Everi Holdings Inc. - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - FORM 8-K - Everi Holdings Inc.	a2222428z8-k.htm
EX-99.1 - EX-99.1 - Everi Holdings Inc.	a2222428zex-99_1.htm
EX-99.3 - EX-99.3 - Everi Holdings Inc.	a2222428zex-99_3.htm

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 99.2

Summary Consolidated Historical and Pro Forma Financial Data for GCA and
Summary Consolidated Historical Financial Data for Multimedia Games

The following tables, as indicated below, present summary consolidated historical financial data for GCA. The summary consolidated statements of operations data for each of the three fiscal years in the period ended December 31, 2013 and the consolidated balance sheet data as of December 31, 2013 have been derived from GCA's audited consolidated financial statements that are included elsewhere in this offering memorandum. The summary consolidated balance sheet data as of September 30, 2014 and the summary consolidated statements of operations data for each of the nine and twelve months ended September 30, 2014 and the nine months ended September 30, 2013 have been derived from GCA's unaudited condensed consolidated financial statements that are included elsewhere in this offering memorandum and each reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of that information for the periods presented.

The following tables, as indicated below, present summary consolidated historical financial data for Multimedia Games. The summary consolidated statements of operations data for each of the three fiscal years in the period ended September 30, 2014 and the consolidated balance sheet data as of September 30, 2014 have been derived from Multimedia Games' audited consolidated financial statements that are included elsewhere in this offering memorandum.

The unaudited pro forma statement of operations data for the twelve months ended September 30, 2014 set forth below gives effect to the Merger, this offering and the other financing transactions, and the application of the proceeds therefrom, as if they had occurred on October 1, 2013. It should be noted that GCA and Multimedia Games have different fiscal year ends. Accordingly, the unaudited pro forma statement of operations data for the twelve months ended September 30, 2014 combines GCA's consolidated historical statement of operations data for the twelve months ended September 30, 2014, which were developed from GCA's unaudited consolidated historical statement of operations data for the three months ended December 31, 2013 plus GCA's unaudited consolidated historical statement of operations data for the nine months ended September 30, 2014, with Multimedia Games' audited consolidated historical statement of operations data for the year ended September 30, 2014. The unaudited pro forma balance sheet data set forth below gives effect to the Merger, this offering and the other financing transactions, and the application of the proceeds therefrom, as if they had occurred on September 30, 2014. The pro forma consolidated financial data is unaudited, is presented for informational purposes only and is not necessarily indicative of what our financial position or results of operations would have been had the Merger been completed as of such dates. Further, the pro forma consolidated financial data does not purport to represent what our financial position, results of operations or cash flows might be for any future period.

The Merger will be accounted for using the acquisition method of accounting with GCA identified as the acquirer. Under the acquisition method of accounting, GCA will record all assets acquired and liabilities assumed at their respective acquisition-date fair values. 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 estimated Merger consideration expected to be transferred and the estimated fair values of the assets acquired and liabilities assumed.

The final allocation of the Merger consideration may include (i) changes in historical carrying values of property and equipment, (ii) allocations to intangible assets such as patents, trademarks and trade names, in-process research and development, developed technology and customer-related assets, and (iii) other changes to assets and liabilities. As a result, actual results will differ from this unaudited pro forma condensed combined financial information once GCA has determined the final Merger consideration and completed the detailed valuation analysis and calculations necessary to finalize the required purchase price allocations. The final allocations of the Merger consideration, which are expected to be determined subsequent to the closing of the Merger, may differ materially from the estimated allocations and unaudited pro forma condensed combined amounts included herein.

The following summary historical and pro forma consolidated financial data should be read in conjunction with "Sources and Uses of Funds," "Unaudited Pro Forma Condensed Combined Financial Statements," "Selected Historical Financial Data of GCA," "Selected Historical Financial Data of Multimedia Games," "GCA Management's Discussion and Analysis of Financial Condition and Results of Operations," "Multimedia Games Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements, and the accompanying notes thereto, of each of GCA and Multimedia Games included elsewhere in this offering memorandum.

GCA Historical and Pro Forma Consolidated Financial Data (in thousands):

	GCA												Combined Company

							Nine Months Ended						Combined Company
	Year Ended December 31,												Pro Forma Twelve Months Ended September 30, 2014
											Twelve Months Ended September 30, 2014
							September 30, 2014		September 30, 2013
	2013		2012		2011		September 30, 2014		September 30, 2013
Statement of Operations Data:
Revenues	$	582,444	$	584,486	$	544,063	$	440,998	$	441,987	$	581,455	$	799,583


Costs and expenses
Cost of revenues (exclusive of depreciation and amortization)		439,794		436,059		419,606		331,181		333,928		437,047		483,980
Operating expenses		76,562		75,806		69,517		62,233		57,710		81,085		133,116
Research and development costs		—		—		—		—		—		—		17,174
Depreciation		7,350		6,843		7,971		5,702		5,421		7,631		43,868
Amortization		9,588		9,796		8,673		8,476		6,974		11,090		18,240


Total costs and expenses		533,294		528,504		505,767		407,592		404,033		536,853		696,378


Operating income		49,150		55,982		38,296		33,406		37,954		44,602		103,205


Other expenses
Interest expense, net of interest income		10,265		15,519		18,638		5,625		8,151		7,739		97,667
Loss on early extinguishment of debt		—		—		943		—		—		—		4,977
Other income, net of other expense		—		—		—		—		—		—		(166	)


Total other expenses		10,265		15,519		19,581		5,625		8,151		7,739		102,478


Income from operations before tax		38,885		40,463		18,715		27,781		29,803		36,863		727
Income tax provision		14,487		14,774		9,586		9,892		11,109		13,270		422


Net income	$	24,398	$	25,689	$	9,129	$	17,889	$	18,694	$	23,593	$	305

	GCA				Combined Company

	As of September 30, 2014		As of December 31, 2013		Pro Forma as of September 30, 2014
Balance Sheet Data:
Cash and cash equivalents⁽¹⁾	$	106,499	$	114,254	$	113,441
Settlement receivables		27,372		38,265		27,372
Goodwill		188,491		180,084		1,104,948
Settlement liabilities		116,711		145,022		116,711
Borrowings		95,743		103,000		1,210,000
Total assets	$	518,110	$	527,327	$	1,661,795
Total liabilities	$	281,459	$	308,723	$	1,433,781

	GCA																		Combined Company

										Nine Months Ended									Combined Company
	Year Ended December 31,																		Pro Forma Twelve Months Ended September 30, 2014
																Twelve Months Ended September 30, 2014
										September 30, 2014			September 30, 2013
	2013			2012			2011			September 30, 2014			September 30, 2013
Other Financial Data:
Capital expenditures	$	(13,986	)	$	(13,654	)	$	(7,420	)	$	(11,035	)	$	(9,165	)	$	(15,856	)	$	(64,378	)
EBITDA⁽²⁾⁽³⁾		66,088			72,621			54,940			47,584			50,349			63,323			158,791
Adjusted EBITDA⁽³⁾		71,166			79,276			61,749			56,070			54,051			73,185			190,497
Pro Forma Adjusted EBITDA⁽³⁾																				220,497
Selected Credit Statistics:
Total debt to Pro Forma Adjusted EBITDA																				5.5x
Net debt⁽⁴⁾ to Pro Forma Adjusted EBITDA																				5.4x
Pro Forma Adjusted EBITDA to cash interest expense⁽⁵⁾																				2.4x

(1): In October 2014, Multimedia Games completed the previously announced acquisition of PokerTek for total cash consideration of approximately $13.5 million. This cash outlay is not reflected in the pro forma results as of September 30, 2014.
(2): EBITDA consists of GAAP net income before net interest expense, loss on extinguishment of debt, income tax provision, depreciation and amortization.
(3): EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA are presented to enhance the understanding of our ability to service our debt. Although EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA are not necessarily measures of our ability to fund our cash needs, we understand that EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA are used by certain investors as measures of financial performance and to compare our performance with the performance of other companies that report EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA. EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA are not measurements determined in accordance with GAAP, are unaudited and should not be considered alternatives to, or more meaningful than, net income or income from operations, as indicators of our operating performance, or cash flows from operating activities, as measures of liquidity or any other measure determined in accordance with GAAP. EBITDA, Adjusted EBITDA and Pro Forma Adjusted EBITDA may not be the same as that of similarly named measures used by other companies.
(4): Net debt is defined as debt less the result of cash and cash equivalents plus settlement receivables less settlement liabilities.
(5): Cash interest expense represents the interest on the New Credit Facilities and the notes offered hereby.

Multimedia Games Historical Financial Data (in thousands):

	Year Ended September 30,

	2014			2013			2012
Statement of Operations Data:
Revenues:	$	218,129		$	189,366		$	156,176
Operating Costs and Expenses
Cost of gaming operations revenue		15,136			13,803			12,547
Cost of equipment and system sales		31,797			23,143			18,548
Selling, general and administrative expenses		58,720			48,350			46,451
Write-off, reserve, impairment & settlement charges		—			—			1,187
Research and development		17,174			16,842			15,082
Amortization and depreciation		43,388			34,846			38,270


Total operating costs and expenses		166,215			136,984			132,085


Operating income		51,914			52,382			24,091
Other income (expense):
Interest income		412			491			1,553
Interest expense		(930	)		(1,139	)		(1,392	)
Other income		166			33			1,045


Income before income taxes		51,562			51,767			25,297
Income tax (expense) benefit		(19,633	)		(16,833	)		2,877


Net Income	$	31,929		$	34,934		$	28,174

	As of September 30, 2014		As of September 30, 2013

Balance Sheet Data:
Cash and cash equivalents	$	138,086	$	102,632
Accounts receivable		25,265		26,566
Total current assets		192,864		156,816
Total assets		315,012		281,525
Total current liabilities		38,145		33,349
Total liabilities		70,654		72,584

	Year Ended September 30,

	2014		2013		2012
Other Financial Data:
Capital expenditures	$	48,522	$	57,884	$	51,322
EBITDA⁽¹⁾		104,825		95,731		71,106
Adjusted EBITDA⁽²⁾		117,312		99,657		74,524

(1): EBITDA consists of GAAP net income before net interest expense, income tax (provision) benefit, accretion of contract rights, depreciation and amortization.
(2): Adjusted EBITDA, as calculated by Multimedia Games, consists of EBITDA, as further adjusted by adding back (i) equity compensation expense, and (ii) fees and expenses related to the Merger and the PokerTek acquisition.

GCA uses non-GAAP measures of performance, including EBITDA and Adjusted EBITDA. GCA's management uses, and chooses to disclose, these non-GAAP financial measures because (i) such measures provide an additional analytical tool to clarify GCA's results from operations and help GCA

to identify underlying trends in its results of operations, (ii) GCA uses non-GAAP earnings measures, including EBITDA, as a measure of profitability because such measures help GCA compare its performance on a consistent basis across time periods and (iii) these non-GAAP measures are employed by GCA's management in its own evaluation of performance and are utilized in financial and operational decision-making processes, such as budget planning and forecasting. GCA also internally uses Adjusted EBITDA measures for determining (a) compliance with certain financial covenants in its credit agreement and (b) executive and employee compensation. Set forth below are additional reasons why specific items are excluded from GCA's non-GAAP financial measures:

•: Depreciation and amortization charges are excluded because they are non-cash expenses, and while tangible and intangible assets support our business, we do not believe the related depreciation and amortization costs are directly attributable to the operating performance of our business.
•: Equity compensation expense is not an expense that typically requires or will require cash settlement by GCA.
•: We do not believe one-time costs and expenses relating to the Merger and other transactions are directly attributable to the operating performance of our business.

Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for GCA's GAAP results. In the future, GCA expects to continue reporting non-GAAP financial measures excluding items described above and GCA expects to continue to incur expenses similar to the non-GAAP adjustments described above. Accordingly, exclusion of these and other similar items in our non-GAAP presentation should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Some of the limitations in relying on non-GAAP financial measures are:

•: Amortization of acquired technology and intangibles, though not directly affecting our current cash position, represent the loss in value as the technology in our industry evolves, is advanced or is replaced over time. The expense associated with this loss in value is not included in the non-GAAP presentation and therefore does not reflect the full economic effect of the ongoing cost of maintaining our current technological position in our competitive industry which is addressed through our research and development program.
•: Equity compensation expense is an important component of our incentive compensation arrangements and will be reflected as expenses in our GAAP results for the foreseeable future.
•: Other companies, including other companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting their usefulness as a comparative measure.

We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP financial measures only supplementally. We also provide reconciliations of each non-GAAP financial measure to our most directly comparable GAAP measure, and we encourage investors to review carefully those reconciliations.

GCA believes that the presentation of these non-GAAP financial measures is warranted for several reasons. First, such non-GAAP financial measures provide investors and management an additional analytical tool for understanding GCA's financial performance by excluding the impact of items which may obscure trends in the core operating performance of the business. Second, since GCA has historically reported non-GAAP results to the investment community, GCA believes the inclusion of non-GAAP numbers provides consistency and enhances investors' ability to compare GCA's performance across financial reporting periods.

The following table presents a reconciliation of GCA's (i) operating income to EBITDA and Adjusted EBITDA and (ii) Adjusted EBITDA to Pro Forma Adjusted EBITDA (in thousands):

	GCA												Combined Company

							Nine Months Ended						Combined Company
	Year Ended December 31,												Pro Forma Twelve Months Ended September 30, 2014
											Twelve Months Ended September 30, 2014
							September 30, 2014		September 30, 2013
	2013		2012		2011		September 30, 2014		September 30, 2013
Reconciliation of operating income to EBITDA and Adjusted EBITDA
Operating income	$	49,150	$	55,982	$	38,296	$	33,406	$	37,954	$	44,602	$	103,205
Plus: Other income		—		—		—		—		—		—		166
Plus: Depreciation and amortization		16,938		16,639		16,644		14,178		12,395		18,721		62,109
Minus: Acquisition related expenses incurred		—		—		—		—		—		—		(6,689	)


EBITDA	$	66,088	$	72,621	$	54,940	$	47,584	$	50,349	$	63,323	$	158,791
Equity compensation expense		5,078		6,655		6,809		7,533		3,702		8,909		14,783
Acquisition related expenses		—		—		—		953		—		953		7,566
Accretion of contract rights		—		—		—		—		—		—		9,357


Adjusted EBITDA	$	71,166	$	79,276	$	61,749	$	56,070	$	54,051	$	73,185	$	190,497
Reconciliation of Adjusted EBITDA to Pro Forma Adjusted EBITDA
Synergies		—		—		—		—		—		—		30,000


Pro Forma Adjusted EBITDA	$	71,166	$	79,276	$	61,749	$	56,070	$	54,051	$	73,185	$	220,497	⁽¹⁾

The following table presents a reconciliation of Multimedia Games' GAAP net income to EBITDA and Adjusted EBITDA (in thousands):

	Year Ended September 30,

	2014		2013		2012
Net income	$	31,929	$	34,934	$	28,174
Plus: Amortization and depreciation		43,388		34,846		38,270
Accretion of contract rights⁽²⁾		9,357		8,470		7,700
Interest expense, net		518		648		(161	)
Income tax expense (benefit)		19,633		16,833		(2,877	)


EBITDA	$	104,825	$	95,731	$	71,106
Acquisition related expenses		6,613		—		—
Equity compensation expense		5,874		3,926		3,418


Adjusted EBITDA	$	117,312	$	99,657	$	74,524

(1): Pro Forma Adjusted EBITDA gives effect to such anticipated annualized synergies as if we received the full effect of such synergies for the twelve-month period ended September 30, 2014. No assurance can be given that such synergies will be achieved in the time-frames we currently expect, or at all.

: The synergies described below and in other sections of this offering memorandum reflect forward-looking statements based on management estimates. There are a variety of factors that impact our operational performance and the assumptions underlying management's estimates that are difficult to predict, such as economic conditions, regulatory changes, changes in the casino and gaming industry and other factors. The anticipated synergies and additional operating profits are based on certain assumptions and our current estimates, but they involve risks, uncertainties, projections and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied. Any of the assumptions relating to our synergies could be inaccurate and, therefore, there can be no assurance that the anticipated synergies will prove to be accurate. Any cost savings that we realize may differ materially from our estimates. In addition, the adjustments below do not give effect to the one-time, non-recurring costs of approximately $9.0 million that we expect to incur to achieve the anticipated cost synergies in connection with the Merger within two years of consummation thereof. Management has provided these additional adjustments so that investors can assess the potential impact of the synergies. For a further discussion of these and other risks associated with our Pro Forma Adjusted EBITDA, see "Information Regarding Forward-Looking Statements" and "Risk factors—Risks relating to the Merger—The combined company may not realize the anticipated benefits of the Merger, including potential cost synergies, due to challenges associated with integrating the two companies or other factors." Pro Forma Adjusted EBITDA is not a measurement of financial performance under GAAP.
: The following table reconciles EBITDA and Adjusted EBITDA presented on a pro forma basis to the Pro Forma Adjusted EBITDA reflecting cost savings and synergies.

	GCA (A)		Multimedia Games (B)		Pro Forma (A+B)

EBITDA	$	63,323	$	95,468	$	158,791
Acquisition related expenses		953		6,613		7,566
Accretion of contract rights		—		9,357		9,357
Equity compensation expense		8,909		5,874		14,783


Adjusted EBITDA	$	73,185	$	117,312	$	190,497




Anticipated cost savings from operating expenses from the Merger with Multimedia Games^(a)						26,800
Anticipated cost savings from operating expenses from prior GCA cost reductions^(a)						3,200


Pro Forma Adjusted EBITDA					$	220,497

(a): Represents anticipated reduction in operating expenses as a result of approximately $16.7 million of headcount-related savings and approximately $13.3 million of savings related to elimination of duplicative costs (for example, professional fees, facilities and public company costs), which we anticipate being fully implemented within two years following the Merger with Multimedia Games, with approximately $24.0 million, or 80%, of these anticipated cost savings, on an annualized basis, to be fully implemented within one year following the Merger with Multimedia Games.

(2): Gaming revenue generated by player terminals deployed at sites under development or placement fee agreements is reduced by the accretion of contract rights acquired as part of those agreements. Contract rights are amounts allocated to intangible assets for dedicated floor space resulting from such agreements. The related amortization expense, or accretion of contract rights, is netted against its respective revenue category in the consolidated statements

of operations and other comprehensive income, which is added back to EBITDA to calculate Adjusted EBITDA for pro forma financial statement presentation. These amounts are calculated as part of EBITDA in Multimedia Games' historical financial statements and therefore any presentation of stand-alone Multimedia Games will include the adjustment in EBITDA.

UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS

The unaudited pro forma condensed combined balance sheet 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.

It should be noted that GCA and Multimedia Games have different fiscal year ends. The unaudited pro forma condensed combined statement of operations data for the twelve-month period ended September 30, 2014 combines historical GCA consolidated statement of operations data for the twelve-month period ended September 30, 2014, which were developed from GCA's unaudited consolidated historical statement of operations data for the three months ended December 31, 2013 plus GCA's unaudited consolidated historical statement of operations data for the nine months ended September 30, 2014, with historical Multimedia Games consolidated statement of operations data for its fiscal year ended September 30, 2014, giving effect to the Merger as if it had occurred on October 1, 2013. 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 total estimated Merger consideration assumed in the pro forma information is approximately $1.2 billion. The estimated Merger consideration assumes no changes in the number of outstanding options to purchase Multimedia Games common stock or restricted stock unit awards through the closing date of the Merger. Under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805, "Business Combinations," acquisition-related transaction costs (i.e., advisory, legal, valuation and other professional fees) are not included as a component of consideration transferred but are accounted for as expenses in the periods in which the costs are incurred.

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.

The unaudited pro forma condensed combined financial statements should be read together with the historical consolidated financial statements and accompanying notes contained elsewhere in this offering memorandum.

GLOBAL CASH ACCESS HOLDINGS, INC.

Unaudited Pro Forma Condensed Combined Balance Sheets

As of September 30, 2014

	Global Cash Access			Multimedia Games			Pro Forma Adjustments				Pro Forma Combined

	(in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	106,499		$	138,086		$	(131,144	)	2a	$	113,441
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			(131,144	)			243,834


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			—			916,457		1, 2b		1,104,948
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			5,073		2c		83,147
Other assets, long-term		7,094			3,637			38,287		2d		49,018


Total non-current assets		335,996			122,148			959,817				1,417,961


Total assets	$	518,110		$	315,012		$	828,673			$	1,661,795




LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Settlement liabilities	$	116,711		$	—		$	—			$	116,711
Accounts payable and accrued expenses		66,256			34,445			(6,689	)	2a, 2k		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			1,083,011		2f		1,200,000
Other accrued expenses and liabilities		2,749			471			—				3,220


Total non-current liabilities		97,538			32,509			1,083,011				1,213,058


Total liabilities		281,459			70,654			1,081,668				1,433,781


Commitments and Contingencies
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			(184,783	)	2i		157,264
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			(252,995	)			228,014


Total liabilities and stockholders' equity	$	518,110		$	315,012		$	828,673			$	1,661,795

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

GLOBAL CASH ACCESS HOLDINGS, INC.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2014

	For the Nine Months Ended September 30, 2014 Global Cash Access			For the Nine Months Ended June 30, 2014 Multimedia Games			Pro Forma Adjustments			Note References	Pro Forma Combined

	(in thousands, except per share amounts)
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	)		(66,655	)	2l, 2m, 2n		(72,730	)
Loss on extinguishment of debt		—			—			(4,561	)	2o		(4,561	)
Other income, net of other expense		—			24			—				24


Total other income (expense)		(5,625	)		(426	)		(71,216	)			(77,267	)


Income from operations before tax		27,781			44,543			(70,263	)			2,061
Income tax provision		9,892			16,400			(25,444	)	2p		848


Net income		17,889			28,143			(44,819	)			1,213
Foreign currency translation		(457	)		—			—				(457	)


Comprehensive income	$	17,432		$	28,143		$	(44,819	)		$	756




Earnings per share
Basic	$	0.27		$	0.95			N/M	⁽¹⁾		$	0.02




Diluted	$	0.27		$	0.91			N/M	⁽¹⁾		$	0.02




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 Statement of Operations

For the Year Ended December 31, 2013

	For the Year Ended December 31, 2013 Global Cash Access			For the Year Ended September 30, 2013 Multimedia Games			Pro Forma Adjustments			Note References	Pro Forma Combined

	(in thousands, except per share amounts)
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	)		(87,558	)	2l, 2m, 2n		(98,471	)
Loss on extinguishment of debt		—			—			(5,648	)	2o		(5,648	)
Other income, net of other expense		—			33			—				33


Total other income (expense)		(10,265	)		(615	)		(93,206	)			(104,086	)


Income/(loss) from operations before tax		38,885			51,767			(93,206	)			(2,554	)


Income tax provision/(benefit)		14,487			16,833			(32,516	)	2p		(1,196	)


Net income/(loss)		24,398			34,934			(60,690	)			(1,358	)
Foreign currency translation		269			329			—				598


Comprehensive income/(loss)	$	24,667		$	35,263		$	(60,690	)		$	(760	)




Earnings/(loss) per share
Basic	$	0.37		$	1.21			N/M	⁽¹⁾		$	(0.02	)




Diluted	$	0.36		$	1.14			N/M	⁽¹⁾		$	(0.02	)




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.

GLOBAL CASH ACCESS HOLDINGS, INC.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Twelve-month Period Ended September 30, 2014

	For the Trailing Twelve Months Ended September 30, 2014 Global Cash Access			For the Year Ended September 30, 2014 Multimedia Games			Pro Forma Adjustments			Note References	Pro Forma Combined

	(in thousands, except per share amounts)
Revenues	$	581,454		$	218,129		$	—			$	799,583


Costs and expenses
Cost of revenues (exclusive of depreciation and amortization)		437,047			46,933			—				483,980
Operating expenses		81,085			58,720			(6,689	)	2k		133,116
Research and development expenses		—			17,174			—				17,174
Depreciation		7,631			36,237			—				43,868
Amortization		11,089			7,151			—				18,240


Total costs and expenses		536,852			166,215			(6,689	)			696,378


Operating income		44,602			51,914			6,689				103,205


Other income (expense)
Interest expense, net of interest income		(7,739	)		(518	)		(89,410	)	2l, 2m, 2n		(97,667	)
Loss on extinguishment of debt		—			—			(4,977	)	2o		(4,977	)
Other income, net of other expense		—			166			—				166


Total other income (expense)		(7,739	)		(352	)		(94,387	)			(102,478	)


Income from operations before tax		36,863			51,562			(87,698	)			727
Income tax provision		13,270			19,633			(32,481	)	2p		422


Net income		23,593			31,929			(55,217	)			305
Foreign currency translation		(267	)		—			—				(267	)


Comprehensive income	$	23,326		$	31,929		$	(55,217	)		$	38




Earnings per share
Basic	$	0.36		$	1.07			N/M	⁽¹⁾		$	0.00




Diluted	$	0.35		$	1.02			N/M	⁽¹⁾		$	0.00




Weighted average common shares outstanding
Basic		65,811			29,861			(29,861	)			65,811




Diluted		67,119			31,269			(31,269	)			67,119

(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. Estimated Merger Consideration and Allocation Assumed in the Pro Forma.

GCA will use proceeds from this offering (see Note 2 below), together with borrowings under the New Credit Facilities and cash on hand at closing of the Merger, to fund the cash obligations of the Merger Agreement, to repay the existing 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.

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 estimated Merger consideration expected to be transferred and the estimated fair values of the assets acquired and liabilities assumed. The following summarizes the estimated goodwill calculation as of September 30, 2014:


Estimated Merger consideration	$	1,152,251
Less: Total assets acquired		(315,012	)
Plus: Total liabilities assumed		70,654
Multimedia Games acquisition related expenses paid at close		8,564


Estimated goodwill	$	916,457

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 and (iii) other changes to assets and liabilities. The results may include the recording of deferred tax assets and liabilities, which are not reflected herein. 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 will differ from this unaudited pro forma condensed combined financial information once GCA has determined the final Merger consideration, completed the detailed valuation analysis and calculations necessary to finalize the required purchase price allocations. The final allocations of the Merger consideration, which are expected to be determined subsequent to the closing of the Merger, may differ materially from the estimated allocations and unaudited pro forma condensed combined amounts included herein. These differences will materially increase the total amount of depreciation and amortization expense recognized, which will have a material impact on GCA's net income.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL

STATEMENTS (Continued)

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

Note 2. Reclassifications and Pro Forma Adjustments.

Unaudited Pro Forma Condensed Combined Balance Sheet

Entries to record the estimated cash consideration and the reversal of Multimedia Games equity balances and the extinguishment of all of GCA's and Multimedia Games' existing debt held prior to the Merger.

Item A


Gross cash proceeds from issuance of new term loan	$	500,000
Gross cash proceeds from issuance of new senior secured notes		350,000
Gross cash proceeds from issuance of new senior unsecured notes		350,000
Gross cash proceeds from issuance of new revolver		10,000


Gross cash proceeds from issuance of new debt	$	1,210,000
Less: Cash consideration paid to Multimedia Games common equity holders		(1,152,251	)
Less: Estimated transaction fees and expenses⁽³⁾		(67,250	)
Less: Extinguishment of GCA's and Multimedia Games' existing debt⁽²⁾		(121,643	)


Total adjustment to cash and cash equivalents	$	(131,144	)

Item B


Preliminary estimate of goodwill in Merger	$	916,457


Total adjustment to goodwill	$	916,457

Item C


Deferred tax impact from extinguishment of debt issuance costs and payment of acquisition related expenses	$	5,073


Total adjustment to deferred tax assets (non-current)	$	5,073

Item D


Preliminary estimate of debt issuance cost in merger	$	41,500
Extinguishment of debt issuance cost related to outstanding debt at September 30, 2014⁽²⁾		(3,213	)


Total adjustment to other assets, long-term	$	38,287

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL

STATEMENTS (Continued)

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

Item E


Issuance of new debt (current portion)⁽¹⁾	$	10,000
Extinguishment of outstanding debt at September 30, 2014 (current portion)⁽²⁾		(4,654	)


Total adjustment to debt, current portion	$	5,346

Item F


Issuance of new debt (non-current portion)⁽¹⁾	$	1,200,000
Extinguishment of outstanding debt at September 30, 2014 (non-current portion)⁽²⁾		(116,989	)


Total adjustment to debt, non-current portion	$	1,083,011

Item G


Elimination of Multimedia Games historical common stock	$	(386	)


Total adjustment to common stock	$	(386	)

Item H


Elimination of Multimedia Games historical additional paid-in capital	$	(148,828	)


Total adjustment to additional paid-in capital	$	(148,828	)

Item I


Elimination of Multimedia Games historical retained earnings	$	(176,146	)
Acquisition related expenses		(10,497	)
Extinguishment of debt issuance cost related to outstanding debt at September 30, 2014⁽²⁾		(3,213	)
Deferred tax impact of extinguishment of debt issuance costs and payment of acquisition related expenses		5,073


Total adjustment to retained earnings	$	(184,783	)

Item J


Elimination of Multimedia Games historical treasury stock	$	81,002


Total adjustment to treasury stock	$	81,002

(1): New debt consists of the $500.0 million new senior secured term loan, the $350.0 million new secured notes, the $350.0 million new unsecured notes and the $10.0 million on the new senior secured revolving credit facility.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL

STATEMENTS (Continued)

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

(2): Extinguished debt consists of the $95.7 million balance outstanding on GCA's existing senior secured debt as well as $25.9 million on Multimedia Games' existing senior secured debt as of September 30, 2014.
(3): Represents the estimated fees and expenses associated with this acquisition. A portion of these amounts of approximately $1.0 million and $5.7 million were previously accrued in the historical financial statements of both GCA and Multimedia Games, for the twelve months ended September 30, 2014, respectively. For purposes of these pro forma financial statements, the above amounts, along with the remaining amounts to be incurred through the date of closing, were assumed to be paid upon consummation of the transaction. As such, on a pro forma basis giving effect to the Merger for the twelve months ended September 30, 2014, the $6.7 million of acquisition related fees incurred to date were paid and recorded against the accrual amounts originally posted. For corresponding clarity, please refer to Item K as well as the specific adjustments in the pro forma financial statements.

Unaudited Pro Forma Condensed Combined Statements of Operations

Item K

Entry records the adjustment associated with the acquisition related expenses previously incurred and recorded in the historical financial statements for both GCA and Multimedia Games in the amounts of approximately $1.0 million and $6.7 million for the nine months ended September 30, 2014 and the twelve months ended September 30, 2014, respectively. 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.

Item L

Entry records the increase in interest expense and amortization of loan fees arising from the amortization of estimated fees on the New Credit Facilities and the notes in order to finance the transaction. The pro forma assumes straight-line amortization of the fees over the respective terms of the notes.

		Quarterly Amortization			Year Ended December 31, 2013			Nine Months Ended September 30, 2014			Twelve Months Ended September 30, 2014

Amortization of financing fees		$	1,643		$	6,572		$	4,929		$	6,572

This entry also takes into consideration the reduction in amortization of loan fees related to GCA's and Multimedia Games' existing senior secured debt as of the beginning of each period presented, which will be extinguished upon consummation of the Merger and issuance of the New Credit Facilities. The reduction in amortization of loan fees on the pre-acquisition debt for GCA and Multimedia Games was $1.5 million, $1.9 million and $2.0 million for the nine months ended September 30, 2014, the twelve months ended December 31, 2013 and trailing twelve months ended September 30, 2014, respectively.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL

STATEMENTS (Continued)

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

Item M

Entry records the decrease in interest income on invested cash balances used to effect the Merger as of January 1, 2013, January 1, 2013 and October 1, 2013, respectively. See Item A of this footnote 2 for a reconciliation of the cash balance on hand.

	Year Ended December 31, 2013⁽¹⁾		Nine Months Ended September 30, 2014⁽²⁾		Twelve Months Ended September 30, 2014

GCA—historical interest income	$	241	$	865	$	939
Multimedia Games—historical interest income	$	321	$	262	$	412
Less interest income on combined cash balances used to fund cash obligations of the Merger	$	321	$	262	$	412

(1): GCA results are for its fiscal year ended December 31, 2013, while Multimedia Games results are for its fiscal year ended September 30, 2013.
(2): GCA results are for its fiscal nine months ended September 30, 2014, while Multimedia Games results are for its fiscal nine months ended June 30, 2014.

Item N

Entry records interest expense on the debt facilities used to effect the Merger as of January 1, 2013, January 1, 2013 and October 1, 2013, respectively:

		Year Ended December 31, 2013			Nine Months Ended September 30, 2014			Twelve Months Ended September 30, 2014

Total interest expense		$	89,863		$	66,987		$	89,863

To pay the Merger consideration, to repay existing indebtedness of GCA and Multimedia Games and to pay related fees and expenses, we expect to incur approximately $1.2 billion of debt, with maturities ranging from five to seven years yielding an anticipated weighted average annual interest rate of approximately 7.46%.

An increase or decrease of 0.25% in the assumed interest rate would impact interest expense by $3.2 million for the year ended December 31, 2013, by $3.7 million for the twelve months ended September 30, 2014 and by $2.8 million for the nine months ended September 30, 2014.

This entry also takes into consideration the reduction in interest expense related to the outstanding existing senior secured debt of GCA and Multimedia Games as of the beginning of each period presented, which will be extinguished upon consummation of the Merger and issuance of the New Credit Facilities. The reduction in interest expense on the pre-Merger debt for GCA and Multimedia Games was $4.0 million, $7.3 million and $5.4 million for the nine months ended September 30, 2014, twelve months ended December 31, 2013 and trailing twelve months ended September 30, 2014, respectively.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL

STATEMENTS (Continued)

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

Item O

This entry records the impact of writing off the outstanding balance of capitalized loan fees related to the outstanding existing senior secured debt of GCA and Multimedia Games as of the beginning of each period presented, which will be extinguished upon consummation of the Merger and issuance of the New Credit Facilities.

Item P

This entry records the estimated tax effect of all adjustments to the pro forma financial statements by applying an arithmetic average of the stand-alone effective tax rates.

QuickLinks

Exhibit 99.2

Summary Consolidated Historical and Pro Forma Financial Data for GCA and Summary Consolidated Historical Financial Data for Multimedia Games
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
GLOBAL CASH ACCESS HOLDINGS, INC. Unaudited Pro Forma Condensed Combined Balance Sheets As of September 30, 2014
GLOBAL CASH ACCESS HOLDINGS, INC. Unaudited Pro Forma Condensed Combined Statement of Operations For the Nine Months Ended September 30, 2014
GLOBAL CASH ACCESS HOLDINGS, INC. Unaudited Pro Forma Condensed Combined Statement of Operations For the Year Ended December 31, 2013
GLOBAL CASH ACCESS HOLDINGS, INC. Unaudited Pro Forma Condensed Combined Statement of Operations For the Twelve-month Period Ended September 30, 2014
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (in thousands, except per share data and as otherwise noted)

Everi Holdings Inc. - FORM 8-K - EX-99.2 - December 5, 2014

Attached files

Everi Holdings Inc. Reports