EXHIBIT 99.3
PRO FORMA FINANCIAL DATA
Introduction to Unaudited Pro Forma Consolidated Financial Statements
The following unaudited pro forma financial statements reflect adjustments to
Motient's historical consolidated balance sheet as of March 31, 2005 and
statements of operations for the three months ended March 31, 2005 and the
twelve months ended December 31, 2004, to give effect to the May 11, 2005,
purchase by Motient of $200 million of newly issued common stock of TerreStar
Networks Inc. and the simultaneous spin-off by Mobile Satellite Ventures LP of
TerreStar to MSV's owners. The unaudited pro forma balance sheet also gives
effect to the April 2005 sale of $408.5 million of our Series A Preferred Stock.
The unaudited consolidated pro forma balance sheet reflects adjustments to
Motient's historical consolidated balance sheet as if all of these transactions
occurred at March 31, 2005. The unaudited consolidated pro forma statements of
operations for the three months ended March 31, 2005 and the twelve months ended
December 31, 2004 reflect adjustments to Motient's historical consolidated
statements of operations as if the spin-off of TerreStar and Motient's
subsequent investment had occurred at January 1, 2005 and January 1, 2004,
respectively. No adjustments in respect of the April 2005 sale of preferred
stock are necessary with respect to these pro forma statements of operations.
These unaudited pro forma consolidated financial statements are not necessarily
indicative of what the actual results of operations of Motient would have been
assuming these transactions had been completed, nor do they purport to represent
what Motient's consolidated financial statements will be for future periods.
They should be read in conjunction with the historical financial statements and
related notes of Motient.
MOTIENT CORPORATION AND SUBSIDIARIES
PRO FORMA BALANCE SHEET
MARCH 31, 2005
(in thousands, except share and per share data)
(UNAUDITED)
MOTIENT TERRESTAR
CORPORATION NETWORKS INC. PRO FORMA PRO FORMA
HISTORICAL(a) HISTORICAL(b) ADJUSTMENTS TOTAL
--------------- --------------- ------------- ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 12,100 $ 381 $ 408,500 (c) $ 355,621
(42,893) (d)
(17,300) (e)
(5,167) (f)
Restricted cash and short-term investments ---- 4,535 42,893 (d) 47,428
Accounts receivable-trade, net of allowance for
doubtful accounts of $171 1,574 ---- ---- 1,574
Inventory 39 ---- ---- 39
Due from Mobile Satellite Ventures LP, net 5 ---- ---- 5
Deferred equipment costs 450 ---- ---- 450
Assets held for sale 261 ---- ---- 261
Other current assets 1,367 1 ---- 1,368
--------------- --------------- ------------- ------------
Total current assets 15,796 4,917 386,033 406,746
RESTRICTED INVESTMENTS 76 ---- ---- 76
PROPERTY AND EQUIPMENT, net 14,894 1,838 ---- 16,732
FCC LICENSES AND OTHER INTANGIBLES, net 66,353 196 77,868 (g) 144,417
INVESTMENT IN MSV 505,446 ---- (529) (h) 504,917
DEFERRED CHARGES AND OTHER ASSETS 10 ---- 17,300 (e) 17,310
--------------- --------------- ------------- ------------
Total assets $ 602,575 $ 6,951 $ 480,672 $ 1,090,198
=============== =============== ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 6,341 $ 700 $ ---- $ 7,041
Deferred equipment revenue 501 ---- ---- 501
Deferred revenue and other current liabilities 5,277 ---- ---- 5,277
--------------- --------------- ------------- ------------
Total current liabilities 12,119 700 ---- 12,819
--------------- --------------- ------------- ------------
LONG-TERM LIABILITIES:
Notes payable, including accrued interest thereon ---- 5,167 (5,167) (f) ----
Shares subject to mandatory redemption ---- ---- 408,500 (c) 408,500
Minority interest in TerreStar ---- ---- 78,423 (i) 78,423
Other long-term liabilities 580 ---- ---- 580
--------------- --------------- ------------- ------------
Total long-term liabilities 580 5,167 481,756 487,503
--------------- --------------- ------------- ------------
Total liabilities 12,699 5,867 481,756 500,322
--------------- --------------- ------------- ------------
COMMITMENTS AND CONTINGENCIES ---- ---- ---- ----
STOCKHOLDERS' EQUITY:
Preferred Stock; par value $0.01; authorized
5,000,000 shares and no shares issued or outstanding ---- ---- ---- ----
Common Stock; voting, par value $0.01; authorized
100,000,000 shares; 65,158,568 shares issued and
outstanding 650 24 (24) (j) 650
Additional paid-in capital 740,442 10,145 (10,145) (j) 740,442
Common stock purchase warrants 71,333 ---- ---- 71,333
Accumulated deficit (222,549) (9,085) 9,085 (j) (222,549)
--------------- --------------- ------------- ------------
STOCKHOLDERS' EQUITY 589,876 1,084 (1,084) 589,876
--------------- --------------- ------------- ------------
Total liabilities, and stockholders' equity $ 602,575 $ 6,951 $ 480,672 $ 1,090,198
=============== =============== ============= ============
(a) Historical financial information is derived from the Registrant's
quarterly report filed on Form 10-Q as of March 31, 2005.
(b) Historical financial information is derived from the unaudited financial
information of TerreStar Networks Inc. as of March 31, 2005.
(c) Reflects gross proceeds obtained by the Registrant for sale of Preferred
Stock (see Note 21, Subsequent Events, in the Registrant's notes to the
consolidated financial statements for further information).
(d) Reflects funding of escrow account by Registrant as required under the
Certificate of Designations of the Series A Cumulative Convertible
Preferred Stock (see Note 21, Subsequent Events, in the Registrant's notes
to the consolidated financial statements for further information).
(e) Reflects deferred costs paid by the Registrant in connection with the sale
of Preferred Stock (see Note 21, Subsequent Events, in the Registrant's
notes to the consolidated financial statements for further information).
(f) Reflects repayments of amounts outstanding under a loan agreement between
TerreStar and MSV.
(g) Reflects the purchase price of the assets and liabilities obtained by the
Registrant including $77.9 million increase in the basis of the rights to
receive licenses in the 2 GHz band.
(h) Reflects transfer of Registrant's proportionate share of TerreStar equity
included in Investment in MSV on March 31, 2005 to Investment in
TerreStar.
(i) Reflects minority interests' 39% proportionate share in TerreStar equity
on March 31, 2005.
(j) Reflects consolidated elimination of TerreStar equity by the Registrant.
MOTIENT CORPORATION AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005
(in thousands, except per share data)
(UNAUDITED)
TERRESTAR
MOTIENT CORPORATION NETWORKS INC. PRO FORMA PRO FORMA
HISTORICAL (a) HISTORICAL (b) ADJUSTMENTS TOTAL
--------------- --------------- ------------- ------------
REVENUES
Services and related revenues $ 4,530 $ ---- $ ---- $ 4,530
Sales of equipment 483 ---- ---- 483
--------------- --------------- ------------- ------------
Total revenues 5,013 ---- ---- 5,013
--------------- --------------- ------------- ------------
COSTS AND EXPENSES
Cost of services and operations (including stock-based
compensation of $1,238; exclusive of depreciation and
amortization below) 7,540 1,016 ---- 8,556
Cost of equipment sold (exclusive of depreciation
and amortization below) 461 ---- ---- 461
Sales and advertising (including stock-based
compensation of $121; exclusive of depreciation and
amortization below) 363 ---- ---- 363
General and administrative (including stock-based
compensation of $10,259; exclusive of depreciation and
amortization below) 14,343 2 ---- 14,345
Restructuring charges 85 ---- ---- 85
Depreciation and amortization 3,679 4 1,298 (c) 4,981
(Gain) on disposal of asset (6) ---- ---- (6)
--------------- --------------- ------------- ------------
Total Costs and Expenses 26,465 1,022 1,298 28,785
--------------- --------------- ------------- ------------
Operating loss (21,452) (1,022) (1,298) (23,772)
Interest expense ---- (129) ---- (129)
Other income, net 80 ---- ---- 80
Equity in losses of MSV (7,168) ---- 509 (d) (6,659)
--------------- --------------- ------------- ------------
Net (loss) $ (28,540) $ (1,151) $ (789) $ (30,480)
=============== =============== ============= ============
Net (loss) - basic and diluted $ (0.48) $ (0.51)
=============== ============
Weighted-Average Common Shares Outstanding - basic and
diluted 59,580 59,580
(a) Historical financial information is derived from the Registrant's
quarterly report filed on Form 10-Q for the three months ended March 31,
2005.
(b) Historical financial information is derived from the unaudited financial
information of TerreStar Networks Inc. for the three months ended March
31, 2005.
(c) Amortization expense on portion of purchase price allocated to Intangible
Assets is recognized using the straight-line method over a 15-year life.
(d) Reflects the TerreStar proportionate share of losses to the Registrant
included in Equity in losses of MSV for the three months ended March 31,
2005.
MOTIENT CORPORATION AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
(in thousands, except per share data)
(UNAUDITED)
TERRESTAR
MOTIENT CORPORATION NETWORKS INC. PRO FORMA PRO FORMA
HISTORICAL (a) HISTORICAL (b) ADJUSTMENTS TOTAL
--------------- --------------- ------------- ------------
REVENUES
Services and related revenues $ 32,378 $ ---- $ ---- $ 32,378
Sales of equipment 4,502 ---- ---- 4,502
--------------- --------------- ------------- ------------
Total revenues 36,880 ---- ---- 36,880
--------------- --------------- ------------- ------------
COSTS AND EXPENSES
Cost of services and operations (including stock-based
compensation of $4,401; exclusive of depreciation and
amortization below). 39,586 1,914 ---- 41,500
Cost of equipment sold (exclusive of depreciation and
amortization below) 4,329 ---- ---- 4,329
Sales and advertising (including stock-based
compensation of $372; exclusive of depreciation and
amortization below). 1,879 ---- ---- 1,879
General and administrative (including stock-based
compensation of $5,370; exclusive of depreciation and
amortization below). 13,223 6 ---- 13,229
Restructuring charges 6,264 ---- ---- 6,264
Depreciation and amortization 15,564 16 5,191 (c) 20,771
Loss on disposal of assets 2,669 ---- ---- 2,669
Loss on impairment of assets 755 ---- ---- 755
Gain on debt and capital lease retirement (802) ---- ---- (802)
--------------- --------------- ------------- ------------
Total Costs and Expenses 83,467 1,936 5,191 90,594
--------------- --------------- ------------- ------------
Operating loss (46,587) (1,936) (5,191) (53,714)
Interest and other income 343 ---- ---- 343
Write-off of deferred financing costs (12,035) ---- ---- (12,035)
Interest expense (4,106) (3) ---- (4,109)
Other income from Aether/MSV 1,953 ---- ---- 1,953
Equity in losses of MSV (11,897) ---- 902 (d) (10,995)
--------------- --------------- ------------- ------------
Net (loss) $ (72,329) $ (1,939) $ (4,289) $ (78,557)
=============== =============== ============= ============
Net (loss) - basic and diluted $ (2.21) $ (2.40)
=============== ============
Weighted-Average Common Shares Outstanding - basic and
diluted 32,771 32,771
(a) Historical financial information is derived from the Registrant's annual
report filed on Form 10-K for the year ended December 31, 2004.
(b) Historical financial information is derived from the unaudited financial
information of TerreStar Networks Inc. for the year ended December 31,
2004.
(c) Amortization expense on portion of purchase price allocated to Intangible
Assets is recognized using the straight-line method over a 15-year life.
(d) Reflects the TerreStar proportionate share of losses to the Registrant
included in Equity in losses of MSV for the year ended December 31, 2004.