EXHIBIT 99.4
ADVANCED ENERGY AND AERA
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
(IN THOUSANDS)
<Table>
<Caption>
ADVANCED
ENERGY AERA
DECEMBER 31, DECEMBER 31, PRO FORMA
2001 2001 ADJUSTMENTS PRO FORMA
------------ ------------ ----------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ......................... $ 81,955 $ 9,368 $ (45,000)(1) $ 46,323
Marketable securities ............................. 190,023 1,219 -- 191,242
Accounts receivable, net .......................... 30,812 9,409 -- 40,221
Notes receivable -- trade ......................... -- 3,055 -- 3,055
Inventories, net .................................. 45,248 17,921 -- 63,169
Income tax receivable ............................. 15,862 -- -- 15,862
Other current assets .............................. 15,378 334 -- 15,712
--------- --------- --------- ---------
Total current assets .......................... 379,278 41,306 (45,000) 375,584
--------- --------- --------- ---------
PROPERTY AND EQUIPMENT, net ......................... 31,095 13,658 -- 44,753
OTHER ASSETS:
Goodwill and intangibles, net ..................... 23,072 -- 37,151(1) 60,223
Deferred debt issuance costs ...................... 5,736 -- -- 5,736
Other ............................................. 11,014 951 -- 11,965
--------- --------- --------- ---------
Total assets .................................. $ 450,195 $ 55,915 $ (7,849) $ 498,261
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .................................. $ 10,231 $ 1,547 $ -- $ 11,778
Trade notes payable ............................... -- 3,665 -- 3,665
Other accrued expenses ............................ 14,263 6,400 -- 20,663
Notes payable ..................................... -- 11,007 -- 11,007
Current portion of long-term debt ................. 1,130 8,377 -- 9,507
Other current liabilities ......................... 3,211 180 -- 3,391
--------- --------- --------- ---------
Total current liabilities ..................... 28,835 31,176 -- 60,011
--------- --------- --------- ---------
LONG-TERM LIABILITIES:
Senior borrowings ................................. -- 13,895 -- 13,895
Convertible subordinated notes payable ............ 206,600 -- -- 206,600
Other long-term liabilities ....................... 415 2,995 -- 3,410
--------- --------- --------- ---------
207,015 16,890 -- 223,905
--------- --------- --------- ---------
Total liabilities ............................. 235,850 48,066 -- 283,916
--------- --------- --------- ---------
STOCKHOLDERS' EQUITY ................................ 214,345 7,849 (7,849)(1) 214,345
--------- --------- --------- ---------
Total liabilities and stockholders' equity .... $ 450,195 $ 55,915 $ (7,849) $ 498,261
========= ========= ========= =========
</Table>
The accompanying notes to unaudited pro forma combined condensed
financial statements are an integral part of this unaudited
pro forma combined condensed balance sheet.
ADVANCED ENERGY AND AERA
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<Table>
<Caption>
ADVANCED
ENERGY AERA
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, PRO FORMA PRO FORMA
2001 2001 ADJUSTMENTS COMBINED
------------ ------------ ----------- ---------
SALES .................................................... $ 193,600 $ 69,793 $ -- $ 263,393
COST OF SALES ............................................ 136,168 54,236 -- 190,404
--------- --------- --------- ---------
Gross profit .......................................... 57,432 15,557 -- 72,989
--------- --------- --------- ---------
OPERATING EXPENSES:
Research and development ............................... 45,151 1,800 -- 46,951
Selling, general and administrative .................... 45,306 23,919 2,654(2) 71,879
Restructuring charges .................................. 3,070 -- -- 3,070
Impairment of goodwill, investments and advances ....... 12,292 -- -- 12,292
Litigation recovery .................................... (1,500) -- -- (1,500)
--------- --------- --------- ---------
Total operating expenses .............................. 104,319 25,719 2,654 132,692
--------- --------- --------- ---------
LOSS FROM OPERATIONS ..................................... (46,887) (10,162) (2,654) (59,703)
OTHER (EXPENSE) INCOME ................................... (2,078) 2,582 (1,800)(3) (1,296)
--------- --------- --------- ---------
Net loss before income taxes and minority interest .... (48,965) (7,580) (4,454) (60,999)
(BENEFIT) PROVISION FOR INCOME TAXES ..................... (17,441) 8,987 (1,860)(4) (10,314)
MINORITY INTEREST IN NET LOSS ............................ (145) -- -- (145)
--------- --------- --------- ---------
NET LOSS ................................................. $ (31,379) $ (16,567) $ (2,594) $ (50,540)
========= ========= ========= =========
BASIC LOSS PER SHARE ..................................... $ (0.99) $ (1.59)
========= =========
DILUTED LOSS PER SHARE ................................... $ (0.99) $ (1.59)
========= =========
BASIC WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING ........................................... 31,712 31,712
========= =========
DILUTED WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING ........................................... 31,712 32,712
========= =========
</Table>
The accompanying notes to unaudited pro forma combined condensed
financial statements are an integral part of this unaudited
pro forma combined condensed statement of operations.
ADVANCED ENERGY AND AERA
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The unaudited pro forma combined condensed balance sheet assumes that the
business combination took place December 31, 2001, and combined Aera's unaudited
condensed consolidated balance sheet as of December 31, 2001 with Advanced
Energy's audited condensed consolidated balance sheet as of December 31, 2001.
The unaudited pro forma combined condensed statement of operations assumes the
business combination took place as of January 1, 2001, and combined Aera's
unaudited condensed consolidated statement of operations for the twelve-month
period ended December 31, 2001 with Advanced Energy's audited condensed
consolidated statement of operations for the twelve-month period ended December
31, 2001.
There were no material transactions between Advanced Energy and Aera during
the period presented.
There are no material differences between the accounting policies of
Advanced Energy and Aera.
The pro forma combined benefit for income taxes may not represent the
amounts that would have resulted had Advanced Energy and Aera filed consolidated
income tax returns for the period presented.
NOTE 2. PRO FORMA ADJUSTMENTS
The purchase price (cash paid and the fair value of the liabilities
assumed) was allocated based upon the estimated fair value of assets acquired as
of the purchase date of January 18, 2002. The pro forma purchase price
allocation is based on Advanced Energy's preliminary estimates of the fair value
of Aera's assets, and is applied to the December 31, 2001 balance sheet of Aera.
Therefore, such allocation may not reflect the actual liabilities assumed and
goodwill or other intangible assets that will result from the transaction.
Advanced Energy is awaiting additional information related to the fair value of
certain assets acquired and liabilities assumed. Management does not expect the
finalization of this matter to have a material effect on the purchase price
allocation.
(1) Adjustment to record the components of the purchase price -- Cash of
approximately $44.0 million was paid to the stockholders of Aera for net assets
of approximately $7.8 million. Advanced Energy also paid approximately $1
million in acquisition-related costs. The excess of purchase price over the
estimated fair value of intangible assets of approximately $37.2 million was
allocated to non-amortizable goodwill and amortizable identifiable intangibles,
with approximately 50% to goodwill and 50% to intangibles.
(2) Adjustment to record amortization of intangibles -- Advanced Energy
estimated that the amortizable intangibles have an average life of approximately
seven years. This adjustment reflects one year of amortization of these
intangibles.
(3) Adjustment to record effect on interest income due to cash purchase -
The cash of approximately $45.0 million that is assumed to have been used to
purchase Aera on January 1, 2001 generated approximately $1.8 million of
interest income in 2001 to Advanced Energy when invested as marketable
securities. This adjustment is to increase before-tax loss by this amount, based
on the assumption of a 4% interest rate on the investments.
(4) Adjustment to record income tax effect of other pro forma income
statement adjustments -- Advanced Energy assumes that Aera's marginal income tax
rate is approximately 45% for intangible amortization that would occur in Japan
and approximately 37% for the assumed lost interest income that would have
occurred in the U.S.