EXHIBIT 99.2
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated statement of earnings for
the year ended June 30, 1999 and for the three months ended
October 3, 1999 have been prepared to give effect to the
disposition of substantially all the assets and certain
liabilities of our Dallas Aerospace, Inc. subsidiary as if it had
occurred on July 1, 1998 and July 1, 1999, respectively. The
unaudited pro forma consolidated balance sheet as of October 3,
1999 has been prepared to give effect to the disposition as if it
had occurred on such date.
The unaudited pro forma consolidated financial data are not
necessarily indicative of the results that would have been
obtained had the disposition been completed as of the dates
presented or for any future period. The unaudited pro forma
consolidated financial data should be read in conjunction with
our Consolidated Financial Statements and notes thereto included
in our June 30, 1999 Form 10-K.
THE FAIRCHILD CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE TWELVE (12) MONTHS ENDED JUNE 30, 1999
(In thousands, except per share data)
Fairchild (1) Fairchild
Historical Adjustments Pro Forma
Sales $ 617,322 $ (69,821) $ 547,501
Other income, net 3,899 - 3,899
621,221 (69,821) 551,400
Costs and expenses:
Cost of sales 504,893 (79,468) 425,425
Selling, general & 149,348 (8,872) 140,476
administrative
Amortization of 6,517 (53) 6,464
goodwill
Restructuring 6,374 - 6,374
667,132 (88,393) 578,739
Operating income
(loss) (45,911) 18,572 (27,339)
Net interest expense (30,346) - (30,346)
Investment income, net 39,800 - 39,800
Earnings (loss) from (36,457) 18,572 (17,885)
continuing operations
before taxes
Income tax (provision) 13,245 (6,500) (2) 6,745
benefit
Equity in earnings of 1,795 - 1,795
affiliates
Minority interest (2,090) - (2,090)
Earnings (loss) from
continuing operations $ (23,507) $ 12,072 $ (11,435)
Loss per share from
continuing operations:
Basic $ (1.03) $ (0.50)
Diluted (1.03) (0.50)
Weighted average shares
outstanding:
Basic 22,766 22,766
Diluted 22,766 22,766
THE FAIRCHILD CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
FOR THE THREE (3) MONTHS ENDED OCTOBER 3, 1999
(In thousands, except per share data)
Fairchild (1) Fairchild
Historical Adjustments Pro Forma
Sales $ 164,509 $ (11,144) $ 153,365
Other income, net 4,828 - 4,828
169,337 (11,144) 158,193
Costs and expenses:
Cost of sales 121,362 (8,358) 113,004
Selling, general &
administrative 31,828 (1,866) 29,962
Amortization of
goodwill 3,096 (13) 3,083
Restructuring 3,017 - 3,017
159,303 (10,237) 149,066
Operating income 10,034 (907) 9,127
Net interest expense (11,474) - (11,474)
Investment income, net 880 - 880
Nonrecurring income 28,003 - 28,003
Earnings from continuing
operations before taxes 27,443 (907) 26,536
Income tax (provision) (2)
benefit (9,132) 317 (8,815)
Equity in earnings of
affiliates (201) - (201)
Earnings from continuing
operations $ 18,110 $ (590) $ 17,520
Earnings per share from
continuing operations:
Basic $ 0.73 $ 0.70
Diluted 0.72 0.70
Weighted average shares
outstanding:
Basic 24,862 24,862
Diluted 25,026 25,026
THE FAIRCHILD CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
OCTOBER 3, 1999
(In thousands)
Fairchild (1) Fairchild
Historical Adjustments Pro Forma
Cash and cash $ 53,190 $ 56,877 (3) $ 110,067
equivalents
Short-term investments 6,489 - 6,489
Accounts receivable,
less allowances 123,527 (9,317) 114,210
Inventory 204,332 (37,482) 166,850
Prepaid and other 74,373 (4,394) 69,979
current assets
Total current assets 461,911 5,684 467,595
Net fixed assets 186,840 (377) 186,463
Net assets held for sale 19,899 - 19,899
Goodwill 433,310 (1,552) 431,758
Investment in affiliated
companies 16,572 - 16,572
Prepaid pension assets 64,113 - 64,113
Deferred loan costs 14,181 - 14,181
Real estate investment 89,240 - 89,240
Long-term investments 16,220 - 16,220
Other assets 5,081 (10) 5,071
Total assets $1,307,367 $ 3,745 $1,311,112
Bank notes payable &
current maturities of
long-term debt $ 28,192 $ - $ 28,192
Accounts payable 43,096 (2,230) 40,866
Other accrued expenses 129,325 7,783 (4) 137,108
Net current liabilities
of discontinued
operations 12,585 - 12,585
Total current
liabilities 213,198 5,553 218,751
Long-term debt, less
current maturities 480,971 - 480,971
Other long-term
liabilities 27,769 (1,858) 25,911
Retiree health care
liabilities 45,289 - 45,289
Noncurrent income taxes 121,107 - 121,107
Total liabilities 888,334 3,695 892,029
Class A common stock 2,982 - 2,982
Class B common stock 262 - 262
Paid-in capital 229,732 - 229,732
Retained earnings 270,140 50 270,190
Cumulative other
comprehensive income (9,357) - (9,357)
Treasury stock, at cost (74,726) - (74,726)
Total stockholders'
equity 419,033 50 419,083
Total liabilities &
stockholders' equity $1,307,367 $ 3,745 $1,311,112
NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
(1)Represents the elimination of the historical results of
operations associated with the disposition of Dallas Aerospace,
Inc., including (i) a reduction in amortization expense for
reduced goodwill and (ii) adjustments to properly reflect the
elimination of intercompany sales.
(2)Represents the 35% tax effect of the pro forma adjustments.
(3)Includes the receipt of the estimated gross proceeds from the
transaction amounting to approximately $57,000.
(4)Includes an increase in accrued expenses of approximately
$11,150 for transaction fees, indemnification of certain retained
liabilities and other costs associated with the transaction.