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Press release from Marketwire

Onex Reports Second-Quarter 2013 Consolidated Results

Monday, August 12, 2013

Onex Reports Second-Quarter 2013 Consolidated Results

17:09 EDT Monday, August 12, 2013

TORONTO, ONTARIO--(Marketwired - Aug. 12, 2013) -

All amounts in U.S. dollars unless otherwise stated

Onex Corporation ("Onex") (TSX:OCX) today announced its consolidated financial results for the second quarter and six months ended June 30, 2013.

Onex' quarterly and full-year consolidated financial results do not follow any specific trends due to acquisitions and dispositions of businesses, changes in the values of its publicly traded and privately held operating companies and varying business cycles at its operating companies.

On a consolidated basis for the second quarter, revenues increased 10% to $7.7 billion compared to the same period of the prior year. The acquisitions completed in the last six months of 2012 contributed to this year-over-year revenue increase. Onex reported a consolidated net loss of $718 million compared to a net loss of $172 million in the second quarter of 2012. The primary driver of this change is an increase in the Limited Partners' Interest charge of approximately $650 million due to an overall increase in value of our operating companies.

On a consolidated basis for the six months ended June 30, 2013, revenues increased 8% to $14.9 billion consistent with the change in the quarter. The net loss for the period was $989 million compared to a net gain of $1 million for the six months ended June 30, 2012, which was impacted by the increase in the Limited Partners' Interest charge mentioned above.

Attached are the Unaudited Interim Consolidated Balance Sheets, Statements of Earnings, Statements of Cash Flows and information by industry segment for the quarter and six months ended June 30, 2013 and 2012 as prepared under International Financial Reporting Standards. The complete financial statements, including Management's Discussion and Analysis of the results, are posted on Onex' website, www.onex.com, and are also available on SEDAR at www.sedar.com.

About Onex

With offices in Toronto, New York and London, Onex is one of the oldest and most successful private equity firms. Onex acquires and builds high-quality businesses in partnership with talented management teams. The Company has approximately $16 billion of assets under management, including $5 billion of Onex capital, in private equity, credit securities and real estate. Onex invests its capital directly and as a substantial limited partner in its Funds.

Onex' businesses have assets of $45 billion, generate annual revenues of $36 billion and employ approximately 236,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. For more information on Onex, visit its website at www.onex.com. The Company's security filings can also be accessed at www.sedar.com.

This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

Onex Corporation
CONSOLIDATED BALANCE SHEETS
(Unaudited) As at As at As at
(in millions of U.S. dollars) June 30, 2013 December 31, 2012 January 1, 2012
Assets
Current assets
Cash and cash equivalents $ 2,707 $ 2,656 $ 2,448
Short-term investments 761 730 749
Accounts receivable 4,022 3,858 3,272
Inventories 4,393 4,519 4,428
Other current assets 1,349 1,443 1,154
13,232 13,206 12,051
Property, plant and equipment 5,423 5,495 5,102
Long-term investments 7,046 6,424 5,415
Other non-current assets 2,052 1,986 1,776
Intangible assets 5,071 4,833 2,599
Goodwill 4,900 4,358 2,434
$ 37,724 $ 36,302 $ 29,377
Liabilities and Equity
Current liabilities
Accounts payable and accrued liabilities $ 4,539 $ 4,549 $ 3,893
Current portion of provisions 315 347 263
Other current liabilities 1,441 1,340 909
Current portion of long-term debt of operating companies, without
recourse to Onex Corporation

2,015

286

482
Current portion of warranty reserves and unearned premiums 1,333 1,366 1,400
9,643 7,888 6,947
Non-current portion of provisions 266 264 180
Long-term debt of operating companies, without recourse to Onex Corporation 10,234 10,184 6,479
Non-current portion of warranty reserves and unearned premiums 1,741 1,774 1,727
Other non-current liabilities 2,938 2,852 2,368
Deferred income taxes 1,863 1,683 1,059
Limited Partners' Interests 6,826 6,208 4,980
33,511 30,853 23,740
Equity
Share capital 353 358 360
Non-controlling interests 3,648 3,822 3,863
Retained earnings and accumulated other comprehensive earnings 212 1,269 1,414
4,213 5,449 5,637
$ 37,724 $ 36,302 $ 29,377
Onex Corporation
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited) Three months ended June 30 Six months ended June 30
(in millions of U.S. dollars except per share data) 2013 2012 2013 2012
Revenues $ 7,699 $ 7,002 $ 14,911 $ 13,819
Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges)
(6,233
)
(5,546
)
(11,844
)
(10,954
)
Operating expenses (1,024 ) (843 ) (2,071 ) (1,672 )
Interest income 23 10 48 20
Amortization of property, plant and equipment (186 ) (154 ) (350 ) (294 )
Amortization of intangible assets and deferred charges (136 ) (79 ) (277 ) (162 )
Interest expense of operating companies (200 ) (158 ) (383 ) (295 )
Increase (decrease) in value of investments in joint ventures and associates at fair value, net
14

(358
)
290

250
Stock-based compensation expense (34 ) (46 ) (156 ) (134 )
Other gains 170 - 170 -
Other items (184 ) (76 ) (283 ) (121 )
Impairment of intangible assets and long-lived assets (114 ) (14 ) (123 ) (16 )
Limited Partners' Interests recovery (charge) (472 ) 180 (846 ) (306 )
Earnings (loss) before income taxes (677 ) (82 ) (914 ) 135
Provision for income taxes (41 ) (90 ) (75 ) (134 )
Net Earnings (Loss) for the Period $ (718 ) $ (172 ) $ (989 ) $ 1
Net Earnings (Loss) attributable to:
Equity holders of Onex Corporation $ (612 ) $ (201 ) $ (920 ) $ (143 )
Non-controlling Interests (106 ) 29 (69 ) 144
Net Earnings (Loss) for the Period $ (718 ) $ (172 ) $ (989 ) $ 1
Net Loss per Subordinate Voting Share of Onex Corporation
Basic and Diluted:
Net Loss for the Period $ (5.38 ) $ (1.75 ) $ (8.08 ) $ (1.25 )
Onex Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30
(Unaudited) 2013 2012
(in millions of U.S. dollars)
Operating Activities
Earnings (loss) for the period $ (989 ) $ 1
Adjustments to earnings (loss):
Provision for income taxes 75 134
Interest income (48 ) (20 )
Interest expense of operating companies 383 295
Net earnings (loss) before interest and provision for income taxes (579 ) 410
Cash taxes paid (183 ) (197 )
Items not affecting cash and cash equivalents:
Amortization of property, plant and equipment 350 294
Amortization of intangible assets and deferred charges 277 162
Amortization of deferred warranty costs 7 20
Increase in value of investments in joint ventures and associates at fair value, net (290 ) (250 )
Stock-based compensation expense 89 113
Other gains (170 ) -
Impairment of intangible assets and long-lived assets 123 16
Limited Partners' Interests charge 846 306
Change in provisions 66 99
Other 102 27
638 1,000
Changes in non-cash working capital items:
Accounts receivable (245 ) (177 )
Inventories 97 (254 )
Other current assets 74 35
Accounts payable, accrued liabilities and other current liabilities (61 ) 173
Decrease in cash and cash equivalents due to changes in working capital items (135 ) (223 )
Decrease in other operating activities (40 ) (60 )
Change in warranty reserves and premiums 26 30
489 747
Financing Activities
Issuance of long-term debt 3,292 2,009
Repayment of long-term debt (2,075 ) (1,726 )
Cash interest paid (319 ) (240 )
Cash dividends paid (6 ) (6 )
Repurchase of share capital of Onex Corporation (50 ) (5 )
Repurchase of share capital of operating companies (66 ) (123 )
Financing provided by Limited Partners 341 125
Issuance of share capital by operating companies 35 18
Distributions paid to non-controlling interests and Limited Partners (591 ) (330 )
Change in restricted cash for distribution to Limited Partners 28 (32 )
Decrease due to other financing activities (42 ) (33 )
547 (343 )
Investing Activities
Acquisitions, net of cash and cash equivalents in acquired companies of $12 (2012 - nil) (382 ) (49 )
Purchase of property, plant and equipment (456 ) (326 )
Proceeds from sale of investments in associates at fair value 323 326
Proceeds from sale of operating investment no longer controlled 217 -
Cash interest and dividends received 29 6
Net purchases of investments and securities (756 ) (412 )
Increase due to other investing activities 64 19
(961 ) (436 )
Increase (Decrease) in Cash and Cash Equivalents for the Period 75 (32 )
Decrease in cash due to changes in foreign exchange rates (24 ) (2 )
Cash and cash equivalents, beginning of the period 2,656 2,448
Cash and Cash Equivalents, End of the Period $ 2,707 $ 2,414
Onex Corporation
INFORMATION BY INDUSTRY SEGMENT
FOR THE THREE MONTHS ENDED JUNE 30, 2013
(Unaudited)
(in millions of U.S. dollars)
Three months ended June 30, 2013
Electronics
Manufacturing
Services


Aerostructures


Healthcare

Insurance
Provider
Customer
Care
Services

Metal
Services

Building
Products


Other(a)

Consolidated
Total
Revenues $1,496 $1,521 $1,222 $298 $349 $631 $907 $1,275 $7,699
Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges)

(1,381
)



(1,557
)



(855
)



(152
)



(231
)



(579
)



(745
)



(733
)



(6,233
)
Operating expenses (57 ) (54 ) (207 ) (93 ) (95 ) (16 ) (114 ) (388 ) (1,024 )
Interest income - - - - - - - 23 23
Amortization of property, plant and equipment
(16
)

(54
)

(31
)

(1
)

(8
)

(16
)

(28
)

(32
)

(186
)
Amortization of intangible assets and deferred charges
(3
)

(7
)

(36
)

(3
)

(5
)

(3
)

(5
)

(74
)

(136
)
Interest expense of operating companies (1 ) (18 ) (60 ) (2 ) (22 ) (6 ) (18 ) (73 ) (200 )
Increase in value of investments in joint ventures and associates at fair value, net

-




-




-




-




-




-




-




14




14
Stock-based compensation recovery (expense)
(6
)

(9
)

(2
)

(2
)

-


-


1


(16
)

(34
)
Other gains - - - - - - - 170 170
Other items 1 (5 ) (97 ) 3 (1 ) - (9 ) (76 ) (184 )
Impairment of intangible assets and long-lived assets
(1
)

-


-


-


-


-


(2
)

(111
)

(114
)
Limited Partners' Interests charge - - - - - - - (472 ) (472 )
Earnings (loss) before income taxes 32 (183 ) (66 ) 48 (13 ) 11 (13 ) (493 ) (677 )
Recovery of (provision for) income taxes (3 ) 52 (12 ) (17 ) (3 ) (4 ) (4 ) (50 ) (41 )
Net earnings (loss) for the period $29 $(131 ) $(78 ) $31 $(16 ) $7 $(17 ) $(543 ) $(718 )
Net earnings (loss) attributable to:
Equity holders of Onex Corporation $3 $(19 ) $(77 ) $28 $(11 ) $3 $(15 ) $(524 ) $(612 )
Non-controlling interests 26 (112 ) (1 ) 3 (5 ) 4 (2 ) (19 ) (106 )
Net earnings (loss) for the period $29 $(131 ) $(78 ) $31 $(16 ) $7 $(17 ) $(543 ) $(718 )
(a) Includes Tropicana Las Vegas, SGS International, USI, KraussMaffei, Emerald Expositions (acquired in June 2013), ONCAP II (BSN SPORTS up to June 2013), ONCAP III, Flushing Town Center, Meridian Aviation, OCP CLO-1, OCP CLO-2, OCP CLO-3, OCP CLO-4 and the parent company. Investments in joint ventures and associates recorded at fair value include Allison Transmission, BBAM, Tomkins, Cypress and certain Onex Real Estate investments.
Onex Corporation
INFORMATION BY INDUSTRY SEGMENT
FOR THE THREE MONTHS ENDED JUNE 30, 2012
(Unaudited)
(in millions of U.S. dollars)
Three months ended June 30, 2012


Electronics
Manufacturing
Services






Aerostructures






Healthcare





Insurance
Provider




Customer
Care
Services





Metal
Services





Building
Products






Other(a)





Consolidated
Total


Revenues $1,745 $1,338 $1,249 $311 $347 $669 $807 $536 $7,002
Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) (1,608 ) (1,104 ) (859 ) (160 ) (225 ) (616 ) (649 ) (325 ) (5,546 )
Operating expenses (60 ) (52 ) (236 ) (99 ) (91 ) (15 ) (113 ) (177 ) (843 )
Interest income 1 - 1 - - - - 8 10
Amortization of property, plant and equipment (18 ) (39 ) (33 ) (1 ) (7 ) (14 ) (25 ) (17 ) (154 )
Amortization of intangible assets and deferred charges (2 ) (7 ) (40 ) (4 ) (6 ) (3 ) (4 ) (13 ) (79 )
Interest expense of operating companies (2 ) (28 ) (57 ) (1 ) (34 ) (5 ) (15 ) (16 ) (158 )
Decrease in value of investments in joint ventures and associates at fair value, net - - - - - - - (358 ) (358 )
Stock-based compensation expense (7 ) (2 ) (2 ) - - (1 ) (14 ) (20 ) (46 )
Other items (17 ) (63 ) (6 ) 2 (8 ) 1 (4 ) 19 (76 )
Impairment of intangible assets and long-lived assets - - (14 ) - - - - - (14 )
Limited Partners' Interests recovery - - - - - - - 180 180
Earnings (loss) before income taxes $32 $43 $3 $48 $(24 ) $16 $(17 ) $(183 ) $(82 )
Provision for income taxes (8 ) (13 ) (9 ) (18 ) (4 ) (6 ) (4 ) (28 ) (90 )
Net earnings (loss) for the period $24 $30 $(6 ) $30 $(28 ) $10 $(21 ) $(211 ) $(172 )
Net earnings (loss) attributable to:
Equity holders of Onex Corporation $2 $5 $(2 ) $27 $(15 ) $6 $(14 ) $(210 ) $(201 )
Non-controlling interests 22 25 (4 ) 3 (13 ) 4 (7 ) (1 ) 29
Net earnings (loss) for the period $24 $30 $(6 ) $30 $(28 ) $10 $(21 ) $(211 ) $(172 )
(a) Includes Tropicana Las Vegas, ONCAP II, ONCAP III, Flushing Town Center, OCP CLO-1 and the parent company. Investments in joint ventures and associates recorded at fair value include Allison Transmission, Hawker Beechcraft, RSI (sold in February 2013), Tomkins, Cypress and certain Onex Real Estate investments.
Onex Corporation
INFORMATION BY INDUSTRY SEGMENT
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(Unaudited)
(in millions of U.S. dollars)
Six months ended June 30, 2013
Electronics
Manufacturing
Services


Aerostructures


Healthcare

Insurance
Provider
Customer
Care
Services

Metal
Services

Building
Products


Other(a)

Consolidated
Total
Revenues $2,868 $2,963 $2,377 $595 $714 $1,221 $1,677 $2,496 $14,911
Cost of sales (excluding amortization of property, plant and equipment, intangible assets and deferred charges) (2,649 ) (2,796 ) (1,672 ) (304 ) (467 ) (1,114 ) (1,394 ) (1,448 ) (11,844 )
Operating expenses (109 ) (110 ) (420 ) (189 ) (187 ) (30 ) (234 ) (792 ) (2,071 )
Interest income - - 1 - - - 1 46 48
Amortization of property, plant and equipment (31 ) (88 ) (62 ) (2 ) (15 ) (32 ) (54 ) (66 ) (350 )
Amortization of intangible assets and deferred charges (6 ) (15 ) (75 ) (6 ) (10 ) (6 ) (9 ) (150 ) (277 )
Interest expense of operating companies (2 ) (35 ) (103 ) (3 ) (47 ) (13 ) (37 ) (143 ) (383 )
Increase in value of investments in joint ventures and associates at fair value, net - - - - - - - 290 290
Stock-based compensation expense (16 ) (13 ) (4 ) (3 ) - (1 ) (6 ) (113 ) (156 )
Other gains - - - - - - - 170 170
Other items (7 ) (24 ) (130 ) 7 (11 ) - 10 (128 ) (283 )
Impairment of intangible assets and long-lived assets (1 ) - - (1 ) - - (2 ) (119 ) (123 )
Limited Partners' Interests charge - - - - - - - (846 ) (846 )
Earnings (loss) before income taxes $47 $(118 ) $(88 ) $94 $(23 ) $25 $(48 ) $(803 ) $(914 )
Recovery of (provision for) income taxes (8 ) 35 (14 ) (34 ) (5 ) (9 ) (2 ) (38 ) (75 )
Net earnings (loss) for the period $39 $(83 ) $(102 ) $60 $(28 ) $16 $(50 ) $(841 ) $(989 )
Net earnings (loss) attributable to:
Equity holders of Onex Corporation $4 $(13 ) $(101 ) $54 $(20 ) $8 $(39 ) $(813 ) $(920 )
Non-controlling interests 35 (70 ) (1 ) 6 (8 ) 8 (11 ) (28 ) (69 )
Net earnings (loss) for the period $39 $(83 ) $(102 ) $60 $(28 ) $16 $(50 ) $(841 ) $(989 )
Total assets $2,706 $5,385 $3,888 $4,806 $588 $994 $2,617 $16,740 $37,724
Long-term debt(b) $- $1,134 $3,083 $257 $716 $302 $729 $6,028 $12,249
(a) Includes Tropicana Las Vegas, SGS International, USI, KraussMaffei, Emerald Expositions (acquired in June 2013), ONCAP II (BSN SPORTS up to June 2013), ONCAP III, Flushing Town Center, Meridian Aviation, OCP CLO-1, OCP CLO-2, OCP CLO-3, OCP CLO-4 and the parent company. Investments in joint ventures and associates recorded at fair value include Allison Transmission, BBAM, RSI (sold in February 2013), Tomkins, Cypress and certain Onex Real Estate investments.
(b) Long-term debt includes current portion, excludes finance leases and is net of financing charges.
Onex Corporation
INFORMATION BY INDUSTRY SEGMENT
FOR THE SIX MONTHS ENDED JUNE 30, 2012
(Unaudited)
(in millions of U.S. dollars)
Six months ended June 30, 2012
Electronics
Manufacturing
Services


Aerostructures


Healthcare

Insurance
Provider
Customer
Care
Services

Metal
Services

Building
Products


Other(a)

Consolidated
Total
Revenues $3,436 $2,604 $2,458 $604 $711 $1,416 $1,538 $1,052 $13,819
Cost of sales excluding amortization of property, plant and equipment, intangible assets and deferred charges) (3,167 ) (2,115 ) (1,700 ) (308 ) (458 ) (1,309 ) (1,258 ) (639 ) (10,954 )
Operating expenses (115 ) (106 ) (471 ) (202 ) (184 ) (32 ) (227 ) (335 ) (1,672 )
Interest income 1 - 2 - - - 1 16 20
Amortization of property, plant and equipment (35 ) (67 ) (65 ) (2 ) (13 ) (27 ) (51 ) (34 ) (294 )
Amortization of intangible assets and deferred charges (5 ) (14 ) (82 ) (8 ) (13 ) (6 ) (8 ) (26 ) (162 )
Interest expense of operating companies (3 ) (46 ) (105 ) (2 ) (56 ) (26 ) (30 ) (27 ) (295 )
Increase in value of investments in joint ventures and associates at fair value, net - - - - - - - 250 250
Stock-based compensation expense (17 ) (7 ) (5 ) - - (1 ) (14 ) (90 ) (134 )
Other items (16 ) (60 ) (9 ) 8 (9 ) 1 (28 ) (8 ) (121 )
Impairment of intangible assets and long-lived assets - - (14 ) - (1 ) - (1 ) - (16 )
Limited Partners' Interests charge - - - - - - - (306 ) (306 )
Earnings (loss) before income taxes $79 $189 $9 $90 $(23 ) $16 $(78 ) $(147 ) $135
Provision for income taxes (12 ) (59 ) - (34 ) (7 ) (6 ) (2 ) (14 ) (134 )
Net earnings (loss) for the period $67 $130 $9 $56 $(30 ) $10 $(80 ) $(161 ) $1
Net earnings (loss) attributable to:
Equity holders of Onex Corporation $6 $21 $7 $51 $(16 ) $6 $(55 ) $(163 ) $(143 )
Non-controlling interests 61 109 2 5 (14 ) 4 (25 ) 2 144
Net earnings (loss) for the period $67 $130 $9 $56 $(30 ) $10 $(80 ) $(161 ) $1
(Unaudited)
(in millions of U.S. dollars)
As at December 31, 2012
Total assets $2,659 $5,371 $3,971 $4,903 $632 $989 $2,626 $15,151 $36,302
Long-term debt(b) $55 $1,133 $2,540 $258 $725 $306 $547 $4,906 $10,470
(a) Includes Tropicana Las Vegas, ONCAP II, ONCAP III, Flushing Town Center, OCP CLO-1 and the parent company. Investments in joint ventures and associates recorded at fair value include Allison Transmission, Hawker Beechcraft, RSI (sold in February 2013), Tomkins, Cypress and certain Onex Real Estate investments.
(b) Long-term debt includes current portion, excludes finance leases and is net of financing charges.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Onex Corporation
Emma Thompson
Vice President, Investor Relations
416.362.7711
www.onex.com

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