Exhibit 99.1
The following unaudited pro forma condensed consolidated statement of operations presented below illustrate the results of operations of the Company as if the acquisition of TV Guide Network on February 28, 2009 had occurred at April 1, 2008 as described and presented in Note 13 and also presents the pro forma adjustments and results of operations as if the sale of the Company’s interest in TV Guide Network as described above occurred at April 1, 2008:
Year ended March 31, 2009 | ||||||||||||
Pro Forma | ||||||||||||
Reflecting the | Pro Forma | |||||||||||
February 28, 2009 | Reflecting the | |||||||||||
Acquisition of | Pro Forma | May 28, 2009 | ||||||||||
TV Guide Network | Adjustments | Disposition of 49% | ||||||||||
(See Note 13) | for Disposition | of TV Guide Network | ||||||||||
(Amounts in thousands, except per share amounts) | ||||||||||||
Revenues | $ | 1,591,312 | $ | — | $ | 1,591,312 | ||||||
Expenses: | ||||||||||||
Direct operating | 829,165 | 829,165 | ||||||||||
Distribution and marketing | 684,250 | 684,250 | ||||||||||
General and administration | 183,045 | 183,045 | ||||||||||
Depreciation and amortization | 24,686 | 24,686 | ||||||||||
Total expenses | 1,721,146 | — | 1,721,146 | |||||||||
Operating loss | (129,834 | ) | — | (129,834 | ) | |||||||
Other expenses (income): | ||||||||||||
Interest expense | 35,648 | 4,395 | (a) | 40,043 | ||||||||
Interest and other income | (5,785 | ) | (5,785 | ) | ||||||||
Gain on sale of equity securities | — | — | ||||||||||
Gain on extinguishment of debt | (3,549 | ) | (3,549 | ) | ||||||||
Total other expenses, net | 26,314 | 4,395 | 30,709 | |||||||||
Loss before equity interests and income taxes | (156,148 | ) | (4,395 | ) | (160,543 | ) | ||||||
Equity interests loss | (9,044 | ) | — | (9,044 | ) | |||||||
Minority interests | — | 2,952 | (b) | 2,952 | ||||||||
Loss before income taxes | (165,192 | ) | (1,444 | ) | (166,636 | ) | ||||||
Income tax benefit | (3,136 | ) | (61 | ) (c) | (3,197 | ) | ||||||
Net loss | $ | (162,056 | ) | $ | (1,383 | ) | $ | (163,439 | ) | |||
Basic Net Income (Loss) Per Common Share | $ | (1.39 | ) | $ | — | $ | (1.40 | ) | ||||
Diluted Net Income (Loss) Per Common Share | $ | (1.39 | ) | $ | — | $ | (1.40 | ) | ||||
Weighted average number of common shares outstanding: | ||||||||||||
Basic | 116,795 | — | 116,795 | |||||||||
Diluted | 116,795 | — | 116,795 |
Pro forma adjustments to the condensed combined Statements of Operation for the year ended March 31, 2009
(a) | To reflect interest expense as a result of issuing $123 million of mandatorily redeemable preferred shares issued to OEP | $ | 12,300 | |||
To reduce pro forma interest expense resulting from the acquisition of TV Guide Network to reflect the receipt of $123 million | (7,905 | ) | ||||
$ | 4,395 | |||||
(b) | To reflect a 49% minority interest of TV Guide Network’s net loss for the year ended March 31, 2009. | $ | (6,024 | ) | ||
49 | % | |||||
$ | (2,952 | ) | ||||
(c) | To remove 49% (minority interest portion) of the pro forma tax benefit reflecting the acquisition of TV Guide Network | $ | (61 | ) |
The following unaudited pro forma condensed consolidated balance sheet presented below illustrates the combined balance sheet of the Company as if the sale of the Company’s interest in TV Guide Network as described above occurred at March 31, 2009:
Pro Forma | ||||||||||||
Pro Forma | Reflecting the | |||||||||||
Adjustments | May 28, 2009 | |||||||||||
March 31, | for Disposition | Disposition of 49% | ||||||||||
2009 | (Notes 1 & 2) | of TV Guide Network | ||||||||||
(Amounts in thousands, | ||||||||||||
except share amounts) | ||||||||||||
ASSETS | ||||||||||||
Cash and cash equivalents | $ | 138,475 | $ | 123,000 | (d) | $ | 261,475 | |||||
Restricted cash | 10,056 | 10,056 | ||||||||||
Restricted investments | 6,987 | 6,987 | ||||||||||
Accounts receivable, net of reserve for returns and allowances of $98,947 (March 31, 2008 — $95,515) and provision for doubtful accounts of $9,847 (March 31, 2008 — $5,978) | 227,010 | 227,010 | ||||||||||
Investment in films and television programs, net | 702,767 | 702,767 | ||||||||||
Property and equipment, net | 42,415 | 42,415 | ||||||||||
Finite-lived intangible assets, net | 78,904 | 78,904 | ||||||||||
Goodwill | 379,402 | 379,402 | ||||||||||
Other assets | 81,554 | 81,554 | ||||||||||
Total Assets | $ | 1,667,570 | $ | 123,000 | $ | 1,790,570 | ||||||
LIABILITIES | ||||||||||||
Bank loans | $ | 255,000 | $ | — | $ | 255,000 | ||||||
Accounts payable and accrued liabilities | 270,561 | 270,561 | ||||||||||
Participations and residuals | 371,857 | 371,857 | ||||||||||
Film and production obligations | 304,525 | 304,525 | ||||||||||
Subordinated notes and other financing obligations | 331,716 | 331,716 | ||||||||||
Deferred revenue | 142,093 | 142,093 | ||||||||||
Manditorily redeemable preferred stock | — | 123,000 | (e) | 123,000 | ||||||||
Total Liabilities | 1,675,752 | 123,000 | 1,798,752 | |||||||||
Commitments and contingencies | ||||||||||||
SHAREHOLDERS’ EQUITY (DEFICIENCY) | ||||||||||||
Common shares, no par value, 500,000,000 shares authorized, 116,950,512 and 121,081,311 shares issued at March 31, 2009 and March 31, 2008, respectively | 390,295 | 390,295 | ||||||||||
Series B preferred shares (nil and 10 shares issued and outstanding at March 31, 2009 and March 31, 2008, respectively) | — | — | ||||||||||
Accumulated deficit | (386,599 | ) | (386,599 | ) | ||||||||
Accumulated other comprehensive income (loss) | (11,878 | ) | (11,878 | ) | ||||||||
Total Shareholders’ Equity (Deficiency) | (8,182 | ) | — | (8,182 | ) | |||||||
$ | 1,667,570 | $ | 123,000 | $ | 1,790,570 | |||||||
Pro forma adjustments to the condensed combined Balance Sheet as of March 31, 2009: | ||||||
(d) | To reflect receipt of $123 million for manditorily redeemable preferred shares of TV Guide Network from OEP | $ | 123,000 | |||
(e) | To reflect issuance of $123 million of mandatorily redeemable preferred shares of TV Guide Network to OEP | $ | (123,000 | ) |