Exhibit 99.3
DLH UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements combine the historical consolidated financial information of DLH Holdings Corp. and Subsidiaries (the “Company”) and the financial statements of Irving Burton Associates, LLC. (“IBA”), acquired on September 30, 2020. The unaudited pro forma condensed combined financial information gives effect to the Company’s acquisition of IBA as if the acquisition had been consummated at October 1, 2018 for the unaudited pro forma condensed combined statements of operations for the year ended September 30, 2019. For the nine months ended June 30, 2020 the unaudited pro forma condensed combined statement of operations is presented as if the acquisition was consummated on October 1, 2019.
We are including an additional statement of operations due to the occurrence of a significant event, the acquisition of Social & Scientific Systems, Inc., ("S3") in June 2019. A statement of operations for the twelve months ended June 30, 2020 has been included and the information in the statement gives effect as if the acquisition had been consummated at July 1, 2019. The statement is derived from combining the three months ended September 30, 2019 and nine months ended June 30, 2020.
The unaudited pro forma condensed combined balance sheet at June 30, 2020 gives effect to the acquisition of IBA as if the acquisition had been consummated on that date. The unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date.
The Company’s historical financial information was derived from its audited consolidated financial statements for the year ended September 30, 2019 (as filed in its Annual Report on Form 10-K with the Securities and Exchange Commission on December 11, 2019) and the Company’s unaudited consolidated financial statements for the nine and twelve months ended June 30, 2020 (as filed in its Quarterly Report on Form 10-Q with the Securities and Exchange Commission on August 5, 2020). The Company’s historical financial statements used in preparing the unaudited pro forma financial data are summarized and should be read in conjunction with its historical financial statements and risk factors, all of which are included in the filings with the Securities and Exchange Commission noted above. IBA’s full year financial information was derived from its audited financial statements for the year ended December 31, 2019, which are included in this report.. IBA’s financial information for the nine and twelve months ended June 30, 2020 was derived from unaudited financial statements for the nine and twelve months ended June 30, 2020.
The Company is providing the unaudited pro forma condensed combined information for illustrative purposes only and such pro forma information does not represent the consolidated results or financial position of the Company had its acquisition of IBA been completed as of the dates indicated. The companies may have performed differently had they been combined during the periods presented. Specifically, the unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies, revenue enhancements or restructuring costs that the combined company may achieve or incur as a result of the acquisition. You should not rely on the unaudited pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies actually been combined during the periods presented. Further, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the combined company.
The unaudited pro forma adjustments represent the Company’s best estimates and are based upon available information and upon certain assumptions that the Company believes are reasonable, as described in the accompanying notes. The unaudited pro forma condensed combined financial information, including the accompanying notes, should be read in conjunction with:
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| | | •The Company’s historical consolidated financial statements and accompanying notes contained in its Annual Report on Form 10-K for its fiscal year ended September 30, 2019, filed with the Securities and Exchange Commission (the “Commission”) on December 11, 2019; |
| | •The Company’s historical consolidated financial statements and accompanying notes contained in its Quarterly Report on Form 10-Q for its quarter ended June 30, 2020, filed with the Commission on August 5, 2020; |
| | •IBA’s historical financial statements and accompanying notes for its fiscal year ended, December 31, 2019, included as Exhibit 99.1 in this amended Current Report on Form 8-K; |
| | •IBA’s unaudited financial statements and accompanying notes as of and for the three months ended June 30,2020, included as Exhibit 99.2 in this amended Current Report on Form 8-K; and |
| | •The Agreement filed as Exhibit 2.1 to The Company’s Current Report on Form 8-K filed with the Commission on October 6, 2020. |
The preliminary base purchase price of $32.0 million for IBA on September 30, 2020 included a target net working capital of $1.4 million, net of cash acquired. Our estimated pro forma balance sheet included herein is stated as if the transaction occurred on June 30, 2020. As such, the estimated net working capital at June 30, 2020 is $1.8 million, reflecting a surplus of $0.4 million over the $1.4 million target. This increased the estimated purchase price as of June 30, 2020, from $32.0 million to $32.4 million. Working capital balances on the actual date of the acquisition, September 30, 2020, will be different from those estimated at June 30, 2020. Future adjustments for working capital excess (deficit) compared to the $1.4 million target will change as we finalize valuations and financial results as of the actual date of the acquisition on September 30, 2020.
DLH HOLDINGS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 2019
(Amounts in thousands, except per share data)
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| | | The
Company | | Irving Burton Associates, LLC. | | Pro Forma
Adjustments | | Pro Forma
Combined | |
| Revenue | | $ | 160,391 | | | $ | 25,966 | | | $ | (1,892) | | [3a] | $ | 184,465 | | |
| Cost of operations | | | | | | | | | |
| Contract costs | | 124,551 | | | 14,096 | | | 4,280 | | [3b] | 142,927 | | |
| General and administrative expenses | | 21,916 | | | 6,203 | | | (4,238) | | [3c] | 23,881 | | |
| Depreciation and amortization | | 3,956 | | | — | | | 1,634 | | [3c] | 5,590 | | |
| Total cost of operations | | 150,423 | | | 20,299 | | | 1,676 | | | 172,398 | | |
| Income from operations | | 9,968 | | | 5,667 | | | (3,568) | | | 12,067 | | |
| Interest and other income (expense), net | | (2,473) | | | 107 | | | (1,482) | | [3d] | (3,848) | | |
| Income/(loss) before income taxes | | 7,495 | | | 5,774 | | | (5,050) | | | 8,219 | | |
| Provision (benefit) for income taxes | | 2,171 | | | — | | | 213 | | [3e] | 2,384 | | |
| Net income/(loss) | | $ | 5,324 | | | $ | 5,774 | | | $ | (5,263) | | | $ | 5,835 | | |
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| Earnings per share - basic | | $ | 0.44 | | | | | | | $ | 0.49 | | [3f] |
| Earnings per share - diluted | | $ | 0.41 | | | | | | | $ | 0.45 | | [3f] |
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| Weighted average shares outstanding | | | | | | | | | |
| Basic | | 12,018 | | | | | | | 12,018 | | |
| Diluted | | 13,041 | | | | | | | 13,041 | | |
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
DLH HOLDINGS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED JUNE 30, 2020
(Amounts in thousands, except per share data)
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| | | The
Company | | Irving Burton Associates, LLC. | | Pro Forma
Adjustments | | Pro Forma
Combined | |
| Revenue | | $ | 158,495 | | | $ | 18,880 | | | $ | (356) | | [3a] | $ | 177,019 | | |
| Cost of operations | | | | | | | | | |
| Contract costs | | 123,895 | | | 11,235 | | | 3,121 | | [3b] | 138,251 | | |
| General and administrative expenses | | 18,497 | | | 4,970 | | | (3,157) | | [3c] | 20,310 | | |
| Depreciation and amortization | | 5,340 | | | — | | | 1,225 | | [3c] | 6,565 | | |
| Total operating costs | | 147,732 | | | 16,205 | | | 1,189 | | | 165,126 | | |
| Income from operations | | 10,763 | | | 2,675 | | | (1,545) | | | 11,893 | | |
| Interest and other income (expense), net | | (2,659) | | | 147 | | | (1,191) | | [3d] | (3,703) | | |
| Income/(loss) before income taxes | | 8,104 | | | 2,822 | | | (2,736) | | | 8,190 | | |
| Provision (benefit) for income taxes | | 2,352 | | | — | | | 24 | | [3e] | 2,376 | | |
| Net income/(loss) | | $ | 5,752 | | | $ | 2,822 | | | $ | (2,760) | | | $ | 5,814 | | |
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| Earnings per share - basic | | $ | 0.47 | | | | | | | $ | 0.47 | | [3f] |
| Earnings per share - diluted | | $ | 0.44 | | | | | | | $ | 0.45 | | [3f] |
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| Weighted average shares outstanding | | | | | | | | | |
| Basic | | 12,246 | | | | | | | 12,246 | | |
| Diluted | | 13,050 | | | | | | | 13,050 | | |
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
DLH HOLDINGS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED JUNE 30, 2020
(Amounts in thousands, except per share data)
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| | | The
Company | | Irving Burton Associates, LLC. | | Pro Forma
Adjustments | | Pro Forma
Combined | |
| Revenue | | $ | 212,679 | | | $ | 25,234 | | | $ | (761) | | [3a] | $ | 237,152 | | |
| Cost of operations | | | | | | | | | |
| Contract costs | | 165,698 | | | 14,633 | | | 4,138 | | [3b] | 184,469 | | |
| General and administrative expenses | | 25,564 | | | 6,482 | | | (4,136) | | [3c] | 27,910 | | |
| Depreciation and amortization | | 7,259 | | | — | | | 1,634 | | [3c] | 8,893 | | |
| Total operating costs | | 198,521 | | | 21,115 | | | 1,636 | | | 221,272 | | |
| Income from operations | | 14,158 | | | 4,119 | | | (2,397) | | | 15,880 | | |
| Interest and other income (expense), net | | (3,849) | | | 161 | | | (1,445) | | [3d] | (5,133) | | |
| Income/(loss) before income taxes | | 10,309 | | | 4,280 | | | (3,842) | | | 10,747 | | |
| Provision (benefit) for income taxes | | 2,990 | | | — | | | 126 | | [3e] | 3,116 | | |
| Net income/(loss) | | $ | 7,319 | | | $ | 4,280 | | | $ | (3,968) | | | $ | 7,631 | | |
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| Earnings per share - basic | | $ | 0.60 | | | | | | | $ | 0.62 | | [3f] |
| Earnings per share - diluted | | $ | 0.56 | | | | | | | $ | 0.58 | | [3f] |
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| Weighted average shares outstanding | | | | | | | | | |
| Basic | | 12,246 | | | | | | | 12,246 | | |
| Diluted | | 13,050 | | | | | | | 13,050 | | |
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
DLH HOLDINGS CORP. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
June 30, 2020
(Amounts in thousands except par value of shares)
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| | | The
Company | | Irving Burton Associates, LLC. | | Pro Forma
Adjustments | | Pro Forma
Combined | |
| ASSETS | | | | | | | | | |
| Current assets: | | | | | | | | | |
| Cash and cash equivalents | | $ | 658 | | | $ | 5,332 | | | $ | (7,968) | | (4a) | $ | (1,978) | | |
| Accounts receivable, net | | 29,635 | | | 4,427 | | | — | | | 34,062 | | |
| Other current assets | | 3,772 | | | 194 | | | (16) | | [4b] | 3,950 | | |
| Total current assets | | 34,065 | | | 9,953 | | | (7,984) | | | 36,034 | | |
| Equipment and Improvements, net | | 3,769 | | | 32 | | | — | | | 3,801 | | |
| Operating lease right-of-use assets | | 22,276 | | | — | | | 474 | | [4c] | 22,750 | | |
| Deferred taxes, net | | 358 | | | — | | | — | | | 358 | | |
| Goodwill | | 52,758 | | | — | | | 14,340 | | (4d) | 67,098 | | |
| Intangible assets, net | | 37,594 | | | — | | | 16,170 | | [4e] | 53,764 | | |
| Other long-term assets | | 620 | | | 534 | | | (512) | | [4f] | 642 | | |
| Total assets | | $ | 151,440 | | | $ | 10,519 | | | $ | 22,488 | | | $ | 184,447 | | |
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| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
| Current liabilities: | | | | | | | | | |
| | | | | | | | | |
| Operating lease liabilities - current | | $ | 1,768 | | | $ | — | | | $ | 175 | | [4g] | $ | 1,943 | | |
| Accrued payroll | | 9,488 | | | 1,191 | | | — | | | 10,679 | | |
| Accounts payable, accrued expenses, and other current liabilities | | 24,253 | | | 1,646 | | | (36) | | [4h] | 25,863 | | |
| Total current liabilities | | 35,509 | | | 2,837 | | | 139 | | | 38,485 | | |
| Operating lease liabilities - long term | | 21,686 | | | — | | | 284 | | [4i] | 21,970 | | |
| Debt obligation - long term | | 42,542 | | | — | | | 29,747 | | [4j] | 72,289 | | |
| Provision rate variance | | — | | | 763 | | | (763) | | [4k] | — | | |
| | | | | | | | | |
| Total long term liabilities | | 64,228 | | | 763 | | | 29,268 | | | 94,259 | | |
| Total liabilities | | 99,737 | | | 3,600 | | | 29,407 | | | 132,744 | | |
| | | | | | | | | |
| Shareholders' equity: | | | | | | | | | |
| Drawings | | — | | | (10,129) | | | 10,129 | | [4l] | — | | |
| Common stock, $.001 par value; authorized 40,000 shares; issued and outstanding 12,354 and 12,036 at June 30, 2020 and September 30, 2019, respectively | | 12 | | | 29 | | | (29) | | [4m] | 12 | | |
| Treasury stock | | — | | | — | | | — | | | — | | |
| | | | | | | | | |
| Additional paid-in capital | | 85,496 | | | — | | | — | | | 85,496 | | |
| Unrealized gains/losses | | — | | | (17) | | | 17 | | [4n] | — | | |
| Accumulated (deficit) earnings | | (33,805) | | | 17,036 | | | (17,036) | | [4o] | (33,805) | | |
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| | | | | | | | | |
| Total shareholders’ equity | | 51,703 | | | 6,919 | | | (6,919) | | | 51,703 | | |
| Total liabilities and shareholders' equity | | $ | 151,440 | | | $ | 10,519 | | | $ | 22,488 | | | $ | 184,447 | | |
The accompanying notes are an integral part of these unaudited pro forma condensed combined financial statements.
Notes to accompanying Financial Statements:
1. Description of the transaction and basis of presentation
On September 30, 2020, we acquired 100% of the equity interests of Irving Burton Associates, LLC for a purchase price of $32.0 million, subject to certain adjustments including a final assessment of IBA's closing working capital. The preliminary base purchase price of $32.0 million included a target net working capital of $1.4 million, net of cash acquired. Future adjustments for working capital excess (deficit) compared to the $1.4 million target will change as we finalize valuations and financial results as of the actual date of the acquisition on September 30, 2020. The acquisition was financed through borrowings of $32.0 million under our existing credit facility. The credit facility includes a $70 million term loan and $25 million revolving line of credit.
The unaudited pro forma condensed combined financial statements have been prepared based upon the Company’s historical financial information and the historical financial information of IBA, giving effect to the acquisition and related adjustments described in these notes. Certain note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted as permitted by SEC rules and regulations.
These unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of operations that would have been achieved had the acquisitions actually taken place at the dates indicated and do not purport to be indicative of future financial position or operating results.
IBA’s operating results included in the unaudited pro forma condensed combined statement of operations for the nine and twelve months ended June 30, 2020 are not intended to represent or be indicative of operating results for a full year. Certain contracts within IBA’s operations had seasonality in their historical performance and such seasonality can continue in the future.
2. Purchase accounting
The acquisition of IBA is being accounted for as a business combination using the acquisition method of accounting, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date.
The fair values of the assets and liabilities in the unaudited pro forma condensed combined financial statements are based upon a preliminary assessment of fair value and may change when the final valuation of intangible assets, working capital and tax-related matters are finalized.
The preliminary base purchase price for IBA was $32.0 million, with adjustments as necessary based on an estimated working capital excess. The preliminary purchase price is adjusted for acquired working capital. Future adjustments for working capital excess (deficit) compared to the $1.4 million target will change as we finalize valuations and financial results as of the actual date of the acquisition on September 30, 2020.
The preliminary base purchase price of $32.0 million on the date of acquisition consisted of $32 million in cash.
Based on September 30, 2020 data, we estimated total acquisition consideration and the preliminary allocation of fair value to the related assets and liabilities as follows:
| | | | | | | | |
| (Amounts in thousands) | | |
| Preliminary base purchase price for IBA | | $ | 32,000 | |
| Estimated working capital excess as if transaction closed on 6/30/2020 | [4j] | $ | 383 | |
| Estimated purchase price, net of cash acquired | [4j] | $ | 32,383 | |
| | |
| Estimated net assets acquired as if transaction closed on 6/30/20: | | |
| Cash and cash equivalents | | $ | — | |
| Accounts receivable | | 4,427 | |
| Other current assets | | 178 | |
| Total current assets | | 4,605 | |
| Accounts payable and accrued expenses | | (1,646) | |
| Payroll liabilities | | (1,191) | |
| Other current liabilities | | (139) | |
| | |
| Estimated net working capital surplus | | 1,629 | |
| Property and equipment, net | | 32 | |
| Other long-term asset/liabilities | | 212 | |
| Net identifiable assets acquired | | 1,873 | |
| Goodwill and other intangibles | [4c] | 30,510 | |
| Net assets acquired | | $ | 32,383 | |
3. Pro forma Condensed Combined Statements of Operations adjustments and assumptions
3a. This adjustment is to remove non-recurring revenue and conform to consistent reporting practices.
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| Amounts in Thousands | | Unaudited |
| | Pro Forma Financial Statements |
| | Year Ended | | Nine Months Ended | | Year Ended |
| Adjustments to revenue: | | 9/30/2019 | | 6/30/2020 | | 6/30/2020 |
| Remove excess revenue from change in contract type on key programs | | $ | (2,022) | | | $ | (457) | | | $ | (891) | |
| Remove revenue from a related party | | (55) | | | (36) | | | (50) | |
| Reclassify administrative fee from revenue to contract costs | | 185 | | | 137 | | | 180 | |
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| Total adjustments to revenue | | $ | (1,892) | | | $ | (356) | | | $ | (761) | |
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3b. This adjustment conforms IBA's income statement presentation with that of DLH.
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| Amounts in Thousands | | Unaudited |
| | Pro Forma Financial Statements |
| | Year Ended | | Nine Months Ended | | Year Ended |
| Adjustments to contract costs: | | 9/30/2019 | | 6/30/2020 | | 6/30/2020 |
| Reclassify certain infrastructure and operational management costs from G&A to contract costs | | $ | 1,292 | | | $ | 953 | | | $ | 1,289 | |
| Reclassify certain fringe costs from G&A to contract costs | | 2,803 | | | 2,031 | | | 2,669 | |
| Reclassify administrative fee from revenue to contract costs | | 185 | | | 137 | | | 180 | |
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| Total adjustments to contract costs | | $ | 4,280 | | | $ | 3,121 | | | $ | 4,138 | |
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3c. Adjustments to general and administrative, and depreciation and amortization expenses are as follows:
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| Amounts in Thousands | | Unaudited |
| | Pro Forma Financial Statements |
| | Year Ended | | Nine Months Ended | | Year Ended |
| Adjustments to G&A and Depreciation and Amortization expense: | | 9/30/2019 | | 6/30/2020 | | 6/30/2020 |
| Reclassify certain infrastructure and operational management costs from G&A to contract costs | | $ | (1,292) | | | $ | (953) | | | $ | (1,289) | |
| Reclassify certain fringe costs from G&A to contract costs | | (2,803) | | | (2,031) | | | (2,669) | |
| Reclassify IBA depreciation and amortization from G&A to depreciation | | (17) | | | (12) | | | (17) | |
| Eliminate certain salary expenses | | (125) | | | (161) | | | (161) | |
| Reclassify interest expense to interest and other income (expense), net | | (1) | | | — | | | — | |
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| Total adjustments to general and administrative expenses | | $ | (4,238) | | | $ | (3,157) | | | $ | (4,136) | |
| Depreciation and amortization expense reclassified from G&A | | $ | 17 | | | $ | 12 | | | $ | 17 | |
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| Amortization expense related to the acquired intangibles assets of IBA | | 1,617 | | | 1,213 | | | 1,617 | |
| Total adjustments to depreciation and amortization expenses | | $ | 1,634 | | | $ | 1,225 | | | $ | 1,634 | |
3d. Adjustments to other income and expenses are as follows:
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| Amounts in Thousands | | Unaudited |
| | Pro Forma Financial Statements |
| | Year Ended | | Nine Months Ended | | Year Ended |
| Adjustments to other income and expense | | 9/30/2019 | | 6/30/2020 | | 6/30/2020 |
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| Eliminate interest income | | $ | (107) | | | $ | (147) | | | $ | (161) | |
| Reclassify interest expense from G&A | | (1) | | | — | | | — | |
| Add estimated interest expense under incremental borrowing on senior debt as if the transaction was consummated at the beginning of the respective period | | (1,374) | | | (1,044) | | | (1,284) | |
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| Total adjustments to other income and expense | | $ | (1,482) | | | $ | (1,191) | | | $ | (1,445) | |
3e. Adjustments to provision (benefit) for income taxes:
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| Amounts in Thousands | | Unaudited |
| | Pro Forma Financial Statements |
| | Year Ended | | Nine Months Ended | | Year Ended |
| Adjustments to provision (benefit) for income taxes | | 9/30/2019 | | 6/30/2020 | | 6/30/2020 |
| This adjustment reflects the tax effects of the pro forma adjustments outlined above. Following the Acquisition, IBA will accrue taxes based upon corporate tax rates at U.S. Federal, state and local level. | | $ | 213 | | | $ | 24 | | | $ | 126 | |
| Total adjustments to other provision (benefit) for income taxes | | $ | 213 | | | $ | 24 | | | $ | 126 | |
3f. The earnings per share calculations have been adjusted to reflect the pro forma transactions outlined above.
4. Pro forma Condensed Combined Balance Sheet adjustments and assumptions
4a. Adjustments to cash and cash equivalents:
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| Amounts in Thousands | | Unaudited |
| | Pro Forma |
| | Balance Sheet |
| Adjustments to cash and cash equivalents | | 6/30/2020 |
| Proceeds from term loan | | $ | 32,000 | |
| Financing fees associated with securing credit facility | | (2,253) | |
| Cash swept at close | | (5,332) | |
| Based upon working capital at June 30, 2020, the estimated acquisition price for IBA used in this pro forma balance sheet would have been $32.4 million. | | (32,383) | |
| Total adjustments to cash and cash equivalents | | $ | (7,968) | |
4b. This adjustment reflects the impact of implementing Accounting Standard Codification ("ASC") 842, Leases, of less than $0.1 million.
4c. This adjustment reflects the impact of ASC 842 of $0.5 million with the addition of the operating lease right-of-use-assets.
4d. This adjustment reflects recording an estimated goodwill of $14.3 million.
4e. This adjustment reflects recording estimated intangible assets of $16.2 million.
4f. This adjustment reflects removing IBA investments of $0.5 million.
4g. This adjustment reflects the impact of ASC 842 of $0.2 million with the addition of operating lease liabilities - current.
4h. This adjustment reflects the elimination of IBA's deferred rent liability balance at June 30, 2020 of less than $0.1 million.
4i. This adjustment reflects the impact of ASC 842 of $0.3 million with the addition of operating lease liabilities - long term.
4j. This adjustment reflects net changes to debt obligation - long term:
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| Amounts in Thousands | | Unaudited |
| | Pro Forma |
| | Balance Sheet |
| Adjustments to additional paid in capital | | 6/30/2020 |
| Term loan in acquisition of IBA | | $ | 32,000 | |
| Deferred financing costs | | (2,253) | |
| Total adjustments to additional paid in capital | | $ | 29,747 | |
4k. This adjustment eliminates an accrued liability for indirect rate variance of $0.8 million.
4l. This adjustment eliminates capital draw from prior ownership $10.1 million.
4m. This adjustment eliminates common stock of less than $0.1 million.
4n. This adjustment eliminates unrealized gains/losses of less than $0.1 million.
4o. This adjustment reflects changes to retained earnings resulting from the acquisition of IBA of $17.0 million.
