EXHIBIT 99.1
UNAUDITED PROFORMA CONSOLIDATED FINANCIAL INFORMATION
The accompanying unaudited pro forma consolidated financial information has
been derived by the application of pro forma adjustments to our historical
consolidated financial statements. The pro forma adjustments give effect to:
- - the issuance of 3.7 million shares of common stock for 100% of the stock of
R&B Communications. This merger has been accounted for using the purchase
method of accounting;
- - the increase in our common ownership in the West Virginia Alliance of 34.3%,
and the subsequent consolidation (entity was previously accounted for on the
equity method, the consolidation will be accounted for as a step transaction)
due to:
- the merger, as R&B Communications owns approximately 34.3% of the common
interests of the West Virginia Alliance;
The adjustments, which are based upon available information and upon certain
assumptions that management believes are reasonable, are described in the
accompanying notes. The allocation of these adjustments will be different and
the difference may be material.
The unaudited pro forma consolidated financial information should not be
considered indicative of actual results that would have been achieved had the
transactions been consummated on the date or for the periods indicated and do
not purport to indicate results of operations as of any future date or for any
future period.
The unaudited pro forma consolidated financial information should be read in
conjunction with the historical financial statements and the notes thereto.
NTELOS Inc.
Unaudited Pro Forma Consolidated
Statement of Operations
For the three months ended March 31, 2001 for NTELOS
For the period from January 1, 2001 to February 13, 2001 for R&B and WV Alliance
(in thousands)
Acquisitions
-------------------------
NTELOS R&B WV Alliance Pro Forma Pro Forma
Historical Historical Historical Adjustments As Adjusted
---------- ---------- ----------- ----------- -----------
Operating Revenues
Wireless communications $ 25,265 $ - $ 2,468 $ - $ 27,733
Wireline communications 19,915 2,699 - - 22,614
Other communication services 2,384 - - - 2,384
---------- ---------- ----------- ----------- -----------
47,564 2,699 2,468 - 52,731
---------- ---------- ----------- ----------- -----------
Operating Expenses
Cost of goods sold 10,184 - 1,388 - 11,572
Maintenance and support 13,828 981 900 - 15,709
Depreciation and amortization 16,199 479 437 440 (a) 17,555
Customer operations 14,791 417 1,089 - 16,297
Corporate operations 4,877 117 378 - 5,372
---------- ---------- ----------- ----------- -----------
59,879 1,994 4,192 440 66,505
---------- ---------- ----------- ----------- -----------
Operating income (loss) (12,315) 705 (1,724) (440) (13,774)
Other income (expenses)
Other expense, principally interest (15,169) (2) (1,155) - (16,326)
Net Equity income (loss) from PCS
and other wireless investees (1,286) (1,803) - 3,089 (b) -
---------- ---------- ----------- ----------- -----------
(16,455) (1,805) (1,155) 3,089 (16,326)
---------- ---------- ----------- ----------- -----------
Income (loss) before income taxes
and minority interest (28,770) (1,100) (2,879) 2,649 (30,100)
Income taxes (10,764) (511) - (449)(c) (11,724)
---------- ---------- ----------- ----------- -----------
Income (loss) before minority
interests (18,006) (589) (2,879) 3,098 (18,376)
Minority Interests 1,747 - - (1,294)(b) 453
---------- ---------- ----------- ----------- -----------
Net income (loss) $ (16,259) $ (589) $ (2,879) $ 1,804 $ (17,923)
========== ========== =========== =========== ===========
Dividend requirements on
preferred stock 4,687 - - - 4,687
---------- ---------- ----------- ----------- -----------
Income (loss) applicable to
common shares $ (20,946) $ (589) $ (2,879) $ 1,804 $ (22,610)
========== ========== =========== =========== ===========
Net loss per common share - basic
and diluted $ (1.34)
===========
Average shares outstanding - basic
and diluted 16,832
Other Data
EBITDA (d) 3,884 1,184 (1,287) - 3,781
Depreciation and amortization 16,199 479 437 440 17,555
Interest expense paid or payable
in cash 18,197 38 1,155 - 19,390
Cash flows provided (used in):
Operating activities (2,257) 1,494 (1,364) - (2,127)
Investing activities (13,267) (2,354) (2,632) - (18,253)
Financing activities 18,433 (48) 3,997 - 22,382
Pro forma deficiency of earnings
to fixed charges (30,553)
Notes to Combined Pro Forma Statements of Operations
The pro forma financial information has been derived by the application of pro
forma adjustments to the Company's historical financial statements for the
period noted.
(a) The pro forma adjustment to depreciation and amortization expense reflects
the application of purchase accounting to R&B and the Alliances.
Three Months Ended
March 31, 2001
--------------------
Purchase accounting (1)
R&B $ 404
Alliances 36
--------------------
Total depreciation and amortization expense adjustment $ 440
====================
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(1) The merger with R&B and the consolidation of the Alliances have been
accounted for as purchases. Under purchase accounting, the total
purchase cost will be allocated to the assets acquired and liabilities
assumed, based on valuations and other studies, as of the date of
acquisition. The actual allocation of purchase cost and the resulting
effect on income from operations may differ significantly from the
estimated pro forma amounts included in this offering memorandum. For
pro forma purposes, the preliminary goodwill balance is being amortized
over twenty years.
(b) Represents the elimination of the equity losses related to the Alliances,
previously recorded by NTELOS and R&B and capital contributions made by R&B
to the Virginia Alliance. NTELOS controls the Alliances following
completion of the Transactions. As such, the Alliances' income statements
have been consolidated with ours.
(c) Represents the tax effect of the pro-forma adjustments and the
consolidation of the Alliances at the applicable effective tax rate.
(d) EBITDA is defined, for any period, as earnings before income taxes and
minority interest, interest expense, interest income, depreciation and
amortization, gain/(loss) on sale of fixed assets, net equity income/loss
from investees and asset impairment charge. EBITDA is presented because it
is a widely accepted financial indicator of a company's ability to service
and/or incur indebtedness. EBITDA should not be considered as an alternative
to net income as a measure of the Company's operating results or to cash
flow as a measure of liquidity. Because EBITDA is not calculated
identically by all companies, the presentation herein may not be strictly
comparable to other similarly titled measures of other companies.
Pro forma EBITDA is calculated as follows:
Three Months Ended
March 31, 2001
------------------
Pro forma net loss before income taxes and minority interest $ (30,100)
Adjustments:
Other expense, principally interest 16,326
Depreciation and amortization 17,555
-----------------
Pro Forma EBITDA $ 3,781
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