INTERNATIONAL SHIPHOLDING CORP - FORM 8-K/A - EX-99.4 - EXHIBIT 99.4 ISH UNAUDITED PRO FORMA FS - February 7, 2013

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8-K/A - FORM 8-K/A FEBRUARY 07, 2013 - INTERNATIONAL SHIPHOLDING CORPform8ka020713.htm
EX-99.2 - EXHIBIT 99.2 UOS AUDITED FS - INTERNATIONAL SHIPHOLDING CORPexhibit991020713.htm
EX-23.1 - EXHIBIT 23.1 CONSNT OF AUDITORS - INTERNATIONAL SHIPHOLDING CORPexhibit231020713.htm
EX-99.3 - EXHIBIT 99.3 UOS UNAUDITED INTERIM FS - INTERNATIONAL SHIPHOLDING CORPexhibit992020713.htm


UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
   
    The following unaudited pro forma condensed combined balance sheet presents our financial position as of September 30, 2012, assuming that the acquisition of UOS had been completed as of September 30, 2012.
 
    The following unaudited pro forma condensed combined statements of income include operations of the Company for the nine months ended September 30, 2012 and the twelve months ended December 31, 2011, assuming as if the acquisition had been consummated on January 1, 2011.
 
    These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations.
 
    The historical financial information has been adjusted to give effect to pro forma events that are directly attributable to the acquisition of UOS and are factually supportable.  Our unaudited pro forma combined financial information and explanatory notes present how our combined financial statements may have appeared had the businesses actually been combined as of the dates above. The unaudited pro forma combined financial information shows the impact on the combined balance sheet and the combined historical statements of income under acquisition accounting with International Shipholding Corporation treated as the acquirer. Under this method of accounting, the assets purchased and liabilities assumed of UOS have been recorded by International Shipholding Corporation at their estimated fair values as of the acquisition date. See the accompanying Notes for additional information.
 
    The unaudited pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results  or financial position of the combined businesses had they actually been combined on the dates and in accordance with the assumptions described herein. However, management believes that the assumptions used provide a reasonable basis for presenting the combined pro forma information, that the pro forma adjustments give the appropriate effect to the assumptions and are properly applied in the unaudited pro forma combined financial information. The results of operations of UOS will be included in our historical consolidated financial statements beginning November 30, 2012.
 
As explained in more detail in the accompanying notes to the unaudited pro forma combined financial information, the allocation of the purchase price for the UOS acquisition that is reflected in our pro forma combined financial information is subject to adjustment. The actual purchase price allocation will be recorded based on the final settlement of the working capital adjustment in accordance with the applicable agreement. In addition, there may be further refinements of the purchase price allocation for the UOS acquisition as additional information becomes available.
 


 
 
 
 
INTERNATIONAL SHIPHOLDING CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012
(All Amounts in Thousands Except Share Data)
(Unaudited)
         
UOS
  
ISH
    
         
Pro Forma
  
Pro Forma
  
Pro Forma
 
ISH
  
UOS
  
Adjustments *
  
Adjustments
  
Combined
Revenues
 $                    186,686
  
 $                       70,417
  
 $                                         -
  
 $                                -
  
 $                    257,103
                   
Operating Expenses:
                  
         Voyage Expenses
                        143,246
  
                          53,730
  
                                             -
  
                                    -
  
                        196,976
         Vessel Depreciation/Amortization
                            18,180
  
                           10,404
  
                                  (10,404)
    1
                              2,411
     1
                           20,591
         Other Depreciation
                                     9
  
                                    -
  
                                             -
  
                                    -
  
                                     9
         Administrative and General Expenses
                            15,871
  
                             3,414
  
                                             -
  
                                    -
  
                           19,285
         Amortization of Intangible
                                    -
  
                             1,634
  
                                     (1,634)
   2
                            3,872
    2
                            3,872
        (Gain) Loss on Sale/Purchase
        of Other Assets
                          (4,463)
  
                                    -
  
                                             -
  
                                    -
  
                          (4,463)
                   
Total Operating Expenses
                        172,843
  
                           69,182
  
                                  (12,038)
  
                            6,283
  
                       236,270
 
 
                
Operating Income
                           13,843
  
                             1,235
  
                                    12,038
  
                          (6,283)
  
                          20,833
                   
Interest and Other:
                  
          Interest Expense
                             7,152
  
                                    -
  
                                             -
  
                                745
    3
                            7,897
          Derivative Loss
                                  97
  
                                    -
  
                                             -
  
                                    -
  
                                  97
          Gain on Sale of Investment
                                (66)
  
                                    -
  
                                             -
  
                                    -
  
                                (66)
          Other Income from Vessel Financing
                            (1,815)
  
                                    -
  
                                             -
  
                                    -
  
                            (1,815)
          Investment Income
                               (391)
  
                                    -
  
                                             -
  
                                    -
  
                               (391)
          Foreign Exchange Loss (Gain)
                               (771)
  
                                    -
  
                                             -
  
                                    -
  
                               (771)
 
                            4,206
  
                                    -
  
                                             -
  
                                745
  
                             4,951
                 
                                    -
                   
Income Before Provision for Income Taxes and
                  
      Equity in Net (Loss) Income of Unconsolidated Entities
                            9,637
  
                             1,235
  
                                    12,038
  
                          (7,028)
  
                           15,882
                   
(Benefit) Provision for Income Taxes:
 
                
         Current
                                280
  
                                    -
  
                                             -
  
                                    -
  
                                280
         Deferred
                              (400)
  
                                    -
  
                                             -
  
                                    -
  
                              (400)
 
                               (120)
  
                                    -
  
                                             -
  
                                    -
  
                               (120)
                   
Equity in Net Income of Unconsolidated
                  
    Entities (Net of Applicable Taxes)
                                665
  
                                    -
  
                                             -
  
                                    -
  
                                665
                   
Net Income
 $                       10,422
  
 $                         1,235
  
 $                                12,038
  
 $                      (7,028)
  
 $                       16,667
                   
Basic and Diluted Earnings Per Common Share:
                  
                   
Basic Earnings Per Common Share:
 $                            1.45
              
 $                           2.32
                   
                   
Diluted Earnings Per Common Share:
 $                            1.45
              
 $                            2.31
                   
Weighted Average Shares of Common Stock Outstanding:
                
         Basic
7,192,818
              
7,192,818
         Diluted
7,208,886
              
7,208,886
                   
Dividends Per Share
 $                        0.750
              
 $                        0.750
                   
* Reverse balance to be replaced with fair market value at acquisition date.
                
1. Reversal of the historical depreciation with the replacement of new depreciation based on fair value at acquisition date.
        
2. Represents the amortization of the intangibles that were identified and measured during the acquisition of UOS by ISH.
        
3. Represents interest expense on new debt to partially fund acquisition, based on one-month Libor rate plus 2.5%.
        

 
 
 

 


INTERNATIONAL SHIPHOLDING CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2011
(All Amounts in Thousands Except Share Data)
(Unaudited)
         
UOS
  
ISH
    
         
Pro Forma
  
Pro Forma
  
Pro Forma
 
ISH
  
UOS
  
Adjustments *
  
Adjustments
  
Combined
Revenues
 $                    263,196
  
 $                    122,742
  
 $                                        -
  
 $                                     -
  
 $                   385,938
                   
Operating Expenses:
                  
         Voyage Expenses
                        192,082
  
                          99,935
  
                                            -
  
                                         -
  
                        292,017
         Vessel Depreciation/Amortization
                          25,388
  
                           21,204
  
                                 (21,204)
    1
                                   3,215
     1
                          28,603
         Administrative and General Expenses
                           20,961
  
                            5,922
  
                                            -
  
                                         -
  
                          26,883
         Gain on Dry Bulk Transaction
                         (18,844)
  
                               (102)
  
                                            -
  
                                         -
  
                         (18,946)
         Impairment Loss on property and equipment
                                    -
  
                             5,919
  
                                   (5,919)
   2
                                         -
  
                                    -
         Amortization of Intangible
                                    -
  
                            2,678
  
                                  (2,678)
   3
                                   5,162
    3
                             5,162
                   
Total Operating Expenses
                        219,587
  
                        135,556
  
                                 (29,801)
  
                                  8,377
  
                        333,719
                   
Operating Income
                          43,609
  
                          (12,814)
  
                                   29,801
  
                                (8,377)
  
                           52,219
                   
Interest and Other:
                  
          Interest Expense
                            10,361
  
                                    -
  
                                            -
  
                                     993
    4
                            11,354
          Derivative Loss
                                  101
  
                                    -
  
                                            -
  
                                         -
  
                                  101
          Loss on Sale of Investment
                                747
  
                                    -
  
                                            -
  
                                         -
  
                                747
          Other Income from Vessel Financing
                          (2,653)
  
                                    -
  
                                            -
  
                                         -
  
                          (2,653)
          Investment Income
                              (637)
  
                                    -
  
                                            -
  
                                         -
  
                              (637)
          Foreign Exchange Loss (Gain)
                             3,051
  
                                    -
  
                                            -
  
                                         -
  
                             3,051
                   
 
                           10,970
  
                                    -
  
                                            -
  
                                     993
  
                            11,963
                   
Income Before Provision for Income Taxes and
                  
      Equity in Net (Loss) Income of Unconsolidated Entities
                          32,639
  
                          (12,814)
  
                                   29,801
  
                                (9,370)
  
                          40,256
                   
(Benefit) Provision for Income Taxes:
 
                
         Current
                                680
  
                                    -
  
                                            -
  
                                         -
  
                                680
         Deferred
                                    -
  
                                    -
  
                                            -
  
                                         -
  
                                    -
 
                                680
  
                                    -
  
                                            -
  
                                         -
  
                                680
                   
Equity in Net Income of Unconsolidated
                  
    Entities (Net of Applicable Taxes)
                               (410)
  
                                    -
  
                                            -
  
                                         -
  
                               (410)
                   
Net Income
 $                       31,549
  
 $                      (12,814)
  
 $                               29,801
  
 $                            (9,370)
  
 $                       39,166
                   
                   
Basic and Diluted Earnings Per Common Share:
                  
                   
Basic Earnings Per Common Share:
                               4.42
  
 -
          
                               5.49
                   
Diluted Earnings Per Common Share:
                               4.40
  
 -
          
                               5.46
Weighted Average Shares of Common Stock Outstanding:
                
         Basic
7,131,820
  
 -
          
7,131,820
         Diluted
7,176,647
  
 -
          
7,176,647
                   
Dividends Per Share
 $                         1.500
  
 -
          
 $                         1.500
                   
* Reverse balance to be replaced with fair market value at acquisition date.
              
1. Reversal of the UOS historical depreciation with the replacement of new depreciation based on fair value at acquisition date.
    
2. To reverse out impairment charges due to the fact the assets were adjusted to fair value at acquisition date.
        
3. Represents the amortization of the intangibles that were identified and measured during the acquisition of UOS by ISH.
        
4. Represents interest expense on new debt to partially fund acquisition, based on one-month Libor rate plus 2.5% and reflects 12 months of interest.
  

 
 
 



INTERNATIONAL SHIPHOLDING CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINED
BALANCE SHEET
September 30, 2012
(All Amounts in Thousands)
(Unaudited)

           
UOS
  
ISH
    
           
Pro Forma
  
Pro Forma
  
Pro Forma
ASSETS
  
ISH
UOS
  
Adjustments (a)
Adjustments
  
Combined
                     
 
            
         Cash and Cash Equivalents
$
12,714
  
105
  
(105)
  
(9,243)
b,c
$                              3,471
         Marketable Securities
  
                  13,382
  
                          -
  
                          -
  
                          -
  
13,382
         Accounts Receivable
  
                  19,511
  
                   4,858
  
                 (4,858)
  
                   8,650
 b
28,161
         Net Investment in Direct Financing Leases
  
                    3,423
  
                          -
  
                          -
  
                          -
  
3,423
         Other Current Assets
  
                    6,144
  
                      901
  
                    (901)
  
                      669
 b
6,813
         Notes Receivable
  
                    4,433
  
                        -
  
                        -
  
                        -
  
4,433
         Material and Supplies Inventory
  
                    5,312
  
                   6,814
  
                 (6,814)
  
                   6,510
 b
11,822
Total Current Assets
  
                  64,919
  
                 12,678
  
               (12,678)
  
                   6,586
  
          71,505
                     
                     
Investment in Unconsolidated Entities
  
                  13,524
  
                          -
  
                          -
  
                          -
  
13,524
                     
Net Investment in Direct Financing Leases
  
                  14,391
  
                          -
  
                          -
  
                          -
  
14,391
                     
Vessels, Property, and Other Equipment, at Cost:
                    
         Vessels
  
                561,207
  
               121,899
  
             (121,899)
  
                 16,696
 b,c
        577,903
         Building
  
                    1,211
  
                          -
  
                          -
  
                          -
  
            1,211
         Land
  
                       623
  
                          -
  
                          -
  
                          -
  
               623
         Leasehold Improvements
  
                  26,348
  
                          -
  
                          -
  
                          -
  
          26,348
         Construction in Progress
  
                       602
  
                          -
  
                          -
  
                          -
  
               602
         Furniture and Equipment
  
                  11,053
  
                          -
  
                          -
  
                          -
  
          11,053
   
                601,044
  
               121,899
  
             (121,899)
  
                 16,696
  
        617,740
Less -  Accumulated Depreciation
  
              (185,907)
  
               (49,100)
  
                 49,100
  
                          -
  
      (185,907)
   
                415,137
  
                 72,799
  
               (72,799)
  
                 16,696
  
        431,833
                   
                    -
Other Assets:
                  
                    -
         Deferred Charges, Net of Accumulated Amortization
                  18,278
  
                   3,222
  
                 (3,222)
  
                          -
  
          18,278
              of $15,821 and $17,429 in 2012 and 2011, Respectively
                
         Intangible Assets, Net
  
                    1,775
  
                 14,494
  
               (14,494)
  
                 45,131
 b
          46,906
             of $30,525 and $30,162 in 2010 and 2009, Respectively
                
         Due from Related Parties
  
                    1,735
  
                          -
  
                          -
  
                          -
  
            1,735
         Notes Receivable
  
                  34,458
  
                          -
  
                          -
  
                          -
  
          34,458
         Other
  
                    6,036
  
                          -
  
                          -
  
                   2,000
 c
            8,036
         Goodwill
  
                            -
  
                          -
  
                          -
  
                   1,901
 b
            1,901
   
                  62,282
  
                 17,716
  
               (17,716)
  
                 49,032
  
        111,314
                     
TOTAL ASSETS
$
570,253
  
103,193
  
(103,193)
  
72,314
  
642,567
                     
LIABILITIES AND STOCKHOLDERS' EQUITY
  
 
                
                     
Current Liabilities:
                    
         Current Maturities of Long-Term Debt
$
                  27,951
  
                          -
  
                        -
  
                   6,000
 c
33,951
         Accounts Payable and Accrued Liabilities
  
                  34,620
  
                   6,189
  
                 (6,189)
  
                   7,696
 b,c
42,316
         Insurance Reserves
  
                            -
  
601
  
(601)
  
547
b
547
         Deferred Revenues
  
                            -
  
                      151
  
                    (151)
  
                      342
 b
342
Total Current Liabilities
  
                  62,571
  
                   6,941
  
                 (6,941)
  
                 14,585
  
          77,156
                     
Long-Term Debt, Less Current Maturities
  
                185,660
  
                          -
      
                 36,000
 c
        221,660
                     
Other Long-Term Liabilities:
                    
         Lease Incentive Obligation
  
                    6,338
  
                          -
  
                          -
  
                          -
  
            6,338
         Other
  
                  62,073
  
                   1,717
  
                 (1,717)
  
                 21,729
 b,c
          83,802
   
                  68,411
  
                   1,717
  
                 (1,717)
  
                 21,729
  
          90,140
                     
 TOTAL LIABILITIES
  
                316,642
  
                   8,658
  
                 (8,658)
  
                 72,314
  
        388,956
                     
Commitments and Contingent Liabilities
                    
                     
                     
Stockholders' Equity:
                    
     Common Stock, $1.00 par value, 20,000,000 shares authorized and
                    8,617
  
                 71,411
  
               (71,411)
  
                          -
  
            8,617
    7,203,860 And  7,140,752 Shares Issued and Outstanding at
                
       September 30, 2012 and December 31, 2011, Respectively
                
     Additional Paid-In Capital
  
                  86,041
  
                          -
  
                          -
  
                          -
  
          86,041
     Retained Earnings
  
                207,919
  
                 23,124
  
               (23,124)
  
                          -
  
        207,919
     Treasury Stock, 1,388,066 shares at September 30, 2012 and
                (25,403)
  
                          -
  
                          -
  
                          -
  
        (25,403)
       December 31, 2011
                    
     Defined Benefits Plan
                    
     Accumulated Other Comprehensive (Loss)
  
                (23,563)
  
                          -
  
                          -
  
                          -
  
        (23,563)
TOTAL STOCKHOLDERS' EQUITY
  
                253,611
  
                 94,535
  
               (94,535)
  
                          -
  
        253,611
                     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
570,253
  
103,193
  
(103,193)
  
72,314
  
$                          642,567
                     
See accompanying notes to unaudited pro forma condensed combined financial statements
          

 
 
 


 

 
Notes to Unaudited Pro Forma Financial Statements
 
Pro Forma Basis of Presentation
 

 
    The acquisition of UOS is reflected in the unaudited pro forma combined financial statements as being accounted for under the acquisition method in accordance with ASC 805. Under the acquisition method, the total estimated purchase price of the acquired company is allocated to the assets acquired and liabilities assumed based on their fair values. Due to the fact that the unaudited pro forma combined financial statements have been prepared based on preliminary estimates of these fair values, the final amounts recorded may differ materially from the information presented.
 
    The unaudited pro forma condensed combined statements of income for the nine months ended September 30, 2012 and twelve months ended December 31, 2012, assume the acquisition occurred January 1, 2011. The unaudited pro forma condensed combined balance sheet as of September 30, 2012 assumes the acquisition was completed as of September 30, 2012.   The unaudited pro forma combined financial statements are based on historical consolidated financial statements of UOS and International Shipholding Corporation, as adjusted for the effects of the acquisition as further described herein.
 
    Under ASC 805, acquisition costs (such as advisory, legal, valuation or other professional fees) are not included as a component of consideration transferred and have been excluded from the unaudited pro forma combined statements of operations.
   
    The unaudited pro forma combined financial statements do not include the realization of any cost savings from anticipated operating efficiencies, synergies, or other restructuring activities which might result from the acquisition. The unaudited pro forma combined financial statements should be read in conjunction with the separately filed historical consolidated financial statements and accompanying notes of UOS.
 
    The unaudited pro forma combined financial statements are not intended to represent or be indicative of the consolidated results of operations or financial conditions of the combined company that would have been reported had the acquisition been completed as of the dates presented, and further should not be taken as representative of the future consolidated results of operations or financial condition of the Company.
 

 
 
Pro Forma Adjustments
 
    Adjustments to the pro forma condensed combined statements of income are reflected on the face of those statements.  Adjustments to the pro formas condensed combined balance sheet are set forth below.  All of these adjustments are based on current assumptions and are subject to change upon completion of the final purchase price allocation of assets acquired and liabilities assumed from UOS at the acquisition closing date.
 
 
 
a.  
To reverse UOS balance sheet
 

 
b.  
To record the UOS preliminary fair value of assets acquired and liabilities assumed funded by the combination of assets sold and leased back of $63 million, bank financing of $30 million, a line of credit draw of $12 million and the remainder with available cash.
 
Accounts Receivable
    $ 8,650,415  
Inventory
     6,509,731  
Other Current Assets
     668,547  
Vessels and Vehicles
     60,036,883  
Intangible asset
     45,131,316  
Goodwill
     1,900,520  
Total Assets
    $ 122,897,412  
         
Accounts Payable and Accrued Liabilities
    $ 4,956,425  
Other Current Liabilities
     890,186  
Non-Current Liabilities
     2,069,663  
Total Liabilities
     7,916,274  
         
Fair Value of Acquisition Price
    $ 114,981,138  

c.  
Funding for Acquisition was based on the following:
 
Vessels and Vehicles (Sale leaseback of two vessels)
    $ (43,341,000 )
Other Long Term Liabilities (Sale leaseback of two vessels)
     (19,659,000 )
Current Maturities of Long-Term Debt (Bank Loan)
     (6,000,000 )
Long-Term Debt, Less Current Maturities (Bank Loan)
     (24,000,000 )
Long-Term Debt, Less Current Maturities (Line of Credit Draw)
     (12,000,000 )
Accounts Payable (Assumed working capital settlement)
     (2,738,610 )
Cash and Cash Equivalents
     (9,242,528 )
Other Assets (Security Deposit Pledged)
     2,000,000  
         
Total Funding for Acquisition
    $ 114,981,138  


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