Exhibit 99.1
VALHI, INC. AND SUBSIDIARIES
INDEX TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page
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Pro Forma Condensed Consolidated Balance Sheet - September 30, 1996 F-2/F-3
Notes to Pro Forma Condensed Consolidated Balance Sheet F-4/F-5
Pro Forma Condensed Consolidated Statement of Income -
Year ended December 31, 1995 F-6
Notes to Pro Forma Condensed Consolidated Statement of Income F-7
These pro forma condensed consolidated financial statements should be read in
conjunction with the historical consolidated financial statements of Valhi,
Inc. The pro forma condensed consolidated financial statements are not
necessarily indicative of Valhi's consolidated financial position or results
of continuing operations as they may be in the future.
No pro forma condensed consolidated statement of income for the nine months
ended September 30, 1996 is presented herein. Such pro forma amounts would
be the same amounts as reflected in Valhi's unaudited consolidated statement
of income for the nine months ended September 30, 1996 included in its
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, as
previously filed with the Commission.
F-1
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1996
(Unaudited)
(In millions)
Pro forma adjustments
Valhi -------------------------
ASSETS Historical (I) (II) Pro forma
----------- ----------- ----------- ----------
Current assets:
Cash and cash equivalents $160.6 $157.9 ($53.0) $265.5
Accounts and notes receivable 244.1 (17.1) - 227.0
Inventories 318.3 (14.8) - 303.5
Prepaid expenses 11.2 (0.9) - 10.3
Deferred income taxes 5.6 (0.1) - 5.5
----------- ----------- ----------- ----------
739.8 125.0 (53.0) 811.8
----------- ----------- ----------- ----------
Other assets:
Marketable securities 155.6 - - 155.6
Investment in joint ventures 192.0 - - 192.0
Natural resource properties 90.2 (53.7) - 36.5
Goodwill 258.8 - - 258.8
Intangible and other assets 74.9 (1.6) - 73.3
----------- ----------- ----------- ----------
771.5 (55.3) - 716.2
----------- ----------- ----------- ----------
Property and equipment, net 857.6 (69.6) - 788.0
----------- ----------- ----------- ----------
$2,368.9 $0.1 ($53.0) $2,316.0
=========== =========== =========== ==========
F-2
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
September 30, 1996
(Unaudited)
(In millions)
Pro forma adjustments
Valhi -------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY Historical (I) (II) Pro forma
----------- ----------- ----------- ----------
Current liabilities:
Notes payable & current long-term debt $205.2 ($3.5) ($8.0) $193.7
Accounts payable & accrued liabilities 322.5 (12.7) - 309.8
Income taxes 40.0 (1.0) - 39.0
Deferred income taxes 2.8 - - 2.8
----------- ----------- ----------- ----------
570.5 (17.2) (8.0) 545.3
----------- ----------- ----------- ----------
Noncurrent liabilities:
Long-term debt 1,038.7 (21.1) (45.0) 972.6
Accrued pension cost 58.3 - - 58.3
Accrued OPEB cost 76.8 - - 76.8
Accrued environmental costs 113.0 - - 113.0
Deferred income taxes 215.3 (19.8) - 195.5
Other 34.9 (0.6) - 34.3
----------- ----------- ----------- ----------
1,537.0 (41.5) (45.0) 1,450.5
----------- ----------- ----------- ----------
Minority interest in NL subsidiaries 0.3 - - 0.3
----------- ----------- ----------- ----------
Stockholders' equity:
Common stock and paid-in capital 36.6 - - 36.6
Retained earnings 244.6 58.8 - 303.4
Treasury stock (71.0) - - (71.0)
Adjustments: -
Currency translation (8.7) - - (8.7)
Marketable securities 62.5 - - 62.5
Pension liabilities (2.9) - - (2.9)
----------- ----------- ----------- ----------
261.1 58.8 - 319.9
----------- ----------- ----------- ----------
$2,368.9 $0.1 ($53.0) $2,316.0
=========== =========== =========== ==========
See accompanying notes to pro forma condensed consolidated balance sheet.
F-3
VALHI, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
Note 1 - Basis of presentation:
The Pro Forma Condensed Consolidated Balance Sheet assumes the following
transactions, more fully described in Item 2 of this Current Report on Form
8-K dated December 31, 1996, occurred on September 30, 1996:
I - Medite sells substantially all of its assets.
II - Medite prepays a portion of its U.S. bank indebtedness.
Note 2 - Pro forma adjustments:
I - Reflect the sale of substantially all of Medite's assets as follows:
Amount
------------
(In millions)
Cash consideration, net of estimated fees and expenses $214.5
------------
Carrying value of assets sold and liabilities assumed:
Cash and equivalents 1.7
Accounts and notes receivable 17.1
Inventories 14.8
Other current assets 1.0
Timber and timberlands 53.7
Other assets 1.6
Net property, plant and equipment 69.6
Accounts payable & accrued liabilities (12.7)
Income taxes payable (1.0)
Long-term debt, including current portion (24.6)
Deferred income taxes and other noncurrent liabilities (4.4)
------------
116.8
------------
Pre-tax gain 97.7
------------
Income tax expense:
Current income taxes 54.9
Deferred income taxes (16.0)
------------
38.9
------------
Net-of-tax gain $58.8
============
F-4
VALHI, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
(Unaudited)
The cash consideration presented above includes Medite's current estimate of (i)
the net realizable value of the two Oregon timber conversion facilities which
Medite has determined to permanently close and sell and (ii) the cash proceeds
which will be realized from the sale of the Oregon MDF facility based upon the
current negotiations for the definitive agreement.
The effective income tax rate relating to the net pre-tax gain on disposal
differs from the 35% federal statutory rate due principally to the impact of
state income taxes.
II - Repayment of $53.0 million of Medite's U.S. bank indebtedness.
F-5
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year ended December 31, 1995
(Unaudited)
(In millions, except per share data)
Valhi Pro forma
Historical adjustments Pro forma
----------- ----------- -----------
Revenues and other income:
Net sales $1,960.8 ($200.0) $1,760.8
Other, net 33.4 (1.6) 31.8
----------- ----------- -----------
1,994.2 (201.6) 1,792.6
----------- ----------- -----------
Costs and expenses:
Cost of goods sold 1,426.7 (164.6) 1,262.1
Selling, general and administrative 330.6 (12.0) 318.6
Interest 126.2 (8.0) 118.2
----------- ----------- -----------
1,883.5 (184.6) 1,698.9
----------- ----------- -----------
Income of consolidated companies
before income taxes 110.7 (17.0) 93.7
Equity in Waste Control Specialists (0.5) - (0.5)
----------- ----------- -----------
Income before income taxes and
minority interest 110.2 (17.0) 93.2
Provision for income taxes 41.1 (6.4) 34.7
Minority interest in NL subsidiaries 0.6 - 0.6
----------- ----------- -----------
Income from continuing operations $68.5 ($10.6) $57.9
=========== =========== ===========
Income from continuing operations per share $0.60 $0.51
=========== ===========
Weighted average common shares outstanding 114.4 114.4
=========== ===========
See accompanying notes to pro forma condensed consolidated statement of income.
F-6
VALHI, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Note 1 - Basis of presentation:
The Pro Forma Condensed Consolidated Statement of Income assumes the
sale of substantially all of Medite's assets, more fully described in Item 2 of
this Current Report on Form 8-K dated December 31, 1996, occurred as of the
beginning of 1995.
Note 2 - Pro forma adjustments -
Eliminate Medite's historical results of operations included in Valhi's
consolidated statement of income. In future filings, Valhi will report
Medite's results of operations as discontinued operations.
F-7