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
periods presented, adjusted to give effect to the following transactions:
(1) the 1999 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;
(4) the Powertel acquisition; and
(5) the recent borrowings under the term loans.
The Unaudited Pro Forma Condensed Consolidated Statements of Operations for
the year ended December 31, 1999 and the three months ended March 31, 2000 give
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 (5) above as if it had been completed as of
March 31, 2000. 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 and quarterly report on Form 10-Q.
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 estimate of their fair values
with the remainder allocated to goodwill and other intangible assets.
In April 2000, CCIC (1) paid $538.8 million in cash (of which $395.9 million
resulted from borrowings under the term loans) in connection with closings for
the GTE Wireless, Optus, BellSouth and BellSouth DCS transactions and (2) used
$50.0 million in funds from an escrow account in connection with a closing for
the GTE Wireless transaction. The effect of these payments has not been
reflected in the Unaudited Pro Forma Condensed Consolidated Balance Sheet.
1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 1999
(Dollars in thousands, except per share amounts)
Adjustments Pro Forma
for 1999 for 1999
Adjustments Acquisitions Adjustments Transactions
Historical for 1999 Historical 1999 and Bell South for 2000 and 2000
CCIC Offerings Acquisitions(c) Transaction Term Loans Term Loans
---------- ----------- --------------- -------------- ----------- ------------
Net revenues:
Site rental and
broadcast
transmission......... $ 267,894 $ -- $ 5,569 $ 35,671 (d) $ -- $ 309,134
Network services and
other................ 77,865 -- -- -- -- 77,865
--------- -------- ------- -------- -------- ---------
Total net revenues... 345,759 -- 5,569 35,671 -- 386,999
Operating expenses:
Costs of operations:
Site rental and
broadcast
transmission........ 114,436 -- 7,948 7,207 (e) -- 129,591
Network services and
other............... 42,312 -- -- -- -- 42,312
General and
administrative....... 43,823 -- -- 10,878 (f) -- 54,701
Corporate
development.......... 5,403 -- -- -- -- 5,403
Restructuring
charges.............. 5,645 -- -- -- -- 5,645
Non-cash compensation
charges.............. 2,173 -- -- -- -- 2,173
Depreciation and
amortization......... 130,106 -- 5,532 27,887 (g) -- 163,525
--------- -------- ------- -------- -------- ---------
343,898 -- 13,480 45,972 -- 403,350
--------- -------- ------- -------- -------- ---------
Operating income
(loss)................. 1,861 -- (7,911) (10,301) -- (16,351)
Other income (expense):
Interest and other
income (expense)..... 17,731 -- -- -- -- 17,731
Interest expense and
amortization of
deferred financing
costs................ (110,908) (36,947)(a) -- (4,428)(h) (47,250)(j) (199,533)
--------- -------- ------- -------- -------- ---------
Income (loss) before
income taxes, minority
interests and
cumulative effect of
change in accounting
principle.............. (91,316) (36,947) (7,911) (14,729) (47,250) (198,153)
Provision for income
taxes.................. (275) -- -- -- -- (275)
Minority interests...... (2,756) -- -- 1,224 (i) -- (1,532)
--------- -------- ------- -------- -------- ---------
Income (loss) before
cumulative effect of
change in accounting
principle.............. (94,347) (36,947) (7,911) (13,505) (47,250) (199,960)
Cumulative effect of
change in accounting
principle for costs of
start-up activities.... (2,414) -- -- -- -- (2,414)
--------- -------- ------- -------- -------- ---------
Net income (loss)....... (96,761) (36,947) (7,911) (13,505) (47,250) (202,374)
Dividends on preferred
stock.................. (28,881) (14,916)(b) -- -- -- (43,797)
--------- -------- ------- -------- -------- ---------
Net income (loss) after
deduction of dividends
on preferred stock..... $(125,642) $(51,863) $(7,911) $(13,505) $(47,250) $(246,171)
========= ======== ======= ======== ======== =========
Per common share--basic
and diluted:
Loss before cumulative
effect of change in
accounting principle... $ (0.94) $ (1.54)
Cumulative effect of
change in accounting
principle.............. (0.02) (0.02)
--------- ---------
Net loss................ $ (0.96) $ (1.56)
========= =========
Common shares
outstanding--basic and
diluted (in
thousands)............. 131,466 158,016
========= =========
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Operations
2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended March 31, 2000
(Dollars in thousands, except per share amounts)
Pro
Forma
Adjustments for 2000
Historical for 2000 Term
CCIC Term Loans Loans
---------- ----------- --------
Net revenues:
Site rental and broadcast transmission.. $ 93,741 $ -- $ 93,741
Network services and other.............. 30,503 -- 30,503
-------- -------- --------
Total net revenues.................... 124,244 -- 124,244
-------- -------- --------
Operating expenses:
Costs of operations:
Site rental and broadcast
transmission......................... 40,287 -- 40,287
Network services and other............ 15,901 -- 15,901
General and administrative.............. 14,853 -- 14,853
Corporate development................... 2,071 -- 2,071
Non-cash compensation charges........... 461 -- 461
Depreciation and amortization........... 45,122 -- 45,122
-------- -------- --------
118,695 -- 118,695
-------- -------- --------
Operating income (loss)................... 5,549 -- 5,549
Other income (expense):
Interest and other income (expense)..... 5,704 -- 5,704
Interest expense and amortization of
deferred financing costs............... (41,761) (12,907)(j) (54,668)
-------- -------- --------
Income (loss) before income taxes,
minority interests and extraordinary
item..................................... (30,508) (12,907) (43,415)
Provision for income taxes................ (11) -- (11)
Minority interests........................ (1,541) -- (1,541)
-------- -------- --------
Income (loss) before extraordinary item... (32,060) (12,907) (44,967)
Extraordinary item--loss on early
extinguishment of debt................... (1,495) -- (1,495)
-------- -------- --------
Net income (loss)......................... (33,555) (12,907) (46,462)
Dividends on preferred stock.............. (11,493) -- (11,493)
-------- -------- --------
Net income (loss) after deduction of
dividends on preferred stock............. $(45,048) $(12,907) $(57,955)
-------- -------- --------
Per common share--basic and diluted:
Loss before extraordinary item............ $ (0.27) $ (0.36)
Extraordinary item........................ (0.01) (0.01)
-------- --------
Net loss.................................. $(0.28) $ (0.37)
======== ========
Common shares outstanding--basic and
diluted (in thousands)................... 158,566 158,566
======== ========
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Operations
3
Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations
(Dollars in thousands)
(a) Reflects:
(1) increase in interest expense as a result of the issuance of the notes
in the 1999 debt offerings of $36,132; and
(2) amortization of deferred financing costs related to the notes issued in
the 1999 debt offerings of $815.
(b) Reflects the increase in dividends attributable to the issuance of the
convertible preferred stock.
(c) Reflects:
(1) the historical results of operations of the tower operations
contributed to the Bell Atlantic joint venture, comprising net
revenues, costs of operations and depreciation and amortization of
$3,705, $5,359 and $1,899, respectively; and
(2) the historical results of operations of the tower operations acquired
in the Powertel acquisition, comprising net revenues, costs of
operations and depreciation and amortization of $1,864, $2,589 and
$3,633, respectively.
(d) Reflects:
(1) additional revenues to be recognized by the Bell Atlantic joint venture
under the global lease and the formation agreement of $8,092;
(2) additional revenues to be recognized by CCIC in connection with the
BellSouth transaction for the sublease of tower space by BellSouth,
including $16,842 in revenues to be received from BellSouth and $4,552
in revenues to be received from other tenants; and
(3) additional revenues to be recognized by CCIC in connection with the
Powertel acquisition under the master site agreements of $6,185.
(e) Reflects additional costs to be incurred for ground rents in connection
with the BellSouth agreement.
(f) We expect that the Bell Atlantic joint venture will incur incremental
operating expenses as a stand-alone entity. Such incremental expenses are
estimated to amount to approximately $1,313 for the year ended December 31,
1999. 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 estimated to amount to
approximately $9,565 for the year ended December 31, 1999. These
incremental operating expenses are based on management's best estimates
rather than any contractual obligations.
(g) Reflects the incremental depreciation of property and equipment as a result
of:
(1) the Bell Atlantic joint venture for $6,222;
(2) the BellSouth transaction for $19,282; and
(3) the Powertel acquisition for $2,383.
Property and equipment is being depreciated over twenty years.
(h) 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.
(i) Reflects the minority partner's 38.5% interest in the Bell Atlantic joint
venture's operations.
(j) Reflects:
(1) increase in interest expense as a result of borrowings under the term
loans of $46,875 for the year ended December 31, 1999 and $12,813 for
the three months ended March 31, 2000; and
(2) amortization of deferred financing costs related to the term loans of
$375 for the year ended December 31, 1999 and $94 for the three months
ended March 31, 2000.
Borrowings under the term loans were initially incurring interest at a rate
of 10.06% per annum, with such interest rate increasing on a periodic
basis.
4
The following tables summarize 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 Group
Pro Forma Pro Forma
for 1999 Exclusion of for 1999
Transactions and Unrestricted Transactions and
2000 Term Loans Subsidiaries 2000 Term Loans
---------------- ------------ ----------------
Net revenues:
Site rental and broadcast
transmission................. $ 309,134 $(221,398) $ 87,736
Network services and other.... 77,865 (31,981) 45,884
--------- --------- ---------
Total net revenues.......... 386,999 (253,379) 133,620
--------- --------- ---------
Operating expenses:
Costs of operations:
Site rental and broadcast
transmission............... 129,591 (99,095) 30,496
Network services and other.. 42,312 (20,275) 22,037
General and administrative.... 54,701 (12,084) 42,617
Corporate development......... 5,403 (819) 4,584
Restructuring charges......... 5,645 -- 5,645
Non-cash compensation
charges...................... 2,173 (769) 1,404
Depreciation and
amortization................. 163,525 (95,873) 67,652
--------- --------- ---------
403,350 (228,915) 174,435
--------- --------- ---------
Operating income (loss)......... (16,351) (24,464) (40,815)
Other income (expense):
Interest and other income
(expense).................... 17,731 (7,797) 9,934
Interest expense and
amortization of deferred
financing costs.............. (199,533) 44,995 (154,538)
--------- --------- ---------
Income (loss) before income
taxes, minority interests and
cumulative effect of change in
accounting principle........... (198,153) 12,734 (185,419)
Provision for income taxes...... (275) -- (275)
Minority interests.............. (1,532) 1,532 --
--------- --------- ---------
Income (loss) before cumulative
effect of change in accounting
principle...................... (199,960) 14,266 (185,694)
Cumulative effect of change in
accounting principle for costs
of start-up activities......... (2,414) -- (2,414)
--------- --------- ---------
Net income (loss)............... (202,374) 14,266 (188,108)
Dividends on preferred stock.... (43,797) -- (43,797)
--------- --------- ---------
Net income (loss) after
deduction of dividends on
preferred stock................ $(246,171) $ 14,266 $(231,905)
========= ========= =========
5
Three Months Ended March 31, 2000
----------------------------------------
Restricted Group
Pro Forma Exclusion of Pro Forma
for 2000 Unrestricted for 2000
Term Loans Subsidiaries Term Loans
---------- ------------ ----------------
Net revenues:
Site rental and broadcast
transmission...................... $ 93,741 $(62,371) $ 31,370
Network services and other......... 30,503 (12,414) 18,089
-------- -------- --------
Total net revenues............... 124,244 (74,785) 49,459
-------- -------- --------
Operating expenses:
Costs of operations:
Site rental and broadcast
transmission.................... 40,287 (28,622) 11,665
Network services and other....... 15,901 (8,134) 7,767
General and administrative......... 14,853 (2,823) 12,030
Corporate development.............. 2,071 (285) 1,786
Non-cash compensation charges...... 461 (54) 407
Depreciation and amortization...... 45,122 (23,672) 21,450
-------- -------- --------
118,695 (63,590) 55,105
-------- -------- --------
Operating income (loss).............. 5,549 (11,195) (5,646)
Other income (expense):
Interest and other income
(expense)......................... 5,704 (656) 5,048
Interest expense and amortization
of deferred financing costs....... (54,668) 12,661 (42,007)
-------- -------- --------
Income (loss) before income taxes,
minority interests and extraordinary
item................................ (43,415) 810 (42,605)
Provision for income taxes........... (11) -- (11)
Minority interests................... (1,541) 1,441 (100)
-------- -------- --------
Income (loss) before extraordinary
item................................ (44,967) 2,251 (42,716)
Extraordinary item--loss on early
extinguishment of debt.............. (1,495) -- (1,495)
-------- -------- --------
Net income (loss).................... (46,462) 2,251 (44,211)
Dividends on preferred stock......... (11,493) -- (11,493)
-------- -------- --------
Net income (loss) after deduction of
dividends on preferred stock........ $(57,955) $ 2,251 $(55,704)
======== ======== ========
6
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 2000
(Dollars in thousands)
Adjustments Pro Forma
Historical for 2000 for 2000
CCIC Term Loans Term Loans
---------- ----------- ----------
Assets:
Current assets:
Cash and cash equivalents............... $ 509,505 $395,875(a) $ 905,380
Receivables............................. 88,041 -- 88,041
Inventories............................. 24,948 -- 24,948
Prepaid expenses and other current
assets................................. 12,897 -- 12,897
---------- -------- ----------
Total current assets.................. 635,391 395,875 1,031,266
Property and equipment, net............... 2,851,855 -- 2,851,855
Escrow deposit for acquisition............ 50,000 -- 50,000
Goodwill and other intangible assets,
net...................................... 595,166 -- 595,166
Deferred financing costs and other assets,
net...................................... 80,100 4,125(b) 84,225
---------- -------- ----------
$4,212,512 $400,000 $4,612,512
========== ======== ==========
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable........................ $ 43,640 $ -- $ 43,640
Other current liabilities............... 99,824 -- 99,824
Long-term debt, current maturities...... -- -- --
---------- -------- ----------
Total current liabilities............. 143,464 -- 143,464
Long-term debt............................ 1,892,566 400,000(c) 2,292,566
Other liabilities......................... 75,250 -- 75,250
---------- -------- ----------
Total liabilities..................... 2,111,280 400,000 2,511,280
---------- -------- ----------
Minority interests........................ 74,529 -- 74,529
Redeemable preferred stock................ 430,291 -- 430,291
Stockholders' equity...................... 1,596,412 -- 1,596,412
---------- -------- ----------
$4,212,512 $400,000 $4,612,512
========== ======== ==========
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
7
Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
(Dollars in thousands)
(a) Reflects the following adjustments to cash and cash equivalents:
(1) Increase resulting from borrowings under the term loans...... $400,000
(2) Decrease resulting from the payment of fees and expenses
related to the term loans.................................... (4,125)
--------
Total adjustments to cash and cash equivalents................. $395,875
========
(b) Reflects deferred financing costs resulting from the payment of fees and
expenses related to the term loans.
(c) Reflects the increase resulting from borrowings under the term loans.
The following table summarizes the adjustments for the 2000 term loans, with
increases to liabilities balances shown as negative amounts:
Adjustment Reference
----------------------
(a)(1),(c) (a)(2),(b) Total
---------- ---------- ---------
Cash and cash equivalents................ $ 400,000 $(4,125) $ 395,875
Deferred financing costs and other
assets, net............................. -- 4,125 4,125
Long-term debt........................... (400,000) -- (400,000)
--------- ------- ---------
$ -- $ -- $ --
========= ======= =========
8
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 March 31, 2000
-----------------------------------
Restricted
Group
Pro Forma Exclusion of Pro Forma
for 2000 Unrestricted for 2000
Term Loans Subsidiaries Term Loans
---------- ------------ ----------
Assets:
Current assets:
Cash and cash equivalents............... $ 905,380 $ (34,498) $ 870,882
Receivables............................. 88,041 (39,877) 48,164
Inventories............................. 24,948 (15,489) 9,459
Prepaid expenses and other current
assets................................. 12,897 (9,272) 3,625
---------- ----------- ----------
Total current assets.................. 1,031,266 (99,136) 932,130
Property and equipment, net............... 2,851,855 (1,144,906) 1,706,949
Escrow deposit for acquisition............ 50,000 -- 50,000
Investments in Unrestricted Subsidiaries.. -- 999,931 999,931
Goodwill and other intangible assets,
net...................................... 595,166 (460,598) 134,568
Deferred financing costs and other assets,
net...................................... 84,225 (11,574) 72,651
---------- ----------- ----------
$4,612,512 $ (716,283) $3,896,229
========== =========== ==========
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable........................ $ 43,640 $ (19,725) $ 23,915
Other current liabilities............... 99,824 (66,054) 33,770
Long-term debt, current maturities...... -- -- --
---------- ----------- ----------
Total current liabilities............. 143,464 (85,779) 57,685
Long-term debt............................ 2,292,566 (504,874) 1,787,692
Other liabilities......................... 75,250 (69,490) 5,760
---------- ----------- ----------
Total liabilities..................... 2,511,280 (660,143) 1,851,137
---------- ----------- ----------
Minority interests........................ 74,529 (56,140) 18,389
Redeemable preferred stock................ 430,291 -- 430,291
Stockholders' equity...................... 1,596,412 -- 1,596,412
---------- ----------- ----------
$4,612,512 $ (716,283) $3,896,229
========== =========== ==========
9