Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Fortegra Financial Corp | a8-kdisposition.htm |
| EX-2.1 - STOCK PURCHASE AGREEMENT - Fortegra Financial Corp | exhibit21stockpurchaseagre.htm |
| EX-99.1 - PRESS RELEASE - Fortegra Financial Corp | exhibit991pressrelease-com.htm |
EXHIBIT 99.2
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Completion of the Disposition of Assets
On December 2, 2013, Fortegra Financial Corporation, a Delaware corporation (the "Company"), entered into a Stock Purchase Agreement ("Purchase Agreement") with AmWINS Holdings, LLC, a Delaware limited liability company ("AmWINS"), pursuant to which LOTS Intermediate Co., a Delaware corporation and direct wholly-owned subsidiary of the Corporation, agreed to sell all the issued and outstanding stock of its subsidiaries, Bliss and Glennon, Inc., a California corporation ("Bliss and Glennon"), and eReinsure.com, Inc., a Delaware corporation ("eReinsure").
On December 31, 2013, the sale of Bliss and Glennon and eReinsure contemplated by the Purchase Agreement (the "Disposition"), was completed.
As consideration for the Disposition, the Company received net cash proceeds of $82.5 million, representing gross proceeds of $83.5 million less $1.0 million in transaction fees paid at the time of closing. The proceeds are subject to certain purchase price adjustments as set forth in the Purchase Agreement to reflect fluctuations in working capital, including adjustments for any receivable balances as of the disposition date that are not collected within one year.
As of and after December 31, 2013, the Company does not beneficially own the disposed businesses and will no longer consolidate Bliss and Glennon or eReinsure into its financial results. Beginning in the fourth quarter of 2013, the historical financial results of the disposed businesses for periods prior to the Disposition will be reflected in the Company's Consolidated Financial Statements as discontinued operations.
Unaudited Pro Forma Consolidated Financial Information
The Unaudited Pro Forma Consolidated Financial Information of the Company and its subsidiaries has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for the purposes of inclusion in the Company's Current Report on Form 8-K prepared and filed in connection with the Disposition.
Certain information and certain disclosures normally included in financial statements prepared in accordance with accounting under generally accepted accounting principles in the United States ("U.S. GAAP") have been omitted pursuant to such rules and regulations. However, the Company believes that the disclosures provided herein are adequate to make the information presented not misleading.
The Unaudited Pro Forma Consolidated Financial Statements are based on the Company's historical Consolidated Financial Statements, adjusted to reflect effects of the Disposition. The following Unaudited Pro Forma Consolidated Financial Statements of the Company and the related Notes should be read in conjunction with the historical Consolidated Financial Statements of the Company and the related Notes included in its Quarterly Report on Form 10-Q for quarterly period ended September 30, 2013 and any amendments thereto and in its Annual Report on Form 10-K for the year ended December 31, 2012 and any amendments thereto.
The accompanying Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2013 gives effect to the Disposition as if it had occurred on that date. The accompanying Unaudited Pro Forma Consolidated Statements of Income for the nine months ended September 30, 2013 and for the years ended December 31, 2012, 2011 and 2010, respectively, give effect to the Disposition as if it had occurred at the beginning of the period presented with respect to Bliss and Glennon, and at the later of the beginning of the period presented or March 11, 2011 with respect to eReinsure (the Company acquired eReinsure on March 11, 2011).
The Unaudited Pro Forma Consolidated Financial Information is provided for informational purposes only and is not intended to represent or be indicative of the consolidated results of operations or financial condition of the Company that would have been reported had the Disposition been completed as of the dates presented, and should not be construed as representative of the future consolidated results of operations or financial condition of the Company. The pro forma adjustments described in Note 2 are based on Management’s judgment, including estimates and assumptions that Management believes to be reasonable. In Management's opinion, all adjustments necessary to reflect the effects of the Disposition on a pro forma basis have been made.
Page 1
FORTEGRA FINANCIAL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(All Amounts in Thousands, Except Share and Per Share Amounts)
At September 30, 2013 | |||||||||||||||||
Historical Information | |||||||||||||||||
As Reported | Disposition | Note 2, Item # | Pro Forma Adjustments | Note 2, Item # | Pro Forma | ||||||||||||
Assets: | |||||||||||||||||
Investments: | |||||||||||||||||
Fixed maturity securities available-for-sale, at fair value | $ | 122,760 | $ | — | $ | — | $ | 122,760 | |||||||||
Equity securities available-for-sale, at fair value | 6,372 | — | — | 6,372 | |||||||||||||
Short-term investments | 971 | — | — | 971 | |||||||||||||
Total investments | 130,103 | — | — | 130,103 | |||||||||||||
Cash and cash equivalents | 17,213 | 376 | (1) | — | 17,589 | ||||||||||||
Restricted cash | 28,792 | (11,513 | ) | (1) | — | 17,279 | |||||||||||
Accrued investment income | 1,006 | — | — | 1,006 | |||||||||||||
Notes receivable, net | 5,818 | — | — | 5,818 | |||||||||||||
Accounts and premiums receivable, net | 32,785 | (16,449 | ) | (1) | — | 16,336 | |||||||||||
Other receivables | 36,109 | (837 | ) | (1) | — | 35,272 | |||||||||||
Reinsurance receivables | 211,835 | — | — | 211,835 | |||||||||||||
Deferred acquisition costs | 67,529 | — | — | 67,529 | |||||||||||||
Property and equipment, net | 16,805 | (1,476 | ) | (1) | — | 15,329 | |||||||||||
Goodwill | 127,679 | (53,978 | ) | (1) | — | 73,701 | |||||||||||
Other intangible assets, net | 65,139 | (14,594 | ) | (1) | — | 50,545 | |||||||||||
Other assets | 9,062 | (196 | ) | (1) | — | 8,866 | |||||||||||
Total assets | $ | 749,875 | $ | (98,667 | ) | $ | — | $ | 651,208 | ||||||||
Liabilities: | |||||||||||||||||
Unpaid claims | $ | 33,471 | — | — | 33,471 | ||||||||||||
Unearned premiums | 249,671 | — | — | 249,671 | |||||||||||||
Policyholder account balances | 24,403 | — | — | 24,403 | |||||||||||||
Accrued expenses, accounts payable and other liabilities | 76,298 | (26,487 | ) | (1) | 2,230 | (2) | 52,041 | ||||||||||
Income taxes payable | 237 | 11 | (1) | 5,610 | (3) | 5,858 | |||||||||||
Deferred revenue | 69,188 | (556 | ) | (1) | — | 68,632 | |||||||||||
Note payable | 82,750 | — | (82,491 | ) | (4) | 259 | |||||||||||
Preferred trust securities | 35,000 | — | — | 35,000 | |||||||||||||
Deferred income taxes, net | 25,844 | (5,407 | ) | (1) | — | 20,437 | |||||||||||
Total liabilities | 596,862 | (32,439 | ) | (74,651 | ) | 489,772 | |||||||||||
Stockholders' Equity: | |||||||||||||||||
Preferred stock, par value $0.01; 10,000,000 shares authorized; none issued | — | — | — | — | |||||||||||||
Common stock, par value $0.01; 150,000,000 shares authorized; 20,888,520 shares issued at September 30, 2013, including shares in treasury | 209 | — | — | 209 | |||||||||||||
Treasury stock, at cost; 1,224,182 shares at September 30, 2013. | (8,014 | ) | — | — | (8,014 | ) | |||||||||||
Additional paid-in capital | 98,893 | — | — | 98,893 | |||||||||||||
Accumulated other comprehensive loss, net of tax | (3,471 | ) | — | — | (3,471 | ) | |||||||||||
Retained earnings | 59,974 | (66,228 | ) | (1) | 74,651 | (5) | 68,397 | ||||||||||
Stockholders' equity before non-controlling interests | 147,591 | (66,228 | ) | 74,651 | 156,014 | ||||||||||||
Non-controlling interests | 5,422 | — | — | 5,422 | |||||||||||||
Total stockholders' equity | 153,013 | (66,228 | ) | 74,651 | 161,436 | ||||||||||||
Total liabilities and stockholders' equity | $ | 749,875 | $ | (98,667 | ) | $ | — | $ | 651,208 | ||||||||
See the accompanying Notes to Unaudited Pro Forma Consolidated Financial Information.
Page 2
FORTEGRA FINANCIAL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(All Amounts in Thousands, Except Share and Per Share Amounts)
For the Nine Months Ended September 30, 2013 | |||||||||||||||||
Historical Information | |||||||||||||||||
As Reported | Disposition | Note 2, Item # | Pro Forma Adjustments | Note 2, Item # | Pro Forma | ||||||||||||
Revenues: | |||||||||||||||||
Service and administrative fees | $ | 135,022 | $ | — | $ | — | $ | 135,022 | |||||||||
Brokerage commissions and fees | 28,409 | (28,409 | ) | (6) | — | — | |||||||||||
Ceding commission | 22,851 | — | — | 22,851 | |||||||||||||
Net investment income | 2,433 | (17 | ) | (6) | — | 2,416 | |||||||||||
Net realized investment gains | 2,043 | — | — | 2,043 | |||||||||||||
Net earned premium | 100,929 | — | — | 100,929 | |||||||||||||
Other income | 529 | (31 | ) | (6) | — | 498 | |||||||||||
Gain on sale of subsidiary | 402 | — | — | 402 | |||||||||||||
Total revenues | 292,618 | (28,457 | ) | — | 264,161 | ||||||||||||
Expenses: | |||||||||||||||||
Net losses and loss adjustment expenses | 31,096 | — | — | 31,096 | |||||||||||||
Member benefit claims | 34,624 | — | — | 34,624 | |||||||||||||
Commissions | 120,148 | — | — | 120,148 | |||||||||||||
Personnel costs | 45,089 | (15,240 | ) | (6) | — | 29,849 | |||||||||||
Other operating expenses | 30,438 | (3,857 | ) | (6) | — | 26,581 | |||||||||||
Depreciation and amortization | 4,063 | (454 | ) | (6) | — | 3,609 | |||||||||||
Amortization of intangibles | 5,598 | (1,443 | ) | (6) | — | 4,155 | |||||||||||
Interest expense | 4,489 | (1,610 | ) | (6) | — | 2,879 | |||||||||||
Total expenses | 275,545 | (22,604 | ) | — | 252,941 | ||||||||||||
Income from continuing operations before income taxes and non-controlling interests | 17,073 | (5,853 | ) | — | 11,220 | ||||||||||||
Income taxes | 6,048 | (2,341 | ) | (6) | — | 3,707 | |||||||||||
Income before non-controlling interests | 11,025 | (3,512 | ) | — | 7,513 | ||||||||||||
Less: net income attributable to non-controlling interests | 868 | — | — | 868 | |||||||||||||
Net income from continuing operations | $ | 10,157 | $ | (3,512 | ) | $ | — | $ | 6,645 | ||||||||
Earnings per share: (a) | |||||||||||||||||
Basic | $ | 0.52 | $ | (0.18 | ) | — | $ | 0.34 | |||||||||
Diluted | $ | 0.49 | $ | (0.17 | ) | — | $ | 0.32 | |||||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 19,500,430 | 19,500,430 | 19,500,430 | 19,500,430 | |||||||||||||
Diluted | 20,531,122 | 20,531,122 | 20,531,122 | 20,531,122 | |||||||||||||
(a) - Earnings per share amounts may not recalculate or cross foot due to rounding.
See the accompanying Notes to Unaudited Pro Forma Consolidated Financial Information.
Page 3
FORTEGRA FINANCIAL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(All Amounts in Thousands, Except Share and Per Share Amounts)
For the Year Ended December 31, 2012 | |||||||||||||||||
Historical Information | |||||||||||||||||
As Reported | Disposition | Note 2, Item # | Pro Forma Adjustments | Note 2, Item # | Pro Forma | ||||||||||||
Revenues: | |||||||||||||||||
Service and administrative fees | $ | 90,550 | $ | — | $ | — | $ | 90,550 | |||||||||
Brokerage commissions and fees | 35,306 | (35,306 | ) | (6) | — | — | |||||||||||
Ceding commission | 34,825 | — | — | 34,825 | |||||||||||||
Net investment income | 3,068 | (3 | ) | (6) | — | 3,065 | |||||||||||
Net realized investment gains | 3 | — | — | 3 | |||||||||||||
Net earned premium | 127,625 | — | — | 127,625 | |||||||||||||
Other income | 269 | (1 | ) | (6) | — | 268 | |||||||||||
Total revenues | 291,646 | (35,310 | ) | — | 256,336 | ||||||||||||
Expenses: | |||||||||||||||||
Net losses and loss adjustment expenses | 40,219 | — | — | 40,219 | |||||||||||||
Member benefit claims | 4,642 | — | — | 4,642 | |||||||||||||
Commissions | 128,741 | — | — | 128,741 | |||||||||||||
Personnel costs | 48,648 | (20,172 | ) | (6) | — | 28,476 | |||||||||||
Other operating expenses | 30,354 | (5,562 | ) | (6) | — | 24,792 | |||||||||||
Depreciation and amortization | 3,933 | (660 | ) | (6) | — | 3,273 | |||||||||||
Amortization of intangibles | 4,953 | (2,213 | ) | (6) | — | 2,740 | |||||||||||
Interest expense | 6,624 | (2,200 | ) | (6) | — | 4,424 | |||||||||||
Total expenses | 268,114 | (30,807 | ) | — | 237,307 | ||||||||||||
Income from continuing operations before income taxes and non-controlling interests | 23,532 | (4,503 | ) | — | 19,029 | ||||||||||||
Income taxes | 8,295 | (1,801 | ) | (6) | — | 6,494 | |||||||||||
Income before non-controlling interests | 15,237 | (2,702 | ) | — | 12,535 | ||||||||||||
Less: net income attributable to non-controlling interests | 72 | — | — | 72 | |||||||||||||
Net income from continuing operations | $ | 15,165 | $ | (2,702 | ) | $ | — | $ | 12,463 | ||||||||
Earnings per share: (a) | |||||||||||||||||
Basic | $ | 0.77 | $ | (0.14 | ) | $ | — | $ | 0.63 | ||||||||
Diluted | $ | 0.74 | $ | (0.13 | ) | $ | — | $ | 0.60 | ||||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 19,655,492 | 19,655,492 | 19,655,492 | 19,655,492 | |||||||||||||
Diluted | 20,600,362 | 20,600,362 | 20,600,362 | 20,600,362 | |||||||||||||
(a) - Earnings per share amounts may not recalculate or cross foot due to rounding.
See the accompanying Notes to Unaudited Pro Forma Consolidated Financial Information.
Page 4
FORTEGRA FINANCIAL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(All Amounts in Thousands, Except Share and Per Share Amounts)
For the Year Ended December 31, 2011 | |||||||||||||||||
Historical Information * | |||||||||||||||||
As Reported | Disposition | Note 2, Item # | Pro Forma Adjustments | Note 2, Item # | Pro Forma | ||||||||||||
Revenues: | |||||||||||||||||
Service and administrative fees | $ | 94,464 | $ | — | $ | — | $ | 94,464 | |||||||||
Brokerage commissions and fees | 34,396 | (34,396 | ) | (6) | — | — | |||||||||||
Ceding commission | 29,495 | — | — | 29,495 | |||||||||||||
Net investment income | 3,368 | (37 | ) | (6) | — | 3,331 | |||||||||||
Net realized investment gains (losses) | 4,193 | — | — | 4,193 | |||||||||||||
Net earned premium | 115,503 | — | — | 115,503 | |||||||||||||
Other income | 170 | (8 | ) | (6) | — | 162 | |||||||||||
Total revenues | 281,589 | (34,441 | ) | — | 247,148 | ||||||||||||
Expenses: | |||||||||||||||||
Net losses and loss adjustment expenses | 37,949 | — | — | 37,949 | |||||||||||||
Member benefit claims | 4,409 | — | — | 4,409 | |||||||||||||
Commissions | 126,918 | — | — | 126,918 | |||||||||||||
Personnel costs | 44,547 | (18,526 | ) | (6) | — | 26,021 | |||||||||||
Other operating expenses | 31,140 | (7,479 | ) | (6) | — | 23,661 | |||||||||||
Depreciation and amortization | 3,077 | (816 | ) | (6) | — | 2,261 | |||||||||||
Amortization of intangibles | 4,952 | (1,732 | ) | (6) | — | 3,220 | |||||||||||
Interest expense | 7,641 | (3,038 | ) | (6) | (401 | ) | (7) | 4,202 | |||||||||
Loss on the sale of subsidiary | 477 | — | — | 477 | |||||||||||||
Total expenses | 261,110 | (31,591 | ) | (401 | ) | 229,118 | |||||||||||
Income from continuing operations before income taxes and non-controlling interests | 20,479 | (2,850 | ) | 401 | 18,030 | ||||||||||||
Income taxes | 7,140 | (1,140 | ) | (6) | 140 | (8) | 6,140 | ||||||||||
Income before non-controlling interests | 13,339 | (1,710 | ) | 261 | 11,890 | ||||||||||||
Less: net (loss) attributable to non-controlling interests | (170 | ) | — | — | (170 | ) | |||||||||||
Net income from continuing operations | $ | 13,509 | $ | (1,710 | ) | $ | 261 | $ | 12,060 | ||||||||
Earnings per share: (a) | |||||||||||||||||
Basic | $ | 0.66 | $ | (0.08 | ) | $ | 0.01 | $ | 0.59 | ||||||||
Diluted | $ | 0.64 | $ | (0.08 | ) | $ | 0.01 | $ | 0.57 | ||||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 20,352,027 | 20,352,027 | 20,352,027 | 20,352,027 | |||||||||||||
Diluted | 21,265,801 | 21,265,801 | 21,265,801 | 21,265,801 | |||||||||||||
* The Historical Information for the year ended December 31, 2011 includes the eReinsure results from its acquisition date of March 11, 2011 through December 31, 2011. | |||||||||||||||||
(a) - Earnings per share amounts may not recalculate or cross foot due to rounding.
See the accompanying Notes to Unaudited Pro Forma Consolidated Financial Information.
Page 5
FORTEGRA FINANCIAL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(All Amounts in Thousands, Except Share and Per Share Amounts)
For the Year Ended December 31, 2010 | |||||||||||||||||
Historical Information * | |||||||||||||||||
As Reported | Disposition | Note 2, Item # | Pro Forma Adjustments | Note 2, Item # | Pro Forma | ||||||||||||
Revenues: | |||||||||||||||||
Service and administrative fees | $ | 56,254 | $ | — | $ | — | $ | 56,254 | |||||||||
Brokerage commissions and fees | 24,620 | (24,620 | ) | (6) | — | — | |||||||||||
Ceding commission | 28,767 | — | — | 28,767 | |||||||||||||
Net investment income | 4,073 | (40 | ) | (6) | — | 4,033 | |||||||||||
Net realized investment gains | 650 | — | — | 650 | |||||||||||||
Net earned premium | 111,805 | — | — | 111,805 | |||||||||||||
Other income | 230 | (74 | ) | (6) | — | 156 | |||||||||||
Total revenues | 226,399 | (24,734 | ) | — | 201,665 | ||||||||||||
Expenses: | |||||||||||||||||
Net losses and loss adjustment expenses | 36,035 | — | — | 36,035 | |||||||||||||
Member benefit claims | 466 | — | — | 466 | |||||||||||||
Commissions | 92,646 | — | — | 92,646 | |||||||||||||
Personnel costs | 36,361 | (14,660 | ) | (6) | — | 21,701 | |||||||||||
Other operating expenses | 24,426 | (4,361 | ) | (6) | — | 20,065 | |||||||||||
Depreciation and amortization | 1,396 | (223 | ) | (6) | — | 1,173 | |||||||||||
Amortization of intangibles | 3,232 | (1,404 | ) | (6) | — | 1,828 | |||||||||||
Interest expense | 8,464 | (1,330 | ) | (6) | (260 | ) | (7) | 6,874 | |||||||||
Total expenses | 203,026 | (21,978 | ) | (260 | ) | 180,788 | |||||||||||
Income from continuing operations before income taxes and non-controlling interests | 23,373 | (2,756 | ) | 260 | 20,877 | ||||||||||||
Income taxes | 8,159 | (1,102 | ) | (6) | 91 | (8) | 7,148 | ||||||||||
Income before non-controlling interests | 15,214 | (1,654 | ) | 169 | 13,729 | ||||||||||||
Less: net income attributable to non-controlling interests | 20 | — | — | 20 | |||||||||||||
Net income from continuing operations | $ | 15,194 | $ | (1,654 | ) | $ | 169 | $ | 13,709 | ||||||||
Earnings per share: (a) | |||||||||||||||||
Basic | $ | 0.95 | $ | (0.10 | ) | $ | 0.01 | $ | 0.86 | ||||||||
Diluted | $ | 0.88 | $ | (0.10 | ) | $ | 0.01 | $ | 0.80 | ||||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 15,929,181 | 15,929,181 | 15,929,181 | 15,929,181 | |||||||||||||
Diluted | 17,220,029 | 17,220,029 | 17,220,029 | 17,220,029 | |||||||||||||
* The Historical Information for the year ended December 31, 2010, only includes the Bliss and Glennon results. | |||||||||||||||||
(a) - Earnings per share amounts may not recalculate or cross foot due to rounding.
See the accompanying Notes to Unaudited Pro Forma Consolidated Financial Information.
Page 6
FORTEGRA FINANCIAL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(All Amounts in Thousands, Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)
NOTE 1. BASIS OF PRO FORMA PRESENTATION
The Unaudited Pro Forma Consolidated Financial Statements are based on the Company's historical Consolidated Financial Statements, adjusted to reflect effects of the Disposition. The following Unaudited Pro Forma Consolidated Financial Statements of the Company and the related Notes should be read in conjunction with the historical Consolidated Financial Statements of the Company and the related Notes included in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 and any amendments thereto and in its Annual Report on Form 10-K for the year ended December 31, 2012 and any amendments thereto.
The accompanying Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2013 gives effect to the Disposition as if it had occurred on that date. The accompanying Unaudited Pro Forma Consolidated Statements of Income for the nine months ended September 30, 2013 and for the years ended December 31, 2012, 2011 and 2010, respectively, give effect to the Disposition as if it had occurred at the beginning of the period presented with respect to Bliss and Glennon, and at the later of the beginning of the period presented or March 11, 2011 with respect to eReinsure (the Company acquired eReinsure on March 11, 2011).
NOTE 2. PRO FORMA ADJUSTMENTS
The pro forma adjustments made to the Unaudited Pro Forma Consolidated Balance Sheet related to the Disposition are as follows:
Item Number | Description |
(1) | Represents the deletion of the assets and liabilities of the disposed businesses at September 30, 2013. |
(2) | Represents the accrual of estimated costs associated with the Disposition. |
(3) | Represents estimated federal and state income taxes applicable to the estimated pre-tax gain on the Disposition as if the transaction had closed on September 30, 2013, which could materially change as we finalize our discontinued operations accounting to be reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. |
(4) | Represents gross proceeds of $83.5 million, less $1.0 million of transaction fees paid at closing, resulting in the initial proceeds of $82.5 million applied fully to Notes Payable as if the transaction had closed on September 30, 2013. |
(5) | Represents the estimated net after-tax proceeds from the Disposition of $74.7 million. This amount, less the net assets of the disposed businesses of $66.2 million, equals the estimated net after-tax gain on disposition of $8.4 million as if the transaction had closed on September 30, 2013. |
The pro forma adjustments made to the Unaudited Pro Forma Consolidated Statements of Income related to the Disposition are as follows:
Item Number | Description | ||||||||
(6) | Reflects the deletion of the revenues and expenses of the disposed businesses. | ||||||||
(7) | Reflects the estimated reduction in interest expense due to the pro forma impact that the Disposition net proceeds would have had on the Company's borrowing requirements. | ||||||||
(8) | Reflects the estimated tax effect of the estimated reduction in interest expense (see Item 7) using a tax rate of 35%. | ||||||||
Page 7