EXHIBIT 99.1
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, 2003 | December 31, 2002 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 105,465 | $ | 127,292 | ||||
Restricted cash and investments | 170,036 | |||||||
Accounts receivable, net | 57,735 | 64,889 | ||||||
Other current assets | 68,160 | 84,390 | ||||||
Assets held for sale | 10,119 | 314,205 | ||||||
Total current assets | 411,515 | 590,776 | ||||||
Property and equipment, net | 2,546,525 | 2,694,999 | ||||||
Goodwill and other intangible assets, net | 1,649,760 | 1,731,001 | ||||||
Deferred income taxes | 449,180 | 383,431 | ||||||
Other long-term assets | 275,508 | 261,996 | ||||||
Total | $ | 5,332,488 | $ | 5,662,203 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 107,557 | $ | 113,380 | ||||
Accrued interest | 59,734 | 63,611 | ||||||
Convertible notes, net - 2.25% | 44 | 210,899 | ||||||
Current portion of long-term obligations (excluding 2.25% convertible notes) | 77,578 | 58,959 | ||||||
Other current liabilities | 41,449 | 38,733 | ||||||
Liabilities held for sale | 8,416 | 200,696 | ||||||
Total current liabilities | 294,778 | 686,278 | ||||||
Long-term obligations | 3,283,603 | 3,178,656 | ||||||
Other long-term liabilities | 23,961 | 41,379 | ||||||
Total liabilities | 3,602,342 | 3,906,313 | ||||||
Minority interest in subsidiaries | 18,599 | 15,567 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Class A Common Stock | 2,119 | 1,856 | ||||||
Class B Common Stock | 70 | 79 | ||||||
Class C Common Stock | 12 | 23 | ||||||
Additional paid-in capital | 3,910,879 | 3,642,019 | ||||||
Accumulated deficit | (2,190,447 | ) | (1,887,030 | ) | ||||
Accumulated other comprehensive loss | (5,564 | ) | ||||||
Note receivable | (6,720 | ) | (6,720 | ) | ||||
Treasury stock | (4,366 | ) | (4,340 | ) | ||||
Total stockholders’ equity | 1,711,547 | 1,740,323 | ||||||
Total | $ | 5,332,488 | $ | 5,662,203 | ||||
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||
REVENUES: | ||||||||||||||||
Rental and management | $ | 163,126 | $ | 148,128 | $ | 619,697 | $ | 544,906 | ||||||||
Network development services | 28,395 | 29,297 | 95,447 | 130,176 | ||||||||||||
Total operating revenues | 191,521 | 177,425 | 715,144 | 675,082 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Rental and management | 57,065 | 56,168 | 222,724 | 226,786 | ||||||||||||
Network development services | 26,457 | 28,279 | 88,943 | 118,591 | ||||||||||||
Depreciation and amortization | 76,500 | 80,524 | 313,465 | 312,866 | ||||||||||||
Corporate general, administrative and development expense | 6,761 | 6,637 | 26,867 | 30,229 | ||||||||||||
Impairments, net loss on sale of long-lived assets and restructuring expense | 12,312 | 9,895 | 31,656 | 101,372 | ||||||||||||
Total operating expenses | 179,095 | 181,503 | 683,655 | 789,844 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS | 12,426 | (4,078 | ) | 31,489 | (114,762 | ) | ||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||
Interest income, TV Azteca, net | 3,669 | 3,524 | 14,222 | 13,938 | ||||||||||||
Interest income | 1,222 | 944 | 5,255 | 3,496 | ||||||||||||
Interest expense | (68,026 | ) | (62,421 | ) | (279,875 | ) | (254,446 | ) | ||||||||
Loss on investments and other expense | (2,769 | ) | (889 | ) | (29,819 | ) | (25,559 | ) | ||||||||
Loss on retirement of long-term obligations (A) | (5,129 | ) | (46,197 | ) | (8,869 | ) | ||||||||||
Minority interest in net earnings of subsidiaries | (1,433 | ) | (745 | ) | (3,703 | ) | (2,118 | ) | ||||||||
Total other expense | (72,466 | ) | (59,587 | ) | (340,117 | ) | (273,558 | ) | ||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (60,040 | ) | (63,665 | ) | (308,628 | ) | (388,320 | ) | ||||||||
INCOME TAX BENEFIT | 15,684 | 14,892 | 66,137 | 67,783 | ||||||||||||
LOSS FROM CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | (44,356 | ) | (48,773 | ) | (242,491 | ) | (320,537 | ) | ||||||||
LOSS FROM DISCONTINUED OPERATIONS, NET (B) | (6,861 | ) | (3,671 | ) | (60,926 | ) | (258,724 | ) | ||||||||
LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE | (51,217 | ) | (52,444 | ) | (303,417 | ) | (579,261 | ) | ||||||||
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF INCOME TAX BENEFIT OF $14,438 (C) | (562,618 | ) | ||||||||||||||
NET LOSS | $ | (51,217 | ) | $ | (52,444 | ) | $ | (303,417 | ) | $ | (1,141,879 | ) | ||||
BASIC AND DILUTED NET LOSS PER COMMON SHARE AMOUNTS | ||||||||||||||||
Loss from continuing operations before cumulative effect of change in accounting principle | $ | (0.20 | ) | $ | (0.25 | ) | $ | (1.17 | ) | $ | (1.64 | ) | ||||
Discontinued operations | (0.03 | ) | (0.02 | ) | $ | (0.29 | ) | (1.32 | ) | |||||||
Cumulative effect of change in accounting principle | (2.88 | ) | ||||||||||||||
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $ | (0.23 | ) | $ | (0.27 | ) | $ | (1.46 | ) | $ | (5.84 | ) | ||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 219,662 | 195,601 | 208,098 | 195,454 | ||||||||||||
NOTES TO CONSOLIDATED STATEMENTS OF OPERATIONS
| (A) | Loss on retirement of long-term obligations is the result of the Company’s repurchase and/or conversion of its long-term obligations. |
| (B) | The above statements of operations have been adjusted to reflect the results of operations of Galaxy Engineering Services, Kline Iron and Steel Co., Inc., Verestar, Inc., Microwave Tower Services, Flash Technologies, Inc. and two office buildings as discontinued operations. |
| (C) | Effective January 1, 2002, the Company adopted SFAS No. 142 “Goodwill and Intangible Assets” and recognized a $562.6 million charge as the cumulative effect of a change in accounting principle related to the write-down of goodwill to its fair value. |
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UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Twelve Months Ended December 31, | ||||||||
| 2003 | 2002 | |||||||
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (303,417 | ) | $ | (1,141,879 | ) | ||
Cumulative effect of change in accounting principle, net | 562,618 | |||||||
Other non-cash items reflected in statements of operations | 473,133 | 660,375 | ||||||
Decrease in assets | 6,383 | 52,610 | ||||||
Decrease in liabilities | (19,713 | ) | (28,575 | ) | ||||
Cash provided by operating activities | 156,386 | 105,149 | ||||||
CASH FLOWS USED FOR INVESTING ACTIVITIES: | ||||||||
Payments for purchase of property and equipment and construction activities | (61,608 | ) | (180,497 | ) | ||||
Payments for acquisitions | (95,077 | ) | (56,361 | ) | ||||
Proceeds from sale of businesses and other long-term assets | 110,753 | 109,353 | ||||||
Deposits, investments and other long-term assets | (10,078 | ) | 12,248 | |||||
Cash used for investing activities | (56,010 | ) | (115,257 | ) | ||||
CASH FLOWS (USED FOR) PROVIDED BY FINANCING ACTIVITIES: | ||||||||
Borrowings under credit facilities | 160,000 | |||||||
Proceeds from issuance of debt securities & notes payable | 1,032,384 | |||||||
Net proceeds from equity offering and stock options | 126,847 | 1,305 | ||||||
Repayment of long-term obligations | (1,071,956 | ) | (148,270 | ) | ||||
Restricted cash and investments | (170,036 | ) | 94,071 | |||||
Deferred financing costs and other | (39,442 | ) | (5,664 | ) | ||||
Cash (used for) provided by financing activities | (122,203 | ) | 101,442 | |||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (21,827 | ) | 91,334 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 127,292 | 35,958 | ||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 105,465 | $ | 127,292 | ||||
CASH PAID FOR INCOME TAXES | $ | 2,609 | $ | 1,640 | ||||
CASH PAID FOR INTEREST | $ | 218,900 | $ | 251,705 | ||||
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