Exhibit 99.4
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JANUARY 25, 2009
(In thousands, except share and per share amounts)
| | | | PRO FORMA | | | |
| | | | ADJUSTMENTS | | | |
| | | | SALE OF NET ASSETS | | AS REPORTED | |
| | | | AND LEASE BUY-OUT, | | WITH | |
| | HISTORICAL | | THE ISLE | | PRO FORMA | |
| | AS REPORTED | | CASINOS, LTD | | ADJUSTMENTS | |
ASSETS | | | | | | | |
Current assets: | | | | | | | |
Cash and cash equivalents | | $ | 181,713 | | $ | (11,323 | )(a) | $ | 170,390 | |
Restricted cash | | 35,000 | | | | 35,000 | |
Marketable securities | | 15,971 | | | | 15,971 | |
Accounts receivable, net | | 8,897 | | 383 | (b) | 9,280 | |
Insurance receivable, net | | 1,209 | | | | 1,209 | |
Income tax receivable | | 9,987 | | | | 9,987 | |
Deferred income taxes | | 9,866 | | | | 9,866 | |
Prepaid expenses and other assets | | 30,656 | | | | 30,656 | |
Total current assets | | 293,299 | | (10,940 | ) | 282,359 | |
Property and equipment, net | | 1,247,967 | | (36,452 | )(c) | 1,211,515 | |
Other assets: | | | | | | | |
Goodwill | | 324,336 | | | | 324,336 | |
Other intangible assets, net | | 95,834 | | | | 95,834 | |
Deferred financing costs, net | | 11,459 | | | | 11,459 | |
Restricted cash | | 2,774 | | | | 2,774 | |
Prepaid deposits and other | | 19,122 | | 367 | (b) | 19,489 | |
Deferred income taxes | | — | | | | — | |
Total assets | | $ | 1,994,791 | | $ | (47,025 | ) | $ | 1,947,766 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
Current liabilities: | | | | | | | |
Current maturities of long-term debt | | $ | 44,228 | | | | $ | 44,228 | |
Accounts payable | | 20,125 | | | | 20,125 | |
Accrued liabilities: | | | | | | | |
Interest | | 17,757 | | | | 17,757 | |
Payroll and related | | 44,390 | | | | 44,390 | |
Property and other taxes | | 29,262 | | | | 29,262 | |
Other | | 56,780 | | (253 | )(d) | 56,527 | |
Total current liabilities | | 212,542 | | (253 | ) | 212,289 | |
Long-term debt, less current maturities | | 1,452,811 | | | | 1,452,811 | |
Deferred income taxes | | 11,756 | | (5,105 | )(e) | 6,651 | |
Other accrued liabilities | | 58,372 | | (155 | )(c) | 58,217 | |
Other long-term liabilities | | 48,351 | | (33,406 | )(c) | 14,945 | |
Stockholders’ equity: | | | | | | | |
Preferred stock | | — | | — | | — | |
Common stock | | 362 | | | | 362 | |
Class B common stock | | — | | — | | — | |
Additional paid-in capital | | 194,496 | | | | 194,496 | |
Retained earnings | | 87,240 | | (8,506 | )(e) | 78,734 | |
Accumulated other comprehensive loss | | (18,740 | ) | 400 | (e) | (18,340 | ) |
| | 263,358 | | (8,106 | ) | 255,252 | |
Treasury stock | | (52,399 | ) | | | (52,399 | ) |
Total stockholders’ equity | | 210,959 | | (8,106 | ) | 202,853 | |
Total liabilities and stockholders’ equity | | $ | 1,994,791 | | $ | (47,025 | ) | $ | 1,947,766 | |
See accompanying Notes to Unaudited Pro Forma Financial Statements
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED JANUARY 25, 2009
(In thousands, except share and per share amounts)
| | | | PRO FORMA | | | |
| | | | ADJUSTMENTS | | | |
| | | | SALE OF NET ASSETS | | AS REPORTED | |
| | | | AND LEASE BUY-OUT, | | WITH | |
| | HISTORICAL | | THE ISLE | | PRO FORMA | |
| | AS REPORTED | | CASINOS, LTD (a) | | ADJUSTMENTS | |
Revenues: | | | | | | | |
Casino | | $ | 788,814 | | $ | (6,132 | ) | $ | 782,682 | |
Rooms | | 35,696 | | — | | 35,696 | |
Pari-mutuel, food, beverage and other | | 104,545 | | (1,828 | ) | 102,717 | |
Hurricane insurance recoveries | | 60,000 | | — | | 60,000 | |
Gross revenues | | 989,055 | | (7,960 | ) | 981,095 | |
Less promotional allowances | | (144,434 | ) | 130 | | (144,304 | ) |
Net revenues | | 844,621 | | (7,830 | ) | 836,791 | |
Operating expenses: | | | | | | | |
Casino | | 119,463 | | (2,178 | ) | 117,285 | |
Gaming taxes | | 198,657 | | (720 | ) | 197,937 | |
Rooms | | 9,206 | | — | | 9,206 | |
Pari-mutuel commissions and fees | | 9,087 | | — | | 9,087 | |
Food, beverage and other | | 31,500 | | (1,546 | ) | 29,954 | |
Marine and facilities | | 50,214 | | (853 | ) | 49,361 | |
Marketing and administrative | | 202,386 | | (5,314 | ) | 197,072 | |
Corporate and development | | 32,570 | | — | | 32,570 | |
Hurricane insurance recoveries | | (32,179 | ) | — | | (32,179 | ) |
Write-offs and other charges | | 6,000 | | — | | 6,000 | |
Depreciation and amortization | | 95,988 | | (3,397 | ) | 92,591 | |
Total operating expenses | | 722,892 | | (14,008 | ) | 708,884 | |
Operating income (loss): | | 121,729 | | 6,178 | | 127,907 | |
Interest expense | | (74,365 | ) | 1,268 | (b) | (73,097 | ) |
Interest income | | 1,808 | | (25 | ) | 1,783 | |
Income (loss) from continuing operations before income taxes and minority interest | | 49,172 | | 7,421 | | 56,593 | |
Income tax benefit (provision) | | (20,185 | ) | (2,770 | )(c) | (22,955 | ) |
Income (loss) from continuing operations | | $ | 28,987 | | $ | 4,651 | | $ | 33,638 | |
| | | | | | | |
Earnings (loss) per common share basic: | | | | | | | |
Income (loss) from continuing operations | | $ | 0.93 | | $ | 0.15 | | $ | 1.08 | |
| | | | | | | |
Earnings (loss) per common share diluted: | | | | | | | |
Income (loss) from continuing operations | | $ | 0.93 | | $ | 0.15 | | $ | 1.08 | |
| | | | | | | |
Weighted average basic shares | | 31,240,008 | | | | 31,240,008 | |
Weighted average diluted shares | | 31,248,402 | | | | 31,248,402 | |
See accompanying Notes to Unaudited Pro Forma Financial Statements
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMACONSOLIDATED STATEMENT OF OPERATIONS
FISCAL YEAR ENDED APRIL 27, 2008
(In thousands, except share and per share amounts)
| | | | PRO FORMA | | | |
| | | | ADJUSTMENTS | | | |
| | | | SALE OF NET ASSETS | | AS REPORTED | |
| | | | AND LEASE BUY-OUT, | | WITH | |
| | HISTORICAL | | THE ISLE | | PRO FORMA | |
| | AS REPORTED | | CASINOS, LTD (a) | | ADJUSTMENTS | |
Revenues: | | | | | | | |
Casino | | $ | 1,121,860 | | $ | (5,970 | ) | $ | 1,115,890 | |
Rooms | | 49,498 | | — | | 49,498 | |
Pari-mutuel, food, beverage and other | | 155,577 | | (2,619 | ) | 152,958 | |
Gross revenues | | 1,326,935 | | (8,589 | ) | 1,318,346 | |
Less promotional allowances | | (201,583 | ) | 363 | | (201,220 | ) |
Net revenues | | 1,125,352 | | (8,226 | ) | 1,117,126 | |
Operating expenses: | | | | | | | |
Casino | | 163,250 | | (4,113 | ) | 159,137 | |
Gaming taxes | | 288,402 | | (669 | ) | 287,733 | |
Rooms | | 12,031 | | — | | 12,031 | |
Pari-mutuel commissions and fees | | 16,834 | | — | | 16,834 | |
Food, beverage and other | | 45,538 | | (2,549 | ) | 42,989 | |
Marine and facilities | | 68,044 | | (1,080 | ) | 66,964 | |
Marketing and administrative | | 290,591 | | (10,890 | ) | 279,701 | |
Corporate and development | | 48,974 | | (353 | ) | 48,621 | |
Write-offs and other valuation charges | | 85,184 | | (77,978 | ) | 7,206 | |
Preopening | | 6,457 | | (2,802 | ) | 3,655 | |
Depreciation and amortization | | 136,127 | | (6,632 | ) | 129,495 | |
Total operating expenses | | 1,161,432 | | (107,066 | ) | 1,054,366 | |
Operating income (loss): | | (36,080 | ) | 98,840 | | 62,760 | |
Interest expense | | (109,286 | ) | 1,009 | (b) | (108,277 | ) |
Interest income | | 3,814 | | (164 | ) | 3,650 | |
Gain (loss) on early extinguishment of debt | | (15,274 | ) | — | | (15,274 | ) |
Income (loss) from continuing operations before income taxes and minority interest | | (156,826 | ) | 99,685 | | (57,141 | ) |
Income tax benefit (provision) | | 64,820 | | (37,250 | )(c) | 27,570 | |
Minority interest | | (4,868 | ) | — | | (4,868 | ) |
Income (loss) from continuing operations | | $ | (96,874 | ) | $ | 62,435 | | $ | (34,439 | ) |
| | | | | | | |
Earnings (loss) per common share basic: | | | | | | | |
Income (loss) from continuing operations | | $ | (3.16 | ) | $ | 2.04 | | $ | (1.12 | ) |
| | | | | | | |
Earnings (loss) per common share diluted: | | | | | | | |
Income (loss) from continuing operations | | $ | (3.16 | ) | $ | 2.04 | | $ | (1.12 | ) |
| | | | | | | |
Weighted average basic shares | | 30,699,457 | | | | 30,699,457 | |
Weighted average diluted shares | | 30,699,457 | | | | 30,699,457 | |
See accompanying Notes to Unaudited Pro Forma Financial Statements
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMACONSOLIDATED STATEMENT OF OPERATIONS
FISCAL YEAR ENDED APRIL 29, 2007
(In thousands, except share and per share amounts)
| | | | PRO FORMA | | | |
| | | | ADJUSTMENTS | | AS REPORTED | |
| | | | SALE OF NET ASSETS, | | WITH | |
| | | | THE ISLE | | PRO FORMA | |
| | AS REPORTED | | CASINOS, LTD (a) | | ADJUSTMENTS | |
Revenues: | | | | | | | |
Casino | | $ | 1,015,629 | | $ | — | | $ | 1,015,629 | |
Rooms | | 49,584 | | — | | 49,584 | |
Pari-mutuel, food, beverage and other | | 150,639 | | — | | 150,639 | |
Gross revenues | | 1,215,852 | | — | | 1,215,852 | |
Less promotional allowances | | (214,458 | ) | — | | (214,458 | ) |
Net revenues | | 1,001,394 | | — | | 1,001,394 | |
Operating expenses: | | | | | | | |
Casino | | 159,534 | | — | | 159,534 | |
Gaming taxes | | 210,404 | | — | | 210,404 | |
Rooms | | 9,811 | | — | | 9,811 | |
Pari-mutuel commissions and fees | | 15,342 | | — | | 15,342 | |
Food, beverage and other | | 32,262 | | — | | 32,262 | |
Marine and facilities | | 60,174 | | — | | 60,174 | |
Marketing and administrative | | 269,279 | | (2,198 | ) | 267,081 | |
Corporate and development | | 57,217 | | — | | 57,217 | |
Write-offs and other valuation charges | | 8,466 | | — | | 8,466 | |
Preopening | | 13,573 | | (2,140 | ) | 11,433 | |
Depreciation and amortization | | 99,506 | | (1,924 | ) | 97,582 | |
Total operating expenses | | 935,568 | | (6,262 | ) | 929,306 | |
Operating income (loss): | | 65,826 | | 6,262 | | 72,088 | |
Interest expense | | (89,150 | ) | — | (b) | (89,150 | ) |
Interest income | | 7,469 | | (108 | ) | 7,361 | |
Gain (loss) on early extinguishment of debt | | — | | — | | — | |
Income (loss) from continuing operations before income taxes and minority interest | | (15,855 | ) | 6,154 | | (9,701 | ) |
Income tax benefit (provision) | | (1,906 | ) | (2,300 | )(c) | (4,206 | ) |
Minority interest | | (3,568 | ) | — | | (3,568 | ) |
Income (loss) from continuing operations | | $ | (21,329 | ) | $ | 3,854 | | $ | (17,475 | ) |
| | | | | | | |
Earnings (loss) per common share basic: | | | | | | | |
Income (loss) from continuing operations | | $ | (0.70 | ) | $ | 0.12 | | $ | (0.58 | ) |
| | | | | | | |
Earnings (loss) per common share diluted: | | | | | | | |
Income (loss) from continuing operations | | $ | (0.70 | ) | $ | 0.12 | | $ | (0.58 | ) |
| | | | | | | |
Weighted average basic shares | | 30,384,255 | | | | 30,384,255 | |
Weighted average diluted shares | | 30,384,255 | | | | 30,384,255 | |
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements
ISLE OF CAPRI CASINOS, INC.
UNAUDITED PRO FORMACONSOLIDATED STATEMENT OF OPERATIONS
FISCAL YEAR ENDED APRIL 30, 2006
(In thousands, except share and per share amounts)
| | | | PRO FORMA | | | |
| | | | ADJUSTMENTS | | AS REPORTED | |
| | | | SALE OF NET ASSETS, | | WITH | |
| | | | THE ISLE | | PRO FORMA | |
| | AS REPORTED | | CASINOS, LTD (a) | | ADJUSTMENTS | |
Revenues: | | | | | | | |
Casino | | $ | 1,004,143 | | $ | — | | $ | 1,004,143 | |
Rooms | | 36,999 | | — | | 36,999 | |
Pari-mutuel, food, beverage and other | | 146,391 | | — | | 146,391 | |
Gross revenues | | 1,187,533 | | — | | 1,187,533 | |
Less promotional allowances | | (200,174 | ) | — | | (200,174 | ) |
Net revenues | | 987,359 | | — | | 987,359 | |
Operating expenses: | | | | | | | |
Casino | | 151,860 | | — | | 151,860 | |
Gaming taxes | | 219,365 | | — | | 219,365 | |
Rooms | | 8,463 | | — | | 8,463 | |
Pari-mutuel commissions and fees | | 16,051 | | — | | 16,051 | |
Food, beverage and other | | 31,530 | | — | | 31,530 | |
Marine and facilities | | 56,993 | | — | | 56,993 | |
Marketing and administrative | | 246,334 | | (7,830 | ) | 238,504 | |
Corporate and development | | 57,803 | | — | | 57,803 | |
Write-offs and other valuation charges | | 13,388 | | (624 | ) | 12,764 | |
Preopening | | 281 | | — | | 281 | |
Depreciation and amortization | | 88,819 | | (1,359 | ) | 87,460 | |
Total operating expenses | | 890,887 | | (9,813 | ) | 881,074 | |
Operating income (loss): | | 96,472 | | 9,813 | | 106,285 | |
Interest expense | | (76,335 | ) | 314 | (b) | (76,021 | ) |
Interest income | | 2,694 | | (252 | ) | 2,442 | |
Gain (loss) on early extinguishment of debt | | (2,110 | ) | — | | (2,110 | ) |
Income (loss) from continuing operations before income taxes and minority interest | | 20,721 | | 9,875 | | 30,596 | |
Income tax benefit (provision) | | (5,628 | ) | (3,690 | )(c) | (9,318 | ) |
Minority interest | | (6,462 | ) | — | | (6,462 | ) |
Income (loss) from continuing operations | | $ | 8,631 | | $ | 6,185 | | $ | 14,816 | |
| | | | | | | |
Earnings (loss) per common share basic: | | | | | | | |
Income (loss) from continuing operations | | $ | 0.29 | | $ | 0.20 | | $ | 0.49 | |
| | | | | | | |
Earnings (loss) per common share diluted: | | | | | | | |
Income (loss) from continuing operations | | $ | 0.28 | | $ | 0.19 | | $ | 0.47 | |
| | | | | | | |
Weighted average basic shares | | 30,028,051 | | | | 30,028,051 | |
Weighted average diluted shares | | 31,270,486 | | | | 31,270,486 | |
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements
ISLE OF CAPRI CASINOS, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
1. Basis of Presentation
The unaudited pro forma condensed consolidated financial statements of the Company include adjustments to the Company’s historical financial statements to reflect the disposition of certain net assets and the termination of its lease obligation relating to its Coventry, England casino operations under its subsidiary, The Isle Casinos Limited.
The historical financial information of the Company has been derived from the historical audited and unaudited consolidated financial statements of the Company included in its Annual Report on Form 10-K for the fiscal year ended April 27, 2008 and its Quarterly Report on Form 10-Q for the quarter ended January 25, 2009. The unaudited pro forma balance sheet was prepared as if the disposition occurred as of January 25, 2009. The unaudited pro forma consolidated statements of operations for the fiscal years ended April 27, 2008, April 29, 2007 and April 30, 2006, and the nine months ended January 25, 2009, were prepared as if the asset disposition and lease termination occurred as of the 1st day of each presented period. The pro forma adjustments are based on factually supportable available information.
The unaudited pro forma statements presented do not purport to represent what the financial position or results of operations of the Company would have been had the transaction occurred on the dates noted above, or to project the results of operations or financial position of the Company for any future periods. In the opinion of management, all necessary adjustments to the unaudited pro forma financial information have been made.
The unaudited pro forma consolidated financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical financial statements and related notes thereto of the Company included in its Annual Report on Form 10-K for the fiscal year ended April 27, 2008 and its Quarterly Report on Form 10-Q for the quarter ended January 25, 2009.
2. | Adjustments to Unaudited Pro Forma Consolidated Balance Sheet |
| |
(a) | Reduction in cash includes payments to terminate our lease of the Coventry Convention Center and cash received net of casino operating cash balances assumed by the purchaser under the asset purchase agreement. |
(b) | Amounts represent receivables under the asset purchase agreement. |
(c) | Reductions in property and equipment, net of $36,452, include assets sold under the asset purchase agreement as well as the remaining net book value for the Coventry Convention Center which we had recorded as an asset prior to our termination of the lease. The termination of the Coventry Convention Center lease results in a $155 reduction in other accrued liabilities and $33,406 in other long-term liabilities as we have no further obligation under such lease. |
(d) | Represents a reduction of accrued liabilities assumed by the purchaser under the asset purchase agreement. |
(e) | The reduction in retained earnings includes the loss on the sale of net assets, the loss on the lease termination, and realized foreign currency loss previously included in accumulated other comprehensive loss, net of a tax benefit allocated to non current deferred income taxes. |
| |
3. | Adjustments to Unaudited Pro Forma Consolidated Statement of Operations |
| |
(a) | Represents the results of operations for The Isle Casinos Limited, Coventry UK casino operations for the periods presented. |
(b) | Represents interest expense which would have been eliminated as a result of the net asset sale and lease termination. |
(c) | Represents the net tax benefit applicable to the pro forma pretax adjustments. |
