Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - INNOVATE Corp. | d361789d8k.htm |
| EX-99.2 - PRESS RELEASE - INNOVATE Corp. | d361789dex992.htm |
| EX-99.3 - Q&A RELATING TO THE CLOSE OF PTGI'S SALE - INNOVATE Corp. | d361789dex993.htm |
Exhibit 99.1
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
On May 31, 2012, Primus Telecommunications Group, Incorporated (the “Company”) completed the sale of 100% of the outstanding equity of Primus Telecom Holdings Pty Ltd. (“Primus Australia”), an indirect wholly owned subsidiary of the Company, to M2 Telecommunications Group Ltd. (“M2”), an Australian telecommunications company. The purchase price before adjustment is approximately $AUD 192.4 million (or approximately $US 195.7 million giving effect to a currency hedge that the Company put in place). The purchase price is subject to a customary post-closing net working capital adjustment. PTGi estimates it will realize net proceeds of approximately $US 193.2 million after expenses.
The following unaudited pro forma consolidated financial information is presented to illustrate the effect of the Company’s disposition of Primus Australia on its historical financial position and operating results. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2012 is based on the historical statements of the Company as of March 31, 2012 after giving effect to the transaction as if the disposition had occurred on March 31, 2012. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2012 and 2011, the years ended December 31, 2011 and 2010 and the six months ended December 31, 2009 and July 1, 2009 are based on the historical financial statements of the Company after giving effect to the transaction as if the disposition had occurred on January 1, 2009. The unaudited pro forma consolidated financial information should be read in conjunction with the Company’s historical consolidated financial statements and notes thereto contained in the Company’s 2011 Annual Report on Form 10–K, filed on March 15, 2012 and Quarterly Report on Form 10-Q for the three months ended March 31, 2012, filed on May 10, 2012.
The preparation of the unaudited pro forma consolidated financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those estimates.
The unaudited pro forma consolidated financial information is provided for illustrative purposes only and does not purport to represent what the actual results of operations would have been had the transaction occurred on the respective date assumed, nor is it necessarily indicative of the Company’s future operating results. However, the pro forma adjustments reflected in the accompanying unaudited pro forma consolidated financial information reflect estimates and assumptions that the Company’s management believes to be reasonable. Based on the March 31, 2012 unaudited pro forma condensed consolidated balance sheet, the Company has calculated an estimated book gain of $77 million from the sale of Australia.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| March 31, 2012 |
Primus Australia Operations (a) |
Other Adjustments |
March 31, 2012 |
|||||||||||||
| ASSETS |
||||||||||||||||
| CURRENT ASSETS: |
||||||||||||||||
| Cash and cash equivalents |
$ | 46,181 | $ | (9,169 | ) | $ | 193,200 | (b) | $ | 230,212 | ||||||
| Accounts receivable (net of allowance for doubtful accounts receivable) |
71,880 | (29,479 | ) | — | 42,401 | |||||||||||
| Prepaid expenses and other current assets |
17,566 | (3,708 | ) | — | 13,858 | |||||||||||
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|
|
|
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|
|
|||||||||
| Total current assets |
135,627 | (42,356 | ) | 193,200 | 286,471 | |||||||||||
| RESTRICTED CASH |
12,287 | (10,957 | ) | — | 1,330 | |||||||||||
| PROPERTY AND EQUIPMENT – Net |
152,368 | (76,051 | ) | — | 76,317 | |||||||||||
| GOODWILL |
71,479 | (1,989 | ) | — | 69,490 | |||||||||||
| OTHER INTANGIBLE ASSETS – Net |
133,561 | (8,938 | ) | (39,200 | )(c) | 85,423 | ||||||||||
| OTHER ASSETS |
32,058 | (1,581 | ) | 30,477 | ||||||||||||
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|
|||||||||
| TOTAL ASSETS |
$ | 537,380 | $ | (141,872 | ) | $ | 154,000 | $ | 549,508 | |||||||
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|||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
||||||||||||||||
| CURRENT LIABILITIES: |
||||||||||||||||
| Accounts payable |
$ | 40,724 | $ | (12,108 | ) | $ | — | $ | 28,616 | |||||||
| Accrued interconnection costs |
23,824 | (11,728 | ) | — | 12,096 | |||||||||||
| Deferred revenue |
12,055 | (2,074 | ) | — | 9,981 | |||||||||||
| Accrued expenses and other current liabilities |
41,002 | (13,100 | ) | — | 27,902 | |||||||||||
| Accrued income taxes |
7,876 | — | — | 7,876 | ||||||||||||
| Accrued interest |
11,150 | (155 | ) | — | 10,995 | |||||||||||
| Current portion of long-term obligations |
2,289 | (2,147 | ) | — | 142 | |||||||||||
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|||||||||
| Total current liabilities |
138,920 | (41,312 | ) | — | 97,608 | |||||||||||
| LONG-TERM OBLIGATIONS |
243,786 | (7,602 | ) | — | 236,184 | |||||||||||
| DEFERRED TAX LIABILITY |
31,843 | (428 | ) | (15,249 | )(c) | 16,166 | ||||||||||
| CONTINGENT VALUE RIGHTS |
23,386 | — | — | 23,386 | ||||||||||||
| OTHER LIABILITIES |
2,502 | — | — | 2,502 | ||||||||||||
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|||||||||
| Total liabilities |
440,437 | (49,342 | ) | (15,249 | ) | 375,846 | ||||||||||
| COMMITMENTS AND CONTINGENCIES |
||||||||||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT): |
||||||||||||||||
| Preferred stock |
— | — | — | — | ||||||||||||
| Common stock |
14 | — | — | 14 | ||||||||||||
| Additional paid-in capital |
143,595 | — | — | 143,595 | ||||||||||||
| 193,200 | (b) | |||||||||||||||
| Accumulated deficit |
(57,943 | ) | (92,530 | ) | (23,951 | )(c) | 18,776 | |||||||||
| Treasury stock, at cost |
(378 | ) | — | — | (378 | ) | ||||||||||
| Accumulated other comprehensive income |
3,410 | — | — | 3,410 | ||||||||||||
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| Total stockholders’ equity before noncontrolling interest |
88,698 | (92,530 | ) | 169,249 | 165,417 | |||||||||||
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| Noncontrolling interest |
8,245 | — | — | 8,245 | ||||||||||||
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| Total stockholders’ equity |
96,943 | (92,530 | ) | 169,249 | 173,662 | |||||||||||
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|||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
$ | 537,380 | $ | (141,872 | ) | $ | 154,000 | $ | 549,508 | |||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| Three Months Ended | Primus Australia | Other | Three Months Ended | |||||||||||||
| March 31, 2012 | Operations (d) | Adjustments | March 31, 2012 | |||||||||||||
| NET REVENUE |
$ | 234,692 | $ | (70,129 | ) | $ | — | $ | 164,563 | |||||||
| OPERATING EXPENSES |
||||||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
162,496 | (39,430 | ) | — | 123,066 | |||||||||||
| Selling, general and administrative |
53,868 | (19,343 | ) | — | 34,525 | |||||||||||
| Depreciation and amortization |
14,519 | (5,356 | ) | — | 9,163 | |||||||||||
| (Gain) loss on sale or disposal of assets |
864 | (318 | ) | — | 546 | |||||||||||
| Goodwill impairment |
— | — | — | — | ||||||||||||
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|||||||||
| Total operating expenses |
231,747 | (64,447 | ) | — | 167,300 | |||||||||||
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| INCOME (LOSS) FROM OPERATIONS |
2,945 | (5,682 | ) | — | (2,737 | ) | ||||||||||
| INTEREST EXPENSE |
(7,127 | ) | 240 | — | (6,887 | ) | ||||||||||
| ACCRETION (AMORTIZATION) ON DEBT PREMIUM/DISCOUNT, net |
(57 | ) | — | — | (57 | ) | ||||||||||
| GAIN (LOSS) FROM CONTINGENT VALUE RIGHTS VALUATION |
(7,190 | ) | — | — | (7,190 | ) | ||||||||||
| INTEREST INCOME AND OTHER INCOME (EXPENSE), net |
158 | (222 | ) | — | (64 | ) | ||||||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
4,745 | (2,590 | ) | (175 | )(e) | 1,980 | ||||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(6,526 | ) | (8,254 | ) | (175 | ) | (14,955 | ) | ||||||||
| INCOME TAX BENEFIT (EXPENSE) |
(86 | ) | 1,192 | — | 1,106 | |||||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(6,612 | ) | (7,062 | ) | (175 | ) | (13,849 | ) | ||||||||
| Less: Net (income) loss attributable to the noncontrolling interest |
(106 | ) | — | — | (106 | ) | ||||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
$ | (6,718 | ) | $ | (7,062 | ) | $ | (175 | ) | $ | (13,955 | ) | ||||
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| BASIC INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (0.49 | ) | $ | (1.02 | ) | ||||||||||
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| DILUTED INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (0.49 | ) | $ | (1.02 | ) | ||||||||||
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| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||||||
| Basic |
13,744 | 13,744 | ||||||||||||||
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|||||||||||||
| Diluted |
13,744 | 13,744 | ||||||||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| Three Months Ended | Primus Australia | Other | Three Months Ended | |||||||||||||
| March 31, 2011 | Operations (d) | Adjustments | March 31, 2011 | |||||||||||||
| NET REVENUE |
$ | 216,952 | $ | (71,732 | ) | $ | — | $ | 145,220 | |||||||
| OPERATING EXPENSES |
||||||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
146,847 | (43,475 | ) | — | 103,372 | |||||||||||
| Selling, general and administrative |
53,095 | (19,192 | ) | — | 33,903 | |||||||||||
| Depreciation and amortization |
14,940 | (5,265 | ) | — | 9,675 | |||||||||||
| (Gain) loss on sale or disposal of assets |
53 | (54 | ) | — | (1 | ) | ||||||||||
| Goodwill impairment |
14,679 | — | — | 14,679 | ||||||||||||
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| Total operating expenses |
229,614 | (67,986 | ) | — | 161,628 | |||||||||||
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| INCOME (LOSS) FROM OPERATIONS |
(12,662 | ) | (3,746 | ) | — | (16,408 | ) | |||||||||
| INTEREST EXPENSE |
(8,679 | ) | 11 | — | (8,668 | ) | ||||||||||
| ACCRETION (AMORTIZATION) ON DEBT PREMIUM/DISCOUNT, net |
(50 | ) | — | — | (50 | ) | ||||||||||
| GAIN (LOSS) FROM CONTINGENT VALUE RIGHTS VALUATION |
(4,384 | ) | — | — | (4,384 | ) | ||||||||||
| INTEREST INCOME AND OTHER INCOME (EXPENSE), net |
(87 | ) | (215 | ) | — | (302 | ) | |||||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
4,048 | (1,276 | ) | (126 | )(e) | 2,646 | ||||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(21,814 | ) | (5,226 | ) | (126 | ) | (27,166 | ) | ||||||||
| INCOME TAX BENEFIT (EXPENSE) |
830 | (255 | ) | — | 575 | |||||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(20,984 | ) | (5,481 | ) | (126 | ) | (26,591 | ) | ||||||||
| Less: Net (income) loss attributable to the noncontrolling interest |
1,367 | — | — | 1,367 | ||||||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
$ | (19,617 | ) | $ | (5,481 | ) | $ | (126 | ) | $ | (25,224 | ) | ||||
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| BASIC INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (1.76 | ) | $ | (2.26 | ) | ||||||||||
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| DILUTED INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (1.76 | ) | $ | (2.26 | ) | ||||||||||
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| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||||||
| Basic |
11,148 | 11,148 | ||||||||||||||
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| Diluted |
11,148 | 11,148 | ||||||||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| Year Ended | Primus Australia | Other | Year Ended | |||||||||||||
| December 31, 2011 | Operations (d) | Adjustments | December 31, 2011 | |||||||||||||
| NET REVENUE |
$ | 989,259 | $ | (286,462 | ) | $ | — | $ | 702,797 | |||||||
| OPERATING EXPENSES |
||||||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
695,738 | (170,008 | ) | — | 525,730 | |||||||||||
| Selling, general and administrative |
214,585 | (75,571 | ) | — | 139,014 | |||||||||||
| Depreciation and amortization |
64,450 | (22,458 | ) | — | 41,992 | |||||||||||
| (Gain) loss on sale or disposal of assets |
(12,944 | ) | (37 | ) | — | (12,981 | ) | |||||||||
| Goodwill impairment |
14,679 | — | — | 14,679 | ||||||||||||
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| Total operating expenses |
976,508 | (268,074 | ) | — | 708,434 | |||||||||||
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|||||||||
| INCOME (LOSS) FROM OPERATIONS |
12,751 | (18,388 | ) | — | (5,637 | ) | ||||||||||
| INTEREST EXPENSE |
(32,506 | ) | 1,601 | — | (30,905 | ) | ||||||||||
| ACCRETION (AMORTIZATION) ON DEBT PREMIUM/DISCOUNT, net |
(213 | ) | — | — | (213 | ) | ||||||||||
| GAIN (LOSS) ON EARLY EXTINGUISHMENT OR RESTRUCTURING OF DEBT |
(7,346 | ) | — | — | (7,346 | ) | ||||||||||
| GAIN (LOSS) FROM CONTINGENT VALUE RIGHTS VALUATION |
2,902 | — | — | 2,902 | ||||||||||||
| INTEREST INCOME AND OTHER INCOME (EXPENSE), net |
(127 | ) | (875 | ) | — | (1,002 | ) | |||||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
(2,661 | ) | (262 | ) | 429 | (e) | (2,494 | ) | ||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS AND INCOME TAXES |
(27,200 | ) | (17,924 | ) | 429 | (44,695 | ) | |||||||||
| REORGANIZATION ITEMS, net |
— | — | — | — | ||||||||||||
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|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(27,200 | ) | (17,924 | ) | 429 | (44,695 | ) | |||||||||
| INCOME TAX BENEFIT (EXPENSE) |
(869 | ) | (413 | ) | — | (1,282 | ) | |||||||||
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|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(28,069 | ) | (18,337 | ) | 429 | (45,977 | ) | |||||||||
| Less: Net (income) loss attributable to the noncontrolling interest |
(5,461 | ) | — | — | (5,461 | ) | ||||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
$ | (33,530 | ) | $ | (18,337 | ) | $ | 429 | $ | (51,438 | ) | |||||
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| BASIC INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (2.58 | ) | $ | (3.96 | ) | ||||||||||
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| DILUTED INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (2.58 | ) | $ | (3.96 | ) | ||||||||||
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| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||||||
| Basic |
12,994 | 12,994 | ||||||||||||||
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|
|||||||||||||
| Diluted |
12,994 | 12,994 | ||||||||||||||
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|
|||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| Year Ended | Primus Australia | Other | Year Ended | |||||||||||||
| December 31, 2010 | Operations (d) | Adjustments | December 31, 2010 | |||||||||||||
| NET REVENUE |
$ | 737,262 | $ | (276,614 | ) | $ | — | $ | 460,648 | |||||||
| OPERATING EXPENSES |
||||||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
466,045 | (168,831 | ) | — | 297,214 | |||||||||||
| Selling, general and administrative |
194,887 | (69,119 | ) | — | 125,768 | |||||||||||
| Depreciation and amortization |
64,427 | (23,856 | ) | — | 40,571 | |||||||||||
| (Gain) loss on sale or disposal of assets |
196 | (392 | ) | — | (196 | ) | ||||||||||
| Goodwill impairment |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
725,555 | (262,198 | ) | — | 463,357 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM OPERATIONS |
11,707 | (14,416 | ) | — | (2,709 | ) | ||||||||||
| INTEREST EXPENSE |
(35,441 | ) | 74 | — | (35,367 | ) | ||||||||||
| ACCRETION (AMORTIZATION) ON DEBT PREMIUM/DISCOUNT, net |
(183 | ) | — | — | (183 | ) | ||||||||||
| GAIN (LOSS) ON EARLY EXTINGUISHMENT OR RESTRUCTURING OF DEBT |
164 | — | — | 164 | ||||||||||||
| GAIN (LOSS) FROM CONTINGENT VALUE RIGHTS VALUATION |
(13,737 | ) | — | — | (13,737 | ) | ||||||||||
| INTEREST INCOME AND OTHER INCOME (EXPENSE), net |
674 | (842 | ) | — | (168 | ) | ||||||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
16,413 | (10,396 | ) | (2,738 | )(e) | 3,279 | ||||||||||
|
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|
|
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|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS AND INCOME TAXES |
(20,403 | ) | (25,580 | ) | (2,738 | ) | (48,721 | ) | ||||||||
| REORGANIZATION ITEMS, net |
1 | — | — | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(20,402 | ) | (25,580 | ) | (2,738 | ) | (48,720 | ) | ||||||||
| INCOME TAX BENEFIT (EXPENSE) |
9,085 | (2,570 | ) | — | 6,515 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(11,317 | ) | (28,150 | ) | (2,738 | ) | (42,205 | ) | ||||||||
| Less: Net (income) loss attributable to the noncontrolling interest |
105 | — | — | 105 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
$ | (11,212 | ) | $ | (28,150 | ) | $ | (2,738 | ) | $ | (42,100 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| BASIC INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (1.15 | ) | $ | (4.33 | ) | ||||||||||
|
|
|
|
|
|||||||||||||
| DILUTED INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (1.15 | ) | $ | (4.33 | ) | ||||||||||
|
|
|
|
|
|||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||||||
| Basic |
9,721 | 9,721 | ||||||||||||||
|
|
|
|
|
|||||||||||||
| Diluted |
9,721 | 9,721 | ||||||||||||||
|
|
|
|
|
|||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| Six Months Ended | Primus Australia | Other | Six Months Ended | |||||||||||||
| December 31, 2009 | Operations (d) | Adjustments | December 31, 2009 | |||||||||||||
| NET REVENUE |
$ | 389,072 | $ | (132,656 | ) | $ | — | $ | 256,416 | |||||||
| OPERATING EXPENSES |
||||||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
253,299 | (83,555 | ) | — | 169,744 | |||||||||||
| Selling, general and administrative |
93,541 | (32,113 | ) | — | 61,428 | |||||||||||
| Depreciation and amortization |
36,284 | (13,959 | ) | — | 22,325 | |||||||||||
| (Gain) loss on sale or disposal of assets |
102 | (91 | ) | — | 11 | |||||||||||
| Goodwill impairment |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
383,226 | (129,718 | ) | — | 253,508 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM OPERATIONS |
5,846 | (2,938 | ) | — | 2,908 | |||||||||||
| INTEREST EXPENSE |
(17,255 | ) | 278 | — | (16,977 | ) | ||||||||||
| ACCRETION (AMORTIZATION) ON DEBT PREMIUM/DISCOUNT, net |
(3 | ) | — | — | (3 | ) | ||||||||||
| GAIN (LOSS) ON EARLY EXTINGUISHMENT OR RESTRUCTURING OF DEBT |
(4,146 | ) | — | — | (4,146 | ) | ||||||||||
| GAIN (LOSS) FROM CONTINGENT VALUE RIGHTS VALUATION |
(2,804 | ) | — | — | (2,804 | ) | ||||||||||
| INTEREST INCOME AND OTHER INCOME (EXPENSE), net |
476 | (300 | ) | — | 176 | |||||||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
19,566 | (22 | ) | (10,759 | )(e) | 8,785 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS AND INCOME TAXES |
1,680 | (2,982 | ) | (10,759 | ) | (12,061 | ) | |||||||||
| REORGANIZATION ITEMS, net |
(421 | ) | (1,799 | ) | — | (2,220 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
1,259 | (4,781 | ) | (10,759 | ) | (14,281 | ) | |||||||||
| INCOME TAX BENEFIT (EXPENSE) |
10,180 | (253 | ) | — | 9,927 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
11,439 | (5,034 | ) | (10,759 | ) | (4,354 | ) | |||||||||
| Less: Net (income) loss attributable to the noncontrolling interest |
(333 | ) | — | — | (333 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
$ | 11,106 | $ | (5,034 | ) | $ | (10,759 | ) | $ | (4,687 | ) | |||||
|
|
|
|
|
|
|
|
|
|||||||||
| BASIC INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | 1.15 | $ | (0.49 | ) | |||||||||||
|
|
|
|
|
|||||||||||||
| DILUTED INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | 1.14 | $ | (0.48 | ) | |||||||||||
|
|
|
|
|
|||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||||||
| Basic |
9,600 | 9,600 | ||||||||||||||
|
|
|
|
|
|||||||||||||
| Diluted |
9,800 | 9,800 | ||||||||||||||
|
|
|
|
|
|||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
| Predecessor | Predecessor | |||||||||||||||
| As Reported | Pro Forma Adjustments | Pro Forma | ||||||||||||||
| Six Months Ended July 1, 2009 |
Primus Australia Operations (d) |
Other Adjustments |
Six Months Ended July 1, 2009 |
|||||||||||||
| NET REVENUE |
$ | 358,999 | $ | (110,502 | ) | $ | — | $ | 248,497 | |||||||
| OPERATING EXPENSES |
||||||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
232,436 | (69,447 | ) | — | 162,989 | |||||||||||
| Selling, general and administrative |
87,134 | (26,448 | ) | — | 60,686 | |||||||||||
| Depreciation and amortization |
11,470 | (4,532 | ) | — | 6,938 | |||||||||||
| (Gain) loss on sale or disposal of assets |
(43 | ) | (80 | ) | — | (123 | ) | |||||||||
| Goodwill impairment |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
330,997 | (100,507 | ) | — | 230,490 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM OPERATIONS |
28,002 | (9,995 | ) | — | 18,007 | |||||||||||
| INTEREST EXPENSE |
(14,072 | ) | 378 | — | (13,694 | ) | ||||||||||
| ACCRETION (AMORTIZATION) ON DEBT PREMIUM/DISCOUNT, net |
189 | — | — | 189 | ||||||||||||
| GAIN (LOSS) ON EARLY EXTINGUISHMENT OR RESTRUCTURING OF DEBT |
— | — | — | — | ||||||||||||
| GAIN (LOSS) FROM CONTINGENT VALUE RIGHTS VALUATION |
— | — | — | — | ||||||||||||
| INTEREST INCOME AND OTHER INCOME (EXPENSE), net |
363 | (281 | ) | — | 82 | |||||||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
20,332 | 47 | (15,551 | )(e) | 4,828 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS AND INCOME TAXES |
34,814 | (9,851 | ) | (15,551 | ) | 9,412 | ||||||||||
| REORGANIZATION ITEMS, net |
422,947 | (20,940 | ) | — | 402,007 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
457,761 | (30,791 | ) | (15,551 | ) | 411,419 | ||||||||||
| INCOME TAX BENEFIT (EXPENSE) |
(4,074 | ) | — | — | (4,074 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
453,687 | (30,791 | ) | (15,551 | ) | 407,345 | ||||||||||
| Less: Net (income) loss attributable to the noncontrolling interest |
32 | — | — | 32 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
$ | 453,719 | $ | (30,791 | ) | $ | (15,551 | ) | $ | 407,377 | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| BASIC INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | 3.18 | $ | 2.85 | ||||||||||||
|
|
|
|
|
|||||||||||||
| DILUTED INCOME (LOSS) PER COMMON SHARE: |
||||||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | 2.62 | $ | 2.35 | ||||||||||||
|
|
|
|
|
|||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||||||
| Basic |
142,695 | 142,695 | ||||||||||||||
|
|
|
|
|
|||||||||||||
| Diluted |
173,117 | 173,117 | ||||||||||||||
|
|
|
|
|
|||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Pro Forma Adjustments
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2012 includes the following adjustments:
| (a) | To reflect the disposition of Primus Australia’s specified balance sheet accounts as of March 31, 2012. |
| (b) | To reflect the cash received from M2 for the sale of Primus Australia, net of transaction costs directly related to the sale. |
| (c) | To reflect the sale of the Company’s Trademark attributable to Primus Australia, net of deferred taxes, to M2. |
The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2012 and 2011, the years ended December 31, 2011 and 2010 and the six months ended December 31, 2009 and July 1, 2009 includes the following adjustments:
| (d) | To reflect the removal of the operating results of Primus Australia as if the transaction occurred on January 1, 2009. |
| (e) | To reflect the removal of foreign exchange gains and losses on intercompany balances with Primus Australia that had been recorded at the parent level. |