<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: OCTOBER 16, 1996
(DATE OF EARLIEST EVENT REPORTED)
PRICELLULAR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OF INCORPORATION)
<TABLE>
<S> <C>
1-13526 22-3043811
(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>
45 ROCKEFELLER CENTER
NEW YORK, NEW YORK 10020
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(212) 459-0800
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<PAGE> 2
ITEM 5. OTHER EVENTS
The purpose of this report is to file PriCellular Corporation's unaudited
pro forma condensed consolidated statements of operations for the nine months
ended September 30, 1996 and for the year ended December 31, 1995, and unaudited
pro forma condensed consolidated balance sheet at September 30, 1996.
The aforementioned financial statements are attached as exhibits to this
report and are hereby incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
99.1 PriCellular Corporation's unaudited pro forma condensed consolidated
statements of operations for the nine months ended September 30, 1996
and for the year ended December 31, 1995, and unaudited pro forma
condensed consolidated balance sheet at September 30, 1996.
2
<PAGE> 3
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PRICELLULAR CORPORATION
By: /s/ Robert Price
Robert Price
President
Dated: October 16, 1996
3
<PAGE> 4
EXHIBIT INDEX
EXHIBIT NO.
99.1 PriCellular Corporation's unaudited pro forma condensed consolidated
statements of operations for the nine months ended September 30, 1996
and for the year ended December 31, 1995, and unaudited pro forma
condensed consolidated balance sheet at September 30, 1996.
4
<PAGE> 1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The pro forma financial statements presented below reflect the effects of
adjustments to the historical consolidated financial statements of PriCellular
Corporation (the "Company" or "PriCellular") necessary to give pro forma effect
to the transactions described as if such transactions had occurred on January 1,
1995 for purposes of the unaudited pro forma condensed consolidated statements
of operations and as of September 30, 1996 for purposes of the unaudited pro
forma condensed consolidated balance sheet.
<TABLE>
<CAPTION>
ACTUAL DATE
PROPERTY DESCRIPTION OF TRANSACTION
<S> <C>
ACQUISITIONS:
1. MI-1 RSA...................................... March 7, 1995
2. Wausau, WI MSA................................ March 28, 1995
3. MN 2-A RSA, MN 3-B RSA, MN-5 RSA and the
Alton/Granite City, IL MSA.................... July 7, 1995
4. OH-7 RSA...................................... September 27, 1995
5. WV-2 RSA...................................... December 20, 1995
6. NY-5 RSA...................................... December 29, 1995
7. PA-9 RSA...................................... February 2, 1996
8. NY-6 RSA, Poughkeepsie, NY MSA (83%).......... April 23, 1996
9. WV-3 RSA...................................... July 23, 1996
10. Orange County, NY MSA......................... Pending
11. KY-4 RSA, KY-5 RSA, KY-6 RSA and KY-8 RSA (the
"Kentucky Cluster Acquisition")............... Pending
12. WI-2 RSA...................................... Pending
13. WI-4 RSA...................................... Pending
DISPOSITIONS:
14. Abilene, TX MSA............................... January 6, 1995
15. AL-4 RSA...................................... July 1, 1996
16. MI-2 RSA...................................... Pending
OTHER:
17. Exchange of Lubbock, TX MSA for Minnesota
properties ("Lubbock/Minnesota Exchange") (see
3 above)...................................... July 7, 1995
18. Joint venture with MSA of SBC Communications
Inc.("Southwestern Bell Joint Venture")....... November 30, 1995
19. Exchange of OH-9 RSA, OH-10B RSA and
Parkersburg, WV/Marietta, OH MSA for Orange
County, NY MSA ("Orange County Exchange") (see
10 above)..................................... Pending
20. Exchange of Florence, AL MSA and AL-1B RSA for
WI-4 RSA ("WI-4 Exchange") (see 13 above)..... Pending
21. Issuance of 10 3/4% Senior Subordinated
Convertible Discount Notes ("10 3/4% Notes"),
12 1/4% Senior Subordinated Notes due 2003
("12 1/4% Notes") and a three-year note
bearing interest at the prime rate issued in
connection with the acquisition described in 8
above (the "Poughkeepsie Note")............... August 21, 1995,
September 27, 1995 and
April 23, 1996, respectively
22. Issuance of debt financing incurred in
connection with the pending acquisition
described in 11 above (the "Kentucky Debt
Financing")................................... Pending
23. Retirement of Poughkeepsie Note............... Pending
24. Sale of minority interest Pops................ September 17, 1996
</TABLE>
The unaudited pro forma condensed consolidated statements of operations
give effect to the above listed transactions under the purchase method of
accounting.
The unaudited pro forma condensed consolidated financial statements have
been prepared by the Company's management. The unaudited pro forma data is not
designed to represent and does not represent
1
<PAGE> 2
what the Company's results of operations or financial position would have been
had the aforementioned transactions been completed on or as of the dates
assumed, and are not intended to project the Company's results of operations for
any future period or as of any future date. The unaudited pro forma condensed
consolidated financial statements should be read in conjunction with the audited
and unaudited consolidated financial statements and notes of the Company and
certain acquired businesses.
2
<PAGE> 3
PRICELLULAR CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
HISTORICAL FOR RECENT HISTORICAL
RECENT TRANSACTIONS PENDING
TRANSACTIONS AND TRANSACTIONS
AND ORANGE PRICELLULAR (OTHER THAN
PRICELLULAR ORANGE COUNTY(1) COUNTY AS ADJUSTED ORANGE COUNTY)(2)
<S> <C> <C> <C> <C> <C>
REVENUES.............................. $ 81,215 $ 14,681 $(15,174)(a),(b) $ 80,722 $17,894
COSTS AND EXPENSES:
Cost of cellular service............. 20,999 2,093 (4,028)(b) 19,064 5,015
Cost of equipment sold............... 6,822 786 (1,078)(b) 6,530 1,243
Selling, general and
administrative..................... 23,917 6,636 (3,955)(b) 26,598 4,684
Depreciation and amortization........ 15,416 1,877 (839)(b),(c) 16,454 4,292
-------- ------- -------- -------- -------
67,154 11,392 (9,900) 68,646 15,234
-------- ------- -------- -------- -------
Operating income (loss)............... 14,061 3,289 (5,274) 12,076 2,660
Other income (expense)
Interest expense, net................ (28,543) (4,205) 2,223(b),(d),(e) (30,525) (1,222)
Other income (expense)............... 1,062 (360) 625(f) 1,327
Gain on sale of investments in
cellular operations................ 177 (177)(g)
-------- ------- -------- -------- -------
Total other income (expense).......... (27,304) (4,565) 2,671 (29,198) (1,222)
-------- ------- -------- -------- -------
Net income (loss)..................... $ (13,243) $ (1,276) $ (2,603) (17,122) $ 1,438
======== ======= ======== ======== =======
Net income (loss) after adjustment for
accrued preferred stock
dividends(ff)........................ $ (17,849) $ (21,987)
======== ========
Net income (loss) per share........... $ (0.46) $ (0.57)
======== ========
Weighted average number of common
shares used in computation of net
income (loss) per share.............. 38,495,000 38,495,000
======== ========
EBITDA(3)............................. $ 30,539 $ 29,857
======== ========
<CAPTION>
PRO FORMA
FOR PENDING
TRANSACTIONS
(OTHER THAN
ORANGE COUNTY)
AND THE PRO FORMA
DEBT FINANCING PRICELLULAR
<S> <<C> <C>
REVENUES.............................. $ (4,187)(h) $ 94,429
COSTS AND EXPENSES:
Cost of cellular service............. (1,204)(h) 22,875
Cost of equipment sold............... (329)(h) 7,444
Selling, general and
administrative..................... (818)(h) 30,464
Depreciation and amortization........ 523(h),(i) 21,269
------- -------
(1,828) 82,052
------- -------
Operating income (loss)............... (2,359) 12,377
Other income (expense)
Interest expense, net................ (9,876) (j)(o) (41,623)
Other income (expense)............... 750(k) 2,077
Gain on sale of investments in
cellular operations................
------- -------
Total other income (expense).......... (9,126) (39,546)
------- -------
Net income (loss)..................... $(11,485) $ (27,169)
======= =======
Net income (loss) after adjustment for
accrued preferred stock
dividends(ff)........................ $ (32,034)
=======
Net income (loss) per share........... $ (0.83)
=======
Weighted average number of common
shares used in computation of net
income (loss) per share.............. 38,495,000
=======
EBITDA(3)............................. $ 35,723
=======
</TABLE>
- ------------------------------
(1) See supplemental unaudited condensed combined statement of operations for
the nine months ended September 30, 1996 on page 11 for details of Recent
Transactions and Orange County.
(2) See supplemental unaudited condensed combined statement of operations for
the nine months ended September 30, 1996 on page 12 for details of Pending
Transactions (other than Orange County).
(3) EBITDA represents earnings before depreciation and amortization, interest
expense, interest income, and gains on sales of cellular properties. EBITDA
is not intended to be a performance measure and should not be regarded as an
alternative to either operating income or net income as an indicator of
operating performance or to cash flows as a measure of liquidity.
Furthermore, EBITDA is not a GAAP-based financial measure, and it should not
be considered as an alternative to GAAP-based measures of financial
performance.
3
<PAGE> 4
PRICELLULAR CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS
RECENT FOR RECENT
TRANSACTIONS TRANSACTIONS
AND AND PRICELLULAR
PRICELLULAR ORANGE COUNTY(1) ORANGE COUNTY AS ADJUSTED
<S> <C> <C> <C> <C>
REVENUES......... $ 41,504 $ 40,280 $ (9,914)(a),(b),(l),(m) $ 71,870
Costs and
expenses:
Cost of cellular
service....... 10,694 8,050 (2,815)(b),(l) 15,929
Cost of
equipment
sold.......... 4,951 2,897 (856)(b),(l) 6,992
Selling, general
and
administrative... 16,512 17,759 (2,715)(b),(l) 31,556
Depreciation and
amortization... 10,337 6,539 3,896 (b),(c),(l) 20,772
----------- ------ ------------- -----------
42,494 35,245 (2,490) 75,249
----------- ------ ------------- -----------
Operating income
(loss).......... (990) 5,035 (7,424) (3,379)
Other income
(expense)
Interest
expense,
net........... (18,839) (7,555) (9,588)(b),(d),(e) (35,982)
Other income
(expense)..... 520 23 1,750 (f),(n) 2,293
Gain on sale of
investments in
cellular
operations.... 11,598 (555) (11,043)(g)
----------- ------ ------------- -----------
Total other
income
(expense)....... (6,721) (8,087) (18,881) (33,689)
----------- ------ ------------- -----------
Net income
(loss).......... $ (7,711) $ (3,052) $ (26,305) $ (37,068)
========== ================ ============= ===========
Net income (loss)
after adjustment
for accrued
preferred stock
dividends(ff)... $ (7,711) $ (43,246)
========== ===========
Net income (loss)
per share....... $ (0.24) $ (1.26)
========== ===========
Weighted average
number of common
shares used in
computation of
net income
(loss) per
share(ee)....... 32,214,000 34,829,000
========== ===========
EBITDA(3)........ $ 9,867 $ 19,686
========== ===========
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS FOR
HISTORICAL PENDING
PENDING TRANSACTIONS
TRANSACTIONS (OTHER THAN
(OTHER THAN ORANGE COUNTY)
ORANGE AND THE PRO FORMA
COUNTY)(2) DEBT FINANCING PRICELLULAR
<S> <C> <C> <C>
REVENUES........ $ 15,667 $ (4,142)(h) $ 83,395
Costs and
expenses:
Cost of cellula
service...... 2,780 (1,013)(h) 17,696
Cost of
equipment
sold......... 1,471 (572)(h) 7,891
Selling, general
and
administrative.. 5,057 (1,209)(h) 35,404
Depreciation an
amortization.. 5,339 780 (h)(i) 26,891
------ ------- -----------
14,647 (2,014) 87,882
------ ------- -----------
Operating income
(loss)......... 1,020 (2,128) (4,487)
Other income
(expense)
Interest
expense,
net.......... (1,895) (13,792)(j)(o) (51,669)
Other income
(expense).... 1,000 (k) 3,293
Gain on sale of
investments i
cellular
operations...
------ ------- -----------
Total other
income
(expense)..... (1,895) (12,792) (48,376)
------ ------- -----------
Net income
(loss)........ $ (875) $ (14,920) $ (52,863)
========= ========= ===========
Net income (loss
after adjustmen
for accrued
preferred stock
dividends(ff).. $ (59,041)
===========
Net income (loss
per share...... $ (1.72)
===========
Weighted average
number of commo
shares used in
computation of
net income
(loss) per
share(ee)...... 34,829,000
===========
EBITDA(3)....... $ 25,697
===========
</TABLE>
- ------------------------------
(1) See supplemental unaudited condensed combined statement of operations for
the twelve months ended December 31, 1995 on page 13 for details of Recent
Transactions and Orange County.
(2) See supplemental unaudited condensed combined statement of operations for
the twelve months ended December 31, 1995 on page 14 for details of Pending
Transactions (other than Orange County).
(3) EBITDA represents earnings before depreciation and amortization, interest
expense, interest income, and gains on sales of cellular properties. EBITDA
is not intended to be a performance measure and should not be regarded as an
alternative to either operating income or net income as an indicator of
operating performance or to cash flows as a measure of liquidity.
Furthermore, EBITDA is not a GAAP-based financial measure, and it should not
be considered as an alternative to GAAP-based measures of financial
performance.
4
<PAGE> 5
PRICELLULAR CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
--------------------------------------------------
ORANGE KENTUCKY PRO FORMA
PRICELLULAR COUNTY CLUSTER WI-4 ADJUSTMENTS PRO FORMA
----------- -------- -------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents................. $ 55,383 $ 5 $ 613 $ 40,974(p) $ 96,975
Accounts receivable, net.................. 14,802 1,186 6,155 31 (2,547)(q) 19,627
Inventory................................. 1,731 168 136 (213)(r) 1,822
Prepaid expenses and other current
assets.................................. 3,258 139 147 25 (62)(s) 3,507
----------- -------- -------- -------- ----------- ---------
Total current assets......................... 75,174 1,498 7,051 56 38,152 121,931
Net fixed assets............................. 61,047 5,327 13,147 3,031 (7,197)(t) 75,355
Investment in cellular operations............ 36,581 2,904 39,485
Cellular licenses, net....................... 390,373 44,662 46,911(u) 481,946
Cellular licenses held for sale, net......... 8,179 (8,179)(v) 0
Deferred financing costs, net................ 10,214 5,100(x) 15,314
Other assets................................. 95 12 2,943 (16)(w) 3,034
----------- -------- -------- -------- ----------- ---------
Total assets................................. $ 581,663 $ 9,741 $67,803 $ 3,087 $ 74,771 $737,065
========== ========= ======== ======== =========== ==========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses..... $ 17,913 $ 359 $ 4,314 $ 45 $ (580)(y) $ 22,051
Long-term debt -- current portion......... 389 (389)(z) 0
Income taxes payable...................... 432 432
Other current liabilities................. 4,779 62 457 938(aa) 6,236
----------- -------- -------- -------- ----------- ---------
Total current liabilities.................... 23,513 421 4,771 45 (31) 28,719
Long-term debt............................... 364,810 118,723(bb) 483,533
Other long-term liabilities.................. 2,342 33,717 14,317 5,134 (52,220)(cc) 3,290
----------- -------- -------- -------- ----------- ---------
Total liabilities............................ 390,665 34,138 19,088 5,179 66,472 515,542
Stockholders' equity (deficit):.............. 190,998 (24,397) 48,715 (2,092) 8,299(dd) 221,523
----------- -------- -------- -------- ----------- ---------
Total liabilities and stockholders' equity
(deficit)................................... $ 581,663 $ 9,741 $67,803 $ 3,087 $ 74,771 $737,065
========== ========= ======== ======== =========== ==========
</TABLE>
5
<PAGE> 6
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
For purposes of determining the pro forma effect of the transactions
described above on PriCellular's Condensed Consolidated Statements of Operations
for the nine months ended September 30, 1996 and the year ended December 31,
1995, the following adjustments have been made:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C> <C>
(a) Represents the share of income from the Southwestern Bell Joint
Venture......................................................... $ 675 $ 3,025
(b) Represents the elimination of the results of operations of the
MI-2, AL-4, OH-9, OH-10, and Parkersburg, WV/Marietta, OH
Systems
Revenues...................................................... $(15,849) $ (4,504)
Cost of cellular service...................................... (4,028) (1,192)
Cost of equipment sold........................................ (1,078) (526)
Selling, general and administrative........................... (3,955) (1,611)
Depreciation and amortization................................. (2,635) (974)
Interest expense, net......................................... 197 107
(c) Represents the incremental depreciation and amortization due to
the application of purchase price accounting and the resulting
increases in the basis of the assets relating to the acquisition
of Wausau, MI-1, MN-2A, MN-3B, MN-5, Alton/Granite City, OH-7,
WV-2, NY-5, PA-9, NY-6, Poughkeepsie, NY, WV-3 and Orange
County, NY Systems. Fixed assets are depreciated over a useful
life of three to seven years. Cellular licences are amortized
over 40 years................................................... $ 1,796 $ 6,302
(d) Represents amortization of the deferred financing costs, as well
as the adjustments to interest expense to give effect to the
issuance of the 12 1/4% Notes issued during 1995 and the
elimination of certain interest expense of Wausau, MI-1, MN-2A,
MN-3B, MN-3, Alton/Granite City, OH-7, WV-2, NY-5, PA-9, NY-6,
WV-3, Orange County, NY and Poughkeepsie, NY as a result of debt
not assumed as a part of these acquisitions.
Amortization of deferred financing costs...................... $ (544)
Interest expense for the 12 1/4% Notes........................ $ (1,745) (13,731)
Interest expense for 10 3/4% Notes............................ (219) (2,546)
Elimination of historical interest expense, net as a result
of debt not assumed as part of the following
acquisitions:
MN-2A, MN-3B, MN-5 and Alton/Granite City................ 496
OH-7..................................................... 326
WV-2..................................................... 156
NY-5..................................................... (154)
PA-9..................................................... 305
NY-6..................................................... 6 38
Orange County............................................ 2,772 3,518
WV-3..................................................... 979 1,598
Poughkeepsie............................................. 448 1,272
-------- --------
$ 2,241 $ (9,266)
======== ========
(e) Represents the loss of interest income attributable to a
decrease in cash on hand due to the purchase of NY-6,
Poughkeepsie and WV-3........................................... $ (215) $ (429)
(f) Represents additional income attributable to the covenant not to
compete pursuant to the sale of AL-4............................ $ 625 $ 1,250
</TABLE>
6
<PAGE> 7
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS -- (CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C> <C>
(g) Represents the elimination of the net gain on the sale of the
Company's AL-4 RSA and an investment in minority Pops and its
interest in the Abilene, TX MSA................................. $ (177) $(11,598)
Elimination of loss on sale of investments in cellular
operations incurred by Orange County....................... 555
-------- --------
$ (177) $(11,043)
======== ========
(h) Represents the elimination of the results of operations of the
Florence, AL system which is to be exchanged in the WI-4
Exchange.
Revenues...................................................... $ (4,187) $ (4,142)
Cost of cellular service...................................... (1,204) (1,013)
Cost of equipment sold........................................ (329) (572)
Selling, general and administrative........................... (818) (1,209)
Depreciation and amortization................................. (535) (632)
(i) Represents the incremental depreciation and amortization due to
the application of purchase price accounting and the resulting
increases in the basis of the assets relating to the acquisition
of the Kentucky Cluster, WI-2 and WI-4 Systems. Fixed assets are
depreciated over a useful life of three to seven years. Cellular
licences are amortized over 40 years............................ $ 1,058 $ 1,412
(j) Represents the elimination of certain interest expense, net of
Kentucky and WI-4 as a result of debt not assumed as a part of
these acquisitions.
Kentucky Cluster.............................................. $ 1,041 $ 1,596
WI-4.......................................................... 181 299
-------- --------
$ 1,222 $ 1,895
======== ========
(k) Represents additional income attributable to the covenant not to
compete pursuant to the sale of Florence........................ $ 750 $ 1,000
(l) Represents the elimination of the results of operations of the
Lubbock system for the period January 1, 1995 to July 7, 1995
and the results of operations of the Laredo System which was
contributed to the Southwestern Bell Joint Venture on November
30, 1995.
Revenues...................................................... $ (7,680)
Cost of cellular service...................................... (1,623)
Cost of equipment sold........................................ (330)
Selling, general and administrative........................... (1,104)
Depreciation and amortization................................. (1,432)
(m) Represents the elimination of revenues earned in connection with
the Management Agreement associated with the purchase of AL-4... $ (755)
(n) Represents additional income attributable to the covenant not to
compete pursuant to the Lubbock/Minnesota Exchange.............. $ 500
(o) Represents amortization of the deferred financing costs, as well
as the adjustments to interest expense to give effect to the
Kentucky Debt Financing and the repayment of the Poughkeepsie
Note.
Amortization of deferred financing costs...................... $ (478) $ (637)
Interest expense for the Poughkeepsie Note.................... 668
Interest expense of the Kentucky Debt Financing (with an
assumed interest rate of 10 3/4%).......................... (11,288) (15,050)
-------- --------
$(11,098) $(15,687)
======== ========
</TABLE>
7
<PAGE> 8
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
For purposes of determining the pro forma effect of the transactions
described above on PriCellular's Condensed Consolidated Balance Sheet as of
September 30, 1996, the following adjustments have been made:
<TABLE>
<S> <C> <C> <C>
(p) CASH AND CASH EQUIVALENTS
Net proceeds from Kentucky Debt Financing....................... $134,900
Proceeds from WI-4 Exchange, net................................ 17,925
Proceeds from disposition of MI-2............................... 6,496
Purchase of WI-2................................................ (4,300)
Purchase of Kentucky............................................ (94,000)
Repayment of Poughkeepsie Note.................................. (19,429)
Total cash not acquired in connection with the above
acquisitions.................................................... (618)
--------
$ 40,974
========
(q) ACCOUNTS RECEIVABLE
Receivables sold or exchanged in the following transactions:
MI-2.......................................................... $ (689)
Florence...................................................... (283)
OH-9.......................................................... (555)
OH-10......................................................... (209)
Parkersburg................................................... (485)
Receivables not acquired in connection with the Orange County
Exchange........................................................ (326)
--------
$ (2,547)
========
(r) INVENTORY
Represents the elimination of inventory disposed of in the
disposition of MI-2............................................. $ (45)
Represents inventory not acquired with the Orange County
Exchange........................................................ (168)
--------
$ (213)
========
(s) PREPAID EXPENSES AND OTHER CURRENT ASSETS
Represents the elimination of prepaid expenses and other current
assets disposed of in the following transactions:
MI-2....................................................... $ (1)
Florence................................................... (23)
OH-9....................................................... (17)
OH-10...................................................... (5)
Parkersburg................................................ (16)
--------
$ (62)
========
(t) NET FIXED ASSETS
Represents the decrease in net fixed assets due to the sale and
disposition of the following:
Florence................................................... $ (2,472)
OH-9....................................................... (1,983)
OH-10...................................................... (1,595)
Parkersburg................................................ (1,147)
--------
$ (7,197)
========
</TABLE>
8
<PAGE> 9
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET -- (CONTINUED)
(IN THOUSANDS)
<TABLE>
<S> <C> <C> <C>
(u) CELLULAR LICENSES, NET
Represents the increase in cellular licenses due to the
application of purchase price accounting for the following
acquisitions:
Kentucky................................................... $ 54,081
WI-4....................................................... 3,113
WI-2....................................................... 4,300
Represents the adjustment to cellular licenses resulting from
the Orange County Exchange...................................... (3,236)
Represents the decrease in cellular licence due to the
disposition of Florence......................................... (11,347)
--------
$ 46,911
========
(v) CELLULAR LICENSES HELD FOR SALE, NET
Represents the decrease in Cellular licenses held for sale due
to the disposition of
MI-2....................................................... $ (8,179)
(w) OTHER ASSETS
Represents the elimination of other assets not acquired in the
Orange County Exchange.......................................... $ (12)
Represents the decrease in other assets due to the disposition
of MI-2......................................................... (4)
--------
$ (16)
========
(x) DEFERRED FINANCING COSTS
Capitalization of estimated costs and expenses of the Kentucky
Debt Financing which will be amortized over the life of the
debt............................................................ $ 5,100
(y) ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Represents the decrease in accounts payable and accrued expenses
due to the disposition of MI-2.................................. $ (176)
Represents the elimination of accounts payable and accrued
expenses not acquired in connection with the following:
WI-4....................................................... (45)
Orange County Exchange..................................... (359)
--------
$ (580)
========
(z) LONG-TERM DEBT -- CURRENT PORTION
Represents the decrease in long-term debt -- current portion due
to the disposition of MI-2...................................... $ (389)
(aa) OTHER CURRENT LIABILITIES
Represents the current unearned portion of the covenant not to
compete received in connection with the disposition of
Florence........................................................ $ 1,000
Represents the decrease in other current liabilities not being
acquired in connection with the Orange County Exchange.......... (62)
--------
$ 938
========
(bb) LONG-TERM DEBT
Represents the increase in long-term debt due to the Kentucky
Debt Financing.................................................. $140,000
Represents decrease in long-term debt due to the repayment of
the Poughkeepsie Note........................................... (19,429)
Represents the decrease in long-term debt due to the disposition
of MI-2......................................................... (1,848)
--------
$118,723
========
</TABLE>
9
<PAGE> 10
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET -- (Continued)
(In thousands)
<TABLE>
<S> <C> <C> <C>
(cc) OTHER LONG-TERM LIABILITIES
Represents the elimination of affiliated payables not being
acquired in the following acquisitions:
WI-4....................................................... $ (5,134)
Kentucky................................................... (14,317)
Orange County.............................................. (33,667)
Represents the long-term unearned portion of the two year
covenant not to compete received in connection with the
disposition of Florence......................................... 1,000
Represents the decrease in other long-term liabilities due to
the disposition of the following:
Florence................................................... (25)
MI-2....................................................... (9)
Represents the decrease in other long-term liabilities of
previously owned entities disposed of in the Orange County
Exchange........................................................ (68)
--------
$(52,220)
========
(dd) STOCKHOLDERS' EQUITY
Contribution of investment in cellular operations in connection
with PriCellular Corporations' issuance of Class A Common Stock
associated with the Kentucky Cluster Acquisition................ $ 22,500
Represents the elimination of net equity in connection with the
following acquisitions:
Kentucky Cluster........................................... (48,715)
WI-4....................................................... 2,092
Orange County.............................................. 24,397
Gain on disposition of Florence................................. 8,025
--------
$ 8,299
========
</TABLE>
(EE) WEIGHTED AVERAGE SHARES OUTSTANDING
The weighted average number of common shares used in computation of net
income (loss) per share for the year ended December 31, 1995 under the
caption PriCellular As Adjusted and under the caption Pro Forma
PriCellular have been computed using the weighted average shares
outstanding for the period, adjusted to reflect the issuance of common
stock in connection with the AL-4 and Parkersburg, WV/Marietta, OH MSA
acquisitions as if such transactions occurred on January 1, 1995.
(FF) NET LOSS PER COMMON SHARE
The net loss per common share for the nine months ended September 30,
1996 was increased for the impact of the accrued dividends attributable
to the Company's 6 1/4% Preferred Stock.
10
<PAGE> 11
PRICELLULAR CORPORATION
SUPPLEMENTAL UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
FOR RECENT TRANSACTIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------------------------
RECENT TRANSACTIONS
-------------------------------------------------------
(1) TOTAL
ORANGE RECENT
PA-9 NY-6 POUGHKEEPSIE WV-3 COUNTY TRANSACTIONS
------------
<S> <C> <C> <C> <C> <C> <C>
Revenues............................... $ 206 $1,228 $2,062 $ 2,886 $ 8,299 $ 14,681
Costs and expenses:
Cost of cellular service............. 70 371 404 321 927 2,093
Cost of equipment sold............... 15 92 181 197 301 786
Selling, general and
administrative.................... 62 449 795 1,344 3,986 6,636
Depreciation and amortization........ 28 213 158 735 743 1,877
------ ------ ------------ ------------ ------- ------------
175 1,125 1,538 2,597 5,957 11,392
------ ------ ------------ ------------ ------- ------------
Operating income (loss)................ 31 103 524 289 2,342 3,289
Other income (expense)
Interest expense, net................ (6) (448) (979) (2,772) (4,205)
Other income (expense)............... 5 (148) (217) (360)
------ ------ ------------ ------------ ------- ------------
Total other income (expense)........... 0 (1) (596) (979) (2,989) (4,565)
------ ------ ------------ ------------ ------- ------------
Net income (loss)...................... $ 31 $ 102 $ (72) $ (690) $ (647) $ (1,276)
====== ====== ========== ====== ======= =========
</TABLE>
- ------------------------------
(1) Pending, expected to close October 17, 1996.
11
<PAGE> 12
PRICELLULAR CORPORATION
SUPPLEMENTAL UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
FOR PENDING TRANSACTIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
-----------------
PENDING
TRANSACTIONS
----------------- TOTAL
KENTUCKY PENDING
CLUSTER WI-4 TRANSACTIONS
-------- ------ ------------
<S> <C> <C> <C>
Revenues......................................................... $ 16,663 $1,231 $ 17,894
Costs and expenses:
Cost of cellular service....................................... 4,215 800 5,015
Cost of equipment sold......................................... 1,027 216 1,243
Selling, general and administrative............................ 4,249 435 4,684
Depreciation and amortization.................................. 4,021 271 4,292
-------- ------ ------------
13,512 1,722 15,234
-------- ------ ------------
Operating income (loss).......................................... 3,151 (491) 2,660
Other income (expense)
Interest expense, net.......................................... (1,041) (181) (1,222)
-------- ------ ------------
Total other income (expense)..................................... (1,041) (181) (1,222)
-------- ------ ------------
Net income (loss)................................................ $ 2,110 $ (672) $ 1,438
======= ====== =========
</TABLE>
12
<PAGE> 13
PRICELLULAR CORPORATION
SUPPLEMENTAL UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
FOR RECENT TRANSACTIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------------------------------------------------------------------------
RECENT TRANSACTIONS
---------------------------------------------------------------------------------------------------------
MN-2A, MN-3B,
MN-5 AND ALTON
GRANITE CITY,
MI-1 WAUSAU IL OH-7 WV-2 NY-5 PA-9 NY-6 POUGHKEEPSIE
---- -------- --------------- ------ ------ ------ ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................. $558 $612 $ 1,224 $3,126 $ 688 $9,926 $1,789 $3,786 $ 5,189
Costs and expenses:
Cost of cellular
service............... 96 153 290 363 239 1,808 339 663 2,190
Cost of equipment
sold.................. 111 66 0 239 4 440 231 258 462
Selling, general and
administrative........ 132 150 776 1,294 325 4,140 847 1,324 2,388
Depreciation and
amortization.......... 129 105 690 282 145 1,572 296 444 471
---- ---- ------- ------ ----- ------ ------ ------ -------
468 474 1,756 2,178 713 7,960 1,713 2,689 5,511
---- ---- ------- ------ ----- ------ ------ ------ -------
Operating income
(loss).................. 90 138 (532) 948 (25) 1,966 76 1,097 (322)
Other income (expense)
Interest income
(expense), net........ (496) (326) (156) 154 (305) (38) (1,272)
Other income (expense).. 6 4 11 6 (17) 13
Gain (loss) on sale of
investment in cellular
operations............
---- ---- ------- ------ ----- ------ ------ ------ -------
Total other income
(expense)............... 0 0 (496) (320) (152) 165 (299) (55) (1,259)
---- ---- ------- ------ ----- ------ ------ ------ -------
Net income (loss)........ $ 90 $138 $(1,028) $ 628 $ (177) $2,131 $ (223) $1,042 $(1,581)
==== ==== ======= ====== ===== ====== ====== ====== =======
<CAPTION>
TOTAL
(1) RECENT
WV-3 ORANGE COUNTY TRANSACTIONS
------- ------------- -----------
<S> <C<C> <C> <C>
Revenues................. $ 4,237 $ 9,145 $40,280
Costs and expenses:
Cost of cellular
service............... 599 1,310 8,050
Cost of equipment
sold.................. 514 572 2,897
Selling, general and
administrative........ 2,069 4,314 17,759
Depreciation and
amortization.......... 1,172 1,233 6,539
------- ------- -------
4,354 7,429 35,245
------- ------- -------
Operating income
(loss).................. (117) 1,716 5,035
Other income (expense)
Interest income
(expense), net........ (1,598) (3,518) (7,555)
Other income (expense).. 23
Gain (loss) on sale of
investment in cellular
operations............ (555) (555)
------- ------- -------
Total other income
(expense)............... (1598) (4,073) (8,087)
------- ------- -------
Net income (loss)........ $(1,715) $(2,357) $(3,052)
======= ======= =======
</TABLE>
- ------------------------------
(1) Pending, expected to close October 17, 1996
13
<PAGE> 14
PRICELLULAR CORPORATION
SUPPLEMENTAL UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
FOR PENDING TRANSACTIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
-----------------
PENDING
TRANSACTIONS
----------------- TOTAL
KENTUCKY PENDING
CLUSTER WI-4 TRANSACTIONS
-------- ------ ------------
<S> <C> <C> <C>
Revenues......................................................... $ 14,381 $1,286 $ 15,667
Costs and expenses:
Cost of cellular service....................................... 1,904 876 2,780
Cost of equipment sold......................................... 1,377 94 1,471
Selling, general and administrative............................ 4,779 278 5,057
Depreciation and amortization.................................. 4,983 356 5,339
-------- ------ ------------
13,043 1,604 14,647
-------- ------ ------------
Operating income (loss).......................................... 1,338 (318) 1,020
Other income (expense)
Interest expense, net.......................................... (1,596) (299) (1,895)
-------- ------ ------------
Total other income (expense)..................................... (1,596) (299) (1,895)
-------- ------ ------------
Net income (loss)................................................ $ (258) $ (617) $ (875)
======= ====== =========
</TABLE>
14
