<PAGE>
Exhibit 99.3
Netcentives Inc.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements give
effect to the acquisition by Netcentives Inc. (Netcentives) of all outstanding
shares of Post Communications, Inc. (referred to as "Post") and the acquisition
by Netcentives of all outstanding shares of UVN Holdings, Inc. and Subsidiary
and SHC Venture L.L.C. (collectively referred to as "UVN") in transactions
accounted for as purchases.
The pro forma condensed combined statements of operations of Netcentives Inc.
for the year ended December 31, 1999 assume that the acquisition of Post and UVN
took place as of January 1, 1999. The statements combine Netcentives', Post's
and UVN's statements of operations for the year ended December 31, 1999.
The pro forma condensed combined balance sheet as of December 31, 1999 combines
Netcentives' and UVN's December 31, 1999 balance sheet with Post's December 31,
1999 balance sheet, as if the acquisition had been consummated on that date.
The unaudited pro forma condensed combined information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results or financial position that would have actually occurred if the
acquisition had been consummated as of the dates indicated, nor is it
necessarily indicative of future operating results or financial position. The
pro forma adjustments are based on the information available at the date of this
filing and are subject to change based on completion of the final purchase price
allocation, including completion of third-party appraisals.
Netcentives' condensed financial information included in these pro forma
financial statements is derived from its December 31, 1999 audited financial
statements included in its Form 10-K for the period ended December 31,1999 filed
on March 30, 2000. Post's condensed financial information included in these pro
forma financial statements is derived from its December 31, 1999 audited
financial statements included elsewhere in this filing. UVN's condensed
financial information included in these pro forma financial statements is
derived from its December 31, 1999 audited financial statements included in a
Form 8-K/A that was previously filed, on May 19, 2000.
<PAGE>
PRO FORMA UNAUDITED CONDENSED COMBINED BALANCE SHEET
AS OF DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
Netcentives SHC Venture, UVN Pro Forma
Inc. L.L.C Holdings, Inc. Adjustments
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and equivalents $ 75,290 $ 308 $ 43 $ (4,535)(B)
Short-term investments 10,812 - - -
Accounts receivable 2,169 423 26 -
Prepaid incentive awards 1,534 - - -
Prepaid expenses and other current assets 1,169 13 4 -
------------------------------------------------------------
Total Current Assets 90,974 744 73 (4,535)
Property and equipment-net 8,963 38 258 -
Intangibles assets-net 1,724 - - 26,334 (A)
Other assets 3,040 13 644 -
------------------------------------------------------------
13,727 51 902 26,334
Total Assets $ 104,701 $ 795 $ 975 $ 21,799
============================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,134 $ 1,960 $ 41 $ -
Accrued compensation and benefits 1,818 - - -
Accrued redemption costs 2,256 - - -
Other accrued liabilities 2,926 125 362 (174)(B)
Deferred revenue-product 6,489 - - -
Deferred revenue-services 3,572 - - -
Current portion of long-term obligations 1,008 - 334 (334)(B)
------------------------------------------------------------
Total current liabilities 19,203 2,085 737 (508)
Long-term obligations 1,234 1,217 3,951 (1,950)(B)
Stockholders' Equity
Common stock 33 - - -
Preferred stock - - - -
Paid-in capital 165,731 - 10 18,027 (B)
Deferred stock expenses (15,665) - - -
Receivables sales of stock (450) - - -
Accumulated deficit (65,385) (2,507) (3,723) 6,230 (B)
------------------------------------------------------------
Total stockholders' equity 84,264 (2,507) (3,713) 24,257
Total liabilities and stockholders'
equity $ 104,701 $ 795 $ 975 $ 21,799
============================================================
<CAPTION>
Post
Communications Pro Forma Pro Forma
Subtotal Inc. Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and equivalents $ 71,106 $ 5,479 $ (4,463)(C) $ 72,122
Short-term investments 10,812 - - 10,812
Accounts receivable 2,618 581 - 3,199
Prepaid incentive awards 1,534 - - 1,534
Prepaid expenses and other current assets 1,186 730 - 1,916
-----------------------------------------------------------------
Total Current Assets 87,256 6,790 (4,463) 89,583
Property and equipment-net 9,259 1,918 - 11,177
Intangibles assets-net 28,058 - 336,754 (D) 364,812
Other assets 3,697 221 - 3,918
-----------------------------------------------------------------
41,014 2,139 336,754 379,907
Total Assets $ 128,270 $ 8,929 $ 332,291 $ 469,490
=================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,135 $ 1,113 $ - $ 4,248
Accrued compensation and benefits 1,818 - - 1,818
Accrued redemption costs 2,256 - - 2,256
Other accrued liabilities 3,239 4,500 - 7,739
Deferred revenue-product 6,489 - - 6,489
Deferred revenue-services 3,572 495 - 4,067
Current portion of long-term obligations 1,008 1,870 - 2,878
-----------------------------------------------------------------
Total current liabilities 21,517 7,978 - 29,495
Long-term obligations 4,452 1,670 - 6,122
Stockholders' Equity
Common stock 33 - 6 (E) 39
Preferred stock - 9,750 (9,750)(E) -
Paid-in capital 183,768 8,151 323,642 (E) 515,561
Deferred stock expenses (15,665) (5,460) 5,460 (E) (15,665)
Receivables sales of stock (450) (227) - (677)
Accumulated deficit (65,385) (12,933) 12,933 (E) (65,385)
-----------------------------------------------------------------
Total stockholders' equity 102,301 (719) 332,291 433,873
Total liabilities and stockholders'
equity $ 128,270 $ 8,929 $ 332,291 $ 469,490
=================================================================
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements.
<PAGE>
PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
SHC UVN UVN
Netcentives Venture, Holdings, Pro Forma
Inc. L.L.C. Inc. Adjustments
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Product $ 859 $ 1,773 $ -
Program related services 2,672 - 360 (324) (F)
Direct marketing services - - -
Technical consulting services 4,310 - -
-------------------------------------------------------------------
Total revenues 7,841 1,773 360 (324)
Costs and expenses:
Cost of product revenues 968 2,159 - (324) (F)
Program-related services, marketing
and support costs 23,425 - -
Cost of direct marketing services - - -
Cost of technical consulting
services revenues 3,056 - -
Research and development 5,321 - - 75 (G)
Selling, general
and administrative 9,139 2,198 1,081 (F), (G)
Operating expenses - - 1,156 (1,156) (G)
Amortization of deferred
stock compensation 4,105 - -
Amortization of supplier
stock and other stock
arrangements 8,551 - -
Amortization of intangibles 1,777 - - 5,112 (H)
-------------------------------------------------------------------
Total costs and expenses 56,342 4,357 1,156 4,788
Loss from operations (48,501) (2,584) (796) (5,112)
Interest income 1,978 6 4 (240) (I)
Other income - 900 452
Cumulative effect of change
in accounting method - - -
Interest expense (305) (61) (288)
-------------------------------------------------------------------
Net Loss $(46,828) $(1,739) $ (628) $(5,352)
===================================================================
Net Loss per share $ (4.99)
============
Shares used in computing per
share amounts-
basic and diluted 9,376
==============
<CAPTION>
Post Post
Communications, Pro Forma Pro Forma
Subtotal Inc. Adjustments Combined
-------------------------------------------------- -------------
<S> <C> <C> <C>
Revenues:
Product $ 2,632 $ $ $ 2,632
- -
Program related services 2,708 - - 2,708
Direct marketing services - 2,899 (213) (K) 2,686
Technical consulting services 4,310 - - 4,310
-------------------------------------------------- -------------
Total revenues 9,650 2,899 (213) 12,336
Costs and expenses:
Cost of product revenues 2,803 - - 2,803
Program-related services, marketing -
and support costs 23,425 - 7 (K) 23,432
Cost of direct marketing services - 2,471 (220) (K) 2,251
Cost of technical consulting -
services revenues 3,056 - - 3,056
Research and development 5,396 1,220 - 6,616
Selling, general -
and administrative (F) 12,418 4,889 - 17,307
Operating expenses - - - -
Amortization of deferred
stock compensation 4,105 1,057 - 5,162
Amortization of supplier
stock and other stock
arrangements 8,551 - - 8,551
Amortization of intangibles 6,889 - 79,295 (L) 86,184
-------------------------------------------------- -------------
Total costs and expenses 66,643 9,637 79,082 155,362
Loss from operations (56,993) (6,738) (79,295) (143,026)
Interest income 1,748 - (223) (J) 1,525
Other income 1,352 - - 1,352
Cumulative effect of change
in accounting method - 230 - 230
Interest expense (654) (1,247) - (1,901)
-------------------------------------------------- -------------
Net Loss $(54,547) $(7,755) $(79,518) $(141,820)
================================================== =============
Net Loss per share $ (11.00)
=============
Shares used in computing per
share amounts-
basic and diluted 15,600
=============
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements.
<PAGE>
NETCENTIVES INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
UVN
The total purchase price of UVN reflects a cash payment of $2,788,000 as well as
the issuance of 371,532 shares of Netcentives' common stock. The total purchase
price was determined as follows (in thousands):
Value of Netcentives' common stock $ 18,027
Cash payment 2,788
Liabilities assumed 4,631
Other direct acquisition expenses 2,077
--------
$ 27,523
========
The valuation of our common stock is based on its closing price for the five
calendar days ending on the trading day immediately prior to the date of
"Agreement and Plan of Reorganization" referenced in the Form 8-K filed March
20, 2000.
The total purchase price of the UVN acquisition will be allocated to acquired
assets based on estimates of their fair values. The purchase price of
approximately $27,523,000 in excess of identifiable assets acquired of
$25,548,000 have been preliminarily classified as intangible assets. The Company
expects to complete the purchase price allocation during the second quarter of
2000.
Post Communications
The total purchase price of Post reflects an issuance of 5,965,504 shares of
Netcentive's common stock. The total purchase price was determined as follows
(in thousands):
Value of Netcentives' common stock $ 308,790
Value of options assumed 14,858
Other direct acquisition expenses 4,463
---------
$ 328,111
=========
The valuation of our common stock and common stock options are based on the
average closing price for the five day period beginning two days prior to the
signing of the "Agreement and Plan of Reorganization" dated February 15, 2000,
referenced in the Form 8-K filed on April 21, 2000.
The total purchase price of the Post acquisition which is based on preliminary
purchase allocations as if the acquisition of UVN occurred on December 31, 1999
will be allocated to acquired assets based on estimates of their fair values.
The purchase price of approximately $328,111,000 in excess of identifiable
assets acquired of $317,181,000 have been preliminarily classified as intangible
assets.
Pro forma adjustments are as follows:
(A) To reflect allocation of purchase price to goodwill and other intangible
assets of approximately $26,334,000 identified in the purchase price
allocation resulting from the acquisition of UVN.
(B) To reflect the purchase price paid as follows: issuance of our common stock
valued at approximately $18,027,000, a cash payment of $2,458,000 and
acquisition related expenses of approximately $2,077,000 and liabilities
assumed of approximately $4,301,000. These numbers are different from
values at acquisition due to standard operating activities.
(C) To reflect deal costs related to the acquisition.
(D) To reflect allocation of purchase price to goodwill and other intangible
assets of approximately $336,754,000. Amount differs from amount recorded
at acquisition due to stock issuance by Post offset by operating losses
between December 31, 1999 and date of acquisition.
(E) To reflect the purchase price paid as follows: issuance of common stock and
options assumed valued at approximately $323,648,000 and acquisition
related expenses of approximately $4,463,000.
(F) To eliminate intercompany charges to revenues recognized by UVN Holdings,
Inc. related to fees paid by SHC Venture, L.L.C.
(G) To reflect the presentation of operating expenses related to UVN on a basis
consistent with Netcentives Inc. financial statements.
(H) To reflect the amortization of approximately $25,548,000 of estimated
intangible assets resulting from the UVN acquisition. The intangible assets
will be amortized ratably over an estimated useful life of five years. The
Company expects to complete the purchase price allocation during the second
quarter of 2000.
(I) To reflect the reduction of interest income as of result of the $4,865,000
of cash paid for the acquisition of UVN.
(J) To reflect the reduction of interest income as a result of the $4,463,000
of cash paid for the acquisiton of Post.
(K) To reflect intercompany charges recognized by Post Communications, Inc.
related to fees paid by Netcentives.
(L) To reflect the amortization of approximately $317,181,000 of estimated
intangible assets resulting from the acquisition. The intangible assets
will be amortized ratably over an estimated useful life of four years. The
Company expects to complete the purchase price allocation during the second
quarter of 2000.
