SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the Quarterly Period Ended March 31, 2003 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period to |
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Commission file number 0-20763 |
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McLEODUSA INCORPORATED |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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42-1407240 |
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(State of Incorporation) |
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(IRS Employer Identification No.) |
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McLeodUSA Technology Park |
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52406-3177 |
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(Address of principal executive office) |
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(Zip Code) |
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319-364-0000 |
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(Registrant’s telephone number, |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant is an accelerated filed (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ý No o
The number of shares outstanding of each class of the issuer’s common stock as of May 1, 2003:
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Common Stock Class A: ($0.01 par value) |
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162,368,920 shares |
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Common Stock Class B: ($0.01 par value) |
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78,203,135 shares |
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Common Stock Class C: ($0.01 par value) |
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35,546,879 shares |
McLEODUSA INCORPORATED AND SUBSIDIARIES
INDEX
2
PART I – FINANCIAL INFORMATION
McLEODUSA INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
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March 31, |
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December
31, |
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(unaudited) |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
115.5 |
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$ |
170.6 |
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Trade receivables, net |
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92.1 |
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93.1 |
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Prepaid expenses and other |
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26.3 |
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26.2 |
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Assets held for sale |
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10.8 |
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11.1 |
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Total current assets |
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244.7 |
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301.0 |
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Property and equipment |
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Land and buildings |
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73.6 |
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72.9 |
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Communications networks |
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852.1 |
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816.0 |
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Furniture, fixtures and equipment |
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185.0 |
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181.3 |
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Networks in progress |
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276.0 |
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303.5 |
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1,386.7 |
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1,373.7 |
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Less accumulated depreciation |
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235.1 |
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170.6 |
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1,151.6 |
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1,203.1 |
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Intangibles and other assets |
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Goodwill, net |
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237.8 |
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237.8 |
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Other intangibles, net |
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226.3 |
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234.5 |
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Other |
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22.7 |
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23.9 |
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486.8 |
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496.2 |
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TOTAL ASSETS |
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$ |
1,883.1 |
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$ |
2,000.3 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities |
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Current maturities of long-term debt |
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$ |
19.9 |
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$ |
15.0 |
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Accounts payable |
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68.4 |
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71.1 |
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Accrued payroll and payroll related expenses |
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20.7 |
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23.6 |
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Other accrued liabilities |
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131.6 |
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152.8 |
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Deferred revenue, current portion |
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9.8 |
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9.8 |
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Liabilities related to discontinued operations |
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1.0 |
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6.3 |
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Total current liabilities |
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251.4 |
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278.6 |
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Long-term debt, less current maturities |
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698.6 |
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704.9 |
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Deferred revenue, less current portion |
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12.9 |
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13.5 |
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Other long-term liabilities |
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55.8 |
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54.9 |
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1,018.7 |
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1,051.9 |
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Redeemable convertible preferred stock |
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McLeodUSA Preferred Series A, redeemable, convertible, $0.01 par value; 10,000,000 authorized and issued; 9,999,800 and 9,999,900 outstanding at March 31, 2003 and December 31, 2002, respectively |
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173.9 |
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172.6 |
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Stockholders’ equity |
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McLeodUSA Common, Class A $0.01 par value; 1,886,249,986 authorized, 162,500,978 and 162,500,481 issued and outstanding at March 31, 2003 and December 31, 2002, respectively |
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1.6 |
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1.6 |
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McLeodUSA Common, Class B $0.01 par value; 78,203,135 authorized, issued and outstanding at March 31, 2003 and December 31, 2002 |
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0.8 |
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0.8 |
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McLeodUSA Common, Class C $0.01 par value; 35,546,879 authorized, issued and outstanding at March 31, 2003 and December 31, 2002 |
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0.3 |
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0.3 |
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McLeodUSA Preferred Series B, $0.01 par value; 10 authorized, issued and outstanding at March 31, 2003 and December 31, 2002 |
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— |
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— |
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McLeodUSA Warrants |
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22.6 |
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22.6 |
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Additional paid-in capital |
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950.6 |
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951.9 |
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Accumulated deficit |
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(285.4 |
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(201.4 |
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690.5 |
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775.8 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
1,883.1 |
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$ |
2,000.3 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
McLEODUSA INCORPORATED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(In millions, except per share data)
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Reorganized |
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Predecessor |
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Three |
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Three |
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Revenues |
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$ |
225.9 |
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$ |
264.1 |
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Operating expenses: |
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Cost of service (exclusive of depreciation shown separately below) |
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137.4 |
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179.1 |
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Selling, general and administrative |
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81.7 |
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91.4 |
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Depreciation and amortization |
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82.2 |
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108.9 |
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Reorganization charges, net |
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57.2 |
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Total operating expenses |
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301.3 |
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436.6 |
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Operating loss |
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