|
|
|
|
|
|
|
|
|
|
Previous: AMERITRADE HOLDING CORP, 8-K/A, EX-99.2, 2000-09-26 |
Next: PBHG INSURANCE SERIES FUND INC, 497, 2000-09-26 |
<PAGE> 1
EXHIBIT 99.3
AMERITRADE HOLDING CORPORATION and SUBSIDIARIES
Unaudited Pro Forma Combined Condensed Financial Statements
On July 21, 2000, Ameritrade Holding Corporation (the "Company") and Financial
Passport, Inc. ("FPI"), consummated a merger (the "Merger") whereby OM
Acquisition Sub I, Inc. a wholly owned subsidiary of the Company (the "Merger
Sub"), was merged with and into FPI pursuant to a Merger Agreement dated as of
June 30, 2000, among the Company, FPI, the Merger Sub, and OnMoney Financial
Services Corporation ("OnMoney"). FPI is an Internet-based provider of financial
planning services and an online marketplace for a wide range of financial
products and services.
Pursuant to the terms of the Merger Agreement, each issued and outstanding share
of FPI common stock was converted into the right to receive 0.2894382 shares of
the Company's Class A Common Stock (except that persons holding 2,000 or fewer
shares of FPI common stock had their shares converted into the right to receive
approximately $3.57 for each share of FPI common stock). The Company issued
approximately 1,482,000 shares of its Class A Common Stock and assumed certain
liabilities in connection the Merger for a total estimated purchase price of
$25,000,000.
The accompanying unaudited pro forma combined condensed financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the combined financial position or results of operations which may be reported
in future periods or the financial position or results of operations that
actually would have been realized had the Company and FPI been a combined
company during the specified periods, or had the acquisition been consummated on
the date indicated. Actual statements of operations of the companies will be
combined commencing from July 21, 2000, the effective date of the acquisition.
The unaudited pro forma combined condensed financial statements, including the
related notes, are qualified in their entirety by reference to, and should be
read in conjunction with, the historical financial statements and related notes
of FPI, included elsewhere in this filing, and the historical financial
statements and related notes of the Company contained in the Company's Annual
Report on Form 10-K for the year ended September 24, 1999.
The accompanying unaudited pro forma combined condensed financial statements
give effect to the merger between the Company and FPI using the purchase method
of accounting. The unaudited pro forma combined condensed financial statements
are based upon the respective historical audited and unaudited consolidated
financial statements and related notes of the Company and FPI. The pro forma
adjustments are preliminary and are based on management's estimates of the value
of the tangible and intangible assets acquired.
<PAGE> 2
The actual adjustments may differ from those presented in these pro forma
financial statements. The purchase price allocation will be completed after the
finalization of asset and liability valuations. The preliminary allocations are
based upon assumptions that management of the Company believes are reasonable.
Actual adjustments may result in a different allocation of the purchase price
which would affect the value assigned to the tangible and intangible assets, or
could result in a change to the statement of operations. The effect of these
changes on the statement of operations will depend on the nature and amounts of
the assets and liabilities adjusted. See the notes to the unaudited pro forma
combined condensed financial statements.
The unaudited pro forma combined condensed balance sheet assumes that the
acquisition took place on June 30, 2000, and combines the Company's unaudited
June 30, 2000 balance sheet with FPI's unaudited June 30, 2000 balance sheet.
The unaudited pro forma combined condensed statements of operations for the year
ended September 24, 1999 and the nine months ended June 30, 2000 assumes the
acquisition took place as of September 26, 1998. The unaudited pro forma
combined condensed statements of operations for the year ended September 24,
1999 combines the Company's audited statement of operations for the year ended
September 24, 1999 with FPI's unaudited statement of operations for the year
ended September 30, 1999. The unaudited pro forma combined condensed statements
of operations for the nine months ended June 30, 2000 combines the Company's
unaudited statement of operations for the nine months ended June 30, 2000 with
FPI's unaudited statement of operations for the nine months ended June 30, 2000.
FPI's financial statements for the years ended December 31, 1999 and 1998 have
been recast to conform to the Company's fiscal year. Reclassifications have been
made to FPI's financial statements to conform to the Company's presentation.
<PAGE> 3
AMERITRADE HOLDING CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
--------------------------------
Historical
--------------------------------
AMERITRADE FPI
-------------- -------------
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 48,773 $ 86
Cash and investments segregated in compliance with federal regulations 448,513 --
Receivable from brokers, dealers and clearing organizations 98,649 --
Receivable from customers and correspondents, net 2,771,200 45
Property, plant & equipment, net of accumulated depreciation and amortization 87,988 8,596
Goodwill, net 12,247 -
Investments 243,960 -
Other assets 61,183 396
----------- -----------
Total assets $ 3,772,513 $ 9,123
=========== ===========
LIABILITIES and STOCKHOLDERS' EQUITY
Liabilities:
Payable to brokers, dealers and clearing organizations 520,721 -
Payable to customers and correspondents 2,589,956 -
Accounts payable and accrued liabilities 122,809 1,589
Notes payable 35,000 2,280
Due to related party - 1,699
Convertible subordinated notes 200,000 -
Income taxes payable 615 -
Deferred income taxes 87,988 -
----------- -----------
Total liabilities 3,557,089 5,568
----------- -----------
Stockholders' equity:
Common stock 1,750 5
Additional paid in capital 29,010 27,121
Retained earnings 41,385 (23,571)
Treasury stock (64) -
Accumulated other comprehensive income 143,343 -
----------- -----------
Total stockholders' equity 215,424 3,555
----------- -----------
----------- -----------
Total liabilities and stockholders' equity $ 3,772,513 $ 9,123
=========== ===========
<CAPTION>
-------------
PRO FORMA
--------------------------
PRO FORMA ADJUSTMENTS COMBINED
--------------------------
AMOUNT REFERENCE AMERITRADE
------------ ----------- -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ (2,997) (a) $ 45,862
Cash and investments segregated in compliance with federal regulations -- 448,513
Receivable from brokers, dealers and clearing organizations -- 98,649
Receivable from customers and correspondents, net -- 2,771,245
Property, plant & equipment, net of accumulated depreciation and amortization (5,472) (a) 91,112
Goodwill, net 17,660 (a) 29,907
Investments -- 243,960
Other assets 1,851 (a) 63,430
-------- -----------
Total assets $ 11,042 $ 3,792,678
======== ===========
LIABILITIES and STOCKHOLDERS' EQUITY
Liabilities:
Payable to brokers, dealers and clearing organizations -- 520,721
Payable to customers and correspondents -- 2,589,956
Accounts payable and accrued liabilities -- 124,398
Notes payable (2,280) (a) 35,000
Due to related party (1,699) (a) -
Convertible subordinated notes -- 200,000
Income taxes payable -- 615
Deferred income taxes -- 87,988
-------- -----------
Total liabilities (3,979) 3,558,678
-------- -----------
Stockholders' equity:
Common stock 10 (a) 1,765
Additional paid in capital (8,560) (a) 47,571
Retained earnings 23,571 (a) 41,385
Treasury stock -- (64)
Accumulated other comprehensive income -- 143,343
-------- -----------
Total stockholders' equity 15,021 234,000
-------- -----------
-------- -----------
Total liabilities and stockholders' equity $ 11,042 $ 3,792,678
======== ===========
</TABLE>
SEE NOTES TO UNAUDITED PROFORMA FINANCIAL STATEMENTS.
<PAGE> 4
AMERITRADE HOLDING CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 24, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
-----------
PRO FORMA
--------------------------- --------------------------
HISTORICAL PRO FORMA ADJUSTMENTS COMBINED
--------------------------- --------------------------
AMERITRADE FPI AMOUNT REFERENCE AMERITRADE
-----------
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions and clearing fees $ 188,874 $ - $ - $ 188,874
Interest revenue 116,162 51 - 116,213
Other revenue 10,213 113 - 10,326
--------- --------- --------- ---------
Total revenues 315,249 164 - 315,413
Interest expense 46,897 1 - 46,898
--------- --------- --------- ---------
Net revenues 268,352 163 - 268,515
Expenses excluding interest:
Employee compensation and benefits 74,353 4,461 - 78,814
Commissions and clearance 8,023 6 - 8,029
Communications 18,592 339 - 18,931
Occupancy and equipment costs 21,382 4,108 1,000 (d) 26,490
Advertising 59,717 - - 59,717
Professional services 40,644 619 - 41,263
Amortization of goodwill from purchase of FPI -- - 2,523 (b) 2,523
Other 27,533 128 - 27,661
--------- --------- --------- ---------
Total expenses excluding interest 250,244 9,661 3,523 263,428
--------- --------- --------- ---------
Income (loss) before provision for income taxes 18,108 (9,498) (3,523) 5,087
Provision (benefit) of income taxes 6,569 - (2,942) (e) 3,627
--------- --------- --------- ---------
Net income (loss) $ 11,539 $ (9,498) $ (581) $ 1,460
========= ========= ========= =========
Basic earnings per share $ 0.07 $ 0.01
Diluted earnings per share $ 0.07 $ 0.01
Weighted average shares outstanding - basic 174,342 1,482 (c) 175,824
Weighted average shares outstanding - diluted 175,745 1,482 (c) 177,227
</TABLE>
SEE NOTES TO UNAUDITED PROFORMA FINANCIAL STATEMENTS.
<PAGE> 5
AMERITRADE HOLDING CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
------------
PRO FORMA
------------------------------ ----------------------------
HISTORICAL PRO FORMA ADJUSTMENTS COMBINED
------------------------------ ----------------------------
AMERITRADE FPI AMOUNT REFERENCE AMERITRADE
------------
<S> <C> <C> <C> <C> <C>
Revenues:
Commissions and clearing fees $ 305,365 $ - $ - $ 305,365
Interest revenue 176,357 33 - 176,390
Other revenue 15,823 325 (229) (f) 15,919
--------- --------- ------- ---------
Total revenues 497,545 358 (229) 497,674
Interest expense 67,303 86 (86) (g) 67,303
--------- --------- ------- ---------
Net revenues 430,242 272 (143) 430,371
Expenses excluding interest:
Employee compensation and benefits 102,834 4,104 - 106,938
Commissions and clearance 4,753 144 - 4,897
Communications 26,316 315 - 26,631
Occupancy and equipment costs 42,233 1,858 750 (d) 44,841
Advertising 154,645 76 - 154,721
Professional services 39,425 1,504 (229) (f) 40,700
OnMoney development 54,737 - - 54,737
Amortization of goodwill from purchase of FPI - - 1,892 (b) 1,892
Other 25,849 27 - 25,876
--------- --------- ------- ---------
Total expenses excluding interest 450,792 8,028 2,413 461,233
--------- --------- ------- ---------
Loss before benefit from for income taxes (20,550) (7,756) (2,556) (30,862)
Benefit from income taxes (6,638) - (2,183) (e) (8,821)
---------- --------- ------- ---------
Net loss $ (13,912) $ (7,756) $ (373) $ (22,041)
========= ========= ======= =========
Basic loss per share $ (0.08) $ (0.13)
Diluted loss per share $ (0.08) $ (0.13)
Weighted average shares outstanding - basic 174,651 1,482 (c) 176,133
Weighted average shares outstanding - diluted 174,651 1,482 (c) 176,133
</TABLE>
SEE NOTES TO UNAUDITED PROFORMA FINANCIAL STATEMENTS.
<PAGE> 6
AMERITRADE HOLDING CORPORATION
Notes to Unaudited Pro Forma Combined Condensed Financial Statements
1. Pro Forma Adjustments
Certain pro forma adjustments have been made to the accompanying
unaudited pro forma condensed combined financial statements,
based upon the acquisition of all of the outstanding capital
stock of FPI for approximately $25.0 million, which represents
approximately 1,482,000 shares of the Company's common stock (the
number of shares issued or to be issued at July 21, 2000 in exchange
for all of the outstanding shares of FPI).
The unaudited pro forma combined condensed balance sheet as at June
30, 2000 gives effect to the acquisition as if it had occurred on
June 30, 2000. The unaudited pro forma combined condensed statements
of operations for the year ended September 24, 1999 and the nine
months ended June 30, 2000 give effect to the acquisition as if it had
occurred at September 26, 1998.
The following adjustments have been reflected in the unaudited pro
forma combined condensed financial statements:
(a) Reflects the issuance of common stock of the Company to
the shareholders of FPI and the recording of the entries
required under the purchase method of accounting. Accordingly,
the total purchase price has been allocated to the tangible
assets and liabilities of FPI based upon their relative fair
values. The amounts and components of the purchase price,
along with the initial allocation of the purchase price,
along with the allocation of the purchase price to the net
assets acquired and associated acquisition costs is presented
below. Amounts are in thousands.
<TABLE>
<CAPTION>
Purchase Price
<S> <C>
Company common stock issued $ 18,576
Cash advanced to FPI prior to 1,699
June 30, 2000
Cash paid to retire convertible notes 2,280
Other cash paid, net of cash acquired 631
--------
Total cash paid, net of cash acquired 4,610
Liabilities assumed 1,589
--------
$ 24,775
========
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Net Cash Paid
<S> <C>
Total cash paid, net of cash acquired $ 4,610
Less: amounts due from FPI
at June 30, 2000 (1,699)
Plus: FPI cash acquired 86
-------
$ 2,997
=======
<CAPTION>
Preliminary Purchase Price Allocation
<S> <C>
Receivables and prepaids $ 441
Fixed assets 124
Software 3,000
Deferred income taxes 3,550
Goodwill 17,660
-------
$24,775
=======
</TABLE>
(b) Reflects the adjustment to record the amortization of goodwill
from the allocation of the purchase price. The pro forma
adjustment assumes goodwill will be amortized on a straight-line
basis over an estimated life of 7 years.
(c) Reflects the impact of shares of common stock of the Company
issued as consideration in the acquisition as if outstanding from
the beginning of the period.
(d) Reflects amortization of software on a straight-line basis over
an estimated life of 3 years.
(e) Reflects tax benefits derived from FPI's losses computed at 36.3%
(the Company's effective rate), adjusted for non-deductible
items.
(f) Reflects the intercompany elimination of revenues earned by FPI
from OnMoney, a wholly owned subsidiary of the Company.
(g) Reflects the elimination of interest expense on the convertible
subordinated notes which were redeemed at the acquisition date.
|
|