Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Andersons, Inc. | ex-99pressrelease8x20.htm |
| EX-99.1 - EX-99.1 - Andersons, Inc. | ex-99pressrelease8x16.htm |
| EX-2.1 - EX-2.1 - Andersons, Inc. | assetpurchaseagreement.htm |
| 8-K - 8-K - Andersons, Inc. | ande-20210816.htm |
Exhibit 99.3
The Andersons Inc.
Unaudited Pro Forma Consolidated Financial Statements
On August 16, 2021, The Andersons, Inc. (the “Company”) entered into a definitive agreement (the “Purchase Agreement”) with American Industrial Transport, Inc. (the “Buyer”) under which the Buyer agreed to purchase the assets of the Company's Rail Leasing business (“Rail Leasing”) and assume certain liabilities for a purchase price of approximately $543 million (the "Rail Leasing Sale") subject to final working capital adjustments. The Rail Leasing Sale was effective at the time of signing the agreement. The following unaudited Pro Forma Condensed Consolidated Balance Sheet, as of June 30, 2021, reflects the Company’s financial position as if the Rail Leasing Sale had occurred on that date. The following unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2021 and each of the fiscal years ended December 31, 2020, December 31, 2019, and December 31, 2018, reflect the Company’s results of operations as if the Rail Leasing Sale had occurred on December 31, 2017, and does not assume any interest income on cash proceeds.
Separate from the Rail Leasing Sale, the Company has communicated its intent to dispose of its rail repair business, including its network of 29 repair shops located across the U.S. The repair shops are expected to meet held for sale treatment by the Company's next fiscal quarter end. As such, the Rail Leasing Sale and the rail repair business (collectively, "Rail Disposal Group") will both be considered in the unaudited Pro Forma Condensed Consolidated Financial Statements.
These unaudited Pro Forma Condensed Consolidated Financial Statements and the accompanying notes are based upon and should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and Quarterly Report on Form 10-Q for the six months ended June 30, 2021. The accompanying unaudited Pro Forma Condensed Consolidated Balance Sheet and unaudited Pro Forma Condensed Consolidated Statements of Operations have been prepared in accordance with the regulations of the Securities and Exchange Commission (the "SEC") and should not be considered indicative of the financial position or results of operations that would have occurred if the Rail Leasing Sale had been consummated on the dates indicated, nor are they indicative of the future financial position or results of operations of the Company.
The following unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared by applying certain transaction accounting adjustments to the Company’s historical consolidated financial statements. The transaction accounting adjustments give effect to the Rail Leasing Sale.
The Purchase Agreement provided that the selection of certain assets sold and liabilities assumed would be subject to working capital adjustments between the Company and the Buyer subsequent to the signing of the Purchase Agreement. As a result of such adjustments, the unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2021 and the Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2021 reflect changes in the assets and liabilities. The amounts reflected in these unaudited Pro Forma Condensed Consolidated Financial Statements are preliminary estimates and assumptions and may change upon the finalization of the working capital account balances. Such changes are not expected to be significant.
The “Rail Disposal Group” column in the unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2021 and the unaudited Pro Forma Condensed Consolidated Statements of Operations for the annual periods presented represents the results of the Rail Disposal Group and other corporate charges that are directly attributable to the Rail Disposal Group and the assets and liabilities that were identified to be part of Rail Disposal Group.
The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are estimates and subject to change. The unaudited pro forma consolidated information is not intended to reflect what the Company’s consolidated financial position and results of operations would have been had the disposition occurred on the dates indicated and is not necessarily indicative of our future consolidated financial position and results of operations.
The pro forma adjustments remove all of the assets, liabilities and results of operations of the Rail Disposal Group, and give effect to various adjustments including cash proceeds and loss from the Rail Leasing Sale.
The Andersons, Inc.
Pro Forma Condensed Consolidated Balance Sheets
As of June 30, 2021
(unaudited)
| (in thousands) | Historical | Rail Disposal Group | Pro Forma Adjustments | Pro Forma | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Current assets: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 27,538 | $ | 35 | $ | 543,102 | (a) | $ | 570,605 | ||||||||||||||
| Accounts receivable, net | 721,575 | 17,061 | — | 704,514 | |||||||||||||||||||
| Inventories | 912,299 | 7,038 | — | 905,261 | |||||||||||||||||||
| Commodity derivative assets – current | 507,148 | — | — | 507,148 | |||||||||||||||||||
| Current assets associated with discontinued operations | — | — | 16,771 | (b) | 16,771 | ||||||||||||||||||
| Other current assets | 65,740 | 1,940 | (1,471) | (c) | 62,329 | ||||||||||||||||||
| Total current assets | 2,234,300 | 26,074 | 558,402 | 2,766,628 | |||||||||||||||||||
| Other assets: | |||||||||||||||||||||||
| Goodwill | 135,709 | 4,167 | — | 131,542 | |||||||||||||||||||
| Other intangible assets, net | 127,756 | 2,025 | — | 125,731 | |||||||||||||||||||
| Right of use assets, net | 61,299 | 2,159 | — | 59,140 | |||||||||||||||||||
| Long-term assets associated with discontinued operations | — | — | 21,463 | (b) | 21,463 | ||||||||||||||||||
| Other assets, net | 73,678 | 2,551 | — | 71,127 | |||||||||||||||||||
| Total other assets | 398,442 | 10,902 | 21,463 | 409,003 | |||||||||||||||||||
| Rail assets leased to others, net | 574,585 | 574,395 | — | 190 | |||||||||||||||||||
| Property, plant and equipment, net | 841,762 | 16,816 | — | 824,946 | |||||||||||||||||||
| Total assets | $ | 4,049,089 | $ | 628,187 | $ | 579,865 | $ | 4,000,767 | |||||||||||||||
| Liabilities and equity | |||||||||||||||||||||||
| Current liabilities: | |||||||||||||||||||||||
| Short-term debt | $ | 757,271 | $ | — | $ | — | $ | 757,271 | |||||||||||||||
| Trade and other payables | 547,169 | 1,989 | 129,990 | (d) | 675,170 | ||||||||||||||||||
| Customer prepayments and deferred revenue | 58,155 | 2,073 | (1,992) | (c) | 54,090 | ||||||||||||||||||
| Commodity derivative liabilities – current | 90,366 | — | — | 90,366 | |||||||||||||||||||
| Current maturities of long-term debt | 56,582 | 6,513 | — | 50,069 | |||||||||||||||||||
| Current liabilities associated with discontinued operations | — | — | 3,058 | (b) | 3,058 | ||||||||||||||||||
| Accrued expenses and other current liabilities | 181,015 | 9,670 | (2,469) | (e) | 168,876 | ||||||||||||||||||
| Total current liabilities | 1,690,558 | 20,245 | 128,587 | 1,798,900 | |||||||||||||||||||
| Long-term lease liabilities | 41,852 | 1,736 | — | 40,116 | |||||||||||||||||||
| Long-term debt, less current maturities | 866,454 | 28,845 | — | 837,609 | |||||||||||||||||||
| Deferred income taxes | 173,212 | — | (125,450) | (f) | 47,762 | ||||||||||||||||||
| Long-term liabilities associated with discontinued operations | — | — | 336 | (b) | 336 | ||||||||||||||||||
| Other long-term liabilities | 52,049 | 429 | — | 51,620 | |||||||||||||||||||
| Total liabilities | 2,824,125 | 51,255 | 3,473 | 2,776,343 | |||||||||||||||||||
| Total equity | 1,224,964 | — | (540) | (a) | 1,224,424 | ||||||||||||||||||
| Total liabilities and equity | $ | 4,049,089 | $ | 51,255 | $ | 2,933 | $ | 4,000,767 | |||||||||||||||
The Andersons, Inc.
Pro Forma Condensed Consolidated Statement of Operations
Six Months Ended June 30, 2021
(unaudited)
| (in thousands, except per share data) | Historical | Rail Disposal Group | Pro Forma | ||||||||||||||
| Sales and merchandising revenues | $ | 5,909,455 | $ | 74,103 | (g) | $ | 5,835,352 | ||||||||||
| Cost of sales and merchandising revenues | 5,612,699 | 54,095 | (g) | 5,558,604 | |||||||||||||
| Gross profit | 296,756 | 20,008 | (g) | 276,748 | |||||||||||||
| Operating, administrative and general expenses | 209,848 | 5,537 | (g) | 204,311 | |||||||||||||
| Interest expense, net | 26,623 | 6,161 | (g) | 20,462 | |||||||||||||
| Other income, net: | |||||||||||||||||
| Equity in earnings of affiliates, net | 2,639 | — | 2,639 | ||||||||||||||
| Other income, net | 12,849 | 1,872 | (g) | 10,977 | |||||||||||||
| Income (loss) before income taxes | 75,773 | 10,182 | 65,591 | ||||||||||||||
| Income tax provision (benefit) | 16,387 | 2,546 | (h) | 13,841 | |||||||||||||
| Net income (loss) from continuing operations | 59,386 | 7,636 | 51,750 | ||||||||||||||
| Net loss attributable to the noncontrolling interests from continuing operations | 780 | — | 780 | ||||||||||||||
| Net income (loss) attributable to The Andersons, Inc. from continuing operations | $ | 58,606 | $ | 7,636 | $ | 50,970 | |||||||||||
| Average number of shares outstanding - basic | 33,263 | 33,263 | |||||||||||||||
| Average number of shares outstanding - diluted | 33,579 | 33,579 | |||||||||||||||
| Per common share: | |||||||||||||||||
| Basic earnings attributable to The Andersons, Inc. common shareholders from continuing operations | $ | 1.76 | $ | 1.53 | |||||||||||||
| Diluted earnings attributable to The Andersons, Inc. common shareholders from continuing operations | $ | 1.74 | $ | 1.52 | |||||||||||||
The Andersons, Inc.
Pro Forma Condensed Consolidated Statement of Operations
Fiscal Year Ended December 31, 2020
(unaudited)
| (in thousands, except per share data) | Historical | Rail Disposal Group | Pro Forma | ||||||||||||||
| Sales and merchandising revenues | $ | 8,208,436 | $ | 136,869 | (g) | $ | 8,071,567 | ||||||||||
| Cost of sales and merchandising revenues | 7,803,514 | 96,871 | (g) | 7,706,643 | |||||||||||||
| Gross profit | 404,922 | 39,998 | (g) | 364,924 | |||||||||||||
| Operating, administrative and general expenses | 399,207 | 18,553 | (g) | 380,654 | |||||||||||||
| Interest expense, net | 51,275 | 16,472 | (g) | 34,803 | |||||||||||||
| Other income, net: | |||||||||||||||||
| Equity in earnings of affiliates, net | 638 | — | 638 | ||||||||||||||
| Other income, net | 20,448 | 2,885 | (g) | 17,563 | |||||||||||||
| Income (loss) before income taxes | (24,474) | 7,858 | (32,332) | ||||||||||||||
| Income tax provision (benefit) | (10,259) | 1,965 | (h) | (12,224) | |||||||||||||
| Net income (loss) from continuing operations | (14,215) | 5,893 | (20,108) | ||||||||||||||
| Net loss attributable to the noncontrolling interests from continuing operations | (21,925) | — | (21,925) | ||||||||||||||
| Net income (loss) attributable to The Andersons, Inc. from continuing operations | $ | 7,710 | $ | 5,893 | $ | 1,817 | |||||||||||
| Average number of shares outstanding - basic | 32,924 | 32,924 | |||||||||||||||
| Average number of shares outstanding - diluted | 33,189 | 33,189 | |||||||||||||||
| Per common share: | |||||||||||||||||
| Basic earnings attributable to The Andersons, Inc. common shareholders from continuing operations | $ | 0.23 | $ | 0.06 | |||||||||||||
| Diluted earnings attributable to The Andersons, Inc. common shareholders from continuing operations | $ | 0.23 | $ | 0.05 | |||||||||||||
The Andersons, Inc.
Pro Forma Condensed Consolidated Statement of Operations
Fiscal Year Ended December 31, 2019
(unaudited)
| (in thousands, except per share data) | Historical | Rail Disposal Group | Pro Forma | ||||||||||||||
| Sales and merchandising revenues | $ | 8,170,191 | $ | 159,033 | (g) | $ | 8,011,158 | ||||||||||
| Cost of sales and merchandising revenues | 7,652,299 | 100,211 | (g) | 7,552,088 | |||||||||||||
| Gross profit | 517,892 | 58,822 | (g) | 459,070 | |||||||||||||
| Operating, administrative and general expenses | 436,842 | 23,653 | (g) | 413,189 | |||||||||||||
| Asset Impairment | 41,212 | — | 41,212 | ||||||||||||||
| Interest expense, net | 59,691 | 15,549 | (g) | 44,142 | |||||||||||||
| Other income, net: | |||||||||||||||||
| Equity in earnings of affiliates, net | (7,359) | — | (7,359) | ||||||||||||||
| Gain from remeasurement of equity method investments, net | 35,214 | — | 35,214 | ||||||||||||||
| Other income, net | 20,109 | 1,583 | (g) | 18,526 | |||||||||||||
| Income (loss) before income taxes | 28,111 | 21,203 | 6,908 | ||||||||||||||
| Income tax provision (benefit) | 13,051 | 5,301 | (h) | 7,750 | |||||||||||||
| Net income (loss) from continuing operations | 15,060 | 15,902 | (842) | ||||||||||||||
| Net loss attributable to the noncontrolling interests from continuing operations | (3,247) | — | (3,247) | ||||||||||||||
| Net income (loss) attributable to The Andersons, Inc. from continuing operations | $ | 18,307 | $ | 15,902 | $ | 2,405 | |||||||||||
| Average number of shares outstanding - basic | 32,570 | 32,570 | |||||||||||||||
| Average number of shares outstanding - diluted | 33,096 | 33,096 | |||||||||||||||
| Per common share: | |||||||||||||||||
| Basic earnings attributable to The Andersons, Inc. common shareholders from continuing operations | $ | 0.56 | $ | 0.07 | |||||||||||||
| Diluted earnings attributable to The Andersons, Inc. common shareholders from continuing operations | $ | 0.55 | $ | 0.07 | |||||||||||||
The Andersons, Inc.
Pro Forma Condensed Consolidated Statement of Operations
Fiscal Year Ended December 31, 2018
(unaudited)
| (in thousands, except per share data) | Historical | Rail Disposal Group | Pro Forma | ||||||||||||||
| Sales and merchandising revenues | $ | 3,045,382 | $ | 164,742 | (g) | $ | 2,880,640 | ||||||||||
| Cost of sales and merchandising revenues | 2,743,377 | 112,480 | (g) | 2,630,897 | |||||||||||||
| Gross profit | 302,005 | 52,262 | (g) | 249,743 | |||||||||||||
| Operating, administrative and general expenses | 257,872 | 26,039 | (g) | 231,833 | |||||||||||||
| Asset Impairment | 6,272 | — | 6,272 | ||||||||||||||
| Interest expense, net | 27,848 | 10,703 | (g) | 17,145 | |||||||||||||
| Other income, net: | |||||||||||||||||
| Equity in earnings of affiliates, net | 27,141 | — | 27,141 | ||||||||||||||
| Other income, net | 16,002 | 3,516 | (g) | 12,486 | |||||||||||||
| Income (loss) before income taxes | 53,156 | 19,036 | 34,120 | ||||||||||||||
| Income tax provision (benefit) | 11,931 | 4,759 | (h) | 7,172 | |||||||||||||
| Net income (loss) from continuing operations | 41,225 | 14,277 | 26,948 | ||||||||||||||
| Net loss attributable to the noncontrolling interests from continuing operations | (259) | — | (259) | ||||||||||||||
| Net income (loss) attributable to The Andersons, Inc. from continuing operations | $ | 41,484 | $ | 14,277 | $ | 27,207 | |||||||||||
| Average number of shares outstanding - basic | 28,258 | 28,258 | |||||||||||||||
| Average number of shares outstanding - diluted | 28,452 | 28,452 | |||||||||||||||
| Per common share: | |||||||||||||||||
| Basic earnings attributable to The Andersons, Inc. common shareholders from continuing operations | $ | 1.47 | $ | 0.96 | |||||||||||||
| Diluted earnings attributable to The Andersons, Inc. common shareholders from continuing operations | $ | 1.46 | $ | 0.96 | |||||||||||||
Notes to Unaudited Pro Forma Consolidated Financial Statements
(a) Reflects the estimated after-tax loss related to the Rail Leasing Sale as of August 16, 2021, using an estimated tax rate of 25%. The actual net loss will differ from the pro forma estimated loss due to the difference in timing between the closing date for the unaudited Pro Forma Condensed Consolidated Financial Statements and the cut-off date for the finalization of working capital and taxes payable adjustments. Such changes are not expected to be significant. The following table reflects the components of the after-tax loss.
| (in thousands) | |||||
| Cash proceeds | $ | 543,102 | |||
| Transfer tax liability assumed by the buyer | (1,718) | ||||
| Net assets sold | (539,454) | ||||
| Transaction costs | (2,650) | ||||
| Estimated pre-tax loss on sale | (720) | ||||
| Estimated tax benefit from loss on sale | 180 | ||||
| Estimated after-tax loss on sale | $ | (540) | |||
(b) These adjustments are related to the rail repair shops that weren't a part of the Rail Leasing Sale, but were moved to discontinued operations.
(c) These adjustments reflect the elimination the modified working capital adjustments associated with the Rail Leasing Sale.
(d) Represents the addition of an estimated tax payable of approximately $127.3 million combined with approximately $2.7 million transaction costs incurred in connection with the Rail Leasing Sale.
(e) Includes the removal of an estimated $1.7 million transfer tax liability payable for U.S. and foreign indirect taxes resulting from the Rail Leasing Sale and a $0.8 million modified working capital adjustment.
(f) Reflects estimates of the deferred tax liabilities recognized in connection with the Rail Leasing Sale offset with the utilization of certain tax attributes.
(g) Amounts reflect the pro forma effect of eliminating the results of operations directly attributable to the Rail Disposal Group.
(h) Reflects an estimated blended 25% effective tax rate for all periods which are materially consistent with actual effective tax rates for the Rail Disposal Group.