Exhibit 20.2
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
September 30, 2004
(in thousands)
Historical Pro Forma
September 30, Lattice September 30,
2004 (A) Acquisition 2004
----------------- --------------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 31,816 $ - B1 $ 31,816
Accounts receivable, prepaid expenses and
other current assets 10,225 - 10,225
Interest rate swap assets, at fair value 2,234 - 2,234
----------------- --------------- -----------------
Total current assets 44,275 - 44,275
Restricted cash 23,734 (5,750) B1 17,984
Fixed assets, net 431,308 100,909 B2 532,217
Intangible assets, net 124,551 16,850 B2 141,401
Deferred debt issuance costs, net 14,356 - 14,356
Other assets 6,887 - 6,887
----------------- --------------- -----------------
$ 645,111 $ 112,009 $ 757,120
================= =============== =================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 17,786 $ - $ 17,786
Dividends payable 19,060 - 19,060
Deferred revenue 12,022 - 12,022
Interest rate swap liabilities, at fair value 488 - 488
Current portion of long-term debt and
mortgage loan 8,083 - 8,083
----------------- --------------- -----------------
Total current liabilities 57,439 - 57,439
Long-term debt, less current portion 406,730 111,750 B1 518,480
Other liabilities 6,601 259 B2 6,860
Total liabilities ----------------- --------------- -----------------
470,770 112,009 582,779
Stockholders' equity:
Common stock 507 - 507
Additional paid-in capital 176,355 - 176,355
Accumulated other comprehensive income (2,521) - (2,521)
Retained earnings - - -
----------------- --------------- -----------------
174,341 - 174,341
----------------- --------------- -----------------
$ 645,111 $ 112,009 $ 757,120
================= =============== =================
Pro Forma Condensed Consolidated Statement of Operations (Unaudited)
Year ended December 31, 2003
(in thousands except per share data)
Historical Pro Forma
Year Ended Year Ended
December 31, Lattice December 31,
2003 (C) Acquisition 2003
------------------- ----------------- -------------------
Revenues $ 169,233 $ 10,255 D1 $ 179,488
Direct site operating expenses (excluding
depreciation, amortization and accretion) 56,343 2,213 D1 58,556
------------------- ----------------- -------------------
Gross margin 112,890 8,042 120,932
Other expenses:
Selling, general and administrative (excluding
non-cash stock-based compensation expense
for services of $1,479) 26,926 189 D1 27,115
State franchise, excise and minimum taxes 848 - 848
Depreciation, amortization and accretion 44,496 6,902 D2 51,398
Non-cash stock-based compensation expense
for services 1,479 - 1,479
------------------- ----------------- -------------------
73,749 7,091 80,840
------------------- ----------------- -------------------
Income from operations 39,141 951 40,092
Interest expense, net 20,352 3,911 D3 24,263
Minority interest in net loss of subsidiary 16 - 16
------------------- ----------------- -------------------
Income (loss) before income tax benefit 18,773 (2,960) 15,813
Income tax benefit 665 - 665
------------------- ----------------- -------------------
Income (loss) from continuing operations $ 19,438 $ (2,960) $ 16,478
=================== ================= ===================
Basic income from continuing operations per share
attributable to common stockholders $ 0.47 $ 0.40
=================== ===================
Diluted income from continuing operations per share
attributable to common stockholders $ 0.47 $ 0.40
================== ===================
Weighted average number of shares of common
stock outstanding:
Basic 41,000 41,000
=================== ===================
Diluted 41,112 41,112
=================== ===================
Pro Forma Condensed Consolidated Statement of Operations (Unaudited)
Nine months ended September 30, 2004
(in thousands except per share data)
Historical Pro Forma
Nine Months Ended Nine Months Ended
September 30, Lattice September 30,
2004 (E) Acquisition 2004
----------------------- ----------------- --------------------
Revenues $ 134,125 $ 9,030 F1 $ 143,155
Direct site operating expenses (excluding
depreciation, amortization and accretion) 41,290 1,947 F1 43,237
----------------------- ----------------- ---------------------
Gross margin 92,835 7,083 99,918
Other expenses:
Selling, general and administrative (excluding
non-cash stock-based compensation expense
for services of $3,440) 18,035 184 F1 18,219
State franchise, excise and minimum taxes 500 - 500
Depreciation, amortization and accretion 37,164 5,176 F2 42,340
Non-cash stock-based compensation expense 3,440 - 3,440
----------------------- ----------------- ---------------------
59,139 5,360 64,499
----------------------- ----------------- ---------------------
Income from operations 33,696 1,723 35,419
Interest expense, net 19,294 2,933 F3 22,227
Loss on early extinquishment of debt 8,449 - 8,449
Other income (84) - (84)
----------------------- ----------------- ---------------------
Income (loss) before income tax expense 6,037 (1,210) 4,827
Income tax expense (324) - (324)
----------------------- ----------------- ---------------------
Income (loss) from continuing operations $ 5,713 $ (1,210) $ 4,503
======================= ================= =====================
Basic income from continuing operations per share
attributable to common stockholders $ 0.13 $ 0.11
======================= =====================
Diluted income from continuing operations per share
attributable to common stockholders $ 0.13 $ 0.11
======================= ======================
Weighted average number of shares of common
stock outstanding:
Basic 42,760 42,760
======================= ======================
Diluted 42,760 42,760
======================= ======================
Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited)
(in thousands except per share data)
The unaudited condensed consolidated balance sheet is presented on a pro forma
basis to reflect the acquisition of the 235 communication sites previously
owned by Lattice Communications, LLC ("Lattice Acquisition") as if it had
occurred on September 30, 2004. The unaudited pro forma condensed consolidated
statements of operations for the year ended December 31, 2003 and the nine
months ended September 30, 2004 are presented on a pro forma basis to reflect
the Lattice Acquisition as if it had occurred on January 1, 2003 and January 1,
2004.
The pro forma condensed consolidated financial statements should be read in
conjunction with our consolidated financial statements, including the notes
thereto, the Lattice Acquisition statements of revenue and certain expenses,
including the notes thereto, and our condensed consolidated interim financial
statements including the notes thereto. These pro forma condensed consolidated
financial statements do not purport to represent our financial position or the
results of operations that would actually have occurred assuming the completion
of this acquisition as of the dates indicated; nor do they purport to project
our financial position or results of operations as of any future date or for
any future period.
Adjustments:
A. Reflects our condensed consolidated balance sheet as of September 30,
2004, derived from our unaudited financial statements included in our Form
10-Q for the quarter ended September 30, 2004.
B1. Reflects the $115.0 million purchase price of Lattice Acquisition plus
$2.5 million in estimated fees and direct third party costs. The
transaction was financed with $5.8 million of restricted cash held in
escrow and $111.8 million of borrowings under the credit facility provided
by Morgan Stanley.
B2. Reflects the preliminary allocation of the Lattice Acquisition purchase
price.
Estimated
Amount Life
------ ----
Purchase price allocation:
Fixed assets $100,909 16 years
Intangible assets:
Lease origination value $ 725 22 years
Lease absorption value 10,893 22 years
Goodwill 5,232 N/A
------------
Total intangible assets 16,850
-------------
Total assets 117,759
Asset retirement obligation (259) 22 years
-------------
Total $117,500
=============
C. Reflects our condensed consolidated statement of operations for the year
ended December 31, 2003, derived from our audited financial statements
included in our Form S-11 dated as of June 2, 2004.
D1. Reflects revenues, direct site operating expenses and selling general and
administrative costs of Lattice Acquisition for the year ended December
31, 2003 derived from the audited statement of revenue and certain
expenses included elsewhere herein.
D2. Reflects depreciation, amortization and accretion for the year ended
December 31, 2003 on the assets acquired as part of the Lattice Acquisition
based on a purchase price of $115.0 million plus estimated expenses of $2.5
million.
Estimated Annual
Amount Life Expense
------ ---- -------
Purchase price allocation:
Fixed assets $100,909 16 years $6,298
Intangible assets:
Lease origination value $ 725 20 years 36
Lease absorption value 10,893 20 years 545
Goodwill 5,232 N/A -
-----------
Total intangible assets 16,850
-----------
Total assets 117,759
Asset retirement obligation (259) 23 years 23
----------- ----------
Total $117,500
===========
Total depreciation, amortization
and accretion $6,902
==========
D3. Reflects interest expense for the year ended December 31, 2003 related to
the borrowings to finance the Lattice Acquisition, assuming an interest
rate of 3.5%.
E. Reflects our condensed consolidated statement of operations for the nine
months ended September 30, 2004, derived from our unaudited interim
financial statements included in our Form 10-Q for the quarter ended
September 30, 2004.
F1. Reflects revenues, direct site operating expenses and selling general and
administrative costs of Lattice Acquisition for the nine months ended
September 30, 2004 derived from the unaudited statements of revenue and
certain expenses included elsewhere herein.
F2. Reflects depreciation, amortization and accretion for the nine months
ended September 30, 2004 on the assets acquired as part of the Lattice
Acquisition based on a purchase price of $115.0 million plus estimated
expenses of $2.5 million.
Estimated Nine Months
Amount Life Expense
------ ---- -------
Purchase price allocation:
Fixed assets $100,909 16 years $4,723
Intangible assets:
Lease origination value $ 725 20 years 27
Lease absorption value 10,893 20 years 409
Goodwill 5,232 N/A -
-----------
Total intangible assets 16,850
------------
Total assets 117,759
Asset retirement obligation (259) 23 years 17
------------ -----------
Total $117,500
============
Total depreciation, amortization
and accretion $5,176
===========
F3. Reflects interest expense for the nine month period ended September 30,
2004 related to the borrowings to finance the Lattice Acquisition, assuming an
interest rate of 3.5%.