Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - INNOVATE Corp. | d522815d8k.htm |
| EX-10.1 - EXHIBIT 10.1 - INNOVATE Corp. | d522815dex101.htm |
| EX-99.2 - EXHIBIT 99.2 - INNOVATE Corp. | d522815dex992.htm |
| EX-99.1 - EXHIBIT 99.1 - INNOVATE Corp. | d522815dex991.htm |
Exhibit 99.3
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
On April 17, 2013, Primus Telecommunications Group, Incorporated (“PTGi”) announced that PTGi and Primus Telecommunications Canada Inc. (“PTCI”), an indirect wholly owned subsidiary of PTGi, entered into an equity purchase agreement, dated April 17, 2013 (the “Purchase Agreement”), with Rogers Communications Inc., a Canadian telecommunications company listed on the Toronto Stock Exchange, and Rogers Data Services Inc., a wholly-owned subsidiary of Rogers Communications Inc. (“Purchaser”), to sell to Purchaser all of the outstanding equity of BLACKIRON Data ULC (“BLACKIRON”), a direct wholly owned subsidiary of PTCI, for approximately CAD$200 million (the “Transaction”). The purchase price is subject to potential downward or upward post-closing adjustments based on net working capital and cash at closing. In addition, CAD$20 million of the purchase price was placed in escrow to be released 15 months after the closing date, subject to any deductions required to satisfy indemnification obligations of PTGi and PTCI under the Purchase Agreement. The Purchase Agreement also contains customary indemnification obligations, representations, warranties and covenants for a transaction of this nature. In addition, subject to certain exceptions, PTGi and its subsidiaries also agreed for a period of two years from the closing date to certain restrictions on competing with BLACKIRON as provided in the Purchase Agreement.
The following unaudited pro forma consolidated financial information is presented to illustrate the effect of the Company’s disposition of BLACKIRON on its historical financial position and operating results. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2012 is based on the historical statements of the Company as of December 31, 2012 after giving effect to the transaction as if the disposition had occurred on December 31, 2012. The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010 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, 2010. 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 2012 Annual Report on Form 10–K, filed on March 14, 2013.
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 December 31, 2012 unaudited pro forma condensed consolidated balance sheet, the Company has calculated an estimated book gain of $120 million from the sale of BLACKIRON.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
| As
Reported December 31, 2012 |
Pro Forma Adjustments | Pro
Forma December 31, 2012 |
||||||||||||||
| BLACKIRON Data Operations (a) |
Other Adjustments |
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| ASSETS |
||||||||||||||||
| CURRENT ASSETS: |
||||||||||||||||
| Cash and cash equivalents |
$ | 23,197 | $ | (194 | ) | $ | 172,104 | (b) | $ | 195,107 | ||||||
| Accounts receivable (net of allowance for doubtful accounts receivable) |
17,871 | (2,073 | ) | — | 15,798 | |||||||||||
| Prepaid expenses and other current assets |
5,792 | (282 | ) | — | 5,510 | |||||||||||
| Assets held for sale |
40,066 | — | — | 40,066 | ||||||||||||
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| Total current assets |
86,926 | (2,549 | ) | 172,104 | 256,481 | |||||||||||
| RESTRICTED CASH |
848 | (75 | ) | — | 773 | |||||||||||
| PROPERTY AND EQUIPMENT – Net |
65,315 | (32,107 | ) | — | 33,208 | |||||||||||
| GOODWILL |
60,744 | (20,518 | ) | — | 40,226 | |||||||||||
| OTHER INTANGIBLE ASSETS – Net |
63,024 | (4,363 | ) | 58,661 | ||||||||||||
| OTHER ASSETS |
24,333 | — | 19,722 | (c) | 44,055 | |||||||||||
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| TOTAL ASSETS |
$ | 301,190 | $ | (59,612 | ) | $ | 191,826 | $ | 433,404 | |||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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| CURRENT LIABILITIES: |
||||||||||||||||
| Accounts payable |
$ | 12,218 | $ | (3,575 | ) | $ | — | $ | 8,643 | |||||||
| Accrued interconnection costs |
2,992 | — | — | 2,992 | ||||||||||||
| Deferred revenue |
8,821 | (516 | ) | — | 8,305 | |||||||||||
| Accrued expenses and other current liabilities |
20,565 | (2,884 | ) | — | 17,681 | |||||||||||
| Accrued income taxes |
7,741 | — | — | 7,741 | ||||||||||||
| Accrued interest |
1,716 | — | — | 1,716 | ||||||||||||
| Current portion of long-term obligations |
66 | (30 | ) | — | 36 | |||||||||||
| Liabilities held for sale |
24,304 | — | — | 24,304 | ||||||||||||
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| Total current liabilities |
78,423 | (7,005 | ) | — | 71,418 | |||||||||||
| LONG-TERM OBLIGATIONS |
127,046 | (34 | ) | — | 127,012 | |||||||||||
| DEFERRED TAX LIABILITY |
11,367 | (161 | ) | 11,206 | ||||||||||||
| CONTINGENT VALUE RIGHTS |
14,904 | — | — | 14,904 | ||||||||||||
| OTHER LIABILITIES |
947 | — | 19,722 | (c) | 20,669 | |||||||||||
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| Total liabilities |
232,687 | (7,200 | ) | 19,722 | 245,209 | |||||||||||
| COMMITMENTS AND CONTINGENCIES |
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| STOCKHOLDERS’ EQUITY (DEFICIT): |
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| Preferred stock |
— | — | — | — | ||||||||||||
| Common stock |
14 | — | — | 14 | ||||||||||||
| Additional paid-in capital |
98,534 | — | — | 98,534 | ||||||||||||
| Accumulated deficit |
(23,198 | ) | (52,412 | ) | 172,104 | (b) | 96,494 | |||||||||
| Treasury stock, at cost |
(378 | ) | — | — | (378 | ) | ||||||||||
| Accumulated other comprehensive income |
(6,469 | ) | — | — | (6,469 | ) | ||||||||||
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| Total stockholders’ equity |
68,503 | (52,412 | ) | 172,104 | 188,195 | |||||||||||
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
$ | 301,190 | $ | (59,612 | ) | $ | 191,826 | $ | 433,404 | |||||||
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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 December 31, 2012 |
BLACKIRON Data Operations (d) |
Year Ended December 31, 2012 |
||||||||||
| NET REVENUE |
$ | 260,554 | $ | (33,734 | ) | $ | 226,820 | |||||
| OPERATING EXPENSES |
||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
125,263 | (14,981 | ) | 110,282 | ||||||||
| Selling, general and administrative |
102,760 | (5,741 | ) | 97,019 | ||||||||
| Depreciation and amortization |
31,023 | (6,675 | ) | 24,348 | ||||||||
| (Gain) loss on sale or disposal of assets |
171 | — | 171 | |||||||||
| Asset impairment expense |
10,000 | — | 10,000 | |||||||||
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| Total operating expenses |
269,217 | (27,397 | ) | 241,820 | ||||||||
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| INCOME (LOSS) FROM OPERATIONS |
(8,663 | ) | (6,337 | ) | (15,000 | ) | ||||||
| INTEREST EXPENSE |
(23,934 | ) | — | (23,934 | ) | |||||||
| ACCRETION (AMORTIZATION) ON DEBT PREMIUM/DISCOUNT, net |
(201 | ) | — | (201 | ) | |||||||
| GAIN (LOSS) ON EARLY EXTINGUISHMENT OR RESTRUCTURING OF DEBT |
(21,682 | ) | — | (21,682 | ) | |||||||
| GAIN (LOSS) FROM CONTINGENT VALUE RIGHTS VALUATION |
1,292 | — | 1,292 | |||||||||
| INTEREST INCOME AND OTHER INCOME (EXPENSE), net |
86 | — | 86 | |||||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
2,739 | — | 2,739 | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS AND INCOME TAXES |
(50,363 | ) | (6,337 | ) | (56,700 | ) | ||||||
| REORGANIZATION ITEMS, net |
— | — | — | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(50,363 | ) | (6,337 | ) | (56,700 | ) | ||||||
| INCOME TAX BENEFIT (EXPENSE) |
4,518 | — | 4,518 | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(45,845 | ) | (6,337 | ) | (52,182 | ) | ||||||
| Less: Net (income) loss attributable to the noncontrolling interest |
18 | — | 18 | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
$ | (45,827 | ) | $ | (6,337 | ) | $ | (52,164 | ) | |||
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| BASIC INCOME (LOSS) PER COMMON SHARE: |
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| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (3.31 | ) | $ | (3.77 | ) | ||||||
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| DILUTED INCOME (LOSS) PER COMMON SHARE: |
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| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (3.31 | ) | $ | (3.77 | ) | ||||||
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| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
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| Basic |
13,844 | 13,844 | ||||||||||
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| Diluted |
13,844 | 13,844 | ||||||||||
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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 December 31, 2011 |
BLACKIRON Data Operations (d) |
Year Ended December 31, 2011 |
||||||||||
| NET REVENUE |
$ | 291,386 | $ | (30,791 | ) | $ | 260,595 | |||||
| OPERATING EXPENSES |
||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
143,347 | (12,823 | ) | 130,524 | ||||||||
| Selling, general and administrative |
110,711 | (5,526 | ) | 105,185 | ||||||||
| Depreciation and amortization |
35,371 | (5,955 | ) | 29,416 | ||||||||
| (Gain) loss on sale or disposal of assets |
(12,948 | ) | — | (12,948 | ) | |||||||
| Asset impairment expense |
— | — | — | |||||||||
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| Total operating expenses |
276,481 | (24,304 | ) | 252,177 | ||||||||
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| INCOME (LOSS) FROM OPERATIONS |
14,905 | (6,487 | ) | 8,418 | ||||||||
| INTEREST EXPENSE |
(30,811 | ) | — | (30,811 | ) | |||||||
| 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 |
1,265 | — | 1,265 | |||||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
(2,426 | ) | — | (2,426 | ) | |||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS AND INCOME TAXES |
(21,724 | ) | (6,487 | ) | (28,211 | ) | ||||||
| REORGANIZATION ITEMS, net |
— | — | — | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(21,724 | ) | (6,487 | ) | (28,211 | ) | ||||||
| INCOME TAX BENEFIT (EXPENSE) |
(1,282 | ) | — | (1,282 | ) | |||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(23,006 | ) | (6,487 | ) | (29,493 | ) | ||||||
| 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 |
$ | (28,467 | ) | $ | (6,487 | ) | $ | (34,954 | ) | |||
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| BASIC INCOME (LOSS) PER COMMON SHARE: |
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| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (2.19 | ) | $ | (2.69 | ) | ||||||
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| DILUTED INCOME (LOSS) PER COMMON SHARE: |
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| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (2.19 | ) | $ | (2.69 | ) | ||||||
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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 December 31, 2010 |
BLACKIRON Data Operations (d) |
Year Ended December 31, 2010 |
||||||||||
| NET REVENUE |
$ | 282,017 | $ | (27,068 | ) | $ | 254,949 | |||||
| OPERATING EXPENSES |
||||||||||||
| Cost of revenue (exclusive of depreciation included below) |
134,892 | (11,457 | ) | 123,435 | ||||||||
| Selling, general and administrative |
113,008 | (4,997 | ) | 108,011 | ||||||||
| Depreciation and amortization |
40,177 | (5,710 | ) | 34,467 | ||||||||
| (Gain) loss on sale or disposal of assets |
(196 | ) | — | (196 | ) | |||||||
| Asset impairment expense |
— | — | — | |||||||||
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| Total operating expenses |
287,881 | (22,164 | ) | 265,717 | ||||||||
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| INCOME (LOSS) FROM OPERATIONS |
(5,864 | ) | (4,904 | ) | (10,768 | ) | ||||||
| INTEREST EXPENSE |
(35,331 | ) | — | (35,331 | ) | |||||||
| 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 |
(167 | ) | — | (167 | ) | |||||||
| FOREIGN CURRENCY TRANSACTION GAIN (LOSS) |
6,570 | — | 6,570 | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE REORGANIZATION ITEMS AND INCOME TAXES |
(48,548 | ) | (4,904 | ) | (53,452 | ) | ||||||
| REORGANIZATION ITEMS, net |
1 | — | 1 | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(48,547 | ) | (4,904 | ) | (53,451 | ) | ||||||
| INCOME TAX BENEFIT (EXPENSE) |
6,515 | — | 6,515 | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(42,032 | ) | (4,904 | ) | (46,936 | ) | ||||||
| Less: Net (income) loss attributable to the noncontrolling interest |
105 | — | 105 | |||||||||
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| INCOME (LOSS) FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS OF PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED |
$ | (41,927 | ) | $ | (4,904 | ) | $ | (46,831 | ) | |||
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| BASIC INCOME (LOSS) PER COMMON SHARE: |
||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (4.31 | ) | $ | (4.82 | ) | ||||||
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| DILUTED INCOME (LOSS) PER COMMON SHARE: |
||||||||||||
| Income (loss) from continuing operations attributable to Primus Telecommunications Group, Incorporated |
$ | (4.31 | ) | $ | (4.82 | ) | ||||||
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| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
||||||||||||
| Basic |
9,721 | 9,721 | ||||||||||
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| Diluted |
9,721 | 9,721 | ||||||||||
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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 December 31, 2012 includes the following adjustments:
| (a) | To reflect the disposition of BLACKIRON’s specified balance sheet accounts as of December 31, 2012. |
| (b) | To reflect the cash received from Purchaser for the sale of BLACKIRON, net of transaction costs directly related to the sale and amounts deposited into escrow. |
| (c) | To reflect the amount of proceeds deposited into escrow and deferral of gain. |
The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2012, 2011 and 2010 include the following adjustments:
| (d) | To reflect the removal of the operating results of BLACKIRON as if the transaction occurred on January 1, 2010. |