EX-99.2 3 a15-5450_1ex99d2.htm EX-99.2

Exhibit 99.2

 

UNAUDITED PRO FORMA CONDENSED COMBINED

FINANCIAL STATEMENTS

 

On December 19, 2014, GCA acquired Multimedia Games through the merger of a wholly owned subsidiary of GCA with and into Multimedia Games, with Multimedia Games surviving the merger as a wholly owned subsidiary of GCA. At the closing of the Merger, each outstanding share of Multimedia Games common stock, par value $0.001, was converted into the right to receive $36.50 per common share in cash, without interest. The total consideration paid in the Merger was approximately $1.2 billion.

 

The following unaudited pro forma combined financial information has been prepared to illustrate the effects of (i) the Merger, and (ii) in connection with the Merger, (A) GCA’s entry into a credit facility consisting of a $500.0 million senior secured term loan and a $50.0 million senior secured revolving credit facility (which was undrawn at the closing of the Merger) (together, the “Credit Facilities”), and (B) GCA’s issuance of $350.0 million of 7.75% Senior Secured Notes due 2021 and $350.0 million of 10.0% Senior Unsecured Notes due 2022 (collectively, the “Notes”). GCA used the net proceeds from the Credit Facilities, the net proceeds from the Notes offering, and cash on hand at GCA and Multimedia Games to pay the merger consideration in the Merger.

 

The unaudited pro forma condensed combined balance sheet set forth below combines the historical balance sheets of GCA and Multimedia Games as of September 30, 2014, and gives effect to the Merger as if it had occurred on September 30, 2014.

 

GCA and Multimedia Games had different fiscal year ends. Accordingly, the unaudited pro forma condensed combined statement of operations data for the nine-month period ended September 30, 2014 combines historical GCA consolidated statement of operations data for its nine-month period ended September 30, 2014 with historical Multimedia Games consolidated statement of operations data for its nine-month period ended June 30, 2014, giving effect to the Merger as if it had occurred on January 1, 2013. The unaudited pro forma condensed combined statement of operations data for the fiscal year ended December 31, 2013 combines the historical GCA consolidated statement of operations data for its fiscal year ended December 31, 2013 with the historical Multimedia Games consolidated statement of operations data for its fiscal year ended September 30, 2013, giving effect to the Merger as if had occurred on January 1, 2013.

 

The unaudited pro forma condensed combined financial information provided herein does not purport to represent the results of operations or financial position of GCA that would have actually resulted had the Merger been completed as of the dates indicated, nor should the information be taken as indicative of the future results of operations or financial position of the combined company. The unaudited pro forma condensed combined financial statements do not reflect the impacts of any potential operational efficiencies, cost savings or economies of scale that GCA may achieve with respect to the combined operations of GCA and Multimedia Games.

 

As of the date of this Current Report on Form 8-K/A, GCA has not completed the valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair market value of the Multimedia Games assets to be acquired and liabilities to be assumed and the related allocations to such items, including goodwill, of the Merger consideration. The pro forma financial statements are presented for illustrative purposes only and are based on the estimates and assumptions set forth in the accompanying notes. Accordingly, the accompanying preliminary unaudited pro forma purchase price allocation is subject to further adjustments as additional information becomes available and as additional analyses are performed. There can be no assurance that such finalization will not result in material changes from the preliminary purchase price allocation.

 

The pro forma financial statements should be read in conjunction with:

 

·

the accompanying notes to the pro forma financial statements;

 

 

·

the separate historical audited consolidated financial statements of GCA as of and for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K;

 

 

·

the separate historical unaudited consolidated interim financial statements of GCA as of and for the nine months ended September 30, 2014, included in the Company’s Quarterly Report on Form 10-Q;

 

 

·

the separate historical audited consolidated financial statements of Multimedia Games as of and for the year ended September 30, 2014, included in Multimedia Games’ Annual Report on Form 10-K; and

 

 

·

the separate historical unaudited consolidated interim financial statements of Multimedia Games as of and for the nine months ended June 30, 2014, included in Multimedia Games’ Quarterly Report on Form 10-Q.

 



 

GLOBAL CASH ACCESS HOLDINGS, INC.

Unaudited Pro Forma Condensed Combined Balance Sheets

As of September 30, 2014

(in thousands)

 

 

 

Global Cash
Access

 

Multimedia
Games

 

Pro Forma
Adjustments

 

Note
References

 

Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

  $

106,499

 

  $

138,086

 

  $

(151,044)

 

2A

 

  $

93,541

 

Settlement receivables

 

27,372

 

-

 

-

 

 

 

27,372

 

Trade Receivables

 

8,876

 

25,265

 

-

 

 

 

34,141

 

Other receivables, net

 

4,050

 

6,775

 

-

 

 

 

10,825

 

Inventory

 

10,905

 

12,412

 

-

 

 

 

23,317

 

Prepaid expenses and other assets

 

21,310

 

4,440

 

-

 

 

 

25,750

 

Deferred tax asset

 

3,102

 

5,886

 

-

 

 

 

8,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current assets

 

182,114

 

192,864

 

(151,044)

 

 

 

223,934

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

Restricted cash and cash equivalents

 

367

 

-

 

-

 

 

 

367

 

Property, equipment and leasehold improvements, net

 

19,707

 

76,862

 

-

 

 

 

96,569

 

Goodwill

 

188,491

 

-

 

917,275

 

1

 

1,105,766

 

Other intangible assets, net

 

39,314

 

32,022

 

-

 

 

 

71,336

 

Other receivables, net

 

4,297

 

8,279

 

-

 

 

 

12,576

 

Deferred tax asset

 

76,726

 

1,348

 

4,325

 

2B

 

82,399

 

Other assets, long-term

 

7,094

 

3,637

 

38,112

 

2C

 

48,843

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-current assets

 

335,996

 

122,148

 

959,712

 

 

 

1,417,856

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

  $

518,110

 

  $

315,012

 

  $

808,668

 

 

 

  $

1,641,790

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Settlement liabilities

 

  $

116,711

 

  $

-

 

  $

-

 

 

 

  $

116,711

 

Accounts payable and accrued expenses

 

66,256

 

34,445

 

(6,689)

 

2D

 

94,012

 

Debt, current portion

 

954

 

3,700

 

5,346

 

2E

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

183,921

 

38,145

 

(1,343)

 

 

 

220,723

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

Deferred tax liability

 

-

 

9,838

 

-

 

 

 

9,838

 

Debt, non-current portion

 

94,789

 

22,200

 

1,061,734

 

2F

 

1,178,723

 

Other accrued expenses and liabilities

 

2,749

 

471

 

-

 

 

 

3,220

 

 

 

 

 

 

 

 

 

 

 

 

 

Total non-current assets

 

97,538

 

32,509

 

1,061,734

 

 

 

1,191,781

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

281,459

 

70,654

 

1,060,391

 

 

 

1,412,504

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

90

 

386

 

(386)

 

2G

 

90

 

Convertible preferred stock

 

-

 

-

 

-

 

 

 

-

 

Additional paid-in capital

 

244,247

 

148,828

 

(148,828)

 

2H

 

244,247

 

Retained earnings

 

165,901

 

176,146

 

(183,511)

 

2I

 

158,536

 

Accumulated other comprehensive income

 

2,370

 

-

 

-

 

 

 

2,370

 

Treasury stock

 

(175,957)

 

(81,002)

 

81,002

 

2J

 

(175,957)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

236,651

 

244,358

 

(251,723)

 

 

 

229,286

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

  $

518,110

 

  $

315,012

 

  $

808,668

 

 

 

  $

1,641,790

 

 

 

See accompanying notes to unaudited pro forma condensed combined financial statements.

 



 

GLOBAL CASH ACCESS HOLDINGS, INC.

Unaudited Pro Forma Condensed Combined Statements of Operations

For the Nine Months Ended September 30, 2014

(in thousands, except per share data)

 

 

 

For the Nine
Months Ended
September 30,
2014

 

For the Nine
Months Ended
June 30, 2014

 

 

 

 

 

 

 

 

 

Global Cash
Access

 

Multimedia
Games

 

Pro Forma
Adjustments

 

Note
References

 

Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 $

  440,998

 

 $

  167,606

 

 $

-

 

 

 

 $

608,604

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization)

 

331,181

 

37,871

 

-

 

 

 

369,052

 

Operating expenses

 

62,233

 

40,042

 

(953)

 

2K

 

101,322

 

Research and development expenses

 

-

 

12,351

 

-

 

 

 

12,351

 

Depreciation

 

5,702

 

26,971

 

-

 

 

 

32,673

 

Amortization

 

8,476

 

5,402

 

-

 

 

 

13,878

 

 

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

407,592

 

122,637

 

(953)

 

 

 

529,276

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

33,406

 

44,969

 

953

 

 

 

79,328

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

(5,625)

 

(450)

 

(70,610)

 

2L

 

(76,685)

 

Loss on extinguishment of debt

 

-

 

-

 

(5,648)

 

2M

 

(5,648)

 

Other income, net of other expense

 

-

 

24

 

-

 

 

 

24

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

(5,625)

 

(426)

 

(76,258)

 

 

 

(82,309)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) from operations before tax

 

27,781

 

44,543

 

(75,305)

 

 

 

(2,981)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision/(benefit)

 

9,892

 

16,400

 

(26,357)

 

2N

 

(65)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

17,889

 

28,143

 

(48,948)

 

 

 

(2,916)

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

(457)

 

-

 

-

 

 

 

(457)

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income/(loss)

 

 $

  17,432

 

 $

  28,143

 

 $

  (48,948)

 

 

 

 $

(3,373)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 $

  0.27

 

 $

  0.95

 

N/M

 (1)

 

 

 $

  (0.04)

 

Diluted

 

 $

  0.27

 

 $

  0.91

 

N/M

 (1)

 

 

 $

  (0.04)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

Basic

 

65,853

 

29,639

 

(29,639)

 

 

 

65,853

 

Diluted

 

67,051

 

30,971

 

(30,971)

 

 

 

67,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited pro forma condensed combined financial statements.

 



 

GLOBAL CASH ACCESS HOLDINGS, INC.

Unaudited Pro Forma Condensed Combined Statements of Operations

For the Year Ended December 31, 2013

(in thousands, except per share data)

 

 

 

For the Year
Ended
December 31,
2013

 

For the Year
Ended
September 30,
2013

 

 

 

 

 

 

 

 

 

Global Cash
Access

 

Multimedia
Games

 

Pro Forma
Adjustments

 

Note
References

 

Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 $

582,444

 

 $

189,366

 

 $

-

 

 

 

$

771,810

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization)

 

439,794

 

36,946

 

-

 

 

 

476,740

 

Operating expenses

 

76,562

 

48,350

 

-

 

 

 

124,912

 

Research and development expenses

 

-

 

16,842

 

-

 

 

 

16,842

 

Depreciation

 

7,350

 

28,805

 

-

 

 

 

36,155

 

Amortization

 

9,588

 

6,041

 

-

 

 

 

15,629

 

 

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses

 

533,294

 

136,984

 

-

 

 

 

670,278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

49,150

 

52,382

 

-

 

 

 

101,532

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

(10,265)

 

(648)

 

(92,832)

 

2L

 

(103,745)

 

Loss on extinguishment of debt

 

-

 

-

 

(5,648)

 

2M

 

(5,648)

 

Other income, net of other expense

 

-

 

33

 

-

 

 

 

33

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

(10,265)

 

(615)

 

(98,480)

 

 

 

(109,360)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) from operations before tax

 

38,885

 

51,767

 

(98,480)

 

 

 

(7,828)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision/(benefit)

 

14,487

 

16,833

 

(34,468)

 

2N

 

(3,148)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

24,398

 

34,934

 

(64,012)

 

 

 

(4,680)

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

269

 

329

 

-

 

 

 

598

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income/(loss)

 

 $

24,667

 

 $

35,263

 

 $

(64,012)

 

 

 

$

(4,082)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings/(loss) per share

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 $

0.37

 

 $

1.21

 

N/M

 (1)

 

 

 $

(0.07)

 

Diluted

 

 $

0.36

 

 $

1.14

 

N/M

 (1)

 

 

 $

(0.07)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

Basic

 

66,014

 

28,929

 

(28,929)

 

 

 

66,014

 

Diluted

 

67,205

 

30,677

 

(30,677)

 

 

 

67,205

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Not meaningful.

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited pro forma condensed combined financial statements.

 



 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL

STATEMENTS

(in thousands, except per share data and as otherwise noted)

 

Note 1. Merger Consideration and Allocation Used in the Pro Forma.

 

GCA used the proceeds from its Notes offering, together with borrowings under the Credit Facilities and cash on hand at closing of the Merger, to fund the cash obligations of the Merger, to repay the then outstanding indebtedness of GCA and Multimedia Games, to pay related fees and expenses, and to provide cash for the combined company’s ongoing working capital and general corporate needs (see Note 2 below).

 

GCA has not completed the valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair market value of the Multimedia Games assets to be acquired and liabilities to be assumed and the related allocations to such items, including goodwill, of the Merger consideration. Accordingly, assets and liabilities are presented in the pro forma financial information at their respective carrying amounts, which management believes is a reasonable estimate of fair value. The estimated goodwill included in the pro forma adjustments is calculated as the difference between the Merger consideration transferred to the Multimedia Games shareholders and the estimated fair values of the assets acquired and liabilities assumed. The following summarizes the estimated goodwill calculation as of September 30, 2014:

 

Merger consideration

 

$

1,149,389

 

Less: Total assets acquired

 

(315,012

)

Plus: Total liabilities assumed

 

70,654

 

Multimedia acquisition expenses paid at close

 

12,244

 

 

 

 

 

Estimated goodwill

 

$

917,275

 

 

The final allocations of the Merger consideration may include (i) changes in historical carrying values of property and equipment, (ii) allocations to intangible assets such as trademarks and trade names, in-process research and development, developed technology and customer-related assets, (iii) the recording of deferred tax assets and deferred tax liabilities, which are not reflected herein, and (iv) other changes to assets and liabilities. In connection with the amount ultimately allocated to goodwill, a deferred tax liability would generally be recorded to the extent that the book basis exceeds the tax basis of such asset, and a deferred tax asset would generally be recorded to the extent that the tax basis exceeds the book basis of such asset. As a result, actual results may differ from this unaudited pro forma condensed combined financial information once GCA has completed the detailed valuation analysis and calculations necessary to finalize the required purchase price allocations. The final purchase price allocations, which are expected to be determined subsequent to the filing of this Current Report on Form 8-K/A, may differ materially from the estimated allocations and unaudited pro forma condensed combined amounts included herein. These differences could materially increase the total amount of depreciation and amortization expense recognized, which could have a material impact on GCA’s net income.

 

Note 2. Pro Forma Adjustments.

 

Entries to record the cash consideration paid in the Merger and the reversal of Multimedia Games equity balances and the extinguishment of GCA’s and Multimedia Games’ outstanding debt held prior to the consummation of the Merger (collectively, the “Prior Credit Facilities”).

 



 

Item A - Cash and cash equivalents

 

 

 

Gross proceeds from term loan

 

  $

500,000

 

Gross proceeds from secured notes

 

350,000

 

Gross proceeds from unsecured notes

 

350,000

 

 

 

 

 

Total gross proceeds

 

1,200,000

 

 

 

 

 

Less: Merger consideration

 

(1,149,389)

 

Less: Transaction costs

 

(80,012)

 

Less: Prior Credit Facilities payoff(1)

 

(121,643)

 

 

 

 

 

Total cash and cash equivalents adjustment

 

  $

(151,044)

 

 

 

 

 

Item B - Deferred tax asset, non-current portion

 

 

 

Deferred tax impact from extinguishment of the Prior Credit Facilities debt issuance costs and payment of transaction costs

 

  $

4,325

 

 

 

 

 

Total deferred tax assets, non-current portion adjustment

 

  $

4,325

 

 

 

 

 

Item C - Other assets, long-term

 

 

 

Debt issuance costs related to Credit Facilities and Notes(2)

 

  $

41,325

 

Extinguishment of the Prior Credit Facilities debt issuance costs

 

(3,213)

 

 

 

 

 

Total other assets, long-term adjustment

 

  $

38,112

 

 

 

 

 

Item D - Accounts payable and accrued expenses

 

 

 

Multimedia Games transaction costs previously accrued

 

  $

(5,736)

 

GCA accrued transaction costs previously accrued

 

(953)

 

 

 

 

 

Total accounts payable and accrued expenses adjustment

 

  $

(6,689)

 

 

 

 

 

Item E - Debt, current portion

 

 

 

Issuance of Credit Facilities and Notes, current portion

 

  $

10,000

 

Prior Credit Facilities payoff, current portion

 

(4,654)

 

 

 

 

 

Total debt, current portion adjustment

 

  $

5,346

 

 

 

 

 

Item F - Debt, non-current portion

 

 

 

Issuance of Credit Facilities and Notes, non-current portion

 

  $

1,190,000

 

Prior Credit Facilities payoff, non-current portion

 

(116,989)

 

Original issue discounts on Credit Facilities and Notes, non-current portion(2)

 

(11,277)

 

 

 

 

 

Total debt, non-current portion adjustment

 

  $

1,061,734

 

 

 

 

 

Item G - Common stock

 

 

 

Elimination of the Multimedia Games historical common stock

 

  $

(386)

 

 

 

 

 

Total common stock adjustment

 

  $

(386)

 

 

 

 

 

Item H - Additional paid-in-capital

 

 

 

Elimination of the Multimedia Games historical additional paid-in capital

 

  $

(148,828)

 

 

 

 

 

Total additional paid-in-capital adjustment

 

  $

(148,828)

 

 

 

 

 

Item I - Retained earnings

 

 

 

Elimination of the Multimedia Games historical retained earnings

 

  $

(176,146)

 

GCA transaction costs paid at closing

 

(8,477)

 

Extinguishment of the Prior Credit Facilities debt issuance cost

 

(3,213)

 

Deferred tax impact from extinguishment of the Prior Credit Facilities debt issuance costs and payment of transaction costs

 

4,325

 

 

 

 

 

Total retained earnings adjustment

 

  $

(183,511)

 

 

 

 

 

Item J - Treasury stock

 

 

 

Elimination of the Multimedia Games historical treasury stock

 

  $

81,002

 

 

 

 

 

Total treasury stock adjustment

 

  $

81,002

 

 

 

 

 

 

(1)

Prior Credit Facilities consisted of outstanding balances of $95.7 million and $25.9 million for GCA and Multimedia Games, respectively, as of the nine months ended September 30, 2014 and June 30, 2014, respectively.

 

 

(2)

Capitalized costs related to the Credit Facilities and Notes included debt issuance costs that were recorded to other assets and original issue discounts that were recorded as contra-liabilities to the long-term debt. Both debt issuance costs and original issue discounts get amortized to interest expense.

 



 

Unaudited Pro Forma Condensed Combined Statements of Operations(*),(**)

 

 

 

 

Nine Months Ended
September 30,
2014

 

Year Ended
December 31,
2013

 

 

 

 

 

 

 

Item K - Operating expenses

 

 

 

 

 

 

 

 

 

 

 

GCA previously accrued transaction costs

 

  $

953

 

  $

-   

 

Multimedia Games previously accrued transaction costs

 

-    

 

-   

 

 

 

 

 

 

 

Total operating expenses adjustment

 

  $

953

 

  $

-   

 

 

 

 

 

 

 

 

There were no historical acquisition related expenses incurred for the year ended December 31, 2013.

 

On a pro forma basis giving effect to the Merger, these one-time expenses should be excluded from the pro forma financial statements.

 

 

 

Nine Months Ended
September 30,
2014

 

Year Ended
December 31,
2013

 

 

 

 

 

 

 

Item L - Interest expense, net of interest income

 

 

 

 

 

 

 

 

 

 

 

Credit facilities and notes interest expense

 

  $

(69,574)

 

  $

(93,313)

 

Amortization of Credit Facilities and Notes debt issuance costs and original issue discounts(1)

 

(6,297)

 

(8,396)

 

Reduction of amortization fees related to the extinguishment of Prior Credit Facilities issuance costs(2)

 

1,503

 

1,884

 

Prior Credit Facilities interest expense that would not have been incurred

 

4,020

 

7,314

 

Prior Credit Facilities interest income that would not have been earned

 

(262)

 

(321)

 

 

 

 

 

 

 

Total interest expense, net of interest income adjustment

 

  $

(70,610)

 

  $

(92,832)

 

 

 

 

 

 

 

 

 

 

 

(1)

The pro forma financial statements assume straight-line amortization of the fees over the respective terms of the Notes.

 

 

(2)

Represents the reduction in amortization of loan fees related to the GCA and Multimedia Games prior credit facilities as of the beginning of each period presented, which was extinguished upon consummation of the Merger and issuance of the Credit Facilities and Notes.

 



 

 

 

Nine Months Ended
September 30,
2014

 

Year Ended
December 31,
2013

 

 

 

 

 

 

 

Item M - Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

GCA loss on extinguishment of debt(1)

 

  $

(5,203) 

 

  $

(5,203) 

 

Multimedia Games loss on extinguishment of debt(1)

 

(445) 

 

(445) 

 

 

 

 

 

 

 

Total loss on extinguishment of debt adjustment

 

  $

(5,648) 

 

  $

(5,648) 

 

 

 

 

 

 

 

 


(1)

Represents the debt issuance costs that would be extinguished on the Prior Credit Facilities as of January 1, 2013 for both periods presented; therefore the outstanding balance of such costs would be the same.

 

To pay the Merger consideration, to repay the then existing indebtedness of GCA and Multimedia Games and to pay related fees and expenses, we incurred $1.2 billion of debt, with maturities ranging from five to seven years yielding a weighted average annual interest rate of approximately 7.75%.

 

 

 

Nine Months Ended
September 30,
2014

 

Year Ended
December 31,
2013

 

 

 

 

 

 

 

Item N - Income tax provision/(benefit)

 

 

 

 

 

 

 

 

 

 

 

Operating expenses adjustment

 

  $

  953 

 

  $

  -      

 

Interest expense, net of interest income adjustment

 

(70,610)

 

(92,832)

 

Loss on extinguishment of debt adjustment

 

(5,648)

 

(5,648)

 

 

 

 

 

 

 

Total loss from operations before tax

 

(75,305)

 

(98,480)

 

 

 

 

 

 

 

Statutory tax rate

 

35.0%

 

35.0%

 

 

 

 

 

 

 

Total income tax benefit

 

(26,357)

 

(34,468)

 

 

 

 

 

 

 

The estimated tax effect of all pro forma adjustments was calculated using the statutory tax rate as set forth in Regulation S-X Article 11-01 and 11-02.

 


(*)

GCA’s results are for its fiscal year ended December 31, 2013, while the Multimedia Games results are for its fiscal year ended September 30, 2013.

 

 

(**)

GCA’s results are for its fiscal nine months ended September 30, 2014, while the Multimedia Games results are for its fiscal nine months ended June 30, 2014.