Exhibit 99.2
RENT-A-CENTER, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
CONSOLIDATED BALANCE SHEET
As of September 30, 2006
| | | | | | | | | | | | | | | | |
| | | | | | | | | | Pro Forma | | Pro Forma |
| | Rent-A-Center | | Rent-Way | | Adjustments | | Consolidated |
(In thousands) | | | | | | | | | | |
ASSETS | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 53,706 | | | $ | 10,739 | | | $ | (19,192 | )(a) | | $ | 45,253 | |
Accounts receivable, net | | | 21,332 | | | | 48 | | | | — | | | | 21,380 | |
Prepaid expenses and other assets | | | 47,303 | | | | 14,763 | | | | (3,712 | )(b) | | | 58,354 | |
Rental merchandise, net | | | | | | | | | | | | | | | | |
On rent | | | 638,091 | | | | 162,349 | | | | — | | | | 800,440 | |
Held for rent | | | 195,086 | | | | 46,655 | | | | — | | | | 241,741 | |
Merchandise held for installment sale | | | 1,928 | | | | 10 | | | | — | | | | 1,938 | |
Property assets, net | | | 158,520 | | | | 45,847 | | | | — | | | | 204,367 | |
Goodwill, net | | | 945,278 | | | | 187,500 | | | | 326,092 | (c) | | | 1,458,870 | |
| | | — | | | | — | | | | (187,500 | )(d) | | | (187,500 | ) |
Intangible assets, net | | | 3,481 | | | | 1,831 | | | | 23,850 | (e) | | | 29,162 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 2,064,725 | | | $ | 469,742 | | | $ | 139,538 | | | $ | 2,674,005 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | | | |
Accounts payable — trade | | $ | 116,091 | | | $ | 15,100 | | | $ | — | | | $ | 131,191 | |
Accrued liabilities | | | 215,764 | | | | 70,841 | | | | 35,008 | (f) | | | 321,613 | |
Deferred income taxes | | | 126,822 | | | | 20,742 | | | | (124,057 | )(g) | | | 23,507 | |
Senior debt | | | 358,468 | | | | 26,000 | | | | 600,000 | (a) | | | 958,468 | |
| | | — | | | | — | | | | (26,000 | )(h) | | | — | |
Subordinated notes payable | | | 300,000 | | | | 202,741 | | | | (202,741 | )(h) | | | 300,000 | |
Convertible preferred stock | | | — | | | | 23,721 | | | | (23,721 | )(h) | | | — | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 1,117,145 | | | | 359,145 | | | | 258,489 | | | | 1,734,779 | |
| | | | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | |
Common stock | | | 1,039 | | | | 305,073 | | | | (305,073 | )(i) | | | 1,039 | |
Additional paid-in capital | | | 653,833 | | | | 1,895 | | | | (1,895 | )(i) | | | 653,833 | |
Retained earnings | | | 1,006,798 | | | | (196,180 | ) | | | 187,826 | (i)(j) | | | 998,444 | |
Treasury stock | | | (714,090 | ) | | | (191 | ) | | | 191 | (i) | | | (714,090 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | 947,580 | | | | 110,597 | | | | (118,951 | ) | | | 939,226 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | $ | 2,064,725 | | | $ | 469,742 | | | $ | 139,538 | | | $ | 2,674,005 | |
| | | | | | | | | | | | |
RENT-A-CENTER, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENT OF EARNINGS
For the Nine Months Ended September 30, 2006
| | | | | | | | | | | | | | | | |
| | | | | | | | | | Pro Forma | | | Pro Forma | |
| | Rent-A-Center | | | Rent-Way | | | Adjustments | | | Consolidated | |
(In thousands, except per share data) | | | | | | | | |
Revenues | | | | | | | | | | | | | | | | |
Store | | | | | | | | | | | | | | | | |
Rentals and fees | | $ | 1,579,719 | | | $ | 365,030 | | | $ | 43 | (p) | | $ | 1,944,792 | |
Merchandise sales | | | 138,934 | | | | 31,895 | | | | — | | | | 170,829 | |
Installment sales | | | 18,377 | | | | — | | | | — | | | | 18,377 | |
Other | | | 10,263 | | | | 12,180 | | | | — | | | | 22,443 | |
Franchise | | | | | | | | | | | | | | | | |
Merchandise sales | | | 26,752 | | | | — | | | | — | | | | 26,752 | |
Royalty income and fees | | | 3,737 | | | | — | | | | — | | | | 3,737 | |
| | | | | | | | | | | | |
| | | 1,777,782 | | | | 409,105 | | | | 43 | | | | 2,186,930 | |
| | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | |
Direct store expenses | | | | | | | | | | | | | | | | |
Cost of rentals and fees | | | 344,518 | | | | 89,148 | | | | — | | | | 433,666 | |
Cost of merchandise sold | | | 100,955 | | | | 30,636 | | | | — | | | | 131,591 | |
Cost of installment sales | | | 7,677 | | | | — | | | | — | | | | 7,677 | |
Salaries and other expenses | | | 1,012,263 | | | | 212,113 | | | | (323 | )(p) | | | 1,224,053 | |
Franchise cost of merchandise sold | | | 25,659 | | | | — | | | | — | | | | 25,659 | |
| | | | | | | | | | | | |
| | | 1,491,072 | | | | 331,897 | | | | (323 | ) | | | 1,822,646 | |
| | | | | | | | | | | | | | | | |
General and administrative expenses | | | 66,017 | | | | 48,529 | | | | — | | | | 114,546 | |
Amortization of intangibles | | | 2,845 | | | | 613 | | | | 8,906 | (k) | | | 12,364 | |
Litigation settlement/(reversion) | | | 15,300 | | | | — | | | | — | | | | 15,300 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 1,575,234 | | | | 381,039 | | | | 8,583 | | | | 1,964,856 | |
| | | | | | | | | | | | | | | | |
Operating profit | | | 202,548 | | | | 28,066 | | | | (8,540 | ) | | | 222,074 | |
| | | | | | | | | | | | | | | | |
Finance charges from refinancing | | | 2,165 | | | | — | | | | — | | | | 2,165 | |
Interest expense | | | 39,646 | | | | 29,670 | | | | 2,606 | (l) | | | 71,922 | |
Interest income | | | (4,194 | ) | | | (435 | ) | | | — | | | | (4,629 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 164,931 | | | | (1,169 | ) | | | (11,146 | ) | | | 152,616 | |
| | | | | | | | | | | | | | | | |
Income tax expense | | | 59,519 | | | | 6,310 | | | | (10,754 | )(m) | | | 55,075 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
NET EARNINGS | | | 105,412 | | | | (7,479 | ) | | | (392 | ) | | | 97,541 | |
| | | | | | | | | | | | | | | | |
Preferred stock dividend | | | — | | | | 1,816 | | | | (1,816 | )(n) | | | — | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net earnings allocable to common stockholders | | $ | 105,412 | | | $ | (9,295 | ) | | $ | 1,424 | | | $ | 97,541 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net income per common share: | | | | | | | | | | | | | | | | |
Basic | | $ | 1.52 | | | | | | | | | | | $ | 1.40 | |
Diluted | | $ | 1.49 | | | | | | | | | | | $ | 1.38 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 69,536 | | | | | | | | | | | | 69,536 | |
Diluted | | | 70,581 | | | | | | | | | | | | 70,581 | |
RENT-A-CENTER, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA
CONSOLIDATED STATEMENT OF EARNINGS
For the Twelve Months Ended December 31, 2005
| | | | | | | | | | | | | | | | |
| | | | | | | | | | Pro Forma | | | Pro Forma | |
| | Rent-A-Center | | | Rent-Way | | | Adjustments | | | Consolidated | |
(In thousands, except per share data) | | | | | | | | |
Revenues | | | | | | | | | | | | | | | | |
Store | | | | | | | | | | | | | | | | |
Rentals and fees | | $ | 2,084,757 | | | $ | 463,094 | | | $ | (857 | )(p) | | $ | 2,546,994 | |
Merchandise sales | | | 177,292 | | | | 38,531 | | | | — | | | | 215,823 | |
Installment sales | | | 26,139 | | | | — | | | | — | | | | 26,139 | |
Other | | | 7,903 | | | | 16,394 | | | | — | | | | 24,297 | |
Franchise | | | | | | | | | | | | | | | | |
Merchandise sales | | | 37,794 | | | | — | | | | — | | | | 37,794 | |
Royalty income and fees | | | 5,222 | | | | — | | | | — | | | | 5,222 | |
| | | | | | | | | | | | |
| | | 2,339,107 | | | | 518,019 | | | | (857 | ) | | | 2,856,269 | |
| | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | |
Direct store expenses | | | | | | | | | | | | | | | | |
Cost of rentals and fees | | | 452,583 | | | | 111,279 | | | | — | | | | 563,862 | |
Cost of merchandise sold | | | 129,624 | | | | 36,448 | | | | — | | | | 166,072 | |
Cost of installment sales | | | 10,889 | | | | — | | | | — | | | | 10,889 | |
Salaries and other expenses | | | 1,358,760 | | | | 273,161 | | | | 101 | (p) | | | 1,632,022 | |
Franchise cost of merchandise sold | | | 36,319 | | | | — | | | | — | | | | 36,319 | |
| | | | | | | | | | | | |
| | | 1,988,175 | | | | 420,888 | | | | 101 | | | | 2,409,164 | |
| | | | | | | | | | | | | | | | |
General and administrative expenses | | | 82,290 | | | | 56,203 | | | | — | | | | 138,493 | |
Amortization of intangibles | | | 11,705 | | | | 380 | | | | 11,874 | (k) | | | 23,959 | |
Litigation settlement/(reversion) | | | 15,166 | | | | — | | | | — | | | | 15,166 | |
Restructuring charge | | | (8,000 | ) | | | — | | | | — | | | | (8,000 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 2,089,336 | | | | 477,471 | | | | 11,975 | | | | 2,578,782 | |
| | | | | | | | | | | | | | | | |
Operating profit | | | 249,771 | | | | 40,548 | | | | (12,832 | ) | | | 277,487 | |
| | | | | | | | | | | | | | | | |
Interest expense | | | 46,195 | | | | 21,815 | | | | 29,091 | (o) | | | 97,101 | |
Interest income | | | (5,492 | ) | | | (126 | ) | | | — | | | | (5,618 | ) |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 209,068 | | | | 18,859 | | | | (41,923 | ) | | | 186,004 | |
| | | | | | | | | | | | | | | | |
Income tax expense | | | 73,330 | | | | 8,584 | | | | (16,674 | )(m) | | | 65,240 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
NET EARNINGS | | | 135,738 | | | | 10,275 | | | | (25,249 | ) | | | 120,764 | |
| | | | | | | | | | | | | | | | |
Preferred stock dividend | | | — | | | | 2,230 | | | | (2,230 | )(n) | | | — | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net earnings allocable to common stockholders | | $ | 135,738 | | | $ | 8,045 | | | $ | (23,019 | ) | | $ | 120,764 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net income per common share: | | | | | | | | | | | | | | | | |
Basic | | $ | 1.86 | | | | | | | | | | | $ | 1.65 | |
Diluted | | $ | 1.83 | | | | | | | | | | | $ | 1.63 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 73,018 | | | | | | | | | | | | 73,018 | |
Diluted | | | 74,108 | | | | | | | | | | | | 74,108 | |
Notes to Unaudited Pro Forma Financial Statements
Basis of Presentation. On November 15, 2006, Rent-A-Center, Inc., completed its acquisition of Rent-Way, Inc., and its subsidiaries, whereby Rent-Way became a wholly owned subsidiary of Rent-A-Center, Inc., in a transaction accounted for using the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141 (“SFAS 141”), “Business Combinations”. The total purchase price of approximately $619.2 million includes cash payments and borrowings under our senior credit facilities and direct transaction costs of approximately $11.0 million. The maturity date of the senior credit facilities is June 30, 2012. A variance of1/8 percent in the interest rate would affect income by $358,000 and $484,000 at September 30, 2006 and December 31, 2005, respectively.
The total purchase price of the merger is as follows (in thousands):
| | | | |
Cash | | $ | 608,192 | |
Direct transaction costs | | | 11,000 | |
| | | |
Total purchase price | | $ | 619,192 | |
| | | |
The allocation of the purchase price is preliminary pending the completion of various analyses and finalization of estimates. The allocation of the purchase price and estimated useful lives and first year amortization associated with certain assets is as follows (in thousands):
| | | | | | | | | | | | |
| | | | | | First Year | | | Estimated | |
| | Amount | | | Amortization | | | Useful Life | |
Net tangible assets | | $ | 110,597 | | | | | | | | | |
Customer contracts and relationships and non-compete agreements | | | 23,850 | | | $ | 11,874 | | | 2-5 years |
Financing costs | | | 4,049 | | | | 230 | | | | 6 years | |
Debt payment | | | 252,463 | | | | | | | | | |
Deferred tax assets | | | 124,057 | | | | | | | | | |
Accrued restructuring charges | | | (34,416 | ) | | | | | | | | |
Goodwill, net | | | 138,592 | | | | | | | | | |
| | | | | | | | | | | |
Total purchase price | | $ | 619,192 | | | | | | | | | |
| | | | | | | | | | | |
Reclassifications.Certain reclassification adjustments have been made to conform Rent-Way’s historical reported balances to the pro forma combined condensed financial statement basis of presentation. The balance sheet reclassifications are as follows:
| | | | | | | | | | | | |
| | | | | | | | | | Rent-Way |
(In thousands) | | Rent-Way | | Reclassifications | | Reclassified |
ASSETS | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 10,782 | | | $ | (43 | ) | | $ | 10,739 | |
Accounts receivable, net | | | — | | | | 48 | | | | 48 | |
Prepaid expenses and other assets | | | 17,304 | | | | (2,541 | ) | | | 14,763 | |
Rental merchandise, net | | | | | | | | | | | | |
On rent | | | 208,404 | | | | (46,055 | ) | | | 162,349 | |
Held for rent | | | — | | | | 46,655 | | | | 46,655 | |
Merchandise held for installment sale | | | — | | | | 10 | | | | 10 | |
Property assets, net | | | 45,709 | | | | 138 | | | | 45,847 | |
Goodwill, net | | | 187,500 | | | | — | | | | 187,500 | |
Intangible assets, net | | | 1,831 | | | | — | | | | 1,831 | |
| | | | | | | | | |
|
| | $ | 471,530 | | | $ | (1,788 | ) | | $ | 469,742 | |
| | | | | | | | | |
| | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | |
Accounts payable — trade | | $ | 20,677 | | | $ | (5,577 | ) | | $ | 15,100 | |
Accrued liabilities | | | 67,049 | | | | 3,792 | | | | 70,841 | |
Deferred income taxes | | | 20,742 | | | | — | | | | 20,742 | |
Senior debt | | | 228,744 | | | | (202,744 | ) | | | 26,000 | |
Subordinated notes | | | — | | | | 202,741 | | | | 202,741 | |
Convertible preferred stock | | | 23,721 | | | | — | | | | 23,721 | |
| | | | | | | | | |
|
| | | 360,933 | | | | (1,788 | ) | | | 359,145 | |
| | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
Common stock | | | 305,073 | | | | — | | | | 305,073 | |
Additional paid-in capital | | | 1,895 | | | | — | | | | 1,895 | |
Retained earnings | | | (196,180 | ) | | | — | | | | (196,180 | ) |
Treasury stock | | | (191 | ) | | | — | | | | (191 | ) |
| | | | | | | | | |
| | | | | | | | | | | | |
| | | 110,597 | | | | — | | | | 110,597 | |
| | | | | | | | | |
| | | | | | | | | | | | |
| | $ | 471,530 | | | $ | (1,788 | ) | | $ | 469,742 | |
| | | | | | | | | |
The income statement reclassifications for the nine months ended September 30, 2006, are as follows:
| | | | | | | | | | | | |
| | | | | | | | | | Rent-Way |
| | Rent-Way | | Reclassifications | | Reclassified |
(In thousands) | | | |
Revenues | | | | | | | | | | | | |
Store | | | | | | | | | | | | |
Rentals and fees | | $ | 343,455 | | | $ | 21,575 | | | $ | 365,030 | |
Merchandise sales | | | — | | | | 31,895 | | | | 31,895 | |
Installment sales | | | — | | | | — | | | | — | |
Other revenue | | | 65,274 | | | | (53,094 | ) | | | 12,180 | |
Franchise | | | | | | | | | | | | |
Merchandise sales | | | — | | | | — | | | | — | |
Royalty income and fees | | | — | | | | — | | | | — | |
| | | | | | | | | |
| | | 408,729 | | | | 376 | | | | 409,105 | |
| | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | |
Direct store expenses | | | | | | | | | | | | |
Cost of rentals and fees | | | 119,981 | | | | (30,833 | ) | | | 89,148 | |
Cost of merchandise sold | | | 7,361 | | | | 23,275 | | | | 30,636 | |
Cost of installment sales | | | — | | | | — | | | | — | |
Salaries and other expenses | | | 255,356 | | | | (43,243 | ) | | | 212,113 | |
Franchise cost of merchandise sold | | | — | | | | — | | | | — | |
| | | | | | | | | |
| | | 382,698 | | | | (50,801 | ) | | | 331,897 | |
| | | | | | | | | | | | |
General and administrative expenses | | | 90 | | | | 48,439 | | | | 48,529 | |
Amortization of intangibles | | | 613 | | | | — | | | | 613 | |
| | | | | | | | | |
| | | | | | | | | | | | |
Total operating expenses | | | 383,401 | | | | (2,362 | ) | | | 381,039 | |
| | | | | | | | | | | | |
Operating profit | | | 25,328 | | | | 2,738 | | | | 28,066 | |
| | | | | | | | | | | | |
Interest expense | | | 29,564 | | | | 106 | | | | 29,670 | |
Interest income | | | (435 | ) | | | — | | | | (435 | ) |
| | | | | | | | | |
| | | | | | | | | | | | |
Earnings before income taxes | | | (3,801 | ) | | | 2,632 | | | | (1,169 | ) |
| | | | | | | | | | | | |
Income tax expense | | | 3,678 | | | | 2,632 | | | | 6,310 | |
| | | | | | | | | |
| | | | | | | | | | | | |
Net loss before discontinued operations | | | (7,479 | ) | | | — | | | | (7,479 | ) |
| | | | | | | | | | | | |
Preferred stock dividend | | | 1,816 | | | | — | | | | 1,816 | |
| | | | | | | | | |
| | | | | | | | | | | | |
Net loss before discontinued operations | | $ | (9,295 | ) | | $ | — | | | $ | (9,295 | ) |
| | | | | | | | | |
The income statement reclassifications for the twelve months ended December 31, 2005, are as follows:
| | | | | | | | | | | | |
| | | | | | | | | | Rent-Way |
| | Rent-Way | | Reclassifications | | Reclassified |
(In thousands) | | | |
Revenues | | | | | | | | | | | | |
Store | | | | | | | | | | | | |
Rentals and fees | | $ | 434,480 | | | $ | 28,614 | | | $ | 463,094 | |
Merchandise sales | | | — | | | | 38,531 | | | | 38,531 | |
Installment sales | | | — | | | | — | | | | — | |
Other revenue | | | 83,738 | | | | (67,344 | ) | | | 16,394 | |
Franchise | | | | | | | | | | | | |
Merchandise sales | | | — | | | | — | | | | — | |
Royalty income and fees | | | — | | | | — | | | | — | |
| | | | | | | | | |
| | | 518,218 | | | | (199 | ) | | | 518,019 | |
| | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | |
Direct store expenses | | | | | | | | | | | | |
Cost of rentals and fees | | | 148,979 | | | | (37,700 | ) | | | 111,279 | |
Cost of merchandise sold | | | 10,403 | | | | 26,045 | | | | 36,448 | |
Cost of installment sales | | | — | | | | — | | | | — | |
Salaries and other expenses | | | 321,558 | | | | (48,397 | ) | | | 273,161 | |
Franchise cost of merchandise sold | | | — | | | | — | | | | — | |
| | | | | | | | | |
| | | 480,940 | | | | (60,052 | ) | | | 420,888 | |
| | | | | | | | | | | | |
General and administrative expenses | | | 120 | | | | 56,083 | | | | 56,203 | |
Amortization of intangibles | | | 380 | | | | — | | | | 380 | |
| | | | | | | | | |
| | | | | | | | | | | | |
Total operating expenses | | | 481,440 | | | | (3,969 | ) | | | 477,471 | |
| | | | | | | | | | | | |
Operating profit | | | 36,778 | | | | 3,770 | | | | 40,548 | |
| | | | | | | | | | | | |
Interest expense | | | 21,275 | | | | 540 | | | | 21,815 | |
Interest income | | | (126 | ) | | | — | | | | (126 | ) |
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Earnings before income taxes | | | 15,629 | | | | 3,230 | | | | 18,859 | |
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Income tax expense | | | 5,354 | | | | 3,230 | | | | 8,584 | |
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Net loss before discontinued operations | | | 10,275 | | | | — | | | | 10,275 | |
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Preferred stock dividend | | | 2,230 | | | | — | | | | 2,230 | |
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Net loss before discontinued operations | | $ | 8,045 | | | $ | — | | | $ | 8,045 | |
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Pro Forma Adjustments.Pro forma adjustments are necessary to reflect the purchase price and to conform accounting of deferred revenue from Rent-Way’s policy to be in accordance with Rent-A-Center’s policy.
The following pro forma adjustments are reflected in the financial statements:
| (a) | | Includes $19.2 million in cash and a $600.0 million increase to our senior credit facility for the purchase price of Rent-Way. |
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| (b) | | Consists of $4.0 in financing fees for the new senior credit facility, net of a write-off of $2.6 million in financing costs for our previous senior credit facility and a write-off of $5.1 million in financing costs for Rent-Way’s credit facilities. |
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| (c) | | Reflects the addition of goodwill. |
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| (d) | | Consists of the elimination of Rent-Way goodwill. |
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| (e) | | Consists of customer contracts of $23.6 million and non-compete agreements of $250,000 resulting from the acquisition. |
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| (f) | | Accrued liabilities include an increase of approximately $600,000 related to the conformity of accounting policies for deferred revenue and $34.4 million related to accrued restructuring charges. |
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| (g) | | Consists of previously unrecognized deferred tax assets that are considered more likely than not to be realized as a result of the acquisition. |
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| (h) | | Consists of the elimination of Rent-Way’s debt and convertible preferred stock. |
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| (i) | | Consists of the elimination of Rent-Way’s equity. |
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| (j) | | Includes adjustment of approximately $600,000 for conformity of accounting policies for deferred revenue, write-off of $2.6 million in our financing costs and $5.1 million in Rent-Way’s financing costs. |
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| (k) | | Consists of amortization expense for customer contracts and non-compete agreements. |
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| (l) | | Reflects interest expense of $31.7 million related to $600 million in additional credit facility, an elimination of $29.3 million of Rent-Way’s interest expense related to their debt and approximately $195,000 in amortization of accrued financing costs. |
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| (m) | | Previously expensed items for income tax expense would not have been recognized if the acquisition had occurred on January 1st of the respective periods. |
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| (n) | | Consists of the elimination of the preferred stock dividend. |
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| (o) | | Reflects interest expense of $42.8 million related to $600 million in additional credit facility, an elimination of $21.7 million of Rent-Way’s interest expense related to their debt, write-off of Rent-A-Center’s accrued financing costs of $2.6 million, write-off of Rent-Way’s accrued financing costs of $5.1 million and approximately $230,000 in amortization of accrued financing costs. |
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| (p) | | Consists of adjustment for conformity of accounting policies for deferred revenue. |