2. Summary of Significant Accounting Policies

Restatement of Previously Issued Consolidated Financial Statements

The Company is restating its previously issued consolidated financial statements and related disclosures for the year ended December 31, 2013 (the “Restated Period”). The Company is revising its unaudited interim financial information for the first three quarters in the fiscal year ended December 31, 2013, the fourth quarter and year ended December 31, 2012 and the year ended December 31, 2011, (the “Revised Periods”).

The restatement is the result of the Company’s correction of a financial statement error attributable to the lack of recognition of the impact of a contract modification related to the M240 machine gun program (the “M240 Program”) for the U.S. Government in the Company’s fourth quarter 2013 results. In conjunction with the correction of the M240 Program error other previously recorded out-of-period errors which were immaterial to the consolidated financial statements individually or in the aggregate prior to the discovery of the M240 Program error were also adjusted to be reflected in the proper period along with the reclassification of business development expenses from other (income) / expense to operating income.

The Company assessed the impact of the M240 Program error, including the impact of previously unrecorded immaterial out-of-period adjustments and the reclassification of business development expenses from other (income)/expense to operating income on its prior interim and annual consolidated financial statements and concluded that the combined impact of these errors was material to the fourth quarter and year-ended consolidated financial statements as of December 31, 2013. Accordingly, the Company is restating the fourth quarter of 2013 and the year then ended. See Note 13, “Commitments and Contingencies”, for the impact on the Company’s 2013 fourth quarter results. The Company determined the combined impact of these adjustments was not material to the first three quarters in the fiscal year ended December 31, 2013, the fourth quarter and year-ended consolidated financial statements as of December 31, 2012 and the year ended December 31, 2011. Accordingly, the Company revised the above mentioned periods consolidated financial statements.

The aggregate impact of correcting the error related to the M240 Program, correcting previously recorded immaterial out-of-period adjustments and the reclassification of business development expenses for the years ended December 31, 2013, 2012 and 2011, on the Company’s consolidated statements of operations and on its consolidated balance sheets was as follows:

	Adjustments to
	Previously Reported Income
	Statement - Income / (Expense)
	December 31,			December 31,			December 31,
For the years ended	2013			2012			2011
Net sales	$	(7,065	)(a)	$	262		—
Cost of sales	(4,129		)(b)	—			—
Gross profit	(2,936		)(c)	262			—
Business development	(575		)(d)	(881		)(d)	(504	)(d)
Operating income	(3,501		)(e)	(619		)(f)	(504	)(d)
Other (income) / expense	(575		)(d)	(881		)(d)	(504	)(d)
Income tax	(59		)	65			—
Net income (loss)	(2,867		)(g)	197			—

(a) Primarily as a result of a ($6,820) reduction in revenue related to a M240 Program contract modification, see Note 13, “Commitments and Contingencies”.

(b) Primarily as a result of a ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”.

(c) Primarily as a result of a ($6,820) reduction in revenue related to a M240 Program contract modification and a ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”.

(d) Reclassification of transaction costs incurred in connection with contemplated merger and acquisition activities from other (income)/expense to business development.

(e) Primarily as a result of the ($6,820) reduction in revenue related to a M240 Program contact modification, the ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense and a $575 reclassification of business development costs from other(income)/expense to business development.

(f) Primarily as the result of the reclassification of $881 of costs incurred in connection with contemplated merger and acquisition activities from other(income)/expense to business development and an adjustment to Colt Canada net sales of $262 related to the timing of recognition of certain sales.

(g) Primarily as a result of the M240 Program contract modification and contract obligation expense.

	Adjustments to
	Previously Reported Balance
	Sheet - Increase / (Decrease)
	December 31,			December 31,			December 31,
For the years ended	2013			2012			2011
Accounts receivable	$	1		$	261		—
Other current assets	(2		)	(65		)	—
Accrued expenses	(4,133		)(a)	—			—
Customer advances and deferred revenue	6,820		(b)	—			—
Accumulated deficit	(2,670		)(c)	197			—
Accumulated other comprehensive loss	(18		)	(1		)	—

(a) Primarily related to the reduction in accrued expenses associated with the ($4,132) reduction in cost of sales related to a M240 Program contract obligation expense, see Note 13, “Commitments and Contingencies”.

(b) As a result of recording a ($6,820) reduction in revenue related to a M240 Program contract modification, see Note 13, “Commitments and Contingencies.”

The correction of the error related to the M240 Program in the Company’s consolidated statements of changes in cash flows for the year ended December 31, 2013 resulted in a $2.7 million decrease in Net income (loss) and a net $2.7 million increase in operating liabilities and didn’t impact previously recorded cash provided by operating activities.

The Company corrected certain other out of period errors which were not material to the consolidated financial statements individually or in aggregate prior to the discovery of the M240 Program error by reflecting them in the proper period. Correction of these out-of-period adjustments had the combined effect on the consolidated statements of operations of increasing (decreasing) net income in the four quarters of fiscal 2013 by $59, $229, ($288) and ($179), respectively and increasing net income in the fourth quarter of fiscal 2012 by $197. The largest contributors to these out-of-period adjustments relate to the timing of the recognition of certain sales transactions and customer discounts along with the timing of recognition of certain inventory and pension related expenses.

The aggregate impact of correcting previously unrecorded immaterial out-of-period adjustments and the reclassification of business development expenses for the first three quarters of fiscal 2013 on the Company’s consolidated statements of operations was as follows:

	Adjustments to
	Previously Reported Income
	Statement - Income / (Expense)
	March 31,			June 30,			September 29,
For the quarter ended	2013			2013			2013
Net sales	$	—		$	(23	)	$	(208	)
Cost of sales	14			65			(168		)
Gross profit	(14		)	(88		)	(40		)
Selling and commissions	(79		)	(130		)	221
Research and development	1			1			4
General and administrative	5			(222		)	10
Business development	(75		)	(169		)	(463		)
Operating income	(16		)	94			(738		)(a)
Other (income) / expense	(75		)	(192		)	(440		)
Income tax	—			57			(10		)
Net income (loss)	59			229			(288		)

(a) Primarily as a result of the reclassification of costs incurred in connection with contemplated merger and acquisition activities from other (income)/expense to business development and the timing of recognition of certain professional fee accruals.

Comparison of restated financial statements to financial statements as previously reported

The following tables compare the Company’s previously reported consolidated balance sheet as of December 31, 2013 and 2012, and the previously reported consolidated statements of operations for the year ended December 31, 2013, 2012 and 2011, and the previously reported statements of comprehensive income (loss), changes in cash flows and changes in deficit for the years ended December 31, 2013 and 2012 to the corresponding financial statements for the Restated Period and the Revised Periods, as applicable.

Colt Defense LLC and Subsidiaries

Consolidated Balance Sheet

(In thousands of dollars)

	December 31, 2013
							As Restated
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A
ASSETS
Current assets:
Cash and cash equivalents	$	12,594		$	—		$	12,594
Restricted cash	771			—			771
Accounts receivable, net	22,481			1			22,482
Inventories	66,674			—			66,674
Deferred tax assets	954			—			954
Other current assets	5,964			(2		)	5,962
Total current assets	109,438			(1		)	109,437

Property and equipment, net	30,733			—			30,733
Goodwill	51,225			—			51,225
Trademarks	50,100			—			50,100
Intangible assets with finite lives, net	13,415			—			13,415
Deferred financing costs	7,742			—			7,742
Long-term restricted cash	572			—			572
Other assets	1,510			—			1,510
Total assets	$	264,735		$	(1	)	$	264,734

LIABILITIES AND DEFICIT
Current liabilities:
Line of credit	$	7,083		$	—		7,083
Accounts payable	14,038			—			14,038
Accrued expenses	26,291			(4,133		)	22,158
Pension and retirement liabilities - current portion	1,085			—			1,085
Customer advances and deferred revenue	12,647			6,820			19,467
Long-term debt current portion	5,000			—			5,000
Accrued distributions to members	670			—			670
Total current liabilities	66,814			2,687			69,501

Long term debt	289,817			—			289,817
Pension and retirement liabilities	21,670			—			21,670
Long-term deferred tax liability	18,715			—			18,715
Long-term distributions to members	2,277			—			2,277
Other long-term liabilities	2,230			—			2,230
Total long-term liabilities	334,709			—			334,709
Total liabilities	401,523			2,687			404,210

Deficit:
Accumulated deficit	(127,466		)	(2,670		)	(130,136		)
Accumulated other comprehensive loss	(9,322		)	(18		)	(9,340		)
Total deficit	(136,788		)	(2,688		)	(139,476		)
Total liabilities and debt	$	264,735		$	(1	)	$	264,734

Colt Defense LLC and Subsidiaries

Consolidated Balance Sheet

(In thousands of dollars)

	December 31, 2012
							As Revised
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A
ASSETS
Current assets:
Cash and cash equivalents	$	42,373		$	—		$	42,373
Restricted cash	777			—			777
Accounts receivable, net	22,683			261			22,944
Inventories	40,561			—			40,561
Deferred tax assets	185			—			185
Other current assets	3,231			(65		)	3,166
Total current assets	109,810			196			110,006

Property and equipment, net	22,134			—			22,134
Goodwill	14,947			—			14,947
Trademarks	—			—			—
Intangible assets with finite lives, net	6,037			—			6,037
Deferred financing costs	7,642			—			7,642
Long-term restricted cash	810			—			810
Other assets	1,588			—			1,588
Total assets	$	162,968		$	196		$	163,164

LIABILITIES AND DEFICIT
Current liabilities:
Line of credit	$	6		$	—		6
Accounts payable	13,055			—			13,055
Accrued expenses	20,315			—			20,315
Pension and retirement liabilities - current portion	626			—			626
Customer advances and deferred revenue	10,002			—			10,002
Long-term debt current portion	—			—			—
Accrued distributions to members	—			—			—
Total current liabilities	44,004			—			44,004

Long term debt	247,567			—			247,567
Pension and retirement liabilities	20,261			—			20,261
Long-term deferred tax liability	1,515			—			1,515
Long-term distributions to members	—			—			—
Other long-term liabilities	908			—			908
Total long-term liabilities	270,251			—			270,251
Total liabilities	314,255			—			314,255

Deficit:
Accumulated deficit	(137,446		)	197			(137,249		)
Accumulated other comprehensive loss	(13,841		)	(1		)	(13,842		)
Total deficit	(151,287		)	196			(151,091		)
Total liabilities and deficit	$	162,968		$	196		$	163,164

Colt Defense LLC and Subsidiaries

Consolidated Statement of Operations

(In thousands of dollars)

	December 31, 2013
							As Restated
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A

Net sales	$	277,948		$	(7,065	)	$	270,883
Cost of sales	201,241			(4,129		)	197,112
Gross profit	76,707			(2,936		)	73,771

Operating expenses:
Selling and commissions	14,143			(1		)	14,142
Research and development	6,127			(1		)	6,126
General and administrative	15,297			(8		)	15,289
	35,567			(10		)	35,557
Business development	—			575			575
Certain transaction costs (Note 3)	1,147			—			1,147
Restructuring costs (Note 4)	782			—			782
Gain on effective settlement of contract (Note 3)	(15,264		)	—			(15,264		)
Total operating expenses	22,232			565			22,797
Operating income	54,475			(3,501		)	50,974

Other (income)/expense:
Interest expense	27,687			—			27,687
Debt prepayment expense	—			—			—
Other (income)/expense, net	(641		)	(575		)	(1,216		)
Total other expenses, net	27,046			(575		)	26,471
Income (loss) before provision for income taxes	27,429			(2,926		)	24,503
Income tax expense	1,695			(59		)	1,636

Net income (loss)	$	25,734		$	(2,867	)	$	22,867

Colt Defense LLC and Subsidiaries

Consolidated Statement of Operations

(In thousands of dollars)

	December 31, 2012
							As Revised
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A

Net sales	$	213,354		$	262		$	213,616
Cost of sales	162,622			—			162,622
Gross profit	50,732			262			50,994

Operating expenses:
Selling and commissions	13,117			—			13,117
Research and development	4,747			—			4,747
General and administrative	14,285			—			14,285
	32,149			—			32,149
Business development	—			881			881
Certain transaction costs (Note 3)	—			—			—
Restructuring costs (Note 4)	—			—			—
Gain on effective settlement of contract (Note 3)	—			—			—
Total operating expenses	32,149			881			33,030
Operating income	18,583			(619		)	17,964

Other (income)/expense:
Interest expense	24,579			—			24,579
Debt prepayment expense	—			—			—
Other (income)/expense, net	(691		)	(881		)	(1,572		)
Total other expenses, net	23,888			(881		)	23,007
Income (loss) before provision for income taxes	(5,305		)	262			(5,043		)
Income tax expense	1,750			65			1,815

Net income (loss)	$	(7,055	)	$	197		$	(6,858	)

Colt Defense LLC and Subsidiaries

Consolidated Statement of Operations

(In thousands of dollars)

	December 31, 2011
						As Revised
	As					in this Annual
	Previously					Report on
	Reported		Adjustments			Form 10-K/A

Net sales	$	208,816	$	—		$	208,816
Cost of sales	143,851		—			143,851
Gross profit	64,965		—			64,965

Operating expenses:
Selling and commissions	13,780		—			13,780
Research and development	5,578		—			5,578
General and administrative	13,098		—			13,098
	32,456		—			32,456
Business development	—		504			504
Certain transaction costs (Note 3)	—		—			—
Restructuring costs (Note 4)	—		—			—
Gain on effective settlement of contract (Note 3)	—		—			—
Total operating expenses	32,456		504			32,960
Operating income	32,509		(504		)	32,005

Other (income)/expense:
Interest expense	24,010		—			24,010
Debt prepayment expense	295		—			295
Other (income)/expense, net	45		(504		)	(459		)
Total other expenses, net	24,350		(504		)	23,846
Income (loss) before provision for income taxes	8,159		—			8,159
Income tax expense	3,171		—			3,171

Net income (loss)	$	4,988	$	—		$	4,988

Colt Defense LLC and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(In thousands of dollars)

	December 31, 2013
							As Restated
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A

Net income (loss)	$	25,734		$	(2,867	)	$	22,867

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment:
Foreign currency translation gains (losses)	(1,872		)	(17		)	(1,889		)

Pension and postretirement benefit liabilities:
Other comprehensive income (loss) arising during the period	5,890			—			5,890
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss)	501			—			501
	6,391			—			6,391

Comprehensive income (loss)	$	30,253		$	(2,884	)	$	27,369

	December 31, 2012
							As Revised
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A

Net income (loss)	$	(7,055	)	$	197		$	(6,858	)

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment:
Foreign currency translation gains (losses)	518			(1		)	517

Pension and postretirement benefit liabilities:
Other comprehensive income (loss) arising during the period	(2,322		)	—			(2,322		)
Reclassification adjustment for unrecognized prior service costs and unrecognized loss included in net income (loss)	1,093			—			1,093
	(1,229		)	—			(1,229		)

Comprehensive income (loss)	$	(7,766	)	$	196		$	(7,570	)

Colt Defense LLC and Subsidiaries

Consolidated Statement of Changes in Cash Flows

(In thousands of dollars)

	December 31, 2013
							As Restated
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A
Operating Activities
Net income (loss)	$	25,734		$	(2,867	)	$	22,867
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	6,359			—			6,359
Amortization of financing fees	2,020			—			2,020
Amortization of debt discount	793			—			793
Gain on effective settlement of contract	(15,264		)	—			(15,264		)
Pension curtailment expense	—			—			—
Deferred income taxes	29			—			29
Loss (gain) on sale/disposal of fixed assets	205			—			205
Debt prepayment expense	—			—			—
Amortization of deferred revenue	(127		)	—			(127		)
Common unit compensation expense	27			—			27
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable	3,222			262			3,484
Inventories	(19,126		)	—			(19,126		)
Prepaid expense and other current assets	(839		)	(65		)	(904		)
Accounts payable and accrued expense	(542		)	(4,132		)	(4,674		)
Accrued pension and retirement liabilities	(1,099		)	—			(1,099		)
Customer advances and deferred income	1,366			6,820			8,186
Other	260			1			261
Net cash provided by (used in) operating activities	3,018			19			3,037

Investing Activities
Purchase of property and equipment	(8,598		)	—			(8,598		)
Proceeds from sale/disposal of property	—			—			—
Business acquisition, net of cash acquired and reinvested Merger consideration	(59,488		)	—			(59,488		)
Change in restricted cash	244			—			244
Net cash used in investing activities	(67,842		)	—			(67,842		)

Financing Activities
Debt issuance costs	(2,120		)	—			(2,120		)
Proceeds from the issuance of long-term debt	47,707			—			47,707
Repayment of long-term debt	(1,250		)	—			(1,250		)
Line of credit advances	10,083			—			10,083
Line of credit repayments	(3,006		)	—			(3,006		)
Purchase of common units	(14,000		)	—			(14,000		)
Proceeds from the issuance of common units, net of reinvested consideration proceeds	5,000			—			5,000
Capital lease obligation payments	(393		)	—			(393		)
Distributions paid to members	(6,370		)	—			(6,370		)
Net cash provided by (used in) financing activities	35,651			—			35,651

Effect of exchange rates on cash and cash equivalents	(606		)	(19		)	(625		)
Change in cash and cash equivalents	(29,779		)	—			(29,779		)
Cash and cash equivalents, beginning of period	42,373			—			42,373
Cash and cash equivalents, end of period	$	12,594		$	—		$	12,594

Colt Defense LLC and Subsidiaries

Consolidated Statement of Changes in Cash Flows

(In thousands of dollars)

	December 31, 2012
							As Revised
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A
Operating Activities
Net income (loss)	$	(7,055	)	$	197		$	(6,858	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	5,696			—			5,696
Amortization of financing fees	1,653			—			1,653
Amortization of debt discount	381			—			381
Gain on effective settlement of contract	—			—			—
Pension curtailment expense	1,325			—			1,325
Deferred income taxes	39			—			39
Loss (gain) on sale/disposal of fixed assets	4			—			4
Debt prepayment expense	—			—			—
Amortization of deferred revenue	(79		)	—			(79		)
Common unit compensation expense	17			—			17
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable	8,091			(262		)	7,829
Inventories	(4,158		)	—			(4,158		)
Prepaid expense and other current assets	(984		)	65			(919		)
Accounts payable and accrued expense	5,201			—			5,201
Accrued pension and retirement liabilities	(172		)	—			(172		)
Customer advances and deferred income	2,001			—			2,001
Other	463			—			463
Net cash provided by (used in) operating activities	12,423			—			12,423

Investing Activities
Purchase of property and equipment	(4,410		)	—			(4,410		)
Proceeds from sale/disposal of property	66			—			66
Business acquisition, net of cash acquired and reinvested Merger consideration	—			—			—
Change in restricted cash	464			—			464
Net cash used in investing activities	(3,880		)	—			(3,880		)

Financing Activities
Debt issuance costs	—			—			—
Proceeds from the issuance of long-term debt	—			—			—
Repayment of long-term debt	—			—			—
Line of credit advances	6			—			6
Line of credit repayments	—			—			—
Purchase of common units	—			—			—
Proceeds from the issuance of common units, net of reinvested consideration proceeds	—			—			—
Capital lease obligation payments	(1,148		)	—			(1,148		)
Distributions paid to members	(3,343		)	—			(3,343		)
Net cash provided by (used in) financing activities	(4,485		)	—			(4,485		)

Effect of exchange rates on cash and cash equivalents	79			—			79
Change in cash and cash equivalents	4,137			—			4,137
Cash and cash equivalents, beginning of period	38,236			—			38,236
Cash and cash equivalents, end of period	$	42,373		$	—		$	42,373

Colt Defense LLC and Subsidiaries

Consolidated Statements of Changes in Deficit

(In thousands of dollars)

			Accumulated Members’				Accumulated Other
			Deficit				Comprehensive Loss				Total Changes in Deficit
					As Restated				As Restated				As Restated
			As		in this Annual		As		in this Annual		As		in this Annual
	Member		Previously		Report on		Previously		Report on		Previously		Report on
	Units		Reported		Form 10-K/A		Reported		Form 10-K/A		Reported		Form 10-K/A

Balance, December 31, 2011	132,174		(129,704	)	(129,704	)	(13,130	)	(13,130	)	(142,834	)	(142,834	)

Common unit expense	—		17		17		—		—		17		17
Distribution to members	—		—		—		—		—		—		—
State of Connecticut members’ withholding	—		(704	)	(704	)	—		—		(704	)	(704	)
Net income	—		(7,055	)	(6,858	)	—		—		(7,055	)	(6,858	)
Other comprehensive (loss)/ income:
Pension and postretirement health liabilities	—		—		—		(1,229	)	(1,229	)	(1,229	)	(1,229	)
Foreign currency translation	—		—		—		518		517		518		517
Comprehensive loss	—		—		—		—				(7,766	)	(7,570	)
Balance, December 31, 2012 (As Revised)	132,174		(137,446	)	(137,249	)	(13,841	)	(13,842	)	(151,287	)	(151,091	)

Common unit expense	—		27		27		—		—		27		27
Distribution to members	—		(9,317	)	(9,317	)	—		—		(9,317	)	(9,317	)
State of Connecticut members’ withholding	—		(408	)	(408	)	—		—		(408	)	(408	)
Write off of prepaid license	—		(1,056	)	(1,056	)	—		—		(1,056	)	(1,056	)
Repurchase of common units	(31,166	)	(14,000	)	(14,000	)	—		—		(14,000	)	(14,000	)
Sale of common units	31,166		9,000		9,000		—		—		9,000		9,000
Net income	—		25,734		22,867		—		—		25,734		22,867
Other comprehensive (loss)/ income:
Pension and postretirement health liabilities	—		—		—		6,391		6,391		6,391		6,391
Foreign currency translation	—		—		—		(1,872	)	(1,889	)	(1,872	)	(1,889	)
Comprehensive income	—		—		—		—		—		30,253		27,369
Balance, December 31, 2013 (As Restated)	132,174		(127,466	)	(130,136	)	(9,322	)	(9,340	)	(136,788	)	(139,476	)

Colt Defense LLC and Subsidiaries

Consolidated Statement of Operations

(In thousands of dollars)

	Three months ended March 31, 2013 (unaudited)
							As Revised
	As						in this Annual
	Previously						Report on
	Reported			Adjustments			Form 10-K/A

Net sales	$	63,849		$	—		$	63,849
Cost of sales	45,098			14			45,112
Gross profit	18,751			(14		)	18,737

Operating expenses:
Selling and commissions	3,174			(79		)	3,095
Research and development	819			1			820
General and administrative	3,725			5			3,730
	7,718			(73		)	7,645
Business development	—			75			75
Certain transaction costs (Note 3)	—			—			—
Restructuring costs (Note 4)	—			—			—
Gain on effective settlement of contract (Note 3)	—			—			—
Total operating expenses	7,718			2			7,720
Operating income	11,033			(16		)	11,017

Other (income)/expense:
Interest expense	5,994			—			5,994
Other (income)/expense, net	(712		)	(75		)	(787		)
Total other expenses, net	5,282			(75		)	5,207
Income (loss) before provision for income taxes	5,751			59			5,810
Income tax expense	681			—			681

Net income (loss)	$	5,070		$	59		$	5,129

Colt Defense LLC and Subsidiaries

Consolidated Statement of Operations

(In thousands of dollars)

	Three months ended June 30, 2013 (unaudited)									Six months ended June 30, 2013 (unaudited)
							As Revised									As Revised
	As						in this Annual			As						in this Annual
	Previously						Report on			Previously						Report on
	Reported			Adjustments			Form 10-K/A			Reported			Adjustments			Form 10-K/A

Net sales	$	64,235		$	(23	)	$	64,212		$	128,084		$	(23	)	$	128,061
Cost of sales	45,765			65			45,830			90,863			79			90,942
Gross profit	18,470			(88		)	18,382			37,221			(102		)	37,119

Operating expenses:
Selling and commissions	3,582			(130		)	3,452			6,756			(209		)	6,547
Research and development	1,480			1			1,481			2,299			2			2,301
General and administrative	3,237			(222		)	3,015			6,962			(217		)	6,745
	8,299			(351		)	7,948			16,017			(424		)	15,593
Business development	—			169			169			—			244			244
Certain transaction costs (Note 3)	416			—			416			416			—			416
Restructuring costs (Note 4)	—			—			—			—			—			—
Gain on effective settlement of contract (Note 3)	—			—			—			—			—			—
Total operating expenses	8,715			(182		)	8,533			16,433			(180		)	16,253
Operating income	9,755			94			9,849			20,788			78			20,866

Other (income)/expense:
Interest expense	6,069			—			6,069			12,063			—			12,063
Other (income)/expense, net	(493		)	(192		)	(685		)	(1,205		)	(267		)	(1,472		)
Total other expenses, net	5,576			(192		)	5,384			10,858			(267		)	10,591
Income (loss) before provision for income taxes	4,179			286			4,465			9,930			345			10,275
Income tax expense	21			57			78			702			57			759

Net income (loss)	$	4,158		$	229		$	4,387		$	9,228		$	288		$	9,516

Colt Defense LLC and Subsidiaries

Consolidated Statement of Operations

(In thousands of dollars)

	Three months ended September 29, 2013 (unaudited)									Nine months ended September 29, 2013 (unaudited)
							As Revised									As Revised
	As						in this Annual			As						in this Annual
	Previously						Report on			Previously						Report on
	Reported			Adjustments			Form 10-K/A			Reported			Adjustments			Form 10-K/A

Net sales	$	73,238		$	(208	)	$	73,030		$	201,396		$	(231	)	$	201,165
Cost of sales	58,655			(168		)	58,487			149,731			(89		)	149,642
Gross profit	14,583			(40		)	14,543			51,665			(142		)	51,523

Operating expenses:
Selling and commissions	3,843			221			4,064			10,386			12			10,398
Research and development	1,710			4			1,714			4,009			6			4,015
General and administrative	3,886			10			3,896			10,848			(207		)	10,641
	9,439			235			9,674			25,243			(189		)	25,054
Business development	—			463			463			—			707			707
Certain transaction costs (Note 3)	461			—			461			877			—			877
Restructuring costs (Note 4)	631			—			631			631			—			631
Gain on effective settlement of contract (Note 3)	(15,264		)	—			(15,264		)	(15,264		)	—			(15,264		)
Total operating expenses	(4,733		)	698			(4,035		)	11,487			518			12,005
Operating income	19,316			(738		)	18,578			40,178			(660		)	39,518

Other (income)/expense:
Interest expense	7,623			—			7,623			19,686			—			19,686
Other (income)/expense, net	746			(440		)	306			(385		)	(707		)	(1,092		)
Total other expenses, net	8,369			(440		)	7,929			19,301			(707		)	18,594
Income (loss) before provision for income taxes	10,947			(298		)	10,649			20,877			47			20,924
Income tax expense	(198		)	(10		)	(208		)	504			47			551

Net income (loss)	$	11,145		$	(288	)	$	10,857		$	20,373		$	—		$	20,373

Basis of Accounting and Consolidation

The accompanying consolidated financial statements of Colt Defense LLC (“Colt Defense”) and Colt Finance Corp. (collectively, the “Company”) are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The Company’s consolidated financial statements include the accounts of Colt Defense LLC and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

On July 12, 2013, the Company acquired 100% ownership of New Colt. The results of New Colt have been included in the consolidated financial statements from the Merger Date.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include estimates used to determine the fair value of assets acquired and liabilities assumed related to the acquisition of New Colt (see Note 3, “Acquisition”) and accruals for contract obligation expense (see Note 13, “Commitments and Contingencies”), excess and obsolete inventory, income tax expense, deferred tax asset valuation, medical claims payable, and worker’s compensation expense. Actual results could differ materially from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consists of cash and short-term, highly liquid investments with original maturities of three months or less at the date of purchase.

Restricted Cash

Restricted cash at December 31, 2013 and 2012 consists of funds deposited to secure standby letters of credit primarily for performance guarantees related to the Company’s international business.

Revenue

The Company recognizes revenue when evidence of an arrangement exists, delivery of the product or service has occurred and title and risk of loss have passed to the customer, the sales price is fixed or determinable, and collectability of the resulting receivable is reasonably assured. For certain “bill and hold” sales to the U.S. and Canadian governments, such sales and related accounts receivable are recognized upon inspection and acceptance of the firearms, including title transfer, by a government official and after the Company places the accepted firearms in a government approved location at the Company’s premises where they are held waiting shipping instructions. The sales value of such bill and hold sales where the shipments were still located at the Company’s premises at December 31, 2013, 2012 and 2011 were $805, $0, and $6,840, respectively.

The Company accounts for revenues and earnings under two long-term government contracts/programs with interrelated multiple elements (procurement of parts, manufacturing and refurbishment services) using concepts of proportionate performance. These contracts effect reported results for all periods presented. The Company estimates the total profit on each contract as the difference between the total estimated revenue and total estimated cost of the contract and recognize that profit over the remaining life of the contract using an output measure (the ratio of rifles completed to the total number of rifles to be refurbished under the contract). The Company computes an earnings rate for each contract, including general and administrative expense, to determine operating earnings. The Company reviews the earnings rate quarterly to assess revisions in contract values and estimated costs at completion. Any changes in earnings rates and recognized contract to date earnings resulting from these assessments are made in the period the revisions are identified. Contract costs include production costs, related overhead and allocated general and administrative costs. Amounts billed and collected on this contract in excess of revenue recorded are reflected as customer advances and deferred revenue in the Company’s consolidated balance sheets.

Anticipated contract losses are charged to operations as soon as they are identified. Anticipated losses cover all costs allocable to the contracts, including certain general and administrative expenses. If a contract is cancelled by the government for its convenience, the Company can make a claim against the customer for fair compensation for worked performed plus costs of settling and paying claims by terminated subcontractors, other settlement expenses and a reasonable profit on costs incurred. When the Company has a customer claim, revenue arising from the claims process is either recognized as revenue or as an offset against a potential loss only when the amount of the claim can be estimated reliably and its realization is probable. The Company had no claims recorded at any year-end presented.

Prior to the Merger, Colt Defense generated an immaterial amount of royalty income, which it included in other income in its consolidated statements of operations. As a result of the Merger, the Company now generates a higher amount of royalty income on a quarterly basis and has therefore determined that royalty income should now be recorded as net sales in the Consolidated Statements of Operations. For comparability, the Company has reclassified royalty income of $26 for the year ended December 31, 2012 and $6 for the year ended December 31, 2011, respectively, from other income to net sales.

The Company recognizes trademark licensing revenue for individual licensees based on historical experience and expected cash receipts from licensees. Licensing revenue consists of minimum royalties and/or a percentage of a licensee’s sales on licensed products. Under most of the Company’s current licensing agreements, royalties are payable in arrears on a calendar quarter basis.

Accounts Receivable and Credit Policies

Credit is extended based on an evaluation of each customer’s financial condition. Generally, collateral is not required, other than in connection with some foreign sales. If the circumstances warrant, the Company requires foreign customers to provide either a documentary letter of credit or prepayment.

Credit losses are provided for, primarily by using specific identification. Once a customer is identified as high risk based on the payment history and creditworthiness, the Company will provide an allowance for the estimated uncollectible portion. Accounts are considered past due based on the original invoice date. Write-offs of uncollectible accounts receivable occur when all reasonable collection efforts have been made. Neither provisions for credit losses nor write-offs were material for any period presented. The Company’s trade receivable allowance for doubtful accounts at December 31, 2013 was $78 and at December 31, 2012 was $0.

The following table presents the activity for the allowance for doubtful accounts:

	Total
Balance at December 31, 2011	$	1
Provision for doubtful accounts	1
Write-offs	(2		)
Balance at December 31, 2012	—
Provision for doubtful accounts	78
Write-offs	—
Balance at December 31, 2013	$	78

Accounts receivable represent amounts billed and currently due from customers. There were no material amounts that were not expected to be collected within one year from the balance sheet date.

Inventories

Inventories are stated at the lower of cost, determined using the first-in, first-out method, or market. Cost includes materials, labor and manufacturing overhead related to the purchase and production of inventories. The Company reviews market value based on historical usage and estimates of future demand. Based on these reviews, inventory write-downs are recorded, as necessary, to reflect estimated obsolescence, excess quantities and declines in market value.

Property and Equipment

Property and equipment are recorded at cost. Depreciation of building and equipment (including assets recorded under capital leases) and amortization of leasehold improvements are computed using the straight-line method over the estimated useful life of the assets, or for leasehold improvements, over the remaining life of the lease term if shorter. Depreciation and amortization of property and equipment for the years ended December 31, 2013, 2012 and 2011 was $4,606, $4,891, and $4,633, respectively. The Company did not enter into any capital leases during 2013 or 2012.

Expenditures that improve or extend the lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

The fair value of the property and equipment acquired as a result of the Merger are allocated to machinery and equipment, furniture, fixtures and leasehold improvements and construction in process in the amounts of $4,420, $30 and $732, respectively.

Property and equipment consists of:

	December 31,						Estimated
	2013			2012			Useful Life
Land	$	338		$	362		—
Building	2,653			2,718			33
Machinery and equipment	47,476			37,749			7-10
Furniture, fixtures and leasehold improvements	7,081			6,378			3-5
	57,548			47,207
Less accumulated depreciation and amortization	(32,152		)	(28,162		)
	25,396			19,045
Construction in process	5,337			3,089
Property and equipment, net	$	30,733		$	22,134

Goodwill

Goodwill is tested for impairment annually as of the beginning of the Company’s fourth fiscal quarter, or when events or circumstances indicate that its value may have declined. Impairment exists when the carrying amount of goodwill exceeds its fair market value. Management estimates the fair value of each reporting unit primarily using the income approach. Specifically the discounted cash flow (“DCF”) model was utilized for the valuation of each reporting unit. Management develops cash flow forecasts based on existing firm orders, expected future orders, contracts with suppliers, labor agreements and general market conditions. The Company discounts the cash flow forecasts using the weighted-average cost of capital method at the date of evaluation. The Company also calculates the fair value of its reporting units using the market approach in order to corroborate our DCF model results. These methodologies used in the current year are consistent with those used in the prior year.

Subsequent to December 2013, the Company has seen a decrease in the demand for commercial rifles when compared to 2013 and if this trend continues it may result in future impairment. In addition, since December 2012 there has been a sharp increase in political and public support for new “gun control” laws and regulations in the United States. Some proposed legislation introduced in the U.S. Congress would ban or restrict the sale of substantially all of the Company’s rifles, in their current configurations, into the commercial market throughout the United States. Similar legislation has been enacted in several states. The Company considers the adverse changes in its business climate to be a triggering event as of December 31, 2012. Therefore, in addition to the Company’s annual goodwill impairment testing, it also performed a sensitivity analysis to determine the impact that a material decrease in Commercial and Law Enforcement rifle sales would have on its valuation. As of December 31, 2013 and December 31, 2012, the fair value of its reporting units was in excess of carrying value for all scenarios that were tested.

There was no impairment of goodwill during 2013, 2012 or 2011. Changes in the carrying amount of goodwill are as follows:

	Total
Balance at December 31, 2011	$	14,713
Effect of foreign currency translation	234
Balance at December 31, 2012	14,947
Goodwill acquired	36,974
Effect of foreign currency translation	(696		)
Balance at December 31, 2013	$	51,225

As of December 31, 2013 and 2012, there was an accumulated impairment of $1,245 on the gross book value of $52,470 and $16,192, respectively.

Trademarks

In connection with the Merger, the Company recorded an indefinite-lived intangible asset of $50,100 for the Colt brand and related trademarks.

The Company, with the assistance of a third party valuation firm, valued the Colt brand and related trademarks by comparing the value of the royalty rate inherent in the prepaid license fee to the current market rate for such a license based upon both the value of the Colt brand and related trademarks in both the defense and the commercial marketplace utilizing a relief from royalty methodology.

Intangible Assets

The Company reviews long-lived assets, including intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Impairment losses, where identified, are determined as the excess of the carrying value over the estimated fair value of the long-lived asset. The Company assesses the recoverability of the carrying value of assets held for use based on a review of projected undiscounted cash flows. When long-lived assets are reclassified to “held for sale”, The Company compares the asset’s carrying amount to its estimated fair value less cost to sell to evaluate impairment. No long-lived assets have been reclassified to held for sale for any period presented.

In connection with the Merger, the Company recorded finite-lived intangible assets of $9,340 which includes $5,240 of existing license agreements which represents the estimated fair value of New Colt license agreements for licensing the Colt trademarks to various third parties, $2,970 of developed technology which represents the estimated fair value of designs, trade secrets, materials, specifications and other proprietary intellectual property included in the technical data packages and related manufacturing processes and know-how and $1,130 of backlog which represents the estimated fair value of unfilled contractual orders from customers. The weighted average useful lives of the acquired assets were 6 years, 20 years and 3 years, respectively.

The net carrying value of the Company’s intangible assets with finite lives follows:

	As of December 31, 2013
	Gross							Estimated
	Carrying		Accumulated					Useful
	Amount		Amortization			Net		Life
Customer relationship
Canadian Government	$	2,369	$	(678	)	$	1,691	30

Customer relationships other	6,160		(4,077		)	2,083		20
License agreements	5,240		(805		)	4,435		6
Backlog	1,722		(604		)	1,118		3
Technology-based intangibles	6,580		(2,492		)	4,088		15 - 20
	$	22,071	$	(8,656	)	$	13,415

	As of December 31, 2012
	Gross							Estimated
	Carrying		Accumulated					Useful
	Amount		Amortization			Net		Life
Customer relationship
Canadian Government	$	2,533	$	(640	)	$	1,893	30
Customer relationships other	6,586		(3,970		)	2,616		20
Backlog	633		(633		)	—		—
Technology-based intangibles	3,610		(2,082		)	1,528		15
	$	13,362	$	(7,325	)	$	6,037

Amortization expense for these intangible assets for the years ended December 31, 2013, 2012 and 2011 was $1,670, $704, and $742, respectively, and was included in cost of sales and selling expense in the Consolidated Statements of Operations. The Company expects to record annual amortization expense of $3,271, $2,785, $1,927, $1,187 and $873 for 2014, 2015, 2016, 2017 and 2018, respectively. Intangibles are amortized using proportionate use methods.

Prepaid License Fee

Prior to the acquisition of New Colt (see Note 3, “Acquisition”), the Company had fully paid for and received a twenty year license from New Colt for the limited use of certain Colt trade names with an expiration date of December 31, 2023. The prepaid license could be extended beyond December 31, 2023 for successive five-year periods. The Company was amortizing this paid-up license ratably over the 20 year term.

Immediately prior to the Merger, the prepaid license fee balance of $1,056 was written off. This was part of the settlement of a pre-existing relationship with New Colt related to Colt Defense’s license agreement. In prior years, the prepaid license fee was being amortized over its initial 20-year term. Amortization expense was $101 per year in 2012 and 2011.

Warranty Costs

The Company generally sells its military products with a one-year warranty and records the estimated costs of such product warranties at the time the sale is recorded. For direct foreign sales, posting a warranty bond for periods ranging from one to five years is occasionally required. The Company’s estimated warranty costs are based upon actual past experience, its current production environment as well as specific and identifiable warranty. As of December 31, 2013 and 2012, the balance of the Company’s warranty reserve was $464 and $167, respectively.

Self-Funded Medical Plan

The Company maintains a self-funded employee group medical plan under which the liability is limited by individual and aggregate stop loss insurance coverage. Included in accrued expense in the accompanying consolidated balance sheets is a liability for reported claims outstanding, as well as an estimate of incurred but unreported claims, based on the Company’s best estimate of the ultimate cost not covered by stop loss insurance. The actual amount of the claims could differ from the estimated liability recorded of $823 and $1,396 at December 31, 2013 and 2012, respectively.

Self- Funded Worker’s Compensation

As of December 31, 2013, the Company self-insures its domestic worker’s compensation by a deductible program that incorporates an aggregate stop loss. Colt’s liability for estimated premiums and incurred losses under this policy has been actuarially determined and was $214 as of December 31, 2013 and $308 as of December 31, 2012. The Company revised its disclosure with respect to the Company’s liability for estimated premiums and incurred losses under the Company’s deductible policies as of December 31, 2013 from $408 to $214. The Company does not consider the revision of this disclosure material.

Accrued Expenses

Accrued expenses consisted of:

	December 31,
	2013		2012
	(As Restated)

Accrued compensation and benefits	$	7,154	$	5,770
Accrued contract obligation expense	1,194		—
Accrued federal, excise and other taxes	4,902		5,293
Accrued interest	2,879		3,230
Accrued commissions	929		1,229
Other accrued expenses	5,100		4,793
	$	22,158	$	20,315

Advertising Costs

Advertising costs primarily consisting of print, television and electronic media, trade shows and samples. The Company expenses advertising expenses as incurred. Advertising expense was $2,626 in 2013, $2,406 in 2012 and $1,760 in 2011. Prior period amounts have been reclassified to conform to the current year presentation.

Research and Development Costs

Research and development costs consist primarily of compensation and benefits and experimental work materials for the Company’s employees who are responsible for the development and enhancement of new and existing products. Research and development costs incurred to develop new products and to enhance existing products, which are not specifically covered by contracts, and those costs related to the Company’s share of research and development activity in connection with cost-sharing arrangements, are charged to expense as incurred. Research and development expenses were $6,126 in 2013, $4,747 in 2012, and $5,578 in 2011.

Research and development costs incurred under contracts with customers are included as a contract cost and reported as a component of cost of sales when revenue from such contracts is recognized. Government research and development support, not associated with specific contracts, is recorded as a reduction to cost of sales in the period earned.

Common Unit Compensation Expense

The Company uses the Black-Scholes option pricing model to estimate the fair value of all unit-based compensation awards on the date of grant. The fair value of each time-based award is expensed on a straight-line basis over the requisite service period. For performance-based awards, compensation expense is recognized when it is probable that the performance conditions will be met.

Foreign Currency Translation

The functional currency for the Company’s Canadian operation is the Canadian dollar. The Company translates the balance sheet accounts of its Canadian operation at the end-of-period exchange rates and its income statement accounts at the average exchange rates for each month. The resulting foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss, which is included in members’ deficit.

The Company’s Canadian operation is subject to foreign currency exchange rate risk relating to receipts from customers, payments to suppliers and some intercompany transactions in currencies other than the Canadian dollar. As a matter of policy, the Company does not engage in interest rate or currency speculation and, therefore, the Company has no derivative financial instruments to hedge this exposure. In the Company’s consolidated statements of operations, it had foreign currency gains of $197 in 2013, $155 for 2012 and a foreign currency loss of $294 for 2011.

Fair Value Measurements

The fair value of an asset or liability is the amount at which the instrument could be exchanged or settled in a current transaction between willing parties where neither is compelled to buy or sell. The carrying values for cash, accounts receivable, accounts payable, accrued expenses and other current assets and liabilities approximate their fair values due to their short maturities. The carrying value of the Company’s long-term debt of $294,817 and $247,567 at December 31, 2013 and 2012, respectively, was recorded at amortized cost. The estimated fair value of long-term debt was approximately $262,775 and $161,250 at December 31, 2013 and 2012, respectively. The Fair value of the Senior Notes was based on quoted market prices, which are Level 1 inputs and the fair value of the term loan was based on Level 3 inputs.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value fall into the following hierarchy.

Level 1:		Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2:		Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3:		Unobservable inputs for the asset or liability.

During 2013 and 2012, the Company did not have any financial assets and liabilities reported at fair value and measured on a recurring basis or any significant non-recurring measurements of nonfinancial assets and nonfinancial liabilities. Therefore, Colt did not have any transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy during the years ended December 31, 2013 and 2012.

Retirement Benefits

The Company has pension and other postretirement benefit costs and obligations which are dependent on various assumptions. The Company’s major assumptions relate primarily to discount rates, long-term return on plan assets and medical cost trend rates. The Company bases the discount rate assumption on current investment yields of high quality fixed income investments during the retirement benefits maturity period. Long-term return on plan assets is determined based on historical portfolio results and management’s expectation of the future economic environment, as well as target asset allocations.

The Company’s medical cost trend assumptions are developed based on historical cost data, the near-term outlook, an assessment of likely long-term trends and the cap limiting the Company’s required contributions. Actual results that differ from the Company’s assumptions are accumulated and are amortized generally over the estimated future working life of the plan participants.

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. The Company provides a valuation allowance when it is more likely than not that deferred tax assets will not be realized. The Company recognizes the benefit of an uncertain tax position that has been taken or it expects to take on income tax returns if such tax position is more likely than not to be sustained.

The Company follows the authoritative guidance regarding accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These unrecognized tax benefits relate primarily to issues common among multinational corporations in the Company’s industry. The Company applies a variety of methodologies in making these estimates which include studies performed by independent economists, advice from industry and subject experts, evaluation of public actions taken by the Internal Revenue Service and other taxing authorities, as well as the Company’s own industry experience. The Company provides estimates for unrecognized tax benefits which may be subject to material adjustments until matters are resolved with taxing authorities or statutes expire. If the Company’s estimates are not representative of actual outcomes, its results of operations could be materially impacted.

The Company continues to maintain a valuation allowance against certain deferred tax assets where realization is not certain. It periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of these deferred tax assets by a valuation allowance to the extent we believe a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including the Company’s recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, carryforward periods available to us for tax reporting purposes, various income tax strategies and other relevant factors. Significant judgment is required in making this assessment and, to the extent future expectations change, we would assess the recoverability of the Company’s deferred tax assets at that time. If we determine that the deferred tax assets are not realizable in a future period, we would record material adjustments to income tax expense in that period.

Recent Accounting Pronouncements

Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists - In July 2013, the FASB issued ASU 2013-11 to provide guidance on the presentation of unrecognized tax benefits. ASU 2013-11 requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. ASU 2013-11 is effective for interim and annual periods beginning after December 15, 2013 with earlier adoption permitted. ASU 2013-11 should be applied prospectively with retroactive application permitted. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2013-11 on its consolidated financial statements

Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income - In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-02, which requires disclosure of significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on the respective line items of net income. This guidance is effective for the Company beginning in the first quarter of 2013. The adoption of ASU 2013-02 only impacted disclosure requirements and did not have any effect on the Company’s operating results or its financial condition.