Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. SOLERA HOLDINGS, INC (1324245) 10-Q published on Jan 28, 2016 at 9:48 pm
Reporting Period: Dec 30, 2015
In January 2016, the FASB issued ASU Topic No. 2016 - 1, Financial Statements - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires equity investments to be measured at fair value with changes in fair value recognized in income; use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk; and eliminates the requirement disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet.
Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Our quarterly tax provision is subject to significant variation due to several factors, including variability in accurately predicting our pre-tax income or loss and the mix of jurisdictions to which they relate, changes in how we do business, acquisitions, foreign currency gains (losses), changes in law, and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss.
Consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including (i) the approval of the Merger by the affirmative vote of holders of a majority of the outstanding shares of the Common Stock entitled to vote at a stockholders meeting (which was approved on December 8, 2015), (ii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (which termination occurred on October 9, 2015) and the receipt of certain other non-United States regulatory approvals required to consummate the Merger (which we have received effective as of December 31, 2015), and (iii) other customary closing conditions, including (a) the absence of any law or order prohibiting the Merger or the other transactions contemplated by the Merger Agreement, (b) the accuracy of each party’s representations and warranties (subject to customary materiality qualifiers) and (c) each party’s performance of its obligations and covenants contained in the Merger Agreement. The Merger Agreement contains representations, warranties and covenants of the parties customary for a transaction of this type, including, among other things, covenants not to solicit alternative transactions or to provide information or enter into discussions in connection with alternative transactions, subject to certain exceptions to allow the Board to exercise its fiduciary duties.
In connection with the pending Merger, the Company commenced cash tender offers for the 2021 Senior Notes and the 2023 Senior Notes (collectively, the "Notes"). Noteholders that validly tender their Notes by January 28, 2016 (the “Early Tender Date”) will receive an amount equal to $1,012.50 per $1,000.00 in principal amount of Notes, which includes an early participation premium of $50.00 per $1,000.00 in principal amount. Noteholders that validly tender their Notes by January 29, 2016 (the “Expiration Date”) will receive an amount equal to $962.50 per $1,000.00 in principal amount of Notes. Consummation of the tender offer and payment for the Notes validly tendered pursuant to the tender offer are subject to the satisfaction of certain conditions, including, but not limited to, the receipt of requisite consents, the consummation of the Merger and financing conditions.
We have been and continue to be involved in legal proceedings, claims and other litigation that arise in the ordinary course of business. For example, we have been involved in disputes with collision repair facilities, acting individually and as a group in some situations that claim that we have colluded with our insurance company customers to depress the repair time estimates generated by our repair estimating software. We have also been involved in litigation alleging that we have colluded with our insurance company customers to cause the estimates of vehicle fair market value generated by our total loss estimation software to be unfairly low. On February 28, 2014, Solera, Explore, and Audatex North America, Inc. were each served with a civil complaint filed against them and another defendant by an insurance company third party claimant in Minnesota state court. The complaint seeks state-wide class action status for similarly situated claimants, claiming that the defendant’s methodology for determining the value of total loss vehicles violates Minnesota law. We filed a motion to dismiss on April 18, 2014. The complaint was subsequently removed to the U.S. District Court for the District of Minnesota and an amended complaint was filed on July 16, 2014. We and our co-defendant moved to dismiss the amended complaint and on October 31, 2014, the Court issued an order dismissing two of the three counts with prejudice and, of the remaining count, dismissing one claim with prejudice and one claim without prejudice.