EXHIBIT 2.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial
statements are based on the historical financial statements of CCIC and the
historical financial statements of the entities acquired by CCIC during the
period presented, adjusted to give effect to the following transactions:
(1) the recent debt and equity offerings and the issuance of the
convertible preferred stock and warrants in the GE Capital
transaction;
(2) the Bell Atlantic joint venture;
(3) the BellSouth transaction; and
(4) the Powertel acquisition.
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1999 gives effect to these transactions as if they
had occurred as of January 1, 1999. The Unaudited Pro Forma Condensed
Consolidated Balance Sheet gives effect to the transaction described in clause
(3) above as if it had been completed as of December 31, 1999. The pro forma
adjustments are described in the accompanying notes and are based upon
available information and certain assumptions that management believes are
reasonable.
Included in the notes accompanying the pro forma financial statements are
tables summarizing the unaudited pro forma results of operations and balance
sheet for CCIC and its subsidiaries that are restricted by covenants in our
high yield debt instruments. These subsidiaries exclude our U.K. subsidiaries
and the Bell Atlantic joint venture, both of which are designated as
unrestricted subsidiaries under our high yield debt instruments.
The pro forma financial statements do not purport to represent what CCIC's
results of operations or financial condition would actually have been had these
transactions in fact occurred on such dates or to project CCIC's results of
operations or financial condition for any future date or period. The pro forma
financial statements should be read in conjunction with the consolidated
financial statements and related notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in CCIC's
most recent annual report on Form 10-K.
The Bell Atlantic joint venture and the Powertel acquisition are accounted
for under the purchase method of accounting. The total purchase price for the
Bell Atlantic joint venture and the Powertel acquisition has been allocated to
the identifiable tangible and intangible assets and liabilities of the
applicable acquired business based upon CCIC's preliminary estimate of their
fair values with the remainder allocated to goodwill and other intangible
assets. The allocations of the purchase prices may be revised when additional
information concerning asset and liability valuations is obtained; however, we
do not expect that any such revisions will have a material effect on our
consolidated financial position or results of operations.
1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 1999
(Dollars in thousands, except per share amounts)
Historical Pro Forma Adjustments
Bell for for
Adjustments Pro Forma Atlantic Adjustments Offerings Proposed
Historical for for Joint for Joint and Joint BellSouth Historical
CCIC Offerings Offerings Venture(c) Venture Venture Transaction Powertel(l)
---------- ----------- --------- ---------- ----------- --------- ----------- -----------
Net revenues:
Site rental and
broadcast
transmission...... $ 267,894 $ -- $ 267,894 $ 3,705 $ 8,092(d) $ 279,691 $21,394(i) $ 1,864
Network services
and other......... 77,865 -- 77,865 -- -- 77,865 -- --
--------- -------- --------- ------- ------- --------- ------- -------
Total net
revenues........ 345,759 -- 345,759 3,705 8,092 357,556 21,394 1,864
--------- -------- --------- ------- ------- --------- ------- -------
Operating expenses:
Costs of
operations:
Site rental and
broadcast
transmission.... 114,436 -- 114,436 5,359 --(e) 119,795 7,207(e)(j) 2,589
Network services
and other....... 42,312 -- 42,312 -- -- 42,312 -- --
General and
administrative.... 43,823 -- 43,823 -- --(e) 43,823 --(e) --
Corporate
development....... 5,403 -- 5,403 -- -- 5,403 -- --
Restructuring
charges........... 5,645 -- 5,645 -- -- 5,645 -- --
Non-cash
compensation
charges........... 2,173 -- 2,173 -- -- 2,173 -- --
Depreciation and
amortization...... 130,106 -- 130,106 1,899 6,222(f) 138,227 19,282(k) 3,633
--------- -------- --------- ------- ------- --------- ------- -------
343,898 -- 343,898 7,258 6,222 357,378 26,489 6,222
--------- -------- --------- ------- ------- --------- ------- -------
Operating income
(loss)............. 1,861 -- 1,861 (3,553) 1,870 178 (5,095) (4,358)
Other income
(expense):
Interest and
other income
(expense)......... 17,731 -- 17,731 -- -- 17,731 -- --
Interest expense
and amortization
of deferred
financing costs... (110,908) (36,947)(a) (147,855) -- (4,428)(g) (152,283) -- --
--------- -------- --------- ------- ------- --------- ------- -------
Income (loss)
before income
taxes, minority
interests and
cumulative effect
of change in
accounting
principle.......... (91,316) (36,947) (128,263) (3,553) (2,558) (134,374) (5,095) (4,358)
Provision for
income taxes....... (275) -- (275) -- -- (275) -- --
Minority
interests.......... (2,756) -- (2,756) -- 1,224(h) (1,532) -- --
--------- -------- --------- ------- ------- --------- ------- -------
Income (loss)
before cumulative
effect of change in
accounting
principle.......... (94,347) (36,947) (131,294) (3,553) (1,334) (136,181) (5,095) (4,358)
Cumulative effect
of change in
accounting
principle for costs
of start-up
activities......... (2,414) -- (2,414) -- -- (2,414) -- --
--------- -------- --------- ------- ------- --------- ------- -------
Net income (loss).. (96,761) (36,947) (133,708) (3,553) (1,334) (138,595) (5,095) (4,358)
Dividends on
preferred stock.... (28,881) (14,916)(b) (43,797) -- -- (43,797) -- --
--------- -------- --------- ------- ------- --------- ------- -------
Net income (loss)
after deduction of
dividends on
preferred stock.... $(125,642) $(51,863) $(177,505) $(3,553) $(1,334) $(182,392) $(5,095) $(4,358)
========= ======== ========= ======= ======= ========= ======= =======
Per common share--
basic and diluted:
Loss before
cumulative effect
of change in
accounting
principle......... $ (0.94) $ (1.23) $ (1.19)
Cumulative effect
of change in
accounting
principle......... (0.02) (0.02) (0.01)
--------- --------- ---------
Net loss.......... $ (0.96) $ (1.25) $ (1.20)
========= ========= =========
Common shares
outstanding--basic
and diluted (in
thousands)......... 131,466 142,201 151,496
========= ========= =========
Adjustments
for Pro Forma
Powertel for the
Acquisition Transactions
------------ ------------
Net revenues:
Site rental and
broadcast
transmission...... $6,185(m) $ 309,134
Network services
and other......... -- 77,865
------------ ------------
Total net
revenues........ 6,185 386,999
------------ ------------
Operating expenses:
Costs of
operations:
Site rental and
broadcast
transmission.... --(e) 129,591
Network services
and other....... -- 42,312
General and
administrative.... --(e) 43,823
Corporate
development....... -- 5,403
Restructuring
charges........... -- 5,645
Non-cash
compensation
charges........... -- 2,173
Depreciation and
amortization...... 2,383(n) 163,525
------------ ------------
2,383 392,472
------------ ------------
Operating income
(loss)............. 3,802 (5,473)
Other income
(expense):
Interest and
other income
(expense)......... -- 17,731
Interest expense
and amortization
of deferred
financing costs... -- (152,283)
------------ ------------
Income (loss)
before income
taxes, minority
interests and
cumulative effect
of change in
accounting
principle.......... 3,802 (140,025)
Provision for
income taxes....... -- (275)
Minority
interests.......... -- (1,532)
------------ ------------
Income (loss)
before cumulative
effect of change in
accounting
principle.......... 3,802 (141,832)
Cumulative effect
of change in
accounting
principle for costs
of start-up
activities......... -- (2,414)
------------ ------------
Net income (loss).. 3,802 (144,246)
Dividends on
preferred stock.... -- (43,797)
------------ ------------
Net income (loss)
after deduction of
dividends on
preferred stock.... $3,802 $(188,043)
============ ============
Per common share--
basic and diluted:
Loss before
cumulative effect
of change in
accounting
principle......... $ (1.17)
Cumulative effect
of change in
accounting
principle......... (0.02)
------------
Net loss.......... $ (1.19)
============
Common shares
outstanding--basic
and diluted (in
thousands)......... 158,016
============
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of
Operations
2
Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations
(Dollars in thousands)
(a) Reflects:
(1) increase in interest expense as a result of the issuance of the notes
in the recent debt offerings of $36,132 for the year ended December 31,
1999; and
(2) amortization of deferred financing costs related to the notes issued in
the recent debt offerings of $815 for the year ended December 31, 1999.
(b) Reflects the increase in dividends attributable to the issuance of the
convertible preferred stock.
(c) Reflects the historical results of operations of the tower operations
contributed to the Bell Atlantic joint venture.
(d) Reflects additional revenues to be recognized by the Bell Atlantic joint
venture under the global lease and the formation agreement.
(e) We expect that the Bell Atlantic joint venture will incur incremental
operating expenses as a stand-alone entity. Such incremental expenses are
currently estimated to amount to approximately $5,137 per year. In
addition, we expect that we will incur incremental operating expenses as a
result of the BellSouth transaction and the Powertel acquisition. Such
incremental expenses are currently estimated to amount to approximately
$15,917 per year. These incremental operating expenses are based on
management's best estimates rather than any contractual obligations; as
such, these amounts have not been presented as adjustments in the
accompanying pro forma financial statement.
(f) Reflects the incremental depreciation of property and equipment as a result
of the Bell Atlantic joint venture. Property and equipment is being
depreciated over twenty years.
(g) Reflects additional interest expense attributable to borrowings under the
credit facility entered into by the Bell Atlantic joint venture. Such
borrowings were initially estimated to incur interest at a rate of 9.25%
per annum.
(h) Reflects the minority partner's 38.5% interest in the joint venture's
operations.
(i) Reflects additional revenues to be recognized by CCIC in connection with
the BellSouth transaction for the sublease of tower space by BellSouth.
This amount includes: $16,842 in revenues to be received from BellSouth and
$4,552 in revenues to be received from other tenants for the year ended
December 31, 1999.
(j) Reflects additional costs to be incurred for ground rents in connection
with the BellSouth agreement.
(k) Reflects the incremental depreciation of property and equipment as a result
of the BellSouth transaction. Property and equipment is being depreciated
over twenty years.
(l) Reflects the historical results of operations of the tower operations
acquired in the Powertel acquisition.
(m) Reflects additional revenues to be recognized by CCIC in connection with
the Powertel acquisition under the master site agreements.
(n) Reflects the incremental depreciation of property and equipment as a result
of the Powertel acquisition. Property and equipment is being depreciated
over twenty years.
3
The following table summarizes the unaudited pro forma results of operations
for the restricted group under our high yield debt instruments. Such
information is not intended as an alternative measure of the operating results
as would be determined in accordance with generally accepted accounting
principles.
Year Ended December 31, 1999
-----------------------------------------------------------------------------------
Restricted Adjustments Restricted
Group for Adjustments Group Pro
Pro Forma Exclusion of Pro Forma Proposed for Forma for
for Unrestricted for BellSouth Historical Powertel the
Offerings Subsidiaries Offerings Transaction Powertel Acquisition Transactions
--------- ------------ ---------- ----------- ---------- ----------- ------------
Net revenues:
Site rental and
broadcast
transmission.......... $ 267,894 $(209,601) $ 58,293 $21,394 $ 1,864 $6,185 $ 87,736
Network services and
other................. 77,865 (31,981) 45,884 -- -- -- 45,884
--------- --------- --------- ------- ------- ------ ---------
Total net revenues... 345,759 (241,582) 104,177 21.394 1,864 6,185 133,620
--------- --------- --------- ------- ------- ------ ---------
Operating expenses:
Costs of operations:
Site rental and
broadcast
transmission........ 114,436 (93,736) 20,700 7,207 2,589 -- 30,496
Network services and
other............... 42,312 (20,275) 22,037 -- -- -- 22,037
General and
administrative........ 43,823 (10,771) 33,052 -- -- -- 33,052
Corporate
development........... 5,403 (819) 4,584 -- -- -- 4,584
Restructuring
charges............... 5,645 -- 5,645 -- -- -- 5,645
Non-cash compensation
charges............... 2,173 (769) 1,404 -- -- -- 1,404
Depreciation and
amortization.......... 130,106 (87,752) 42,354 19,282 3,633 2,383 67,652
--------- --------- --------- ------- ------- ------ ---------
343,898 (214,122) 129,776 26,489 6,222 2,383 164,870
--------- --------- --------- ------- ------- ------ ---------
Operating income
(loss)................ 1,861 (27,460) (25,599) (5,095) (4,358) 3,802 (31,250)
Other income (expense):
Interest and other
income (expense)...... 17,731 (7,797) 9,934 -- -- -- 9,934
Interest expense and
amortization of
deferred financing
costs................. (147,855) 40,567 (107,288) -- -- -- (107,288)
--------- --------- --------- ------- ------- ------ ---------
Income (loss) before
income taxes,
minority interests
and cumulative effect
of change in
accounting
principle............. (128,263) 5,310 (122,953) (5,095) (4,358) 3,802 (128,604)
Provision for income
taxes................. (275) -- (275) -- -- -- (275)
Minority interests..... (2,756) 2,756 -- -- -- -- --
--------- --------- --------- ------- ------- ------ ---------
Income (loss) before
cumulative effect of
change in accounting
principle............. (131,294) 8,066 (123,228) (5,095) (4,358) 3,802 (128,879)
Cumulative effect of
change in accounting
principle for costs
of start-up
activities............ (2,414) -- (2,414) -- -- -- (2,414)
--------- --------- --------- ------- ------- ------ ---------
Net income (loss)...... (133,708) 8,066 (125,642) (5,095) (4,358) 3,802 (131,293)
Dividends on preferred
stock................. (43,797) -- (43,797) -- -- -- (43,797)
--------- --------- --------- ------- ------- ------ ---------
Net income (loss)
after deduction of
dividends on
preferred stock....... $(177,505) $ 8,066 $(169,439) $(5,095) $(4,358) $3,802 $(175,090)
========= ========= ========= ======= ======= ====== =========
4
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of December 31, 1999
(Dollars in thousands)
Adjustments
for
Proposed Pro Forma
Historical BellSouth for the
CCIC Transaction Transaction
---------- ----------- -----------
Assets:
Current assets:
Cash and cash equivalents............. $ 549,328 $(62,660)(a) $ 486,668
Receivables........................... 78,617 -- 78,617
Inventories........................... 19,178 -- 19,178
Prepaid expenses and other current
assets............................... 14,922 -- 14,922
---------- -------- ----------
Total current assets................ 662,045 (62,660) 599,385
Property and equipment, net............. 2,468,101 89,514(b) 2,557,615
Escrow deposit for acquisition.......... 50,000 -- 50,000
Goodwill and other intangible assets,
net.................................... 596,147 -- 596,147
Deferred financing costs and other
assets, net............................ 60,357 -- 60,357
---------- -------- ----------
$3,836,650 $ 26,854 $3,863,504
========== ======== ==========
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable...................... $ 45,998 $ -- $ 45,998
Other current liabilities............. 85,283 -- 85,283
Long-term debt, current maturities.... -- -- --
---------- -------- ----------
Total current liabilities........... 131,281 -- 131,281
Long-term debt, less current
maturities............................. 1,542,343 -- 1,542,343
Other liabilities....................... 67,064 -- 67,064
---------- -------- ----------
Total liabilities................... 1,740,688 -- 1,740,688
---------- -------- ----------
Minority interests...................... 55,292 -- 55,292
Redeemable preferred stock.............. 422,923 -- 422,923
Stockholders' equity.................... 1,617,747 26,854(c) 1,644,601
---------- -------- ----------
$3,836,650 $ 26,854 $3,863,504
========== ======== ==========
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
5
Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
(Dollars in thousands)
(a) Reflects the payment of the remaining cash portion of the purchase price
for the BellSouth transaction.
(b) Reflects the basis of property and equipment recorded in connection with
the BellSouth transaction.
(c) Reflects the increase resulting from the issuance of common stock for a
portion of the remaining purchase price for the BellSouth transaction.
6
The following table summarizes the adjustments for the BellSouth
transaction, with the increase to the stockholders' equity balance shown as a
negative amount:
Adjustment Reference
--------------------
(a),(b),(c)
--------------------
Cash and cash equivalents............................... $(62,660)
Property and equipment, net............................. 89,514
Stockholders' equity.................................... (26,854)
--------
$ --
========
The following table summarizes the unaudited pro forma balance sheet for the
restricted group under our high yield debt instruments. Such information is not
intended as an alternative measure of financial position as determined in
accordance with generally accepted accounting principles.
As of December 31, 1999
-----------------------------------------------------------
Adjustments Restricted
for Group
Exclusion of Historical Proposed Pro Forma
Historical Unrestricted Restricted BellSouth for the
CCIC Subsidiaries Group Transaction Transaction
---------- ------------ ---------- ----------- -----------
Assets:
Current assets:
Cash and cash
equivalents.......... $ 549,328 $ (54,604) $ 494,724 $(62,660) $ 432,064
Receivables........... 78,617 (30,472) 48,145 -- 48,145
Inventories........... 19,178 (12,279) 6,899 -- 6,899
Prepaid expenses and
other current
assets............... 14,922 (10,860) 4,062 -- 4,062
---------- ----------- ---------- -------- ----------
Total current
assets............. 662,045 (108,215) 553,830 (62,660) 491,170
Property and equipment,
net.................... 2,468,101 (1,117,491) 1,350,610 89,514 1,440,124
Escrow deposit for
acquisition............ 50,000 -- 50,000 -- 50,000
Investments in
Unrestricted
Subsidiaries........... -- 991,261 991,261 -- 991,261
Goodwill and other
intangible assets,
net.................... 596,147 (463,594) 132,553 -- 132,553
Deferred financing costs
and other assets, net.. 60,357 (11,779) 48,578 -- 48,578
---------- ----------- ---------- -------- ----------
$3,836,650 $ (709,818) $3,126,832 $ 26,854 $3,153,686
========== =========== ========== ======== ==========
Liabilities and
Stockholders' Equity:
Current liabilities:
Accounts payable...... $ 45,998 $ (22,517) $ 23,481 $ -- $ 23,481
Other current
liabilities.......... 85,283 (58,859) 26,424 -- 26,424
Long-term debt,
current maturities... -- -- -- -- --
---------- ----------- ---------- -------- ----------
Total current
liabilities........ 131,281 (81,376) 49,905 -- 49,905
Long-term debt, less
current maturities..... 1,542,343 (509,155) 1,033,188 -- 1,033,188
Other liabilities....... 67,064 (63,995) 3,069 -- 3,069
---------- ----------- ---------- -------- ----------
Total liabilities... 1,740,688 (654,526) 1,086,162 -- 1,086,162
---------- ----------- ---------- -------- ----------
Minority interests...... 55,292 (55,292) -- -- --
Redeemable preferred
stock.................. 422,923 -- 422,923 -- 422,923
Stockholders' equity.... 1,617,747 -- 1,617,747 26,854 1,644,601
---------- ----------- ---------- -------- ----------
$3,836,650 $ (709,818) $3,126,832 $ 26,854 $3,153,686
========== =========== ========== ======== ==========
7