-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OYMPPNamYCyXWL/PR15ghNNnZDxtwz6RjvDohhZqxNQb7zx6WcbGA1Dvr08OzxhY yjy6G+1BBUyIEquMyrEGng== 0000889812-00-001108.txt : 20000308 0000889812-00-001108.hdr.sgml : 20000308 ACCESSION NUMBER: 0000889812-00-001108 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000229 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000307 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG COMMUNICATIONS INC /DE/ CENTRAL INDEX KEY: 0001013240 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841342022 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11965 FILM NUMBER: 562915 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: PO BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 8004145000 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O OX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80112 FORMER COMPANY: FORMER CONFORMED NAME: ICG HOLDINGS CANADA CO DATE OF NAME CHANGE: 19990226 FORMER COMPANY: FORMER CONFORMED NAME: ICG COMMUNICATIONS INC DATE OF NAME CHANGE: 19960430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG HOLDINGS CANADA CO /CO/ CENTRAL INDEX KEY: 0000786343 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841128866 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11052 FILM NUMBER: 562916 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3034145431 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE STREET 2: PO BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80111 FORMER COMPANY: FORMER CONFORMED NAME: ICG HOLDINGS CANADA INC DATE OF NAME CHANGE: 19970225 FORMER COMPANY: FORMER CONFORMED NAME: INTERTEL COMMUNICATIONS INC DATE OF NAME CHANGE: 19930107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG HOLDINGS INC CENTRAL INDEX KEY: 0001001131 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841128866 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 033-96540 FILM NUMBER: 562917 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3034145000 MAIL ADDRESS: STREET 1: P O BOX 6742 STREET 2: SUITE 1610 CITY: ENGLEWOOD STATE: CO ZIP: 80155-6742 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG FUNDING LLC CENTRAL INDEX KEY: 0001049902 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 841434980 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-40495-01 FILM NUMBER: 562918 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3034145643 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O BOX 6742 CITY: ENGELWOOD STATE: CO ZIP: 80155-6742 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG SERVICES INC CENTRAL INDEX KEY: 0001060436 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATION SERVICES, NEC [4899] IRS NUMBER: 841448147 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-51037 FILM NUMBER: 562919 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3034145000 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST CITY: ENGLEWOOD STATE: CO ZIP: 80112 8-K 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 29, 2000 ICG COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) Delaware 1-11965 84-1342022 (State or other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation) Identification No.) 161 Inverness Drive West Englewood, Colorado 80112 (Address of principal executive offices including Zip Code) ICG HOLDINGS (CANADA) CO. (Exact name of registrant as specified in its charter) Canada 1-11052 Not Applicable (State or other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 161 Inverness Drive West Englewood, Colorado 80112 (Address of principal executive offices including Zip Code) ICG HOLDINGS, INC. (Exact name of registrant as specified in charter) Colorado 33-96540 84-1158866 (State or other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 161 Inverness Drive West Englewood, Colorado 80112 (Address of principal executive offices including Zip Code) ICG FUNDING, LLC (Exact name of registrant as specified in charter) Delaware 333-40495 84-1434980 (State or other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 161 Inverness Drive West Englewood, Colorado 80112 (Address of principal executive offices including Zip Code) (888)424-1144 and (303)414-5000 (Registrants' telephone numbers, including area code) N.A. ---------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 5. Other Events In a press release dated February 29, 2000, ICG Communications, Inc., a Delaware corporation (the "Company"), announced its consolidated earnings information and results of operations for the Company's 1999 fourth quarter and year end. A copy of the press release is attached. Item 7. Exhibit (c) Exhibit 99.1 Press Release, dated February 29, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated March 7, 2000 ICG COMMUNICATIONS, INC. By: /s/ Harry R. Herbst -------------------------------- Harry R. Herbst Executive Vice President and Chief Financial Officer (Principal Financial Officer) ICG HOLDINGS (CANADA) CO. By: /s/ Harry R. Herbst -------------------------------- Harry R. Herbst Executive Vice President and Chief Financial Officer (Principal Financial Officer) ICG HOLDINGS, INC. By: /s/ Harry R. Herbst -------------------------------- Harry R. Herbst Executive Vice President and Chief Financial Officer (Principal Financial Officer) ICG FUNDING, LLC By: /s/ Harry R. Herbst -------------------------------- Harry R. Herbst Executive Vice President and Chief Financial Officer (Principal Financial Officer) EXHIBIT INDEX Exhibit No. Description ----------- ----------- 99.1 Press Release dated February 29, 2000 EX-99.1 2 PRESS RELEASE DATED FEBRUARY 29, 2000 [GRAPHIC OMITTED] FOR IMMEDIATE RELEASE For more information: Investor Contact Media Contact Investor Relations Dept. Silvia McLachlan (303) 414-5347 (303) 414-5325 investor_relations@icgcom.com silvia_mclachlan@icgcom.com ICG Reports Fourth Quarter & Year-end 1999 Results 133,000 Lines Installed in 4th Quarter ENGLEWOOD, COLORADO (February 29, 2000)--ICG Communications, Inc. (NASDAQ: ICGX) today announced fourth quarter and full-year 1999 results that reflect significant revenue growth and improved operations. ICG installed a record 133,000 net business access lines and Internet service provider (ISP) ports during the fourth quarter, bringing the year-end total to 731,000, more than double the year-end 1998 total. Approximately 80 percent of lines provisioned during the year are for Internet access ports for ISP customers, where ICG's national network and excellent customer service have enabled the Company to capture an increasing share of this new, high growth market. ICG continues as a leader among competitive local telephone companies, increasing the number of business lines in service by more than 40 percent during 1999. Further, the Company recorded full-year revenue of $479.2 million, reflecting 58 percent growth over 1998 adjusted for discontinued operations, and realized a 50 percent gross operating margin on revenue versus 38 percent for 1998. "During 1999, we demonstrated remarkable growth in terms of revenue, lines in service and network capability," said J. Shelby Bryan, chairman and chief executive officer of ICG. "We initiated an aggressive plan to expand our national network, extended our product portfolio through alliances with broadband and application providers, and added substantial management expertise. Yesterday, we announced $750 million in equity funding and today additional vendor financing that brings total capital raised year-to-date to nearly $1.2 billion. These actions clearly position ICG to deliver accelerated growth in 2000 and meet the changing telecommunications needs of our customers." Highlights -- Fourth Quarter and 1999 in Review o Recorded fourth quarter revenue of $142.1 million reflecting 23 percent sequential and 45 percent year-over-year growth. o Recorded positive fourth quarter EBITDA of $23.1 million. o Initiated service in six, new major market areas. o Provisioned a record 133,000 lines in the fourth quarter, a 48 percent sequential increase and a 110 percent increase over fourth quarter 1998. o Entered contracts in 1999 to supply over 700,000 RAS and IRAS (remote access services) ports to large, established Internet service providers. o Completed sales in the fourth quarter of the company's FOTI and Satellite Services divisions for net cash proceeds of $122.0 million, bringing 1999 total net proceeds from non-core asset sales and related securities to $404.9 million. o Centralized the corporate structure to drive economies of scale and opened two new provisioning centers, streamlining operations from 30 locations. o Signed a Memorandum of Understanding with Covad Communications to jointly develop voice over digital subscriber line (VoDSL) technology to integrate voice and broadband data capability. o Collected $29.1 million in the fourth quarter for reciprocal compensation revenue and a total of $86.3 million for the year. o Completed an aggressive full-year capital program with cash expenditures and capital leases totaling $735.2 million that added significant long haul capacity, new voice and data switches, optical transmission equipment and new collocation sites. o Initiated the upgrade of the Company's operating support systems with the installation of a state-of-the-art billing system and the beginning phases of the deployment of a new end-to-end Telcordia OSS platform. Operations Review During 1999, ICG added 376,000 business lines and access ports and had contracts in place to provision approximately one-half million more in 2000. At year-end 1999, ICG's network served approximately 10 percent of U.S. Internet users, with market share expected to increase in 2000. In addition, total network minutes of use increased from approximately 6 to over 11 billion per quarter, from fourth quarter 1998 to fourth quarter 1999. Year-end 1999 total lines in service of 731,000 include fourth quarter net installations of 133,000 plus a year-end adjustment that added net 13,000. In addition, ICG increased the percent of lines "on switch" to over 90, up from approximately 75 percent at year-end 1998. New infrastructure and capacity added during 1999 included: o 2,861 new building connections; 2 o 18,000 miles of high capacity long-haul service; o 26 voice and data switches; o 88 new collocation sites with regional incumbent telephone companies; New infrastructure and capacity added during 1999 include (continued): o 23 ICG collocation sites for ISP customer equipment; o Approximately 70,000 square feet of ICG collocation space; o 181 OC48 and 3 new OC192 Sonet transmission equipment systems; In 1999, ICG launched a network expansion program to add 22 major metropolitan areas by year-end 2000. By year-end 1999, services were being offered in six of these markets: Boston, New York, Washington, D.C., Miami, Chicago and Seattle. Long-term contracts signed with major Internet companies such as The Microsoft Network, L.L.C., Spinway.com (in collaboration with its e-commerce partner Kmart Corporation), NetZero, Inc. and several others, illustrate ICG's leadership among Internet infrastructure providers. Through the year, sales to ISPs transitioned from basic Internet access services to remote access services, which better employ the capabilities at the ICG hub to manage and route Internet traffic. By providing more advanced network services for its ISP customers, ICG increases revenue per line, minimizes the ISP's capital outlay and improves the quality of service to the end-user. Outlook By year-end 2000, ICG has a target to increase lines in service to over 1.5 million, again more than doubling year-over-year totals. Network build-out plans into new, major metropolitan areas are driven by existing ISP contracts yet engineered to readily meet expected increases in demand. This "smart-build" design will enable the company to quickly deliver the infrastructure requirements associated with growth in ISP business as well as open new markets for accelerated growth in sales to local businesses planned for 2001. Beyond network expansion, ICG is focused on delivering value-added services and continues to introduce products and services that complement its existing portfolio to meet the changing and growing demands of both its ISP and business customers. The company recently completed restructuring of its management team with the addition of two experienced industry leaders to head up network services and sales and marketing. In addition, over 350 talented new employees have been hired over the past six months, including experienced marketing, sales and product development leaders. Funding raised over the last 60 days of nearly $1.2 billion will fund ICG's business plan into 2001. Completion of the 2000 business plan will position 3 ICG for even more aggressive line growth, revenue growth and EBITDA growth in 2001. The new employees, in combination with the company's increased funding, are key elements to ensure delivery of ICG's business plan for 2000 and beyond. Financial Review Revenue Fourth quarter revenue of $142.1 million reflects 23 percent sequential growth over third quarter revenue of $115.2 million. Revenue for the year totaled $479.2 million, a 58 percent increase over 1998, adjusted for discontinued operations. Local services revenue of $299.9 million for 1999 accounts for 63 percent of total revenue and includes revenue from ISP customers, business customers for local services and reciprocal compensation charges for call termination. Special access revenue increased during the fourth quarter to $38.5 million from $29.3 million in the third quarter, including recognition of $13.0 million of revenue related to the June 1999 fiber optic lease agreement with a long-haul carrier. Annual special access revenue of $113.9 million was up 53 percent over 1998. Long distance revenue was $4.0 million for the fourth quarter and $18.7 million for the year. Switched termination revenue was $13.3 million for the quarter and modestly decreased year over year to $46.7 million. Operating Costs and Gross Operating Margin Fourth quarter operating costs of $59.5 million resulted in full year operating costs of $238.9 million. The 1999 gross operating margin of 50 percent favorably compares to 1998 of 38 percent. The higher gross operating margin is due to increased volume on ICG's network that greatly improved network efficiency, and higher margin revenue per line/port from remote access services and special access services. Fourth quarter operating costs were lower than the third quarter primarily due to a fourth quarter 1999 in-depth management review of network costs that was conducted following the centralization of network functions. The analysis identified $9.5 million in costs from the first nine months of 1999 that related to capital activities under the existing ICG policy. Selling, general and administrative (SG&A) expenses SG&A expenses of $59.4 million for the fourth quarter are up approximately $10.0 million over the prior quarter (excluding the one-time third quarter provision for doubtful accounts of $45.2 million) as a result of costs associated with increased fourth quarter revenue and an acceleration of the company's expansion plan. In addition, fourth quarter SG&A included approximately $3.5 million 4 for one-time charges primarily related to Y2K initiatives and organizational changes. Earnings The fourth quarter loss from continuing operations of $100.0 million, or $2.10 per share, resulted in a full-year loss from continuing operations of $466.5 million or $9.90 per share. Income from discontinued operations for 1999 was $36.8 million. This includes the 1999 results of operations from the company's FOTI and Satellite Services divisions that were sold in October and December, as well as the gains and losses recorded on the disposals of these divisions. Additionally, the company recorded an extraordinary gain on the sale of NETCOM On-Line Communication Services, Inc. of $195.5 million for 1999. Including these non-recurring items, the loss for the quarter was $52.7 million, or $1.11 per share, and for the year totaled $234.2 million or $4.97 per share. Reciprocal Compensation During the fourth quarter, the company received $29.1 million in reciprocal compensation payments from incumbent local exchange carriers, for a total of $86.3 million collected for the year. In the third quarter, the company recorded an allowance of $45.2 million for potentially non-collectible accounts receivable related to tandem and transport elements of reciprocal compensation recorded through June 30, 1999, and the company suspended revenue recognition for these services subsequent to June 30, 1999. However, the company continues to bill and pursue collection for these services. Capital Expenditures and Liquidity Fourth quarter capital expenditures, including capital leases, were $360.9 million and the full-year capital expenditures totaled $735.2 million. The fourth quarter includes a $135.3 million capital lease that will expand the company's long-haul network capacity. Subsequent to Year-end The company entered a multi-year contract to lease local network capacity to a long-haul carrier for $126.5 million and expects to recognize revenue for this transaction over a six-year period beginning in the second half of 2000. The company collected an additional $29 million in reciprocal compensation. In January 2000, ICG signed a vendor financing commitment letter with Cisco Systems Capital Corporation, the financing arm of Cisco Systems Inc., for up to $180 million. Purchases are for equipment that will expand access and 5 transport capacity, as well as provide greater capability and reliability for broadband deliveries. In February 2000, ICG announced that it is raising $750 million in equity funding from investors that included affiliates of Liberty Media Corporation, Hicks, Muse, Tate & Furst Incorporated and Gleacher Capital Partners. The investment will be in the form of 8% convertible preferred stock and warrants. In February 2000, ICG agreed to a common stock share exchange with Teligent, Inc and signed a memorandum of understanding with Teligent to foster a relationship that will identify and implement operating efficiencies between the two companies networks and services. In February 2000, ICG entered into an agreement with Lucent Technologies for a up to $250 million in vendor financing. The commitment is subject to finalization of legal documentation and the satisfaction of certain conditions. Equipment purchases are expected to include Lucent switches and accompanying hardware and software that will allow ICG to deliver advanced voice and data products. Forward Looking Statement Disclosure Information and statements presented in this press release may contain forward looking disclosures, expressed or implied, that are based on the beliefs of management as well as assumptions made based on information currently available to management. These forward looking statements and information involve risks and uncertainties including, but not limited to, future demand for the company's services, general economic conditions, government regulations, competition and customer strategies, capital deployment, the impact of pricing and other risks and uncertainties. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release as anticipated, believed, estimated or expected. These risks are detailed from time to time in various reports filed by ICG with the Securities and Exchange Commission, including Forms 10-K (filed for the year-ended December 31, 1998 and to be filed for the 6 year-ended December 31, 1999) and Forms 10-Q filed quarterly subsequent to March 31, June 30 and September 30, 1999. 7 Key Operating Statistics - -------------------------------------------------------------------------------- As of, Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, 1999 1999 1999 1999 1998 - -------------------------------------------------------------------------------- Access lines/ports in 730,975 584,827 494,405 418,610 354,482 service - -------------------------------------------------------------------------------- Total port capacity* 932,143 -- -- -- 584,047 - -------------------------------------------------------------------------------- Fiber route miles Operational 4,596 4,449 4,406 4,351 4,255 Under construction 531 -- -- -- -- - -------------------------------------------------------------------------------- Fiber strand miles Operational 174,644 167,067 164,416 155,788 134,152 Under construction 18,564 -- -- -- -- - -------------------------------------------------------------------------------- Buildings connected On network 963 939 874 789 777 Hybrid 7,115 6,476 5,915 5,337 4,620 ---------------------------------------------------- Total buildings connected 8,078 7,415 6,789 6,126 5,397 - -------------------------------------------------------------------------------- Switches Circuit 31 29 29 29 29 Data - Frame relay 16 16 16 17 16 ------------------------------------------------ Data - ATM 24 Total switches 71 45 45 46 45 - ---------------------------------------------------------------------------- Collocations with ILECs 147 139 126 111 59 - ---------------------------------------------------------------------------- * Customer port equivalent Additional Year-End 1999 Statistics: o Long-haul capacity under long-term leases: 18,000 miles o ICG customer collocations: 145 o VoIP Gateways: 140 o SS7 ports: 388 [LOGO] CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands, except per share data)
Comparative periods ------------------------------------------------- Sequential Year-over-year Three months --------------------- ------------------- ended, Three months ended, Three months ended, 12/31/99 9/30/99 % Change 12/31/98 % Change - -------------------------------------------------------------------------------------------------------------------------------- Revenue: Local services $ 86,318 $ 69,454 24% $ 60,457 43% Long distance 3,968 4,541 (13%) 5,160 (23%) Special access 38,524 29,328 31% 20,606 87% Switched terminating access 13,265 11,843 12% 11,825 12% - -------------------------------------------------------------------------------------------------------------------------------- Total revenue 142,075 115,166 23% 98,048 45% - -------------------------------------------------------------------------------------------------------------------------------- Operating costs (59,536) (66,284) (10%) (50,147) 19% Selling, general and administrative (59,415) (94,558) (37%) (45,454) 31% - -------------------------------------------------------------------------------------------------------------------------------- EBITDA (before nonrecurring and noncash charges) 23,124 (45,676) NA 2,447 845% - -------------------------------------------------------------------------------------------------------------------------------- Depreciation and amortization (48,102) (45,079) 7% (37,617) 28% Provision for impairment of long-lived assets (2,515) - NA (4,379) (43%) Other, net (296) (626) (53%) (1,786) (83%) - -------------------------------------------------------------------------------------------------------------------------------- Operating loss (27,789) (91,381) (70%) (41,335) (33%) - -------------------------------------------------------------------------------------------------------------------------------- Interest expense (60,783) (52,891) 15% (48,153) 26% Interest income 4,631 3,772 23% 6,226 (26%) Other, net 154 (333) NA (156) (199%) - -------------------------------------------------------------------------------------------------------------------------------- Loss from continuing operations before income taxes, preferred dividends and extraordinary gain (83,787) (140,833) (41%) (83,418) 0% - -------------------------------------------------------------------------------------------------------------------------------- Income tax expense (25) - NA (45) (44%) Accretion and preferred dividends on preferred securities of subsidiaries (16,158) (15,694) 3% (14,409) 12% Loss from continuing operations before extraordinary gain (99,970) (156,527) (36%) (97,872) 2% Discontinued operations: (Loss) income from discontinued operations (981) 748 (231%) (20,342) (95%) (Loss) gain on disposal of discontinued operations 45,784 - NA (576) NA - -------------------------------------------------------------------------------------------------------------------------------- 44,803 748 5890% (20,918) (314%) - -------------------------------------------------------------------------------------------------------------------------------- Extraordinary gain on sales of operations of NETCOM, net of income taxes 2,482 - NA - NA ================================================================================================================================ Net loss $ (52,685) $ (155,779) 66% $ (118,790) (56%) Net loss per share - basic and diluted: Loss from continuing operations $ (2.10) $ (3.31) 37% $ (2.13) (1%) Income (loss) from discontinued operations 0.94 0.02 (5852%) (0.45) (307%) Extraordinary gain 0.05 - NA - NA - -------------------------------------------------------------------------------------------------------------------------------- Net loss per share - basic and diluted $ (1.11) $ (3.29) 66% $ (2.58) (57%) ================================================================================================================================ Weighted average number of shares outstanding - basic and diluted 47,618 47,320 46,010 ================================================================================================================================
[logo] CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands, except per share data)
Years ended, ----------------------------- 12/31/99 12/31/98 % Change - ----------------------------------------------------------------------------------------------- Revenue: Local services $ 299,941 159,197 88% Long distance 18,733 20,591 (9%) Special access 113,852 74,489 53% Switched terminatAng access 46,700 49,040 (5%) - ----------------------------------------------------------------------------------------------- Total revenue 479,226 303,317 58% - ----------------------------------------------------------------------------------------------- Operating costs (238,927) (187,260) 28% Selling, general and administrative (239,756) (158,153) 52% - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- EBITDA (before nonrecurring and noncash charges) 543 (42,096) NA - ----------------------------------------------------------------------------------------------- Depreciation and amortization (174,239) (91,927) 90% Provision for impairment of long-lived assets (31,815) (4,877) 552% Other, net (387) (1,786) (78%) - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- Operating loss (205,898) (140,686) 46% - ----------------------------------------------------------------------------------------------- Interest expense (212,420) (170,015) 25% Interest income 16,300 28,401 (43%) Other, net (2,522) (1,118) 126% - ----------------------------------------------------------------------------------------------- Loss from continuing operations before income taxes, preferred dividends and extraordinary gain (404,540) (283,418) 43% - ----------------------------------------------------------------------------------------------- Income tax expense (25) (90) (72%) Accretion and preferred dividends on preferred securities of subsidiaries (61,897) (55,183) 12% - ----------------------------------------------------------------------------------------------- Loss from continuing operations before extraordinary (466,462) (338,691) 38% - ----------------------------------------------------------------------------------------------- Discontinued operations: Loss from discontinued operations (1,036) (77,577) (99%) Gain (loss) on disposal of discontinued operations 37,825 (1,777) NA - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- 36,789 (79,354) (146%) - ----------------------------------------------------------------------------------------------- Extraordinary gain on sales of operations of NETCOM, net of income taxes 195,511 - NA - ----------------------------------------------------------------------------------------------- Net loss $ (234,162) (418,045) 44% =============================================================================================== Net loss per share - basic and diluted: Loss from continuing operations $ (9.90) (7.49) (32%) Income (loss) from discontinued operations 0.78 (1.76) 144% Extraordinary gain 4.15 - NA - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- Net loss per share - basic and diluted $ (4.97) (9.25) 46% =============================================================================================== Weighted average number of shares outstanding - basic and diluted 47,116 45,194 ===============================================================================================
[logo] CONSOLIDATED CONDENSED BALANCE SHEETS (unaudited) ($ in thousands)
December 31, ----------------------------- 1999 1998 - --------------------------------------------------------------------------------------------- Assets: Cash, cash equivalents and short-term investments $ 125,507 262,307 Receivables, net 168,731 113,559 Property and equipment, net 1,525,680 908,058 Other assets, net 200,703 202,883 Net assets of discontinued operations - 102,840 - --------------------------------------------------------------------------------------------- Total assets $ 2,020,621 1,589,647 ============================================================================================= Liabilities and Stockholders' Deficit: Accounts payable and accrued liabilities $ 198,000 81,989 Capital leases 206,760 67,792 Debt 1,906,697 1,599,044 Other liabilities 33,705 5,647 - --------------------------------------------------------------------------------------------- Total liabilities 2,345,162 1,754,472 - --------------------------------------------------------------------------------------------- Redeemable preferred securities of subsidiaries 519,323 466,352 Stockholders' deficit: Common stock 478 464 Additional paid-in capital 599,282 577,940 Accumulated deficit (1,443,624) (1,209,462) Accumulated other comprehensive loss - (119) - --------------------------------------------------------------------------------------------- Total stockholders' deficit (843,864) (631,177) - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- Total liabilities and stockholders' deficit $ 2,020,621 1,589,647 ============================================================================================= Diluted shares (in thousands) 50,217 56,183
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