Supplemental Guarantor Information | 3 Months Ended |
Mar. 31, 2014 |
Supplemental Guarantor Information [Abstract] | ' |
Supplemental Guarantor Information | ' |
Supplemental Guarantor Information |
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Each of the material domestic direct and indirect wholly-owned subsidiaries of the Company (the “Guarantor Subsidiaries”) has fully and unconditionally guaranteed, on a joint and several basis, to pay principal, premium, and interest with respect to the Company's 8.125% Senior Notes due 2021. Each of the Guarantor Subsidiaries is “100% owned,” as defined by Rule 3-10(h)(1) of Regulation S-X. |
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The guarantee of a Guarantor Subsidiary will automatically terminate, and the obligations of such Guarantor Subsidiary under its guarantee of 8.125% Senior Notes due 2021 will be released: |
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(a) in the event of any sale or other disposition of all or substantially all of the assets or all of the capital stock of any Subsidiary Guarantor, by way of merger, consolidation or otherwise; |
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(b) upon designation of any Subsidiary Guarantor as an “unrestricted subsidiary” (as defined in the indenture governing the 8.125% Senior Notes due 2021 (the “Indenture”); |
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(c) upon defeasance or satisfaction and discharge of the Indenture; and |
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(d) upon the release of such Subsidiary Guarantor's guarantees under all credit facilities of the Company (other than a release as a result of payment under or a discharge of such guarantee). |
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Effective in the third quarter of 2013, Southwest Steel Processing LLC (“SSC”) was released from its guarantee of the 8.125% Senior Notes due 2021 in conjunction with its designation as an "Unrestricted Subsidiary" under the Indenture and the sale of 25% of its business. During the third quarter of 2013, all the outstanding equity interests of a non-core business unit in the Supply Technologies segment was sold and released as a guarantor of the Company's 8.125% Senior Notes due 2021 under customary conditions. As a result of the aforementioned releases from the guarantee to the Company's 8.125% Senior Notes due 2021 all periods presented have been restated to reflect SSP and the disposed Supply Technologies business unit as non-guarantor subsidiaries. |
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The following supplemental condensed consolidating financial statements present condensed consolidating balance sheets as of March 31, 2014 and December 31, 2013, condensed consolidating statements of income for the three months ended March 31, 2014 and 2013, condensed consolidating statements of cash flows for the three months ended March 31, 2014 and 2013 and reclassification and elimination entries necessary to consolidate the Parent and all of its subsidiaries. The “Parent” reflected in the accompanying supplemental guarantor information is Park-Ohio Industries, Inc. |
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| Condensed Consolidating Balance Sheet |
| 31-Mar-14 |
| Parent | | Combined | | Combined | | Reclassifications/ | | Consolidated |
Guarantor | Non-Guarantor | Eliminations |
Subsidiaries | Subsidiaries | |
| (In millions) |
ASSETS |
Current assets: | | | | | | | | | |
Cash and cash equivalents | $ | — | | | $ | 1.5 | | | $ | 45.3 | | | $ | — | | | $ | 46.8 | |
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Accounts receivable, net | — | | | 139.5 | | | 45 | | | — | | | 184.5 | |
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Inventories, net | — | | | 180.7 | | | 46.8 | | | — | | | 227.5 | |
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Deferred tax assets | — | | | 24.3 | | | 1.3 | | | — | | | 25.6 | |
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Unbilled contract revenue | — | | | 8.2 | | | 1.2 | | | — | | | 9.4 | |
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Other current assets | 0.6 | | | 14.5 | | | 3.8 | | | — | | | 18.9 | |
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Total current assets | 0.6 | | | 368.7 | | | 143.4 | | | — | | | 512.7 | |
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Investment in subsidiaries | 425.1 | | | 153.3 | | | — | | | (578.4 | ) | | — | |
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Intercompany advances | 167.2 | | | 14.7 | | | 140.6 | | | (322.5 | ) | | — | |
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Property, plant and equipment, net | 5.8 | | | 92.2 | | | 15.9 | | | — | | | 113.9 | |
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Goodwill | — | | | 51.3 | | | 9.1 | | | — | | | 60.4 | |
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Intangible assets, net | — | | | 51.5 | | | 13.7 | | | — | | | 65.2 | |
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Other long-term assets | 78 | | | 3.1 | | | 1.1 | | | — | | | 82.2 | |
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Total assets | $ | 676.7 | | | $ | 734.8 | | | $ | 323.8 | | | $ | (900.9 | ) | | $ | 834.4 | |
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LIABILITIES AND SHAREHOLDER'S EQUITY |
Current liabilities: | | | | | | | | | |
Trade accounts payable | $ | 0.8 | | | $ | 100.9 | | | $ | 20.6 | | | $ | — | | | $ | 122.3 | |
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Payable to affiliates | — | | | — | | | 1.6 | | | — | | | 1.6 | |
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Accrued expenses | 16.5 | | | 45 | | | 23.6 | | | — | | | 85.1 | |
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Current portion of long-term debt | 3.6 | | | 0.6 | | | 0.3 | | | — | | | 4.5 | |
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Current portion of other postretirement benefits | 1.7 | | | — | | | — | | | — | | | 1.7 | |
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Total current liabilities | 22.6 | | | 146.5 | | | 46.1 | | | — | | | 215.2 | |
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Long-term liabilities, less current portion: | | | | | | | | | |
Senior Notes | 250 | | | — | | | — | | | — | | | 250 | |
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Credit facility | 128.7 | | | — | | | — | | | — | | | 128.7 | |
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Other long-term debt | — | | | 2.5 | | | 0.4 | | | — | | | 2.9 | |
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Deferred tax liabilities | — | | | 43.8 | | | 2.5 | | | — | | | 46.3 | |
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Other postretirement benefits and other long-term liabilities | 23 | | | 7.6 | | | 0.9 | | | — | | | 31.5 | |
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Total long-term liabilities | 401.7 | | | 53.9 | | | 3.8 | | | — | | | 459.4 | |
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Intercompany advances | 92.6 | | | 124.6 | | | 105.3 | | | (322.5 | ) | | — | |
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Total Park-Ohio Industries Inc. and Subsidiaries shareholder's equity | 154.6 | | | 409.8 | | | 163.4 | | | (573.2 | ) | | 154.6 | |
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Noncontrolling interest | 5.2 | | | — | | | 5.2 | | | (5.2 | ) | | 5.2 | |
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Total shareholder's equity | 159.8 | | | 409.8 | | | 168.6 | | | (578.4 | ) | | 159.8 | |
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Total liabilities and shareholder’s equity | $ | 676.7 | | | $ | 734.8 | | | $ | 323.8 | | | $ | (900.9 | ) | | $ | 834.4 | |
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| Condensed Consolidating Balance Sheet |
| 31-Dec-13 |
| Parent | | Combined | | Combined | | Reclassifications/ | | Consolidated |
Guarantor | Non-Guarantor | Eliminations |
Subsidiaries | Subsidiaries | |
| (In millions) |
ASSETS |
Current assets: | | | | | | | | | |
Cash and cash equivalents | $ | — | | | $ | 0.7 | | | $ | 43 | | | $ | — | | | $ | 43.7 | |
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Accounts receivable, net | — | | | 124 | | | 41.6 | | | — | | | 165.6 | |
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Inventories, net | — | | | 175.5 | | | 45.9 | | | — | | | 221.4 | |
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Deferred tax assets | — | | | 23.3 | | | 1.3 | | | — | | | 24.6 | |
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Unbilled contract revenue | — | | | 8.5 | | | 0.2 | | | — | | | 8.7 | |
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Other current assets | 0.7 | | | 16.1 | | | 5.1 | | | — | | | 21.9 | |
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Total current assets | 0.7 | | | 348.1 | | | 137.1 | | | — | | | 485.9 | |
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Investment in subsidiaries | 403.8 | | | 149.8 | | | — | | | (553.6 | ) | | — | |
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Intercompany advances | 158.1 | | | 12 | | | 143 | | | (313.1 | ) | | — | |
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Property, plant and equipment, net | 5.8 | | | 93.3 | | | 15.4 | | | — | | | 114.5 | |
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Goodwill | — | | | 51.3 | | | 9.1 | | | — | | | 60.4 | |
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Intangible assets, net | — | | | 52.3 | | | 13.9 | | | — | | | 66.2 | |
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Other long-term liabilities | 77.1 | | | 2.7 | | | 0.6 | | | — | | | 80.4 | |
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Total assets | $ | 645.5 | | | $ | 709.5 | | | $ | 319.1 | | | $ | (866.7 | ) | | $ | 807.4 | |
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LIABILITIES AND SHAREHOLDER'S EQUITY |
Current liabilities: | | | | | | | | | |
Trade accounts payable | $ | 1.3 | | | $ | 89.6 | | | $ | 22 | | | $ | — | | | $ | 112.9 | |
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Payable to affiliates | — | | | — | | | 1.6 | | | — | | | 1.6 | |
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Accrued expenses | 8.9 | | | 47.9 | | | 22.7 | | | — | | | 79.5 | |
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Current portion of long-term debt | 3.6 | | | 0.6 | | | 0.2 | | | — | | | 4.4 | |
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Current portion of other postretirement benefits | 1.7 | | | — | | | — | | | — | | | 1.7 | |
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Total current liabilities | 15.5 | | | 138.1 | | | 46.5 | | | — | | | 200.1 | |
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Long-term liabilities, less current portion: | | | | | | | | | |
Senior Notes | 250 | | | — | | | — | | | — | | | 250 | |
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Credit facility | 126.2 | | | — | | | — | | | — | | | 126.2 | |
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Other long-term debt | — | | | 2.6 | | | 0.4 | | | — | | | 3 | |
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Deferred tax liabilities | — | | | 42.8 | | | 2.5 | | | — | | | 45.3 | |
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Other postretirement benefits and other long-term liabilities | 23.6 | | | 7.6 | | | 1 | | | — | | | 32.2 | |
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Total long-term liabilities | 399.8 | | | 53 | | | 3.9 | | | — | | | 456.7 | |
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Intercompany advances | 79.6 | | | 129.3 | | | 104.2 | | | (313.1 | ) | | — | |
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Total Park-Ohio Industries Inc. and Subsidiaries shareholder's equity | 145.6 | | | 389.1 | | | 159.5 | | | (548.6 | ) | | 145.6 | |
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Noncontrolling interest | 5 | | | — | | | 5 | | | (5.0 | ) | | 5 | |
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Total shareholder's equity | 150.6 | | | 389.1 | | | 164.5 | | | (553.6 | ) | | 150.6 | |
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Total liabilities and shareholder’s equity | $ | 645.5 | | | $ | 709.5 | | | $ | 319.1 | | | $ | (866.7 | ) | | $ | 807.4 | |
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| Consolidating Statement of Operations |
and Comprehensive Income (Loss) |
| Three Months Ended March 31, 2014 |
| Parent | | Combined | | Combined | | Eliminations | | Consolidated |
Guarantor | Non-Guarantor |
Subsidiaries | Subsidiaries |
| (In millions) |
Net sales | $ | — | | | $ | 256.9 | | | $ | 60.9 | | | $ | — | | | $ | 317.8 | |
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Cost of sales | — | | | 215.7 | | | 46.1 | | | — | | | 261.8 | |
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Gross profit | — | | | 41.2 | | | 14.8 | | | — | | | 56 | |
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Selling, general and administrative expenses | 6.8 | | | 18.8 | | | 7.3 | | | — | | | 32.9 | |
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Income (loss) from subsidiaries | 23.7 | | | 4.7 | | | — | | | (28.4 | ) | | — | |
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Operating income (loss) | 16.9 | | | 27.1 | | | 7.5 | | | (28.4 | ) | | 23.1 | |
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Interest expense | 6.4 | | | — | | | 0.6 | | | — | | | 7 | |
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Income (loss) from continuing operations before income taxes | 10.5 | | | 27.1 | | | 6.9 | | | (28.4 | ) | | 16.1 | |
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Income tax expense | — | | | 3.9 | | | 1.7 | | | — | | | 5.6 | |
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Net income (loss) from continuing operations | 10.5 | | | 23.2 | | | 5.2 | | | (28.4 | ) | | 10.5 | |
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Loss from discontinued operations, net of taxes | — | | | — | | | — | | | — | | | — | |
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Net income (loss) | 10.5 | | | 23.2 | | | 5.2 | | | (28.4 | ) | | 10.5 | |
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Net income attributable to noncontrolling interest | (0.2 | ) | | — | | | (0.2 | ) | | 0.2 | | | (0.2 | ) |
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Net income (loss) attributable to ParkOhio common shareholder | $ | 10.3 | | | $ | 23.2 | | | $ | 5 | | | $ | (28.2 | ) | | $ | 10.3 | |
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Other comprehensive income (loss) (see note 15): | | | | | | | | | |
Net income (loss) | $ | 10.5 | | | $ | 23.2 | | | $ | 5.2 | | | $ | (28.4 | ) | | $ | 10.5 | |
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Foreign currency translation adjustments | (0.4 | ) | | — | | | (0.4 | ) | | 0.4 | | | (0.4 | ) |
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Recognition of actuarial loss, net of tax | (0.1 | ) | | (0.1 | ) | | — | | | 0.1 | | | (0.1 | ) |
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Comprehensive income (loss), net of tax | 10 | | | 23.1 | | | 4.8 | | | (27.9 | ) | | 10 | |
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Comprehensive income attributable to noncontrolling interest | (0.2 | ) | | — | | | (0.2 | ) | | 0.2 | | | (0.2 | ) |
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Comprehensive income (loss) attributable to ParkOhio common shareholder | $ | 9.8 | | | $ | 23.1 | | | $ | 4.6 | | | $ | (27.7 | ) | | $ | 9.8 | |
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| Consolidating Statement of Operations |
and Comprehensive Income (Loss) |
| Three Months Ended March 31, 2013 |
| Parent | | Combined | | Combined | | Eliminations | | Consolidated |
Guarantor | Non-Guarantor |
Subsidiaries | Subsidiaries |
| (In millions) |
Net sales | $ | — | | | $ | 236.2 | | | $ | 46.8 | | | $ | — | | | $ | 283 | |
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Cost of sales | — | | | 196.3 | | | 35.1 | | | — | | | 231.4 | |
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Gross profit | — | | | 39.9 | | | 11.7 | | | — | | | 51.6 | |
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Selling, general and administrative expenses | 4.5 | | | 17.7 | | | 6.1 | | | — | | | 28.3 | |
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Income (loss) from subsidiaries | 21.6 | | | 3.4 | | | — | | | (25.0 | ) | | — | |
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Operating income (loss) | 17.1 | | | 25.6 | | | 5.6 | | | (25.0 | ) | | 23.3 | |
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Interest expense | 6.3 | | | 0.1 | | | 0.1 | | | — | | | 6.5 | |
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Income (loss) from continuing operations before income taxes | 10.8 | | | 25.5 | | | 5.5 | | | (25.0 | ) | | 16.8 | |
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Income tax expense | — | | | 4.6 | | | 1.4 | | | — | | | 6 | |
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Net income (loss) from continuing operations | 10.8 | | | 20.9 | | | 4.1 | | | (25.0 | ) | | 10.8 | |
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Income (loss) from discontinued operations, net of taxes | (0.4 | ) | | — | | | (0.4 | ) | | 0.4 | | | (0.4 | ) |
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Net income (loss) | 10.4 | | | 20.9 | | | 3.7 | | | (24.6 | ) | | 10.4 | |
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Net income attributable to noncontrolling interest | — | | | — | | | — | | | — | | | — | |
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Net income (loss) attributable to ParkOhio common shareholder | $ | 10.4 | | | $ | 20.9 | | | $ | 3.7 | | | $ | (24.6 | ) | | $ | 10.4 | |
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Other comprehensive income (loss) (see note 15): | | | | | | | | | |
Net income (loss) | $ | 10.4 | | | $ | 20.9 | | | $ | 3.7 | | | $ | (24.6 | ) | | $ | 10.4 | |
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Foreign currency translation adjustments | (2.2 | ) | | — | | | (2.2 | ) | | 2.2 | | | (2.2 | ) |
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Recognition of actuarial loss, net of tax | 0.4 | | | 0.4 | | | — | | | (0.4 | ) | | 0.4 | |
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Comprehensive income (loss), net of tax | 8.6 | | | 21.3 | | | 1.5 | | | (22.8 | ) | | 8.6 | |
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Comprehensive income attributable to noncontrolling interest | — | | | — | | | — | | | — | | | — | |
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Comprehensive income (loss) attributable to ParkOhio common shareholder | $ | 8.6 | | | $ | 21.3 | | | $ | 1.5 | | | $ | (22.8 | ) | | $ | 8.6 | |
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| Condensed Consolidating Statement of |
Cash Flows |
| Three Months Ended March 31, 2014 |
| Parent | | Combined | | Combined | | Eliminations | | Consolidated |
Guarantor | Non-Guarantor |
Subsidiaries | Subsidiaries |
| (In millions) |
Net cash provided (used) by operating activities | $ | (2.5 | ) | | $ | 10.8 | | | $ | 0.2 | | | $ | (2.7 | ) | | $ | 5.8 | |
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INVESTING ACTIVITIES | | | | | | | | | |
Purchases of property, plant and equipment | — | | | (2.1 | ) | | (1.0 | ) | | — | | | (3.1 | ) |
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Net cash used in investing activities | — | | | (2.1 | ) | | (1.0 | ) | | — | | | (3.1 | ) |
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FINANCING ACTIVITIES | | | | | | | | | |
Intercompany account change | 2.4 | | | (7.8 | ) | | 2.7 | | | 2.7 | | | — | |
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Payments on term loans and other debt | (0.9 | ) | | (0.1 | ) | | (0.1 | ) | | — | | | (1.1 | ) |
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Proceeds from revolving credit and long term debt | 3.5 | | | — | | | — | | | — | | | 3.5 | |
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Dividends paid to parent | (2.5 | ) | | — | | | — | | | — | | | (2.5 | ) |
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Net cash (used) provided by financing activities | 2.5 | | | (7.9 | ) | | 2.6 | | | 2.7 | | | (0.1 | ) |
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Effect of exchange rate changes on cash | — | | | — | | | 0.5 | | | — | | | 0.5 | |
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Increase in cash and cash equivalents | — | | | 0.8 | | | 2.3 | | | — | | | 3.1 | |
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Cash and cash equivalents at beginning of period | — | | | 0.7 | | | 43 | | | — | | | 43.7 | |
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Cash and cash equivalents at end of period | $ | — | | | $ | 1.5 | | | $ | 45.3 | | | $ | — | | | $ | 46.8 | |
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| Condensed Consolidating Statement of |
Cash Flows |
| Three Months Ended March 31, 2013 |
| Parent | | Combined | | Combined | | Eliminations | | Consolidated |
Guarantor | Non-Guarantor |
Subsidiaries | Subsidiaries |
| (In millions) |
Net cash provided (used) by operating activities | $ | (7.2 | ) | | $ | 22.9 | | | $ | 2.6 | | | $ | (1.8 | ) | | $ | 16.5 | |
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INVESTING ACTIVITIES | | | | | | | | | |
Purchases of property, plant and equipment | — | | | (5.3 | ) | | (0.5 | ) | | — | | | (5.8 | ) |
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Proceeds from sale and leaseback transactions | — | | | 1.9 | | | — | | | — | | | 1.9 | |
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Net cash used in investing activities | — | | | (3.4 | ) | | (0.5 | ) | | — | | | (3.9 | ) |
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FINANCING ACTIVITIES | | | | | | | | | |
Intercompany account change | 15 | | | (19.6 | ) | | 2.8 | | | 1.8 | | | — | |
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Payments on term loans and other debt | (0.9 | ) | | — | | | — | | | — | | | (0.9 | ) |
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Proceeds from revolving credit facility | (3.7 | ) | | — | | | — | | | — | | | (3.7 | ) |
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Dividends paid to parent | (3.2 | ) | | — | | | — | | | — | | | (3.2 | ) |
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Net cash (used) provided by financing activities | 7.2 | | | (19.6 | ) | | 2.8 | | | 1.8 | | | (7.8 | ) |
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Effect of exchange rate changes on cash | — | | | — | | | (1.1 | ) | | — | | | (1.1 | ) |
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Increase (decrease) in cash and cash equivalents | — | | | (0.1 | ) | | 3.8 | | | — | | | 3.7 | |
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Cash and cash equivalents at beginning of period | — | | | 0.2 | | | 42.2 | | | — | | | 42.4 | |
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Cash and cash equivalents at end of period | $ | — | | | $ | 0.1 | | | $ | 46 | | | $ | — | | | $ | 46.1 | |
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