Aarons 2014 Annual Report Download - page 72

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62
The estimated intangible assets attributable to the Progressive acquisition are comprised of the following:
Fair Value
(in thousands)
Weighted Average Life
(in years)
Internal Use Software $ 14,000 3.0
Technology 66,000 10.0
Trade Names and Trademarks 53,000 Indefinite
Customer Lease Contracts111,000 1.0
Merchant Relationships 181,000 12.0
Total Acquired Intangible Assets2$ 325,000
1 During the fourth quarter of 2014, the Company recorded adjustments to the customer lease contract intangible asset
previously recorded based on the finalization of appraisals by the Company’s independent consultants. The measurement
period adjustment resulted in a reduction of customer lease contract intangible assets and an increase in goodwill of
$8.0 million and did not have a material effect on amortization expense in the consolidated financial statements in any period
presented.
2 Acquired definite-lived intangible assets have a total weighted average life of 10.6 years.
During the year ended December 31, 2014, the Company incurred $6.6 million of transaction costs in connection with the
acquisition of Progressive. These costs were included in the line item “Progressive-related transaction costs” in the consolidated
statements of earnings. In addition, during the year ended December 31, 2014, the Company incurred approximately
$2.3 million in debt financing costs related to the $491.3 million of new indebtedness incurred to partially finance the
acquisition, which has been capitalized as a component of prepaid expenses and other assets in the consolidated balance sheets.
Pro Forma Financial Information
The following table presents unaudited consolidated pro forma information as if the acquisition of Progressive had occurred on
January 1, 2013:
Twelve Months Ended
December 31,
2014 2013
(In Thousands) As Reported Pro Forma As Reported Pro Forma
Revenues $ 2,725,239 $ 2,894,413 $ 2,234,631 $ 2,638,582
Net Earnings 78,233 86,038 120,666 105,682
The unaudited pro forma financial information presented above does not purport to represent what the actual results of our
operations would have been if the acquisition of Progressive had occurred on January 1, 2013, nor is it indicative of future
performance. The unaudited pro forma financial information does not reflect the impact of future events that may occur after
the acquisition, including, but not limited to, anticipated cost savings from operating synergies.
The unaudited pro forma financial information presented in the table above has been adjusted to give effect to adjustments that
are (1) directly related to the business combination; (2) factually supportable; and (3) expected to have a continuing impact.
These adjustments include, but are not limited to, amortization related to fair value adjustments to intangible assets and the
adjustment of interest expense to reflect the additional borrowings of the Company in conjunction with the acquisition.