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Exhibit 99.5
SMURFIT-STONE CONTAINER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma condensed consolidated statements of
operations and condensed consolidated balance sheet of Smurfit-Stone were
prepared to illustrate the estimated effects of the Transaction, including the
financing plan, as if those transactions had occurred for the statements of
operations as of the beginning of the periods presented and for the balance
sheet presentation as of March 31, 2000.
The pro forma adjustments are based upon available information and upon
certain assumptions that Smurfit-Stone and St. Laurent believe are reasonable.
The unaudited pro forma condensed consolidated financial statements and
accompanying notes should be read in conjunction with the historical financial
statements of Smurfit-Stone and St. Laurent, and the related notes thereto. The
historical condensed consolidated statements of operations and condensed
consolidated balance sheets of St. Laurent are presented in accordance with
accounting principles generally accepted in the United States.
The unaudited pro forma condensed consolidated financial statements are
provided for informational purposes only in response to Securities and Exhange
Commission ("SEC") requirements and do not purport to represent what
Smurfit-Stone's financial position or results of operations would actually have
been if the Transaction had in fact occurred at such dates or to project
Smurfit-Stone's financial position or results of operations for any future date
or period.
For financial accounting purposes, the acquisition of St. Laurent will be
accounted for using the purchase method of accounting. Accordingly,
St. Laurent's assets and liabilities have been adjusted, on a preliminary basis,
to reflect their fair values in the unaudited pro forma condensed consolidated
balance sheet as of March 31, 2000. The estimated effects resulting from these
adjustments have been reflected in the unaudited pro forma condensed
consolidated statements of operations. The allocation of the estimated purchase
price and the estimated transaction fees and expenses included in the unaudited
pro forma condensed consolidated financial statements are preliminary; final
amounts may differ from those set forth herein and such differences may be
material.
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SMURFIT-STONE CONTAINER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
March 31, 2000
-----------------------------------------------------------------
Smurfit-Stone St. Laurent Pro Forma Smurfit-Stone
Historical Historical Adjustments Pro Forma
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
ASSETS (In millions)
Current assets:
Cash and cash equivalents....................... $ 30 $ 25 $ (622) (a) $ 55
622 (d)
Receivables..................................... 680 130 (2) (b) 808
Inventories..................................... 761 111 872
Refundable income taxes......................... 7 5 12
Deferred income taxes........................... 123 123
Prepaid expenses and other current assets....... 60 7 67
------ ------ ------- -------
Total current assets....................... 1,661 278 (2) 1,937
Property, plant and equipment, net................... 4,350 813 550 (a) 5,713
Timberland, net...................................... 25 10 35
Goodwill, net........................................ 3,305 40 96 (a) 3,441
Investment in non-consolidated affiliates............ 180 180
Other assets......................................... 327 36 (6) (a) 365
8 (d)
------ ------ ------- -------
$9,848 $1,177 $ 646 $11,671
====== ====== ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt............ $ 43 $ 48 $ (48) (d) $ 43
Accounts payable................................ 609 105 (2) (b) 712
Other accrued liabilities....................... 630 24 (a) 630
(24) (d)
------ ------ ------- -------
Total current liabilities.................. 1,282 153 (50) 1,385
Long-term debt, less current maturities.............. 4,848 337 (323) (d) 5,887
1,025 (d)
Other long-term liabilities.......................... 879 46 11 (a) 936
Deferred income taxes................................ 862 22 209 (a) 1,093
Minority interest.................................... 93 93
Stockholders' equity:
Common stock and additional paid-in capital..... 3,444 581 (581) (a) 3,837
393 (a)
Retained earnings (deficit)..................... (1,546) 38 (38) (a) (1,546)
Accumulated other comprehensive income (loss)... (14) (14)
------ ------ ------- -------
Total stockholders' equity................. 1,884 619 (226) 2,277
------ ------ ------- -------
$9,848 $1,177 $ 646 $11,671
====== ====== ======= =======
Common stock shares outstanding 218 50 (25) (c) 243
</TABLE>
See accompanying notes to the Unaudited Pro Forma Condensed Consolidated
Financial Statements.
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SMURFIT-STONE CONTAINER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Smurfit-Stone St. Laurent Pro Forma Smurfit-Stone
Historical Historical Adjustments Pro Forma
------------- ------------ ----------- -------------
(in millions, except per share data)
<S> <C> <C> <C> <C>
Three months ended March 31, 2000:
Net sales......................................... $1,865 $282 $(10)(b) $2,137
Cost of goods sold................................ 1,481 233 4 (a) 1,708
(10)(b)
Selling and administrative expenses............... 179 24 203
Restructuring charge.............................. 6 6
------ ---- ----- ------
Income from operations............................ 199 25 (4) 220
Interest expense, net............................. (121) (8) (18)(d) (147)
Other income - net................................ 7 (3) 4
------ ---- ----- ------
Income from continuing operations before
income taxes, minority interest and
extraordinary item........................... 85 14 (22) 77
Benefit from (provision for) income taxes......... (43) (6) 8 (a) (41)
Minority interest expense......................... (2) (2)
------ ---- ----- ------
Income from continuing operations before
extraordinary item........................... $ 40 $ 8 $(14) $ 34
====== ==== ===== ======
Basic earnings per common share from
continuing operations before
extraordinary item........................... $ .18 $.16 $ .14
====== ==== ======
Diluted earnings per common share
from continuing operations before
extraordinary item........................... $ .18 $.16 $ .14
====== ==== ======
Weighted average common shares
outstanding - Basic.......................... 218 50 (25)(c) 243
Weighted average common shares
outstanding - Diluted........................ 221 50 (25)(c) 246
</TABLE>
See accompanying notes to the Unaudited Pro forma Condensed Consolidated
Financial Statements.
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SMURFIT-STONE CONTAINER CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Smurfit-Stone St. Laurent Pro Forma Smurfit-Stone
Historical Historical Adjustments Pro Forma
------------- ------------ ----------- -------------
(in millions, except per share data)
<S> <C> <C> <C> <C>
Year ended December 31, 1999:
Net sales......................................... $ 7,151 $ 916 $ (53) (b) $ 8,014
Cost of goods sold................................ 6,022 778 18 (a) 6,765
(53) (b)
Selling and administrative expenses............... 696 64 760
Restructuring charge.............................. 10 10
------- ----- ------ -------
Income from operations............................ 423 74 (18) 479
Interest expense, net............................. (563) (29) (73) (d) (665)
Other income - net................................ 479 (e) 14 493
------- ----- ------ -------
Income from continuing operations before
income taxes, minority interest and
extraordinary item............................ 339 59 (91) 307
Benefit from (provision for) income taxes........ (168) (22) 34 (a) (156)
Minority interest expense........................ (8) (8)
------- ----- ------ -------
Income from continuing operations before
extraordinary item............................ $ 163 $ 37 $ (57) $ 143
======= ===== ====== =======
Basic earnings per common share from
continuing operations before
extraordinary item............................ $ .75 $ .75 $ .59
======= ===== =======
Diluted earnings per common share
from continuing operations before
extraordinary item............................ $ .74 $ .75 $ .58
======= ===== =======
Weighted average common shares
outstanding - Basic........................... 217 50 (24) (c) 243
Weighted average common shares
outstanding - Diluted......................... 220 50 (24) (c) 246
</TABLE>
See accompanying notes to the Unaudited Pro Forma Condensed Consolidated
Financial Statements.
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SMURFIT-STONE CONTAINER CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(a) To record:
Balance sheet
- The cash payment of $622 million for 49.8 million shares of St. Laurent
common stock at $12.50 per share to the existing shareholders;
- The cash payment of $11 million or $12.50 per share for .9 million shares
of St. Laurent common stock issued upon exercise of stock options in
conjunction with the Transaction, less $11 million received upon exercise
from optionees;
- The conversion of 50.7 million shares of St. Laurent common stock including
.9 shares from the exercise of stock options into 25.3 million shares of
Smurfit-Stone common stock at a fair value of $393 million, based upon an
average market price of $15.51 for Smurfit-Stone shares five days before
and after February 23, 2000, the date of the Pre-Merger Agreement;
- Acquired assets and liabilities, at fair value;
- Excess purchase price as goodwill; and
- Estimated Smurfit-Stone merger costs of $24 million directly attributable
to the cost of acquisition representing primarily financial advisor,
banking and legal fees.
Statements of operations
- Depreciation of property, plant and equipment over an average life of
seventeen years; and
- Amortization of goodwill over a forty year period.
Tax effects are recorded assuming a 39% tax rate.
The allocation of fair values to assets and liabilities, including
intangibles and property, plant and equipment was performed on a
preliminary basis. Based upon additional analyses and evaluations to be
performed, the final amounts to be allocated to assets and liabilities may
differ from those amounts included herein and such differences may be
material. In particular the amount allocated to property, plant and
equipment will change upon completion of certain valuations and other
studies. A $100 million increase in property, plant and equipment and a
corresponding decrease in goodwill would decrease the pro forma after-tax
income by $1 million for the year ended December 31, 1999 and by $.3
million for the three months ended March 31, 2000.
(b) To eliminate the effects of sales transactions between Smurfit-Stone
and St. Laurent.
(c) To convert St. Laurent common stock to Smurfit-Stone common stock using
a 0.5 conversion factor.
Smurfit-Stone has granted Smurfit International B.V. ("SIBV"), the right to
maintain its percentage ownership of Smurfit-Stone common stock in the
event of public or private issuances. It was assumed that SIBV will not
elect to exercise its right.
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SMURFIT-STONE CONTAINER CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(d) To record the effects of additional borrowings under the Smurfit-Stone
senior secured credit facilities and repayment of St. Laurent debt:
<TABLE>
<CAPTION>
Principal
March 31, 2000
--------------
Balance sheet
-------------
<S> <C>
New borrowings
U.S. term facility (variable rate of 10%) due 2006.................... $ 450
Canadian term facility (variable rate of 10%) due 2006................ 500
Stone revolving credit facility (variable rate of 10%) due 2005 ...... 75
-------
Total new borrowings............................................... $ 1,025
=======
</TABLE>
The interest rate on the term facilities is based on the assumed LIBOR rate
of 6.50%. A one-eighth of one percent change in the interest rate would
increase or decrease interest expense by $1 million for the year ended
December 31, 1999 and by $.3 million for the three months ended March 31,
2000.
<TABLE>
<CAPTION>
<S> <C>
Repayments of St. Laurent debt
Secured term loan (7.68% weighted average variable rate)
payable in installments through 2005.................................. $ 219
Senior secured notes (9.01% weighted average variable rate)
payable in installments though 2008................................... 125
Other debt.............................................................. 27
-------
Total St. Laurent debt to be repaid.................................. 371
-------
Net increase to total debt.............................................. $ 654
=======
Additional net borrowings will be used as follows
Cash consideration to St. Laurent shareholders at
$12.50 per share...................................................... $ 622
Deferred debt issuance costs............................................ 8
Advisory and banking fees............................................... 24
-------
Total uses of additional borrowings.................................. $ 654
=======
</TABLE>
<TABLE>
<CAPTION>
Year ended Three months ended
Statements of operations December 31, 1999 March 31, 2000
----------------- --------------
<S> <C> <C>
Interest expense on $1,025 million new
borrowings used to finance the acquisition.... $ 103 $ 26
Amortization of new deferred debt issuance
costs......................................... 1
Less interest expense on extinguished debt...... (31) (8)
----- -------
Net interest expense increase................... $ 73 $ 18
===== =======
</TABLE>
(e) Other, net for Smurfit-Stone includes pretax gains on asset sales of
$446 million resulting from the sales of a majority of its timberlands
and its interest in Abitibi.
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