EXHIBIT 99
BORG-WARNER SECURITY CORPORATION
SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
(MILLIONS OF DOLLARS)
Introduction
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The accompanying unaudited Pro Forma Financial Information has been prepared as
a result of the combination of the Company's armored services unit ("WFAS") with
Loomis, as described in the preceding information. The unaudited Pro Forma
Financial Information is based on the historical financial statements of the
Company and WFAS and gives effect to (i) the disposition of substantially all of
the assets and certain liabilities of WFAS and other adjustments related to the
business combination and (ii) the application of the net proceeds received by
the Company to repay certain indebtedness. The accompanying unaudited Pro Forma
Consolidated Statements of Earnings for the year ended December 31, 1995 and the
nine months ended September 30, 1996 give effect to the transactions as if they
had been consummated on January 1, 1995. The unaudited Pro Forma Condensed
Consolidated Balance Sheet at September 30, 1996 is presented giving effect to
the transactions as if they had been consummated as of that date.
The pro forma results of operations do not include any nonrecurring charges or
credits which will directly result from the transaction and which will be
included in the Company's results of operations within the 12 months following
the transaction. While the Company anticipates that it will recognize a gain
from the sale of WFAS' assets, the transaction is subject to potential
significant purchase price adjustments and any gain cannot be reasonably
estimated at this time. The Company does not anticipate that the gain will be
material. The Company does not expect any other material nonrecurring charges or
credits to result from the transaction.
The unaudited Pro Forma Financial Information is intended for informational
purposes only and is not necessarily indicative of the future results of
operations or financial position of the Company had the transactions described
above occurred on the indicated dates or been in effect for the periods
presented.
The unaudited Pro Forma Financial Information and the accompanying notes should
be read in conjunction with, and are qualified in their entirety by, the
historical consolidated financial statements of the Company and WFAS, including
the related notes thereto.
BORG-WARNER SECURITY CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
YEAR ENDED DECEMBER 31, 1995
(MILLIONS OF DOLLARS EXCEPT PER SHARE)
Pro Forma
Historical Adjustments (a) Pro Forma
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Net service revenue $1,711.2 ($231.0) $1,480.2
Cost of services 1,360.2 (188.6) 1,171.6
Selling, general and administrative expenses 210.6 (18.7) 191.9
Depreciation 47.0 (7.2) 39.8
Amortization of excess purchase price
over net assets acquired 13.4 (1.5) 11.9
Interest expense and finance charges 56.6 (8.9)(b) 47.7
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Earnings before income taxes and equity in
earnings of unconsolidated subsidiaries 23.4 (6.1) 17.3
Provision for income taxes 9.5 (2.6)(c) 6.9
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Earnings before equity in earnings of
unconsolidated subsidiaries 13.9 (3.5) 10.4
Equity in earnings of Loomis Fargo - 3.3 (d) 3.3
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Earnings from continuing operations $13.9 ($0.2) $13.7
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Earnings per share from continuing operations $0.59 $0.59
Average shares outstanding (thousands) 23,399 23,399
BORG-WARNER SECURITY CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
9 MONTHS ENDED SEPTEMBER 30, 1996
(MILLIONS OF DOLLARS EXCEPT PER SHARE)
Pro Forma
Historical Adjustments (a) Pro Forma
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Net service revenue $1,267.3 $(182.3) $1,085.0
Cost of services 1,010.0 (153.4) 856.6
Selling, general and administrative expenses 156.7 (13.8) 142.9
Depreciation 35.6 (5.2) 30.4
Amortization of excess purchase price
over net assets acquired 10.1 (1.1) 9.0
Interest expense and finance charges 42.7 (7.1)(b) 35.6
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Earnings before income taxes and equity in
earnings of unconsolidated subsidiaries 12.2 (1.7) 10.5
Provision for income taxes 4.5 (0.9)(c) 3.6
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Earnings before equity in earnings of
unconsolidated subsidiaries 7.7 (0.8) 6.9
Equity in earnings of Loomis Fargo - 1.9 (d) 1.9
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Earnings from continuing operations $7.7 $1.1 $8.8
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Earnings per share from continuing operations $0.33 $0.38
Average shares outstanding (thousands) 23,502 23,502
BORG-WARNER SECURITY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 1996
(MILLIONS OF DOLLARS)
Pro Forma
Historical Adjustments (e) Pro Forma
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ASSETS
Cash and cash equivalents $ 17.3 - $ 17.3
Receivables, net 99.9 ($ 28.9) 71.0
Inventories 12.6 (1.8) 10.8
Other current assets 31.4 10.5(b) 41.9
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Total current assets 161.2 (20.2) 141.0
Property, plant and equipment, at cost 446.1 (79.9) 366.2
Less accumulated depreciation 234.1 (49.0) 185.1
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Net property, plan and equipment 212.0 (30.9) 181.1
Net excess purchase price over net assets acquired 240.3 (27.8) 212.5
Deferred tax asset 62.3 - 62.3
Net assets of discontinued operations 11.5 - 11.5
Investment in Loomis Fargo - 5.3(d) 5.3
Other assets 88.3 (4.2) 84.1
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Total assets $775.6 ($ 77.8) $697.8
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LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 2.9 ($ 0.7) $ 2.2
Accounts payable and accrued expenses 176.9 (11.8) 165.1
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Total current liabilities 179.8 (12.5) 167.3
Long-term debt 456.9 (91.0)(b) 365.9
Other long-term liabilities 109.5 25.7(f) 135.2
Capital stock:
Common stock 0.2 - 0.2
Series I non-voting common stock - - -
Other stockholders' equity 29.2 - 29.2
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Total stockholders' equity 29.4 - 29.4
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Total liabilities and stockholders' equity $775.6 ($ 77.8) $697.8
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BORG-WARNER SECURITY CORPORATION
SUPPLEMENTAL PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
Notes to Pro Forma Statements of Earnings and Balance Sheet
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a To eliminate the historical revenues and expenses of WFAS and subsidiaries
for the respective periods presented.
b To eliminate debt retired with proceeds received from the transaction and to
adjust interest expense. Proceeds from the transaction, net of transaction and
related expenses, were approximately $105 million and were applied as follows:
decrease in borrowings under the term loan, $80 million; decrease in
borrowings under the revolving line of credit, $10 million; and increase in
interest-bearing cash deposits under the accounts receivable facility, $15
million. The interest expense adjustment was computed using the average
interest rates for the respective periods. Such rates were used because
management believes these rates would have been the same if the facilities had
been negotiated by the Company on a stand-alone basis without WFAS.
c To record the estimated income tax effect for the pro forma adjustments
described in Notes (a) and (b) for the respective periods.
d To recognize, under the equity method, the Company's 49% interest in the pro
forma net assets and earnings of Loomis, Fargo & Co.
e To eliminate the historical assets, liabilities and stockholder's equity of
WFAS and subsidiaries.
f To establish allowances for anticipated expenses incurred as a direct result
of the business combination and for purchase price adjustments under the
contribution agreement, including indemnifications and performance guarantees.