 | ) | 161 | ||||||||
| Interest expense |
44 | (4 | ) | 40 | ||||||||
| Other income, net |
(11 | ) | 2 | (9 | ) | |||||||
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| Income from continuing operations attributable to the company before income taxes |
77 | 4 | 81 | |||||||||
| Income tax provision |
28 | 2 | 30 | |||||||||
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| Income from continuing operations attributable to the company |
$ | 49 | $ | 2 | $ | 51 | ||||||
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| Net income per share attributable to the company – basic |
$ | 0.29 | $ | 0.01 | $ | 0.30 | ||||||
| Net income per share attributable to the company – diluted |
$ | 0.28 | $ | 0.01 | $ | 0.29 | ||||||
| Shares used to compute income from continuing operations per share attributable to the company: |
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| Basic |
171.9 | 171.9 | 171.9 | |||||||||
| Diluted |
175.3 | 175.3 | 175.3 | |||||||||
| In millions, except per share amounts | Three Months Ended March 31, 2011 |
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| Historical Balances (g) |
Discontinued Operations Adjustments (a) |
Pro Forma Balances |
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| Net sales |
$ | 1,365 | $ | (115 | ) | $ | 1,250 | |||||
| Cost of sales |
1,049 | (83 | ) | 966 | ||||||||
| Selling, general and administrative expenses |
184 | (29 | ) | 155 | ||||||||
| Interest expense |
47 | (4 | ) | 43 | ||||||||
| Other income, net |
(21 | ) | 2 | (19 | ) | |||||||
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| Income from continuing operations attributable to the company before income taxes |
106 | (1 | ) | 105 | ||||||||
| Income tax provision |
35 | (2 | ) | 33 | ||||||||
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| Income from continuing operations attributable to the company |
$ | 71 | $ | 1 | $ | 72 | ||||||
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| Net income per share attributable to the company – basic |
$ | 0.42 | $ | 0.01 | $ | 0.43 | ||||||
| Net income per share attributable to the company – diluted |
$ | 0.41 | $ | 0.01 | $ | 0.42 | ||||||
| Shares used to compute income from continuing operations per share attributable to the company: |
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| Basic |
169.0 | 169.0 | 169.0 | |||||||||
| Diluted |
172.7 | 172.7 | 172.7 | |||||||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
MEADWESTVACO CORPORATION
and Consolidated Subsidiary Companies
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
| In millions, except per share amounts | Year Ended December 31, 2011 |
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| Historical Balances (g) |
Discontinued Operations Adjustments (a) |
Pro Forma Balances |
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| Net sales |
$ | 6,060 | $ | (742 | ) | $ | 5,318 | |||||
| Cost of sales |
4,678 | (485 | ) | 4,193 | ||||||||
| Selling, general and administrative expenses |
818 | (147 | ) | 671 | ||||||||
| Interest expense |
181 | (16 | ) | 165 | ||||||||
| Other income, net |
(35 | ) | 11 | (24 | ) | |||||||
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| Income from continuing operations attributable to the company before income taxes |
418 | (105 | ) | 313 | ||||||||
| Income tax provision |
160 | (65 | ) | 95 | ||||||||
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| Income from continuing operations attributable to the company |
$ | 258 | $ | (40 | ) | $ | 218 | |||||
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| Net income per share attributable to the company – basic |
$ | 1.52 | $ | (0.24 | ) | $ | 1.28 | |||||
| Net income per share attributable to the company – diluted |
$ | 1.49 | $ | (0.24 | ) | $ | 1.25 | |||||
| Shares used to compute income from continuing operations per share attributable to the company: |
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| Basic |
170.4 | 170.4 | 170.4 | |||||||||
| Diluted |
174.1 | 174.1 | 174.1 | |||||||||
| In millions, except per share amounts | Year Ended December 31, 2010 |
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| Historical Balances (g) |
Discontinued Operations Adjustments (a) |
Pro Forma Balances |
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| Net sales |
$ | 5,693 | $ | (747 | ) | $ | 4,946 | |||||
| Cost of sales |
4,472 | (486 | ) | 3,986 | ||||||||
| Selling, general and administrative expenses |
729 | (130 | ) | 599 | ||||||||
| Interest expense |
186 | (16 | ) | 170 | ||||||||
| Other income, net |
(10 | ) | 6 | (4 | ) | |||||||
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| Income from continuing operations attributable to the company before income taxes |
316 | (121 | ) | 195 | ||||||||
| Income tax provision |
54 | (50 | ) | 4 | ||||||||
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| Income from continuing operations attributable to the company |
$ | 262 | $ | (71 | ) | $ | 191 | |||||
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| Net income per share attributable to the company – basic |
$ | 1.54 | $ | (0.42 | ) | $ | 1.12 | |||||
| Net income per share attributable to the company – diluted |
$ | 1.52 | $ | (0.41 | ) | $ | 1.11 | |||||
| Shares used to compute income from continuing operations per share attributable to the company: |
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| Basic |
170.3 | 170.3 | 170.3 | |||||||||
| Diluted |
172.7 | 172.7 | 172.7 | |||||||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
MEADWESTVACO CORPORATION
and Consolidated Subsidiary Companies
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
| In millions, except per share amounts | Year Ended December 31, 2009 |
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| Historical Balances (g) |
Discontinued Operations Adjustments (a) |
Pro Forma Balances |
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| Net sales |
$ | 5,406 | $ | (747 | ) | $ | 4,659 | |||||
| Cost of sales |
4,446 | (495 | ) | 3,951 | ||||||||
| Selling, general and administrative expenses |
755 | (124 | ) | 631 | ||||||||
| Interest expense |
195 | (15 | ) | 180 | ||||||||
| Other income, net |
(382 | ) | 4 | (378 | ) | |||||||
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| Income from continuing operations attributable to the company before income taxes |
392 | (117 | ) | 275 | ||||||||
| Income tax provision |
152 | (47 | ) | 105 | ||||||||
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| Income from continuing operations attributable to the company |
$ | 240 | $ | (70 | ) | $ | 170 | |||||
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| Net income per share attributable to the company – basic |
$ | 1.40 | $ | (0.41 | ) | $ | 0.99 | |||||
| Net income per share attributable to the company – diluted |
$ | 1.38 | $ | (0.40 | ) | $ | 0.98 | |||||
| Shares used to compute income from continuing operations per share attributable to the company: |
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| Basic |
171.3 | 171.3 | 171.3 | |||||||||
| Diluted |
173.2 | 173.2 | 173.2 | |||||||||
The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
MEADWESTVACO CORPORATION
and Consolidated Subsidiary Companies
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
| March 31, 2012 | ||||||||||||||||||||
| In millions | Historical Balances |
Discontinued Operations Adjustments (b) |
Pro Forma Balances Before Separation Adjustments |
Separation Adjustments |
Pro Forma Balances |
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| ASSETS |
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| Cash and cash equivalents |
$ | 483 | $ | (28 | ) (f) | $ | 455 | $ | 433 | (c) | $ | 888 | ||||||||
| Accounts receivable, net |
723 | (95 | ) | 628 | — | 628 | ||||||||||||||
| Inventories |
742 | (98 | ) | 644 | — | 644 | ||||||||||||||
| Other current assets |
113 | (24 | ) | 89 | — | 89 | ||||||||||||||
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| Current assets |
2,061 | (245 | ) | 1,816 | 433 | 2,249 | ||||||||||||||
| Net investment in discontinued operations |
— | 474 | 474 | (474 | ) (d) | — | ||||||||||||||
| Property, plant, equipment and forestlands, net |
3,594 | (105 | ) | 3,489 | — | 3,489 | ||||||||||||||
| Prepaid pension asset |
1,000 | — | 1,000 | — | 1,000 | |||||||||||||||
| Goodwill |
836 | (165 | ) | 671 | — | 671 | ||||||||||||||
| Other assets |
1,207 | (103 | ) | 1,104 | — | 1,104 | ||||||||||||||
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| $ | 8,698 | $ | (144 | ) | $ | 8,554 | $ | (41 | ) | $ | 8,513 | |||||||||
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| LIABILITIES AND EQUITY |
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| Accounts payable |
$ | 644 | $ | (33 | ) | $ | 611 | $ | — | $ | 611 | |||||||||
| Accrued expenses |
477 | (58 | ) | 419 | — | 419 | ||||||||||||||
| Notes payable and current maturities of long-term debt |
254 | — | 254 | — | 254 | |||||||||||||||
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| Current liabilities |
1,375 | (91 | ) | 1,284 | — | 1,284 | ||||||||||||||
| Long-term debt |
1,879 | — | 1,879 | — | 1,879 | |||||||||||||||
| Other long-term obligations |
1,295 | (25 | ) | 1,270 | — | 1,270 | ||||||||||||||
| Deferred income taxes |
898 | (28 | ) | 870 | — | 870 | ||||||||||||||
| Commitments and contingencies |
— | — | — | — | — | |||||||||||||||
| Equity: |
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| Shareholders’ equity: |
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| Common stock |
2 | — | 2 | — | 2 | |||||||||||||||
| Additional paid-in capital |
3,156 | — | 3,156 | — | 3,156 | |||||||||||||||
| Retained earnings |
298 | — | 298 | (41 | ) (e) | 257 | ||||||||||||||
| Accumulated other comprehensive loss |
(225 | ) | — | (225 | ) | — | (225 | ) | ||||||||||||
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| Total shareholders’ equity |
3,231 | — | 3,231 | (41 | ) | 3,190 | ||||||||||||||
| Non-controlling interests |
20 | — | 20 | — | 20 | |||||||||||||||
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| Total equity |
3,251 | — | 3,251 | (41 | ) | 3,210 | ||||||||||||||
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| $ | 8,698 | $ | (144 | ) | $ | 8,554 | $ | (41 | ) | $ | 8,513 | |||||||||
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The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Basis of Pro Forma Presentation |
These unaudited pro forma consolidated statements of operations of MeadWestvaco for the three months ended March 31, 2012 and 2011 and for the three years ended December 31, 2011, 2010 and 2009, are based on the historical consolidated statements of operations, and give effect to the Transaction as if it had occurred at the beginning of the earliest period presented. The unaudited pro forma consolidated balance sheet of the Company is based on the historical consolidated balance sheet as of March 31, 2012, and gives effect to the Transaction as if it had occurred on March 31, 2012.
These unaudited pro forma consolidated financial statements are based on the assumptions and adjustments described below and do not reflect any adjustments for non-recurring items or changes in operating strategies arising as a result of the Transaction. However, in the opinion of management, all adjustments necessary to present fairly the unaudited pro forma consolidated financial statements have been made. These unaudited pro forma consolidated statements of operations are presented for illustrative purposes and do not purport to represent what our results of operations actually would have been if the events described above had occurred as of the dates indicated or what such results would be for any future periods.
These unaudited pro forma consolidated financial statements, and the accompanying notes, should be read in conjunction with the company’s historical consolidated financial statements and related note disclosures, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the three months ended March 31, 2012.
| 2. | Pro Forma Adjustments |
Pro forma adjustments to the unaudited consolidated financial statements are as follows:
| (a) | Represents the reclassification of all revenues and expenses of the Consumer & Office Products business to discontinued operations. The measurement date for discontinued operations was on or about the time of separation. |
| (b) | Represents the reclassification of all assets and liabilities of the Consumer & Office Products business to discontinued operations. The measurement date for discontinued operations was on or about the time of separation. |
| (c) | Represents cash totaling $433 million received by the Company upon the merger of the Consumer & Office Products business with ACCO Brands which was effective on May 1, 2012. The $433 million was received on a tax-free basis subject to certain potential post-closing adjustments. |
| (d) | Represents the removal of the net investment in discontinued operations as a result of the separation. |
| (e) | Represents the distribution of the Consumer & Office Products business common stock to the Company’s shareholders offset by the $433 million of cash received by the Company upon the merger of the Consumer & Office Products business with ACCO Brands which was effective on May 1, 2012. |
| (f) | Represents the estimated balance of cash and cash equivalents of $28 million of the Consumer & Office Products business that was transferred to ACCO Brands on the separation date. |
| (g) | Represents the amounts previously reported in the consolidated statements of operations on a continuing operations basis in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2012 the in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. |