EXHIBIT 2.5
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 roll-up of our U.K. subsidiary to an 80% ownership interest in
August 1998;
(2) CCIC's initial public offering in August 1998;
(3) the conversion of CCIC's senior convertible preferred stock into
common stock, all of which had been converted as of July 17, 1998;
(4) the issuance of the exchangeable preferred stock in December 1998;
(5) the recent debt and equity offerings;
(6) the Bell Atlantic joint venture;
(7) the proposed BellSouth transaction; and
(8) the Powertel acquisition.
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1998 gives effect to these transactions as if they
had occurred as of January 1, 1998. The Unaudited Pro Forma Condensed
Consolidated Statement of Operations for the three months ended March 31, 1999
gives effect to the (1) recent debt and equity offerings and (2) the recent and
proposed transactions described in clauses (6), (7) and (8) above as if they
had occurred as of January 1, 1999. The Unaudited Pro Forma Condensed
Consolidated Balance Sheet gives effect to the (1) recent debt and equity
offerings and (2) the recent and proposed transactions described in clauses (7)
and (8) above as if they had occurred as of March 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
Annual Report on Form 10-K and Quarterly Report on Form 10-Q.
The roll-up, the Bell Atlantic joint venture and the Powertel acquisition
are accounted for under the purchase method of accounting. The total purchase
price for the roll-up, 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. We have recorded the purchase price for the roll-up based on (1)
the number of shares of our common stock and Class A common stock exchanged for
shares of CTSH's capital stock and (2) the price per share received by us in
our initial public offering.
1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended December 31, 1998
(Dollars in thousands, except per share amounts)
Pro Forma Historical
for 1998 Bell
Adjustments Pro Forma Adjustments Transactions Atlantic Adjustments
Historical Historical for 1998 for 1998 for and Joint for Joint
CCIC(a) CTSH(b) Transactions Transactions Offerings Offerings Venture(j) Venture
---------- ---------- ------------ ------------ ----------- ------------ ---------- -----------
Net revenues:
Site rental and
broadcast
transmission.... $ 75,028 $84,714 $ -- $159,742 $ -- $ 159,742 $ 11,183 $31,009(k)
Network services
and other....... 38,050 12,514 (265)(c) 50,299 -- 50,299 -- --
-------- ------- -------- -------- -------- --------- -------- -------
Total net
revenues........ 113,078 97,228 (265) 210,041 -- 210,041 11,183 31,009
-------- ------- -------- -------- -------- --------- -------- -------
Operating
expenses:
Costs of
operations:
Site rental and
broadcast
transmission.... 26,254 35,901 -- 62,155 -- 62,155 14,941 -- (l)
Network services
and other....... 21,564 7,916 -- 29,480 -- 29,480 -- --
General and
administrative.. 23,571 5,265 (265)(c) 28,571 -- 28,571 -- -- (l)
Corporate
development..... 4,625 8 -- 4,633 -- 4,633 -- --
Non-cash
compensation
charges......... 12,758 3,831 -- 16,589 -- 16,589 -- --
Depreciation and
amortization.... 37,239 25,684 11,463 (d) 74,386 -- 74,386 6,278 23,346 (m)
-------- ------- -------- -------- -------- --------- -------- -------
126,011 78,605 11,198 215,814 -- 215,814 21,219 23,346
-------- ------- -------- -------- -------- --------- -------- -------
Operating income
(loss).......... (12,933) 18,623 (11,463) (5,773) -- (5,773) (10,036) 7,663
Other income
(expense):
Equity in
earnings of
unconsolidated
affiliate....... 2,055 -- (2,055)(e) -- -- -- -- --
Interest and
other income
(expense)....... 4,220 725 -- 4,945 -- 4,945 -- --
Interest expense
and amortization
of deferred
financing
costs........... (29,089) (13,378) 3,689 (f) (38,778) (52,642)(i) (91,420) -- (17,711)(n)
-------- ------- -------- -------- -------- --------- -------- -------
Income (loss)
before income
taxes and
minority
interests....... (35,747) 5,970 (9,829) (39,606) (52,642) (92,248) (10,036) (10,048)
Provision for
income taxes.... (374) -- -- (374) -- (374) -- --
Minority
interests....... (1,654) -- (1,194)(g) (2,848) -- (2,848) -- 4,155 (o)
-------- ------- -------- -------- -------- --------- -------- -------
Net income
(loss).......... (37,775) 5,970 (11,023) (42,828) (52,642) (95,470) (10,036) (5,893)
Dividends on
preferred
stock........... (5,411) -- (21,334)(h) (26,745) -- (26,745) -- --
-------- ------- -------- -------- -------- --------- -------- -------
Net income (loss)
after deduction
of dividends on
preferred
stock........... $(43,186) $ 5,970 $(32,357) $(69,573) $(52,642) $(122,215) $(10,036) $(5,893)
======== ======= ======== ======== ======== ========= ======== =======
Loss per common
share--basic and
diluted ........ $ (1.02) $ (0.74) $ (0.97)
======== ======== =========
Common shares
outstanding--
basic and
diluted (in
thousands)...... 42,518 94,064 126,566
======== ======== =========
Pro Forma
for 1998 Adjustments
Transactions, for Adjustments
Offerings Proposed for Pro Forma
and Joint BellSouth Historical Powertel for the
Venture Transaction Powertel(s) Acquisition Transactions
------------- --------------- ----------- ------------- ------------
Net revenues:
Site rental and
broadcast
transmission.... $ 201,934 $33,840(p) $ 1,865 $14,040(t) $ 251,679
Network services
and other....... 50,299 -- -- -- 50,299
------------- --------------- ----------- ------------- ------------
Total net
revenues........ 252,233 33,840 1,865 14,040 301,978
------------- --------------- ----------- ------------- ------------
Operating
expenses:
Costs of
operations:
Site rental and
broadcast
transmission.... 77,096 11,400(l)(q) 6,167 -- (l) 94,663
Network services
and other....... 29,480 -- -- -- 29,480
General and
administrative.. 28,571 -- (l) -- -- (l) 28,571
Corporate
development..... 4,633 -- -- -- 4,633
Non-cash
compensation
charges......... 16,589 -- -- -- 16,589
Depreciation and
amortization.... 104,010 30,500 (r) 7,534 6,111 (u) 148,155
------------- --------------- ----------- ------------- ------------
260,379 41,900 13,701 6,111 322,091
------------- --------------- ----------- ------------- ------------
Operating income
(loss).......... (8,146) (8,060) (11,836) 7,929 (20,113)
Other income
(expense):
Equity in
earnings of
unconsolidated
affiliate....... -- -- -- -- --
Interest and
other income
(expense)....... 4,945 -- -- -- 4,945
Interest expense
and amortization
of deferred
financing
costs........... (109,131) -- -- -- (109,131)
------------- --------------- ----------- ------------- ------------
Income (loss)
before income
taxes and
minority
interests....... (112,332) (8,060) (11,836) 7,929 (124,299)
Provision for
income taxes.... (374) -- -- -- (374)
Minority
interests....... 1,307 -- -- -- 1,307
------------- --------------- ----------- ------------- ------------
Net income
(loss).......... (111,399) (8,060) (11,836) 7,929 (123,366)
Dividends on
preferred
stock........... (26,745) -- -- -- (26,745)
------------- --------------- ----------- ------------- ------------
Net income (loss)
after deduction
of dividends on
preferred
stock........... $(138,144) $(8,060) $(11,836) $ 7,929 $(150,111)
============= =============== =========== ============= ============
Loss per common
share--basic and
diluted ........ $ (0.94) $ (0.96)
============= ============
Common shares
outstanding--
basic and
diluted (in
thousands)...... 147,559 156,643
============= ============
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, 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(a) Offerings Offerings Venture(j) Venture Venture Transaction Powertel(s)
---------- ----------- --------- ---------- ----------- --------- ----------- -----------
Net revenues:
Site rental and
broadcast
transmission...... $ 45,326 $ -- $ 45,326 $ 3,705 $ 8,092(k) $ 57,123 $ 8,460(p) $ 1,118
Network services
and other......... 9,783 -- 9,783 -- -- 9,783 -- --
-------- -------- -------- ------- ------- -------- ------- -------
Total net
revenues........ 55,109 -- 55,109 3,705 8,092 66,906 8,460 1,118
-------- -------- -------- ------- ------- -------- ------- -------
Operating expenses:
Costs of
operations:
Site rental and
broadcast
transmission.... 18,527 -- 18,527 5,359 --(l) 23,886 2,850(l)(q) 1,641
Network services
and other....... 6,982 -- 6,982 -- -- 6,982 -- --
General and
administrative.... 8,304 -- 8,304 -- --(l) 8,304 --(l) --
Corporate
development....... 874 -- 874 -- -- 874 -- --
Restructuring
charges........... 1,814 -- 1,814 -- -- 1,814 -- --
Non-cash
compensation
charges........... 667 -- 667 -- -- 667 -- --
Depreciation and
amortization...... 19,656 -- 19,656 1,899 6,222(m) 27,777 7,625(r) 2,151
-------- -------- -------- ------- ------- -------- ------- -------
56,824 -- 56,824 7,258 6,222 70,304 10,475 3,792
-------- -------- -------- ------- ------- -------- ------- -------
Operating income
(loss)............. (1,715) -- (1,715) (3,553) 1,870 (3,398) (2,015) (2,674)
Other income
(expense):
Interest and
other income
(expense)......... 340 -- 340 -- -- 340 -- --
Interest expense
and amortization
of deferred
financing costs... (11,286) (15,208)(i) (26,494) -- (4,428)(n) (30,922) -- --
-------- -------- -------- ------- ------- -------- ------- -------
Income (loss)
before income
taxes, minority
interests and
cumulative effect
of change in
accounting
principle.......... (12,661) (15,208) (27,869) (3,553) (2,558) (33,980) (2,015) (2,674)
Provision for
income taxes....... (127) -- (127) -- -- (127) -- --
Minority
interests.......... (685) -- (685) -- 1,224(o) 539 -- --
-------- -------- -------- ------- ------- -------- ------- -------
Income (loss)
before cumulative
effect of change in
accounting
principle.......... (13,473) (15,208) (28,681) (3,553) (1,334) (33,568) (2,015) (2,674)
Cumulative effect
of change in
accounting
principle for costs
of start-up
activities......... (2,414) -- (2,414) -- -- (2,414) -- --
-------- -------- -------- ------- ------- -------- ------- -------
Net income (loss).. (15,887) (15,208) (31,095) (3,553) (1,334) (35,982) (2,015) (2,674)
Dividends on
preferred stock.... (6,408) -- (6,408) -- -- (6,408) -- --
-------- -------- -------- ------- ------- -------- ------- -------
Net income (loss)
after deduction of
dividends on
preferred stock.... $(22,295) $(15,208) $(37,503) $(3,553) $(1,334) $(42,390) $(2,015) $(2,674)
======== ======== ======== ======= ======= ======== ======= =======
Per common share--
basic and diluted:
Loss before
cumulative effect
of change in
accounting
principle......... $ (0.21) $ (0.27) $ (0.27)
Cumulative effect
of change in
accounting
principle......... (0.03) (0.02) (0.02)
-------- -------- --------
Net loss.......... $ (0.24) $ (0.29) $ (0.29)
======== ======== ========
Common shares
outstanding--basic
and diluted (in
thousands)......... 94,732 127,234 148,227
======== ======== ========
Adjustments
for Pro Forma
Powertel for the
Acquisition Transactions
------------ ------------
Net revenues:
Site rental and
broadcast
transmission...... $3,510(t) $ 70,211
Network services
and other......... -- 9,783
------------ ------------
Total net
revenues........ 3,510 79,994
------------ ------------
Operating expenses:
Costs of
operations:
Site rental and
broadcast
transmission.... --(l) 28,377
Network services
and other....... -- 6,982
General and
administrative.... --(l) 8,304
Corporate
development....... -- 874
Restructuring
charges........... -- 1,814
Non-cash
compensation
charges........... -- 667
Depreciation and
amortization...... 1,244(u) 38,797
------------ ------------
1,244 85,815
------------ ------------
Operating income
(loss)............. 2,266 (5,821)
Other income
(expense):
Interest and
other income
(expense)......... -- 340
Interest expense
and amortization
of deferred
financing costs... -- (30,922)
------------ ------------
Income (loss)
before income
taxes, minority
interests and
cumulative effect
of change in
accounting
principle.......... 2,266 (36,403)
Provision for
income taxes....... -- (127)
Minority
interests.......... -- 539
------------ ------------
Income (loss)
before cumulative
effect of change in
accounting
principle.......... 2,266 (35,991)
Cumulative effect
of change in
accounting
principle for costs
of start-up
activities......... -- (2,414)
------------ ------------
Net income (loss).. 2,266 (38,405)
Dividends on
preferred stock.... -- (6,408)
------------ ------------
Net income (loss)
after deduction of
dividends on
preferred stock.... $2,266 $(44,813)
============ ============
Per common share--
basic and diluted:
Loss before
cumulative effect
of change in
accounting
principle......... $ (0.27)
Cumulative effect
of change in
accounting
principle......... (0.01)
------------
Net loss.......... $ (0.28)
============
Common shares
outstanding--basic
and diluted (in
thousands)......... 157,311
============
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) The historical results of operations for our U.K. business are included in
CCIC's historical results of operations for the period from the date of the
roll-up, August 21, 1998, through December 31, 1998.
(b) Reflects the historical results of operations of our U.K. business (under
U.S. GAAP) for the periods prior to the completion of the roll-up on August
21, 1998. Such results have been translated from pounds sterling to U.S.
dollars at the average noon buying rate for the period.
(c) Reflects the elimination of management fees payable to CCIC from Castle
Transmission.
(d) Reflects the incremental amortization of goodwill as a result of the roll-
up. Goodwill is being amortized over twenty years.
(e) Reflects the elimination of equity accounting adjustments to include CCIC's
percentage in our U.K. business' earnings and losses.
(f) Reflects decrease in interest expense attributable to the repayment of
borrowings under CCIC's senior credit facility from a portion of the net
proceeds from the issuance of our exchangeable preferred stock.
(g) Reflects the minority interest in dividends accrued on CTSH's redeemable
preference shares.
(h) Reflects (1) decrease in dividends of $4,348 attributable to the conversion
of the outstanding shares of senior convertible preferred stock into shares
of common stock and (2) increase in dividends of $25,682 attributable to
the exchangeable preferred stock.
(i) Reflects:
(1) increase in interest expense as a result of the issuance of the notes
in the recent debt offering of $48,313 for the year ended December 31,
1998 and $11,875 for the three months ended March 31, 1999;
(2) amortization of deferred financing costs related to the notes issued in
the recent debt offering of $1,329 for the year ended December 31, 1998
and $333 for the three months ended March 31, 1999; and
(3) nonrecurring financing fees of $3,000 for both periods related to the
term loans incurred to fund the escrow payments in connection with the
proposed BellSouth transaction and the Powertel acquisition.
(j) Reflects the historical results of operations of the tower operations
contributed to the Bell Atlantic joint venture.
(k) Reflects additional revenues to be recognized by the Bell Atlantic joint
venture under the global lease and the formation agreement.
(l) 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.
(m) 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.
(n) Reflects additional interest expense attributable to borrowings under the
credit facility entered into by the Bell Atlantic joint venture. Such
borrowings are initially estimated to incur interest at a rate of 9.25% per
annum.
(o) Reflects the minority partner's 38.5% interest in the joint venture's
operations.
(p) 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: $26,640 in revenues to be received from BellSouth and
$7,200 in revenues to be received from other tenants for the year ended
December 31,
4
1998; and $6,660 in revenues to be received from BellSouth and $1,800 in
revenues to be received from other tenants for the three months ended March
31, 1999.
(q) Reflects additional costs to be incurred for ground rents in connection
with the preliminary BellSouth agreement.
(r) Reflects the incremental depreciation of property and equipment as a
result of the BellSouth transaction. Property and equipment is being
depreciated over twenty years.
(s) Reflects the historical results of operations of the tower operations
acquired in the Powertel acquisition.
(t) Reflects additional revenues to be recognized by CCIC in connection with
the Powertel acquisition under the master site agreements.
(u) Reflects the incremental depreciation of property and equipment as a
result of the Powertel acquisition. Property and equipment is being
depreciated over twenty years.
5
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, 1998
------------------------------------------------------------------------------------------------
Restricted Adjustments Restricted
Exclusion of Group for Adjustments Group Pro
Pro Forma Exclusion of Certain Pro Forma Proposed for Forma for
for Unrestricted Adjustments for BellSouth Historical Powertel the
Offerings Subsidiaries for Roll-Up Offerings Transaction Powertel Acquisition Transactions
--------- ------------ ------------ ---------- ----------- ---------- ----------- ------------
Net revenues:
Site rental and
broadcast
transmission.......... $ 159,742 $(137,201) $ -- $ 22,541 $33,840 $ 1,865 $14,040 $ 72,286
Network services and
other................. 50,299 (18,082) -- 32,217 -- -- -- 32,217
--------- --------- ------- --------- ------- -------- ------- ---------
Total net revenues.... 210,041 (155,283) -- 54,758 33,840 1,865 14,040 104,503
--------- --------- ------- --------- ------- -------- ------- ---------
Operating expenses:
Costs of operations:
Site rental and
broadcast
transmission......... 62,155 (56,038) -- 6,117 11,400 6,167 -- 23,684
Network services and
other................ 29,480 (12,151) -- 17,329 -- -- -- 17,329
General and
administrative........ 28,571 (7,683) 265 21,153 -- -- -- 21,153
Corporate development.. 4,633 (8) -- 4,625 -- -- -- 4,625
Non-cash compensation
charges............... 16,589 (6,682) -- 9,907 -- -- -- 9,907
Depreciation and
amortization.......... 74,386 (46,002) (11,463) 16,921 30,500 7,534 6,111 61,066
--------- --------- ------- --------- ------- -------- ------- ---------
215,814 (128,564) (11,198) 76,052 41,900 13,701 6,111 137,764
--------- --------- ------- --------- ------- -------- ------- ---------
Operating income
(loss)................ (5,773) (26,719) 11,198 (21,294) (8,060) (11,836) 7,929 (33,261)
Other income (expense):
Interest and other
income (expense)...... 4,945 (3,844) -- 1,101 -- -- -- 1,101
Interest expense and
amortization of
deferred financing
costs................. (91,420) 20,740 -- (70,680) -- -- -- (70,680)
--------- --------- ------- --------- ------- -------- ------- ---------
Income (loss) before
income taxes and
minority interests.... (92,248) (9,823) 11,198 (90,873) (8,060) (11,836) 7,929 (102,840)
Provision for income
taxes................. (374) -- -- (374) -- -- -- (374)
Minority interests..... (2,848) 1,654 1,194 -- -- -- -- --
--------- --------- ------- --------- ------- -------- ------- ---------
Net income (loss)...... (95,470) (8,169) 12,392 (91,247) (8,060) (11,836) 7,929 (103,214)
Dividends on preferred
stock................. (26,745) -- -- (26,745) -- -- -- (26,745)
--------- --------- ------- --------- ------- -------- ------- ---------
Net income (loss) after
deduction of dividends
on preferred stock.... $(122,215) $ (8,169) $12,392 $(117,992) $(8,060) $(11,836) $ 7,929 $(129,959)
========= ========= ======= ========= ======= ======== ======= =========
6
Three Months Ended March 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.......... $ 45,326 $(39,010) $ 6,316 $ 8,460 $ 1,118 $3,510 $ 19,404
Network services and
other................. 9,783 (3,845) 5,938 -- -- -- 5,938
-------- -------- -------- ------- ------- ------ --------
Total net revenues... 55,109 (42,855) 12,254 8,460 1,118 3,510 25,342
-------- -------- -------- ------- ------- ------ --------
Operating expenses:
Costs of operations:
Site rental and
broadcast
transmission........ 18,527 (16,884) 1,643 2,850 1,641 -- 6,134
Network services and
other............... 6,982 (3,900) 3,082 -- -- -- 3,082
General and
administrative........ 8,304 (1,680) 6,624 -- -- -- 6,624
Corporate
development........... 874 (33) 841 -- -- -- 841
Restructuring
charges............... 1,814 -- 1,814 -- -- -- 1,814
Non-cash compensation
charges............... 667 (284) 383 -- -- -- 383
Depreciation and
amortization.......... 19,656 (15,139) 4,517 7,625 2,151 1,244 15,537
-------- -------- -------- ------- ------- ------ --------
56,824 (37,920) 18,904 10,475 3,792 1,244 34,415
-------- -------- -------- ------- ------- ------ --------
Operating income
(loss)................ (1,715) (4,935) (6,650) (2,015) (2,674) 2,266 (9,073)
Other income (expense):
Interest and other
income (expense)...... 340 (2,668) (2,328) -- -- -- (2,328)
Interest expense and
amortization of
deferred financing
costs................. (26,494) 5,539 (20,955) -- -- -- (20,955)
-------- -------- -------- ------- ------- ------ --------
Income (loss) before
income taxes,
minority interests
and cumulative effect
of change in
accounting
principle............. (27,869) (2,064) (29,933) (2,015) (2,674) 2,266 (32,356)
Provision for income
taxes................. (127) -- (127) -- -- -- (127)
Minority interests..... (685) 685 -- -- -- -- --
-------- -------- -------- ------- ------- ------ --------
Loss before cumulative
effect of change in
accounting
principle............. (28,681) (1,379) (30,060) (2,015) (2,674) 2,266 (32,483)
Cumulative effect of
change in accounting
principle for costs
of start-up
activities............ (2,414) -- (2,414) -- -- -- (2,414)
-------- -------- -------- ------- ------- ------ --------
Net income (loss)...... (31,095) (1,379) (32,474) (2,015) (2,674) 2,266 (34,897)
Dividends on preferred
stock................. (6,408) -- (6,408) -- -- -- (6,408)
-------- -------- -------- ------- ------- ------ --------
Net income (loss)
after deduction of
dividends on
preferred stock....... $(37,503) $ (1,379) $(38,882) $(2,015) $(2,674) $2,266 $(41,305)
======== ======== ======== ======= ======= ====== ========
7
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 1999
(Dollars in thousands)
Adjustments
for Adjustments
Adjustments Pro Forma Proposed for Pro Forma
Historical for for BellSouth Historical Powertel for the
CCIC Offerings Offerings Transaction Powertel(h) Acquisition Transactions
---------- ----------- ---------- ----------- ----------- ----------- ------------
Assets:
Current assets:
Cash and cash
equivalents.......... $ 101,847 $974,921(a) $1,076,768 $(380,000)(e) $ -- $(224,617)(i) $ 472,151
Receivables........... 37,146 -- 37,146 -- -- -- 37,146
Inventories........... 8,634 -- 8,634 -- -- -- 8,634
Prepaid expenses and
other current
assets............... 7,148 -- 7,148 -- 1,604 -- 8,752
---------- -------- ---------- --------- -------- --------- ----------
Total current
assets.............. 154,775 974,921 1,129,696 (380,000) 1,604 (224,617) 526,683
Property and equipment,
net.................... 1,233,204 -- 1,233,204 610,000 (f) 116,722 156,380 (j) 2,116,306
Escrow deposits for
acquisitions........... 100,000 -- 100,000 (50,000)(e) -- (50,000)(i) --
Goodwill and other
intangible assets,
net.................... 617,769 -- 617,769 -- -- -- 617,769
Deferred financing costs
and other assets, net.. 17,946 15,950(b) 33,896 -- -- -- 33,896
---------- -------- ---------- --------- -------- --------- ----------
$2,123,694 $990,871 $3,114,565 $ 180,000 $118,326 $(118,237) $3,294,654
========== ======== ========== ========= ======== ========= ==========
Liabilities and
Stockholders' Equity:
Current liabilities:
Accounts payable...... $ 27,383 $ -- $ 27,383 $ -- $ -- $ -- $ 27,383
Other current
liabilities.......... 50,912 -- 50,912 -- 89 -- 51,001
Long-term debt,
current maturities... -- -- -- -- -- -- --
---------- -------- ---------- --------- -------- --------- ----------
Total current
liabilities......... 78,295 -- 78,295 -- 89 -- 78,384
Long-term debt, less
current maturities..... 771,190 381,695(c) 1,152,885 -- -- -- 1,152,885
Other liabilities....... 46,884 -- 46,884 -- -- -- 46,884
---------- -------- ---------- --------- -------- --------- ----------
Total liabilities.... 896,369 381,695 1,278,064 -- 89 -- 1,278,153
---------- -------- ---------- --------- -------- --------- ----------
Minority interests...... 53,098 -- 53,098 -- -- -- 53,098
Redeemable preferred
stock.................. 207,471 -- 207,471 -- -- -- 207,471
Stockholders' equity.... 966,756 609,176(d) 1,575,932 180,000 (g) 118,237 (118,237)(k) 1,755,932
---------- -------- ---------- --------- -------- --------- ----------
$2,123,694 $990,871 $3,114,565 $ 180,000 $118,326 $(118,237) $3,294,654
========== ======== ========== ========= ======== ========= ==========
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
8
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 the receipt of proceeds from
the recent offerings................................. $ 904,320
(2) Decrease resulting from the payment of underwriting
discounts and commissions and other fees and expenses
related to the recent offerings...................... (34,855)
(3) Decrease resulting from the payment of outstanding
borrowings and nonrecurring financing fees related to
the term loans used to finance the BellSouth and
Powertel escrow payments............................. (103,000)
(4) Increase resulting from sale of common stock to TdF
under its preemptive rights from the Bell Atlantic
joint venture and the equity offering................ 208,456
---------
Total adjustments to cash and cash equivalents....... $ 974,921
=========
(b) Reflects deferred financing costs resulting from the
payment of underwriting discounts and commissions and
other fees and expenses related to the recent debt
offerings.
(c) Reflects the following adjustments to long-term debt,
less current maturities:
(1) Increase resulting from the receipt of proceeds from
the recent debt offering............................. $ 481,695
(2) Decrease resulting from the repayment of outstanding
borrowings under the term loans used to finance the
BellSouth and Powertel escrow payments............... (100,000)
---------
Total adjustments to long-term debt, less current
maturities............................................... $ 381,695
=========
(d) Reflects the following adjustments to stockholders'
equity:
(1) Increase resulting from the receipt of proceeds from
the recent equity offering........................... $ 422,625
(2) Decrease resulting from the payment of underwriting
discounts and commissions and other fees and expenses
related to the recent equity offering................ (18,905)
(3) Decrease resulting from payment of nonrecurring
financing fees related to the term loans used to
finance the BellSouth and Powertel escrow payments... (3,000)
(4) Increase resulting from sale of common stock to TdF
under its preemptive rights from the Bell Atlantic
joint venture and the equity offering................ 208,456
---------
Total adjustments to stockholders' equity................ $ 609,176
=========
(e) Reflects the payment of the cash portion of the purchase price for
the proposed BellSouth transaction.
(f) Reflects the basis of property and equipment recorded in connection
with the proposed BellSouth transaction.
(g) Reflects the increase resulting from the issuance of common stock
for a portion of the purchase price for the proposed BellSouth
transaction.
(h) Reflects the historical amounts from the statement of net assets
for the tower operations acquired in the Powertel acquisition.
(i) Reflects the payment of the closing price for the Powertel
acquisition.
(j) Reflects the increase in basis of property and equipment acquired
in the Powertel acquisition.
(k) Reflects the elimination of the historical basis of the net assets
acquired in the Powertel acquisition.
9
The following table summarizes the adjustments for the recent offerings,
with increases to liabilities and stockholders' equity balances shown as
negative amounts:
Adjustment Reference
-------------------------------------------------------------------------
(a)(1),(a)(4),(c)(1),(d)(1),(d)(4) (a)(2),(b),(d)(2) (a)(3),(c)(2),(d)(3) Totals
---------------------------------- ----------------- -------------------- ---------
Cash and cash
equivalents............ $1,112,776 $(34,855) $(103,000) $ 974,921
Deferred financing cost
and other assets, net.. -- 15,950 -- 15,950
Long-term debt, less
current maturities..... (481,695) -- 100,000 (381,695)
Stockholders' equity.... (631,081) 18,905 3,000 (609,176)
---------- -------- --------- ---------
$ -- $ -- $ -- $ --
========== ======== ========= =========
The following table summarizes the adjustments for the BellSouth
transaction, with increases to liabilities and stockholders' equity balances
shown as negative amounts:
Adjustment Reference
--------------------
(e),(f),(g)
--------------------
Cash and cash equivalents............................... $(380,000)
Property and equipment, net............................. 610,000
Escrow deposits for acquisitions........................ (50,000)
Stockholders' equity.................................... (180,000)
---------
$ --
=========
The following table summarizes the adjustments for the Powertel
acquisition, with increases to liabilities and stockholders' equity balances
shown as negative amounts:
Adjustment Reference
--------------------
(i),(j),(k)
--------------------
Cash and cash equivalents............................... $(224,617)
Property and equipment, net............................. 156,380
Escrow deposits for acquisitions........................ (50,000)
Stockholders' equity.................................... 118,237
---------
$ --
=========
10
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, 1999
--------------------------------------------------------------------------------------------
Restricted Adjustments Restricted
Group for Group
Pro Exclusion of Pro Proposed Adjustments Pro Forma
Forma for Unrestricted Forma for BellSouth Historical for Powertel for the
Offerings Subsidiaries Offerings Transaction Powertel Acquisition Transactions
---------- ------------ ---------- ----------- ---------- ------------ ------------
Assets:
Current assets:
Cash and cash
equivalents........... $1,076,768 $ (51,178) $1,025,590 $(380,000) $ -- $(224,617) $ 420,973
Receivables............ 37,146 (20,070) 17,076 -- -- -- 17,076
Inventories............ 8,634 (5,362) 3,272 -- -- -- 3,272
Prepaid expenses and
other current
assets................ 7,148 (6,123) 1,025 -- 1,604 -- 2,629
---------- ----------- ---------- --------- -------- --------- ----------
Total current
assets.............. 1,129,696 (82,733) 1,046,963 (380,000) 1,604 (224,617) 443,950
Property and equipment,
net.................... 1,233,204 (1,054,900) 178,304 610,000 116,722 156,380 1,061,406
Escrow deposits for
acquisitions........... 100,000 -- 100,000 (50,000) -- (50,000) --
Investments in
Unrestricted
Subsidiaries........... -- 992,675 992,675 -- -- -- 992,675
Goodwill and other
intangible assets,
net.................... 617,769 (476,326) 141,443 -- -- -- 141,443
Deferred financing costs
and other assets, net.. 33,896 (4,540) 29,356 -- -- -- 29,356
---------- ----------- ---------- --------- -------- --------- ----------
$3,114,565 $ (625,824) $2,488,741 $ 180,000 $118,326 $(118,237) $2,668,830
========== =========== ========== ========= ======== ========= ==========
Liabilities and
Stockholders' Equity:
Current liabilities:
Accounts payable....... $ 27,383 $ (22,646) $ 4,737 $ -- $ -- $ -- $ 4,737
Other current
liabilities........... 50,912 (46,255) 4,657 -- 89 -- 4,746
Long-term debt,
current maturities.... -- -- -- -- -- -- --
---------- ----------- ---------- --------- -------- --------- ----------
Total current
liabilities......... 78,295 (68,901) 9,394 -- 89 -- 9,483
Long-term debt, less
current maturities..... 1,152,885 (458,685) 694,200 -- -- -- 694,200
Other liabilities....... 46,884 (45,140) 1,744 -- -- -- 1,744
---------- ----------- ---------- --------- -------- --------- ----------
Total liabilities.... 1,278,064 (572,726) 705,338 -- 89 -- 705,427
---------- ----------- ---------- --------- -------- --------- ----------
Minority interests...... 53,098 (53,098) -- -- -- -- --
Redeemable preferred
stock.................. 207,471 -- 207,471 -- -- -- 207,471
Stockholders' equity.... 1,575,932 -- 1,575,932 180,000 118,237 (118,237) 1,755,932
---------- ----------- ---------- --------- -------- --------- ----------
$3,114,565 $ (625,824) $2,488,741 $ 180,000 $118,326 $(118,237) $2,668,830
========== =========== ========== ========= ======== ========= ==========
11