Exhibit 99.2
VALHI, INC. AND SUBSIDIARIES
INDEX TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page
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Pro Forma Condensed Consolidated Balance Sheet - December 31, 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, 1996 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.
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1996
(Unaudited)
(In millions)
Pro forma adjustments
Valhi -------------------------------------- ----------
ASSETS Historical (I) (II) (III) Pro forma
----------- ----------- ----------- ---------- ----------
Current assets:
Cash and cash equivalents $255.7 ($1.1) $73.6 ($6.0) $322.2
Marketable securities 142.5 - - - 142.5
Accounts and notes receivable 178.8 - - 178.8
Inventories 251.6 - (1.5) - 250.1
Prepaid expenses 7.5 - (1.0) - 6.5
Deferred income taxes 1.6 - (1.2) - 0.4
----------- ----------- ----------- ---------- ----------
837.7 (1.1) 69.9 (6.0) 900.5
----------- ----------- ----------- ---------- ----------
Other assets:
Marketable securities 17.3 - - 6.0 23.3
Investment in joint ventures 196.7 - - - 196.7
Investment in Amalgamated 34.1 - - - 34.1
Mining properties 36.4 - - - 36.4
Goodwill 258.4 - (5.0) - 253.4
Intangible and other assets 74.2 - (11.0) - 63.2
----------- ----------- ----------- ---------- ----------
617.1 - (16.0) 6.0 607.1
----------- ----------- ----------- ---------- ----------
Property and equipment, net 690.2 - (52.8) - 637.4
----------- ----------- ----------- ---------- ----------
$2,145.0 ($1.1) $1.1 $ - $2,145.0
=========== =========== =========== ========== ==========
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
December 31, 1996
(Unaudited)
(In millions)
Pro forma adjustments
Valhi -------------------------------------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY Historical (I) (II) (III) Pro forma
----------- ----------- ----------- ---------- ----------
Current liabilities:
Notes payable & current long-term debt $274.3 $ - ($0.9) $ - $273.4
Accounts payable & accrued liabilities 250.7 - (13.6) - 237.1
Income taxes 8.2 - - - 8.2
Deferred income taxes 30.5 - - - 30.5
----------- ----------- ----------- ---------- ----------
563.7 - (14.5) - 549.2
----------- ----------- ----------- ---------- ----------
Noncurrent liabilities:
Long-term debt 844.5 (1.1) (3.6) - 839.8
Accrued pension cost 59.2 - - - 59.2
Accrued OPEB cost 56.3 - - - 56.3
Accrued environmental costs 109.9 - - - 109.9
Deferred income taxes 178.0 - - - 178.0
Other 29.2 - (1.3) - 27.9
----------- ----------- ----------- ---------- ----------
1,277.1 (1.1) (4.9) - 1,271.1
----------- ----------- ----------- ---------- ----------
Minority interest in NL subsidiaries 0.3 - - - 0.3
----------- ----------- ----------- ---------- ----------
Stockholders' equity:
Common stock and paid-in capital 36.5 - - - 36.5
Retained earnings 282.8 - 20.5 - 303.3
Treasury stock (71.1) - - - (71.1)
Adjustments: -
Marketable securities 65.1 - - - 65.1
Currency translation (6.2) - - - (6.2)
Pension liabilities (3.2) - - - (3.2)
----------- ----------- ----------- ---------- ----------
303.9 - 20.5 - 324.4
----------- ----------- ----------- ---------- ----------
$2,145.0 ($1.1) $1.1 $ - $2,145.0
=========== =========== =========== ========== ==========
See accompanying notes to pro forma condensed consolidated balance sheet.
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 April 30, 1997, occurred on December 31, 1996:
I - Sybra increases its intercompany loan from Valcor by $3.8 million
(bringing its total intercompany loan from Valcor to $23.8 million)
and repays all of its outstanding bank indebtedness ($1.1 million).
II - Sybra sells certain restaurant real estate to U.S. Resaturant
Properties Master L.P., Valcor sells 100% of the common stock of
Sybra to I.C.H. Corporation and I.C.H. repays $23.8 million of
intercompany indebtedness owed to Valcor by Sybra.
III - Valhi purchases 222,222 units of U.S Restaurant Properties Master
L.P. for $6 million.
Note 2 - Pro forma adjustments:
I - Reflect Sybra's borrowing $3.8 million from Valcor and repaying $1.1
million of bank indebtedness.
VALHI, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
(Unaudited)
II - Reflect Sybra's sale of certain restaurant real estate to U.S.
Restaurant Properties Master L.P., Valcor's sale of 100% of the
common stock of Sybra to I.C.H. Corporation and I.C.H.'s repayment of
$23.8 million of intercompany indebtedness owed to Valcor by Sybra,
as follows: Amount
------------
(In millions)
Aggregate cash consideration (including repayment of intercompany
indebtedness owed to Valcor), net of estimated fees and expenses $81.0
------------
Carrying value of assets sold and liabilities assumed:
Cash and equivalents 4.0
Inventories 1.5
Prepaid expenses 1.0
Current deferred income taxes 1.2
Goodwill 5.0
Other intangible assets 10.9
Other assets 0.1
Net property, plant and equipment 52.8
Accounts payable & accrued liabilities (13.6)
Long-term debt and capital lease
obligations, including current portion (4.5)
Noncurrent deferred income taxes (0.3)
Other noncurrent liabilities (1.3)
------------
56.8
------------
Pre-tax gain 24.2
------------
Income tax expense:
Current income taxes 3.4
Deferred income taxes 0.3
------------
3.7
------------
Net-of-tax gain $20.5
============
The overall effective income tax rate applicable to the pre-tax gain
varies from the 35% statutory federal income tax rate due principally
to the excess of tax basis over book basis of the common stock of
Sybra sold for which no deferred income tax benefit was previously
recognized.
III- Reflect purchase of 222,222 units of U.S. Restaurant Properties
Master L.P. for $6 million cash.
VALHI, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
Year ended December 31, 1996
(Unaudited)
(In millions, except per share data)
Valhi Pro forma
Historical adjustments Pro forma
----------- ----------- -----------
Revenues and other income:
Net sales $1,190.8 ($116.0)(a) $1,074.8
Other, net 41.4 (0.1)(a)
0.6 (b) 41.9
----------- ----------- -----------
1,232.2 (115.5) 1,116.7
----------- ----------- -----------
Costs and expenses:
Cost of goods sold 909.3 (101.1)(a) 808.2
Selling, general and administrative 211.7 (6.2)(a) 205.5
Interest 100.2 (2.3)(a)
0.6 (b) 98.5
----------- ----------- -----------
1,221.2 (109.0) 1,112.2
----------- ----------- -----------
Income of consolidated companies
before income taxes 11.0 (6.5) 4.5
Equity in Amalgamated Sugar Company 10.0 10.0
Equity in Waste Control Specialists (6.4) - (6.4)
----------- ----------- -----------
Income before income taxes and
minority interest 14.6 (6.5) 8.1
Provision for income taxes 3.5 (2.4)(a) 1.1
Minority interest 6.9 - 6.9
----------- ----------- -----------
Income from continuing operations $4.2 ($4.1) $0.1
=========== =========== ===========
Income from continuing operations per share $0.04 $ -
=========== ===========
Weighted average common shares outstanding 114.6 114.6
=========== ===========
See accompanying notes to pro forma condensed consolidated statement of income.
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
disposition of the Company's fast food operations, more fully described in
Item 2 of this Current Report on Form 8-K dated April 30, 1997, occurred as
of the beginning of 1996.
Note 2 - Pro forma adjustments:
(a) Eliminate Sybra's historical results of operations included in Valhi's
consolidated statement of income. In future filings, Valhi will report
Sybra's results of operations through the date of disposal as
discontinued operations.
(b) Reclassification.