Exhibit 99.4.5
INDEPENDENT AUDITOR'S REPORT
To the Management Committee
West Virginia PCS Alliance, L.C.
Waynesboro, Virginia
We have audited the accompanying balance sheets of West Virginia PCS Alliance,
L.C. as of December 31, 1999 and 1998, and the related statements of
operations, members' equity (deficit) and cash flows for each of the years in
the two-year period ended December 31, 1999 and for the period from July 1,
1997 (date of inception) through December 31, 1997. These financial statements
are the responsibility of the Alliance's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Virginia PCS Alliance,
L.C. as of December 31, 1999 and 1998, and the results of its operations and
its cash flows for each of the years in the two-year period ended December 31,
1999 and for the period from July 1, 1997 (date of inception) through December
31, 1997, in conformity with generally accepted accounting principles.
/s/ McGladrey & Pullen LLP
Richmond, Virginia
February 17, 2000
1
WEST VIRGINIA PCS ALLIANCE, L.C.
BALANCE SHEETS
December 31, 1999 and 1998
1999 1998
----------- -----------
ASSETS (Note 2)
Current Assets
Cash and cash equivalents............................ $ 8,120 $ 10,254
Accounts receivable, net of allowance of $99,915
($1,768 in 1998).................................... 832,763 32,453
Other receivables.................................... 175,376 141,449
Inventories.......................................... 1,281,241 229,150
Prepaid expenses..................................... 69,049 74,145
----------- -----------
Total current assets............................... 2,366,549 487,451
----------- -----------
Subordinated Capital Certificates...................... 2,506,255 411,869
----------- -----------
Property and Equipment
Land and building.................................... 942,988 42,668
Network plant and equipment.......................... 33,898,373 8,911,322
Furniture, fixtures and other equipment.............. 1,330,005 789,631
Radio spectrum licenses.............................. 6,132,100 6,132,100
----------- -----------
Total in service................................... 42,303,466 15,875,721
Under construction................................... 5,436,007 11,634,333
----------- -----------
47,739,473 27,510,054
Less accumulated depreciation........................ 2,317,215 257,819
----------- -----------
45,422,258 27,252,235
----------- -----------
Other Assets
Radio spectrum licenses.............................. 2,844,772 2,756,946
Other................................................ 356,894 223,441
----------- -----------
3,201,666 2,980,387
----------- -----------
$53,496,728 $31,131,942
=========== ===========
LIABILITIES AND MEMBERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable..................................... $ 1,819,567 $ 7,147,589
Due to affiliates (Note 5)........................... 1,059,198 3,492,424
Accrued payroll...................................... 59,797 56,337
Advance billings..................................... 27,550 9,371
Accrued interest..................................... 5,434 4,526
Other accrued liabilities............................ 104,530 22,280
----------- -----------
Total current liabilities.......................... 3,076,076 10,732,527
----------- -----------
Long-Term Debt (Note 2)................................ 51,125,102 9,237,389
Commitments (Note 4)
Members' Equity (Deficit) (Note 3)..................... (704,450) 11,162,026
----------- -----------
$53,496,728 $31,131,942
=========== ===========
See Notes to Financial Statements.
2
WEST VIRGINIA PCS ALLIANCE, L.C.
STATEMENTS OF OPERATIONS
Years Ended December 31, 1999, 1998 and for the period fromJuly 1, 1997 (date
of inception) through December 31, 1997
1999 1998 1997
------------ ----------- ---------
Operating revenues:
Subscriber revenue...................... $ 2,307,517 $ 46,293 $ --
Equipment sales......................... 681,398 65,388 --
------------ ----------- ---------
2,988,915 111,681 --
------------ ----------- ---------
Operating expenses:
Cost of sales........................... 3,065,469 218,943 --
Maintenance and support................. 4,129,714 610,106 --
Depreciation and amortization........... 2,067,618 258,959 --
Customer operations..................... 4,094,039 1,308,767 --
Corporate operations.................... 1,743,683 817,984 --
------------ ----------- ---------
15,100,523 3,214,759 --
------------ ----------- ---------
Loss before interest expense.......... (12,111,608) (3,103,078) --
Interest expense.......................... 1,175,868 -- --
------------ ----------- ---------
Net loss.................................. $(13,287,476) $(3,103,078) $ --
============ =========== =========
See Notes to Financial Statements.
3
WEST VIRGINIA PCS ALLIANCE, L.C.
STATEMENTS OF CASH FLOWS
Years Ended December 31, 1999, 1998 and for the period from July 1, 1997 (date
of inception) through December 31, 1997
1999 1998 1997
------------ ------------ -----------
Cash Flows From Operating Activities
Net loss............................. $(13,287,476) $ (3,103,078) $ --
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation....................... 2,059,396 254,849 --
Amortization....................... 8,222 4,110 --
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable.............. (834,237) (173,902) --
Inventories...................... (1,052,091) (229,150) --
Prepaid expenses................. 5,096 (74,145) --
Increase in:
Accounts payable................. 518,754 682,086 --
Advance billings................. 18,180 9,371 --
Accrued interest................. 908 4,526 --
Other accrued liabilities........ 85,710 2,489 --
------------ ------------ -----------
Net cash used in operating
activities.................... (12,477,538) (2,622,844) --
------------ ------------ -----------
Cash Flows From Investing Activities
Purchase of property and
equipment......................... (26,076,196) (13,997,039) (729,160)
Increase in radio spectrum
licenses.......................... (87,826) (3,994) (8,851,607)
Increase in deferred charges....... (95) (10,803) (380,235)
Increase in patronage capital
certificates...................... (141,580) -- --
------------ ------------ -----------
Net cash used in investing
activities.................... (26,305,697) (14,011,836) (9,961,002)
------------ ------------ -----------
Cash Flows From Financing Activities
Increase in equity issuance costs.. -- (2,232) (25,812)
Capital contributions.............. 1,421,000 -- 14,316,036
Advances from affiliates........... (2,433,226) 3,426,045 66,379
Borrowings on revolving credit
agreements, net................... -- 1,000,000 --
Proceeds from long-term borrowings,
net............................... 39,793,327 7,825,520 --
------------ ------------ -----------
Net cash provided by financing
activities.................... 38,781,101 12,249,333 14,356,603
------------ ------------ -----------
Net increase (decrease) in cash
and cash equivalents.......... (2,134) (4,385,347) 4,395,601
Cash and Cash Equivalents
Beginning............................ 10,254 4,395,601 --
------------ ------------ -----------
Ending............................... $ 8,120 $ 10,254 $ 4,395,601
============ ============ ===========
See Notes to Financial Statements.
4
WEST VIRGINIA PCS ALLIANCE, L.C.
STATEMENTS OF CASH FLOWS (CONTINUED)
Years Ended December 31, 1999, 1998 and for the period from July 1, 1997 (date
of inception) through December 31, 1997
1999 1998 1997
---------- ---------- --------
Supplemental Schedule of Noncash Investing and
Financing Activities
Noncash increases in property and equipment
consisting primarily of accrued construction
costs and reallocation of prior year other
intangible costs............................. $ 618,726 $6,661,939 $799,469
========== ========== ========
Subordinated capital certificates acquired by
long-term borrowings......................... $2,094,386 $ 411,869 $ --
========== ========== ========
Supplemental Disclosure of Cash Flow Information
Cash payments for interest.................... $1,781,822 $ 178,627 $ --
========== ========== ========
See Notes to Financial Statements.
5
WEST VIRGINIA PCS ALLIANCE, L.C.
STATEMENTS OF MEMBERS' EQUITY (DEFICIT)
Years Ended December 31, 1999, 1998 and for the period from July 1, 1997 (date
of inception) through December 31, 1997
Common
Membership
Interests
------------
Initial Capital Contribution..................................... $ 14,316,036
Issuance costs................................................. (25,812)
Net income..................................................... --
------------
Balance as of December 31, 1997.................................. 14,290,224
Issuance costs................................................. (25,120)
Net loss....................................................... (3,103,078)
------------
Balance as of December 31, 1998.................................. 11,162,026
Capital contributions.......................................... 1,421,000
Net loss....................................................... (13,287,476)
------------
Balance as of December 31, 1999.................................. $ (704,450)
============
See Notes to Financial Statements.
6
WEST VIRGINIA PCS ALLIANCE, L.C.
NOTES TO FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies
The West Virginia PCS Alliance, L.C. ("Alliance") was organized in 1997
pursuant to the provisions of the Virginia Limited Liability Company Act. The
Alliance was formed to fund, establish and operate a business to design,
construct, own, operate and maintain a personal communications system to
provide personal communications services ("PCS") in West Virginia. Operations
commenced during September 1998, prior to which the Alliance was in the
development stage. Its major activities through September 1998 were limited to
acquiring PCS radio spectrum licenses, designing and constructing a personal
communications system and obtaining equity capital.
CFW Wireless Inc., a wholly-owned subsidiary of CFW Communications Company, is
responsible for managing and operating the Alliance pursuant to the terms and
conditions of the service agreement and within the framework of the approved
operating and capital business plan.
The following is a summary of the Alliance's significant accounting policies:
Accounting estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Cash and cash equivalents: The Alliance considers all highly liquid cash
investments with a purchased maturity of three months or less to be cash
equivalents. At times such investments may be in excess of federally-
insured amounts.
Inventories: Inventories include PCS telephone equipment held for sale and
are stated at the lower of average cost or market.
Property and equipment: Property and equipment is stated at cost and
depreciated using the straight-line method over their estimated useful
lives. Buildings are depreciated over a 50-year life. Network plant and
equipment are depreciated over various lives ranging from 5 to 17 years,
with an average life of approximately 10 years for the category. Furniture,
fixtures and other equipment are depreciated over various lives ranging
from 3 to 24 years. Radio spectrum licenses, which are for areas where the
licenses are being used in operations, are amortized over a life of 40
years. The Alliance includes radio spectrum licenses in other assets until
such licenses are placed in service. Assets under construction represent
costs incurred for the construction of cell sites, including allocated
overhead costs.
Revenue recognition: The Alliance earns revenue by providing access to and
usage of its personal communications network. Local service and airtime
revenues are recognized as services are provided. Other revenues for
equipment sales are recognized at the point of sale. Handset equipment is
sold at prices below cost. Prices are based on the service contract period.
The Alliance recognizes the entire cost of the handsets at the point of
sale, rather than deferring such costs over the service contract period.
7
WEST VIRGINIA PCS ALLIANCE, L.C.
NOTES TO FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies (Continued)
Fair value of financial instruments: The fair value of financial
instruments recorded on the balance sheets are not significantly different
than the carrying amounts.
Income taxes: The Alliance is treated as a partnership for income tax
purposes. The Internal Revenue Code and applicable state statutes provide
that income and expenses of a partnership are not separately taxable, but
rather accrue directly to the members as provided by agreement.
Accordingly, no provision for federal or state income taxes has been made
in the financial statements.
Financial statement classifications: Certain amounts on the 1998 and 1997
financial statements have been reclassified, with no effect on net loss or
members' equity to conform with classifications adopted in 1999.
Note 2. Long-Term Debt
Long-term debt consists of the following as of December 31:
1999 1998
----------- ----------
Vendor Supported Loan.................................... $50,125,102 $8,237,389
Line of Credit........................................... 1,000,000 1,000,000
----------- ----------
$51,125,102 $9,237,389
=========== ==========
In July 1998, the Alliance entered into a $70.5 million Senior Secured Credit
Facility with the Rural Telephone Financing Cooperative ("RTFC" or "Lender")
and Motorola, Inc. ("Motorola"). The available facilities consist of a 7-year
senior secured term loan ("Vendor Supported Loan") in the amount of $52.5
million, a 7-year senior secured term loan ("Supplemental Loan") in the amount
of $17.0 million, and a 5-year senior secured revolving line of credit loan
("Line of Credit") in the amount of $1.0 million.
The Vendor Supported Loan is to finance up to $49.9 million of Motorola
supplied PCS equipment and engineering services, nonvendor related capital
expenditures and microwave relocation expenses, and to purchase up to $2.6
million of RTFC subordinated capital certificates ("SCCs"). The Supplemental
Loan is to finance up to $16.2 million of non-Motorola related capital
expenditures and working capital, and to purchase up to $0.8 million of RTFC
SCCs. The Line of Credit is to supplement the Alliance's general short-term
cash requirements.
The RTFC SCC's are nonmarketable securities and are stated at historical cost.
As the RTFC loans are repaid, the SCCs will be refunded through a cash payment
to maintain a 5% SCCs-to-outstanding loan balance ratio.
As borrowings occur, the Alliance can choose between several fixed and
variable rate interest options. The variable interest rate in effect on the
nonfixed portions of the Vendor Supported Loan at December 31, 1999 was 7.45%.
In September 1998, the Alliance converted $5.0 million of the Vendor Supported
Loan to a fixed rate of 6.55%. This rate is in effect until September 2001, at
which time the loan will revert to the variable rate.
8
WEST VIRGINIA PCS ALLIANCE, L.C.
NOTES TO FINANCIAL STATEMENTS
Note 2. Long-Term Debt (Continued)
Under the Line of Credit agreement, the Alliance will pay interest quarterly
with all principal and interest payments due five years from the date of the
Line of Credit agreement. The interest rate on the Line of Credit is the
RTFC's standard monthly quoted line of credit rate plus 0.5%. The interest
rate in effect on the Line of Credit at December 31, 1999 was 8.1%.
All of the Alliance's present and future assets and revenues are pledged as
security for the RTFC loans. In addition, each member of the Alliance has
entered into an irrevocable unsecured pro rata guaranty with the RTFC. These
guarantees will not exceed the lesser of (i) $32.8 million plus interest and
fees due thereon or (ii) 30% of the outstanding indebtedness under the Vendor
Supported Loan plus outstanding borrowings on the Supplemental Loan and Line
of Credit, inclusive of principal, interest and fees due thereon. As
additional credit support for the Vendor Supported Loan, Motorola has entered
into a guaranty agreement with the RTFC, whereby it is committed to guarantee
up to the lesser of (i) $36.8 million or (ii) 70% of the Alliance's
outstanding indebtedness under the Vendor Supported Loan. Pursuant to this
agreement, Motorola is entitled to a guaranty fee of 2%, 3%, and 4% of the
outstanding indebtedness under the Vendor Supported Loan which it guarantees
in years 5, 6, and 7, respectively. There is no fee in years 1 through 4.
The loan agreements contain various restrictive covenants including negative
covenants related to additional indebtedness, redemption of membership
interests and payment of management fees. The agreements also contain
financial covenants related to cash flows, population coverage, number of
subscribers, debt service coverage and leverage.
There are no long-term debt maturities for 2000-2001. Maturities for 2002,
2003, 2004 and 2005 are $2,506,255, $7,265,638, $7,518,765 and $33,834,444,
respectively. Interest costs were approximately $1,783,000 in 1999,
approximately $607,000 of which was capitalized.
The RTFC allocates a large percentage of its annual margins to its patrons. A
majority portion of the allocation is returned to the borrowers in cash. The
remainder is issued to borrowers in the form of patronage capital
certificates, which are retired in cash on an RTFC board approved cycle. In
1999, the Alliance recorded a receivable in the amount of $42,932 for the 1999
cash distribution that is reflected in other receivables on the balance sheet.
The net present value of the total patronage capital certificates was $141,579
at December 31, 1999 and is reflected in other assets on the balance sheet.
Note 3. Capital Structure
The Alliance's authorized capitalization consists of one class of membership
interest, which consists of 1,242,002 units issued for a total of $14,316,036
before $50,932 of related issuance costs. This issuance is defined as the
initial "Capital Contribution." Additional future cash contributions may be
required from the members on the same terms and conditions of their initial
Capital Contribution. If any member fails to make the additional
contributions, their existing capital account balance may be redeemed at 25%
of the then outstanding balance and amounts forfeited would be allocated among
the remaining common members.
9
WEST VIRGINIA PCS ALLIANCE, L.C.
NOTES TO FINANCIAL STATEMENTS
Note 3. Capital Structure (Continued)
Pursuant to the terms of the aforementioned debt facility, the members entered
into equity subscriptions agreements that obligate them to contribute
additional equity of $5.68 million, in the aggregate. Such additional equity
contributions are to be made in four annual installments of $1.42 million
ending in 2002 for the purchase, at fair market value, of Common Membership
units.
In January 2000, the members contributed $1.42 million to the Alliance,
purchasing 78,944.44 Common Membership units.
Note 4. Commitments
Leases: The Alliance leases property for cell site locations and retail
stores. Leases for cell site locations vary in term from five to ten years.
Leases for retail store locations vary in term from one to five years. Certain
cell site location leases have been prepaid and are being amortized on a
straight-line basis over the total lease term. Total annual lease expense was
approximately $769,000 for the year ended December 31, 1999. The total amount
committed under these agreements is $727,989 in 2000, $682,133 in 2001,
$657,140 in 2002, $557,183 in 2003, $308,602 in 2004 and $326,765 for the
years thereafter.
Equipment: The Alliance has entered into a purchase contract to acquire up to
$35.0 million of equipment over a period ending July 10, 2002. As of December
31, 1999, the Alliance had purchased $20.2 million pursuant to the terms of
such contract. Total outstanding purchase commitments were approximately $2.6
million at December 31, 1999.
Note 5. Related Party Transactions
All transactions of the Alliance are administered by the managing partner. CFW
Wireless, a subsidiary of CFW Communications Company provided engineering,
construction, customer care and other services to the Alliance in accordance
with the service contract, which totalled $1,273,715 in 1999, $933,585 in 1998
and $179,836 in 1997. All 1999 charges were expensed. Of the total 1998
charges, $380,746 was expensed and $552,839 was capitalized during the
construction and start up period. CFW Communications Company also provided
certain corporate services for the Alliance in the amount of $1,168,009 in
1999, $553,225 in 1998 and $69,541 in 1997. All of the 1999 charges were
expensed. Of the total 1998 charges, $436,014 was expensed and $117,211 was
capitalized during the construction and start up period. All of the 1997
charges were capitalized. Corporate services include executive, finance,
accounting, human resources, information management and marketing services.
Such services are charged to the Alliance at cost. In addition, the managing
partner advances funds to the Alliance to cover expenditures incurred. The net
advances are included in due to affiliates in the accompanying balance sheet.
In addition, the managing partner advances funds to the Alliance to cover
expenditures incurred. These advances are included in due to affiliates in the
accompanying balance sheets. Interest on outstanding advances totaled $193,990
in 1999.
Switch access and switching equipment and services totaling $972,759 in 1999
and $1,115,043 in 1998 were provided at cost by the Virginia PCS Alliance LC
(an entity related by common ownership and management). All of the 1999
charges were expensed. Of the total 1998 charges, $375,941 was expensed and
$739,102 was capitalized.
10
WEST VIRGINIA PCS ALLIANCE L.C.
CONDENSED BALANCE SHEETS
March 31, December 31,
2000 1999
----------- ------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents.......................... $15,071,227 $ 8,120
Accounts receivable, net of allowance.............. 1,428,408 832,763
Accounts receivable, other......................... 172,186 175,376
Inventories........................................ 767,446 1,281,241
Prepaid expenses................................... 54,676 69,049
----------- -----------
Total current assets............................. 17,493,943 2,366,549
----------- -----------
Subordinated Capital Certificates.................... 2,518,223 2,506,255
----------- -----------
Property and Equipment
Land and building.................................. 949,020 942,988
Network plant and equipment........................ 26,818,885 33,898,373
Furniture, fixtures and other equipment............ 1,480,372 1,330,005
Radio spectrum licenses............................ 6,132,100 6,132,100
----------- -----------
Total in service................................. 35,380,377 42,303,466
Under construction................................. 10,220,007 5,436,007
----------- -----------
45,600,384 47,739,473
Less accumulated depreciation...................... 2,625,379 2,317,215
----------- -----------
42,975,005 45,422,258
----------- -----------
Other Assets
Radio spectrum licenses............................ 2,844,772 2,844,772
Other.............................................. 425,702 356,894
----------- -----------
3,270,474 3,201,666
----------- -----------
$66,257,645 $53,496,728
=========== ===========
LIABILITIES AND MEMBER'S EQUITY (DEFICIT)
Current Liabilities
Accounts payable................................... $ 6,352,826 $ 1,819,567
Due to affiliates.................................. 1,423,472 1,059,198
Advance billings................................... 38,273 27,550
Accrued interest................................... (1,915) 5,434
Accrued payroll.................................... 31,144 59,797
Other accrued liabilities.......................... 108,655 104,530
----------- -----------
Total current liabilities........................ 7,952,455 3,076,076
Long-Term Liabilities
Long-term debt..................................... 51,546,937 51,125,102
Other long term liabilities........................ 10,846,977 --
----------- -----------
62,393,914 51,125,102
Members' Equity (Deficit)
Common membership interests........................ (4,088,724) (704,450)
----------- -----------
(4,088,724) (704,450)
----------- -----------
$66,257,645 $53,496,728
=========== ===========
See Notes to Financial Statements.
11
WEST VIRGINIA PCS ALLIANCE L.C.
CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2000 and 1999
2000 1999
----------- -----------
(Unaudited)
Operating revenues:
Subscriber revenue................................. $ 1,670,673 $ 143,210
Wholesale revenue.................................. 319,803 --
Equipment revenue.................................. 467,598 89,752
----------- -----------
2,458,074 232,962
----------- -----------
Operating expenses:
Cost of sales...................................... 2,167,018 251,394
Maintenance and support............................ 1,405,295 784,720
Depreciation and amortization...................... 701,557 268,130
Customer operations................................ 1,681,816 692,327
Corporate operations............................... 459,279 407,485
----------- -----------
6,414,965 2,404,056
----------- -----------
Operating loss................................... (3,956,891) (2,171,094)
Interest income (expense)
Interest income.................................... 47,430 153,553
Senior credit facility............................. (895,813) (161,735)
----------- -----------
(848,383) (8,182)
----------- -----------
Net loss............................................. $(4,805,274) $(2,179,276)
=========== ===========
See Notes to Financial Statements.
12
WEST VIRGINIA PCS ALLIANCE L.C.
CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2000 and 1999
2000 1999
------------ -----------
(Unaudited) ---
Cash Flows From Operating Activities
Net loss...................................... $ (4,805,274) $(2,179,276)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation................................ 699,502 266,075
Amortization................................ 2,055 2,055
Changes in assets and liabilities (Increase)
in:
Accounts receivable....................... (592,455) (126,909)
Inventories............................... 513,795 (387,706)
Prepaid expenses.......................... 14,373 (18,325)
Increase (decrease) in:
Accounts payable, trade................... 2,756,162 (103,499)
Advance billings and customer deposits.... 10,723 3,546
Accrued interest.......................... (7,349) (1,737)
Other accrued liabilities................. (24,528) (4,039)
------------ -----------
Net cash used in operating activities... (1,432,996) (2,549,815)
------------ -----------
Cash Flows From Investing Activities
Purchase of property and equipment............ (6,070,868) (4,494,430)
Proceeds from sale of towers.................. 20,442,692 --
Increase in patronage capital certificates.... (90,146) --
Decrease (Increase) in deferred
charges/credits.............................. 19,283 9,287
------------ -----------
Net cash provided by (used in) investing
activities............................... 14,300,961 (4,485,143)
------------ -----------
Cash Flows From Financing Activities
Capital contributions, net.................... 1,421,000 1,421,000
Advances from affiliates...................... 364,274 (2,328,269)
Borrowings on revolving credit agreements,
net.......................................... (500,000) (1,000,000)
Proceeds from long-term borrowings............ 909,868 8,942,730
------------ -----------
Net cash provided by financing
activities............................... 2,195,142 7,035,461
------------ -----------
Net increase in cash and cash
equivalents.............................. 15,063,107 503
Cash and Cash Equivalents:
Beginning..................................... 8,120 10,254
------------ -----------
Ending........................................ $15,071,227 $ 10,757
============ ===========
See Notes to Financial Statements.
13
WEST VIRGINIA PCS ALLIANCE L.C.
CONDENSED STATEMENTS OF MEMBERS' EQUITY (DEFICIT)
(Unaudited)
Common
Membership
Interests
-----------
Balance as of January 1, 1999..................................... $11,162,026
Capital contributions........................................... 1,421,000
Net loss........................................................ (2,179,278)
-----------
Balance as of March 31, 1999...................................... 10,403,748
Net loss........................................................ (3,269,708)
-----------
Balance as of June 30, 1999....................................... 7,134,040
Net loss........................................................ (3,146,097)
-----------
Balance as of September 30, 1999.................................. 3,987,943
Net loss........................................................ (4,692,393)
-----------
Balance (deficit) as of December 31, 1999......................... (704,450)
Capital contributions........................................... 1,421,000
Net loss........................................................ (4,805,274)
-----------
Balance (deficit) as of March 31, 2000............................ $(4,088,724)
===========
See Notes to Financial Statements.
14
WEST VIRGINIA PCS ALLIANCE, L.C.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) In the opinion of the managing member of the Alliance, the accompanying
financial statements which are unaudited, except for the balance sheet
dated December 31, 1999, contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial
position as of March 31, 2000 and December 31, 1999 and the results of
operations for the three months ended March 31, 2000 and 1999 and cash
flows for the three months ended March 31, 2000 and 1999. The results of
operations for the three months ended March 31, 2000 and 1999 are not
necessarily indicative of the results to be expected for the full year.
(2) In March 2000, the Alliance sold 67 towers for $20.6 million to Crown
Castle International Corp (Crown). In April 2000, the Alliance sold a
total of 15 towers for $3.3 million to Crown. In connection with these
transactions, the Alliance has certain future leaseback and other
commitments. Accordingly, these gains have been deferred for book purposes
and will be amortized over the life of the leaseback agreement.
(3) In January 2000, the members contributed $1.4 million to the Alliance,
purchasing 78,944.44 Common Membership Units.
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