Exhibit 99.2
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma condensed combined balance sheet at December 31, 2010 gives effect to the acquisition of DBCH as if the acquisition had occurred on December 31, 2010. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2010 gives effect to the acquisition of DBCH as if the acquisition had occurred on January 1, 2010.
The unaudited pro forma financial information has been prepared by our management and is based on our historical financial statements and the assumptions and adjustments described herein and in the notes to the unaudited pro forma financial information below. The presentation of the unaudited pro forma financial information is prepared in conformity with Article 11 of Regulation S-X.
The historical financial information of the Company for the year ended December 31, 2010 has been derived from the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The historical financial information of DBCH (Target) for the year ended December 31, 2010 has been derived from the audited consolidated financial statements of DBCH and the accompanying notes, of which the audited consolidated financial statements of DBCH are included as Exhibit 99.1 in this current report on Form 8-K/A.
We based the pro forma adjustments on available information and on assumptions that we believe are reasonable under the circumstances. The unaudited pro forma financial information is presented for informational purposes and is based on management’s estimates. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2010 does not purport to represent what our results of operations actually would have been if the transactions set forth above had occurred on the dates indicated or what our results of operations will be for future periods.
The foregoing financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and the quarter ended March 31, 2011 report on Form 10-Q.
INTERNATIONAL SHIPHOLDING CORPORATION | |||||||||
UNAUDITED PRO FORMA CONDENSED COMBINED | |||||||||
STATEMENT OF INCOME | |||||||||
FOR THE YEAR ENDED DECEMBER 31, 2010 | |||||||||
(All Amounts in Thousands Except Share Data) | |||||||||
Subsidiary | Pro Forma | Pro Forma | |||||||
Acquirer | 1 | Target | Transfers | 2 | Adjustments | Combined | |||
Revenues | $ 290,049 | $ 25,315 | $ (12,658) | $ - | $ 302,707 | ||||
Operating Expenses: | |||||||||
Voyage Expenses | 209,347 | 4,382 | (2,191) | 2,576 | 4 | 214,114 | |||
Vessel Depreciation | 17,929 | 2,543 | (1,272) | 805 | 4 | 20,006 | |||
Impairment Loss | 25,430 | - | - | - | 25,430 | ||||
Gross Voyage Profit | 37,343 | 18,390 | (9,195) | (3,381) | 43,157 | ||||
Administrative and General Expenses | 21,202 | 548 | (274) | - | 21,476 | ||||
Gain on Sale of Other Assets | (42) | - | - | - | (42) | ||||
Operating Income (Loss) | 16,183 | 17,842 | (8,921) | (3,381) | 21,723 | ||||
Interest and Other: | |||||||||
Interest Expense | 7,157 | 962 | (481) | - | 7,638 | ||||
Derivative Loss | 426 | - | - | - | 426 | ||||
Gain on Sale of Investment | (213) | - | - | - | (213) | ||||
Other Income from Vessel Financing | (2,335) | - | - | - | (2,335) | ||||
Investment Income | (1,778) | (24) | 12 | - | (1,790) | ||||
Foreign Exchange Loss | 8,196 | - | - | - | 8,196 | ||||
11,453 | 938 | (469) | - | 11,922 | |||||
- | - | - | |||||||
Income Before (Benefit) Provision for Income Taxes and | |||||||||
Equity in Net Income of Unconsolidated Entities | 4,730 | 16,904 | (8,452) | (3,381) | 9,801 | ||||
(Benefit) Provision for Income Taxes: | |||||||||
Current | 692 | - | - | - | 692 | ||||
Deferred | (1,982) | - | - | - | (1,982) | ||||
(1,290) | - | - | - | (1,290) | |||||
Equity in Net Income of Unconsolidated | |||||||||
Entities (Net of Applicable Taxes) | 9,282 | - | - | (10,791) | 3 | (1,509) | |||
Income from Continuing Operations | 15,302 | 16,904 | (8,452) | (14,172) | 9,582 | ||||
Income from Discontinued Operations | |||||||||
Income from Discontinued Operations | - | 2,179 | 5 | (1,090) | - | 1,090 | |||
Gain on Sale of Vessel | - | 2,498 | (1,249) | - | 1,249 | ||||
Net Income from Discontinued Operations | - | 4,677 | (2,339) | - | 2,339 | ||||
Net Income | $ 15,302 | $ 21,581 | $ (10,791) | $ (14,172) | $ 11,921 | ||||
Basic and Diluted Earnings Per Common Share: | |||||||||
Continuing Operations | $ 2.14 | $ - | $ - | $ - | $ 1.34 | ||||
Discontinued Operations | - | - | - | - | 0.33 | ||||
Basic Earnings Per Common Share: | $ 2.14 | $ - | $ - | $ - | $ 1.67 | ||||
Continuing Operations | $ 2.12 | $ - | $ - | $ - | $ 1.33 | ||||
Discontinued Operations | - | - | - | - | 0.32 | ||||
Diluted Earnings Per Common Share: | $ 2.12 | $ - | $ - | $ - | $ 1.65 | ||||
Weighted Average Shares of Common Stock Outstanding: | |||||||||
Basic | 7,158,439 | - | - | - | 7,158,439 | ||||
Diluted | 7,231,178 | - | - | - | 7,231,178 | ||||
Dividends Per Share | $ 1.625 | $ - | - | - | $ 1.625 | ||||
1 - Company Consolidated Statement of Income | |||||||||
2 - To remove 50% of Target not included in future operations due to subsequent transfer of subsidiaries | |||||||||
3 - To remove 2010 Equity in Net Income of 50% ownership of DBCH | |||||||||
4 - To record depreciation and amortization on vessels and intangible at step-up fair value | |||||||||
5 - Target is not subject to taxes |
INTERNATIONAL SHIPHOLDING CORPORATION | ||||||||||
UNAUDITED PRO FORMA CONDENSED COMBINED | ||||||||||
BALANCE SHEETS | ||||||||||
December 31, 2010 | ||||||||||
(All Amounts in Thousands) | ||||||||||
Subsidiary | Pro Forma | Pro Forma | ||||||||
ASSETS | Acquirer | 1 | Target | Transfers | 2 | Adjustments | Combined | |||
Current Assets: | ||||||||||
Cash and Cash Equivalents | $24,158 | $7,134 | ($3,567) | $ - | $27,725 | |||||
Marketable Securities | 11,527 | - | - | - | 11,527 | |||||
Accounts Receivable, Net of Allowance for Doubtful Accounts | ||||||||||
of $311 | ||||||||||
Traffic | 6,364 | 834 | (417) | - | 6,781 | |||||
Agents' | 1,555 | - | - | - | 1,555 | |||||
Other | 8,555 | - | - | - | 8,555 | |||||
Federal Income Taxes Receivable | 242 | - | - | - | 242 | |||||
Net Investment in Direct Financing Leases | 5,596 | - | - | - | 5,596 | |||||
Other Current Assets | 2,513 | 189 | (95) | 2,576 | 3 | 5,183 | ||||
Notes Receivable | 4,248 | - | - | - | 4,248 | |||||
Material and Supplies Inventory, at Lower of Cost or Market | 3,774 | 261 | (131) | - | 3,904 | |||||
Total Current Assets | 68,532 | 8,418 | ($4,210) | 2,576 | $75,316 | |||||
Investment in Unconsolidated Entities | 27,261 | - | (13,939) | 4 | 13,322 | |||||
Net Investment in Direct Financing Leases | 50,102 | - | - | - | 50,102 | |||||
Vessels, Property, and Other Equipment, at Cost: | ||||||||||
Vessels | 365,797 | 73,000 | (36,500) | 5,800 | 3 | 408,097 | ||||
Leasehold Improvements | 26,128 | - | - | - | 26,128 | |||||
Construction in Progress | 78,355 | 15,196 | (7,598) | - | 85,953 | |||||
Furniture and Equipment | 7,863 | - | - | - | 7,863 | |||||
478,143 | 88,196 | (44,098) | 5,800 | 528,041 | ||||||
Less - Accumulated Depreciation | (143,667) | (19,004) | 9,502 | 9,502 | (143,667) | |||||
334,476 | 69,192 | (34,596) | 15,302 | 384,374 | ||||||
Other Assets: | ||||||||||
Deferred Charges, Net of Accumulated Amortization | 14,482 | 477 | (238) | - | 14,721 | |||||
of $14,525 | ||||||||||
Intangible Assets, Net | - | - | - | 2,576 | 3 | 2,576 | ||||
Restricted Cash | - | 9,088 | (4,544) | - | 4,544 | |||||
Due from Related Parties | 4,124 | - | - | - | 4,124 | |||||
Notes Receivable | 40,142 | - | - | - | 40,142 | |||||
Other | 5,004 | - | - | - | 5,004 | |||||
63,752 | 9,565 | (4,782) | 2,576 | 71,111 | ||||||
Total Assets | $544,123 | $87,175 | ($43,588) | $6,515 | $594,225 |
Subsidiary | Pro Forma | Pro Forma | ||||||||
Acquirer | Target | Transfers | Adjustments | Combined | ||||||
LIABILITIES AND STOCKHOLDERS' INVESTMENT | ||||||||||
Current Liabilities: | ||||||||||
Current Maturities of Long-Term Debt | $21,324 | $5,951 | ($2,976) | $ - | $24,299 | |||||
Accounts Payable and Accrued Liabilities | 32,114 | 1,210 | (605) | 1,500 | 5 | 34,219 | ||||
Total Current Liabilities | 53,438 | 7,161 | (3,581) | 1,500 | 58,518 | |||||
Long-Term Debt, Less Current Maturities | 200,241 | 52,996 | (26,498) | - | 226,739 | |||||
Other Long-Term Liabilities: | ||||||||||
Lease Incentive Obligation | 7,022 | - | - | - | 7,022 | |||||
Other | 49,672 | - | - | - | 49,672 | |||||
56,694 | - | - | - | 56,694 | ||||||
Stockholders' Investment: | ||||||||||
Common Stock, $1.00 Par Value, 10,000,000 Shares Authorized | 8,564 | - | - | - | 8,564 | |||||
and 7,075,659 Shares Issued at December 31, 2010 | ||||||||||
Additional Paid-In Capital | 84,846 | 3,202 | (1,601) | (1,601) | 6 | 84,846 | ||||
Retained Earnings | 183,541 | 23,816 | (11,908) | 6,616 | 6 | 202,065 | ||||
Treasury Stock, 1,388,066 at cost at December 31, 2010 | (25,403) | - | - | - | (25,403) | |||||
Accumulated Other Comprehensive Loss | (17,798) | - | - | - | (17,798) | |||||
233,750 | 27,018 | (13,509) | 5,015 | 252,274 | ||||||
Total Liabilities and Stockholders' Investment | $544,123 | $87,175 | ($43,588) | $6,515 | $594,225 | |||||
1 - Company Consolidated Balance Sheet not including DBCH acquisition | ||||||||||
2 - To remove 50% of Target not included in future operations due to subsequent transfer of subsidiaries | ||||||||||
3 - To record vessels and intangible at step-up fair value | ||||||||||
4 - To remove the Company's 50% ownership in DBCH | ||||||||||
5 - To record payable for the difference in the value of the two capesize vessels | ||||||||||
6 - To remove Target equity balances and reflect Pro forma results |