================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------------
Date of report (date of earliest event reported):
December 30, 2001
INTERNATIONAL GAME TECHNOLOGY
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 001-10684 88-0173041
-------------------------- ----------------------- --------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
9295 Prototype Drive, Reno, Nevada 89511
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(775) 448-7777
--------------------------------------------------------------
(Registrant's telephone number, including area code)
not applicable
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
================================================================================
International Game Technology, a Nevada corporation (IGT), filed a
Current Report on Form 8-K with the Securities and Exchange Commission on
January 4, 2002 (the Current Report) describing IGT's acquisition of all of the
outstanding capital stock of Anchor Gaming, a Nevada corporation (Anchor),
effective as of December 30, 2001. In accordance with the instructions to
paragraph (b)(2) of Item 7, the Current Report omitted the pro forma financial
information required by that paragraph.
Accordingly, IGT hereby amends the Current Report by deleting Item 7
thereof and replacing it in its entirety with the following:
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial statements of business acquired. The financial statements
of the business acquired are included or incorporated by reference in IGT's
Registration Statement on Form S-4 (333-67928).
(b) Pro Forma Financial Information.
(i) Pro forma combined condensed balance sheet as of
December 29, 2001 (unaudited).
(ii) Pro forma combined condensed statement of income for the
year ended September 29, 2001 (unaudited).
(iii) Pro forma combined condensed statement of income for the
three months ended December 29, 2001 (unaudited).
(c) Exhibits.
Exhibit No. Description
----------- -------------------------------------------------------------
2.1 Agreement and Plan of Merger dated as of July 8, 2001
among International Game Technology, NAC Corporation,
a wholly-owned subsidiary of IGT, and Anchor Gaming
(incorporated by reference to Exhibit 2.1 to the Form
8-K/A of IGT filed with the Securities and Exchange
Commission on July 12, 2001).
99.1 Press Release, dated December 26, 2001, reporting the filing
of the Articles of Merger.*
*Previously filed.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial statements,
including the notes thereto, are based on and are qualified in their entirety by
reference to, and should be read in conjunction with, the consolidated financial
statements and the notes thereto of IGT, which were previously reported in IGT's
Annual Report on Form 10-K for the year ended September 29, 2001, and the
consolidated financial statements and the notes thereto of Anchor, which were
previously reported in Anchor's Annual Report on Form 10-K, as amended on Form
10-K/A, for the year ended June 30, 2001 and Quarterly Report on Form 10-Q for
the quarter ended September 30, 2001. All of the above-listed financial
statements of IGT and Anchor are incorporated by reference in this Form 8-K/A.
The unaudited pro forma combined financial statements being filed with this
8-K/A, including the notes thereto, are based on the consolidated financial
statements of IGT and Anchor as of and for the three months ended December 29,
2001, which include all normal recurring adjustments considered necessary for a
fair presentation.
The acquisition of Anchor will be accounted for using the purchase method of
accounting. The unaudited pro forma combined condensed statements of income of
IGT for the three months ended December 29, 2001 and for the year ended
September 29, 2001 and the unaudited pro forma combined condensed balance sheet
of IGT as of December 29, 2001, which are set forth below, give effect to the
purchase of Anchor based upon the assumptions set forth below and in the notes
to unaudited pro forma combined condensed financial statements. The unaudited
pro forma financial information assumes that the purchase of Anchor was
completed on October 1, 2000 for the unaudited pro forma combined condensed
statements of income and on December 29, 2001 for the unaudited pro forma
combined condensed balance sheet.
Certain amounts in the historical financial statements for Anchor including
certain revenues and related direct costs, and certain depreciation have been
reclassified to be consistent with the presentation used by IGT. IGT and Anchor
have no significant intercompany activity which would require elimination in
preparing the unaudited pro forma combined condensed financial statements.
The pro forma adjustments and the resulting unaudited pro forma combined
condensed financial statements were prepared based on available information and
certain assumptions and estimates described in the notes to unaudited pro forma
combined condensed financial statements. A final determination of required
purchase accounting adjustments, including the allocation of the purchase price
to the assets acquired and liabilities assumed, has not been made, and the
allocation reflected in the unaudited pro forma combined condensed financial
statements should be considered preliminary.
The unaudited pro forma combined condensed financial statements do not purport
to represent what IGT's financial position or results of operations would have
been had the acquisition of Anchor occurred on the dates indicated or to project
IGT's financial position or results of operations for any future period.
Furthermore, the unaudited pro forma combined condensed financial statements do
not reflect changes that may occur as the result of activities after the merger
closes.
In March 2001, IGT completed the purchase of Silicon Gaming, Inc. (Silicon).
Financial results for Silicon after the closing of the acquisition are included
in IGT's historical results. The pro forma effect of Silicon is not included as
it is not material.
During fiscal 2001 Anchor recorded various one-time charges. Anchor incurred
impairment, restructuring, and other charges of $121.5 million ($97.6 million
net of tax) primarily related to its AWI subsidiary. Anchor also incurred
one-time charges of $1.7 million ($1.0 million net of tax) related to vesting of
restricted stock grants and $7.1 million ($4.3 million net of tax) for inventory
writedowns and contractual disputes. Excluding these charges, pro forma net
income for the year ended September 29, 2001 would have been $270.1 million or
$2.93 per diluted share.
IGT
Unaudited Pro Forma Combined Condensed Balance Sheet
December 29, 2001
(in thousands)
IGT Anchor Pro Forma IGT
Historical Historical Adjustments Pro Forma
---------- ---------- ----------- ----------
Assets
Current assets:
Cash and cash equivalents.................. $ 407,068 $ 25,301 $ 13,915 (1,2) $ 446,284
Investment securities at market value...... 18,904 - - 18,904
Accounts receivable, net................... 244,105 27,381 41,479 (1) 312,965
Current maturities of long-term notes and
contracts receivable, net of allowances.. 44,008 3,325 - 47,333
Inventory.................................. 135,740 16,863 - 152,603
Investments to fund liabilities to jackpot
winners.................................. 29,376 - 9,056 (1) 38,432
Deferred income taxes...................... 19,707 5,488 - 25,195
Assets held for sale....................... - 17,334 59,666 (4,13) 77,000
Prepaid expenses and other................. 60,028 1,971 19,985 (1) 81,984
---------- --------- ---------- -----------
Total Current Assets 958,936 97,663 144,101 1,200,700
Long-term notes and contracts receivable, net
of allowances and current maturities....... 91,067 15,574 - 106,641
Property, plant and equipment, net........... 207,234 112,362 54,684 (1,4) 374,280
Investments to fund liabilities to jackpot
winners.................................... 233,223 - 93,824 (1) 327,047
Deferred income taxes........................ 125,610 26,239 (151,849)(3,4) -
Goodwill..................................... 139,077 15,624 802,409 (4) 957,110
Intangible assets............................ 39,693 33,035 292,765 (4) 365,493
Other assets................................. 105,196 81,446 (129,507)(1) 57,135
---------- --------- ---------- -----------
Total Assets $1,900,036 $ 381,943 $1,106,427 $ 3,388,406
========== ========= ========== ===========
Liabilities and Stockholders' Equity
(Deficiency)
Current liabilities:
Current maturities of long-term notes
payable.................................. $ 4,180 $ 604 $ - $ 4,784
Accounts payable........................... 81,872 8,180 5,183 (1) 95,235
Jackpot liabilities........................ 93,923 - 56,316 (1) 150,239
Accrued employee benefit plan liabilities.. 15,987 - - 15,987
Accrued interest........................... 10,559 5,574 - 16,133
Other accrued liabilities.................. 80,480 36,002 - 116,482
---------- --------- ---------- -----------
Total Current Liabilities 287,001 50,360 61,499 398,860
Long-term notes payable and capital lease
obligations, net of current maturities..... 985,047 336,394 (60,559)(2,4) 1,260,882
Long-term jackpot liabilities................ 261,162 - 112,294 (1) 373,456
Long-term deferred tax liabilities........... - - 3,151 (3,4) 3,151
Other liabilities............................ 11,265 2,626 - 13,891
---------- --------- ---------- -----------
Total Liabilities 1,544,475 389,380 116,385 2,050,240
---------- --------- ---------- -----------
Minority interest in consolidated subsidiary - 9,228 - 9,228
---------- --------- ---------- -----------
Commitments and contingencies
Stockholders' equity (deficiency):
Common stock............................... 98 294 (285)(4,5) 107
Additional paid-in capital................. 372,953 161,026 827,315 (4,5,6) 1,361,294
Deferred compensation...................... - (4,555) (9,418)(4,6,7) (13,973)
Retained earnings.......................... 1,308,909 255,784 (256,784)(4,5) 1,307,909
Treasury stock............................. (1,321,432) (429,214) 429,214 (5) (1,321,432)
Accumulated other comprehensive loss....... (4,967) - - (4,967)
---------- --------- ----------- -----------
Total Stockholders' Equity (Deficiency) 355,561 (16,665) 990,042 1,328,938
---------- --------- ----------- -----------
Total Liabilities and Stockholders'
Equity (Deficiency) $1,900,036 $ 381,943 $ 1,106,427 $ 3,388,406
========== ========= =========== ===========
IGT
Unaudited Pro Forma Combined Condensed Statement of Income
For the Year Ended September 29, 2001
(in thousands except per share amounts)
IGT Anchor Pro Forma IGT
Historical Historical Adjustments Pro Forma
----------- ----------- ----------- -----------
Revenues
Product sales............................ $ 824,267 $ - $ - $ 824,267
Proprietary gaming ...................... 374,942 55,468 504,321 (1) 934,731
Gaming systems........................... - 170,993 - 170,993
Casino operations........................ - 156,719 (37,787)(8,9,13) 118,932
----------- ----------- ----------- -----------
Total revenues....................... 1,199,209 383,180 466,534 2,048,923
----------- ----------- ----------- -----------
Costs and Expenses
Cost of product sales.................... 493,201 - - 493,201
Cost of proprietary gaming .............. 171,087 37,179 217,867 (1) 426,133
Cost of gaming systems................... - 140,672 - 140,672
Cost of casino operations................ - 101,334 (22,694)(8,9,13) 78,640
Selling, general, and administrative..... 181,521 65,596 460 (1,6,8,9,11,13) 247,577
Depreciation and amortization............ 20,252 14,080 20,764 (4,8,9,13) 55,096
Research and development................. 62,526 12,598 3,617 (1) 78,741
Provision for bad debts.................. 19,073 3,798 3,569 (1,9) 26,440
Impairment of assets and restructuring... (1,100) 129,398 (7,896)(9) 120,402
----------- ----------- ----------- -----------
Total costs and expenses............... 946,560 504,655 215,687 1,666,902
----------- ----------- ----------- -----------
Earnings of Unconsolidated Affiliates 142,630 142,102 (283,814) 918
----------- ----------- ----------- -----------
Income from Operations 395,279 20,627 (32,967) 382,939
----------- ----------- ----------- -----------
Other Income (Expense)
Interest income.......................... 49,819 2,174 4,340 (1,2,8,9,13) 56,333
Interest expense......................... (102,039) (40,010) 11,082 (1,2,4,8) (130,967)
Gain on sale of assets................... (26) 9,759 (10,135)(8,9) (402)
Other.................................... (3,561) 601 (97)(1,8) (3,057)
Minority interest in earnings of
consolidated subsidiary................ - (857) - (857)
----------- ----------- ----------- -----------
Other income (expense), net............ (55,807) (28,333) 5,190 (78,950)
----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes 339,472 (7,706) (27,777) 303,989
Provision for Income Taxes 125,537 35,750 (24,531)(3,8) 136,756
----------- ----------- ----------- -----------
Net Income (Loss) $ 213,935 $ (43,456) $ (3,246) $ 167,233
=========== =========== =========== ===========
Weighted Average Common Shares Outstanding 73,851 14,902 (10) 88,753
Weighted Average Common and Potential Shares
Outstanding 76,525 15,536 (10) 92,061
Basic Earnings Per Share $ 2.90 $ 1.88
=========== ===========
Diluted Earnings Per Share $ 2.80 $ 1.82 (12)
=========== ===========
IGT
Unaudited Pro Forma Combined Condensed Statement of Income
For the Three Months Ended December 29, 2001
(in thousands except per share amounts)
IGT Anchor Pro Forma IGT
Historical Historical Adjustments Pro Forma
---------- ---------- ----------- -----------
Revenues
Product sales............................ $ 199,605 $ - $ - $ 199,605
Proprietary gaming ...................... 101,888 11,591 127,071 (1) 240,550
Gaming systems........................... - 46,035 - 46,035
Casino operations........................ - 34,539 (5,639)(13) 28,900
----------- ----------- ----------- -----------
Total revenues....................... 301,493 92,165 121,432 515,090
----------- ----------- ----------- -----------
Costs and Expenses
Cost of product sales.................... 117,103 - - 117,103
Cost of proprietary gaming .............. 47,988 7,605 59,162 (1) 114,755
Cost of gaming systems................... - 33,275 - 33,275
Cost of casino operations................ 20,004 (83)(13) 19,921
Selling, general, and administrative..... 45,307 15,424 403 (1,6,11) 61,134
Depreciation and amortization............ 5,240 3,151 5,567 (4,13) 13,958
Research and development................. 15,413 3,103 1,142 (1) 19,658
Provision (credit) for bad debts......... 6,517 3,881 (216)(1) 10,182
----------- ----------- ----------- -----------
Total costs and expenses............. 237,568 86,443 65,975 389,986
----------- ----------- ----------- -----------
Earnings of Unconsolidated Affiliates 33,865 33,476 (67,341)(1) -
----------- ----------- ----------- -----------
Income from Operations 97,790 39,198 (11,884) 125,104
----------- ----------- ----------- -----------
Other Income (Expense)
Interest income.......................... 10,918 525 1,033 (1,2,13) 12,476
Interest expense......................... (25,352) (7,706) 1,322 (1,2,4) (31,736)
Gain on sale of assets................... 32 278 - 310
Other.................................... (1,182) 100 (47)(1) (1,129)
Minority interest in earnings of
consolidated subsidiary................. - (304) - (304)
----------- ----------- ----------- -----------
Other income (expense), net.............. (15,584) (7,107) 2,308 (20,383)
----------- ----------- ----------- -----------
Income Before Income Taxes 82,206 32,091 (9,576) 104,721
Provision for Income Taxes 30,416 12,676 (3,352)(3) 39,740
----------- ----------- ------------ -----------
Net Income $ 51,790 $ 19,415 $ (6,224) $ 64,981
=========== =========== =========== ===========
Weighted Average Common Shares Outstanding 72,864 14,902 (10) 87,766
Weighted Average Common and Potential Shares
Outstanding 74,440 15,637 (10) 90,077
Basic Earnings Per Share $ 0.71 $ 0.74
=========== ===========
Diluted Earnings Per Share $ 0.70 $ 0.72
=========== ===========
IGT
Notes to Unaudited Pro Forma Combined Condensed
Financial Statements
The following pro forma adjustments have been made to the unaudited pro forma
financial information:
(1) Historically IGT and Anchor applied the equity method to account for their
respective share of the Spin For Cash Joint Venture. After the merger, the
joint venture will be consolidated. The pro forma adjustments reflect the
elimination of the investments in the joint venture of $129.5 million. The
elimination of the earnings of unconsolidated affiliates of $67.3 million
for the three months ended December 29, 2001 and $283.8 million for the
twelve months ended September 29, 2001, includes the elimination of timing
differences of $389,000 due to IGT and Anchor having different closing
cycles for fiscal year 2001. The adjustments also include the
consolidation of the joint venture as summarized below (in thousands):
Balance sheet items as of: December 29, 2001
-----------------
Cash and cash equivalents $103,415
Accounts receivable, net 41,479
Investments to fund liabilities to jackpot winners 9,056
Prepaid expenses and other 19,985
Property, plant and equipment, net 35,541
Investments to fund liabilities to jackpot winners 93,824
Jackpot liabilities 56,316
Accounts payable 5,183
Long-term jackpot liabilities 112,294
Three months
Year Ended ended
Statement of income items for the periods: September 29, 2001 December 29, 2001
------------------ -----------------
Proprietary gaming revenues $504,321 $127,071
Cost of proprietary gaming 217,867 59,162
Selling, general, and administrative 400 100
Research and development 3,617 1,142
Provision (credit) for bad debts 3,576 (216)
Interest income 10,046 2,376
Interest expense 5,387 1,482
Other expense, net 95 47
(2) Concurrent with the merger, IGT repaid in full and terminated Anchor's
senior credit facility of $89.5 million using available cash.
The unaudited pro forma condensed combined statements of income assume
that the purchase of Anchor was completed on October 1, 2000. On this
date, Anchor's obligation under its senior credit facility totaled $200.5
million. The adjustment for the statement of income reflects the repayment
of this obligation assuming $125.0 million is paid using available cash
and the remainder is drawn from IGT's line of credit at an interest rate
of 4.95%. The weighted average interest rate on Anchor's credit facility
including amortization of debt issue costs for the three month period
ended December 29, 2001 was 6.62% and was 8.28% for fiscal 2001. Pro forma
interest expense decreased by $1.7 million in the three month period and
$11.1 million for fiscal 2001. The adjustment also includes a decrease in
interest income of $1.3 million for the three month period due to lower
cash balances at an interest rate of 2.42% and $5.7 million for fiscal
2001 based on an interest rate of 3.7%.
The $248.6 million amount of Anchor's 9-7/8% Senior Subordinated Notes
remains outstanding and these Notes have been treated on this basis
in the pro forma information presented.
(3) All adjustments to the pro forma statements of income have been tax
effected using our statutory federal tax rate of 35%, except for the
disposal of Sunland Park Race Track and Casino (Sunland), which reflects
actual taxes on the transaction of approximately $15.0 million. The
long-term deferred tax liabilities amount reflects the adjustment to
recognize the difference between the fair market values and the tax bases
of the assets acquired by IGT.
(4) The merger will be accounted for as a purchase under the newly issued
Statement of Financial Accounting Standards (SFAS) No. 141 "Business
Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets." The
estimated purchase price and purchase price allocation are noted below (in
thousands except shares and per share amounts):
Estimated Purchase Price:
Shares of Anchor common stock outstanding at December 30, 2001
(excluding 92,500 shares already owned by IGT) 14,901,920
IGT's share price based on average closing prices for the 7 trading days ended July
12, 2001 (merger announcement on July 9, 2001) $ 59.50
------------
Consideration for Anchor outstanding common stock 886,664
Fair value of Anchor stock options assumed by IGT 92,957
Carrying value of Anchor shares held by IGT prior to closing 3,729
Estimated transaction costs 5,000
------------
Total estimated purchase price $ 988,350
============
Purchase Price Allocation:
Historical net book value of Anchor, excluding intangible assets of
$33.0 million, goodwill of $15.6 million and assets held for sale of
$17.3 million $ (82,658)
------------
Estimated fair value adjustments relating to:
Intangible assets with finite lives 250,700
Intangible assets with indefinite lives 75,100
------------
Total intangible assets 325,800
------------
Goodwill 818,033
Asset held for sale (see Note 13) 77,000
Property, plant and equipment, net 19,143
Assumed debt (28,941)
Deferred taxes (155,000)
Deferred compensation 13,973
In process research and development 1,000
------------
Total estimated purchase price $ 988,350
============
The pro forma adjustments related to goodwill, intangible assets, and
assets held for sale include the estimated increase from the purchase
price allocation above and the elimination of Anchor's historical balance
as follows (in thousands):
Anchor's
Purchase Price Historical Pro forma
Allocation Balance Adjustment
---------- ------- ----------
Goodwill $818,033 $15,624 $802,409
Intangible assets 325,800 33,035 292,765
Assets held for sale 77,000 17,334 59,666
Stock options of Anchor employees have been converted into the right to
purchase IGT stock. In accordance with Financial Accounting Standards
Board (FASB) Interpretation 44, "Accounting for Certain Transactions
Involving Stock Compensation," the fair value of the stock options issued
in exchange for outstanding awards are to be included as part of the
purchase price in a business combination. The fair value of the options is
approximately $93.0 million.
Amortizable intangible assets with finite lives of $250.7 million have
been assigned useful lives of 1 to 16 years. Intangible assets with
indefinite lives totaled $75.1 million. The write-off of in process
research and development costs of $1.0 million is not included in the
pro forma statement of income as it is a non-recurring charge.
This amount is reflected in the retained earnings on the unaudited
pro forma combined condensed balance sheet. The increase in
amortization of identifiable intangible assets with finite lives
totaled $7.5 million for the three months ended December 29, 2001 and
$30.0 million for fiscal 2001. The increase in amortization expense
was offset by the elimination of amortization of Anchor's historical
intangible assets of $1.3 million for the three months ended December
29, 2001 and $7.9 million for the fiscal year 2001. The estimated fair
value adjustment related to the debt assumed totaled $28.9 million.
The amortization of this fair value adjustment resulted in a decrease
in interest expense of $1.1 million for the three months ended December
29, 2001 and $4.3 million for fiscal 2001.
The above purchase price allocation and the lives assigned to the assets
are preliminary and have been made solely for the purpose of developing
the IGT pro forma financial statements. IGT, with the assistance of
valuation consultants, is in the process of evaluating the fair value and
the lives of the assets acquired. Accordingly, the allocation of the
purchase price and the lives of the assets acquired, and the resulting
depreciation and amortization expense, are preliminary and may differ from
the final purchase price allocation and the final lives assigned to the
assets. Any changes in the fair value or lives assigned to amortizable or
depreciable assets would impact the results of future operations.
(5) The adjustment reflects IGT shares issued in the merger and the adjustment
of Anchor's equity.
(6) FASB Interpretation 44 requires the intrinsic value of the unvested awards
to be allocated to deferred compensation and recognized as non-cash
compensation cost over the remaining future vesting periods. The amount
allocated to deferred compensation is based on the closing price of IGT
common stock at consummation of the merger. We estimate the total deferred
compensation to be $14.0 million based on a closing stock price of $70.00
per share. Deferred compensation will be amortized over an estimated
remaining vesting period of three years. The adjustment reflects deferred
compensation as a component of stockholders' equity. Amortization of
deferred compensation included in the pro forma financial statements was
$1.2 million for the three months ended December 29, 2001 and $4.7 million
for fiscal 2001.
(7) The Anchor historical balance sheet includes deferred compensation related
to shares issued as restricted stock awards. The vesting of these shares
will be accelerated upon merger. The amount reflects the elimination of
the related deferred compensation.
(8) In December 2000, Anchor disposed of its racetrack assets including
Sunland and its 25% interest in a Massachusetts horse racing facility. The
fiscal year 2001 pro forma statement of income includes adjustments to
eliminate the Sunland operations and gain on the sale of these assets. The
eliminations are reflected below (in thousands):
Year ended
Statement of income items for the periods: September 29, 2001
------------------
Casino operations revenues $ 8,012
Cost of casino operations 6,361
Selling, general and administrative 722
Depreciation and amortization 6
Interest income 1
Interest expense 1,036
Gain on sale of assets 8,051
Other 2
Provision for income taxes 14,915
(9) On September 28, 2001, Anchor sold its Montana route for $5.2 million for
a gain of $2.1 million. Fiscal year 2001 includes an adjustment to
eliminate the Montana route operations and the gain on the sale of these
assets. The eliminations are reflected below (in thousands):
Year ended
Statement of income items for the periods: September 29, 2001
------------------
Casino operations revenues $ 20,238
Cost of casino operations 16,208
Selling, general and administrative 2,350
Depreciation and amortization 2
Provision for bad debts 7
Impairment of assets and restructuring 7,896
Interest income 7
Gain on sale of assets 2,084
(10) Weighted average common shares outstanding have been adjusted to include
approximately 14.9 million shares issued in the merger at a conversion
ratio of one-for-one. The adjustment also reflects the potential dilutive
effect of Anchor stock options, which will be converted to options to
purchase approximately 2.2 million shares of IGT common stock. This
calculation excludes 600,000 shares as the option exercise price was
greater than the average market price. Applying the treasury method of
accounting, the pro forma adjustment reflects approximately 735,000
additional common shares related to these options for the three months
ended December 29, 2001 and 634,000 additional shares for fiscal 2001.
(11) The adjustment reflects the elimination of Anchor's legal, accounting, and
advisory costs related to the merger of $861,000 for the quarter ended
December 29, 2001 and $1.6 million for the year ended September 29, 2001.
(12) During fiscal 2001 Anchor incurred various one-time charges. Anchor
incurred impairment, restructuring, and other charges of $121.5 million
($97.6 million net of tax) primarily related to its AWI subsidiary.
This amount excludes the impairment related to the Montana route of $7.9
million. Anchor also incurred one-time charges of $1.7 million ($1.0
million net of tax) related to vesting of restricted stock grants and $7.1
million ($4.3 million net of tax) for inventory writedowns and contractual
disputes. Excluding these charges, pro forma income from operations for
fiscal 2001 would have been $513.2 million and pro forma net income would
have totaled $270.1 million or $2.93 per diluted share.
(13) Under an agreement entered into on December 23, 2001, Anchor's Pala casino
management contract will be surrendered for an agreed upon payment and has
been classified as an asset held for sale. The pro forma statements of
income have been adjusted to exclude the results of operations for the
Pala management contract.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
INTERNATIONAL GAME TECHNOLOGY
(Registrant)
Date: January 31, 2002 By: /s/ Maureen Mullarkey
------------------------------------
Name: Maureen Mullarkey
Its: Senior Vice President of Finance and
Chief Financial Officer
INDEX OF EXHIBITS
Exhibit No. Description
----------- -----------------------------------------------------
2.1 Agreement and Plan of Merger dated as of July 8, 2001
among International Game Technology, NAC Corporation,
a wholly-owned subsidiary of IGT, and Anchor Gaming
(incorporated by reference to Exhibit 2.1 to the Form
8-K/A of IGT filed with the Securities and Exchange
Commission on July 12, 2001).
99.1 Press Release, dated December 26, 2001, reporting the
filing of the Articles of Merger.*
*Previously filed.