<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ----------------------
Commission file number 0-28036
BROOKS FIBER PROPERTIES, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 43-1656187
- --------------------------------------- --------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
425 Woods Mill Road South, Suite 300, St. Louis, Missouri 63017
- --------------------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 314-878-1616
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Shares of Voting Common Stock outstanding at May 15, 1996: 29,639,482 par
value $.01 per share.
Exhibit Index is on page 19.
<PAGE> 2
BROOKS FIBER PROPERTIES, INC. AND SUBSIDIARIES
PART I - Financial Information
------------------------------
Page No.
--------
Item 1. Financial Statements.
Consolidated Balance Sheets as of March 31, 1996
and December 31, 1995. 3
Consolidated Statements of Operations for the Three
Month Periods Ended March 31, 1996 and 1995. 5
Consolidated Statement of Changes in Shareholders'
Equity for the Three Months Ended March 31, 1996. 6
Consolidated Statements of Cash Flow for the Three
Months Ended March 31, 1996 and 1995. 8
Notes to Consolidated Financial Statements 9-13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 13-17
Part II - Other Information
---------------------------
Item 6. Exhibit and Reports on Form 8-K. 17
Signatures 18
<PAGE> 3
<TABLE>
BROOKS FIBER PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1996 1995
-------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $253,795,955 $59,912,554
Marketable securities 25,158,956 --
Accounts receivable, net 3,866,982 2,002,930
Other current assets 3,822,058 1,183,183
-------------- --------------
Total current assets 286,643,951 63,098,667
NETWORKS AND EQUIPMENT, net 97,777,465 50,042,235
OTHER ASSETS, net 64,713,475 33,469,017
-------------- --------------
$449,134,891 $146,609,919
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and accrued liabilities 21,871,597 5,186,395
-------------- --------------
Total current liabilities 21,871,597 5,186,395
-------------- --------------
LONG-TERM DEBT 298,529,107 43,977,091
MINORITY INTERESTS 3,469,764 3,992,610
COMMON STOCK, subject to redemption, $.01 par value,
2,240,000 and 0 shares issued and outstanding 28,000,000 --
SHAREHOLDERS' EQUITY:
Preferred stock, 1,040,012 shares authorized:
Convertible preferred stock, Series A-1, $.01 par value;
489,600 shares authorized; 389,650 and 396,000 shares
issued and outstanding 38,965,000 39,600,000
Convertible preferred stock, Series A-2, $.01 par value;
439,927 shares authorized; 419,704 and 419,705 shares
issued and outstanding 65,592,647 65,596,092
Convertible preferred stock, Series B-1, $.01 par value;
12,000 shares authorized; 12,000 and 12,000 shares
issued and outstanding 1,200,000 1,200,000
Convertible preferred stock, Series B-2, $.01 par value;
4,545 shares authorized; 4,545 and 4,545 shares
issued and outstanding 711,029 711,029
Common stock, $.01 par value, 50,000,000 shares authorized,
2,167,360 and 1,162,800 shares issued and outstanding 11,100,693 11,378
<PAGE> 4
Accumulated deficit (20,304,946) (13,664,676)
-------------- --------------
Total shareholders' equity 97,264,423 93,453,823
-------------- --------------
$449,134,891 $146,609,919
============== ==============
<FN>
See notes to consolidated financial statements
</TABLE>
<PAGE> 5
<TABLE>
BROOKS FIBER PROPERTIES, INC.
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
Three Months Ended
------------------------------
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
Revenues $6,795,413 $3,022,854
Expenses:
Service costs 2,867,625 1,665,651
Selling, general and administrative expenses 6,620,822 2,256,340
Depreciation and amortization 2,427,534 745,226
-------------- --------------
11,915,981 4,667,217
-------------- --------------
Loss from operations (5,120,568) (1,644,363)
Other income (expense):
Interest income 1,792,610 107,329
Interest expense (3,835,157) (819,043)
-------------- --------------
Loss before minority interests (7,163,115) (2,356,077)
Minority interests in share of loss 522,845 142,009
-------------- --------------
Net loss ($6,640,270) ($2,214,068)
============== ==============
Pro forma loss per common and common equivalent (0.34) (0.11)
============== ==============
Pro forma weighted average number of shares outstanding $19,523,584 $19,523,584
============== ==============
<FN>
See notes to consolidated financial statements
</TABLE>
<PAGE> 6
<TABLE>
BROOKS FIBER PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD ENDED MARCH 31, 1996
(Unaudited)
<CAPTION>
Convertible Preferred Stock
------------------------------------------------------
Series A-1 Series A-2
-------------------------- --------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance, December 31, 1995 396,000 $39,600,000 419,705 $65,596,092
Merger with BTC
-- issuance of common stock -- -- -- --
-- conversion of preferred stock to common stock (6,350) (635,000) (6,061) (1,000,065)
Issuance of Series A-2 Preferred Stock -- -- 6,060 996,620
Net Loss -- -- -- --
------------ ------------ ------------ ------------
Balance, March 31, 1996 389,650 $38,965,000 419,704 $65,592,647
============ ============ ============ ============
</TABLE>
<TABLE>
Convertible Preferred Stock
------------------------------------------------------
Series B-1 Series B-2
-------------------------- --------------------------
Shares Amount Shares Amount
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance, December 31, 1995 12,000 $1,200,000 4,545 $711,029
Merger with BTC
- issuance of common stock -- -- -- --
- conversion of preferred stock to common stock -- -- -- --
Issuance of Series A-2 Preferred Stock -- -- -- --
Net Loss -- -- -- --
------------ ------------ ------------ ------------
Balance, March 31, 1996 12,000 $1,200,000 4,545 $711,029
============ ============ ============ ============
</TABLE>
<PAGE> 7
<TABLE>
Common Stock Total
-------------------------- Accumulated Shareholders'
Shares Amount Deficit Equity
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance, December 31, 1995 1,162,800 $11,378 ($13,664,676) $93,453,823
Merger with BTC
- issuance of common stock 756,340 9,454,250 -- 9,454,250
- conversion of preferred stock to common stock 248,220 1,635,065 -- --
Issuance of Series A-2 Preferred Stock -- -- -- 996,620
Net Loss -- -- (6,640,270) (6,640,270)
------------ ------------ ------------ ------------
Balance, March 31, 1996 2,167,360 $11,100,693 ($20,304,946) $97,264,423
============ ============ ============ ============
<FN>
See notes to consolidated financial statements
</TABLE>
<PAGE> 8
<TABLE>
BROOKS FIBER PROPERTIES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
Three Months Ended
------------------------------
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($6,640,270) ($2,214,069)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 2,427,534 745,226
Non-cash interest expense 3,753,932 817,302
Minority interests (522,845) (142,009)
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable (381,983) (51,341)
Other, net (1,829,888) 46,978
Accounts payable and accrued expenses 1,253,052 (385,973)
-------------- --------------
Net cash from operating activities (1,940,468) (1,183,886)
-------------- --------------
Cash flows from investing activities:
Purchase of networks and equipment (15,577,086) (4,219,095)
Purchase of marketable securities (25,152,206) --
Increase in other assets (2,159,236) (140,112)
Payment for acquisitions, net of cash acquired 1,284,813 (13,940,819)
-------------- --------------
Net cash used in investing activities (41,603,715) (18,300,026)
-------------- --------------
Cash flows from financing activities:
Issuance of preferred stock and subscriptions receivable
payments, net 996,620 17,800,030
Proceeds from long-term debt, net 249,917,000 2,322,590
Repayment of long-term debt and capital leases (3,233,131) --
Other financing activities (10,252,905) (1,298,338)
-------------- --------------
Net cash provided by financing activities 237,427,584 18,824,282
-------------- --------------
Net increase in cash 193,883,401 (659,630)
Cash, beginning of period 59,912,554 8,794,566
-------------- --------------
Cash, end of period $253,795,955 $8,134,936
============== ==============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $58,333 $129,096
============== ==============
<FN>
See notes to consolidated financial statements
</TABLE>
<PAGE> 9
BROOKS FIBER PROPERTIES, INC.
Notes to Consolidated Financial Statements
1. Basis of Presentation
---------------------
The consolidated balance sheet of Brooks Fiber Properties, Inc. ("BFP" or
the "Company") at December 31, 1995 was obtained from the Company's audited
balance sheet as of that date. All other financial statements contained
herein are unaudited and, in the opinion of management, contain all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation. Operating results for the three months ended
March 31, 1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996. The Company's accounting
policies and certain other disclosures are set forth in the notes to the
Company's audited consolidated financial statements as of and for the year
ended December 31, 1995 included in the Company's Prospectus dated May 2,
1996 (File No. 333-1924) .
2. Marketable Securities
---------------------
Marketable securities consist of treasury bills, commercial paper, and
repurchase agreements which are stated at cost, adjusted for discount
accretion and premium amortization. The securities in the Company's
portfolio are short-term in nature and are classified as "held to
maturity", as management has the intent and ability to hold those
securities to maturity.
3. Acquisitions
------------
Pursuant to an Agreement and Plan of Merger between Brooks
Telecommunications Corporation (BTC) and the Company, BTC was merged into
the Company on January 2, 1996, and the securities of the Company held by
BTC were cancelled. Following the merger, the former holders of BTC's
common stock, preferred stock, convertible notes, options and warrants
received shares of the Company's common stock, options, and warrants.
After the consideration of the shares and warrants of BFP held by BTC at
the time of acquisition, the Company issued an additional 756,340 shares of
common stock valued at $12.50 per share and certain options and warrants
(see Note 7). Intangible assets of approximately $6.1 million were
recorded as a result of this acquisition.
On January 31, 1996, the Company signed a definitive agreement with an
unrelated party to acquire City Signal, Inc., a provider of competitive
access and local exchange services in Michigan and Ohio, and certain assets
of a related entity. In connection with the acquisition, the Company
agreed to issue approximately 2.2 million shares of common stock and to
assume certain specified liabilities. In addition, the Company has
provided the seller with the option to require the Company to repurchase
any or all shares at a price of $12.50 per share on or before February 1,
1998. Intangible assets of approximately $13.1 million were recorded as a
result of this acquisition.
<PAGE> 10
The above acquisitions were accounted for using the purchase method of
accounting and, accordingly, the results of operations of the acquired
companies have been included in the Company's consolidated financial
statements since the effective dates of acquisition. The aggregate
purchase price for these acquisitions was allocated based on fair values as
follows:
Fair value of tangible assets acquired $ 36,968,631
Fair value of intangible assets acquired 19,212,314
Liabilities assumed (20,011,507)
--------------
Purchase price, net of cash acquired $ 36,169,438
==============
4. Networks and Equipment, Net
---------------------------
Networks and equipment consist of the following:
March 31 December 31
1996 1995
------------ ------------
Telecommunications networks $41,516,678 $30,158,000
Electronic and related equipment 42,573,261 20,174,000
Land and Buildings 4,480,049 ---
Leasehold improvements 1,565,086 232,000
Furniture and office equipment 12,303,078 2,435,000
Motor vehicles 320,040 173,000
------------ ------------
102,758,192 53,172,000
Less accumulated depreciation 4,980,727 3,130,000
------------ ------------
$97,777,465 $50,042,000
============ ============
As of March 31, 1996 and December 31, 1995, networks and equipment include
$6,541,063 and $4,469,000 of networks in progress that are not in service
and, accordingly, have not been depreciated.
<PAGE> 11
5. Other Assets, Net
-----------------
Other assets consist of the following:
March 31 December 31
1996 1995
------------ ------------
Goodwill $ 48,370,603 $ 29,129,000
Debt issuance costs 11,758,557 1,559,000
Organization, development, and pre-
operating costs 4,008,831 2,341,000
Interest rate cap arrangements 1,511,000 1,511,000
Rights-of-way 303,646 283,000
Other 1,055,462 298,000
------------ ------------
67,008,099 35,121,000
Less accumulated amortization 2,294,624 1,652,000
------------ ------------
$ 64,713,475 $ 33,469,000
============ ============
6. Shareholder's Equity:
---------------------
On January 2, 1996, the Company's Board of Directors authorized a 20-for-1
split for each share of common stock and adjusted all outstanding common
stock options and warrants accordingly. All share data presented within
the consolidated financial statements have been revised to effect for the
stock split.
7. Stock Options and Warrants
--------------------------
The Company's 1993 Stock Option Plan (the Plan) authorizes the granting of
options and stock appreciation rights covering up to 3,400,000 shares of
common stock. The options generally vest over a period of three years from
the date of grant.
Stock option activity for the Plan for the three months ended March 31,
1996 is as follows:
Price
Number per Share
------------ ------------
Balance, December 31, 1995 1,651,660 $4.00- $6.60
Granted 702,000 $12.50
Cancelled (52,000) $ 6.60
------------ ------------
Balance, March 31, 1996 2,301,660 $4.00-$12.50
============ ============
<PAGE> 12
Also, in connection with the Agreement and Plan of Merger between the
Company and BTC, the Company issued options and warrants to certain of the
shareholders and employees of BTC for the purchase of 1,134,840 shares of
the Company's Common Stock at prices of $11.35 to $31.04 per share. The
warrants expire at various dates from March 31, 1997 to December 21, 1999.
The options generally vest over a three year period from the dates of
original grant.
8. Long-Term Debt:
---------------
On February 26, 1996, the Company completed the issuance and sale of $425.0
million aggregate principal amount of 10 7/8% Senior Discount Notes due
March 1, 2006, for which gross proceeds of approximately $250.0 million
were received. No cash payments of interest are required prior to
September 1, 2001. Commencing at such time, the Company will be required
to make semi-annual interest payments on the Senior Discount Notes,
totaling approximately $46.2 million annually.
9. Pro Forma Loss Per Share:
-------------------------
Pro forma loss per share has been computed using the number of shares of
Common Stock and Common Stock equivalents outstanding. The number of
shares used in computing pro forma loss per share was 19,532,584. Pursuant
to Securities and Exchange Commission Staff Accounting Bulletin No. 83,
shares issued and stock options and warrants granted at prices below the
initial public offering price of $27.00 per share during the twelve-month
period preceding the date of the Company's initial filing of the
Registration Statement related to such initial public offering have been
included in the calculation of common stock equivalent shares, using the
treasury stock method, as if they were outstanding for all of 1995 and for
the first quarter of 1996.
10. Commitments and Contingencies:
------------------------------
During September 1995, GST Tucson Lightwave, Inc. (Lightwave) was permitted
to intervene in litigation originally filed by Brooks Fiber Communications
of Tucson, Inc. a wholly-owned subsidiary of BFP (BFC Tucson). Lightwave
filed a counterclaim against BFC Tucson, BFP, and Tucson Electric Power
Company (TEP) charging BFC Tucson, BFP, and TEP with violations of
antitrust laws, all of which stem from an agreement between BFC Tucson and
TEP that allowed BFC Tucson exclusive rights, for one year, to utilize
certain of TEP's rights-of-way. The original causes of the action have
been settled, however, the counterclaim by Lightwave is currently still
pending. The Company believes the claim to be without merit and intends to
vigorously defend against this action. The Company believes that
resolution of the matter will not have a material adverse effect on the
financial condition or results of operations of the Company.
<PAGE> 13
11. Subsequent Event:
-----------------
On May 2, 1996, the Company completed the sale of 7,385,331 shares of
Common Stock at a price of $27.00 per share in an initial public offering,
for gross proceeds of approximately $199.4 million and proceeds net of
underwriting discounts and advisory fees of approximately $186.4 million.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the Company's condensed Consolidated Financial Statements and Notes thereto
included herewith, and with the Company's Management's Discussion and Analysis
of Financial Condition and Results of Operations and audited consolidated
financial statements and notes thereto included in the Company's prospectus
dated May 2, 1996, filed with the Securities and Exchange Commission (File
No. 333-1924).
Overview
- --------
The Company is a leading full-service provider of competitive local
telecommunications services in selected markets in the United States. The
Company acquires and constructs its own state-of-the-art fiber optic networks
and facilities and leases network capacity from others to provide interexchange
carriers ("IXCs") and business, government and institutional end users with an
alternative to the local exchange carriers ("LECs") for a broad array of high
quality voice, data and other telecommunications services.
The Company's goal is to become the primary full-service provider of
competitive local telecommunications services to IXCs and business, government
and institutional end-users in selected cities by offering superior products
with excellent customer service at prices below those charged by the LECs. The
Company currently has systems in 25 cities, consisting of systems in operation
in 13 cities and under construction in 12 cities. The Company plans to expand
its network operations to have systems in operation or under construction in a
total of 30 cities by the end of 1996 and a total of 50 cities by the end of
1998. The Company has recently installed switches in its networks in
Sacramento, California and Hartford, Connecticut and, in connection with the
Company's recent acquisition of City Signal, Inc., obtained a fully-operational
switch serving Grand Rapids, Michigan, and subject to regulatory approvals,
plans to have switching, frame relay and asynchronous transfer mode ("ATM")
based packet transport capabilities in 20 of its operating networks by the end
of 1996.
On January 31, 1996, the Company completed the acquisition of City Signal,
Inc., which included networks in operation or under construction in four cities
in Michigan and Ohio, including an installed switch in Grand Rapids, Michigan.
At the date of acquisition, the acquired networks had approximately 208 route
miles of fiber, 30,456 in voice grade equivalent circuits ("VGEs"), and 226
buildings connected. In addition, effective January 2, 1996, Brooks
Telecommunications Corporation ("BTC"), a founding stockholder of the Company
and the previous owner of GLA International ("GLA"), was merged into the
Company. GLA, a wholly-owned subsidiary of the Company, offers a full range of
<PAGE> 14
consulting, management, engineering and information system solutions for
telecommunications companies. GLA's capabilities also serve as an internal
source for the telecommunications infrastructure support needed to facilitate
the Company's network growth and penetration of the competitive local exchange
company ("CLEC") business.
Results of Operations
- ---------------------
Three Months Ended March 31, 1996 and 1995
Revenue
The Company's revenues for the first quarter of 1996 increased 125% as
compared to the first quarter of 1995 to $6.8 million for the three months
ended March 31, 1996 as compared with revenues of $3.0 million for the three
months ended March 31, 1995. Network capacity as reflected in VGEs in service
increased to 165,122 VGEs as of March 31, 1996 as compared with 84,384 VGEs as
of March 31, 1996. These increases reflect the impact of the Company's
acquisition and development activities as well as increased utilization of the
Company's network facilities arising from the sales of additional services to
current and new customers. A significant contributor to the Company's revenue
growth for the first quarter of 1996 relates to the Company's entry into
switched services in Grand Rapids, Michigan via the Company's City Signal
acquisition. Switched services revenues for the quarter ended March 31, 1996,
representing two months' revenues from the Company's switched services
activities in Grand Rapids, totaled $754,000 or $4.5 million on an annualized
basis.
Costs and Expenses
Service costs increased to $2.9 million for the three months ended
March 31, 1996 from $1.7 million for the three months ended March 31, 1995.
Service costs consist of costs associated directly with the operation of the
Company's networks, facilities management services, and consulting and system
support activities for third parties including technical salaries and benefits,
rights-of-way fees, and local and long distance service costs. Service costs
as a percentage of telecommunications services revenues declined to
approximately 42% for the three months ended March 31, 1996 as compared to
approximately 55% for the three months ended March 31, 1995.
The Company's selling, general and administrative expenses ("SG&A") for the
three months ended March 31, 1996 were $6.6 million, as compared with SG&A
expenses of $2.3 million for the three months ended March 31, 1995. The
increase was principally due to the increasing number and continued expansion
of the Company's competitive access networks, including the introduction of
switched services, and related marketing activities. There is typically a
period of higher SG&A expense and a lag time in the generation of revenues
following the acquisition and development of a competitive access network.
Management expects SG&A expenses to continue to increase during the remainder
of 1996 as the Company continues to expand its networks, services and marketing
activities.
Depreciation and amortization expense increased to $2.4 million for the
three months ended March 31, 1996, from $745,000 for the three months ended
<PAGE> 15
March 31, 1995 as a result of the Company's acquisitions and the continued
expansion of the Company's networks.
Interest Income (Expense)
Interest expense totaling $3.8 million was recorded during the three months
ended March 31, 1996, as compared to interest expense of $819,000 for the three
months ended March 31,1995. The primary contributor to the substantial
increase in interest expense as compared to the comparable period in the prior
year is interest totaling $2.6 million attributable to the senior discount
notes offering (see "Liquidity and Capital Resources") which was completed by
the Company on February 26, 1996. For the quarters ended March 31, 1996 and
1995, interest income totaling $1.8 million and $107,000, respectively, was
derived from the Company's available cash and cash equivalents and marketable
securities.
Net Loss
For the reasons stated above, the Company's net loss before minority
interest increased to $7.2 million for the quarter ended March 31, 1996, from
$2.4 million for the quarter ended March 31, 1995. Minority interests in net
losses, representing minority investors' interests in certain of the Company's
subsidiaries, totaled $523,000 and $142,000 for the quarters ended March 31,
1996 and 1995, respectively. As a result, the Company's net loss for the
quarter ended March 31, 1996 was $6.6 million as compared to a net loss of $2.2
million for the quarter ended March 31, 1995.
EBITDA
Earnings before interest, taxes, depreciation and amortization (EBITDA)
decreased to ($2.7) million for the three months ended March 31, 1996, from
($899,000) for the three months ended March 31, 1995, a decrease of $1.8
million. The decrease reflects the increasing operating and SG&A expenses
noted above resulting from the acquisition, development and expansion of the
Company's networks and the introduction of switch services in certain of the
Company's markets.
EBITDA is a measure commonly used in the telecommunications industry and is
presented to assist in an understanding of the Company's operating results and
is not intended to represent cash flow or results of operations in accordance
with generally accepted accounting principles.
Liquidity and Capital Resources
- -------------------------------
March 31, 1996 and December 31, 1995
The Company's total assets increased from $146.6 million as of December 31,
1995 to $449.1 million at March 31, 1996. The Company's current assets of
$286.6 million at March 31, 1996, including cash and cash equivalents and
marketable securities of $279.0 million, exceeded current liabilities of $21.9
million, providing working capital of $264.7 million. Network and equipment
totaled $97.8 million at March 31, 1996 as compared to $50.0 million at
December 31, 1995. Other assets, principally goodwill, net of accumulated
<PAGE> 16
amortization, increased to $64.7 million at March 31, 1996 from $33.5 million
at December 31, 1995, primarily as a result of the Company's acquisitions of
both City Signal, Inc. and BTC, and debt issuance costs associated with the
Company's recent $250 million gross proceeds from the 10 7/8% senior discount
note offering.
In connection with the City Signal acquisition, the seller received an
option to require the Company to repurchase any or all of the 2,240,000 shares
of the Company's common stock issued in the City Signal acquisition at a price
of $12.50 per share on or before January 31, 1997 or the date of an initial
public equity offering by the Company, whichever occurs first, which option is
subject to extension to February 1, 1998 under certain circumstances.
On February 26, 1996, the Company sold $425.0 million aggregate principal
amount of 10 7/8% Senior Discount Notes, providing gross proceeds of
approximately $250 million, and proceeds net of underwriting fees of
approximately $241 million. No cash payments of interest are required on the
Senior Discount Notes until September 1, 2001.
On May 2, 1996, the Company sold 7,385,331 shares of the Company's common
stock in an initial public offering at a price of $27.00 per share. Gross
proceeds from this offering totaled approximately $199.4 million and proceeds
net of underwriting discounts and advisory fees totalled approximately $186.4
million.
The competitive local telecommunications services business is a capital-
intensive business. The Company's operations have required and will continue
to require substantial capital investment for (i) the installation of
electronics for switched services in the Company's operating networks; (ii) the
expansion and improvement of the Company's operating systems, including the
installation of capabilities to provide other enhanced services; and (iii) the
acquisition, design, construction and development of additional networks. For
the three months ended March 31, 1995 and 1996, the Company made expenditures,
including the assumption of indebtedness and issuance of shares, for the
acquisition, design, construction and development of systems totaling $59.3
million and $18.9 million, respectively.
The Company plans to continue to make substantial capital investments in
connection with the entry into new markets and the continued development of its
existing systems, including the capital required to provide switched and other
enhanced services as technology and regulations permit. The Company currently
intends to use the net proceeds from the Company's recent equity offering,
together with the remaining net proceeds from its 10 7/8% senior discount note
offering and minority investments in individual networks, to fund the Company's
expansion as well as initial operating losses. The Company estimates that it
will spend approximately $290 million during 1996 and 1997 to fund the
Company's expansion to 30 networks that are expected to be in operation or
under construction by the end of 1996 and the installation of switching
electronics and other enhanced capabilities in these networks. The Company's
strategic plan calls for having systems in operation or under development in a
total of 50 cities by the end of 1998, which will require substantial
additional capital. The Company expects its expansion into additional cities
will be accomplished by the acquisition of existing networks as well as the
construction of new networks. The Company will continue to evaluate additional
revenue opportunities in its existing markets and, as such opportunities may
develop, the Company may determine to make additional capital investments in
its networks that may be required to pursue such opportunities, such as costs
required to extend a network or install additional electronics to meet customer
<PAGE> 17
requirements. Due to the number and variability of the factors which could
affect the amount of capital that will be required for such purposes, the
Company cannot provide a reasonable estimate of such additional capital needs.
For example, the size of a particular network to be developed or acquired and
the types of electronics installed can impact significantly the amount of
capital required. Similarly, the potential cost of acquiring additional
networks is not determinable, and it is possible that the Company could acquire
existing networks using a variety of financing alternatives. The Company
expects to meet such additional capital needs with the proceeds from its recent
equity offering, the proceeds from existing and future credit facilities and
other borrowings, and the proceeds from sales of additional equity securities
and joint ventures. The Company's expectations of required future capital
expenditures are based on the Company's current estimates and the current state
and federal regulatory environment. There can be no assurance that actual
expenditures will not be significantly higher or lower. In addition, there can
be no assurance that the Company will be able to raise or generate sufficient
funds to enable it to meet its strategic objectives or that such funds, if
available at all, will be available on a timely basis or on terms that are
acceptable to the Company.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
Exhibit No.
(Reference to Item 601(b)
of Regulation S-K) Description
- ------------------------- --------------------------------------------------
3.2 By-Laws
11 Statement regarding Computation of Per Share
Earnings
27 Financial Data Schedule (furnished to the
Securities and Exchange Commission for Electronic
Data Gathering, Analysis, and Retrieval [EDGAR]
purposes only)
(b) Reports on Form 8-K
-------------------
There were no reports on Form 8-K filed during the quarter for which this
report is filed.
<PAGE> 18
SIGNATURES
----------
Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
BROOKS FIBER PROPERTIES, INC.
(Registrant)
Date: May 15, 1996 By: /S/ JAMES C. ALLEN
---------------------------------
James C. Allen
Chief Executive Officer
Date: May 15, 1996 By: /S/ DAVID L. SOLOMON
---------------------------------
David L. Solomon
Chief Financial Officer
<PAGE> 19
EXHIBIT INDEX
-------------
Exhibit Number Description
- -------------- --------------------------------------------------------------
3.2 By-Laws
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule (furnished to the Securities and
Exchange Commission for Electronic Data Gathering, Analysis,
and Retrieval [EDGAR] purposes only)
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
OF
BROOKS FIBER PROPERTIES, INC.
<PAGE> 2
BY-LAWS
OF
BROOKS FIBER PROPERTIES, INC.
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Registered Office . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Offices . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II Meetings of Stockholders. . . . . . . . . . . . . . . . . . . . 1
Section 2.1 Place . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.2 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . 1
Section 2.3 Special Meetings. . . . . . . . . . . . . . . . . . . . . . 1
Section 2.4 Notice of Meetings. . . . . . . . . . . . . . . . . . . . . 2
Section 2.5 Adjournments. . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.6 List of Stockholders. . . . . . . . . . . . . . . . . . . . 2
Section 2.7 Quorum. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.8 Organization. . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.9 Proxies; Voting . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III Board of Directors. . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.1 General Powers. . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2 Number and Term of Office . . . . . . . . . . . . . . . . . 4
Section 3.3 Resignation, Removal and Vacancies. . . . . . . . . . . . . 4
Section 3.4 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.5 Compensation. . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.6 Nominations . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1 Committees. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2 Meetings and Quorum . . . . . . . . . . . . . . . . . . . . 7
ARTICLE V Officers. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.1 Election and Appointment; Term of Office. . . . . . . . . . 8
Section 5.2 Resignation; Removal; Vacancies . . . . . . . . . . . . . . 8
Section 5.3 Duties and Functions. . . . . . . . . . . . . . . . . . . . 8
ARTICLE VI Books and Records . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII Shares and Their Transfer; Fixing Record Dates. . . . . . . . 10
Section 7.1 Certificates for Stock. . . . . . . . . . . . . . . . . . 10
Section 7.2 Transfer Agents and Registrars; Facsimile Signatures . . . 11
Section 7.3 Stock Record. . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.4 Transfer of Stock . . . . . . . . . . . . . . . . . . . . . 11
Section 7.5 Lost, Stolen, Destroyed, or Mutilated Certificates. . . . . 11
Section 7.6 Record Dates. . . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE> 3
ARTICLE VIII Corporate Seal. . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IX Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE X Indemnification . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE XI Amendments. . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE> 4
BY-LAWS
OF
BROOKS FIBER PROPERTIES, INC.
ARTICLE I
Offices
-------
SECTION 1.1. Registered Office. The registered office of the
Corporation in the State of Delaware shall be located at 1013 Centre Road, City
of Wilmington, County of New Castle, Delaware, 19805. The name of the
registered agent in charge thereof is Corporation Service Company.
SECTION 1.2 Other Offices. The Corporation may also have offices at
such other places within or without the State of Delaware as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
ARTICLE II
Meetings of Stockholders
------------------------
SECTION 2.1 Place. Meetings of stockholders shall be held at such
place, within or without the State of Delaware, as shall be designated from
time to time by the Board of Directors and stated in the notice of the meeting.
SECTION 2.2 Annual Meetings. The annual meeting of stockholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held on the second Tuesday of April
if not a legal holiday, and if a legal holiday then on the next day following
which is not a legal holiday, at 10:00 A.M., or at such other date and time as
shall be designated from time to time by the Board of Directors and stated in
the notice of the meeting.
SECTION 2.3 Special Meetings. Special meetings of the stockholders
for any purpose or purposes may be called by any two (2) members of the Board
of Directors or by the Chairman of the Board of the Corporation, to be held at
such place, either within or without the State of Delaware, and at such date
and time as shall be designated in the notice of the meeting.
SECTION 2.4 Notice of Meetings. Except as otherwise expressly
required by law, written notice of each meeting of the stockholders shall be
given not less than ten (10) nor more than sixty (60) days before the date of
the meeting to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed given when deposited in the United States
mail, postage prepaid, directed to the stockholder at the stockholder's address
as it appears on the records of the Corporation. Every such notice shall state
the place, date and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called. A written waiver of
notice, signed by the person entitled thereto, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person
at a meeting in person or by proxy shall constitute a waiver of notice of such
meeting, except when the person attends the meeting for the express purpose of
<PAGE> 5
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
SECTION 2.5. Adjournments. Any meeting of the stockholders, annual
or special, may adjourn from time to time to reconvene at the same or some
other place, and notice need not be given of any such adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting, the Corporation may transact any business
which might have been transacted at the original meeting. If the adjournment
is for more than thirty (30) days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting
shall be given to each stockholder of record entitled to vote at the meeting.
SECTION 2.6 List of Stockholders. At least ten (10) days before every
meeting of the stockholders, the Secretary or other officer of the Corporation
who shall have charge of the stock ledger of the Corporation shall prepare and
make, or cause the preparation and making of, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at
the place where the meeting is to be held. Such list shall also be produced
and kept at the time and place of the meeting during the whole time thereof,
and may be inspected by any stockholder who is present.
SECTION 2.7 Quorum. At each meeting of the stockholders, except as
otherwise expressly required by law or by the Certificate of Incorporation of
the Corporation, the holders of a majority of the voting power of the issued
and outstanding shares of each class of stock of the Corporation entitled to
vote at the meeting, present in person or represented by proxy, shall
constitute a quorum for the transaction of business. For purposes of the
foregoing, two or more classes or series of stock shall be considered a single
class if the holders thereof are entitled to vote together as a single class at
the meeting. In the absence of a quorum at any such meeting or any adjournment
thereof, any officer entitled to preside at, or to act as secretary of, such
meeting may adjourn the meeting from time to time in the manner provided in
Section 2.5 of these By-laws, until stockholders holding the amount of stock
requisite for a quorum shall be present in person or by proxy.
SECTION 2.8 Organization. At each meeting of the stockholders, one of
the following shall act as chairman of the meeting and preside thereat, in the
following order of precedence:
(a) the Chairman of the Board;
(b) the Vice Chairman of the Board;
(c) the President;
(d) any other officer of the Corporation designated by the Board of
Directors to act as chairman of such meeting and to preside
thereat if both of the above-named officers shall be absent from
such meeting; or
<PAGE> 6
(e) in the absence of any of the foregoing, a stockholder of record of
the Corporation who shall be chosen chairman of such meeting by a
majority in voting power of the stockholders present in person or
by proxy at the meeting and entitled to vote thereat.
The Secretary, or, if the Secretary shall be presiding over the meeting in
accordance with the provisions of this Section or if the Secretary shall be
absent from such meeting, the person (who shall be an Assistant Secretary, if
an Assistant Secretary, shall be present thereat) whom the chairman of such
meeting shall appoint, shall act as secretary of such meeting and keep the
minutes thereof.
SECTION 2.9. Proxies; Voting. Each stockholder entitled to vote at
a meeting of stockholders or to express consent or dissent to corporate action
in writing without a meeting may authorize another person or persons to act for
such stockholder by proxy, but no such proxy shall be voted or acted upon after
three (3) years from its date, unless the proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with an interest sufficient in law
to support an irrevocable power. A stockholder may revoke any proxy which is
not irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date with the Secretary of the Corporation. Voting at meetings of the
stockholders need not be by written ballot and need not be conducted by
inspectors unless otherwise provided in these By-laws or unless so directed by
the chairman of the meeting or unless the holders of a majority of the voting
power of the outstanding shares of all classes of stock entitled to vote
thereon present in person or by proxy at such meeting shall so determine. At
all meetings of the stockholders for the election of directors, a plurality of
the votes of the shares present in person or represented by proxy at the
meeting and entitled to vote on the election of directors shall be sufficient
to elect. All other elections and questions shall, unless otherwise provided
by law or by the Certificate of Incorporation of the Corporation or a
Certificate of Designation thereunder, or these By-laws, be decided by the vote
of the holders of a majority of the voting power of the outstanding shares of
the Corporation's stock entitled to vote thereon present in person or by proxy
at the meeting, voting as a single class, provided that (except as otherwise
required by law or by the Certificate of Incorporation of the Corporation) the
Board of Directors may require a larger vote upon any election or question.
ARTICLE III
Board of Directors
------------------
SECTION 3.1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors.
SECTION 3.2. Number and Term of Office. The number of directors
which shall constitute the whole Board of Directors shall be ten (10). Each
director shall hold office for a term of one year or until his or her successor
is elected and qualified or until his or her earlier death, resignation or
removal. In accordance with the provisions of Section 4.1 of the Amended and
Restated Stockholders' Agreement dated as of June 15, 1995 between the
Corporation and the Stockholders of the Corporation named therein (the
"Stockholders' Agreement"), five (5) directors ("Institutional Directors")
<PAGE> 7
shall be designated by certain Institutional Stockholders (as defined in the
Stockholders Agreement), two (2) directors shall be designated by the Board of
Directors and three (3) directors shall be designated by the Founding
Stockholder (as defined in the Stockholders Agreement).
SECTION 3.3. Resignation, Removal and Vacancies. Any director may
resign at any time by giving written notice of his resignation to the Board of
Directors or to the Chairman of the Board or the Secretary of the Corporation.
Any such resignation shall take effect upon receipt unless specified to be
effective at some other time and, unless otherwise specified therein, no
acceptance of such resignation shall be necessary to make it effective. A
director may be removed with or without cause by the holders of a majority of
the shares of stock entitled to vote for the election of directors, provided,
that, if the director to be removed has been designated to serve by a
stockholder or group of stockholders pursuant to the terms of a stockholders
agreement between the Corporation and the holders of at least a majority of the
stock entitled to vote for the election of directors, such stockholder or group
of stockholders has voted in favor of the removal of such director. Any
vacancy by reason of death, resignation, removal or otherwise may be filled by
the holders of a majority of the stock entitled to vote for the election of
directors to fill such vacancy or by a majority of the directors then in
office, though less than a quorum, or by a sole remaining director so elected,
each to hold office until the next annual meeting of stockholders and until his
or her successor shall have been elected and qualified or until his or her
earlier death, resignation or removal; provided, that, if a director whose
vacancy is to be filled has been designated to serve by a stockholder or group
of stockholders pursuant to the terms of a stockholders agreement between the
Corporation and the holders of at least a majority of the stock entitled to
vote for the election of directors, the candidate chosen to fill such vacancy
shall be a candidate designated by such stockholder or group of stockholders.
SECTION 3.4. Meetings.
(A) Annual Meetings. As promptly as practicable after each annual
election of directors, the Board of Directors shall meet for the purpose of
organization, the election of officers and the transaction of other business.
(B) Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times and places as the Board of Directors shall from
time to time determine.
(C) Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board or by any two (2)
members of the Board of Directors. Any and all business may be transacted at a
special meeting which may be transacted at a regular meeting of the Board of
Directors.
(D) Place of Meeting. The Board of Directors may hold its meetings at
such place or places within or without the State of Delaware as the Board of
Directors may from time to time by resolution determine or as shall be
designated in the notice of meeting.
(E) Notice of Meetings. Notice of the annual and other regular
meetings of the Board of Directors or of any adjourned meeting need not be
given. Notice of special meetings of the Board of Directors, or of any meeting
of any committee of the Board of Directors, shall be given to each director, or
member of such committee, at least five (5) business days before the day on
which such meeting is to be held, if by mail, and at least two (2) business
<PAGE> 8
days before the time of the meeting, if by telegraph, cable, telex, telecopy or
telephone, or if delivered personally. Such notice shall include the time and
place of such meeting. A written waiver of notice, signed by the director,
whether before or after such meeting shall be deemed equivalent to notice.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except when the director attends the meeting for the express
purposes of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened.
(F) Quorum and Manner of Acting. A majority of the directors then in
office shall be present in person at any meeting of the Board of Directors in
order to constitute a quorum for the transaction of business at such meeting.
In the absence of a quorum for any such meeting, a majority of the directors
present thereat may adjourn such meeting from time to time until a quorum shall
be present. The vote of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors unless the
vote of a greater number of directors or any specified number of such
Institutional Directors shall be required by the Certificate of Incorporation
of the Corporation, these By-laws or any Stockholders Agreement between the
Corporation and the holders of at least a majority of the stock entitled to
vote for the election of directors.
(G) Action by Communications Equipment. The directors, or the members
of any committee of the Board of Directors, may participate in a meeting of the
Board of Directors, or of such committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation shall constitute
presence in person at such meeting.
(H) Action by Consent. Any action required or permitted to be taken
at any meeting of the Board of Directors, or of any committee thereof, may be
taken without a meeting if all members of the Board of Directors or such
committee, as the case may be, consent thereto in writing, and such writing is
filed with the minutes of the proceedings of the Board of Directors or such
committee.
(I) Organization. At each meeting of the Board of Directors, the
Chairman of the Board, or, if the Chairman of the Board shall be absent from a
meeting, any director chosen by a majority of the directors present thereat,
shall act as chairman of the meeting and preside thereat. The Secretary or, in
the absence of the Secretary, any person (who shall be an Assistant Secretary,
if an Assistant Secretary shall be present thereat) whom the chairman shall
appoint shall act as secretary of such meeting and keep the minutes thereof.
SECTION 3.5. Compensation. The Board of Directors may provide that
the Corporation shall reimburse directors for any expenses incurred on account
of attendance at any meeting of the Board of Directors or any committee
thereof, and may otherwise fix the compensation of directors. Nothing herein
shall preclude any director from serving the Corporation in any other capacity
and receiving compensation therefor or limit the authority of the Board of
Directors to fix such compensation.
SECTION 3.6. Nominations. Only persons who are nominated in
accordance with the following procedures shall be eligible for election by the
stockholders as Directors. Nominations of persons for election as Directors of
the Corporation may be made at a meeting of stockholders at which Directors are
being elected (i) by or at the direction of the Board of Directors and/or by or
at the direction of any committee or person authorized or appointed by the
<PAGE> 9
Board of Directors or (ii) by any stockholder of the Corporation entitled to
vote for the election of directors at the meeting who complies with the notice
procedures set forth in this Section 3.6. Any nomination other than those
governed by clause (i) of the preceding sentence shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than 50 days prior to
the meeting; provided, however, that in the event that less than 60 days'
notice or prior public disclosure of the date of the meeting is given or made
to stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 10th day following the day on which
such notice of the date of the meeting was mailed or such public disclosure was
made. Such stockholder's notice to the Secretary shall set forth (i) the name,
age, business address and residence of any such person, (ii) the principal
occupation or employment of such person, (iii) the class and number of any
shares of the Corporation or any subsidiary of the Corporation which are
beneficially owned by such person, and (iv) any other information relating to
such person that is required to be disclosed in solicitations for proxies for
election of Directors pursuant to any then existing rule or regulation
promulgated under the Securities Exchange Act of 1934, as amended; and (b) as
to the stockholder giving the notice (i) the name and record address of such
stockholder and (ii) the class and number of shares of the Corporation which
are beneficially owned by such stockholder. The Corporation may require any
proposed nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such proposed
nominee as a Director. No person shall be eligible for election as a Director
unless nominated as set forth herein.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if the chairman should so determine, the chairman
shall so declare to the meeting and the defective nomination shall be
disregarded.
ARTICLE IV
Committees
----------
SECTION 4.1. Committees. The Board of Directors may designate one
or more committees, each committee to consist of three (3) or more directors
and to have such duties and functions permitted by law as shall be provided in
such resolution.
SECTION 4.2. Meetings and Quorum. Each Committee shall meet as
often as may be deemed necessary and expedient at such times and places as
shall be determined by such Committee. At all meetings of any Committee, a
majority of the members thereof shall constitute a quorum and the vote of a
majority of all of the members thereof at a meeting at which a quorum is
present shall be the act of such Committee. The Chairman of the Board or, in
his absence, any other member of any Committee selected by a majority of the
members present shall preside at the meetings of any Committee.
<PAGE> 10
ARTICLE V
Officers
--------
SECTION 5.1. Election and Appointment; Term of Office. The
officers of the Corporation shall be a Chairman of the Board, a Vice Chairman
of the Board, a President, one or more Vice Presidents (the number thereof to
be determined from time to time by the Board of Directors), a Treasurer and a
Secretary. Each such officer shall be elected by the Board of Directors at its
annual meeting and shall hold office until the next annual meeting of the Board
of Directors and until his or her successor is elected or until his or her
earlier death, resignation or removal in the manner hereinafter provided. The
Board of Directors may elect or appoint such other officers (including one or
more Assistant Treasurers and one or more Assistant Secretaries) as it deems
necessary who shall have such authority and shall perform such duties as the
Board of Directors may prescribe. If additional officers are elected or
appointed during the year, each of them shall hold office until the next annual
meeting of the Board of Directors at which officers are regularly elected or
appointed and until his or her successor is elected or appointed or until his
or her earlier death, resignation or removal in the manner hereinafter
provided.
SECTION 5.2. Resignation; Removal; Vacancies.
(A) Resignation. Any officer may resign at any time by giving written
notice to the Chairman of the Board or the Secretary of the Corporation, and
such resignation shall take effect upon receipt unless specified therein to be
effective at some other time (subject always to the provisions of
Section 5.2B). No acceptance of any such resignation shall be necessary to
make it effective.
(B) Removal. All officers and agents elected or appointed by the
Board of Directors shall be subject to removal at any time by the Board of
Directors with or without cause.
(C) Vacancies. A vacancy in any office may be filled for the
unexpired portion of the term in the same manner as provided for election or
appointment to such office.
SECTION 5.3. Duties and Functions.
(A) Chairman of the Board. The Chairman of the Board shall preside at
all meetings of stockholders and directors and shall perform such other duties
as the Board of Directors may prescribe.
(B) Vice Chairman of the Board. The Vice Chairman of the Board shall
be the Chief Executive Officer of the Corporation and shall see that orders and
resolutions of the stockholders and Board of Directors are carried into affect.
Subject to the direction and control of the Board of Directors, the Vice
Chairman of the Board shall have responsibility for the management and control
of the affairs and business of the Corporation and shall perform all duties and
have all powers which are commonly incident to the office of the Chief
Executive Officer, including the power to enter into commitments, execute and
deliver contracts and do and perform all such other acts and things as are
necessary and appropriate in the ordinary course of business to accomplish the
Corporation's business and operations and to manage the day to day business and
affairs of the Corporation. In the absence or incapacity of the Chairman of
the Board or the President, the Vice Chairman of the Board shall perform the
<PAGE> 11
duties of the Chairman of the Board or the President, as the case may be. The
Vice Chairman of the Board may assign such duties to other officers of the
Corporation as he or she deems appropriate.
(C) President. The President shall act under the direction of the
Vice Chairman of the Board. The President shall be the Chief Operating Officer
of the Corporation and shall have such powers and perform such duties as the
Board of Directors or the Vice Chairman of the Board may prescribe.
(D) Vice Presidents. The Vice Presidents shall have such powers and
perform such duties as the Board of Directors or the Vice Chairman of the Board
or the President may prescribe. One or more Vice Presidents may be given and
shall use as part of his or her title such other designations, including,
without limitation, the designations "Executive Vice President" and "Senior
Vice President", as the Board of Directors may designate from time to time. In
the absence or incapacity of the Vice Chairman of the Board and the President,
the powers and duties of the President shall be vested in and performed by such
Vice Presidents as have the designation "Executive Vice President", in the
order of their seniority or as otherwise established by action of the Board of
Directors from time to time, or by such other officer as the Board of Directors
or the Vice Chairman of the Board shall have most recently designated for that
purpose in a writing filed with the Secretary.
(E) Treasurer. The Treasurer shall act under the direction of the
Vice Chairman of the Board. Subject to the direction of the Vice Chairman of
the Board, the Treasurer shall have charge and custody of and be responsible
for all funds and securities of the Corporation and the deposit thereof in the
name and to the credit of the Corporation in such depositories as may be
designated by the Board of Directors or by the Treasurer pursuant hereto. The
Treasurer shall be authorized at any time, and from time to time, by a writing
countersigned by the Vice Chairman of the Board, to open bank accounts in the
name of the Corporation in any bank or trust company for the deposit therein of
any funds, drafts, checks or other orders for the payment of money to the
Corporation; and the Treasurer shall be authorized at any time, and from time
to time, by a writing countersigned by the Vice Chairman of the Board, to
authorize and empower any representative or agent of the Corporation to draw
upon or sign for the Corporation either manually or by the use of facsimile
signature, any and all checks, drafts or other orders for the payment of money
against such bank accounts which any such bank or trust company may pay without
further inquiry. Subject to the direction of the Vice Chairman of the Board,
the Treasurer shall also have charge of the accounting records of the
Corporation, shall keep full and accurate accounts of all receipts and
disbursements in books belonging to the Corporation, shall maintain adequate
internal control of the Corporation's accounts, and may perform such other
duties as may be prescribed by the Vice Chairman of the Board, and by the Board
of Directors.
(F) Secretary. The Secretary shall act under the direction of the
Vice Chairman of the Board. Subject to the direction of the Vice Chairman of
the Board, the Secretary shall attend all meetings of the Board of Directors
and the stockholders and record the proceedings in a book to be kept for that
purpose and shall perform like duties for committees designated by the Board of
Directors when required. The Secretary shall give or cause to be given notice
of all meetings of the stockholders and special meetings of the Board of
Directors. The Secretary shall affix the seal of the Corporation to all deeds,
contracts, bonds or other instruments requiring the corporate seal when the
same shall have been signed on behalf of the Corporation by a duly authorized
officer. The Secretary shall be the custodian of all contracts, deeds,
<PAGE> 12
documents and all other indicia of title to properties owned by the Corporation
and of its other corporate records (except accounting records).
G. Execution of Documents. The Board of Directors or the Vice
Chairman of the Board shall designate the officers, employees and agents of the
Corporation who shall have power to execute and deliver deeds, contracts,
mortgages, bonds, debentures, checks, notes, drafts and other orders for the
payment of money and other documents in the ordinary course of business of the
Corporation for and in the name of the Corporation, except when the execution
and delivery thereof shall be expressly delegated by the Board of Directors or
these By-laws to some other officer or agent of the Corporation.
ARTICLE VI
Books and Records
-----------------
The books and records of the Corporation may be kept at such places
within or without the State of Delaware as the Board of Directors may from time
to time determine.
ARTICLE VII
Shares and Their Transfer; Fixing Record Dates
----------------------------------------------
SECTION 7.1. Certificates for Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate certifying the number of
shares owned and designating the class of stock to which such shares belong,
which shall otherwise be in such form as the Board of Directors shall
prescribe. Each such certificate shall be signed by, or in the name of the
Corporation by, the Vice Chairman of the Board or the President or a Vice
President and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Corporation. In the event the Corporation is
advised in writing of any agreement or agreements among stockholders of the
Corporation relating to restrictions on the transferability or voting rights of
the Corporation's stock, no certificate for such restricted stock will be
issued by the Corporation unless first imprinted with a legend referring to
such agreement or agreements.
SECTION 7.2 Transfer Agents and Registrars; Facsimile Signatures. The
Board of Directors shall have the power to appoint one or more transfer agents
and/or registrars for the transfer and/or registration of certificates of stock
of any class, and may require that stock certificates shall be countersigned
and/or registered by one or more of such transfer agents and/or registrars. In
the case of certificates for stock of the Corporation countersigned by a
transfer agent of the Corporation and/or registered by a registrar of the
Corporation, the signatures of the officers of the Corporation thereon may be
facsimiles of their respective autograph signatures, and all such stock
certificates so countersigned and/or registered and signed in facsimile as
aforesaid shall be as valid and effective for all purposes as if the facsimile
signatures thereon of such officers were their respective autograph signatures,
and notwithstanding the fact that any such officer whose facsimile signature
appears thereon may have ceased to be such officer at the time when any such
stock certificate shall be actually issued or delivered.
<PAGE> 13
SECTION 7.3. Stock Record. A record shall be kept of the name of
the person owning the stock represented by each certificate for stock of the
Corporation issued, the number of shares represented by each such certificate,
and the date thereof, and, in the case of cancellation, the date of
cancellation. The person in whose name shares of stock stand on the books of
the Corporation shall be deemed the owner thereof for all purposes.
SECTION 7.4. Transfer of Stock. Transfers of shares of the stock
of the Corporation shall be made only on the books of the Corporation by the
registered holder thereof, or by the attorney of such registered holder
thereunto authorized by power of attorney duly executed and filed with the
Secretary of the Corporation, and upon the surrender to the Corporation or a
transfer agent of the Corporation of the certificate or certificates for such
shares properly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer.
SECTION 7.5. Lost, Stolen, Destroyed or Mutilated Certificates.
The holder of any stock of the Corporation shall promptly notify the
Corporation of any loss, theft, destruction or mutilation of the certificate
therefor. The Corporation may issue a new certificate for stock in the place
of any certificate theretofore issued by it and alleged to have been lost,
stolen, destroyed or mutilated, and the Board of Directors may, in its
discretion, require the owner of the lost, stolen, destroyed or mutilated
certificate or the legal representative of such owner to give the Corporation a
bond in such sum, limited or unlimited, in such form and with such surety or
sureties as the Board of Directors shall in its discretion determine, to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss, theft, destruction or mutilation of any such
certificate or the issuance of any such new certificate.
SECTION 7.6. Record Dates. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
the stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board of Directors may fix,
in advance, a record date, which shall not be more than sixty (60) nor less
than ten (10) days before the date of such meeting, nor more than sixty (60)
days prior to any such other action. If no record date is fixed: (1) the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; (2) the record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is necessary, shall be the day on which the first
written consent is expressed; and (3) the record date for determining
stockholders for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
<PAGE> 14
ARTICLE VIII
Corporate Seal
--------------
The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization, and the words "Corporate Seal
Delaware". The seal may be used by causing it or a facsimile to be impressed
or affixed or in any other manner reproduced.
ARTICLE IX
Fiscal Year
-----------
The fiscal year of the Corporation shall end on the 31st day of
December of each year, or as otherwise fixed by resolution of the Board of
Directors.
ARTICLE X
Indemnification
---------------
A. Every person who was or is a party or is threatened to be made a
party to or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person or a person of whom such person is a legal
representative is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation or for its benefit as a director,
officer, employee or agent of any other corporation, or as the representative
of the Corporation in a partnership, joint venture, trust or other entity,
shall be indemnified and held harmless by the Corporation to the fullest extent
legally permissible under the General Corporation Law of the State of Delaware,
as amended from time to time, against all expenses, liabilities and losses
(including attorneys' fees, judgments, fines and amounts paid or to be paid in
settlement) reasonably paid or incurred by such person in connection therewith.
Such right of indemnification shall be a contract right that may be enforced in
any manner desired by such person. Such right of indemnification shall include
the right to be paid by the Corporation the expenses incurred in defending any
such action, suit or proceeding in advance of its final disposition upon
receipt of an undertaking by or on behalf of such person to repay such amount
if ultimately it should be determined that such person is not entitled to be
indemnified by the Corporation under the General Corporation Law of the State
of Delaware. Such right of indemnification shall not be exclusive of any other
right which such directors, officers or representatives may have or hereafter
acquire and, without limiting the generality of such statement, they shall be
entitled to their respective rights of indemnification under the Certificate of
Incorporation of the Corporation or any agreement, vote of stockholders,
provision of law or otherwise, as well as their rights under this Article X.
B. Notwithstanding anything in this Article X to the contrary, no
person shall be indemnified in respect of any claim, action, suit or proceeding
initiated by any such person or in which any such person has voluntarily
intervened, other than an action initiated by such person to enforce
indemnification rights hereunder or an action initiated with the approval of a
majority of the Board of Directors.
<PAGE> 15
C. The Board of Directors may cause the Corporation to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation or for its benefit as a director, officer, employee or agent of
any other corporation, or as the representative of the Corporation in a
partnership, joint venture, trust or other entity, against any expense,
liability or loss asserted against or incurred by any such person in any such
capacity or arising out of such status, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or
loss.
D. The Board of Directors may adopt further By-laws from time to time
with respect to indemnification and may amend these and such further By-laws to
provide at all times the fullest indemnification permitted by the General
Corporation Law of the State of Delaware, as amended from time to time.
ARTICLE XI
Amendments
----------
These By-laws may be altered, amended or repealed by (i) the
affirmative vote of at least 66-2/3% of the members of the Board of Directors
present at a meeting at which a quorum is present, which vote shall include the
affirmative vote of at least three Institutional Directors, or (ii) the holders
of 66-2/3% of the issued and outstanding shares of the Corporation's stock
entitled to vote generally at a meeting of stockholders, voting as a single
class.
<PAGE> 1
EXHIBIT 11
BROOKS FIBER PROPERTIES, INC.
Statement Regarding Computation of Earnings Per Share
Three Months Ended March 31, 1996
Shares outstanding -- beginning of period. . . . . . . . . . . . . 1,162,800
Weighted average number of common and common equivalent shares
issued (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,360,784
------------
Weighted average number of common and common equivalent shares
outstanding -- end of period . . . . . . . . . . . . . . . . . . 19,523,584
============
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(6,640,270)
============
Pro forma loss per common and common equivalent shares . . . . . . $(.34)
============
- ---------------
(1) Common and common equivalent shares issued consist of certain effects of
shares issued, stock options, warrants, and Preferred Stock. Common
equivalent shares from convertible Preferred Stock (using the if converted
method) and stock options and warrants (using the treasury stock method)
have been included inthe computation. Pursuant to the Securities and
Exchange Commission rules, convertible Preferred Stock which will be
automatically converted at the date of issuance is included even though
inclusion may be antidilutive. Pursuant to the Securities and Exchange
Commission Staff Accounting Bulletin No. 83, shares issued, and stock
options and warrants granted by the Company at prices below the assumed
public offering price during the twelve-month period preceding the date of
the initial filing of the Registration Statement have been included in the
calculation of common stock equivalent shares, using the treasury stock
method, as if they were outstanding for the three months ended March 31,
1996.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATMENTS FOR BROOKS FIBER PROPERTIES, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000915509
<NAME> BROOKS FIBER PROPERTIES, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 253,795,955
<SECURITIES> 25,158,956
<RECEIVABLES> 3,866,982
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,822,058
<PP&E> 102,758,192
<DEPRECIATION> 4,980,727
<TOTAL-ASSETS> 449,134,891
<CURRENT-LIABILITIES> 21,871,597
<BONDS> 298,529,107
28,000,000
106,468,676
<COMMON> 11,100,693
<OTHER-SE> (20,304,946)
<TOTAL-LIABILITY-AND-EQUITY> 97,264,423
<SALES> 6,795,413
<TOTAL-REVENUES> 6,795,413
<CGS> 0
<TOTAL-COSTS> 11,915,981
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,042,547
<INCOME-PRETAX> (6,640,270)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,640,270)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,640,270)
<EPS-PRIMARY> (0.34)
<EPS-DILUTED> (0.34)
</TABLE>
