EXHIBIT 99.3
CARDTRONICS, INC.
Unaudited Pro Forma Condensed Consolidated Financial Statements
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated financial statements give effect to the acquisition of substantially all of the assets of the7-Eleven Financial Services Business (the“7-Eleven ATM Transaction”) and the related financings.
On June 1, 2007, we executed an asset purchase agreement which outlined the terms and conditions under which we agreed to purchase substantially all of the assets of the 7-Eleven Financial Services Business. The7-Eleven ATM Transaction, the purchase price of which is expected to total approximately $135.0 million in cash proceeds, subject to adjustment for changes in working capital, will be funded by the sale of $100.0 million 9 1/4% senior subordinated notes due 2013 — Series B and borrowings under our revolving credit facility, which we expect to have amended prior to the acquisition. It is our expectation that the7-Eleven ATM Transaction and the related financings will occur simultaneously.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2007 gives effect to the7-Eleven ATM Transaction and the related financings as if they occurred on that date. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2006 and three months ended March 31, 2006 and 2007, give effect to the7-Eleven ATM Transaction and the Financing Transactions as if they occurred on January 1, 2006.
The 7-Eleven ATM Transaction will be accounted for using the purchase method of accounting and, accordingly, the tangible and intangible assets acquired and liabilities assumed in such transaction will be recorded at their estimated fair values as of the related acquisition date. The purchase price allocation reflected in the accompanying pro forma condensed consolidated financial statements is considered to be preliminary. The final purchase price allocation will be dependent upon, among other things, obtaining the final valuations for the acquired assets and assumed liabilities, which we expect to have completed within one year of closing. As such, the total estimated purchase price, as outlined in note 2 to the unaudited pro forma condensed consolidated financial statements, has been allocated to the assets to be acquired and the liabilities to be assumed based on preliminary estimates of their fair values. The final valuation will be based on the actual acquired net tangible and intangible assets and liabilities that existed as of the closing date of the7-Eleven ATM Transaction. This includes, among other things, estimations of the value of the acquired automated teller machines (“ATM”) and Vcom units, which may ultimately differ significantly from the amounts shown herein. Accordingly, any adjustments that result from the final valuation process for all of the acquired assets and assumed liabilities will change the purchase price allocation, and thus would change the unaudited pro forma condensed consolidated financial statements reflected herein, and in particular, the depreciation and amortization expense associated with the acquired assets.
We have agreed to acquire substantially all of the assets of the7-Eleven Financial Services Business, which operates approximately 3,500 ATMs that allow customers to carry out traditional ATM services and approximately 2,000 Vcom advanced functionality machines that, in addition to traditional ATM services, provide more sophisticated financial services, including check cashing, money transfer, and bill payment services (the “Vcom Services”).
Historically, 7-Eleven has received upfront placement fees from third-party service providers to help fund the development and implementation efforts surrounding the Vcom Services, which have been recognized as revenues in the accompanying historical financial statements of the7-Eleven Financial Services Business. Although we may attempt to execute similar payment arrangements with the same (or new) service providers in the future, there is no guarantee that we will be successful in doing so. Accordingly, such upfront placement fees may not occur in the future, or may occur at lower levels than those realized historically. Reference is made to note 1 in the notes to the unaudited pro forma condensed consolidated financial statements for additional information regarding the amount of upfront placement fees that have been recognized in the historical financial statements of the7-Eleven Financial Services Business.
We currently expect to incur operating losses associated with the Vcom Services portion of the acquired7-Eleven ATM portfolio within the first12-18 months subsequent to the acquisition date. While we plan to continue to operate the Vcom units and restructure the Vcom Services to improve the underlying financial results of that portion of the acquired business, we may be unsuccessful in this effort. In the event we are not able to improve the operating results of the Vcom business and we incur cumulative losses of $10.0 million on the Vcom business (including $1.8 million in contract termination costs), our current intent is to terminate the
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Vcom Services and utilize the Vcom machines to provide traditional ATM services.
The unaudited pro forma condensed consolidated financial statements presented below are based on the assumptions and adjustments described in the accompanying notes. Such unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of what our financial position or results of operations would have been had the7-Eleven ATM Transaction and the related financings been consummated on the dates indicated, nor are they necessarily indicative of what our financial position or results of operations will be in future periods. The unaudited pro forma condensed consolidated financial statements do not contain any adjustments to reflect anticipated changes in operating costs or synergies anticipated as a result of the7-Eleven ATM Transaction. Operating results for the three months ended March 31, 2007 are not indicative of the results that may be expected for the year ending December 31, 2007. The unaudited pro forma condensed consolidated financial statements, and accompanying notes thereto, should be read in conjunction with the historical audited and unaudited financial statements, and accompanying notes thereto, of Cardtronics and the7-Eleven Financial Services Business.
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CARDTRONICS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2007
(in thousands)
AS OF MARCH 31, 2007
(in thousands)
7-Eleven Financial | ||||||||||||||||||||
Cardtronics | Services Business | Pro Forma | ||||||||||||||||||
Historical | (See Note 1) | Adjustments | Notes | Pro Forma | ||||||||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 1,782 | $ | 12,113 | $ | — | $ | 13,895 | ||||||||||||
Accounts and notes receivable, net | 12,800 | 64,586 | — | 77,386 | ||||||||||||||||
Other current assets | 16,129 | 4,471 | — | 20,600 | ||||||||||||||||
Total current assets | 30,711 | 81,170 | — | 111,881 | ||||||||||||||||
Property and equipment, net | 92,890 | 86,608 | (31,160 | ) | 2,4 | 148,338 | ||||||||||||||
Intangible assets, net | 64,697 | — | 69,000 | 2 | 133,697 | |||||||||||||||
Goodwill | 169,477 | 35,593 | (20,793 | ) | 2 | 184,277 | ||||||||||||||
Other assets | 5,797 | — | 2,041 | 3 | 7,838 | |||||||||||||||
Total assets | $ | 363,572 | $ | 203,371 | $ | 19,088 | $ | 586,031 | ||||||||||||
Liabilities and Stockholders’ Equity (Deficit) | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Current portion of long-term debt and capital lease obligations | $ | 282 | $ | 1,378 | $ | — | $ | 1,660 | ||||||||||||
Accrued expenses and other current liabilities | 46,277 | 65,017 | — | 111,294 | ||||||||||||||||
Total current liabilities | 46,559 | 66,395 | — | 112,954 | ||||||||||||||||
Long-term liabilities: | ||||||||||||||||||||
Long-term debt and capital lease obligations, net of current portion | 262,769 | 1,620 | 140,041 | 2,3 | 404,430 | |||||||||||||||
Other long-term liabilities, net of current portion | 19,768 | 10,920 | 3,483 | 4 | 34,171 | |||||||||||||||
Total liabilities | 329,096 | 78,935 | 143,524 | 551,555 | ||||||||||||||||
Redeemable preferred stock | 76,661 | — | — | 76,661 | ||||||||||||||||
Total stockholders’ equity (deficit) | (42,185 | ) | 124,436 | (124,436 | ) | (42,185 | ) | |||||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 363,572 | $ | 203,371 | $ | 19,088 | $ | 586,031 | ||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
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CARDTRONICS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2006
(in thousands)
FOR THE YEAR ENDED DECEMBER 31, 2006
(in thousands)
7-Eleven Financial | ||||||||||||||||||||
Cardtronics | Services Business | Pro Forma | ||||||||||||||||||
Historical | (See Note 1) | Adjustments | Notes | Pro Forma | ||||||||||||||||
Revenues: | ||||||||||||||||||||
ATM operating revenues | $ | 280,985 | $ | 135,976 | $ | — | $ | 416,961 | ||||||||||||
Vcom operating revenues | — | 27,686 | — | 27,686 | ||||||||||||||||
ATM product sales and other revenues | 12,620 | — | — | 12,620 | ||||||||||||||||
Total revenues | 293,605 | 163,662 | — | 457,267 | ||||||||||||||||
Cost of revenues: | ||||||||||||||||||||
Cost of ATM operating revenues | 209,850 | 100,263 | — | 310,113 | ||||||||||||||||
Cost of Vcom operating revenues | — | 16,309 | — | 16,309 | ||||||||||||||||
Cost of ATM product sales and other revenues | 11,443 | — | — | 11,443 | ||||||||||||||||
Total cost of revenues | 221,293 | 116,572 | — | 337,865 | ||||||||||||||||
Gross profit | 72,312 | 47,090 | — | 119,402 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling, general and administrative expenses | 21,667 | 13,197 | — | 34,864 | ||||||||||||||||
Depreciation and accretion expense | 18,595 | 12,649 | (6,108 | ) | 4 | 25,136 | ||||||||||||||
Amortization expense | 11,983 | 3,171 | 6,900 | 4 | 22,054 | |||||||||||||||
Total operating expenses | 52,245 | 29,017 | 792 | 82,054 | ||||||||||||||||
Income from operations | 20,067 | 18,073 | (792 | ) | 37,348 | |||||||||||||||
Interest expense | 25,072 | 520 | 13,707 | 3 | 39,299 | |||||||||||||||
Other income | (4,986 | ) | — | — | (4,986 | ) | ||||||||||||||
Income (loss) before income taxes | (19 | ) | 17,553 | (14,499 | ) | 3,035 | ||||||||||||||
Income tax provision (benefit) | 512 | 6,776 | (5,643 | ) | 5 | 1,645 | ||||||||||||||
Net income (loss) | (531 | ) | 10,777 | (8,856 | ) | 1,390 | ||||||||||||||
Preferred stock accretion expense | 265 | — | — | 265 | ||||||||||||||||
Net income (loss) available to common stockholders | $ | (796 | ) | $ | 10,777 | $ | (8,856 | ) | $ | 1,125 | ||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
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CARDTRONICS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2007
(in thousands)
FOR THE THREE MONTHS ENDED MARCH 31, 2007
(in thousands)
7-Eleven Financial | ||||||||||||||||||||
Cardtronics | Services Business | Pro Forma | ||||||||||||||||||
Historical | (See Note 1) | Adjustments | Notes | Pro Forma | ||||||||||||||||
Revenues: | ||||||||||||||||||||
ATM operating revenues | $ | 71,656 | $ | 35,195 | $ | — | $ | 106,851 | ||||||||||||
Vcom operating revenues | — | 6,326 | — | 6,326 | ||||||||||||||||
ATM product sales and other revenues | 2,862 | — | — | 2,862 | ||||||||||||||||
Total revenues | 74,518 | 41,521 | — | 116,039 | ||||||||||||||||
Cost of revenues: | ||||||||||||||||||||
Cost of ATM operating revenues | 54,736 | 26,229 | — | 80,965 | ||||||||||||||||
Cost of Vcom operating revenues | — | 4,171 | — | 4,171 | ||||||||||||||||
Cost of ATM product sales and other revenues | 2,797 | — | — | 2,797 | ||||||||||||||||
Total cost of revenues | 57,533 | 30,400 | — | 87,933 | ||||||||||||||||
Gross profit | 16,985 | 11,121 | — | 28,106 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling, general and administrative expenses | 6,444 | 2,501 | — | 8,945 | ||||||||||||||||
Depreciation and accretion expense | 6,398 | 4,392 | (1,527 | ) | 4 | 9,263 | ||||||||||||||
Amortization expense | 2,486 | 157 | 1,725 | 4 | 4,368 | |||||||||||||||
Total operating expenses | 15,328 | 7,050 | 198 | 22,576 | ||||||||||||||||
Income (loss) from operations | 1,657 | 4,071 | (198 | ) | 5,530 | |||||||||||||||
Interest expense | 6,248 | 49 | 3,402 | 3 | 9,699 | |||||||||||||||
Other income | (231 | ) | — | — | (231 | ) | ||||||||||||||
Income (loss) before income taxes | (4,360 | ) | 4,022 | (3,600 | ) | (3,938 | ) | |||||||||||||
Income tax provision (benefit) | (973 | ) | 1,552 | (1,395 | ) | 5 | (816 | ) | ||||||||||||
Net income (loss) | (3,387 | ) | 2,470 | (2,205 | ) | (3,122 | ) | |||||||||||||
Preferred stock accretion expense | 67 | — | — | 67 | ||||||||||||||||
Net income (loss) available to common stockholders | $ | (3,454 | ) | $ | 2,470 | $ | (2,205 | ) | $ | (3,189 | ) | |||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
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CARDTRONICS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006
(in thousands)
FOR THE THREE MONTHS ENDED MARCH 31, 2006
(in thousands)
7-Eleven Financial | ||||||||||||||||||
Cardtronics | Services Business | Pro Forma | ||||||||||||||||
Historical | (See Note 1) | Adjustments | Notes | Pro Forma | ||||||||||||||
Revenues: | ||||||||||||||||||
ATM operating revenues | $ | 66,409 | $ | 28,421 | $ | — | $ | 94,830 | ||||||||||
Vcom operating revenues | — | 7,802 | — | 7,802 | ||||||||||||||
ATM product sales and other revenues | 2,732 | — | — | 2,732 | ||||||||||||||
Total revenues | 69,141 | 36,223 | — | 105,364 | ||||||||||||||
Cost of revenues: | ||||||||||||||||||
Cost of ATM operating revenues | 50,539 | 22,528 | — | 73,067 | ||||||||||||||
Cost of Vcom operating revenues | — | 5,091 | — | 5,091 | ||||||||||||||
Cost of ATM product sales and other revenues | 2,559 | — | — | 2,559 | ||||||||||||||
Total cost of revenues | 53,098 | 27,619 | — | 80,717 | ||||||||||||||
Gross profit | 16,043 | 8,604 | — | 24,647 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Selling, general and administrative expenses | 4,838 | 3,991 | — | 8,829 | ||||||||||||||
Depreciation and accretion expense | 4,217 | 2,240 | (1,527 | ) | 4 | 4,930 | ||||||||||||
Amortization expense | 5,016 | 1,683 | 1,725 | 4 | 8,424 | |||||||||||||
Total operating expenses | 14,071 | 7,914 | 198 | 22,183 | ||||||||||||||
Income (loss) from operations | 1,972 | 690 | (198 | ) | 2,464 | |||||||||||||
Interest expense | 6,542 | 238 | 3,440 | 3 | 10,220 | |||||||||||||
Other expense | 189 | — | — | 189 | ||||||||||||||
Income (loss) before income taxes | (4,759 | ) | 452 | (3,638 | ) | (7,945 | ) | |||||||||||
Income tax provision (benefit) | (1,635 | ) | 174 | (1,356 | ) | 5 | (2,817 | ) | ||||||||||
Net income (loss) | (3,124 | ) | 278 | (2,282 | ) | (5,128 | ) | |||||||||||
Preferred stock accretion expense | 66 | — | — | 66 | ||||||||||||||
Net income (loss) available to common stockholders | $ | (3,190 | ) | $ | 278 | $ | (2,282 | ) | $ | (5,194 | ) | |||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
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CARDTRONICS, INC.
STATEMENTS
(1) | The unaudited pro forma condensed consolidated financial statements combine the historical results of Cardtronics and the 7-Eleven Financial Services Business, and assume, for purposes of the pro forma condensed consolidated statements of operations, that the 7-Eleven ATM Transaction and the Financing Transactions all occurred on January 1, 2006. For purposes of the pro forma condensed consolidated balance sheet, it is assumed that the aforementioned transactions occurred on March 31, 2007. |
As discussed elsewhere, we have agreed to acquire substantially all of the assets associated with the 7-Eleven Financial Services Business, including approximately 3,500 ATMs that allow customers to carry out traditional ATM services and approximately 2,000 advanced functionality Vcom machines that offer traditional ATM services, as well as some or all of the Vcom Services.
Historically, 7-Eleven has received upfront placement fees from third-party service providers to help fund the development and implementation efforts surrounding the Vcom Services, which have been recognized as revenues in the accompanying historical financial statements of the 7-Eleven Financial Services Business. However, it is uncertain as to whether such payments will occur in the future, or, if they do, whether such payments will occur at levels consistent with those seen in the past. During the year ended December 31, 2006 and the three months ended March 31, 2006 and 2007, the 7-Eleven Financial Services Business recognized approximately $18.7 million, $4.6 million, and $4.4 million, respectively, in revenues associated with such upfront placement fees. The exclusion of such fees (which were directly attributable to providing the Vcom Services), would have resulted in lower operating results for the 7-Eleven Financial Services Business.
Excluding the majority of the upfront placement fees, the Vcom Services have historically generated operating losses, including, based upon our analysis, $6.6 million and $2.1 million for the year ended December 31, 2006 and the three months ended March 31, 2007, respectively. Despite these losses, we plan to continue to operate the Vcom units following the completion of the acquisition and restructure the Vcom Services to improve the underlying financial results of that portion of the acquired business. By continuing to provide the Vcom Services for the12-18 months following the acquisition, we currently expect that we may incur up to $10.0 million in operating losses, including $1.8 million in contract termination costs. However, in the event we are unsuccessful in our efforts and our cumulative losses (including termination costs) reach $10.0 million, our current intent is to terminate the Vcom Services and utilize the existing Vcom machines to provide traditional ATM services. If we terminate the Vcom Services, we believe that the financial results of the acquired 7-Eleven Financial Services Business could considerably improve.
(2) | The reported amounts reflect the financing of and the preliminary allocation of the purchase price for the 7-Eleven ATM Transaction. Such acquisition will be financed primarily through the issuance and sale of $100.0 million principal amount of 9 1/4% senior subordinated notes due 2013 — Series B and an additional $43.0 million in borrowings under our amended revolving credit facility. This amount includes approximately $2.0 million in deferred financing costs associated with the issuance of the notes and the amendment of our existing revolving credit facility. Our estimate of the total purchase price is summarized as follows (in thousands): |
Total cash consideration | $ | 135,000 | ||
Estimated working capital adjustment to be funded at closing | 1,500 | |||
Estimated acquisition-related costs | 1,500 | |||
Total estimated purchase price of acquisition | $ | 138,000 | ||
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CARDTRONICS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The total estimated purchase price has been allocated on a preliminary basis as follows (in thousands):
Current assets | $ | 81,170 | ||
Property and equipment | 55,448 | |||
Intangible assets: | ||||
Customer contracts and relationships | 69,000 | |||
Goodwill | 14,800 | |||
Current liabilities | (66,395 | ) | ||
Other non-current liabilities | (16,023 | ) | ||
Total estimated purchase price of acquisition | $ | 138,000 | ||
The preliminary allocation of the purchase price is pending completion of certain items, including the finalization of our independent appraisal efforts related to the valuation of the tangible and intangible assets acquired, including the acquired ATMs and Vcom units and any acquired intangible assets. As such, there may be material changes to the initial allocation reflected above as those remaining items are finalized.
(3) | The reported amounts reflect the issuance and sale of the notes and borrowings under our amended credit facility, which will be utilized to fund the 7-Eleven ATM Transaction. The unaudited pro forma condensed consolidated statements of operations assume such debt was issued or borrowed on January 1, 2006, and the unaudited pro forma condensed consolidated balance sheet assumes such debt was issued on March 31, 2007. |
The debt capitalization structure assumed to be outstanding for all periods presented in the above pro forma financial statements is as follows (in thousands):
$100.0 million 91/4% senior subordinated notes due 2013 — Series B contemplated in connection with the 7-Eleven ATM Transaction, net of the related discount | $ | 97,000 | (1) | |
$200.0 million 91/4% senior subordinated notes due 2013 issued in 2005, net of the related discount | 198,816 | |||
Revolving credit facility (including $43.0 million additional borrowings contemplated in connection with the 7-Eleven ATM Transaction) | 104,641 | (1) | ||
Other long-term and current debt obligations | 5,633 | |||
Total pro forma debt | $ | 406,090 | ||
(1) | To the extent the proceeds from the notes differ from the estimated amount of $97.0 million, the amount of borrowings outstanding under our amended revolving credit facility will increase or decrease accordingly in order to finance the 7-Eleven ATM Transaction. |
For purposes of computing the interest expense amounts associated with the above debt structure, a weighted-average rate of 9.02% has been utilized. Assuming an increase of 25 basis points in the floating borrowing rate under our revolving credit facility, pro forma interest expense would have increased by $262,000 for the year ended December 31, 2006 and $65,000 for each of the three months ended March 31, 2006 and 2007. In addition, in the event the net proceeds from the notes differ from the amount estimated and we borrow more or less under our amended revolving credit facility, pro forma interest expense will change accordingly.
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CARDTRONICS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following reconciliation provides additional details behind the pro forma interest expense adjustment reflected in the accompanying unaudited pro forma condensed consolidated statement of operations for the periods indicated (in thousands):
Year Ended | Three Months Ended | |||||||||||
December 31, | March 31, | |||||||||||
2006 | 2006 | 2007 | ||||||||||
Interest expense associated with senior subordinated notes contemplated in connection with the 7-Eleven ATM Transaction ($97.0 million at an effective interest rate of 9.5%) | $ | 9,250 | $ | 2,313 | $ | 2,313 | ||||||
Interest expense associated with senior subordinated notes issued in August 2005 ($198.8 million at an effective interest rate of 9.4%) | 18,620 | 4,655 | 4,655 | |||||||||
Interest expense associated with pro forma revolving credit facility balance ($104.6 million at an effective interest rate of 7.8%) | 8,162 | 2,041 | 2,041 | |||||||||
Interest expense associated with other indebtedness, including acquired capital lease obligations | 486 | 121 | 121 | |||||||||
Amortization of deferred financing costs associated with the notes contemplated in connection with the 7-Eleven ATM Transaction and amended revolving credit facility ($1.7 million and $0.3 million amortized on a straight-line basis over 6 years and 5 years, respectively) | 352 | 88 | 88 | |||||||||
Amortization of discount associated with the notes contemplated in connection with the 7-Eleven ATM Transaction | 500 | 125 | 125 | |||||||||
Amortization of deferred financing costs associated with the existing senior subordinated notes and revolving credit facility | 1,929 | 877 | 356 | |||||||||
Pro forma interest expense | 39,299 | 10,220 | 9,699 | |||||||||
Elimination of the historical interest expense of Cardtronics, Inc. and the 7-Eleven Financial Services Business | (25,592 | ) | (6,780 | ) | (6,297 | ) | ||||||
Pro forma interest expense adjustment | $ | 13,707 | $ | 3,440 | $ | 3,402 | ||||||
Future maturities of the principal amounts of our pro forma long-term debt are as follows (in thousands):
Total | 2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | ||||||||||||||||||||||
Long-term debt | $ | 410,274 | $ | 1,322 | $ | 1,312 | $ | 1,300 | $ | 899 | $ | 715 | $ | 404,726 |
(4) | The reported amounts reflect the adjustments to the historical depreciation and amortization expense resulting from the effects of the preliminary purchase price allocations associated with the 7-Eleven ATM Transaction. Such amounts are, therefore, subject to change, and may change materially, once the valuation of the acquired assets and assumed liabilities is finalized and the final purchase price allocation completed. The acquired tangible assets were assumed to have a weighted-average remaining useful life of approximately 5.0 years and are being depreciated on a straight-line basis over such period of time. The acquired intangible customer contract/relationship is estimated to have a ten year life and is being amortized over such period on a straight-line basis, consistent with our past practice. The reported amounts also reflect the depreciation and accretion amounts related to our estimated asset retirement obligations associated with the acquired ATMs and Vcom units. |
(5) | The reported amounts reflect the adjustments to income taxes at the statutory rates of 37.1% for our U.S. operations (34.0% federal and 3.1% state, net of federal benefit), 30.0% for our U.K. operations, and 0.0% for our Mexico operations. All current and deferred tax benefits accruing to our Mexico operations are being fully reserved for due to the uncertain future utilization of such benefits. |
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