At September 30, 2012, cash and cash equivalents were $46 million and long-term debt was $202 million, reflecting $82 million of borrowings used in the formation of the Canadian joint venture and $52 million of borrowings used to fund the purchase of the additional 10% ownership interest in Carrier Enterprise. At September 30, 2012, the Company's debt-to-total-capitalization was 14%. The Company expects to generate significant cash flow from operations during the fourth quarter of 2012 and meet its annual goal of producing operating cash flow equal to or greater than net income.
Dividends paid during the first nine-months of 2012 increased 14% to $62 million. On October 1, 2012, the Company’s Board of Directors declared a special cash dividend of $5.00 per share, which will be paid on October 31, 2012. The Company anticipates that, subject to its financial position, government tax policy and general economic conditions, it will continue to pay quarterly cash dividends, but on a more moderate basis in 2013.
Mr. Nahmad added: “We believe the special dividend represents a terrific value to our shareholders given the state of the economy and uncertainty surrounding Federal income tax rates on dividends. Our financial position will remain conservative with continued capacity to make investments in our business and build our network.”
The Company estimates the payment of the special dividend will reduce fourth quarter and annual earnings per diluted share by a non-recurring amount of 38 cents and 34 cents per share, respectively, as dividends allocated to non-vested (restricted) common stock are considered in the calculation of EPS.Outlook for 2012 Watsco’s outlook for 2012 diluted earnings per share is revised to a range of $3.00 to $3.10 per diluted share, excluding the impact of the special dividend cited above, representing growth of 9% to 13% over last year. Diluted EPS on a GAAP basis (including the impact of the special dividend) is estimated to be in the range of $2.66 to $2.76 per diluted share.
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