Universal Logistics 8K Index to Financial Statements | ULH 1 Oct 12

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”) by and among LINC Logistics Company (“LINC”), Universal Truckload Services, Inc. (“Univesal”), Upton Merger Sub I, Inc., Upton Merger Sub II, LLC, Matthew T. Moroun, Matthew T. Moroun in his capacity as Trustee of the MJM 2012 Annuity Trust dated April 30, 2012 (the “Annuity Trust”), Manuel J. Moroun in his capacity as Trustee of the Maunel J. Moroun Revocable Trust U/A dated March 24, 1977, as amended and restated on December 22, 2004 (the “MJM Revocable Trust”), Matthew T. Moroun in his capacity as agent and attorney in fact for the Company Shareholder (as defined therein) and Manuel J. Moroun, solely with respect to the Applicable Sections (as defined therein), Universal has completed the acquisition of LINC and each outstanding share of LINC common stock was converted into the right to receive consideration consisting of 0.700 of a share of Universal’s common stock and cash in lieu of fractional shares. This resulted in the issuance of 14,527,332 shares of Universal’s common stock and payment of $27.60 of cash in lieu of fractional shares. In connection with the transactions, the current and former shareholders of LINC (or entities related to them) received cash payment in respect of promissory notes and dividends payable outstanding under previously declared dividends. As a result of the mergers contemplated by the Merger Agreement, LINC became a wholly-owned subsidiary of Universal.

The following unaudited pro forma condensed combined financial statements are derived from and should be read in conjunction with historical consolidated financial statements and related notes of Universal in its Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and its Quarterly Report on Form 10-Q for the fiscal period ended June 30, 2012, as previously filed with the Securities and Exchange Commission (the “SEC”), and LINC, that are included as Exhibit 99.1 to this Form 8-K . The unaudited pro forma condensed consolidated financial statements illustrate the effects of Universal’s acquisition of LINC, the termination of LINC’s existence and S-corporation status and acquisition by a C-corporation, the payoff of promissory notes and dividends payable outstanding to LINC’s former shareholders under previously declared dividends, and the effects of the anticipated borrowings under the new credit agreement. In connection with the acquisition, Universal has entered into a new credit agreement consisting of a $220 million senior secured loan facility. The unaudited pro forma condensed combined balance sheet as of June 30, 2012, and the unaudited pro forma condensed combined statement of income for the twenty-six weeks ended June 30, 2012 and July 2, 2011, and for each of the three years in the three-year period ended December 31, 2011, are presented herein.

The unaudited pro forma condensed combined balance sheet as of June 30, 2012 gives effect to the acquisition, to the termination of LINC’s existence and S-corporation status and acquisition by a C-corporation, to the payoff of promissory notes and dividends payable outstanding to LINC’s former shareholders under previously declared dividends, and to the anticipated borrowings under the new credit agreement as if it occurred as of that date. The unaudited pro forma condensed combined statements of income give effect to the acquisition of LINC and to the termination of LINC’s S-corporation status and acquisition by a C-corporation as if they occurred on January 1, 2009. The unaudited pro forma condensed combined balance sheet as of June 30, 2012 and the unaudited pro forma condensed combined statement of income for the twenty-six weeks ended June 30, 2012 and July 2, 2011, and for the fiscal year ended December 31, 2011 give effect of the anticipated borrowings under the new credit agreement and the impact on interest expense assuming the retirement of LINC’s outstanding debt as if it occurred on January 1, 2011.

The unaudited pro forma condensed combined financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes and do not purport to represent what the financial position or results of operations would actually have been if the acquisition occurred as of the dates indicated or what financial position or results would be for any future periods. The unaudited pro forma condensed combined financial statements are based upon the respective historical consolidated financial statements of Universal and LINC, and should be read in conjunction with (1) the accompanying notes to the unaudited pro forma condensed combined financial statements, (2) the unaudited condensed consolidated financial statements for the twenty-six weeks ended June 30, 2012 and notes thereto of Universal included in Universal’s Quarterly Report on Form 10-Q, as previously filed with the SEC, (3) the audited consolidated financial statements for the three-year period ended December 31, 2011 and notes thereto included in Universal’s Annual Report on Form 10-K, as previously filed with the SEC, (4) the unaudited condensed consolidated financial statements for the twenty-six weeks ended June 30, 2012 and notes thereto of LINC, that are included as Exhibit 99.1 to this Form 8-K, and (5) the audited consolidated financial statements and notes thereto for the three-year period ended December 31, 2011 of LINC, that are included as Exhibit 99.1 to this Form 8-K.

Universal is majority owned by the Moroun family and entities they control and LINC was 100% owned by the Moroun family and entities they control. Under United States Generally Accepted Accounting Principles, the mergers contemplated by the Merger Agreement will be accounted for using the guidance for transactions between entities under common control as described in Accounting Standards Codification (“ASC”) Topic 805—“Business Combinations.” As such, the unaudited pro forma condensed combined financial information was prepared in accordance with ASC Topic 805-30 and Universal has recorded the recognized assets and liabilities of LINC at their carrying amounts at the date of transfer.

The unaudited pro forma condensed combined statements of income also include certain adjustments, including reclassification of items to conform to a consolidated presentation between Universal and LINC and elimination of intercompany transactions.

The unaudited pro forma condensed combined statements of income do not include the impacts of any revenue, cost or other operating synergies that may result from the acquisition or any related restructuring costs. Cost savings, if achieved, could result from material sourcing and elimination of redundant costs, including headcount and facilities.

Based on Universal’s review of LINC’s summary of significant accounting policies disclosed in LINC’s financial statements, the nature and amount of any adjustments to the historical financial statements of LINC to conform their accounting policies to those of Universal are not expected to be significant. Further review of LINC’s accounting policies and financial statements may result in required revisions to LINC’s policies and classifications to conform to Universal.

See the accompanying notes to the unaudited pro forma condensed combined financial statements. The pro forma adjustments are explained in Note 2—Pro Forma Adjustments.

UNIVERSAL TRUCKLOAD SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2012

(In thousands)


	Universal			LINC			Pro Forma Adjustments			Consolidated			Tax Adjustments			Pro forma			Proposed Financing Adjustments			Pro Forma as Adjusted
Current Assets:
Cash and cash equivalents	$	226		$	6,894		$	—		$	7,120					$	7,120			3,543	(c)	$	8,513
																				(150	)(k)
																				(2,000	)(l)
Marketable securities		14,201			—						14,201						14,201						14,201
Accounts receivable—net		80,750			41,332			(348	)(a)		121,734						121,734						121,734
Other receivables		2,205			—			348	(a)		2,553						2,553						2,553
Due from CenTra and affiliates		922			461			(67	)(b)		1,316						1,316						1,316
Prepaid income taxes		2,699			—						2,699						2,699						2,699
Prepaid expenses and other		5,478			5,485						10,963						10,963			(637	)(k)		10,326
Deferred income taxes		3,882			156						4,038			902	(g)		4,940						4,940

Total current assets		110,363			54,328			(67	)		164,624			902			165,526			756			166,282

Property and equipment		137,414			103,175						240,589						240,589						240,589
Less accumulated depreciation		(45,898	)		(76,492	)					(122,390	)					(122,390	)					(122,390	)

Property and equipment—net		91,516			26,683			—			118,199			—			118,199			—			118,199

Goodwill		17,965			—						17,965						17,965						17,965
Intangible assets—net		8,635			—						8,635						8,635						8,635
Notes receivable—affiliates		—			5,000						5,000						5,000			(5,000	)(c)		—
Other assets		3,292			191						3,483						3,483			1,295	(c)		4,778

Total assets	$	231,771		$	86,202		$	(67	)	$	317,906		$	902		$	318,808		$	(2,949	)	$	315,859

Current liabilities:
Current portion of long-term debt	$	—		$	14,514		$	—		$	14,514					$	14,514		$	(14,514	)(c)	$	4,571
																				4,571	(c)
Accounts payable		35,113			13,978			5,595	(a)		54,686						54,686						54,686
Due to CenTra and affiliates		564			2,531			(67	)(b)		3,028						3,028						3,028
Accrued expenses and other current liabilities		23,067			12,946			(5,363	)(a)		30,650						30,650						30,650
Line of credit		6,424			—						6,424						6,424						6,424

Total current liabilities		65,168			43,969			165			109,302			—			109,302			(9,943	)		99,359

Long-term liabilities
Long-term debt		—			68,290						68,290						68,290			(43,290	)(c)		145,571
																				(25,000	)(c)
																				145,571	(c)
Dividend payable		—			24,500						24,500						24,500			(22,500	)(c)		—
																				(2,000	)(l)
Deferred income taxes		10,738			10						10,748			4,139	(g)		14,887						14,887
Other long-term liabilities		1,609			3,851			(232	)(a)		5,228						5,228						5,228

Total long-term liabilities		12,347			96,651			(232	)		108,766			4,139			112,905			52,781			165,686

Shareholders’ equity
Common stock		16,122			—			14,527	(f)		30,649						30,649						30,649
Paid-in capital (distributions in excess of capital)		79,914			—			(14,527	)(f)		11,354						11,354			(45,000	)(h)		(33,646	)
								(54,033	)(j)
Treasury stock, at cost		(9,316	)		—						(9,316	)					(9,316	)					(9,316	)
Retained earnings (accumulated deficit)		65,914			(54,033	)		54,033	(j)		65,914			(3,237	)(g)		62,677			(787	)(k)		61,890
Accumulated other comprehensive income (loss)		1,622			(385	)					1,237						1,237						1,237

Total shareholders’ equity		154,256			(54,418	)		—			99,838			(3,237	)		96,601			(45,787	)		50,814

Total liabilities and shareholders’ equity	$	231,771		$	86,202		$	(67	)	$	317,906		$	902		$	318,808		$	(2,949	)	$	315,859

See the accompanying notes to the unaudited pro forma condensed combined financial statements which are an integral part of these statements. The pro forma adjustments are explained in Note 2—Pro Forma Adjustments.

UNIVERSAL TRUCKLOAD SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE TWENTY-SIX WEEKS ENDED JUNE 30, 2012

(In thousands, except share data)


	Universal			LINC			Pro Forma Adjustments			Consolidated			Tax Adjustments			Pro Forma			Proposed Financing Pro Forma			Pro Forma as Adjusted
Operating Revenues:
Truckload	$	214,101		$	59,990			6,386	(a)	$	280,477					$	280,477					$	280,477
Brokerage		92,415			—			3,683	(a)		96,098						96,098						96,098
Value added		—			89,752						89,752						89,752						89,752
Specialized services		—			10,074			(10,069	)(a)		—						—						—
								(5	)(b)
Intermodal		54,387			—						54,387						54,387						54,387

Total operating revenues		360,903			159,816			(5	)		520,714			—			520,714						520,714
Operating Expenses:
Purchased transportation and equipment rent		276,873			25,104			(4,937	)(a)		297,040						297,040						297,040
Direct personnel and related benefits		—			68,264			879	(a)		69,143						69,143						69,143
Commission expense		20,625			—			315	(a)		20,940						20,940						20,940
Operating expenses (exclusive of items shown separately)		8,243			23,936			(5	)(b)		31,128						31,128						31,128
								(1,046	)(a)
Occupancy expense		—			8,875			1,033	(a)		9,908						9,908						9,908
Selling, general and administrative expense		28,257			6,919			1,354	(a)		36,530						36,530						36,530
Insurance and claims		8,050			—			2,402	(a)		10,452						10,452						10,452
Depreciation and amortization		5,966			2,964						8,930						8,930						8,930

Total operating expenses		348,014			136,062			(5	)		484,071			—			484,071						484,071

Income from operations		12,889			23,754			—			36,643			—			36,643						36,643
Interest income		27			94						121						121						121
Interest expense		(14	)		(1,697	)					(1,711	)					(1,711	)		1,697	(d)		(2,115	)
																				(2,101	)(e)
Other non-operating income		1,173			—						1,173						1,173						1,173

Income before provision for income taxes		14,075			22,151			—			36,226			—			36,226			(404	)		35,822
Provision for income taxes		5,479			563						6,042			8,032	(i)		14,074			(157	)(i)		13,917

Net income	$	8,596		$	21,588		$	—		$	30,184		$	(8,032	)	$	22,152		$	(247	)	$	21,905

Earnings per common share:
Basic	$	0.55								$	1.00		$	(0.26	)	$	0.74					$	0.73
Diluted	$	0.55								$	1.00		$	(0.26	)	$	0.74					$	0.73
Weighted average number of common shares outstanding:
Basic		15,516						14,527	(f)		30,043			30,043			30,043						30,043
Diluted		15,516						14,527	(f)		30,043			30,043			30,043						30,043

UNIVERSAL TRUCKLOAD SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE TWENTY-SIX WEEKS ENDED JULY 2, 2011

(In thousands, except per share data)


	Universal			LINC			Pro Forma Adjustments			Consolidated			Tax Adjustments			Pro Forma			Proposed Financing Pro Forma			Pro Forma as Adjusted
Operating Revenues:
Truckload	$	208,111		$	63,433		$	8,246	(a)	$	279,790						279,790					$	279,790
Brokerage		78,970			—			2,492	(a)		81,462						81,462						81,462
Value added		—			68,959						68,959						68,959						68,959
Specialized services		—			10,745			(10,738	)(a)		—						—						—
								(7	)(b)
Intermodal		50,510			—						50,510						50,510						50,510

Total operating revenues		337,591			143,137			(7	)		480,721			—			480,721						480,721
Operating Expenses:
Purchased transportation and equipment rent		260,090			26,891			(4,593	)(a)		282,388						282,388						282,388
Direct personnel and related benefits		—			54,989			920	(a)		55,909						55,909						55,909
Commission expense		20,581			—			353	(a)		20,934						20,934						20,934
Operating expenses (exclusive of items shown separately)		6,939			23,549			(7	)(b)		29,490						29,490						29,490
								(991	)(a)
Occupancy expense		—			7,402			1,160	(a)		8,562						8,562						8,562
Selling, general and administrative expense		25,946			5,058			970	(a)		31,974						31,974						31,974
Insurance and claims		8,326			—			2,181	(a)		10,507						10,507						10,507
Depreciation and amortization		5,768			2,922						8,690						8,690						8,690

Total operating expenses		327,650			120,811			(7	)		448,454			—			448,454						448,454

Income from operations		9,941			22,326			—			32,267			—			32,267						32,267
Interest income		48			—						48						48						48
Interest expense		(4	)		(1,010	)					(1,014	)					(1,014	)		1,010	(d)		(2,105	)
																				(2,101	)(e)
Other non-operating income		1,158			—						1,158						1,158						1,158

Income before provision for income taxes		11,143			21,316			—			32,459			—			32,459			(1,091	)		31,368
Provision for income taxes		4,309			1,510						5,819			6,697	(i)		12,516			(440	)(i)		12,076

Net income	$	6,834		$	19,806		$	—		$	26,640		$	(6,697	)	$	19,943		$	(651	)	$	19,292

Earnings per common share:
Basic	$	0.44								$	0.88		$	(0.22	)	$	0.66					$	0.64
Diluted	$	0.44								$	0.88		$	(0.22	)	$	0.66					$	0.64
Weighted average number of common shares outstanding:
Basic		15,623						14,527	(f)		30,150			30,150			30,150						30,150
Diluted		15,623						14,527	(f)		30,150			30,150			30,150						30,150

UNIVERSAL TRUCKLOAD SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2011

(In thousands, except share data)


	Universal			LINC			Pro Forma Adjustments			Consolidated			Tax Adjustments			Pro Forma			Proposed Financing Pro Forma			Pro Forma as Adjusted
Operating Revenues:
Truckload	$	423,182		$	120,391			17,591	(a)	$	561,164						561,164					$	561,164
Brokerage		173,820			—			5,104	(a)		178,924						178,924						178,924
Value added					147,815						147,815						147,815						147,815
Specialized services					22,723			(22,695	)(a)		—						—						—
								(28	)(b)								—
Intermodal		102,769									102,769						102,769						102,769

Total operating revenues		699,771			290,929			(28	)		990,672			—			990,672						990,672
Operating Expenses:
Purchased transportation and equipment rent		538,313			53,200			(9,523	)(a)		581,990						581,990						581,990
Direct personnel and related benefits		—			116,164			2,317	(a)		118,481						118,481						118,481
Commission expense		41,930			—			654	(a)		42,584						42,584						42,584
Operating expenses (exclusive of items shown separately)		14,178			47,152			(28	)(b)		58,943						58,943						58,943
								(2,359	)(a)
Occupancy expense		—			16,145			2,293	(a)		18,438						18,438						18,438
Selling, general and administrative expense		52,367			10,532			1,852	(a)		64,751						64,751						64,751
Insurance and claims		16,956			—			4,766	(a)		21,722						21,722						21,722
Depreciation and amortization		11,636			6,094						17,730						17,730						17,730

Total operating expenses		675,380			249,287			(28	)		924,639			—			924,639						924,639

Income from operations		24,391			41,642			—			66,033			—			66,033						66,033
Interest income		80			3						83						83						83
Interest expense		(22	)		(2,218	)					(2,240	)					(2,240	)		2,218	(d)		(4,225	)
																				(4,203	)(e)
Other non-operating income		1,778			—						1,778						1,778						1,778

Income before provision for income taxes		26,227			39,427			—			65,654			—			65,654			(1,985	)		63,669
Provision for income taxes		10,414			3,794						14,208			12,016	(i)		26,224			(793	)(i)		25,431

Net income	$	15,813		$	35,633		$	—		$	51,446		$	(12,016	)	$	39,430		$	(1,192	)	$	38,238

Earnings per common share:
Basic	$	1.01								$	1.71		$	(0.40	)	$	1.31					$	1.27
Diluted	$	1.01								$	1.71		$	(0.40	)	$	1.31					$	1.27
Weighted average number of common shares outstanding:
Basic		15,594						14,527	(f)		30,121			30,121			30,121						30,121
Diluted		15,594						14,527	(f)		30,121			30,121			30,121						30,121

UNIVERSAL TRUCKLOAD SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2010

(In thousands, except share data)


	Universal			LINC			Pro Forma Adjustments			Consolidated			Tax Adjustments			Pro Forma
Operating Revenues:
Truckload	$	370,096		$	99,628		$	22,574	(a)	$	492,298					$	492,298
Brokerage		147,970			—			6,013	(a)		153,983						153,983
Value added					117,557						117,557						117,557
Specialized services					28,600			(28,587	)(a)		—						—
								(13	)(b)								—
Intermodal		87,877			—						87,877						87,877

Total operating revenues		605,943			245,785			(13	)		851,715			—			851,715
Operating Expenses:
Purchased transportation and equipment rent		461,041			49,986			(12,723	)(a)		498,304						498,304
Direct personnel and related benefits		—			94,701			5,557	(a)		100,258						100,258
Commission expense		38,805			—			643	(a)		39,448						39,448
Operating expenses (exclusive of items shown separately)		13,276			33,684			(13	)(b)		47,338						47,338
								391	(a)
Occupancy expense		—			13,745			2,942	(a)		16,687						16,687
Selling, general and administrative expense		49,253			10,073			(374	)(a)		58,952						58,952
Insurance and claims		17,205			—			3,564	(a)		20,769						20,769
Depreciation and amortization		10,996			6,543						17,539						17,539

Total operating expenses		590,576			208,732			(13	)		799,295			—			799,295

Income from operations		15,367			37,053			—			52,420			—			52,420
Interest income		136			64						200						200
Interest expense		(16	)		(1,578	)					(1,594	)					(1,594	)
Other non-operating income		5,969			—						5,969						5,969

Income before provision for income taxes		21,456			35,539			—			56,995			—			56,995
Provision for income taxes		8,712			2,574						11,286			11,037	(i)		22,323

Net income	$	12,744		$	32,965		$	—		$	45,709		$	(11,037	)	$	34,672

Earnings per common share:
Basic	$	0.80								$	1.50		$	(0.36	)	$	1.14
Diluted	$	0.80								$	1.50		$	(0.36	)	$	1.14
Weighted average number of common shares outstanding:
Basic		15,917						14,527	(f)		30,444			30,444			30,444
Diluted		15,917						14,527	(f)		30,444			30,444			30,444

UNIVERSAL TRUCKLOAD SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2009

(In thousands, except share data)


	Universal			LINC			Pro Forma Adjustments			Consolidated			Tax Adjustments			Pro Forma
Operating Revenues:
Truckload	$	313,573		$	61,339		$	13,530	(a)	$	388,442					$	388,442
Brokerage		112,914			—			4,065	(a)		116,979						116,979
Value added		—			98,972						98,972						98,972
Specialized services		—			17,627			(17,595	)(a)		—						—
								(32	)(b)
Intermodal		76,743			—						76,743						76,743

Total operating revenues		503,230			177,938			(32	)		681,136			—			681,136
Operating Expenses:
Purchased transportation and equipment rent		378,008			26,626			(7,329	)(a)		397,305						397,305
Direct personnel and related benefits		—			72,625			3,195	(a)		75,820						75,820
Commission expense		33,953			—			736	(a)		34,689						34,689
Operating expenses (exclusive of items shown separately)		10,316			26,364			(32	)(b)		31,579						31,579
								(5,069	)(a)
Occupancy expense		—			19,897			3,016	(a)		22,913						22,913
Selling, general and administrative expense		44,232			7,852			212	(a)		52,296						52,296
Insurance and claims		17,348			—			5,239	(a)		22,587						22,587
Depreciation and amortization		10,354			6,952						17,306						17,306

Total operating expenses		494,211			160,316			(32	)		654,495			—			654,495

Income from operations		9,019			17,622			—			26,641			—			26,641
Interest income		90			116						206						206
Interest expense		(356	)��		(1,470	)					(1,826	)					(1,826	)
Other non-operating income		(733	)		—						(733	)					(733	)

Income before provision for income taxes		8,020			16,268			—			24,288			—			24,288
Provision for income taxes		3,120			1,339						4,459			4,918	(i)		9,377

Net income	$	4,900		$	14,929		$	—		$	19,829		$	(4,918	)	$	14,911

Earnings per common share:
Basic	$	0.31								$	0.65		$	(0.16	)	$	0.49
Diluted	$	0.31								$	0.65		$	(0.16	)	$	0.49
Weighted average number of common shares outstanding:
Basic		15,982						14,527	(f)		30,509			30,509			30,509
Diluted		15,982						14,527	(f)		30,509			30,509			30,509

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1—Basis of Presentation

Pursuant to the terms of the Merger Agreement, Universal has completed the acquisition of LINC and each outstanding share of LINC common stock was converted into the right to receive consideration consisting of 0.700 of a share of Universal’s common stock and cash in lieu of fractional shares. This resulted in the issuance of 14,527,332 shares of Universal’s common stock and payment of $27.60 of cash in lieu of fractional shares. In connection with the transactions, the current and former shareholders of LINC (or entities related to them) received cash payment in respect of promissory notes and dividends payable outstanding under previously declared dividends. As a result of the mergers contemplated in the Merger Agreement, LINC became a wholly-owned subsidiary of Universal.

The accompanying unaudited pro forma condensed financial statements were prepared in accordance with Article 11 of SEC Regulation S-X. The unaudited pro forma condensed combined balance sheet as of June 30, 2012 gives effect to the acquisition, to the termination of LINC’s existence and S-corporation status and acquisition by a C-corporation, to the payoff of promissory notes and dividends payable outstanding to LINC’s former shareholders under previously declared dividends, and to the anticipated borrowings under Universal’s new credit agreement as if it occurred as of that date. In connection with the acquisition, Universal has entered into a new credit agreement consisting of a $220 million senior secured loan facility. The unaudited pro forma condensed combined statements of income give effect to the acquisition and to the termination of LINC’s S-corporation status and acquisition by a C-corporation as if they occurred on January 1, 2009. The unaudited pro forma condensed combined balance sheet as of June 30, 2012 and the unaudited pro forma condensed combined statement of income for the twenty-six weeks ended June 30, 2012 and July 2, 2011, and for the fiscal year ended December 31, 2011 give effect of the anticipated borrowings under Universal’s new credit agreement and the impact on interest expense assuming the retirement of LINC’s outstanding debt as if it occurred on January 1, 2011.

Note 2—Pro Forma Adjustments

The following represents an explanation of the various pro forma adjustments to the unaudited condensed pro forma combined balance sheet and income statements:

(a)

Certain assets and liabilities in the unaudited pro forma condensed combined balance sheet and certain revenues and expenses in the unaudited pro forma condensed combined statements of income have been reclassified to conform to the presentation of Universal. Such reclassifications had no impact on total assets, total liabilities, total operating revenues, total operating expenses, or net income.

(b)

Reflects elimination of intercompany transactions between Universal and LINC.

(c)

To record the repayment of LINC’s outstanding bank indebtedness and to pay off promissory notes and dividends payable that is outstanding to LINC’s current and former shareholders from borrowings under Universal’s new credit agreement. In connection with the acquisition, Universal has entered into a new credit agreement consisting of a $220 million senior secured loan facility. Based on Universal’s and LINC’s outstanding indebtedness and dividends payable at June 30, 2012, not including accrued interest payable of $216,757, Universal would expect to borrow approximately $150.1 million under the new credit agreement and use the proceeds for the following: (i) to pay off LINC’s outstanding indebtedness to lenders totaling $57.8 million, (ii) to pay off $22.5 million of a dividend payable, (iii) to pay off a $25.0 million Dividend Distribution Promissory Note to an affiliate of Messrs. Moroun, (iv) to pay off a Promissory Note, dated July 23, 2012, among Matthew T. Moroun and LINC to pay the principal amount of $14,094,360 in respect of a shareholder distribution, (v) to pay off a Promissory Note, dated July 23, 2012, among LINC and the MJM Revocable Trust to pay the principal amount of $13,905,640 in respect of a shareholder distribution, (vi) to pay off a Promissory Note, dated July 23, 2012, among LINC and Matthew T. Moroun to pay the principal amount of $8,551,000 in respect of a dividend declared on July

23, 2012, (vii) to pay off a Promissory Note, dated July 23, 2012, among LINC and the Annuity Trust to pay the principal amount of $5,893,266 in respect of a dividend declared on July 23, 2012 and (viii) to pay off a Promissory Note, dated July 23, 2012, among LINC and the MJM Revocable Trust to pay the principal amount of $2,555,734 in respect of a dividend declared on July 23, 2012, and (ix) to pay an estimated $1.3 million of debt issuance costs. On the closing date of the mergers contemplated by the Merger Agreement, the shareholders of LINC shall cause DIBC Investments Inc. to repay a $5.0 million promissory note owed to LINC, which together with the approximately $150.1 million of expected borrowings under the new credit agreement and the use of $151.6 million of proceeds described above will result in a net increase of pro forma cash for Universal of $3.5 million.

(d)

To adjust for pro forma interest expense and exclude interest expense that was incurred on LINC’s outstanding debt, including amortization of debt issuance costs reflected in Universal’s Consolidated Statements of Income.

(e)

To adjust pro forma interest expense and assume that our only debt balance outstanding, on a pro forma basis beginning January 1, 2011, is the $150.1 million borrowed pursuant to the new credit agreement. For purposes of this calculation, only the required quarterly interest payments are assumed to have been made and for the twenty-six week periods ended June 30, 2012 and July 2, 2011, and the fiscal year ended December 31, 2011, the expected effective interest rate was 2.8%. The interest rate is expected to be variable based on LIBOR. For comparison purposes, a 1/8% increase or decrease in the expected interest rate would yield a rate of 2.925% and 2.675%, respectively. Based on this increase or decrease in the rate, interest expense for the twenty-six week periods ended June 30, 2012 and July 2, 2011 would be $2.20 million and $2.01 million, respectively, and for the fiscal year ended December 31, 2011 $4.39 million and $4.02 million, respectively.

(f)

To record the issuance of 14,527,332 shares of Universal’s common stock issued for the acquisition of LINC. Each share of LINC’s outstanding common stock will be converted into 0.700 newly issued shares of Universal’s common stock.

(g)

To record the federal component of the deferred tax accounts as the result of LINC, which was a S-corporation for U.S. federal income tax purposes, being acquired by Universal, a C-corporation. The state and foreign deferred tax components had previously been recorded in LINC’s historical financial statements. The cumulative deferred tax accounts have been recognized at a combined effective tax rate of 39.0%.

(h)

To record the distribution of LINC’s taxable income to its shareholders after the termination of its S-corporation status.

(i)

To record the pro forma provision for income taxes as if LINC had been a C-corporation and tax effect the additional interest expense in connection with the pro forma borrowings under Universal’s new credit agreement, where applicable, The adjustment to income taxes is to arrive at a blended statutory federal, state, and local income tax rate of 38.9%, 38.5%, 39.9%, 39.2%, and 38.6% for the twenty-six week periods ended June 30, 2012 and July 2, 2011, and the years ended December 31, 2011, 2010 and 2009.

(j)

To reclassify LINC’s accumulated deficit to additional paid in capital (distributions in excess of capital) after the termination of its S-corporation status.

(k)

To record (i) the write off of unamortized debt issuance costs of $696 thousand and (ii) $150 thousand in prepayment penalties related to LINC’s existing outstanding indebtedness.

(l)

Subsequent to June 30, 2012, $2.0 million of LINC’s dividend payable was paid in cash.

Note 3—Estimated Transaction Costs

Universal and LINC expect to incur costs associated with combining the operations of these businesses, as well as transaction fees and other costs related to the merger totaling approximately $6.8 million. The amount of transaction costs expected to be incurred is a preliminary estimate and subject to change. The unaudited pro forma condensed combined statements of income do not reflect any of these related transaction costs.

Universal Logistics (ULH) 8-KIndex to Financial Statements