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 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 then-outstanding senior convertible
preferred stock into common stock, all of which had been converted
as of July 17, 1998;
(4) the issuance of CCIC's exchangeable preferred stock in December
1998;
(5) the recent debt and equity offerings and the proposed issuance of
the convertible preferred stock and warrants in the GE Capital
transaction;
(6) the Bell Atlantic joint venture;
(7) the 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 six months ended June 30, 1999
gives effect to the (1) recent debt and equity offerings and the proposed
issuance of the convertible preferred stock and warrants in the GE Capital
transaction and (2) the 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 the proposed issuance of the convertible preferred stock
and warrants in the GE Capital transaction and (2) the transactions described
in clauses (7) and (8) above as if they had been completed as of June 30, 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 and quarterly reports 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(k) Venture
---------- ---------- ------------ ------------ ----------- ------------ ---------- -----------
Net revenues:
Site rental and
broadcast
transmission.... $ 75,028 $84,714 $ -- $159,742 $ -- $ 159,742 $ 11,183 $31,009(l)
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 -- (m)
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 -- -- (m)
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 (n)
-------- ------- -------- -------- -------- --------- -------- -------
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) (82,468)(i) (121,246) -- (17,711)(o)
-------- ------- -------- -------- -------- --------- -------- -------
Income (loss)
before income
taxes and
minority
interests....... (35,747) 5,970 (9,829) (39,606) (82,468) (122,074) (10,036) (10,048)
Provision for
income taxes.... (374) -- -- (374) -- (374) -- --
Minority
interests....... (1,654) -- (1,194)(g) (2,848) -- (2,848) -- 4,155 (p)
-------- ------- -------- -------- -------- --------- -------- -------
Net income
(loss).......... (37,775) 5,970 (11,023) (42,828) (82,468) (125,296) (10,036) (5,893)
Dividends on
preferred
stock........... (5,411) -- (21,334)(h) (26,745) (16,910)(j) (43,655) -- --
-------- ------- -------- -------- -------- --------- -------- -------
Net income (loss)
after deduction
of dividends on
preferred
stock........... $(43,186) $ 5,970 $(32,357) $(69,573) $(99,378) $(168,951) $(10,036) $(5,893)
======== ======= ======== ======== ======== ========= ======== =======
Loss per common
share--basic and
diluted ........ $ (1.02) $ (0.74) $ (1.33)
======== ======== =========
Common shares
outstanding--
basic and
diluted (in
thousands)...... 42,518 94,064 126,878
======== ======== =========
Pro Forma
for 1998 Adjustments
Transactions, for Adjustments
Offerings Proposed for Pro Forma
and Joint BellSouth Historical Powertel for the
Venture Transaction Powertel(t) Acquisition Transactions
------------- --------------- ----------- ------------- ------------
Net revenues:
Site rental and
broadcast
transmission.... $ 201,934 $33,840(q) $ 1,865 $14,040(u) $ 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(m)(r) 6,167 -- (m) 94,663
Network services
and other....... 29,480 -- -- -- 29,480
General and
administrative.. 28,571 -- (m) -- -- (m) 28,571
Corporate
development..... 4,633 -- -- -- 4,633
Non-cash
compensation
charges......... 16,589 -- -- -- 16,589
Depreciation and
amortization.... 104,010 30,500 (s) 7,534 6,111 (v) 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........... (138,957) -- -- -- (138,957)
------------- --------------- ----------- ------------- ------------
Income (loss)
before income
taxes and
minority
interests....... (142,158) (8,060) (11,836) 7,929 (154,125)
Provision for
income taxes.... (374) -- -- -- (374)
Minority
interests....... 1,307 -- -- -- 1,307
------------- --------------- ----------- ------------- ------------
Net income
(loss).......... (141,225) (8,060) (11,836) 7,929 (153,192)
Dividends on
preferred
stock........... (43,655) -- -- -- (43,655)
------------- --------------- ----------- ------------- ------------
Net income (loss)
after deduction
of dividends on
preferred
stock........... $(184,880) $(8,060) $(11,836) $ 7,929 $(196,847)
============= =============== =========== ============= ============
Loss per common
share--basic and
diluted ........ $ (1.25) $ (1.25)
============= ============
Common shares
outstanding--
basic and
diluted (in
thousands)...... 147,871 156,955
============= ============
See Notes to Unaudited Pro Forma Condensed Consolidated Statements of
Operations
2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Six Months Ended June 30, 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(k) Venture Venture Transaction Powertel(t)
---------- ----------- --------- ---------- ----------- --------- ----------- -----------
Net revenues:
Site rental and
broadcast
transmission...... $107,503 $ -- $107,503 $ 3,705 $ 8,092(l) $119,300 $16,504(q) $ 1,864
Network services
and other......... 25,133 -- 25,133 -- -- 25,133 -- --
-------- -------- -------- ------- ------- -------- ------- -------
Total net
revenues........ 132,636 -- 132,636 3,705 8,092 144,433 16,504 1,864
-------- -------- -------- ------- ------- -------- ------- -------
Operating expenses:
Costs of
operations:
Site rental and
broadcast
transmission.... 45,084 -- 45,084 5,359 --(m) 50,443 5,560(m)(r) 2,589
Network services
and other....... 15,157 -- 15,157 -- -- 15,157 -- --
General and
administrative.... 17,542 -- 17,542 -- --(m) 17,542 --(m) --
Corporate
development....... 2,940 -- 2,940 -- -- 2,940 -- --
Restructuring
charges........... 1,814 -- 1,814 -- -- 1,814 -- --
Non-cash
compensation
charges........... 1,171 -- 1,171 -- -- 1,171 -- --
Depreciation and
amortization...... 49,519 -- 49,519 1,899 6,222(n) 57,640 14,875(s) 3,633
-------- -------- -------- ------- ------- -------- ------- -------
133,227 -- 133,227 7,258 6,222 146,707 20,435 6,222
-------- -------- -------- ------- ------- -------- ------- -------
Operating income
(loss)............. (591) -- (591) (3,553) 1,870 (2,274) (3,931) (4,358)
Other income
(expense):
Interest and
other income
(expense)......... 4,879 -- 4,879 -- -- 4,879 -- --
Interest expense
and amortization
of deferred
financing costs... (37,842) (33,251)(i) (71,093) -- (4,428)(o) (75,521) -- --
-------- -------- -------- ------- ------- -------- ------- -------
Income (loss)
before income
taxes, minority
interests and
cumulative effect
of change in
accounting
principle.......... (33,554) (33,251) (66,805) (3,553) (2,558) (72,916) (3,931) (4,358)
Provision for
income taxes....... (197) -- (197) -- -- (197) -- --
Minority
interests.......... (572) -- (572) -- 1,224(p) 652 -- --
-------- -------- -------- ------- ------- -------- ------- -------
Income (loss)
before cumulative
effect of change in
accounting
principle.......... (34,323) (33,251) (66,574) (3,553) (1,334) (72,461) (3,931) (4,358)
Cumulative effect
of change in
accounting
principle for costs
of start-up
activities......... (2,414) -- (2,414) -- -- (2,414) -- --
-------- -------- -------- ------- ------- -------- ------- -------
Net income (loss).. (36,737) (33,251) (69,988) (3,553) (1,334) (74,875) (3,931) (4,358)
Dividends on
preferred stock.... (13,022) (8,455)(j) (21,477) -- -- (21,477) -- --
-------- -------- -------- ------- ------- -------- ------- -------
Net income (loss)
after deduction of
dividends on
preferred stock.... $(49,759) $(41,706) $(91,465) $(3,553) $(1,334) $(96,352) $(3,931) $(4,358)
======== ======== ======== ======= ======= ======== ======= =======
Per common share--
basic and diluted:
Loss before
cumulative effect
of change in
accounting
principle......... $ (0.43) $ (0.65) $ (0.63)
Cumulative effect
of change in
accounting
principle......... (0.02) (0.02) (0.02)
-------- -------- --------
Net loss.......... $ (0.45) $ (0.67) $ (.0.65)
======== ======== ========
Common shares
outstanding--basic
and diluted (in
thousands)......... 109,791 135,912 148,662
======== ======== ========
Adjustments
for Pro Forma
Powertel for the
Acquisition Transactions
------------ ------------
Net revenues:
Site rental and
broadcast
transmission...... $5,906(u) $ 143,574
Network services
and other......... -- 25,133
------------ ------------
Total net
revenues........ 5,906 168,707
------------ ------------
Operating expenses:
Costs of
operations:
Site rental and
broadcast
transmission.... --(m) 58,592
Network services
and other....... -- 15,157
General and
administrative.... --(m) 17,542
Corporate
development....... -- 2,940
Restructuring
charges........... -- 1,814
Non-cash
compensation
charges........... -- 1,171
Depreciation and
amortization...... 2,111(v) 78,259
------------ ------------
2,111 175,475
------------ ------------
Operating income
(loss)............. 3,795 (6,768)
Other income
(expense):
Interest and
other income
(expense)......... -- 4,879
Interest expense
and amortization
of deferred
financing costs... -- (75,521)
------------ ------------
Income (loss)
before income
taxes, minority
interests and
cumulative effect
of change in
accounting
principle.......... 3,795 (77,410)
Provision for
income taxes....... -- (197)
Minority
interests.......... -- 652
------------ ------------
Income (loss)
before cumulative
effect of change in
accounting
principle.......... 3,795 (76,955)
Cumulative effect
of change in
accounting
principle for costs
of start-up
activities......... -- (2,414)
------------ ------------
Net income (loss).. 3,795 (79,369)
Dividends on
preferred stock.... -- (21,477)
------------ ------------
Net income (loss)
after deduction of
dividends on
preferred stock.... $3,795 $(100,846)
============ ============
Per common share--
basic and diluted:
Loss before
cumulative effect
of change in
accounting
principle......... $ (0.62)
Cumulative effect
of change in
accounting
principle......... (0.02)
------------
Net loss.......... $ (0.64)
============
Common shares
outstanding--basic
and diluted (in
thousands)......... 157,552
============
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 offerings of $77,596 for the year ended December 31,
1998 and $32,481 for the six months ended June 30, 1999;
(2) amortization of deferred financing costs related to the notes issued in
the recent debt offerings of $1,872 for the year ended December 31,
1998 and $770 for the six months ended June 30, 1999; and
(3) nonrecurring financing fees of $3,000 for the year ended December 31,
1998 related to the term loans incurred to fund the escrow payments in
connection with the BellSouth transaction and the Powertel acquisition.
(j) Reflects the increase in dividends attributable to the proposed issuance of
the convertible preferred stock.
(k) Reflects the historical results of operations of the tower operations
contributed to the Bell Atlantic joint venture.
(l) Reflects additional revenues to be recognized by the Bell Atlantic joint
venture under the global lease and the formation agreement.
(m) 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.
(n) 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.
(o) 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.
(p) Reflects the minority partner's 38.5% interest in the joint venture's
operations.
(q) 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
4
BellSouth and $7,200 in revenues to be received from other tenants for the
year ended December 31, 1998; and $12,992 in revenues to be received from
BellSouth and $3,512 in revenues to be received from other tenants for the
six months ended June 30, 1999.
(r) Reflects additional costs to be incurred for ground rents in connection
with the preliminary BellSouth agreement.
(s) Reflects the incremental depreciation of property and equipment as a result
of the BellSouth transaction. Property and equipment is being depreciated
over twenty years.
(t) Reflects the historical results of operations of the tower operations
acquired in the Powertel acquisition.
(u) Reflects additional revenues to be recognized by CCIC in connection with
the Powertel acquisition under the master site agreements.
(v) 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................. (121,246) 20,740 -- (100,506) -- -- -- (100,506)
--------- --------- ------- --------- ------- -------- ------- ---------
Income (loss) before
income taxes and
minority interests.... (122,074) (9,823) 11,198 (120,699) (8,060) (11,836) 7,929 (132,666)
Provision for income
taxes................. (374) -- -- (374) -- -- -- (374)
Minority interests..... (2,848) 1,654 1,194 -- -- -- -- --
--------- --------- ------- --------- ------- -------- ------- ---------
Net income (loss)...... (125,296) (8,169) 12,392 (121,073) (8,060) (11,836) 7,929 (133,040)
Dividends on preferred
stock................. (43,655) -- -- (43,655) -- -- -- (43,655)
--------- --------- ------- --------- ------- -------- ------- ---------
Net income (loss) after
deduction of dividends
on preferred stock.... $(168,951) $ (8,169) $12,392 $(164,728) $(8,060) $(11,836) $ 7,929 $(176,695)
========= ========= ======= ========= ======= ======== ======= =========
6
Six Months Ended June 30, 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.......... $107,503 $(92,624) $ 14,879 $16,504 $ 1,864 $5,906 $ 39,153
Network services and
other................. 25,133 (9,965) 15,168 -- -- -- 15,168
-------- -------- --------- ------- ------- ------ --------
Total net revenues... 132,636 (102,589) 30,047 16,504 1,864 5,906 54,321
-------- -------- --------- ------- ------- ------ --------
Operating expenses:
Costs of operations:
Site rental and
broadcast
transmission........ 45,084 (41,008) 4,076 5,560 2,589 -- 12,225
Network services and
other............... 15,157 (7,891) 7,266 -- -- -- 7,266
General and
administrative........ 17,542 (4,128) 13,414 -- -- -- 13,414
Corporate
development........... 2,940 (688) 2,252 -- -- -- 2,252
Restructuring
charges............... 1,814 -- 1,814 -- -- -- 1,814
Non-cash compensation
charges............... 1,171 (447) 724 -- -- -- 724
Depreciation and
amortization.......... 49,519 (38,910) 10,609 14,875 3,633 2,111 31,228
-------- -------- --------- ------- ------- ------ --------
133,227 (93,072) 40,155 20,435 6,222 2,111 68,923
-------- -------- --------- ------- ------- ------ --------
Operating income
(loss)................ (591) (9,517) (10,108) (3,931) (4,358) 3,795 (14,602)
Other income (expense):
Interest and other
income (expense)...... 4,879 (6,258) (1,379) -- -- -- (1,379)
Interest expense and
amortization of
deferred financing
costs................. (71,093) 16,452 (54,641) -- -- -- (54,641)
-------- -------- --------- ------- ------- ------ --------
Income (loss) before
income taxes,
minority interests
and cumulative effect
of change in
accounting
principle............. (66,805) 677 (66,128) (3,931) (4,358) 3,795 (70,622)
Provision for income
taxes................. (197) -- (197) -- -- -- (197)
Minority interests..... (572) 572 -- -- -- -- --
-------- -------- --------- ------- ------- ------ --------
Income (loss) before
cumulative effect of
change in accounting
principle............. (67,574) 1,249 (66,325) (3,931) (4,358) 3,795 (70,819)
Cumulative effect of
change in accounting
principle for costs
of start-up
activities............ (2,414) -- (2,414) -- -- -- (2,414)
-------- -------- --------- ------- ------- ------ --------
Net income (loss)...... (69,988) 1,249 (68,739) (3,931) (4,358) 3,795 (73,233)
Dividends on preferred
stock................. (21,477) -- (21,477) -- -- -- (21,477)
-------- -------- --------- ------- ------- ------ --------
Net income (loss)
after deduction of
dividends on
preferred stock....... $(91,465) $ 1,249 $(90,216) $(3,931) $(4,358) $3,795 $(94,710)
======== ======== ========= ======= ======= ====== ========
7
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of June 30, 1999
(Dollars in thousands)
Adjustments
for Adjustments
Adjustments Pro Forma Proposed for Pro Forma
Historical for for BellSouth Powertel for the
CCIC Offerings Offerings Transaction Acquisition Transactions
---------- ----------- ---------- ----------- ----------- ------------
Assets:
Current assets:
Cash and cash
equivalents.......... $ 705,924 $600,511(a) $1,306,435 $(358,021)(f) $(13,115)(i) $ 935,299
Receivables........... 41,009 -- 41,009 -- -- 41,009
Inventories........... 12,591 -- 12,591 -- -- 12,591
Prepaid expenses and
other current
assets............... 7,951 -- 7,951 -- -- 7,951
---------- -------- ---------- --------- -------- ----------
Total current
assets.............. 767,475 600,511 1,367,986 (358,021) (13,115) 996,850
Property and equipment,
net.................... 1,615,646 -- 1,615,646 511,459(g) 13,115(j) 2,140,220
Goodwill and other
intangible assets,
net.................... 608,800 -- 608,800 -- -- 608,800
Deferred financing costs
and other assets, net.. 37,173 6,510(b) 43,683 -- -- 43,683
---------- -------- ---------- --------- -------- ----------
$3,029,094 $607,021 $3,636,115 $ 153,438 $ -- $3,789,553
========== ======== ========== ========= ======== ==========
Liabilities and
Stockholders' Equity:
Current liabilities:
Accounts payable...... $ 22,690 $ -- $ 22,690 $ -- $ -- $ 22,690
Other current
liabilities.......... 63,149 -- 63,149 -- -- 63,149
Long-term debt,
current maturities... -- -- -- -- -- --
---------- -------- ---------- --------- -------- ----------
Total current
liabilities......... 85,839 -- 85,839 -- -- 85,839
Long-term debt, less
current maturities..... 1,194,681 275,511(c) 1,470,192 -- -- 1,470,192
Other liabilities....... 45,991 -- 45,991 -- -- 45,991
---------- -------- ---------- --------- -------- ----------
Total liabilities.... 1,326,511 275,511 1,602,022 -- -- 1,602,022
---------- -------- ---------- --------- -------- ----------
Minority interests...... 52,100 -- 52,100 -- -- 52,100
Redeemable preferred
stock.................. 214,085 194,904(d) 408,989 -- -- 408,989
Stockholders' equity.... 1,436,398 136,606(e) 1,573,004 153,438(h) -- 1,726,442
---------- -------- ---------- --------- -------- ----------
$3,029,094 $607,021 $3,636,115 $ 153,438 $ -- $3,789,553
========== ======== ========== ========= ======== ==========
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 most recent debt offerings....................... $ 275,511
(2) Decrease resulting from the payment of underwriting
discounts and commissions and other fees and expenses
related to the most recent debt offerings............ (6,510)
(3) Increase resulting from sale of common stock to TdF
under its preemptive rights from the recent equity
offering............................................. 140,310
(4) Increase resulting from the receipt of proceeds from
the proposed issuance of the convertible preferred
stock and warrants in the GE Capital transaction..... 200,000
(5) Decrease resulting from the payment of fees and
expenses related to the proposed issuance of the
convertible preferred stock and warrants in the GE
Capital transaction.................................. (8,800)
---------
Total adjustments to cash and cash equivalents....... $ 600,511
=========
(b) Reflects deferred financing costs resulting from the
payment of underwriting discounts and commissions and
other fees and expenses related to the most recent debt
offerings.
(c) Reflects the increase resulting from the receipt of
proceeds from the most recent debt offerings.
(d) Reflects the increase resulting from the receipt of
proceeds from the proposed issuance of the convertible
preferred stock in the GE Capital transaction, net of the
value attributed to the accompanying warrants to purchase
shares of CCIC common stock.
(e) Reflects the following adjustments to stockholders'
equity:
(1) Increase resulting from sale of common stock to TdF
under its preemptive rights from the recent equity
offering............................................. $ 140,310
(2) Decrease resulting from the payment of fees and
expenses related to the proposed issuance of the
convertible preferred stock and warrants in the GE
Capital transaction.................................. (8,800)
(3) Increase resulting from the value attributed to the
warrants to purchase shares of CCIC common stock in
the GE Capital transaction........................... 5,096
---------
Total adjustments to stockholders' equity................ $ 136,606
=========
(f) Reflects the payment of the remaining cash portion of the purchase
price for the BellSouth transaction.
(g) Reflects the basis of property and equipment recorded in connection
with the BellSouth transaction.
(h) Reflects the increase resulting from the issuance of common stock
for a portion of the remaining purchase price for the BellSouth
transaction.
(i) Reflects the payment of the remaining portion of the closing price
for the Powertel acquisition.
(j) Reflects the increase in basis of property and equipment acquired
in the remaining portion of the Powertel acquisition.
9
The following table summarizes the adjustments for the recent and proposed
offerings, with increases to liabilities and stockholders' equity balances
shown as negative amounts:
Adjustment Reference
-------------------------------------------------------------------
(a)(1),(a)(3),(c),(e)(1) (a)(2),(a)(5),(b),(e)(2) (a)(4),(d),(e)(3) Totals
------------------------ ------------------------ ----------------- ---------
Cash and cash
equivalents............ $415,821 $(15,310) $200,000 $ 600,511
Deferred financing cost
and other assets, net.. -- 6,510 -- 6,510
Long-term debt, less
current maturities..... (275,511) -- -- (275,511)
Redeemable preferred
stock.................. -- -- (194,904) (194,904)
Stockholders' equity.... (140,310) 8,800 (5,096) (136,606)
-------- -------- -------- ---------
$ -- $ -- $ -- $ --
======== ======== ======== =========
The following table summarizes the adjustments for the BellSouth
transaction, with increases to liabilities and stockholders' equity balances
shown as negative amounts:
Adjustment Reference
--------------------
(f),(g),(h)
--------------------
Cash and cash equivalents............................... $(358,021)
Property and equpment, net.............................. 511,459
Stockholders' equity.................................... (153,438)
---------
$ --
=========
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)
--------------------
Cash and cash equivalents............................... $(13,115)
Property and equipment, net............................. 13,115
--------
$ --
========
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 June 30, 1999
-------------------------------------------------------------------------
Restricted Adjustments Restricted
Group for Group
Pro Exclusion of Pro Proposed Adjustments Pro Forma
Forma for Unrestricted Forma for BellSouth for Powertel for the
Offerings Subsidiaries Offerings Transaction Acquisition Transactions
---------- ------------ ---------- ----------- ------------ ------------
Assets:
Current assets:
Cash and cash
equivalents........... $1,306,435 $ (64,441) $1,241,994 $(358,021) $(13,115) $ 870,858
Receivables............ 41,009 (19,330) 21,679 -- -- 21,679
Inventories............ 12,591 (6,921) 5,670 -- -- 5,670
Prepaid expenses and
other current
assets................ 7,951 (5,975) 1,976 -- -- 1,976
---------- ----------- ---------- --------- -------- ----------
Total current
assets.............. 1,367,986 (96,667) 1,271,319 (358,021) (13,115) 900,183
Property and equipment,
net.................... 1,615,646 (1,051,307) 564,339 511,459 13,115 1,088,913
Investments in
Unrestricted
Subsidiaries........... -- 989,506 989,506 -- -- 989,506
Goodwill and other
intangible assets,
net.................... 608,800 (469,643) 139,157 -- -- 139,157
Deferred financing costs
and other assets, net.. 43,683 (4,396) 39,287 -- -- 39,287
---------- ----------- ---------- --------- -------- ----------
$3,636,115 $ (632,507) $3,003,608 $ 153,438 $ -- $3,157,046
========== =========== ========== ========= ======== ==========
Liabilities and
Stockholders' Equity:
Current liabilities:
Accounts payable....... $ 22,690 $ (18,571) $ 4,119 $ -- $ -- $ 4,119
Other current
liabilities........... 63,149 (56,551) 6,598 -- -- 6,598
Long-term debt,
current maturities.... -- -- -- -- -- --
---------- ----------- ---------- --------- -------- ----------
Total current
liabilities......... 85,839 (75,122) 10,717 -- -- 10,717
Long-term debt, less
current maturities..... 1,470,192 (461,219) 1,008,973 -- -- 1,008,973
Other liabilities....... 45,991 (44,066) 1,925 -- -- 1,925
---------- ----------- ---------- --------- -------- ----------
Total liabilities.... 1,602,022 (580,407) 1,021,615 -- -- 1,021,615
---------- ----------- ---------- --------- -------- ----------
Minority interests...... 52,100 (52,100) -- -- -- --
Redeemable preferred
stock.................. 408,989 -- 408,989 -- -- 408,989
Stockholders' equity.... 1,573,004 -- 1,573,004 153,438 -- 1,726,442
---------- ----------- ---------- --------- -------- ----------
$3,636,115 $ (632,507) $3,003,608 $ 153,438 $ -- $3,157,046
========== =========== ========== ========= ======== ==========
11