Attached files
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| 8-K - 8-K - ARMSTRONG WORLD INDUSTRIES INC | d176542d8k.htm |
Exhibit 99.1
Armstrong World Industries, Inc., and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Earnings
(amounts in millions, except per share data)
| Year Ended December 31, 2015 | ||||||||||||||||
| Historical AWI (as reported) |
Discontinued Operation - AFI (a) |
Pro Forma Adjustments |
Pro Forma AWI Continuing Operations |
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| Net sales |
$ | 2,420.0 | $ | 1,188.7 | — | $ | 1,231.3 | |||||||||
| Cost of goods sold |
1,817.2 | 962.3 | — | 854.9 | ||||||||||||
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| Gross profit |
602.8 | 226.4 | — | 376.4 | ||||||||||||
| Selling, general and administrative expenses |
447.2 | 179.5 | — | 267.7 | ||||||||||||
| Separation costs |
34.3 | — | — | 34.3 | ||||||||||||
| Equity earnings from joint venture |
(66.1 | ) | — | — | (66.1 | ) | ||||||||||
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| Operating income |
187.4 | 46.9 | — | 140.5 | ||||||||||||
| Interest expense |
45.3 | — | — | 45.3 | ||||||||||||
| Other non-operating expense |
23.5 | 3.4 | — | 20.1 | ||||||||||||
| Other non-operating (income) |
(5.3 | ) | (0.3 | ) | — | (5.0 | ) | |||||||||
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| Earnings from continuing operations before income taxes |
123.9 | 43.8 | — | 80.1 | ||||||||||||
| Income tax expense |
71.3 | 17.4 | — | 53.9 | ||||||||||||
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| Earnings from continuing operations |
$ | 52.6 | $ | 26.4 | — | $ | 26.2 | |||||||||
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| Earnings per share of common stock, continuing operations: |
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| Basic |
$ | 0.95 | $ | 0.47 | ||||||||||||
| Diluted |
$ | 0.94 | $ | 0.47 | ||||||||||||
| Average number of common shares outstanding: |
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| Basic |
55.5 | 55.5 | ||||||||||||||
| Diluted |
55.9 | 55.9 | ||||||||||||||
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements on page 5.
1
Armstrong World Industries, Inc., and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Earnings
(amounts in millions, except per share data)
| Year Ended December 31, 2014 | ||||||||||||||||
| Historical AWI (as reported) |
Discontinued Operation - AFI (a) |
Pro Forma Adjustments |
Pro Forma AWI Continuing Operations |
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| Net sales |
$ | 2,515.3 | $ | 1,221.0 | — | $ | 1,294.3 | |||||||||
| Cost of goods sold |
1,932.0 | 1,020.8 | — | 911.2 | ||||||||||||
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| Gross profit |
583.3 | 200.2 | — | 383.1 | ||||||||||||
| Selling, general and administrative expenses |
398.5 | 148.4 | — | 250.1 | ||||||||||||
| Intangible asset impairments |
10.8 | 10.8 | — | — | ||||||||||||
| Equity earnings from joint venture |
(65.1 | ) | — | — | (65.1 | ) | ||||||||||
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| Operating income |
239.1 | 41.0 | — | 198.1 | ||||||||||||
| Interest expense |
46.0 | — | — | 46.0 | ||||||||||||
| Other non-operating expense |
10.5 | 4.6 | — | 5.9 | ||||||||||||
| Other non-operating (income) |
(2.6 | ) | (0.4 | ) | — | (2.2 | ) | |||||||||
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| Earnings from continuing operations before income taxes |
185.2 | 36.8 | — | 148.4 | ||||||||||||
| Income tax expense |
83.2 | 13.0 | — | 70.2 | ||||||||||||
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| Earnings from continuing operations |
$ | 102.0 | $ | 23.8 | — | $ | 78.2 | |||||||||
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| Earnings per share of common stock, continuing operations: |
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| Basic |
$ | 1.85 | $ | 1.42 | ||||||||||||
| Diluted |
$ | 1.83 | $ | 1.41 | ||||||||||||
| Average number of common shares outstanding: |
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| Basic |
55.0 | 55.0 | ||||||||||||||
| Diluted |
55.4 | 55.4 | ||||||||||||||
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements on page 5.
2
Armstrong World Industries, Inc., and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Earnings
(amounts in millions, except per share data)
| Year Ended December 31, 2013 | ||||||||||||||||
| Historical AWI (as reported) |
Discontinued Operation - AFI (a) |
Pro Forma Adjustments |
Pro Forma AWI Continuing Operations |
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| Net sales |
$ | 2,527.4 | $ | 1,262.8 | — | $ | 1,264.6 | |||||||||
| Cost of goods sold |
1,934.4 | 1,051.8 | — | 882.6 | ||||||||||||
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| Gross profit |
593.0 | 211.0 | — | 382.0 | ||||||||||||
| Selling, general and administrative expenses |
386.9 | 142.2 | — | 244.7 | ||||||||||||
| Restructuring charges, net |
(0.1 | ) | — | — | (0.1 | ) | ||||||||||
| Equity earnings from joint venture |
(59.4 | ) | — | (59.4 | ) | |||||||||||
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| Operating income |
265.6 | 68.8 | — | 196.8 | ||||||||||||
| Interest expense |
68.7 | — | — | 68.7 | ||||||||||||
| Other non-operating expense |
2.0 | 0.6 | — | 1.4 | ||||||||||||
| Other non-operating (income) |
(3.8 | ) | (1.1 | ) | — | (2.7 | ) | |||||||||
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| Earnings from continuing operations before income taxes |
198.7 | 69.3 | — | 129.4 | ||||||||||||
| Income tax expense |
71.4 | 27.0 | — | 44.4 | ||||||||||||
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| Earnings from continuing operations |
$ | 127.3 | $ | 42.3 | — | $ | 85.0 | |||||||||
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| Earnings per share of common stock, continuing operations: |
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| Basic |
$ | 2.19 | $ | 1.47 | ||||||||||||
| Diluted |
$ | 2.17 | $ | 1.46 | ||||||||||||
| Average number of common shares outstanding: |
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| Basic |
57.8 | 57.8 | ||||||||||||||
| Diluted |
58.4 | 58.4 | ||||||||||||||
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements on page 5.
3
Armstrong World Industries, Inc., and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet
(amounts in millions, except per share data)
| December 31, 2015 | ||||||||||||||||
| Historical AWI (as reported) |
Discontinued Operation - AFI (a) |
Pro Forma Adjustments |
Pro Forma AWI Continuing Operations |
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| Assets | ||||||||||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 244.8 | $ | 35.5 | — | $ | 209.3 | |||||||||
| Accounts and notes receivable, net |
184.3 | 70.0 | — | 114.3 | ||||||||||||
| Inventories, net |
344.2 | 242.8 | — | 101.4 | ||||||||||||
| Deferred income taxes |
35.5 | 2.5 | — | 33.0 | ||||||||||||
| Income tax receivable |
11.1 | — | — | 11.1 | ||||||||||||
| Prepaid expenses and other current assets |
60.9 | 27.2 | — | 33.7 | ||||||||||||
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| Total current assets |
880.8 | 378.0 | — | 502.8 | ||||||||||||
| Property, plant, and equipment, less accumulated depreciation |
1,096.3 | 448.2 | — | 648.1 | ||||||||||||
| Prepaid pension costs |
8.3 | — | — | 8.3 | ||||||||||||
| Investment in joint venture |
130.8 | — | — | 130.8 | ||||||||||||
| Intangible assets, net |
489.7 | 42.5 | — | 447.2 | ||||||||||||
| Deferred income taxes |
21.0 | 12.7 | $ | 11.6 | (b) | 19.9 | ||||||||||
| Income tax receivable |
2.4 | — | — | 2.4 | ||||||||||||
| Other non-current assets |
62.6 | 0.9 | — | 61.7 | ||||||||||||
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| Total assets |
$ | 2,691.9 | $ | 882.3 | $ | 11.6 | $ | 1,821.2 | ||||||||
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| Liabilities and Shareholders’ Equity | ||||||||||||||||
| Current liabilities: |
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| Current installments of long-term debt |
$ | 52.1 | — | — | $ | 52.1 | ||||||||||
| Accounts payable and accrued expenses |
380.4 | $ | 149.2 | — | 231.2 | |||||||||||
| Income tax payable |
3.2 | — | — | 3.2 | ||||||||||||
| Deferred income taxes |
0.6 | 0.3 | — | 0.3 | ||||||||||||
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| Total current liabilities |
436.3 | 149.5 | — | 286.8 | ||||||||||||
| Long-term debt |
950.9 | 10.0 | ($ | 50.0 | )(c) | 890.9 | ||||||||||
| Postretirement benefit liabilities |
172.4 | 85.1 | — | 87.3 | ||||||||||||
| Pension benefit liabilities |
107.6 | 37.5 | — | 70.1 | ||||||||||||
| Other long-term liabilities |
49.6 | 6.3 | — | 43.3 | ||||||||||||
| Income taxes payable |
92.3 | — | — | 92.3 | ||||||||||||
| Deferred income taxes |
114.0 | 2.1 | 11.6 | (b) | 123.5 | |||||||||||
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| Total noncurrent liabilities |
1,486.8 | 141.0 | (38.4 | ) | 1,307.4 | |||||||||||
| Shareholders’ equity: |
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| Common stock, $0.01 par value per share, authorized 200 million shares; 60,416,446 shares issued, 55,359,064 and outstanding at December 31, 2015 |
0.6 | — | — | 0.6 | ||||||||||||
| Capital in excess of par value |
1,151.8 | 655.1 | — | 496.7 | ||||||||||||
| Retained earnings |
365.2 | — | 50.0 | (d) | 415.2 | |||||||||||
| Treasury stock, at cost, 5,057,382 shares |
(261.4 | ) | — | — | (261.4 | ) | ||||||||||
| Accumulated other comprehensive income (loss) |
(487.4 | ) | (63.3 | ) | — | (424.1 | ) | |||||||||
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| Total shareholders’ equity |
768.8 | 591.8 | 50.0 | 227.0 | ||||||||||||
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| Total liabilities and shareholders’ equity |
$ | 2,691.9 | $ | 882.3 | $ | 11.6 | $ | 1,821.2 | ||||||||
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See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements on page 5.
4
Armstrong World Industries, Inc., and Subsidiaries
Unaudited Notes to Consolidated Financial Statements
(amounts in millions, except per share data)
| (a) | Reflects the operations, assets, liabilities and equity of AFI. Cost of goods sold and selling, general and administrative expenses for AFI include certain historical costs of employee benefits that were previously categorized as unallocated corporate costs. Expense categories exclude certain general corporate overhead expenses that were allocated to AFI in its historical financial statements that do not meet the requirements to be presented in discontinued operations and thus will be presented as part of AWI’s continuing operations. |
Postretirement and pension benefit liabilities for AFI include historical benefit plan liabilities for certain AFI employees and retirees that were previously categorized as unallocated corporate liabilities, in addition to the related accumulated other comprehensive (loss) and related deferred tax assets associated with such benefit plans. Property, plant and equipment excludes allocations of certain corporate facilities that do not meet the requirements to be presented in discontinued operations and thus will be presented as part of AWI’s continuing operations.
| (b) | Reflects a reclassification of tax balances associated with jurisdictional netting within continuing operations. |
| (c) | Reflects the cash distribution upon separation by AFI to AWI, pursuant to the terms of the Separation and Distribution Agreement, of $50.0 million, representing the dividend paid by AFI to AWI from the net proceeds of AFI’s borrowings. If the $50.0 million dividend had been paid as of December 31, 2015, AWI would have used the proceeds from the dividend to reduce borrowings outstanding. |
| (d) | Total equity was adjusted as a result of adjustment (c) above. |
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