Calculation of Post Merger Income statement
To achieve an equivalent combined income statement. The Income statement for USS is adjusted to the latest income statement of NSC of March 31, 2023. This is done through using the base income statement for the financial year of 2022, deducting 2022 Q1 income and adding 2023 Q1 income from information found in the 10-Q Quarterly report.
b. Adjustment of Nippon Steel Corporation Financial statement to USD
For a comparative analysis, the income statement for Nippon Steel Corporation has also been converted from JPY to USD.
c. Synergistic Effect in Cost savings
As synergistic cost savings were not given in the merger proposal, analysis of a similar corporation is used. ArcelorMittal has a similar combined production capacity of the merged entity as well as having similar business operations as the combined merged entity (ArcelorMittal, 2022). *Taken from ArcelorMittal FY2022 annual report NAFTA*
An analysis of their income statement is used to estimate the cost savings through reduction in cost of sales and selling, general and administrative expenses.
d. Post-Synergistic Income Statement
Taking into account the Synergistic effects found in Section c, the post-merger income statement is estimated as below.