Form: 8-K

Current report filing

August 8, 2006

Documents



Exhibit 99.2

Note 14 of the unaudited consolidated financial statements of the Company
for the quarterly period ended May 31, 2006, conformed to reflect the Company’s
condensed consolidating financial information as if the new subsidiary
nonguarantors had been in place as of and for all periods presented


14)
CONDENSED CONSOLIDATING FINANCIAL INFORMATION:

Subsequent to May 31, 2006, seven subsidiaries of the Company which were previously included as Subsidiary Guarantors (as defined below) became Subsidiary Nonguarantors (as defined below) under the Company’s existing indentures. The following information sets forth the condensed consolidating balance sheets as of May 31, 2006, and February 28, 2006, the condensed consolidating statements of income for the three months ended May 31, 2006, and May 31, 2005, and the condensed consolidating statements of cash flows for the three months ended May 31, 2006, and May 31, 2005, for the Company, the parent company, the combined subsidiaries of the Company which guarantee the Company’s senior notes and senior subordinated notes (“Subsidiary Guarantors”) and the combined subsidiaries of the Company which are not Subsidiary Guarantors (primarily foreign subsidiaries) (“Subsidiary Nonguarantors”), as if the new Subsidiary Nonguarantors had been in place as of and for all periods presented. The Subsidiary Guarantors are wholly-owned and the guarantees are full, unconditional, joint and several obligations of each of the Subsidiary Guarantors. Separate financial statements for the Subsidiary Guarantors of the Company are not presented because the Company has determined that such financial statements would not be material to investors. The accounting policies of the parent company, the Subsidiary Guarantors and the Subsidiary Nonguarantors are the same as those described for the Company in the Summary of Significant Accounting Policies in Note 1 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2006, and include the recently adopted accounting pronouncements described in Note 2 herein. There are no restrictions on the ability of the Subsidiary Guarantors to transfer funds to the Company in the form of cash dividends, loans or advances.

   
Parent 
Company 
 
Subsidiary 
Guarantors 
 
Subsidiary 
Nonguarantors
  
Eliminations 
 
Consolidated
  
(in millions)
                               
Condensed Consolidating Balance Sheet at May 31, 2006
Current assets:
                                
Cash and cash investments
 
$
1.1
 
$
2.0
 
$
34.4
 
$
-
 
$
37.5
 
Accounts receivable, net
   
207.5
   
213.4
   
433.3
   
-
   
854.2
 
Inventories
   
37.5
   
998.8
   
718.7
   
(3.9
)
 
1,751.1
 
Prepaid expenses and other
   
14.3
   
215.5
   
48.9
   
-
   
278.7
 
Intercompany receivable (payable)
   
989.1
   
(1,053.0
)
 
63.9
   
-
   
-
 
Total current assets
   
1,249.5
   
376.7
   
1,299.2
   
(3.9
)
 
2,921.5
 
Property, plant and equipment, net
    
34.8
   
732.9
   
675.0
   
-
   
1,442.7
 
Investments in subsidiaries
    
4,730.4
   
116.4
   
-
   
(4,846.8
)
 
-
 
Goodwill
    
-
   
1,309.6
   
894.5
   
-
   
2,204.1
 
Intangible assets, net
    
-
   
548.2
   
338.7
   
-
   
886.9
 
Other assets, net
    
28.6
   
84.1
   
103.6
   
-
   
216.3
 
Total assets
 
$
6,043.3
 
$
3,167.9
 
$
3,311.0
 
$
(4,850.7
)
$
7,671.5
 



 
  
Parent 
Company 
 
Subsidiary 
Guarantors 
 
Subsidiary 
Nonguarantors
  
Eliminations 
 
Consolidated
  
(in millions)
                               
Current liabilities:
                                
Notes payable to banks
 
$
62.0
 
$
-
 
$
102.3
 
$
-
 
$
164.3
 
Current maturities of long-term debt
   
200.0
   
4.4
   
9.9
   
-
   
214.3
 
Accounts payable
   
6.0
   
99.7
   
259.3
   
-
   
365.0
 
Accrued excise taxes
   
10.0
   
30.3
   
27.9
   
-
   
68.2
 
Other accrued expenses and liabilities
   
204.4
   
192.8
   
229.4
   
(1.3
)
 
625.3
 
Total current liabilities
   
482.4
   
327.2
   
628.8
   
(1.3
)
 
1,437.1
 
Long-term debt, less current maturities
    
2,453.5
   
11.9
   
16.4
   
-
   
2,481.8
 
Deferred income taxes
    
(17.3
)
 
364.5
   
26.4
   
-
   
373.6
 
Other liabilities
    
4.7
   
83.7
   
170.6
   
-
   
259.0
 
Stockholders’ equity:
                                
Preferred stock
   
-
   
9.0
   
1,013.9
   
(1,022.9
)
 
-
 
Class A and Class B common stock
   
2.3
   
6.4
   
28.3
   
(34.7
)
 
2.3
 
Additional paid-in capital
   
1,174.9
   
1,034.8
   
873.0
   
(1,907.8
)
 
1,174.9
 
Retained earnings
   
1,675.3
   
1,291.6
   
228.0
   
(1,519.6
)
 
1,675.3
 
Accumulated other comprehensive
(loss) income
   
293.7
   
38.8
   
325.6
   
(364.4
)
 
293.7
 
Treasury stock
   
(26.2
)
 
-
   
-
   
-
   
(26.2
)
Total stockholders’ equity
   
3,120.0
   
2,380.6
   
2,468.8
   
(4,849.4
)
 
3,120.0
 
Total liabilities and
stockholders’ equity
 
$
6,043.3
 
$
3,167.9
 
$
3,311.0
 
$
(4,850.7
)
$
7,671.5
 
                                 
Condensed Consolidating Balance Sheet at February 28, 2006
Current assets:
                                
Cash and cash investments
 
$
0.9
 
$
1.2
 
$
8.8
 
$
-
 
$
10.9
 
Accounts receivable, net
   
233.0
   
195.3
   
343.6
   
-
   
771.9
 
Inventories
   
38.6
   
1,032.6
   
637.8
   
(4.6
)
 
1,704.4
 
Prepaid expenses and other
   
13.6
   
156.4
   
39.3
   
4.4
   
213.7
 
Intercompany receivable (payable)
   
956.1
   
(1,101.3
)
 
145.2
   
-
   
-
 
Total current assets
   
1,242.2
   
284.2
   
1,174.7
   
(0.2
)
 
2,700.9
 
Property, plant and equipment, net
    
35.6
   
729.4
   
660.3
   
-
   
1,425.3
 
Investments in subsidiaries
    
4,655.8
   
113.1
   
-
   
(4,768.9
)
 
-
 
Goodwill
    
-
   
1,308.8
   
884.8
   
-
   
2,193.6
 
Intangible assets, net
    
-
   
549.6
   
334.3
   
-
   
883.9
 
Other assets, net
    
24.9
   
69.3
   
102.7
   
-
   
196.9
 
Total assets
 
$
5,958.5
 
$
3,054.4
 
$
3,156.8
 
$
(4,769.1
)
$
7,400.6
 
                                 
Current liabilities:
                                
Notes payable to banks
 
$
54.5
 
$
-
 
$
25.4
 
$
-
 
$
79.9
 
Current maturities of long-term debt
   
200.1
   
4.6
   
9.4
   
-
   
214.1
 
Accounts payable
   
4.4
   
123.1
   
185.3
   
-
   
312.8
 
Accrued excise taxes
   
15.6
   
42.9
   
18.2
   
-
   
76.7
 
Other accrued expenses and liabilities
   
230.6
   
146.1
   
235.1
   
2.8
   
614.6
 
Total current liabilities
   
505.2
   
316.7
   
473.4
   
2.8
   
1,298.1
 
Long-term debt, less current maturities
    
2,485.5
   
12.8
   
17.5
   
-
   
2,515.8
 
Deferred income taxes
    
(12.8
)
 
356.1
   
27.9
   
-
   
371.2
 
Other liabilities
    
5.4
   
72.1
   
162.8
   
-
   
240.3
 



   
Parent 
Company 
 
Subsidiary 
Guarantors 
 
Subsidiary 
Nonguarantors
  
Eliminations 
 
Consolidated
  
(in millions)
                               
Stockholders’ equity:
                                
Preferred stock
   
-
   
9.0
   
938.9
   
(947.9
)
 
-
 
Class A and Class B common stock
   
2.3
   
6.4
   
28.3
   
(34.7
)
 
2.3
 
Additional paid-in capital
   
1,159.4
   
1,034.8
   
879.8
   
(1,914.6
)
 
1,159.4
 
Retained earnings
   
1,592.3
   
1,216.0
   
353.1
   
(1,569.1
)
 
1,592.3
 
Accumulated other comprehensive
(loss) income
   
247.4
   
30.5
   
275.1
   
(305.6
)
 
247.4
 
Treasury stock
   
(26.2
)
 
-
   
-
   
-
   
(26.2
)
Total stockholders’ equity
   
2,975.2
   
2,296.7
   
2,475.2
   
(4,771.9
)
 
2,975.2
 
Total liabilities and
stockholders’ equity
 
$
5,958.5
 
$
3,054.4
 
$
3,156.8
 
$
(4,769.1
)
$
7,400.6
 
 
Condensed Consolidating Statement of Income for the Three Months Ended May 31, 2006
Sales
 
$
319.7
 
$
764.6
 
$
569.7
 
$
(223.8
)
$
1,430.2
 
Less - excise taxes
   
(37.2
)
 
(112.6
)
 
(124.5
)
 
-
   
(274.3
)
Net sales
   
282.5
   
652.0
   
445.2
   
(223.8
)
 
1,155.9
 
Cost of product sold
    
(219.0
)
 
(475.9
)
 
(367.2
)
 
224.8
   
(837.3
)
Gross profit
   
63.5
   
176.1
   
78.0
   
1.0
   
318.6
 
Selling, general and administrative
expenses
   
(46.2
)
 
(58.9
)
 
(67.5
)
 
-
   
(172.6
)
Restructuring and related charges
    
-
   
(2.3
)
 
-
   
-
   
(2.3
)
Acquisition-related integration costs
    
-
   
(0.7
)
 
-
   
-
   
(0.7
)
Operating income
   
17.3
   
114.2
   
10.5
   
1.0
   
143.0
 
Equity in earnings (loss) of equity
method investees and subsidiaries
   
82.7
   
1.4
   
0.6
   
(84.6
)
 
0.1
 
Gain on change in fair value of
derivative instrument
   
-
   
52.5
   
-
   
-
   
52.5
 
Interest (expense) income, net
    
(21.5
)
 
(25.0
)
 
(2.2
)
 
-
   
(48.7
)
Income before income taxes
   
78.5
   
143.1
   
8.9
   
(83.6
)
 
146.9
 
Provision for income taxes
    
7.0
   
(67.6
)
 
(1.0
)
 
0.2
   
(61.4
)
Net income
    
85.5
   
75.5
   
7.9
   
(83.4
)
 
85.5
 
Dividends on preferred stock
   
(2.5
)
 
-
   
-
   
-
   
(2.5
)
Income available to common
stockholders
 
$
83.0
 
$
75.5
 
$
7.9
 
$
(83.4
)
$
83.0
 

   
Parent 
Company 
 
Subsidiary 
Guarantors 
 
Subsidiary 
Nonguarantors
  
Eliminations 
 
Consolidated
  
(in millions)
                               
Condensed Consolidating Statement of Income for the Three Months Ended May 31, 2005
Sales
 
$
248.0
 
$
700.2
 
$
610.5
 
$
(192.4
)
$
1,366.3
 
Less - excise taxes
   
(33.4
)
 
(110.0
)
 
(126.4
)
 
-
   
(269.8
)
Net sales
   
214.6
   
590.2
   
484.1
   
(192.4
)
 
1,096.5
 
Cost of product sold
    
(176.6
)
 
(418.9
)
 
(388.0
)
 
193.0
   
(790.5
)
Gross profit
   
38.0
   
171.3
   
96.1
   
0.6
   
306.0
 
Selling, general and administrative
expenses
   
(38.0
)
 
(60.0
)
 
(59.9
)
 
-
   
(157.9
)
Restructuring and related charges
    
-
   
(1.2
)
 
(0.7
)
 
-
   
(1.9
)
Acquisition-related integration costs
    
-
   
(5.8
)
 
(0.6
)
 
-
   
(6.4
)
Operating (loss) income
   
-
   
104.3
   
34.9
   
0.6
   
139.8
 
Equity in earnings (loss) of equity
method investees and subsidiaries
   
33.3
   
4.0
   
(1.1
)
 
(36.7
)
 
(0.5
)
Gain on change in fair value of
derivative instrument
   
-
   
-
   
-
   
-
   
-
 
Interest income (expense), net
    
36.8
   
(65.5
)
 
(18.6
)
 
-
   
(47.3
)
Income before income taxes
   
70.1
   
42.8
   
15.2
   
(36.1
)
 
92.0
 
Benefit from (provision for)
income taxes
   
5.6
   
(20.2
)
 
(1.5
)
 
(0.2
)
 
(16.3
)
Net income
    
75.7
   
22.6
   
13.7
   
(36.3
)
 
75.7
 
Dividends on preferred stock
   
(2.5
)
 
-
   
-
   
-
   
(2.5
)
Income available to common
stockholders
 
$
73.2
 
$
22.6
 
$
13.7
 
$
(36.3
)
$
73.2
 
 
Condensed Consolidating Statement of Cash Flows for the Three Months Ended May 31, 2006
Net cash (used in) provided by
operating activities
 
$
(19.7
)
$
74.1
 
$
(47.7
)
$
-
 
$
6.7
 
                                 
Cash flows from investing activities:
                                
Purchases of property, plant and
equipment
   
(0.5
)
 
(13.1
)
 
(31.5
)
 
-
   
(45.1
)
Payment of accrued earn-out amount
   
-
   
(1.1
)
 
-
   
-
   
(1.1
)
Proceeds from sales of businesses
   
-
   
-
   
28.0
   
-
   
28.0
 
Proceeds from sales of assets
   
-
   
-
   
0.7
   
-
   
0.7
 
Proceeds from sales of equity
method investments
   
-
   
-
   
-
   
-
   
-
 
Investment in equity method investee
   
-
   
-
   
-
   
-
   
-
 
Other investing activities
   
-
   
(2.1
)
 
-
   
-
   
(2.1
)
Net cash (used in) provided by
investing activities
   
(0.5
)
 
(16.3
)
 
(2.8
)
 
-
   
(19.6
)
                                 
Cash flows from financing activities:
                                
Intercompany financings, net
   
55.1
   
(55.6
)
 
0.5
   
-
   
-
 
Net proceeds from notes payable
   
7.5
   
-
   
76.4
   
-
   
83.9
 
Exercise of employee stock options
   
8.6
   
-
   
-
   
-
   
8.6
 
Excess tax benefits from share-based
payment awards
   
1.7
   
-
   
-
   
-
   
1.7
 
Principal payments of long-term debt
   
(50.0
)
 
(1.4
)
 
(1.2
)
 
-
   
(52.6
)
Payment of preferred stock dividends
   
(2.5
)
 
-
   
-
   
-
   
(2.5
)
Net cash provided by (used in)
financing activities
   
20.4
   
(57.0
)
 
75.7
   
-
   
39.1
 
 
   
Parent 
Company 
 
Subsidiary 
Guarantors 
 
Subsidiary 
Nonguarantors
  
Eliminations 
 
Consolidated
  
(in millions)
                               
Effect of exchange rate changes on
cash and cash investments
   
-
   
-
   
0.4
   
-
   
0.4
 
                                 
Net increase (decrease) in cash and
cash investments
   
0.2
   
0.8
   
25.6
   
-
   
26.6
 
Cash and cash investments, beginning
of period
   
0.9
   
1.2
   
8.8
   
-
   
10.9
 
Cash and cash investments, end of
period
 
$
1.1
 
$
2.0
 
$
34.4
 
$
-
 
$
37.5
 
 
Condensed Consolidating Statement of Cash Flows for the Three Months Ended May 31, 2005
Net cash (used in) provided by
operating activities
 
$
(9.7
)
$
109.2
 
$
(39.5
)
$
-
 
$
60.0
 
                                 
Cash flows from investing activities:
                                
Purchases of property, plant and
equipment
   
(1.2
)
 
(10.8
)
 
(19.8
)
 
-
   
(31.8
)
Payment of accrued earn-out amount
   
-
   
(1.6
)
 
-
   
-
   
(1.6
)
Proceeds from sales of businesses
   
-
   
17.8
   
-
   
-
   
17.8
 
Proceeds from sales of assets
   
-
   
92.5
   
0.3
   
-
   
92.8
 
Proceeds from sales of equity
method investments
   
-
   
35.2
   
-
   
-
   
35.2
 
Investment in equity method investee
   
-
   
-
   
(2.3
)
 
-
   
(2.3
)
Other investing activities
   
-
   
-
   
-
   
-
   
-
 
Net cash (used in) provided by
investing activities
   
(1.2
)
 
133.1
   
(21.8
)
 
-
   
110.1
 
                                 
Cash flows from financing activities:
                                
Intercompany financings, net
   
183.6
   
(243.4
)
 
59.8
   
-
   
-
 
Net proceeds from notes payable
   
40.0
   
-
   
6.3
   
-
   
46.3
 
Exercise of employee stock options
   
8.7
   
-
   
-
   
-
   
8.7
 
Excess tax benefits from share-based
payment awards
   
-
   
-
   
-
   
-
   
-
 
Principal payments of long-term debt
   
(215.0
)
 
(3.6
)
 
(0.9
)
 
-
   
(219.5
)
Payment of preferred stock dividends
   
(2.5
)
 
-
   
-
   
-
   
(2.5
)
Net cash provided by (used in)
financing activities
   
14.8
   
(247.0
)
 
65.2
   
-
   
(167.0
)
                                 
Effect of exchange rate changes on
cash and cash investments
   
-
   
-
   
(1.5
)
 
-
   
(1.5
)
                                 
Net increase (decrease) in cash and
cash investments
   
3.9
   
(4.7
)
 
2.4
   
-
   
1.6
 
Cash and cash investments, beginning
of period
   
-
   
9.3
   
8.3
   
-
   
17.6
 
Cash and cash investments, end of
period
 
$
3.9
 
$
4.6
 
$
10.7
 
$
-
 
$
19.2