PICO HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of June 30, 2013
(In thousands)
|
| | | | | | | | | | | |
| | As Reported | | Pro Forma | | Pro Forma |
| | 2013 | | Adjustments | | as Adjusted |
| ASSETS | | | | | |
| Cash and cash equivalents | $ | 67,440 |
| | $ | (328 | ) | (2) | $ | 67,112 |
|
| Investments ($46.6 million measured at fair value) | 48,732 |
| | 26,471 |
| (3) | 75,203 |
|
| Notes and other receivables, net | 18,716 |
| | (5,059 | ) | (2) | 13,657 |
|
| Real estate and tangible water assets, net | 223,307 |
| (1) | | | 223,307 |
|
| Property, plant and equipment, net | 124,907 |
| | (1,072 | ) | (2) | 123,835 |
|
| Intangible water assets | 124,375 |
| (1) | | | 124,375 |
|
| Other assets | 55,308 |
| | (17,687 | ) | (2) | 37,621 |
|
| Total assets | $ | 662,785 |
| | $ | 2,325 |
| | $ | 665,110 |
|
| | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| Debt | 150,447 |
| | (8,035 | ) | (2) | 142,412 |
|
| Accounts payable, accrued expenses and other liabilities | 33,260 |
| | (7,126 | ) | (4) | 26,134 |
|
| Deferred compensation | 23,213 |
| | | | 23,213 |
|
| Total liabilities | 206,920 |
| | (15,161 | ) | | 191,759 |
|
| | | | | | |
| Commitments and Contingencies | | | | |
|
| | | | | | |
| Common stock, $.001 par value; authorized 100,000 shares, 25,818 issued and 22,745 outstanding at June 30, 2013 | 26 |
| | | | 26 |
|
| Additional paid-in capital | 528,767 |
| | | | 528,767 |
|
| Retained earnings (deficit) | (17,470 | ) | | 16,575 |
| (2) (5) | (895 | ) |
| Accumulated other comprehensive loss | (514 | ) | | | | (514 | ) |
| Treasury stock, at cost (common shares: 3,073) | (56,593 | ) | | | | (56,593 | ) |
| Total PICO Holdings, Inc. shareholders’ equity | 454,216 |
| | 16,575 |
| | 470,791 |
|
| Noncontrolling interest in subsidiaries | 1,649 |
| | 911 |
| (2) | 2,560 |
|
| Total shareholders’ equity | 455,865 |
| | 17,486 |
| | 473,351 |
|
| Total liabilities and shareholders’ equity | $ | 662,785 |
| | $ | 2,325 |
| | $ | 665,110 |
|
* See accompanying footnotes below.
PICO HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
For the Six Months Ended June 30, 2013
(In thousands, except per share data)
|
| | | | | | | | | | | |
| | As Reported | | Pro Forma | | Pro Forma |
| | 2013 | | Adjustments | | as Adjusted |
| REVENUES AND OTHER INCOME: | | | | | |
| Sale of real estate and water assets | $ | 63,191 |
| | | | $ | 63,191 |
|
| Sale of canola oil and meal | 84,469 |
| | | | 84,469 |
|
| Sale of software | 9,247 |
| | $ | (9,247 | ) | (2) |
|
|
| Other income | 5,107 |
| | 23,095 |
| (5) | 28,202 |
|
| Total revenues and other income | 162,014 |
| | 13,848 |
| | 175,862 |
|
| | | | | | |
| COST OF SALES: | | | | | |
| Cost of real estate and water assets sold | 46,272 |
| | | | 46,272 |
|
| Cost of canola oil and meal sold | 85,741 |
| | | | 85,741 |
|
| Cost of software sold | 1,933 |
| | (1,933 | ) | (2) |
|
|
| Total cost of sales | 133,946 |
| | (1,933 | ) | | 132,013 |
|
| | | | | | |
| EXPENSES: | | | | | |
| Operating and other costs | 45,056 |
| | (7,730 | ) | (2) | 37,326 |
|
| Impairment loss on real estate and water assets | 1,410 |
| | | | 1,410 |
|
| Interest | 3,418 |
| | (192 | ) | (2) | 3,226 |
|
| Depreciation and amortization | 5,357 |
| | (45 | ) | (2) | 5,312 |
|
| Total costs and expenses | 189,187 |
| | (9,900 | ) | | 179,287 |
|
| Income (loss) from continuing operations before income taxes and equity in loss of unconsolidated affiliate | (27,173 | ) | | 23,748 |
| | (3,425 | ) |
| Provision (benefit) for federal, foreign, and state income taxes | (898 | ) | | 4,571 |
| (6) | 3,673 |
|
| Equity in loss of unconsolidated affiliate | | | (2,604 | ) | (7) | (2,604 | ) |
| Net income (loss) | (26,275 | ) | | 16,573 |
| | (9,702 | ) |
| Loss attributable to noncontrolling interests | 3,590 |
| | (1,329 | ) | (2) | 2,261 |
|
| Net income (loss) attributable to PICO Holdings, Inc. | $ | (22,685 | ) | | $ | 15,244 |
| | $ | (7,441 | ) |
* See accompanying footnotes below.
PICO HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS, CONTINUED
For the Six Months Ended June 30, 2013
(In thousands, except per share data)
|
| | | | | | | | | | | |
| | As Reported | | Pro Forma | | Pro Forma |
| | 2013 | | Adjustments | | as Adjusted |
| Other Comprehensive Income: | | | | | |
| Net loss | $ | (26,275 | ) | | $ | 16,573 |
| | $ | (9,702 | ) |
| Other comprehensive income, net of tax: | | | | | |
| Unrealized appreciation on available-for-sale securities | 1,543 |
| | | | 1,543 |
|
| Foreign currency translation | (43 | ) | | | | (43 | ) |
| Total other comprehensive income, net of tax | 1,500 |
| |
|
| | 1,500 |
|
| Comprehensive loss | (24,775 | ) | | 16,573 |
| | (8,202 | ) |
| Comprehensive loss attributable to noncontrolling interests | 3,590 |
| | (1,329 | ) | | 2,261 |
|
| Comprehensive income (loss) attributable to PICO Holdings, Inc. | $ | (21,185 | ) | | $ | 15,244 |
| | $ | (5,941 | ) |
| | | | | | |
| Net income (loss) per common share – basic and diluted: | | | | | |
| Net income (loss) per common share | $ | (1.00 | ) | | $ | 0.67 |
| | $ | (0.33 | ) |
| Weighted average shares outstanding | 22,735 |
| | | | 22,735 |
|
(1) These balances were not previously reported in the Company’s June 30, 2013 consolidated balance sheet. Subsequent to filing the Company’s quarterly report on Form 10-Q for the three months ended June 30, 2013, the Company discovered that indefinite-lived intangible assets, which should have been presented on a separate line, were inappropriately aggregated and presented within real estate and water assets, net on the consolidated balance sheets as of December 31, 2012. The assets have been properly presented as indefinite-lived intangible assets on the accompanying unaudited pro forma consolidated balance sheet for the current period presented.
(2) Adjustment reflects the deconsolidation of Spigit balances.
(3) Adjustment reflects the fair value of the investment in Mindjet, calculated as $26.5 million, less $2.2 million in compensation expense recorded to reflect the fair value of Mindjet common shares, from the Company’s allocation of Mindjet common shares under the terms of the merger, which were provided by Mindjet as compensation to certain members of Spigit management.
(4) Adjustment includes a deferred tax liability of $3.8 million related to the taxable temporary difference of the Company’s tax basis in its investment in Mindjet which is not expected to reverse within a period that would allow it to be offset by existing deductible temporary differences.
(5) Adjustment reflects the gain recognized upon deconsolidation of Spigit and simultaneous recording of the fair value of the Company’s investment in Mindjet, calculated as the difference between the fair market value of the investment in Mindjet of $28.7 million, less carrying value of the Company’s investment in Spigit of $5.6 million.
(6) Adjustment reflects $5.5 million of deferred income tax expense related to the taxable temporary difference of the Company’s tax basis in its investment in Mindjet which is not expected to reverse within a period that would allow it to be offset by existing deductible temporary differences, and includes $912,000 of deferred tax benefit recorded on the loss in unconsolidated affiliate for the Company’s investment in Mindjet for the period.
(7) Adjustment reflects the equity in loss of unconsolidated affiliate for the Company’s investment in Mindjet for the six months ended June 30, 2013.
